ACQUISITION AGREEMENT
This ACQUISITION AGREEMENT (the "Agreement") is made and entered into
this 1st day of January, 2000 (the "Effective Date"), by and between RESEARCH
ENGINEERS, INC. ("REI"), a Delaware corporation, with offices at 00000 Xxxx
Xxxxx Xxxxxxx, Xxxxx Xxxxx, XX 00000-0000, and XXXX XXXXX ("Seller"), 0000
Xxxxxxx Xxxxxx, #00, Xx Xxxxx, XX 00000, sole proprietor of XXXXXX
COMMUNICATIONS.
In consideration of the respective terms, conditions, representations
and warranties contained herein, and other good and valuable consideration, the
receipt and sufficiency of which are hereby acknowledged, REI and Seller hereby
agree as follows:
1. PURCHASE AND SALE OF BUSINESS. Upon the terms and subject to the conditions
set forth in this Agreement, on the Effective Date, Seller shall sell,
transfer, assign and deliver to REI, and REI shall purchase from Seller,
all of Seller's right, title and interest in and to Xxxxxx Communications
(the "Business"), a sole proprietorship owned by Seller, marketing prepaid
phone cards and communication services. The Business shall include all of
its assets and properties, including the inventories, products, customers,
prospects, orders, accounts receivable and accounts payable, other than
cash.
2. EMPLOYMENT. As of the Effective Date, in partial consideration for Seller's
agreement to sell the Business to REI, REI shall hire Seller as REI's
Communications Services Manager, at an annual salary of $60,000.00 to REI's
standard terms and conditions of employment.
3. SHARES. In partial consideration for Seller's agreement to sell the
Business to REI, REI shall issue and deliver to Seller two thousand (2,000)
shares (the "Shares") of REI's common stock, par value $0.01, within one
hundred and eighty (180) days of the Effective Date. When issued, the
Shares shall be unregistered, restricted stock as defined in the Securities
Act of 1933, and shall be stamped or otherwise imprinted with a legend in
substantially the following terms:
THE SECURITIES REPRESENTED BY THIS CERTIFICATE HAVE BEEN ACQUIRED FOR
INVESTMENT AND HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933
OR ANY STATE SECURITIES OR BLUE SKY LAWS. THESE SECURITIES MAY NOT BE
SOLD OR TRANSFERRED IN THE ABSENCE OF SUCH REGISTRATION OR AN EXEMPTION
THEREFROM UNDER SAID ACT OR LAWS.
Within one hundred eighty (180) days of the Effective Date, REI shall
register the Shares under the Securities Act of 1933 and, Seller shall have
the right to sell or transfer the Shares.
4. REPRESENTATIONS AND WARRANTIES OF SELLER.
(a) SOLE PROPRIETORSHIP. The Business is a sole proprietorship in good
standing under the laws of the State of California with all requisite
power to carry on its business. Seller has the absolute and
unrestricted right, power, authority and capacity to execute this
Agreement.
(b) VIOLATION OF LAWS; LIABILITY; NO LIENS. Seller is not in violation of
any applicable laws relating to the operation of the Business and,
except as fully disclosed to REI, the Business has no liabilities or
lawsuits, mature, pending, threatened or contingent, as of the
Effective Date. As of the Effective Date, Seller is selling and
transferring the Business to REI free and clear of all liabilities,
liens, charges, encumbrances or other claims.
(c) FULL DISCLOSURE. The representations, warranties and other information
provided by Seller to REI under and/or pursuant to this Agreement do
not contain any untrue statement of a material fact or omit to state a
material fact required to be stated herein or therein.
(d) INVESTMENT PURPOSE. Seller is acquiring the Shares for its own account
and not with a view to their distribution within the meaning of
Section 2(11) the Securities Act of 1933, until at least such time as
REI notifies Seller that such Shares are validly registered.
5. REPRESENTATIONS AND WARRANTIES OF REI.
(a) ORGANIZATION; GOOD STANDING; AUTHORITY. REI is a corporation duly
organized, validly existing and in good standing under the laws of the
State of Delaware with all requisite power to carry on its business as
is now being conducted. REI is duly qualified to do business in all
jurisdictions in which it currently conducts business. This Agreement
constitutes the legal, valid and binding obligations of REI,
enforceable against REI in accordance with its terms. REI has the
absolute and unrestricted right, power, authority and capacity to
execute and deliver this Agreement and to perform its obligations
hereunder.
(b) CAPITALIZATION; SHARES. The authorized capital stock of REI consists
of 20,000,000 shares of common stock (the "Common Stock"), $0.01 par
value per share, and 357.143 shares of Series A 5% Convertible
Preferred Stock, $0.01 par value per share, 371,429 shares of Series B
5% Convertible Preferred Stock, $0.01 par value per share, and
4,271,428 shares of undesignated preferred stock, $0.01 par value per
share (collectively, the "Preferred Stock"). As of the date hereof,
6,418,692 shares of Common Stock are issued and outstanding and
1,183,739 shares of Common Stock are reserved for issuance upon the
exercise of outstanding options and warrants to purchase Common Stock.
No shares of Preferred Stock are issued and outstanding. All shares of
Common Stock are validly issued, fully paid and non-assessable and are
not subject to preemptive rights.
6. SELLER COVENANTS.
(a) NON-COMPETE. In partial consideration of REI's agreement to purchase
the Business, Seller shall not, without REI's prior written approval,
directly or indirectly, engage in any business competitive with the
Business in the United States of America during Seller's employment
with REI and for one (1) year thereafter.
(b) CONFIDENTIALITY. Seller acknowledges and agrees that Seller has had
and will have access to confidential, proprietary and trade secret
information of REI (including information of the Business acquired by
REI hereunder) ("Confidential Information") and Seller agrees not to
disclose to any third party of use for his own benefit without the
prior written permission of REI.
7. INDEMNITIES.
(a) SELLER INDEMNITY. Seller shall indemnify, defend, protect and hold
harmless REI and its successors and assigns and each of such entities'
directors, officers, employees, agents and affiliates from and against
all losses, claims, damages, actions, suits, proceedings, assessments,
adjustments, costs and expenses, including reasonable attorneys' fees,
based upon, resulting from or arising out of (i) any act or failure to
act related to the Business prior to the Effective Date; and (ii) any
breach of any of Seller's representations, warranties or obligations
under this Agreement.
(b) REI INDEMNITY. REI shall indemnify, defend, protect and hold harmless
Seller from and against all losses, claims, damages, actions, suits,
proceedings, assessments, adjustments, costs and expenses, including
reasonable attorneys' fees, based upon, resulting from or arising out
of (i) any act or failure to act related to the Business after the
Effective Date; and (ii) any breach of any of REI's representations,
warranties or obligations under this Agreement.
8. SURVIVAL. All agreements, covenants, representations and warranties made
hereunder shall survive the consummation of the transactions contemplated
hereunder for two (2) years.
9. NOTICES. All notices, demands or other communications hereunder shall be in
writing and shall be deemed given upon personal delivery or on the third
business day following deposit in the United States mail, postage prepaid,
and sent certified mail, return receipt requested, correctly addressed to
the addresses of the parties first set forth above, and, in the case of
REI, to the attention of the President.
10. GOVERNING LAW. This Agreement shall be governed by and interpreted in
accordance with the law of the State of California, without giving effect
to principles of conflict of laws.
11. GENERAL. This Agreement sets forth the entire agreement and understanding
of the parties with regard to the subject matter hereof, and supercedes all
prior and contemporaneous agreements, understandings, promises,
representations and warranties, express or implied, oral or written,
relating to the subject matter hereof. This Agreement may be amended only
by written instrument signed by both parties. Each provision of this
Agreement is intended to be severable and if any covenant, condition or
other provision hereof is held to be invalid, illegal or unenforceable,
such provision shall be deemed severable from the remainder of this
Agreement and the remainder of the Agreement shall continue in full force
and effect without such invalid, illegal or unenforceable provision.
IN WITNESS WHEREOF, each of the parties has executed this Agreement as of
the date first above written.
XXXX XXXXX RESEARCH ENGINEERS, INC.
By: /s/ Xxxx Xxxxx By: /S/ Xxxxx X. Xxx
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Xxxxx X. Xxx
Chairman of the Board and CEO
