EXHIBIT 2.4
SALE AND ASSIGNMENT AGREEMENT
This SALE AND ASSIGNMENT AGREEMENT (hereinafter referred to as "the Agreement")
is made and entered into as of January 27, 2000, by and between ▇▇▇▇
▇▇▇▇▇▇▇▇▇ ("Seller"), an individual resident of the State of Florida, and
SPARTAN CAPITAL MANAGEMENT, INC. ("Buyer") a Delaware corporation.
R E C I T A L S:
A. WHEREAS, Seller has good and clear title in and to certain tangible
and intangible personal and intellectual property (the "Assets") by virtue of
the following set of circumstances:
(i) As of January 29, 1997, Applied Information Systems, Inc., a Montana
corporation, ("AIS") was in default under certain payment obligations
owed to Seller, which obligations were secured by a first-position
security interest in certain tangible and intangible personal and
intellectual property (the "Assets") which Seller held as a secured
creditor of AIS;
(ii) Seller subsequently acquired all rights, title and interest in and to
the Assets through strict foreclosure pursuant to M.C.A. (S)
30-9-505(2)(a);
(iii) Seller subsequently entered into an Asset Sale and Purchase Agreement
dated April 14, 1997, wherein Seller agreed to sell, transfer and
convey the Assets to Orbit Network, Inc., a Delaware corporation
("Orbit Network");
(iv) Pursuant to the Asset Sale and Purchase Agreement, and as a material
part of the purchase price of the Assets, Orbit Network executed and
delivered to Seller a Promissory Note dated April 14, 1997, in the
principle sum of $771,000, and further granted Seller a purchase
money security interest in the Assets by executing a Security
Agreement;
(v) Seller duly perfected Seller's purchase money security interest in
the Assets by filing the Financing Statements in the offices of the
Montana Secretary of State and California Secretary of State;
(vi) On November 5, 1998, Seller filed an action in Federal District Court
for the District of Montana seeking to foreclose Seller's security
interest in the Assets (the "Civil Action") pursuant to M.C.A.(S)
30-9-101, et seq.;
(vii) As of the date set forth above, the Civil Action is proceeding
towards a stipulated Judgment entered in favor of Seller, which
grants Seller full title and possession in and to the Assets (the
"Foreclosure Judgment");
B. WHEREAS, Seller now desires to sell and deliver the all of his right,
title and interest in and to the Assets to the Buyer, and Buyer desires to
acquire, accept, and receive the Assets from Seller for use in Buyer's future
business operations, all upon the
terms and conditions set forth herein,.
NOW, THEREFORE, for good and valuable consideration, the receipt of which
is hereby acknowledged, and in consideration of the mutual covenants and
agreements contained herein, the Parties hereby agree as follows:
A G R E E M E N T S:
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1. Sale of Assets: In consideration of the mutual covenants, representations,
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and obligations contained in this Agreement, Seller does hereby sell,
transfer, convey, assign, and deliver to Buyer, and Buyer agrees to
purchase, accept and receive from Seller, all of the Seller's right, title
and interest in and to the specific items of tangible and intangible
personal property and intellectual property owned by the Seller
specifically identified and listed in the Security Agreement attached
hereto as Exhibit "A" and by this reference incorporated herein (the
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"Assets"). The sale, transfer, conveyance, assignment, and delivery of the
Assets from the Seller to the Buyer shall be evidenced by a ▇▇▇▇ of Sale
which the Seller agrees to execute and deliver to Buyer simultaneously with
the execution of this Agreement. In addition to the ▇▇▇▇ of Sale, the
Seller hereby agrees to hereinafter properly execute and deliver to Buyer,
upon Buyer's reasonable request, any such additional documentation or
instruments as may be reasonably necessary to evidence and establish the
sale, transfer, conveyance, and assignment of all right, title, and
interest in and to the Assets from the Seller to the Buyer. If the Seller
fails to provide any such documentation or instruments within ten (10)
business days after the Seller receives a written request from the Buyer
for the same, then the Seller hereby appoints Buyer as his limited attorney
in fact, with the power to execute the requested documents or instruments
in the Seller's name as the Buyer deems reasonably necessary in its
discretion, and any such documents or instruments shall have the same force
and effect as if signed by the Seller.
2. Purchase Price: In consideration for the Seller's sale and transfer of
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Assets as set forth in Section 1 above, Buyer hereby covenants, represents,
warrants and agrees to the following:
(a) $50,000 Cash Payment to Seller. Simultaneously with the execution of
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this Agreement, Buyer shall pay to Seller a cash payment in the sum of
Fifty Thousand Dollars ($50,000). Buyer shall pay the cash payment of
$50,000 to Seller in immediately available and collectible funds in
the form of a bank wire transfer directly into the following
designated bank account:
Name of Bank: First Union
Routing Number: ▇▇▇▇▇▇▇▇▇
Name of Account: ▇▇▇▇ ▇. ▇▇▇▇▇
Account Number: 1090005764101
(b) $10,000 Cash Payment to Seller's Legal Counsel. The Parties
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acknowledge and recognize that the law firm of ▇▇▇▇▇▇, ▇▇▇▇▇ & ▇▇▇▇▇▇,
P.C. (referred to herein as "WTH") of Missoula, Montana has served as
Seller's legal counsel in the Civil Action. The Parties further
acknowledge and agree that WTH has a lien upon Seller's Claims in the
Civil Action, including any proceeds thereof, pursuant to M.C.A. (S)
▇▇-▇▇-▇▇▇, which lien shall not exceed the sum of Twenty-Five Thousand
Dollars ($25,000). Buyer desires to acquire all of Seller's rights in
the Assets free and clear of any lien authorized under M.C.A. (S) 37-
61-420. Accordingly, Seller hereby authorizes and instructs Buyer to
pay to WTH a cash payment in the sum of Ten Thousand Dollars
($10,000), immediately upon execution of this Agreement, in partial
satisfaction of sums due and owing by Seller to WTH. Buyer agrees to
pay WTH a cash payment in the sum of Ten Thousand Dollars ($10,000) in
immediately available and collectible funds in the form of a bank wire
transfer directly into the following designated bank account:
Name of Bank: First Interstate Bank
Missoula Office
Address of Bank: ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Routing Number: ▇▇▇▇▇▇▇▇▇
Name of Account: ▇▇▇▇▇▇, ▇▇▇▇▇ & ▇▇▇▇▇▇, P.C.
Account Number: 1400922793
(c) Issuance of Shares. Buyer shall transfer to Seller Three Million
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(3,000,000) shares of the common stock of ▇▇▇▇▇▇▇▇▇▇▇.▇▇▇, Inc, a
Delaware corporation (the "Shares"), which Shares are currently held
in Buyer's account. The Shares shall be fully-paid, non-assessable,
and evidenced by four (4) separate and distinct stock certificates to
be issued in the name of Seller, with each such stock certificate
representing Seven Hundred and Fifty Thousand (750,000) Shares. The
parties understand and agree that the Shares will be subject to the
following registration rights and transfer restrictions:
(1) Shares Subject to Registration Rights. Buyer hereby represents
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and warrants to Seller the Shares will be registered for sale
immediately upon the effective filing of a Form SB-2 Registration
Statement with the Securities and Exchange Commission ("SEC").
(2) Transfer Restrictions. The Shares will be subject to the
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following "staggered lockup" transfer restrictions under which
Seller may sell, transfer, trade or otherwise dispose of the
Shares at the following times and in the following amounts:
(A) Immediately upon the effective date of registration of the
Shares with the SEC, Seller shall have the unrestricted right to
sell, transfer, trade or otherwise dispose of any number of the
Shares not to exceed twenty five percent (25%) of the total
Shares;
(B) Commencing ninety (90) days following the effective date of
registration of the Shares with the SEC, Seller shall have the
unrestricted right to sell, transfer, trade or otherwise dispose
of any number of the Shares not to exceed fifty percent (50%) of
the total Shares;
(C) Commencing one hundred and eighty (180) days following the
effective date of registration of the Shares with the SEC, Seller
shall have the unrestricted right to sell, transfer, trade or
otherwise dispose of any number of the Shares not to exceed
seventy five percent (75%) of the total Shares;
(D) Commencing two hundred and seventy (270) days following the
effective date of registration of the Shares with the SEC, Seller
shall have the unrestricted right to sell, transfer, trade or
otherwise dispose of all or any portion of the 3,000,000 Shares;
and
(E) Any additional restrictions imposed by federal and/or state
securities laws.
(d) $535,000 Buyer Note. Simultaneously with the execution of this Agreement,
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Buyer shall execute and deliver to and in favor of Seller a Promissory Note
in the amount of $535,000.00 (the "Buyer Note") in the form attached hereto
as Exhibit "B" attached hereto and by this reference incorporated herein.
Pursuant to the terms of the Buyer Note, Buyer shall have an unconditional
obligation to pay Seller the principal sum of $535,000.00, together with
accrued interest thereon at the rate of ten percent (10%) per annum
commencing on the Closing Date. The Buyer Note shall become immediately due
and payable in full upon the earliest date to occur of the following: (i) )
that date upon which ▇▇▇▇▇▇▇▇▇▇▇.▇▇▇, Inc., Divot Golf Corporation, or the
Buyer receives any money, proceeds or other consideration resulting from
any filing of a registration statement with the SEC or any public sale of
securities to be issued by either ▇▇▇▇▇▇▇▇▇▇▇.▇▇▇, Inc., Divot Golf
Corporation, or the Buyer; or (ii) that date which is 180 days following
the Effective Date of this Agreement. Buyer represents, warrants and
guarantees that the Buyer Note shall be satisfied and paid from any of the
money, proceeds or other consideration received by Buyer from the sale of
securities. Buyer represents, warrants and guarantees that the Buyer Note
shall be disclosed as a payment obligation and a portion of the "use of
proceeds" with respect to any registration statement hereafter filed by or
on behalf of ▇▇▇▇▇▇▇▇▇▇▇.▇▇▇,
Inc. with the SEC, including, but not limited to, any Registration
Statement. In addition to the foregoing, Buyer agrees to the following
terms and conditions.
(1) Guarantee of Buyer Note: Buyer's payment obligations under the Buyer
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Note shall be unconditionally guaranteed by ▇▇▇▇▇▇▇▇▇▇▇.▇▇▇, Inc. and
Divot Golf Corporation, which guarantee shall be reflected in the
Note.
(2) Prepayment of Buyer Note. Buyer shall be entitled to prepay at any
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time, without penalty, all or any portion of the unpaid principal
balance outstanding under Buyer Note.
(3) Due on Sale or Transfer. If Buyer sells, transfers, conveys, assigns,
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delivers or otherwise disposes of all or any portion of the Assets,
otherwise than in the normal and ordinary course of Buyer's continuing
and on-going business operations, without Seller's prior written
consent, then the entire outstanding principal balance due from Buyer
under Buyer Note, together with any accrued but unpaid interest and
any late payment charges due thereon, shall immediately become due and
payable.
(4) Grant of Security Interest to Seller. To secure Buyer's complete,
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timely and full performance of Buyer's obligations under this
Agreement and the Buyer Note executed by Buyer in accordance with this
Agreement, Buyer hereby grants to Seller a first-position security
interest in and to the Assets, together with any and all proceeds
derived therefrom. Buyer agrees to execute a security agreement in
favor of Seller as the secured party. In the event Buyer fails to
timely and fully make all payments due and owing to Seller under this
Agreement or the Buyer Note, or otherwise fails to timely satisfy and
perform all other duties and obligations under this Agreement or any
documents or instruments executed in accordance with this Agreement,
then Seller may, at Seller's sole option, elect to exercise any and
all of Seller's rights and remedies under the Uniform Commercial Code
adopted in Montana or in any other state having jurisdiction over the
Collateral.
(e) $15,000 Payment to Seller's Legal Counsel. Buyer desires to acquire all of
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Seller's rights in the Assets free and clear of any lien authorized under
M.C.A. (S) ▇▇-▇▇-▇▇▇. Accordingly, in addition to the cash payment to WTH
under Section 2(b) of this Agreement, Seller hereby authorizes and
instructs Buyer to pay to WTH an additional cash payment in the sum of
Fifteen Thousand Dollars ($15,000) in complete satisfaction of all other
sums due and owing by Seller to WTH. The $15,000 cash payment from Buyer to
WTH shall become immediately due and payable in full upon the earliest date
to occur of the following: (i) that date upon which the Buyer
receives any money, proceeds or other consideration resulting from any
filing of a registration statement with the SEC or any public sale of
securities to be issued by OrbitTravel; or (ii) that date which is 180 days
following the Effective Date of this Agreement. Any sum due and owing to
WTH under this Section 2(e) shall be paid by Buyer prior to the payment of
any sums to Seller under Section 2(c) of this Agreement. Buyer shall pay
WTH the cash payment in the sum of $15,000 in immediately available and
collectible funds in the form of a bank wire transfer directly into the
bank account designated in Section 2(b) of this Agreement.
Notwithstanding anything contained in this Agreement to the contrary,
Seller shall remain responsible for and agrees to satisfy in full any and
all sums due and owing to WTH with respect to legal services rendered by
WTH to Seller in the Civil Action.
(f) Consulting Agreement with Seller. Simultaneously with the execution of this
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Agreement, Buyer shall enter into and execute a Consulting Agreement to
hire and retain Seller as an independent contractor to provide professional
consulting services to Buyer. Pursuant to the terms of the Consulting
Agreement, Buyer shall pay Seller the total sum of Two Hundred Twenty Five
Thousand Dollars ($225,000.00), payable in thirty-six (36) equal monthly
installments of Six Thousand Two Hundred Fifty Dollars ($6,250.00) per
installment. The term of the Consulting Agreement shall be for a period of
36 months commencing on the Closing Date, and may not be terminated prior
to the end of such 36-month term without Seller's prior written consent. In
the event Buyer attempts to terminate such Consulting Agreement prior to
expiration of the 36-month term, then Buyer shall immediately become
obligated to pay all remaining sums owing to Seller for the remaining term
of the Consulting Agreement.
(g) Consulting Agreement With ▇▇▇▇ ▇. ▇▇▇▇▇. In addition to the Seller
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Consulting Agreement, simultaneously with the execution of this Agreement
Buyer shall also enter into and execute a Consulting Agreement to hire and
retain ▇▇▇▇ ▇. ▇▇▇▇▇ as an independent contractor to provide professional
consulting services to Buyer. The Consulting Agreement with ▇▇▇▇ ▇. ▇▇▇▇▇
shall contain the same terms as those set forth in the Consulting Agreement
entered into by and between Buyer and Seller.
(h) Assumption and Satisfaction of Jansec and Pierre Equipment Leases.
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Buyer acknowledges that AIS, Orbit Network and Seller are in default and
have failed to pay all sums due and owing under the following Equipment
Leases: (i) Equipment Lease with Pierre; and (ii) Equipment Lease with
Jansec. Buyer agrees to assume and become responsible for the timely and
immediate payment, satisfaction, and discharge of any and all sums which
are due and owing or may hereafter become due and owing by AIS, Orbit
Network, or Seller under the above-referenced Equipment Leases.
3. Representations and Warranties of Seller: Seller hereby represents and
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warrants to Buyer as follows:
(a) Seller's Interests: Seller hereby represents and warrants that,
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subject to subsection (i) below, Seller will transfer full and clear
title to the Assets by virtue of the Foreclosure Judgment, and that
Seller's interests in and to the Assets are senior and superior to
those of any third person or entity. Seller further warrants that
title to the Assets shall be delivered to Buyer free and clear of any
lien, interest, or encumbrance, and that no third person or entity has
claimed an interest in and to the Assets that may be senior to the
interests of the Seller.
(i) ▇▇▇▇▇▇▇▇ ▇▇▇▇: . On or about February 5, 1997, Orbit Network
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granted a security interest in all of its contract rights and
general intangible personal property to ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇ (the
"▇▇▇▇▇▇▇▇ ▇▇▇▇"), which security interest also included
after-acquired assets. Seller makes the following representations
with respect to the ▇▇▇▇▇▇▇▇ ▇▇▇▇:
(A) Seller will undertake Seller's best efforts in the Civil
Action to notify ▇▇▇▇▇▇▇▇ of the pending Civil Action and to
foreclose the ▇▇▇▇▇▇▇▇ ▇▇▇▇ as a subordinate lien in
conjunction with the foreclosure sale of the Collateral in
the Civil Action; and
(B) To the extent that ▇▇▇▇▇▇▇▇ successfully obtains a judgment
from a court of competent jurisdiction declaring the
▇▇▇▇▇▇▇▇'▇ holds a security interest in the Assets which has
priority over Savoretti's security interest and that
▇▇▇▇▇▇▇▇ is entitled to levy upon and execute upon the
Assets in satisfaction of ▇▇▇▇▇▇▇▇'▇ priority lien, then
Seller agrees to indemnify the Buyer as set forth in the
immediately following subparagraph (i)(C).
(C) In the event ▇▇▇▇▇▇▇▇ successfully obtains a judgment from a
court of competent jurisdiction declaring that ▇▇▇▇▇▇▇▇
holds a security interest in the Assets which has priority
over Seller's security interest and that ▇▇▇▇▇▇▇▇ is
entitled to levy upon and execute upon the Assets in
satisfaction of ▇▇▇▇▇▇▇▇'▇ priority lien, then Seller shall
indemnify Buyer from and against any amount payable to
▇▇▇▇▇▇▇▇ as a result of such action (through judgment,
settlement, or otherwise), to the extent that the ▇▇▇▇▇▇▇▇
▇▇▇▇ is not satisfied by the Account Proceeds described in
Section 4(h) of this Agreement (the "▇▇▇▇▇▇▇▇
Indemnification"). Seller shall have the right to
participate in the defense of any action initiated by
▇▇▇▇▇▇▇▇, and Buyer shall have the right to participate in
any such defense. If Seller or the Buyer are unable to
successfully defend any such action by ▇▇▇▇▇▇▇▇, and
▇▇▇▇▇▇▇▇ obtains a judgment
from a court of competent jurisdiction declaring that
▇▇▇▇▇▇▇▇ holds a security interest in the Assets which has
priority over Seller's security interest and that ▇▇▇▇▇▇▇▇
is entitled to levy upon and execute upon the Assets in
satisfaction of ▇▇▇▇▇▇▇▇'▇ priority lien, then Seller's
obligation to indemnify the Buyer from and against the
▇▇▇▇▇▇▇▇ ▇▇▇▇ shall be limited to the following:
(1) To the extent that the ▇▇▇▇▇▇▇▇ ▇▇▇▇ is equal to or
less than $115,000, then the Account Proceeds shall
first be used to satisfy the ▇▇▇▇▇▇▇▇ ▇▇▇▇. If the
Account Proceeds are insufficient to satisfy the amount
of the ▇▇▇▇▇▇▇▇ ▇▇▇▇, then Seller shall then pay 100%
of the difference between the amount of the ▇▇▇▇▇▇▇▇
▇▇▇▇ not in excess of $115,000 and the amount of the
Account Proceeds; and
(2) If and to the extent that the ▇▇▇▇▇▇▇▇ ▇▇▇▇ exceeds
$115,000, then pay fifty percent (50%) of that portion
of the ▇▇▇▇▇▇▇▇ ▇▇▇▇ which exceeds $115,000.00 and the
Buyer shall be responsible to pay fifty percent (50%)
of that portion of the ▇▇▇▇▇▇▇▇ ▇▇▇▇ which exceeds
$115,000.00.
(ii) EVI Lien: Electric Ventures, Inc. ("EVI") was also a party
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to the Security Agreement between Orbit Network and Seller
concerning the Assets, and was granted a security interest
in the Assets thereby. Seller has been informed by both
▇▇▇▇▇▇▇▇▇▇▇.▇▇▇, Inc. and EVI that all cash amounts due to
EVI have been paid, and that any promised Orbit Network
share issuances have been effected. In reliance upon such
representations, the Seller represents and warrants that he
shall deliver the Assets free and clear of any claim by EVI.
(b) No Prior Pledge, Sale, or Assignment: As of the date of this
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Agreement, Seller has not sold, assigned or otherwise pledged all
or any portion of his right, title, and interest in and to the
Assets to any third person or entity, nor has Seller agreed to
any such sale, assignment, or pledge.
(c) No Bankruptcy: The Seller has not sought protection under any
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bankruptcy statute, nor can any trustee in bankruptcy or any
creditor of Seller lay claim to the Assets transferred in
accordance with this Agreement.
(d) Indemnification: With the exception of the ▇▇▇▇▇▇▇▇ ▇▇▇▇, Seller
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hereby agrees to indemnify, defend, and hold harmless the Buyer,
including its parent, affiliates, subsidiaries, successors,
assigns, officers, directors, agents, and employees, from and
against the amount of any and all final judgments (including, but
not limited to, attorneys' fees, expert witness costs, court
costs, and expenses) that may be entered against the Buyer in any
forum, by
reason of Seller's failure to assign all of his right, title and
interest in and to the Assets being assigned and/or a breach by Seller
of the representations set forth in this Section 3.
(e) Assignment of Security Interest. Upon execution hereof, Seller shall
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execute five (5) separate copies of UCC-3 forms reflecting the
assignment of Seller's security interest in and to the Assets to the
Buyer, and provide the Buyer with such executed UCC-3 forms. In the
event any lien is hereafter asserted against the Assets following the
execution of this Agreement by any person or entity which is not a
party to this Agreement, and such lien does not have priority over or
is subordinate to Seller's purchase money security interest, then the
Buyer shall be entitled to exercise Seller's rights and remedies under
the Uniform Commercial Code with respect to such subordinate lien.
(f) No Warranty: Seller sells, transfers, conveys, assigns and delivers
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the Assets to the Buyer "AS IS" and "WHERE IS" and "WITH ALL FAULTS."
With the exception of Seller's warranties with respect to title,
Seller hereby disclaims all express or implied warranties with respect
to Assets, including disclaimer of the implied warranty of
merchantability and the implied warranty of fitness for a particular
purpose.
4. Representations and Warranties of Buyer: Buyer hereby represents and
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warrants to Seller as follows:
(a) Buyer is a corporation duly organized, validly existing, and in good
standing under the laws of the state of its incorporation;
(b) Buyer has the full power and authority to enter into, execute and
deliver this Agreement and to perform and discharge its duties and
obligations hereunder;
(c) This Agreement constitutes a legal, valid and binding obligation of
the Buyer which is enforceable against Buyer according to the terms
contained herein;
(d) Buyer is not in violation of any provision of its Articles of
Incorporation, its Bylaws, or any other corporate or organizing
instrument to which the Buyer is a party, and the execution and
delivery of this Agreement and the consummation of the transaction
contemplated herein will not result in any such violation;
(e) Impairment. Buyer shall not, by amendment of its Certificate of
Incorporation or through any reorganization, transfer of ownership or
assets, consolidation, merger, dissolution, bankruptcy proceeding, or
any other voluntary or involuntary action, avoid or seek to avoid the
observance or performance of any of the terms of this Agreement or the
Buyer Note executed by Buyer in accordance with this Agreement, but
will act at all times in good faith to assist all Parties in the
carrying out of all such terms and in the taking of all such action as
may be necessary or appropriate in order to
protect the rights of all Parties under this Agreement.
(f) No Knowledge. Buyer, each Guarantor, and their respective officers,
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agents and representatives have no knowledge of:
(1) Claims or demands being made against the Assets by any person or
entity which is not a party to this Agreement, with the exception
of EVI and ▇▇▇▇▇▇▇▇;
(2) Financial records or other information indicating that EVI has
not received payment for any and all debts, obligations or other
advances due and owing from Orbit Network to EVI, to the extent
such debts, obligations or other advances are subject to the
terms and conditions of the Security Agreement.
(3) Any other recorded security interest in the Assets being
transferred;
(4) Any factors or conditions which would have a material adverse
effect on the present or future financial condition of Buyer or
its ability to satisfy and discharge its duties, obligations and
liabilities as provided in this Agreement and any documents,
instruments and agreements executed in connection with this
Agreement.
(g) No Transfer of Assets: Until Buyer has satisfied, discharged, and
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performed all of its obligations under this Agreement and pays Seller
all sums due under the Buyer Note, Buyer will not sell, transfer,
assign, or otherwise dispose of any of the Assets other than in the
ordinary course of Buyer's continuing and ongoing business operations,
without first obtaining Seller's prior written consent.
(h) Escrow Account: The Buyer hereby agrees to establish an escrow account
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for the express purpose of satisfying the ▇▇▇▇▇▇▇▇ ▇▇▇▇, in the event
the Seller is unsuccessful in his efforts to foreclose ▇▇▇▇▇▇▇▇'▇
security interest in the Assets. Buyer shall cause 50,000 shares of
▇▇▇▇▇▇▇▇▇▇▇.▇▇▇ common stock to be deposited in escrow (the "Escrowed
Stock"). The Escrowed Stock shall be registered through the Form SB-2
Registration Statement referenced in Section 2(c)(1) of this
Agreement. In the event that ▇▇▇▇▇▇▇▇ brings an action to foreclose
the ▇▇▇▇▇▇▇▇ ▇▇▇▇, which action is reduced to a money judgment or
settlement (the terms of which are agreed to by Buyer and Seller), the
Buyer shall liquidate the Escrowed Stock at the market price, and
shall utilize the proceeds (the "Account Proceeds") towards
satisfaction of any such judgment or settlement. Seller shall retain
any Account Proceeds that are in excess of any such judgment or
settlement.
5. Survival of Representations and Warranties. The Parties acknowledge and
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agree that all covenants, representations and warranties contained in this
Agreement shall survive the Effective Date and the full satisfaction and
performance of this Agreement by each Party. Notwithstanding the full
satisfaction and performance of this Agreement by any Party, each Party
shall be entitled to pursue any remedy available at law or in equity upon
the occurrence of any breach or default by any other Party with respect to
any term, condition, covenant, representation or warranty contained in this
Agreement.
6. Confidentiality. The Parties hereby agree that the terms and conditions of
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this Agreement shall remain absolutely confidential and, absent an order of
a court of competent jurisdiction, shall not be disclosed or discussed by
either Party or their respective attorneys or other representatives with
any person, entity or governmental agency not a party to this Agreement.
This provision does not prohibit any Party from discussing the terms of
this Agreement with such Party's accountants or other legal advisors,
provided, however, that all such individuals shall also agree to abide by
the confidentiality provisions of this Agreement.
7. Waiver. No waiver of any term, provision, or condition of this Agreement,
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whether by conduct or otherwise, in any one or more instances, shall be
deemed to be, or shall constitute, a waiver of any other provision hereof,
whether or not similar, nor shall any such waiver constitute a continuing
waiver, and no waiver shall be binding unless executed by the Party making
such waiver.
8. Time of Essence. Time will be of the essence in complying with the terms
---------------
and conditions of this Agreement.
9. Successors Bound By Agreement. This Agreement shall inure to the benefit of
-----------------------------
and be binding upon the Parties to this Agreement and their respective
beneficiaries, successors in interest and assignees.
10. Further Documents. Each Party shall execute such documents and instruments
-----------------
and take such other steps as may be necessary to accomplish the agreements,
obligations and purposes set forth in this Agreement.
11. Merger of Prior Agreements. This Agreement supersedes, merges and voids any
--------------------------
and all prior or contemporaneous discussions, negotiations, written or oral
agreements and all undertakings between the Parties with respect to the
subject matter hereof. The Parties hereby waive and release each other from
any claims, actions or causes of action which relate in any manner to any
prior discussions, negotiations, written or oral agreements, and
undertakings between the Parties with respect to the subject matter hereof.
12. Entire Agreement. This Agreement, including any exhibits and attachments
----------------
hereto, embodies the entire agreement and understanding of the Parties and
supersedes any and all oral or written understandings or agreements
relating to its subject matter. There are no restrictions, promises,
representations, warranties, covenants, or undertakings between the Parties
other than those expressly set forth or referred to herein.
13. Modification. This Agreement shall not be modified, altered, changed or
------------
amended in any respect, except by a written agreement executed by the party
against whom enforcement of the modification or amendment is sought.
14. Attorney's Fees and Costs. If any Party deems it necessary to commence a
-------------------------
legal proceeding to enforce the terms of this Agreement or any document or
instrument executed in accordance with this Agreement, the Parties agree
that the breaching party or unsuccessful party will pay the reasonable
attorney's fees and legal costs of any and all Parties, both at trial and
on appeal. For purposes of this Section, a party shall be considered an
"unsuccessful party" if such party is ordered, directed or required to pay
more compensation or consideration under a settlement agreement or final
judgment than any amount offered by the unsuccessful party, in writing, to
settle the dispute prior to the commencement of a legal action.
15. Delivery of Assets/Governing Law. The parties understand and agree that the
--------------------------------
Assets referenced in this Agreement are present and shall be delivered by
the Seller in the State of Montana. Notwithstanding the foregoing, this
Agreement and the legal relations between the parties hereto shall be
governed by and construed in accordance with the laws of the State of New
York, and the parties hereby consent to the jurisdiction of the courts of
the State of New York and the Federal District Court for the Southern
District of New York, without giving effect to any choice of law statutes,
rules or principles.
16. No Third Party Beneficiaries: This Agreement is made sole for the benefit
----------------------------
of the parties to this Agreement and their respective successors and
assigns, and no other person or entity shall have or acquire any right by
virtue of this Agreement.
17. Execution in Counterparts and Via Facsimile. This Agreement and all
-------------------------------------------
instruments or documents in accordance herewith may be executed in one or
more counterparts or duplicates, and via facsimile, each of which shall be
deemed to be an original copy of this Agreement and all of which, when
taken together, shall be deemed to constitute one and the same Agreement.
IN WITNESS WHEREOF, the Parties have executed this Agreement to be
effective as of the date first set forth on Page 1 hereof.
SPARTAN CAPITAL MANAGEMENT, LLC, ▇▇▇▇ ▇▇▇▇▇▇▇▇▇
a Delaware corporation
By: /s/ ▇▇▇▇▇ ▇▇▇▇▇▇▇▇ By: /s/ ▇▇▇▇ ▇▇▇▇▇▇▇▇▇
------------------------ --------------------
▇▇▇▇ ▇▇▇▇▇▇▇▇▇
Name: ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
-----------------------
Title: Executive Director
----------------------
EXHIBIT "A"
DESCRIPTION OF ASSETS
The Assets which are the subject of this Asset Sale and Purchase
Agreement and which the Seller hereby sells, transfers, conveys, assigns and
delivers to the Buyer in accordance with this Agreement are described as
follows:
(a) All right, title and interest in and to all items of tangible and
intangible personal property and intellectual property owned, held or
used in the management and operation of Applied Information Services,
Inc. ("AIS"), a Montana corporation, which the Seller acquired from AIS
through strict foreclosure under MCA ss. 30-9-505(2)(a), including, but
not limited to, the Assets described in the "Asset List of Applied
Information Services, Inc." attached hereto and made a part of this
Exhibit "A";
(b) WITH THE EXCEPTION OF ANY AIS CORPORATE RECORD BOOKS, MINUTES,
SHAREHOLDER LISTS, ACCOUNTING RECORDS, PAYROLL RECORDS, FINANCIAL
STATEMENTS AND TAX RECORDS WHICH THE SELLER DID NOT ACQUIRE THROUGH
STRICT FORECLOSURE UNDER MCA SS. 30-9-502(2)(A), any other books,
documents, accounts, correspondence, manuals, lists or other
information pertaining to or relating to: (i) Trade secrets concerning
the business and affairs of AIS; (ii) contracts rights and other
intangible rights of AIS with respect to any of AIS's suppliers,
distributors, vendors or customers; (iii) the fixed assets, equipment,
inventory and supplies of AIS; (iv) AIS customer lists; (v) AIS
customer registration files and databases; (vi) AIS vendor and supplier
lists; (vii) AIS marketing, sales, promotional and other literary,
written or video material, and applications for any and all of the
foregoing; (viii) computer software and computer programs designed,
developed, written or improved by AIS; and (ix) computer data, computer
input, computer databases, technologies, systems and structures created
by or used by AIS in the operation of its business and affairs;
(c) All intellectual property rights, trade secrets and copyrights,
whether patentable or nonpatentable and whether or not reduced to
practice, or any other intangible property right of any kind which may
be embodied in the assets of AIS which the Seller acquired from AIS
through strict foreclosure under MCA ss. 30-9-505(2)(a), including, but
not limited to: all licenses of and rights to use licenses for all
revisions, enhancements, improvements, modifications, translations,
abridgments, condensations and expansions developed or created by AIS,
inventions, discoveries, trade secrets, processes, formulas, know-how,
United States and foreign patents, patent applications, patent
disclosures and all related continuations, continuations-in-part,
divisional, reissue, reexamination, utility, model, certificate of
invention and design patents, registrations and applications for
registration of such inventions and patents, trade names, trademarks,
trademark registrations, applications for trademark registrations,
logos, copyrights, and copyright registrations owned or, where not
owned, used by, AIS in its business;
(d) WITH THE EXCEPTION OF AIS'S ACCOUNTS RECEIVABLE ACQUIRED BY AND
RETAINED BY THE SELLER, all claims, prepayments, refunds, causes of
action, choses in action, rights of recovery, rights of setoff, rights
of recoupment and all rights under warranties, in connection with any
of the foregoing; and
(e) Any and all other rights which the Seller now has or may hereafter
acquire from AIS through strict foreclosure under MCA ss.
30-9-505(2)(a) as a secured creditor.
EXHIBIT "B"
PROMISSORY NOTE
Principal Amount: New York, NY
$535,000.00 January 27, 2000
-----------
FOR VALUE RECEIVED, the undersigned, Spartan Capital Management, Inc.
("Borrower"), promises to pay to the order of ▇▇▇▇ ▇▇▇▇▇▇▇▇▇ ("Lender"), in
lawful money of the United States of America, the principal sum of Five Hundred
Thirty Five Thousand and No/100 Dollars ($535,000.00) plus simple interest
thereon from the date hereof until this Note is paid in full.
Repayment of the Principal Sum. The Principal Sum shall be due and
------------------------------
payable in one (1) installment of Five Hundred Thirty Five Thousand and No/100
Dollars ($535,000) on the earlier of: (i) the receipt by the Borrower of
proceeds from a Form SB-2 Registration Statement filed by ▇▇▇▇▇▇▇▇▇▇▇.▇▇▇, Inc.;
or (ii) 180 days following the date set forth above (the "Maturity Date").
-------------
Interest: Interest shall accrue on the unpaid Principal Sum at the rate
--------
of ten percent (10%) per annum. Accrued and unpaid interest shall be payable,
together with the unpaid Principal Sum, on the Maturity Date. If the Maturity
Date should fall on a weekend or national holiday, payment shall be due on the
following business day. Interest on this Note shall be computed on the basis of
the actual number of days elapsed during which the unpaid Principal Sum is
outstanding, divided by a year of three hundred sixty-five (365) days. All
payments under this Note shall be applied first to the payment of accrued and
unpaid interest with the remainder applied to the unpaid Principal Sum in
inverse chronological order.
3. Events of Default: The occurrence of any of the events set out below
-----------------
(Events of Default) shall, at the option of the Lender, make all interest and
principal remaining on due under this Note immediately due and payable, without
notice of default, presentment or demand for payment, protest or notice of
nonpayment or dishonor, or other notices or demands of any kind, except as
specified herein:
(a) Borrower shall fail to timely pay any installment of interest or
principal in accordance with the terms of this Note, within ten (10)
days after receipt of written notice of such failure from the Lender,;
(b) Borrower shall file any petition or action for relief under any
bankruptcy, arrangement, reorganization, insolvency, or moratorium
law, or any other law
or laws for the relief of or relating to debtors, or shall, with
respect to any involuntary petition or action for relief under such
law or laws, consent or fail to timely object to the relief requested
in such petition;
(c) An involuntary petition shall be filed under any bankruptcy statute
against Borrower, or a receiver, trustee, custodian, or similar
officer of the court shall be appointed to take possession of all or
any substantial part of Borrower's properties, unless such petition or
appointment is dismissed or withdrawn or ceases to be in effect within
sixty (60) days from the date of the filing or appointment;
4. Notices: Any communications between the parties or notices provided
-------
for in this Note may be given by mailing them, first class, postage prepaid, to
Lender at:
▇▇▇▇ ▇▇▇▇▇▇▇▇▇
▇▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇, ▇▇ ▇▇▇▇▇
And to Borrower at:
Spartan Capital Management, Inc.
▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇. ▇▇-▇,
▇▇▇ ▇▇▇▇ ▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
or to such other address as either party may indicate to the other in writing
after the date of this Note.
5. Assignment: This Note shall bind and inure to the benefit of the parties
----------
and their respective successors and assigns; provided, however, that Borrower
shall not assign this Note or any of the rights, duties, or obligations of
Borrower under this Note without the prior written consent of Lender.
6. Governing Law: This Note shall be interpreted under the laws of the
-------------
State of New York, without giving effect to the conflict of law principles
thereof.
Spartan Capital Management, LLC
a Delaware Corporation
By: /s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
---------------------------
Authorized Signatory
GUARANTEE
Divot Golf Corporation, a Delaware corporation, and ▇▇▇▇▇▇▇▇▇▇▇.▇▇▇, Inc.,
a Delaware corporation, acting jointly and severally, do herby unconditionally
guarantee the full and timely satisfaction and performance of the Borrower's
payment obligations under this Promissory Note. In the event of Borrower's
default, Lender shall be entitled to immediately seek and obtain satisfaction
and performance of Borrower's obligations from the Guarantors, either jointly or
severally, without the obligation to first seek satisfaction or performance from
the Borrower.
DIVOT GOLF CORPORATION
Per: /s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
---------------------------------------
▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇, Chairman and C.E.O.
▇▇▇▇▇▇▇▇▇▇▇.▇▇▇, INC.
Per: /s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
---------------------------------------
▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇, Chairman and C.E.O.
