AGREEMENT AND PLAN OF MERGER AND EXCHANGE OF STOCK
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THIS AGREEMENT AND PLAN OF MERGER AND EXCHANGE OF STOCK ("Agreement") is
made and entered into as of the 10th day of May, 2001, by and among RETURN ON
INVESTMENT CORPORATION, a corporation organized and existing under the laws of
the State of Delaware ("ROI"), whose address is ▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇., ▇▇▇▇▇
▇▇▇, ▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇; GO SOFTWARE, INC., a corporation organized and existing
under the laws of the State of Washington ("GO"), whose address is Parkway
Business Center, ▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇; and
NETWORK COMMERCE INC., a corporation organized and existing under the laws of
the State of Washington ("Network Commerce"), whose address is ▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇ and GO ACQUISITION, INC.
("Subsidiary"), whose address is ▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇ ▇▇▇▇▇,
▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇.
W I T N E S S E T H:
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WHEREAS, GO is a wholly-owned subsidiary of Network Commerce;
WHEREAS, upon the terms and subject to the conditions of this Agreement and
in accordance with applicable law, Network Commerce shall, sell, assign, and
transfer ownership of GO to ROI (the "GO Sale");
WHEREAS, the Board of Directors of GO (i) has determined that the GO Sale
is consistent with and in furtherance of the long term business strategy of GO
and fair to, and in the best interests of, GO and its shareholder; and (ii) has
approved this Agreement, the GO Sale and the other transactions contemplated by
this Agreement;
WHEREAS, the Board of Directors of Network Commerce (i) has determined that
the GO Sale is consistent with and in furtherance of the long term business
strategy of Network Commerce and fair to, and in the best interests of, Network
Commerce and its shareholders; and (ii) has approved this Agreement, the GO Sale
and the other transactions contemplated by this Agreement;
WHEREAS, the Board of Directors of ROI (i) has determined that the GO Sale
is consistent with and in furtherance of the long term business strategy of ROI
and is fair to, and in the best interests of, ROI and its shareholders; (ii) has
approved this Agreement, the GO Sale and the other transactions contemplated by
this Agreement; (iii) has recommended that the shareholders of ROI approve the
GO Sale; and (iv) has approved the issuance of shares of common stock, $.01 par
value per share, of ROI (the "ROI Common Stock") in exchange for all of the
issued and outstanding shares of common stock, $0.00 par value per share, of GO
(the "GO Common Stock"); and
WHEREAS, the shareholders of ROI have approved this Agreement, the GO Sale
and the other transactions contemplated by this Agreement;
NOW, THEREFORE, in consideration of the premises, the mutual covenants and
agreements set forth herein, and for other good and valuable consideration, the
receipt, adequacy and sufficiency of which are hereby acknowledged by the
parties hereto, the parties hereto do hereby mutually covenant and agree as
follows:
1. THE MERGER
(a) THE MERGER. ROI will set up a corporation under the laws of the State
of Washington as a wholly-owned subsidiary of ROI (the "Subsidiary"). Upon the
terms and subject to the conditions set forth in this Agreement, and in
accordance with the applicable provisions of the Washington Business Corporation
Act (the "WBCA"), the Subsidiary shall be merged with and into GO at the
Effective Time (as defined in Section 1(c) hereof) (the "Merger"). Following the
Effective Time, the separate corporate existence of the Subsidiary shall cease,
and GO shall continue as the surviving corporation (the "Surviving Corporation")
under the name GO Software, Inc. and shall succeed to and assume all the rights
and obligations of GO and the Subsidiary in accordance with the WBCA.
(b) THE CLOSING; EFFECTIVE DATE. The closing of the Merger contemplated by
this Agreement (the "Closing") shall take place on May 11, 2001, or at such
other time and on such other date as is agreed to by the parties (the "Closing
Date"), which (subject to satisfaction or waiver of the conditions set forth in
Section 7) shall be
no later than the second business day after satisfaction or waiver of the
conditions set forth in Section 7 at the offices of ROI. If the parties hereto
do not agree in writing to extend the Closing Date beyond May 31, 2001, and the
Closing does not occur on or prior to such date, any party to this Agreement
may, at its sole option, terminate this Agreement by notifying the other parties
in writing of such termination. Upon such termination, each party shall be
responsible for its own costs and expenses related to this Agreement and no
party shall have any obligation hereunder except for those obligations that have
been expressly agreed to herein or agreed to in writing in a separate document
as surviving the termination of this Agreement.
(c) EFFECTIVE TIME. Subject to the provisions of this Agreement, the
parties shall file articles of merger (the "Articles of Merger") executed in
accordance Section 23B.11.050 of the WBCA and shall make all other filings or
records required under the WBCA as soon as practical on or after the Closing
Date. The Merger shall become effective at such time as the Articles of Merger
are accepted for record by the Secretary of State of the State of Washington or
at such other time as the Subsidiary and GO shall agree as specified in the
Articles of Merger but not exceeding 30 days after the date the Articles of
Merger are accepted for record by the Secretary of State of the State of
Washington (the "Effective Time").
(d) EFFECT OF MERGER ON THE CONSTITUENT CORPORATIONS.
(1) GENERAL. The Merger shall have the effect set forth in the WBCA.
Without limiting the generality of the foregoing, and subject thereto, at
the Effective Time of the Merger, (i) the Surviving Corporation shall
possess all assets and property of every description, and every interest
therein, wherever located, excluding only those assets of GO comprising the
"call center" and specifically listed on Schedule A (the "Call Center"),
and the rights, privileges, immunities, powers, franchises and authority,
of a public as well as of a private nature, of each of the Subsidiary and
GO (together, the "Constituent Corporations"), (ii) all obligations
belonging to or due each of the Constituent Corporations shall be vested
in, and become the obligations of, the Surviving Corporation without
further act or deed, (iii) title to any real estate or any interest therein
vested in either of the Constituent Corporations shall not revert or in any
way be impaired by reason of the Merger, (iv) all rights of creditors and
all liens upon any property of either of the Constituent Corporations shall
be preserved unimpaired, and (v) the Surviving Corporation shall be liable
for all of the debts and obligations of each of the Constituent
Corporations, and any claim existing, or action or proceeding pending, by
or against either of the Constituent Corporations may be prosecuted to
judgment with right of appeal, as if the Merger had not taken place.
(2) ARTICLES OF INCORPORATION OF THE SURVIVING CORPORATION. The
Articles of Incorporation of GO, in effect as of the Effective Time, shall
become the Articles of Incorporation of the Surviving Corporation from and
after the Effective Time and until thereafter amended as provided by law.
(3) BYLAWS OF THE SURVIVING CORPORATION. The Bylaws of GO shall be the
Bylaws of the Surviving Corporation from and after the Effective Time and
until thereafter altered, amended or repealed in accordance with the WBCA,
the Articles of Incorporation of the Surviving Corporation and said Bylaws.
(4) DIRECTORS. The Board of Directors of GO at the Effective Time
shall resign. The Board of Directors of ROI at the Effective Time shall,
from and after the Effective Time, be the Board of Directors of the
Surviving Corporation until their successors have been duly elected or
appointed and qualified or until their earlier death, resignation or
removal in accordance with the Surviving Corporation's Articles of
Incorporation and applicable law.
(5) OFFICERS. The officers of GO at the Effective Time shall resign.
The officers of ROI at the Effective Time shall, from and after the
Effective Time, be the officers of the Surviving Corporation until their
successors have been duly elected or appointed and qualified or until their
earlier death, resignation or removal in accordance with the Surviving
Corporation's Articles of Incorporation and Bylaws.
(6) ASSETS, LIABILITIES. At the Effective Time, the assets,
liabilities, reserves and accounts of each of the Constituent Corporations
shall be taken upon the books of the Surviving Corporation at the amounts
at which they respectively shall be carried on the books of said
corporations immediately prior to
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the Effective Time, except as otherwise set forth in this Agreement and
subject to such adjustments, or elimination of intercompany items, as may
be appropriate in giving effect to the Merger in accordance with generally
accepted accounting principles.
(7) TAX TREATMENT. The parties hereto acknowledge that for federal
income tax purposes, it is intended that the Merger shall qualify as a
reorganization under the provisions of Sections 368(a)(1)(A) and
368(a)(2)(E) of the Code.
2. EFFECT OF THE MERGER ON THE STOCK OF THE CONSTITUENT CORPORATIONS;
EXCHANGE OF CERTIFICATES.
(a) EFFECT ON STOCK . As of the Effective Time, by virtue of the Merger and
without any action on the part of any holder of any stock of either of the
Constituent Corporations:
(1) CANCELLATION OF TREASURY STOCK. Each share of GO Common Stock that
is owned by GO or by any subsidiary of GO shall automatically be canceled
and retired and shall cease to exist, and no Merger Consideration (as
hereinafter defined) shall be delivered in exchange therefor.
(2) CONVERSION OF COMPANY STOCK. At and as of the Closing, (i) ROI
shall deliver to Network Commerce $1,000,000.00 and a non-interest bearing
promissory note in the form attached hereto as Schedule B (the "Note") in
the principal amount of $500,000.00 (the "Cash Consideration"), and (ii)
all of the issued and outstanding shares of GO Common Stock shall at the
Effective Time be converted into that number of shares of ROI Common Stock
with a value of $3,000,000.00 (the "Stock Consideration" and together with
the Cash Consideration, the "Merger Consideration") as determined by the
average of the closing sales prices of ROI Common Stock as reported on the
OTC:BB exchange for each of the five trading days immediately preceding the
Closing Date (the "Closing Stock Value"), using the previous closing price
if no trades occur on any of such trading days. The Note shall be due and
payable on August 31, 2001 if ROI fails to register the Stock Consideration
as required by Section 8 hereof. If ROI is required to pay the Note,
Network Commerce shall deliver to ROI that number of shares of ROI Common
Stock with a Closing Stock Value equal to the amount paid by ROI to Network
Commerce in payment of the Note together with a completed stock transfer
power executed by Network Commerce. The number of shares of ROI Common
Stock referred to throughout this Agreement shall be adjusted from time to
time to reflect any stock splits or stock dividends or reclassification of
capital structure that occur after the date of this Agreement. As of the
Effective Time, all such GO Common Stock shall no longer be outstanding and
shall automatically be canceled and retired and shall cease to exist, and
each holder of a certificate evidencing any GO Common Stock shall cease to
have any rights with respect thereto, except the right to receive the
Merger Consideration to be issued in consideration therefor upon surrender
of such certificate in accordance with Section 2(b) hereof. Notwithstanding
the foregoing, at the Effective Time (i) certificates representing the
number of shares of ROI Common Stock to be delivered at closing determined
by dividing $400,000.00 by the Closing Stock Value shall be held by the
escrow agent pursuant to and in accordance with the terms of the Escrow
Agreement in the form attached hereto as Schedule C and thereby made an
integral part hereof (the "Escrow Agreement"), to secure the accuracy of
the representations and warranties made by GO and Network Commerce pursuant
to Section 6 hereof.
(3) SUBSIDIARY STOCK. As of the Effective Time, all of the issued and
outstanding shares of Subsidiary common stock shall be converted into 1,000
shares of GO Common Stock.
(b) EXCHANGE OF CERTIFICATES. Upon the terms, subject to the conditions and
in reliance upon the representations and warranties contained herein and subject
to the Escrow Agreement, , upon the proper surrender at Closing to ROI by
Network Commerce of the certificate or certificates which immediately prior to
the Closing represented the outstanding shares of GO Common Stock (or
appropriate affidavits of loss) (the "Certificates") that are to be exchanged
pursuant to Section 2(a) for the Merger Consideration, Network Commerce shall be
entitled to receive in exchange therefor the Merger Consideration subject to
adjustment as described herein.
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3. CLOSING OBLIGATIONS.
(a) Closing Obligations of GO and Network Commerce. At the Closing, GO and
Network Commerce shall deliver to ROI the following:
(1) certificates representing all of the GO Common Stock, duly
endorsed (or accompanied by duly executed stock powers) (or appropriate
affidavits of loss) for transfer to ROI;
(2) a certificate, dated the Closing Date, stating that (i) the
representations and warranties of GO and Network Commerce contained in this
Agreement or any Schedule are true and correct in all material respects on
and as of the Closing Date, and (ii) GO and Network Commerce have performed
in all material respects all obligations required to be performed by them
under this Agreement at or prior to the Closing.
(3) an executed Escrow Agreement.
(4) an executed Proxy, the form of which is attached hereto as
Schedule D.
(b) Closing Obligations of ROI. At the Closing, ROI shall deliver to GO and
Network Commerce the following:
(1) the Merger Consideration in the form of (i) a certified check
payable to Network Commerce for $1,000,000.00 and the Note in the principal
amount of $500,000.00 and (ii) evidence that ROI has irrevocably instructed
its stock transfer agent to issue and deliver certificates representing the
Stock Consideration to Network Commerce and the Escrow Agent, as the case
may be;
(2) a certificate, dated the Closing Date, stating that (i) the
representations and warranties of ROI contained in this Agreement or any
Schedule are true and correct in all material respects on and as of the
Closing Date, (ii) ROI has performed in all material respects all
obligations required to be performed by it under this Agreement at or prior
to the Closing.
(3) an executed Escrow Agreement.
4. APPROVALS.
(a) This Agreement and the transactions contemplated herein have been duly
approved by the GO Board of Directors and by the sole shareholder of GO, Network
Commerce.
(b) The Network Commerce Board of Directors has approved this Agreement and
the transactions contemplated herein.
(c) This Agreement and the transactions contemplated herein have been duly
approved by the ROI Board of Directors and by ROI shareholders holding at least
65% of the outstanding shares of common stock of ROI.
(d) This Agreement and the transactions contemplated herein have been duly
approved by UniComp as required by the UniComp Merger Agreement.
(e) No other approvals, including, without limitation, the approval of
Network Commerce shareholders, are required for the Closing to occur.
5. REPRESENTATIONS AND WARRANTIES OF ROI. ROI represents and warrants to GO
and Network Commerce that the following representations and warranties are true
and correct in all material respects as of the Closing:
(a) ROI is a corporation duly organized, validly existing and in good
standing under the laws of the State of Delaware and has the corporate power and
authority and all licenses, permits, and authorizations necessary to carry on
the businesses in which it is engaged and to own and use the properties owned
and used by it.
(b) ROI has the requisite corporate power and authority to execute and
deliver this Agreement and the Escrow Agreement and to consummate the
transactions contemplated hereby and thereby. The execution and
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delivery of this Agreement and the Escrow Agreement by ROI and the consummation
by ROI of the transactions contemplated herein and therein have been duly
authorized by ROI's Board of Directors and the ROI shareholders, and no other
corporate or other proceedings on the part of ROI or the ROI shareholders are
necessary to authorize this Agreement and the Escrow Agreement or for ROI to
consummate the transactions contemplated hereunder and thereunder. This
Agreement has been duly and validly executed and delivered by ROI and
constitutes, and the Escrow Agreement when executed and delivered at Closing
will constitute, a valid and binding agreement of ROI, enforceable against ROI
in accordance with their terms, except as enforceability may be limited by
creditors' rights, bankruptcy, insolvency and general principles of equity.
(c) Neither the execution, delivery or performance of this Agreement or the
Escrow Agreement by ROI, nor the consummation by ROI of the transactions
contemplated hereunder or thereunder, will (i) conflict with or result in any
breach of any provisions of the Articles of Incorporation or Bylaws of ROI, (ii)
require a filing with, or a permit, authorization, consent or approval of, any
federal, state, local or foreign court, arbitral tribunal, administrative agency
or commission or other governmental or other regulatory authority or
administrative agency or commission, except for filings or approvals required
under applicable federal or state securities laws and the filing of the Articles
of Merger, (iii) result in a violation or breach of, or constitute (with or
without due notice or lapse of time or both) a default (or give rise to any
right of termination, cancellation or acceleration) under, or result in the
creation of any mortgage, pledge, security interest, encumbrance, lien, claim or
charge of any kind or right of others of whatever nature, on any property or
asset of ROI pursuant to any of the terms, conditions or provisions of any
contract, agreement, lease, intellectual property license, note, bond, mortgage,
indenture, license, or other instrument or obligation to which ROI is a party or
by which it is bound or (iv) to the best knowledge of ROI, violate any law,
order, writ, injunction, decree, statute, rule or regulation of any governmental
entity applicable to ROI or any of its properties or assets, except, in the case
of clauses (ii), (iii) and (iv), where failures to make such filing or obtain
such authorization, consent or approval would not have, or where such
violations, breaches or defaults or liens would not have, individually or in the
aggregate, a material adverse effect.
(d) The representations contained in this subsection (d) are complete and
accurate. Any and all securities issued by ROI have been issued in compliance
with Federal and State securities laws. ROI has filed with the Securities and
Exchange Commission all of the documents ("ROI SEC Documents") that it was
required to file through the date of this Agreement. As of their respective
dates, the ROI SEC Documents did not contain any untrue statements of a material
fact or omit to state any material fact required to be stated therein or
necessary to make the statements therein, in light of the circumstances under
which they were made, not misleading. True, accurate and complete copies of the
ROI SEC Documents are available for viewing via the SEC's ▇▇▇▇▇ filing system
maintained at the SEC's website: ▇▇▇.▇▇▇.▇▇▇. As of their respective dates, the
ROI SEC Documents complied in all material respects with the applicable
requirements of the Securities Act of 1933 and the Securities Exchange Act of
1934 and the rules and regulations promulgated under such statutes. The
financial statements contained in the ROI SEC Documents, together with the notes
thereto, have been prepared in accordance with generally accepted accounting
principles consistently followed throughout the periods indicated (except as may
be indicated in the notes thereto or, in the case of the unaudited financial
statements, as permitted by Form 10-Q), reflect all liabilities of ROI required
to be stated therein, including all contingent liabilities as of the end of each
period reflected therein, and present fairly the financial condition of ROI at
said date and the results of operations and cash flows of ROI for the periods
then ended.
(e) The Stock Consideration has been, or will be prior to the Effective
Time, duly authorized for issuance, and when issued and delivered to Network
Commerce pursuant to this Agreement, shall be validly issued, fully paid and
nonassessable free from any liens, encumbrances and pre-emptive or similar
rights.
(f) Pursuant to Section 8 hereof, ROI will register under the Securities
Act of 1933 the shares of ROI Common Stock to be delivered to Network Commerce
hereunder.
6. REPRESENTATIONS AND WARRANTIES OF GO AND NETWORK COMMERCE. GO and
Network Commerce respectively (and not jointly) represents and warrants to ROI
that the following representations and warranties pertaining to GO contained
herein are true and correct in all material respects as of the Closing:
(a) GO is a corporation duly organized, validly existing and in good
standing under the laws of the State of Washington and has the corporate power
and authority and all licenses, permits, and authorizations
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necessary to carry on the businesses in which it is engaged and to own and use
the properties owned and used by it. Complete and correct copies of GO's charter
documents and all amendments thereof to date, certified by the Secretary of
State of Washington, and the by-laws, as amended to date, certified by an
officer of GO will be delivered to ROI at the Closing.
(b) GO and Network Commerce have the requisite power and authority to
execute and deliver this Agreement and to consummate the transactions
contemplated hereby. The execution and delivery of this Agreement and the Escrow
Agreement and the consummation of the transactions contemplated herein and
therein have been duly authorized by GO's Board of Directors, Network Commerce,
and Network Commerce's Board of Directors and no other corporate or other
proceedings on the part of GO or Network Commerce are necessary to authorize
this Agreement and the Escrow Agreement or to consummate the transactions
contemplated hereunder and thereunder. This Agreement has been duly and validly
executed and delivered by GO and Network Commerce and constitutes a valid and
binding agreement of GO and Network Commerce, enforceable against GO and Network
Commerce in accordance with its terms, except as enforceability may be limited
by creditors' rights, bankruptcy, insolvency and general principles of equity.
(c) Neither the execution, delivery or performance of this Agreement or the
Escrow Agreement, nor the consummation of the transactions contemplated
hereunder or thereunder, will (i) conflict with or result in any breach of any
provisions of the Articles of Incorporation or Bylaws of GO, (ii) require a
filing with, or a permit, authorization, consent or approval of, any federal,
state, local or foreign court, arbitral tribunal, administrative agency or
commission or other governmental or other regulatory authority or administrative
agency or commission, except for filings or approvals required under applicable
federal or state securities laws and the filing of the Articles of Merger, (iii)
result in a violation or breach of, or constitute (with or without due notice or
lapse of time or both) a default (or give rise to any right of termination,
cancellation or acceleration) under, or result in the creation of any mortgage,
pledge, security interest, encumbrance, lien, claim or charge of any kind or
right of others of whatever nature, on any property or asset of GO pursuant to
any of the terms, conditions or provisions of any contract, agreement, lease,
intellectual property license, note, bond, mortgage, indenture, license, or
other instrument or obligation to which GO is a party or by which it is bound or
(iv) to the best knowledge of GO and Network Commerce, violate any law, order,
writ, injunction, decree, statute, rule or regulation of any governmental entity
applicable to GO or any of its properties or assets, except, in the case of
clauses (ii), (iii) and (iv), where failures to make such filing or obtain such
authorization, consent or approval would not have, or where such violations,
breaches or defaults or liens would not have, individually or in the aggregate,
a material adverse effect.
(d) Network Commerce is the sole shareholder of GO and is the owner of 100
shares of GO Common Stock and is entitled to transfer such GO Common Stock in
accordance herewith. There are no other securities of GO of any kind, whether
debt or equity. There are no outstanding options or warrants of any kind for the
purchase of shares or any other securities of GO, whether debt or equity.
(e) GO and Network Commerce have the requisite authority and capacity to
perform the Merger.
(f) Neither GO nor Network Commerce or any of their affiliates has employed
or used the services of any finder or broker in connection with the transactions
contemplated herein.
(g) Other than the GO Common Stock as shown in (d) above, Network Commerce
owns no other shares of common stock of GO and has not transferred or caused GO
to issue any shares of common stock of GO to anyone else.
(h) There is no material litigation pending or threatened against or
relating to Network Commerce that would affect the GO Common Stock or the
transactions contemplated by this Agreement.
(i) There is no effective order, decree or judgment of any court to which
Network Commerce is a party that would affect the GO Common Stock or the
transactions contemplated by this Agreement.
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(j) Network Commerce has good title to the GO Common Stock to be
transferred pursuant to this Agreement; such GO Common Stock is validly issued
and outstanding, and is paid for in full; and Network Commerce has full legal
right, power and authority to sell, assign and transfer the GO Common Stock to
ROI pursuant to this Agreement.
(k) Schedule E, which is attached hereto and thereby made an integral part
hereof, contains the unaudited financial statements of GO for the fiscal years
ended December 31, 1999, and 2000, and the four months ended April 30, 2001. All
such financial statements are accurate and complete in all material respects.
Except as disclosed on Schedule E, there is no material litigation pending or
threatened against GO and there are no delinquent taxes of any kind. Schedule
E-1, which is attached hereto and thereby made an integral part hereof, contains
a list of the intellectual property of GO (the "Intellectual Property")
indicating whether or not each such item of intellectual property is reflected
on the Balance Sheet. Except as noted on said Schedule E-1, (a) GO owns and
possesses all right, title and interest in and to, or has a valid license to
use, all of the Intellectual Property necessary for the operation of its
business as presently conducted; (b) no claim by any third party contesting the
validity, enforceability, use or ownership of any such Intellectual Property has
been made, is currently outstanding or, to the knowledge of GO, threatened, and,
to the knowledge of GO, there is no reasonable basis for any such claim; (c)
Neither GO nor Network Commerce nor any registered agent of GO has received any
notices of, nor is aware of any reasonable basis for an allegation of, any
infringement or misappropriation by, or conflict with, any third party with
respect to such Intellectual Property, nor has GO, Network Commerce or any
registered agent of GO received any claims of infringement or misappropriation
of or other conflict with any Intellectual Property rights of any third party;
and (d) GO has not infringed, misappropriated or otherwise violated any
Intellectual Property rights of any third parties, and GO is not aware of any
infringement, misappropriation or conflict which will occur as a result of the
continued operation of GO's business as presently conducted or as currently
proposed by GO to be conducted. Schedule E-2, which is attached hereto and
thereby made an integral part hereof, contains a list of tangible assets of GO
whether or not such assets are reflected on the Balance Sheet. Except as set
forth in Schedule E-2, none of the personal property listed therein is held
under any lease, security agreement, conditional sales contract or other title
retention or security arrangement. Except as noted on Schedule E-2, GO is the
owner of all such assets and has granted no rights of any kind related to the
assets to any other party. Except as noted on the Schedules, GO has good, valid
and marketable title to all of its property and assets (whether real, personal
or mixed and whether tangible or intangible) free and clear of all liens. GO
does not own any real property.
(l) To the knowledge of GO and Network Commerce, Schedule F attached hereto
contains a correct and complete list of every written contract, agreement,
relationship or commitment, and every oral contract, commitment, agreement or
relationship, to which GO is a party or by which GO is bound (collectively, the
"Material Contracts"). True and complete copies of all Material Contracts have
been furnished to ROI. To the knowledge of GO and Network Commerce, and except
as set forth on Schedule F, (a) all of the Material Contracts are in full force
and effect, (b) GO is not in default, and no event has occurred which with the
giving of notice or the passage of time or both would constitute a default by
GO, under any Material Contract or any other obligation owed by GO, and (c) no
event has occurred which with the giving of notice or the passage of time or
both would constitute such a default by any other party to any such Material
Contract or obligation. To the knowledge of GO and Network Commerce, GO does not
have any debts, liabilities or obligations of any nature (whether accrued,
absolute, contingent, direct, indirect, perfected, inchoate, unliquidated or
otherwise, whether due or to become due), except (a) liabilities and obligations
under Material Contracts or other liabilities and obligations described on the
attached Schedule F, (b) liabilities and obligations included in the financial
statements on Schedule E, and (c) liabilities and obligations which have arisen
after April 30, 2001, in the ordinary course of business, consistent with past
custom and practice (none of which is a liability resulting from breach of
contract, environmental matters, breach of warranty tort, infringement, claims
or lawsuits).
(m) Except as set forth on Schedule E, GO (i) has timely filed all Tax
Returns (as hereinafter defined) required to be filed by it for all periods
ending on or prior to the Closing, and such tax returns are true, correct and
complete in all material respects, (ii) has duly paid in full or made adequate
provision for the payment of all Taxes for all periods ending at or prior to the
Closing (whether or not shown on any Tax Return), and (iii) has not filed for an
extension to file any Tax Return not yet filed. No claim has been made by any
authority in a jurisdiction where GO does not file a Tax Return that GO is or
may be subject to tax in such jurisdiction. No waivers of statutes of limitation
have been given by or requested with respect to any Taxes of GO. Except as set
forth on Schedule E, GO has not agreed to any extension of time with respect to
any Tax deficiency. The liabilities and reserves for Taxes reflected in the GO
Financial Statements are adequate to cover all Taxes for all periods ending on
or prior to April 30, 2001, and there are no liens for Taxes upon any property
or asset of GO, except for liens for Taxes not yet due. Except as set forth on
Schedule E, GO has withheld and paid all Taxes required to have been withheld
and paid in
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connection with amounts paid or owing to any employee, independent contractor,
creditor, shareholder, or other third party.
(n) Any and all securities issued by GO have been issued in compliance with
Federal and State securities laws. Any and all filings required any governmental
authority have been filed by GO on a timely basis and such filings are true and
correct in all material respects.
(o) GO does not have, directly or indirectly, any ownership interest in any
other entity.
(p) Since April 30, 2001, GO has conducted its business only in the
ordinary course of business consistent with past custom and practice, and has
incurred no liabilities other than in the ordinary course of business consistent
with past custom and practice and there has been no material adverse change in
the assets, condition (financial or otherwise), operating results, employee or
customer relations, business activities or business prospects of GO. Without
limitation of the foregoing and except as described herein, since April 30,
2001, and through the Closing Date, GO has not and will not have:
(i) sold, assigned or transferred any of the assets of its business or
mortgaged, pledged or subjected them to any Lien, charge or other
restriction;
(ii) sold, assigned, transferred, abandoned or permitted to lapse any
licenses or permits which, individually or in the aggregate, are material
to its business or any portion thereof, or any of the intellectual property
or other intangible assets, or disclosed any material proprietary
confidential information to any person, granted any license or sublicense
of any rights under or with respect to any intellectual property;
(iii) made or granted any increase in, or amended or terminated, any
existing plan, program, policy or arrangement;
(iv) conducted its cash management customs and practices (including
the timing of collection of receivables and payment of payables and other
current liabilities) and maintained its books and records other than in the
usual and ordinary course of business consistent with past custom and
practice;
(v) made any loans or advances to, or guarantees for the benefit of,
or entered into any transaction with any employee, officer or director;
(vi) suffered any material loss, damage, destruction or casualty loss
to its business or waived any rights of material value, whether or not
covered by insurance and whether or not in the ordinary course of business;
(vii) declared, set aside or paid any dividend or distribution of cash
or other property to any stockholder or purchased, redeemed or otherwise
acquired any shares of its capital stock, or made any other payments to any
stockholder;
(viii) amended or authorized the amendment of its charter documents or
by-laws;
(ix) made any capital expenditures or commitments therefor in excess
of $10,000.00;
(x) paid any bonuses or compensation other than regular salary
payments, or increased the salaries, or paid any debt, to any stockholder,
director, officer, or employee, or entered into any employment, severance,
or similar contract with any director, officer, or employee;
(xi) changed its authorized or issued capital stock; granted any stock
option or right to purchase shares of its capital stock; issued any
security convertible into such capital stock; granted any registration
rights; purchased, redeemed retired, or otherwise acquired any shares of
any such capital stock; or declared or paid any dividend or other
distribution or payment in respect of shares of capital stock;
(xii) cancelled or waived any claims or rights with a value in excess
of $10,000.00;
8
(xiii) materially changed its accounting methods;
(xiv) entered into any other material transaction, other than in the
ordinary course of business consistent with past custom and practice; or
(xv) committed to any of the foregoing.
(q) GO has not at any time made or committed to make any payments for
illegal political contributions or made any bribes, kickback payments or other
illegal payments.
(r) Schedule G attached hereto contains a correct and complete list setting
forth (a) the name, job title and original date of employment for each employee
of GO, and (b) the names for all independent contractors who render services on
a regular basis to GO. Except as previously disclosed to ROI in writing or set
forth on Schedule G, no employee or independent contractor of GO has received
any bonus or increase in compensation and there has been no general increase in
the compensation or rate of compensation payable to any employees or independent
contractors of GO since April 30, 2001, nor has there been any change in any
Employee Benefit Plan or any promise by GO to employees or independent
contractors orally or in writing of any bonus or increase in compensation or a
general increase or change in any Employee Benefit Plan, whether or not legally
binding. GO is not a party to or obligated with respect to any (a) outstanding
contracts with current or former employees, agents, consultants, advisers,
salesmen, sales representatives, distributors, sales agents or dealers, or (b)
collective bargaining agreements or contracts with any labor union or other
representative of employees or any employee benefits provided for by any such
agreement. No strike, union organizational activity, allegation, charge or
complaint of employment discrimination or other similar occurrence has occurred
during GO's operation of its business, or is pending or, to the knowledge of GO
and Network Commerce, threatened against GO; nor does GO or Network Commerce
know any basis for any such allegation, charge, or complaint. GO has materially
complied with all applicable legal requirements relating to the employment of
labor, including provisions thereof relating to wages, hours, equal opportunity,
collective bargaining and the withholding and payment of social security,
unemployment and other Taxes. There are no administrative charges or court
complaints pending or, to the knowledge of GO and Network Commerce, threatened
against GO before the U.S. Equal Employment Opportunity Commission or any
Governmental Entity concerning alleged employment discrimination or any other
matters relating to the employment of labor; there is no unfair labor practice
charge or complaint relating to the business of GO pending or, to the knowledge
of Company and Network Commerce, threatened against GO before the National Labor
Relations Board or any similar state or local body; and, to the knowledge of GO
and Network Commerce, no such charges or complaints have been brought against
GO.
(s) Network Commerce will transition the Call Center off of various GO
systems within sixty (60) days. Network Commerce will pay directly or reimburse
GO for any and all costs GO incurs related to the Call Center and the
transition, including, but not limited to, long distance and other telephone
charges, utilities, and rent.
(t) Network Commerce waives all claims of whatever kind or nature, which it
has heretofore had, now has, or may in the future have whatsoever, in law or in
equity or otherwise against GO, including, without limitation, any amounts due
from GO as a result of intercompany transactions.
7. CONDITIONS PRECEDENT TO CLOSING. The parties covenant and agree that the
Closing of the Merger shall be subject to the fulfillment of each of the
following covenants and agreements, each of which constitutes a condition
precedent to the obligations of the parties hereunder:
(a) GO shall make available to ROI any and all data, records, and other
information as ROI, in its sole discretion, deems necessary to perform due
diligence prior to the Closing and said Closing shall be contingent upon ROI's
approval based on the results of said due diligence.
(b) At the Closing, Network Commerce and ROI shall enter into the Escrow
Agreement.
(c) At the Closing, Network Commerce will provide ROI with a letter from
its independent accounting firm agreeing to provide ROI, at no charge to ROI,
with copies of any and all audit workpapers related to GO for the years ending
December 31, 1999 and 2000.
9
(d) At the Closing, the officers and Board of Directors of GO shall submit
resignations that will be effective as of the Effective Time.
(e) At the Closing, Network Commerce and ROI shall enter into the Escrow
Agreement.
8. REGISTRATION/PUT AND CALL.
(a) REGISTRATION. ROI or UniComp shall prepare promptly and file with the
SEC as soon as practicable, but in no event later than June 30, 2001 (the
"FILING DATE"), a Registration Statement on such form of Registration Statement
as is then available to effect a registration of the Stock Consideration or the
stock to be exchanged for the Stock Consideration in accordance with the UniComp
Merger. ROI or UniComp shall cause such Registration Statement to become
effective as soon as practicable, but in no event later than August 31, 2001
(the "REGISTRATION DEADLINE") and shall maintain the effectiveness thereof with
the SEC until the earlier to occur of (i) the date Network Commerce has disposed
of all of the Stock Consideration, or (ii) two years from the effective date of
such registration statement. The Registration Statement (and each amendment or
supplement thereto, and each request for acceleration of effectiveness thereof)
shall be provided to (and subject to the approval of) Network Commerce a
reasonable amount of time prior to its filing or other submission sufficient to
permit Network Commerce to review and submit comments thereon.
(b) If (A) the Registration Statement required to be filed by ROI or
UniComp pursuant to Section 8(a) is not filed with the SEC prior to the Filing
Date or (B) such Registration Statement covering all of the registrable
securities is not declared effective by the SEC on or before the Registration
Deadline, then the Note shall become immediately due and payable to Network
Commerce on and as of the Filing Date or the Registration Deadline, as the case
may be.
(c) Sale/Put Provisions. If at any time after registration of the Stock
Consideration, Network Commerce desires to sell all or any portion of the Stock
Consideration, it shall notify ROI in writing, stating the shares of Stock
Consideration to be sold, and ROI shall have fifteen (15) days to arrange the
purchase of such shares. If ROI does not arrange such purchase within fifteen
(15) days, Network Commerce may sell such shares in the open market within the
next fifteen (15) days. If any of such shares are not sold within that period,
Network Commerce must again notify ROI before selling such shares. For a period
of eighteen (18) months following the Closing Date (the "Put/Call Period"),
provided that Network Commerce has complied with the terms of this subsection
(c), ROI hereby grants to Network Commerce the right to sell all or any portion
of Stock Consideration to ROI in the event that the closing sale price on the
OTC:BB (or such other electronic trading system or national stock exchange on
which the shares of ROI are then traded) is less than 67% of the Closing Stock
Value (the "Put"). Network Commerce may exercise the Put by delivering a
properly completed Notice of Exercise of Put Right (the "Put Notice") on or
prior to 5 pm Atlanta time, on the date such stock price is less than 67% of the
Closing Stock Value (the "Put Expiration Time"). The Put Notice shall state the
shares of Stock Consideration to be sold pursuant thereto. In the event that the
Put Notice is not so delivered, the Put shall expire as of the Put Expiration
Time. The Put Notice shall be transmitted by telecopy, confirmed as to receipt,
and shall be deemed effective as of the time when received by ROI. Upon exercise
of the Put, ROI shall pay to Network Commerce, within fifteen (15) days of
receipt of such exercise, a price per share equal to the Closing Stock Value for
each share of Stock Consideration specified in the Put Notice upon receipt of
certificates representing the shares of Stock Consideration being Put to ROI (if
such shares are represented by a certificate) at its address set forth in this
Agreement, together with a completed stock transfer power executed by Network
Commerce.
(d) Call Provisions. During the Put/Call Period, Network Commerce herby
grants ROI the option to purchase all (but not less than all) of the Stock
Consideration (the "Call") in the event that the closing sale price on the
OTC:BB (or such other electronic trading system or national stock exchange on
which the shares of ROI are then traded) is more than 133% of the Closing Stock
Value. Upon exercise of the Call, ROI shall pay to Network Commerce, within
fifteen (15) days of receipt of such exercise, a price per share equal to the
Closing Stock Value for each share of Stock Consideration specified in the Call
Notice (as defined below) and Network Commerce shall deliver to ROI certificates
representing the shares of Stock Consideration being Called by
10
ROI (if such shares are represented by a certificate) at its address set forth
in this Agreement, together with a completed stock transfer power executed by
Network Commerce. ROI may exercise the Call by delivering a properly completed
Notice of Exercise of Call Right (the "Call Notice") on or prior to 5 pm Seattle
time, on the date such stock price has exceeded 133% of the Closing Stock Value
(the "Call Expiration Time"). In the event that the Call Notice is not so
delivered, the Call shall expire as of the Call Expiration Time. The Call Notice
shall be transmitted by telecopy, confirmed as to receipt, and shall be deemed
effective as of the time when received by Network Commerce. Notwithstanding
anything to the contrary, Network Commerce shall not be restricted from selling
shares representing the Stock Consideration to any third party at any time prior
to receipt of the Call Notice.
(e) Subsequent Merger or Similar Transaction. In the event that ROI closes
a merger or other similar acquisition transaction with any third party,
including, but not limited to the announced transaction with UniComp Inc., then,
as a condition to the closing under any such transaction, the surviving entity
or parent corporation in such transaction (the "Surviving Entity") shall
specifically assume ROI's obligations under this Section 8 and any shares of
capital stock of the surviving or parent corporation following such merger
exchanged or substituted for the Stock Consideration shall be deemed to be the
Stock Consideration for purposes of applying this Section 8 to the Surviving
Entity.
9. ASSIGNMENT. Except as permitted herein, none of the parties to this
Agreement may assign its respective rights and obligations hereunder without the
prior written consent of the other parties hereto, which consent shall not be
unreasonably withheld.
10. TERMINOLOGY AND SECTION HEADINGS. All personal pronouns in this
Agreement, whether used in the masculine, feminine or neuter gender shall
include all other genders; the singular shall include the plural and the plural
shall include the singular. Titles of sections are for convenience only, and
neither limit nor amplify the provisions of this Agreement.
11. BINDING EFFECT. Subject to the restrictions on assignments set forth in
this Agreement, this Agreement and the rights of the parties hereunder shall
inure to the benefit of and be binding upon the parties and their respective
legal representatives, successors and assigns. Whenever in this Agreement a
reference is made to one of the parties, such reference shall be deemed to
include a reference to the legal representatives, successors and assigns of such
party.
12. SEVERABILITY. This Agreement shall be governed by and construed in
accordance with, and only to the extent permitted by, all applicable laws,
ordinances, rules and regulations. If any provision of this Agreement, or the
application thereof to any person or circumstance, shall, for any reason and to
any extent, be invalid or unenforceable, the remainder of this Agreement and the
application of such provision to other persons or circumstances shall not be
affected thereby, but rather shall be enforced to the greatest extent permitted
by law.
13. INTERPRETATION. In construing the terms and provisions of this
Agreement, it is understood and agreed that no court or other interpretive body
shall apply a presumption that the terms of this Agreement shall be more
strictly or particularly construed against one party hereto by reason of the
fact that said party, either directly or through its agents, prepared this
Agreement, it being understood and agreed that all parties, either directly or
through their agents, have fully participated in the preparation hereof.
14. GOVERNING LAW. This Agreement shall be governed by and construed in
accordance with the laws of the State of Georgia, excluding any conflict of law
provisions. Any dispute or controversy arising out of or relating to this
agreement, (i) if brought by Network Commerce shall be heard by the state courts
of King County, Washington or the U.S. District Court for the Western District
of Washington, and (ii) if brought by ROI or UniComp, shall be heard by the
state courts of ▇▇▇▇ County, Georgia or the federal courts for the Northern
District of Georgia, and the parties hereby consent to the jurisdiction of such
courts and waive any objections based on inconvenient forum.
15. PUBLIC ANNOUNCEMENTS. Any news release or other public announcement
related to this Agreement or the transactions contemplated herein shall be
approved in advance in writing by the Chief Executive Officer of Network
Commerce and the President of ROI.
16. ENTIRE AGREEMENT. Except as specifically provided in this Agreement to
the contrary, this Agreement constitutes the entire agreement between the
parties hereto regarding the subject matter hereof, and no modification hereof
shall be effective unless made in a supplemental agreement in writing executed
by all of the parties hereto.
11
IN WITNESS WHEREOF, the parties hereto have caused this instrument to be
executed in multiple counterparts, each of which shall be deemed an original,
with their respective seals affixed thereto all as of the date and year first
above written.
RETURN ON INVESTMENT CORPORATION
Attest: By:
---------------------------- --------------------------------
Its: Its:
---------------------------- -------------------------------
UNICOMP, INC.
Attest: By:
---------------------------- --------------------------------
Its: Its:
---------------------------- -------------------------------
GO SOFTWARE, INC.
Attest: By:
---------------------------- --------------------------------
Its: Its:
---------------------------- -------------------------------
NETWORK COMMERCE INC.
Attest: By:
---------------------------- --------------------------------
Its: Its:
---------------------------- -------------------------------
GO ACQUISITION, INC.
Attest: By:
---------------------------- --------------------------------
Its: Its:
---------------------------- -------------------------------
12
SCHEDULE A
----------
CALL CENTER ASSETS
------------------
--------------------------------------------------------------------------------
B2B NWKC ASSETS
--------------------------------------------------------------------------------
BUILDING B
--------------------------------------------------------------------------------
QTY DESCRIPTION QTY DESCRIPTION
--- ----------- --- -----------
1 3-draw filing cabinet 1 Large Garbage Can
2 APC UPS'es 1 Lexmark Optra T612 Printer
1 Canon Copier 3 Metal Bookshelves
36 Chairs - No Arms 1 Microwave
28 Chairs with Arms 3 Office Desks
1 Cisco 100mb 24 port switch 1 Paper Shredder
2 Cisco 24 port hubs 1 Refrigerator
1 Coffee Machine 2 Rolling Meeting Room Tables
30 Cubicles 1 Time Clock
1 Double Desk for Double Office 7 Training Room Tables
1 Intellifax 1270 Fax Machine
--------------------------------------------------------------------------------
13
NETWORK COMMERCE EQUIPMENT
--------------------------
BUILDING CID MGHZ RAM HD1 HD2 MANUF. MODEL LT0/DT1 MONITOR SIZE PERIPHERAL(S)
-------- --- ---- --- --- --- ------ ----- ------- ------------ -------------
B - B2B NWKC 700 128 10G Compaq DESKTOP ▇▇
▇ - ▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇▇ 700 128 10G Compaq DESKTOP ▇▇ ▇▇▇▇▇▇▇▇
▇ - ▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇▇ 667 196 14G Dell Optiplex DESKTOP 17
B - B2B NWKC MellisaWood 667 128 14G Dell Optiplex DESKTOP 17
B - B2B NWKC ▇▇▇▇▇▇▇ ▇▇▇▇ 667 128 14G Dell Optiplex DESKTOP 17
B - B2B NWKC ▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇▇ 667 128 14G Dell Optiplex DESKTOP 17
B - B2B NWKC ▇▇▇▇▇▇ H 732 128 10G Dell Optiplex DESKTOP 17
B - B2B NWKC Training - A 733 128 14G Dell Optiplex DESKTOP 17
B - B2B NWKC Training - E 733 128 14G Dell Optiplex DESKTOP 17
B - B2B NWKC Training - Bad 733 128 14G Dell Optiplex DESKTOP None
B - B2B NWKC Training - G 733 128 14G Dell Optiplex DESKTOP 17
B - B2B NWKC Training - ? 733 128 14G Dell Optiplex DESKTOP 17
B - B2B NWKC Training - Bad 733 128 14G Dell Optiplex DESKTOP 17
B - B2B NWKC ▇▇▇▇▇ ▇▇▇▇▇▇▇ 667 128 14G Dell Optiplex DESKTOP 17 Speakers
B - B2B NWKC ▇▇▇▇▇ ▇▇▇▇▇ 500 128 10G Dell Dimension DESKTOP 17 Speakers
B - B2B NWKC ▇▇▇▇ ▇▇▇▇▇▇▇ 667 128 14G Dell Optiplex DESKTOP ▇▇ ▇▇▇▇▇▇▇▇
▇ - ▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇▇▇▇ 667 194 14G Dell Optiplex DESKTOP ▇▇ ▇▇▇▇▇▇▇▇
▇ - ▇▇▇ ▇▇▇▇ ▇▇▇▇▇ 732 128 10G Dell Optiplex DESKTOP 17 Speakers
B - B2B NWKC ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ 733 128 10G Dell Optiplex DESKTOP 17 Speakers
B - B2B NWKC 500 128 10G HP Vectra VL DESKTOP 17
14
SCHEDULE B
----------
TO AGREEMENT AND PLAN OF MERGER AND EXCHANGE OF STOCK
-----------------------------------------------------
PROMISSORY NOTE
---------------
May ___, 2001
RETURN ON INVESTMENT CORPORATION, a Delaware corporation (the "Payor"), for
value received, promises to pay, subject to the terms and conditions of this
note (the "Note"), to NETWORK COMMERCE INC., a Washington corporation (the
"Holder"), the principal sum of Five Hundred Thousand and 00/100 ($500,000.00)
Dollars. This Note shall not bear interest prior to maturity.
This Note is issued by the Payor pursuant to the Agreement and Plan of Merger
and Exchange of Stock, dated as of May ___, 2001 entered into among Payor,
Holder, UniComp, Inc. and Go Software, Inc. (the "Merger Agreement").
1. PAYMENTS.
1.1. The principal amount of this Note shall become fully due and payable
on August 31, 2001 if Payor fails to register the Stock Consideration (as
defined in Section 2 of the Merger Agreement) as required by Sections 8(a) and
8(b) of the Merger Agreement (the "Maturity Date").
1.2. Payment shall be made to Holder at ▇▇▇ ▇▇▇ ▇▇▇. ▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇,
▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇, or such other place as may be specified by the Holder
of this Note in a written notice to the Payor at least ten (10) days before the
Maturity Date.
1.3. Payment shall be made in lawful money of the United States of America
by mailing the Payor's good check in the proper amount to Holder on the due date
of such payment or otherwise transferring funds for receipt by Holder on the due
date of such payment. Payor may prepay this Note without penalty at any time.
1.4 Immediately upon receipt of payment of this Note, Holder shall deliver
to Payor that number of shares of Payor's Common Stock with a Closing Stock
Value (as defined in the Merger Agreement) equal to the amount paid by Payor to
Holder in payment of this Note together with a completed stock transfer power
executed by Holder as specifed in Section 2(a)(2) of the Merger Agreement.
2. CANCELLATION OF NOTE.
Upon satisfaction of the conditions set forth in Section 8 of the Merger
Agreement, or payment in full of all outstanding obligations under this Note,
the Payor's obligations in respect of payment of this Note shall terminate and
the Holder shall surrender this Note to the Payor.
3. EVENTS OF DEFAULT. In the event that the Payor:
(a) defaults for more than three (3) days in making the payment required
to be made on this Note; or
(b) commences any case, proceeding or other action (A) under any existing
or future law of any jurisdiction, domestic or foreign, relating to
bankruptcy, insolvency, reorganization or relief of debtors, seeking
to have an order for relief entered with respect to it, or seeking to
adjudicate it a bankrupt or insolvent, or seeking reorganization,
arrangement, composition or other relief with respect to it or its
debts or (B) seeking appointment of a
15
receiver, trustee, custodian or other similar official for it or for
all or any substantial part of its assets, or shall make a general
assignment for the benefit of its creditor; or
(c) is the debtor named in any other case, proceeding or other action of a
nature referred to in clause (b) above which (A) results in the entry
of an order for relief or any such adjudication or appointment or (B)
remains undismissed, undischarged or unbonded for a period of sixty
(60) days; or (C) takes any action in furtherance of, or indicating
its consent to, approval of, or acquiescence in, any of the facts set
forth above or in subsection (b); or (D) shall generally not, or shall
be unable to, or shall admit in writing its inability to, pay its
debts as they become due;
then, in any such event (an "Event of Default"), and at any time thereafter, if
such Event of Default shall then be continuing, this Note shall bear interest at
the rate of 18% per annum and the Holder may, by written notice to the Payor,
declare this Note due and payable, whereupon this Note shall be due and payable
without presentment, demand, protest or further notice of any kind, all of which
are hereby expressly waived.
5. MISCELLANEOUS.
5.1 In the event that an Event of Default has occurred and is continuing,
the Holder of this Note shall be reimbursed by the Payor for the payment of its
reasonable attorneys' fees actually paid relating to the enforcement of any of
the provisions of this Note.
5.2 This Note shall be construed and controlled by the laws of the State of
Washington without regard to the principles of conflicts of laws. In the event
any action shall be brought by either party to this Note, such action at the
option of the Holder hereof, shall be brought in the Superior Court of the State
of Washington in and for King County and Payor irrevocably consents to the
jurisdiction of such court as to all such actions.
5.3 The provisions hereof shall inure to the benefit of, and be binding
upon, the successors, assigns, heirs, executors and administrators of the
parties hereto.
5.4 This Note may be amended or waived only by the signed written consent
of the party against who such amendment or waiver is to be enforced.
IN WITNESS WHEREOF, the Payor has executed this Note as of the day and year
first above written.
RETURN ON INVESTMENT CORPORATION
By:________________________________
Name:______________________________
Title:_____________________________
16
SCHEDULE C
----------
TO AGREEMENT AND PLAN OF MERGER AND EXCHANGE OF STOCK
-----------------------------------------------------
ESCROW AGREEMENT
----------------
THIS ESCROW AGREEMENT ("Agreement") is made and entered into as of the ____
day of _________, 2001, by and among RETURN ON INVESTMENT CORPORATION, a
corporation organized and existing under the laws of the State of Delaware
("ROI"), whose address is ▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇., ▇▇▇▇▇ ▇▇▇, ▇▇▇▇▇▇▇▇, ▇▇
▇▇▇▇▇, NETWORK COMMERCE INC., a corporation organized and existing under the
laws of the State of Washington ("Network Commerce"), whose address is ▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇ ("Shareholder"), and
_________________, a ________________, whose address is
____________________________ ("Escrow Agent").
W I T N E S S E T H:
-------------------
WHEREAS, ROI and the Shareholder have entered into that certain Agreement
and Plan of Merger and Exchange of Stock dated _____________________ (the
"Merger Agreement") under the terms of which the Shareholder received a total of
_________ shares (subject to adjustment as defined therein and herein) of the
$.01 par value common stock of ROI as restricted in accordance with securities
laws, ROI's bylaws, and this Agreement (the "ROI Common Stock"); and
WHEREAS, the parties agree that a portion of the ROI Common Stock shall be
held in escrow and released to the Shareholder in accordance with the terms,
provisions, conditions and limitations set forth in this Agreement;
NOW, THEREFORE, in consideration of the premises, the mutual covenants and
agreements set forth herein, and for other good and valuable consideration, the
receipt, adequacy and sufficiency of which are hereby acknowledged by the
parties hereto, the parties hereto do hereby mutually covenant and agree as
follows:
1. ESCROW. The number of shares of ROI Common Stock referred to throughout
this Agreement shall be adjusted from time to time to reflect any stock splits
or stock dividends or reclassification of capital structure. Of the total of
_________ shares of ROI Common Stock issued to the Shareholder, _________ shares
owned by the Shareholder (the "Escrowed Shares") shall be held in escrow by
Escrow Agent to be released according to the terms of Section 2 of this
Agreement. Escrow Agent agrees to hold the same and to perform the duties
required hereunder.
2. RELEASE OF SHARES. Within 60 days after the first anniversary date of
this Agreement, Escrow Agent shall release the Escrowed Shares reduced by the
number of shares at the rate of the Closing Stock Value (as defined in the
Merger Agreement) required to compensate ROI for its actual costs related to the
representations and warranties of GO and Network Commerce contained in the
Merger Agreement or any Schedule that were untrue or incorrect in any material
respect on and as of the Closing Date. For example, if the actual costs are
$70,000.00 and the Closing Stock Value is $3.50, the shares released would be
reduced by 20,000 shares ($70,000.00 divided by $3.50). ROI shall be not be
entitled to receive any indemnification payment in ROI Common Stock with respect
to any claims for indemnification for breach of the representations and
warranties made by GO and Network Commerce pursuant to Section 6 of the Merger
Agreement until the aggregate losses for which ROI would be otherwise entitled
to receive indemnification exceed $25,000 (the "THRESHOLD"); provided, however,
that once such aggregate losses exceed the Threshold, ROI shall be entitled to
indemnification for the aggregate amount of all losses without regard to the
Threshold. The Escrowed Shares shall be adjusted from time to time to reflect
any splits or stock dividends or reclassification of capital structure of ROI.
The balance of any Escrowed Shares that are not released shall be repurchased
from the Shareholder by ROI at par value and returned to the Treasury of ROI. At
such time as Escrow Agent receives written notice from ROI (meaning a notice
signed by the President and the Chairman of the Board of Directors of ROI,
referred to herein as the "ROI Notice") setting forth the number of Escrowed
Shares to be delivered to the Shareholder and returned to ROI, Escrow Agent
shall deliver such Escrowed Shares as directed in the written notice. ROI agrees
to send to the Shareholder a duplicate copy of any written notice sent to the
Escrow Agent.
17
3. RIGHTS AND PRIVILEGES. Except for the proxy granted by the Shareholder
under the terms of the Merger Agreement, the Shareholder shall enjoy all of the
rights and privileges related to the Escrowed Shares unless and until any of the
Escrowed Shares are returned to the Treasury as described in Section 2 hereof,
including, but not limited to, any and all voting rights and dividends,
provided, however, that any Escrowed Shares that have not yet been released to
the Shareholder and any rights or privileges associated therewith may not be
sold, transferred, or pledged.
4. INDEMNITY. So long as Escrow Agent has met its standard of care provided
for in Section 6 hereof, ROI and the Shareholder agree to indemnify and hold
harmless Escrow Agent from any loss, damage, liability or claim to which Escrow
Agent may become subject as a result of performing its duties as Escrow Agent
under this Agreement
5. PERMITTED RELIANCE. Escrow Agent may rely and shall be fully protected
in acting or refraining from acting upon any notice, advice, schedule, report,
certificate, direction or other document believed by Escrow Agent in good faith
to be genuine and to have been signed or presented by the proper party or
parties in accordance with the provisions hereof. Escrow Agent may consult with
counsel, and the written advice or opinion of counsel shall be full and complete
authorization and protection in respect of any action taken or omitted by it
hereunder in good faith and in accordance with such advice or opinion of
counsel.
6. STANDARD OF CARE. Escrow Agent shall not be liable for any mistake of
fact or of law or any error of judgment, or for any act or omission, except as a
result of Escrow Agent's bad faith or gross negligence.
7. DUTIES. Escrow Agent shall have no duties or responsibilities except
those expressly set forth herein. Escrow Agent shall not be bound by any waiver,
modification, amendment, termination, cancellation or revision of this
Agreement, unless in writing and signed by the other parties hereto, and, if
Escrow Agent's duties as Escrow Agent hereunder are affected, unless Escrow
Agent shall have given its prior written consent thereto. Escrow Agent shall not
be bound by any assignment by the parties hereto of their rights hereunder
unless Escrow Agent shall have received written notice thereof from the
assignor. Escrow Agent shall perform any acts ordered by a court of competent
jurisdiction.
8. DIRECTION TO ESCROW AGENT. If Escrow Agent shall be uncertain as to its
duties or rights hereunder, shall receive any notice, advice, schedule, report,
certificate, direction or other document from any other party to this Agreement
with respect to the Escrowed Shares that, in Escrow Agent's opinion, is in
conflict with any of the provisions of this Agreement, or shall be advised that
a dispute has arisen with respect to the Escrowed Shares, Escrow Agent shall be
entitled, without liability to anyone, to refrain from taking any action other
than to use Escrow Agent's best efforts to keep safely the Escrowed Shares until
Escrow Agent shall be directed otherwise in writing by an order, decree or
judgment of a court of competent jurisdiction that has been finally affirmed on
appeal or that by lapse of time or otherwise is no longer subject to appeal or
by mutual agreement of ROI and the Shareholder evidenced in writing to Escrow
Agent with direction; but Escrow Agent shall be under no duty to institute or
defend any proceeding.
9. RESIGNATION OF ESCROW AGENT. Should, at anytime, any attempt be made to
modify this Agreement in a manner that would increase the duties and
responsibilities of Escrow Agent, or to modify this Agreement in any manner in
which Escrow Agent deems undesirable, Escrow Agent may resign by notifying ROI
and the Shareholder. In the event that Escrow Agent so elects to resign, until
(i) a successor escrow agent is appointed and has agreed to act as escrow agent
hereunder, or (ii) thirty (30) days following notice from Escrow Agent that is
has elected to resign, whichever occurs earlier, Escrow Agent's only remaining
obligations will be to perform its duties hereunder in accordance with the terms
of this Agreement.
10. SUCCESSOR ESCROW AGENT. If Escrow Agent shall be unable to act or shall
resign as Escrow Agent hereunder, ROI and the Shareholder shall appoint a
successor escrow agent (the "Successor"). If the Successor is for any reason
unable or unwilling to become successor escrow agent and to accept the Escrowed
Shares, the parties hereto shall promptly appoint another successor escrow
agent. If no successor escrow agent has been appointed and has accepted the
Escrowed Shares within thirty (30) days after the Escrow Agent has notified ROI
and the Shareholder that it has elected to resign, Escrow Agent may petition any
court of competent jurisdiction for the appointment of a successor escrow agent.
Such court may thereupon appoint a successor escrow agent after Escrow Agent
deposits the Escrowed Shares into court and after such notice, if any, to the
other parties hereto as the court may deem proper and prescribe. This Agreement
shall not otherwise be assignable by Escrow Agent without the prior written
consent of the other parties hereto.
18
11. INTERPLEADER. The parties to this Agreement authorize Escrow Agent to
interplead all interested parties in any court of competent jurisdiction and to
deposit the Escrowed Shares with the clerk of that court.
12. TERMINATION OF DUTIES. Escrow Agent's responsibilities and liabilities
hereunder, except as a result of Escrow Agent's own bad faith or gross
negligence, will terminate upon the disbursement and delivery of the Escrowed
Shares as provided in this Agreement, or until Escrow Agent deposits the
Escrowed Shares in the registry of the court, resigns or otherwise ceases to act
as Escrow Agent, whichever occurs earlier.
13. FURTHER ACTION. At any time and from time to time the parties to this
Agreement agree, at their expense, to take such actions and to execute and
deliver such documents as may be reasonably necessary to effectuate the purposes
of this Agreement.
14. NOTICES. Any notice, request or other communication required or
permitted hereunder shall be in writing and shall be deemed to have been duly
given if sent by registered or certified mail, return receipt requested, postage
prepaid, to the parties at their respective addresses set forth above, or to
such other addresses as may be furnished in writing from time to time by any
party hereto to the other parties.
15. ASSIGNMENT. Except as permitted herein, none of the parties to this
Agreement may assign its respective rights and obligations hereunder without the
prior written consent of the other parties hereto.
16. TERMINOLOGY AND SECTION HEADINGS. All personal pronouns in this
Agreement, whether used in the masculine, feminine or neuter gender shall
include all other genders; the singular shall include the plural and the plural
shall include the singular. Titles of Paragraphs are for convenience only, and
neither limit nor amplify the provisions of this Agreement.
17. BINDING EFFECT. Subject to the restrictions on assignments set forth in
this Agreement, this Agreement and the rights of the parties hereunder shall
inure to the benefit of and be binding upon the parties and their respective
legal representatives, successors and assigns. Whenever in this Agreement a
reference is made to one of the parties, such reference shall be deemed to
include a reference to the legal representatives, heirs, successors and assigns
of such party.
18. SEVERABILITY. This Agreement shall be governed by and construed in
accordance with, and only to the extent permitted by, all applicable laws,
ordinances, rules and regulations. If any provision of this Agreement, or the
application thereof to any person or circumstance, shall, for any reason and to
any extent, be invalid or unenforceable, the remainder of this Agreement and the
application of such provision to other persons or circumstances shall not be
affected thereby, but rather shall be enforced to the greatest extent permitted
by law.
19. INTERPRETATION. In construing the terms and provisions of this
Agreement, it is understood and agreed that no court or other interpretive body
shall apply a presumption that the terms of this Agreement shall be more
strictly or particularly construed against one party hereto by reason of the
fact that said party, either directly or through its agents, prepared this
Agreement, it being understood and agreed that all parties, either directly or
through their agents, have fully participated in the preparation hereof.
20. GOVERNING LAW. This Agreement shall be governed by and construed in
accordance with the laws of the State of Georgia.
21. ENTIRE AGREEMENT. Except as specifically provided in this Agreement to
the contrary, this Agreement constitutes the entire agreement between the
parties hereto regarding the subject matter hereof, and no modification hereof
shall be effective unless made a supplemental agreement in writing executed by
all of the parties hereto.
IN WITNESS WHEREOF, the parties hereto have caused this instrument to be
executed in multiple counterparts, each of which shall be deemed an original,
with their respective seals affixed thereto all as of the date and year first
above written.
RETURN ON INVESTMENT CORPORATION
Attest: By:
----------------------------- --------------------------------
Its: Its:
-------------------------------- -------------------------------
NETWORK COMMERCE, INC.
Attest: By:
----------------------------- --------------------------------
Its: Its:
-------------------------------- -------------------------------
Attest: By:
----------------------------- --------------------------------
Its: Its:
-------------------------------- -------------------------------
19
SCHEDULE D
----------
TO AGREEMENT AND PLAN OF MERGER AND EXCHANGE OF STOCK
-----------------------------------------------------
PROXY
-----
To the Board of Directors of RETURN ON INVESTMENT CORPORATION (the "Company"):
The undersigned does hereby constitute and appoint the Chairman of the Board of
Directors of the Company and his nominees, or the successors and survivors of
them, its true and lawful attorneys, for it and in its name, place and stead,
with full power of substitution, to vote as its proxy all shares (the "Shares")
now or hereafter owned by the undersigned in the Company from the date hereof
through October 31, 2001, at any and all meetings, regular or special, of the
shareholders of the Company, or any adjournments thereof, which may be held
during said period of this proxy, giving and granting to its said attorneys all
the powers the undersigned would possess if personally represented. Each of the
said attorneys of the undersigned may substitute for himself as such attorney
any other person, and revoke such substitution, and any substitute so appointed
shall have all the rights, powers and authority that the person appointing him
would have possessed but for such substitution. This Proxy shall expire at
midnight on October 31, 2001. The undersigned hereby expressly revokes any and
all proxies heretofore given or executed by the undersigned with respect to the
shares represented by this Proxy and, filing this Proxy with the Secretary of
the Company gives notice of such revocation.
Date:___________________
NETWORK COMMERCE, INC.
Attest: By:
----------------------------- --------------------------------
Its: Its:
-------------------------------- -------------------------------
[CORPORATE SEAL]
20
SCHEDULE E
NETWORK COMMERCE INC
DIVISION: GO SOFTWARE
BALANCE SHEET
12/31/99 12/31/00 4/30/01
-------- -------- -------
ASSETS
CURRENT ASSETS:
Cash and cash equivalents $ 185,066 ($ 9,516) $ 11,189
Intercompany Elimination ($ 237,523) ($ 2,560,772) ($ 2,781,355)
Ubarter Dollars $ 1,596 $ 1,596
Accounts receivable, net $ 344,934 $ 419,779 $ 546,900
Allowance for Returns and Doubtful Accounts ($ 68,612) ($ 60,816) ($ 16,223)
----------------------------------------------
Accounts Receivable, net $ 276,322 $ 360,559 $ 532,273
Inventory, net $ 4,643 $ 31,107 $ 23,480
Refundable Income Taxes $ 0 $ 0 $ 0
Prepaid Expenses and other current assets $ 31,415 $ 15,254 $ 25,913
----------------------------------------------
Total current assets $ 259,923 ($ 2,163,368) ($ 2,188,499)
PROPERTY AND EQUIPMENT, AT COST:
Property and equipment, net $ 345,540 $ 481,144 $ 478,350
Accumulated Depreciation ($ 103,831) ($ 233,890) ($ 216,967)
----------------------------------------------
Net property and equipment $ 241,709 $ 247,254 $ 261,383
Capitalized Software Costs $ 27,683 $ 27,683 $ 31,283
Accumulated Amortization ($ 7,690) ($ 17,686) ($ 21,062)
Deferred Tax Asset $ 0 $ 0 $ 0
----------------------------------------------
Total assets $ 521,625 ($ 1,906,117) ($ 1,916,896)
==============================================
LIABILITIES AND STOCKHOLDER'S EQUITY
CURRENT LIABILITIES:
Trade accounts payable $ 31,389 $ 19,809 $ 38,698
Payroll Taxes Payable $ 49,385 $ 30 $ 14
Accrued Liabilities $ 91,615 $ 71,369 $ 63,111
Deferred Revenues $ 103,360 $ 136,226 $ 254,534
----------------------------------------------
Total current liabilities $ 275,749 $ 227,434 $ 356,358
Deferred tax liability $ 0 $ 0 $ 0
Total liabilities $ 275,749 $ 227,434 $ 356,358
STOCKHOLDER'S EQUITY:
Intercompany Equity Elimination $ 801,734 $ 801,734 $ 801,734
Current Income ($ 141,794) ($ 2,379,426) ($ 139,703)
Retained Earnings ($ 414,064) ($ 555,858) ($ 2,935,284)
----------------------------------------------
Total stockholder's equity $ 245,876 ($ 2,133,551) ($ 2,273,253)
----------------------------------------------
Total liabilities and stockholder's equity $ 521,625 ($ 1,906,117) ($ 1,916,896)
21
GO SOFTWARE, INC. - 2001 MONTHLY INCOME STATEMENT
JANUARY FEBRUARY MARCH APRIL YTD
Revenue:
Gross Sales 303,284.60 336,341.47 362,000.21 370,107.55 $ 1,371,734
Returns and Allowances (1,406.00) (3,228.95) (2,479.95) (2,476.95) $ (9,592)
-------------------------------------------------------------------------------
Net Sales 301,878.60 333,112.52 359,520.26 367,630.60 $ 1,362,142
Cost of Sales 15,976.96 16,807.20 14,268.28 28,238.42 $ 75,291
-------------------------------------------------------------------------------
Gross Profit 285,901.64 316,305.32 345,251.98 339,392.18 $ 1,286,851
Operating Expenses:
Salaries 190,427.70 173,923.19 186,125.17 176,407.39 $ 726,883
Group Health Insurance 11,369.16 9,744.40 9,744.40 9,744.40 $ 40,602
Payroll Taxes 15,256.72 14,919.25 12,308.54 16,662.40 $ 59,147
Temporary Services 17,166.26 13,552.55 17,202.72 19,671.65 $ 67,593
Office Supplies 1,376.00 1,923.69 2,733.53 2,010.11 $ 8,043
Equipment Rental 1,201.18 1,447.43 1,447.43 1,383.30 $ 5,479
Business Travel 2,923.28 173.85 3,217.30 1,342.26 $ 7,657
Recruiting -- -- -- 284.00 $ 284
Training 125.65 1,955.15 5,304.91 3,419.54 $ 10,805
Miscellaneous (220.00) -- 50.00 -- $ (170)
Taxes & Licenses 30.00 1,286.00 1,420.00 735.00 $ 3,471
Printing Expense -- -- 466.86 76.02 $ 543
Cleaning 731.82 731.82 731.82 731.82 $ 2,927
Advertising 5,685.87 6,358.49 10,589.00 -- $ 22,633
Marketing 1,976.53 2,157.54 6,400.00 4,683.49 $ 15,218
Trade Show 113.85 246.72 4,800.37 10,387.02 $ 15,548
Rent 10,664.01 10,973.27 10,973.27 10,973.27 $ 43,584
Repair & Maintenance 4,291.03 2,236.05 2,469.28 2,323.63 $ 11,320
Electricity 1,878.81 1,398.54 1,413.91 1,324.50 $ 6,016
Telephone / Online Service 11,054.68 10,990.01 6,654.03 8,943.73 $ 37,642
Depreciation and Amoritization 11,972.49 22,222.15 11,153.59 11,411.59 $ 56,760
Provision for Bad Debt (2,562.24) 6,870.83 1,809.31 1,915.46 $ 8,033
Postage 1,568.44 1,220.49 1,707.92 1,310.92 $ 5,808
Employee Recognition 50.00 1,700.00 600.00 737.74 $ 3,088
Allocations (8,853.23) (8,219.43) (9,237.33) (6,663.02) $ (32,973)
Fees 2,951.48 4,325.12 3,451.70 5,694.90 $ 16,423
-------------------------------------------------------------------------------
Total Operating Expense 281,179.49 282,137.11 293,537.73 285,511.12 $ 1,142,365
-------------------------------------------------------------------------------
Operating Income 4,722.15 34,168.21 51,714.25 53,881.06 $ 144,486
===============================================================================
22
GO SOFTWARE
----------------------------------------------------------------------
PRE - ACQUSITION
----------------
----------------------------------------------------------------------
Jan-99 Feb-99 Mar-99 Apr-99 May-99 TOTAL
EMPLOYEES
Permanent 20 20 22 25 27 22.8
Temp/Equiv (40hrs) 0.5 0 1 1 4.5 1.4
TOTAL 20.5 20 23 26 31.5 24.2
Sale Days
P & L SALES
Units 1122 760 866 1134 784 4666
$AMT $152,603 $137,463 $145,551 $170,148 $122,602 $728,367
PER UNIT $136.01 $180.87 $168.07 $150.04 $156.38 $156.10
COST OF SALES
$AMT $8,937 $6,886 $6,298 $13,436 $9,390 $44,947
PER UNIT $7.97 $9.06 $7.27 $11.85 $11.98 $9.63
GROSS PROFIT
$AMT $143,666 $130,577 $139,253 $156,712 $113,212 $683,420
PER UNIT $128.04 $171.81 $160.80 $138.19 $144.40 $146.47
PERSONNEL EXPENSE
Salaries $93,675 $95,580 $88,430 $93,333 $103,342 $474,360
Taxes/Benefits $11,575 $9,768 $10,698 $8,717 $8,671 $49,429
Temporary $850 $1,700 $1,700 $8,435 $12,685
TOTAL $106,100 $105,348 $100,828 $103,750 $120,448 $536,474
PER UNIT $94.56 $138.62 $116.43 $91.49 $153.63 $114.98
ADVERTISING/MARKETING/
TRADESHOWS
Advertising $11,794 $14,985 $19,749 $21,830 $29,467 $97,825
Marketing $0
Trade Shows $100 $1,362 $6,353 $3,695 $6,988 $18,498
TOTAL $11,894 $16,347 $26,102 $25,525 $36,455 $116,323
PER UNIT $10.60 $21.51 $30.14 $22.51 $46.50 $24.93
TRAVEL - ALL
Business $6,647 $10,248 $9,575 $10,467 $15,886 $52,823
Trade Show
TOTAL $6,647 $10,248 $9,575 $10,467 $15,886 $52,823
PER UNIT $5.92 $13.48 $11.06 $9.23 $20.26 $11.32
BUILDING/UTILITIES EXPENSE
Utilities $5,759 $1,889 $6,486 $4,708 $6,001 $24,843
Rent $2,435 $2,435 $2,420 $2,435 $2,435 $12,160
TOTAL $8,194 $4,324 $8,906 $7,143 $8,436 $37,003
PER UNIT $7.30 $5.69 $10.28 $6.30 $10.76 $7.93
OTHER EXPENSES
Material/Supplies $3,665 $2,092 $916 $1,401 $3,397 $11,471
Bad Debt $15,664 $12,474 $15,867 $44,005
Fees -$1,670 $3,112 $1,471 $2,657 $14,767 $20,337
Legal $1,748 $1,685 $0 $9,227 $12,660
Other $1,513 $1,565 $3,833 $961 $453 $8,325
TOTAL $19,172 $20,991 $7,905 $20,886 $27,844 $96,798
PER UNIT $17.09 $27.62 $9.13 $18.42 $35.52 $20.75
TOTAL OPERATING EXPENSES
$AMT $152,007 $157,258 $153,316 $167,771 $209,069 $839,421
PER UNIT $135.48 $206.92 $177.04 $147.95 $266.67 $179.90
INCOME BEFORE NON-CASH ITEMS ($8,341) ($26,681) ($14,063) ($11,059) ($95,857) ($156,001)
PER UNIT ($7.43) ($35.11) ($16.24) ($9.75) ($122.27) ($33.43)
DEPR/AMORT $4,071 $3,757 $3,757 $3,162 $3,162 $17,909
PER UNIT $3.63 $4.94 $4.34 $2.79 $4.03 $3.84
NET INCOME/(LOSS)
$AMT ($12,412) ($30,438) ($17,820) ($14,221) ($99,019) ($173,910)
PER UNIT ($11.06) ($40.05) ($20.58) ($12.54) ($126.30) ($37.27)
----------------------------------------------------------------------
-----------------------------------------------------------------------------------------------------
POST ACQUSITION 1999
-------------------- 1999
-----------------------------------------------------------------------------------------
Jun-99 Jul-99 Aug-99 Sep-99 Oct-99 Nov-99 Dec-99 TOTAL TOTAL
EMPLOYEES
Permanent 29 31 35 38 39 38 40 35.7 30.3
Temp/Equiv (40hrs) 1.3 1.8 2.1 1.1 3.8 5.8 4.3 2.9 2.3
TOTAL 30.3 32.8 37.1 39.1 42.8 43.8 44.3 38.6 32.6
Sale Days 20 20
P & L SALES
Units 895 979 1170 1043 3289 2156 990 10522 15188
$AMT $142,461 $140,445 $154,531 $146,072 $209,064 $218,742 $196,311 $1,207,626 $1,935,993
PER UNIT $159.17 $143.46 $132.08 $140.05 $63.56 $101.46 $198.29 $114.77 $127.47
COST OF SALES
$AMT $2,054 $2,891 $1,816 $6,496 $2,810 $3,080 $7,844 $26,991 $71,938
PER UNIT $2.29 $2.95 $1.55 $6.23 $0.85 $1.43 $7.92 $2.57 $4.74
GROSS PROFIT
$AMT $140,407 $137,554 $152,715 $139,576 $206,254 $215,662 $188,467 $1,180,635 $1,864,055
PER UNIT $156.88 $140.50 $130.53 $133.82 $62.71 $100.03 $190.37 $112.21 $122.73
PERSONNEL EXPENSE
Salaries $111,989 $106,760 $114,727 $118,527 $124,644 $154,248 $183,092 $913,987 $1,388,347
Taxes/Benefits $12,167 $12,862 $14,733 $13,052 $15,211 $16,528 $16,233 $100,786 $150,215
Temporary $2,210 -$3,114 $3,966 $2,148 $7,369 $11,069 $16,250 $39,898 $52,583
TOTAL $126,366 $116,508 $133,426 $133,727 $147,224 $181,845 $215,575 $1,054,671 $1,591,145
PER UNIT $141.19 $119.01 $114.04 $128.21 $44.76 $84.34 $217.75 $100.23 $104.76
ADVERTISING/MARKETING/
TRADESHOWS
Advertising $11,981 $15,702 $19,072 $10,832 $20,296 $19,308 $10,818 $108,009 $205,834
Marketing $0 $0 $26,249 $8,571 $1,130 $6,138 $1,670 $43,758 $43,758
Trade Shows $5,648 $3,040 $7,342 $23,916 $2,995 $2,350 $300 $45,591 $64,089
TOTAL $17,629 $18,742 $52,663 $43,319 $24,421 $27,796 $12,788 $197,358 $313,681
PER UNIT $19.70 $19.14 $45.01 $41.53 $7.43 $12.89 $12.92 $18.76 $20.65
TRAVEL - ALL
Business $21,249 $13,485 $6,446 $18,889 $7,394 $15,014 $11,832 $94,309 $147,132
Trade Show
TOTAL $21,249 $13,485 $6,446 $18,889 $7,394 $15,014 $11,832 $94,309 $147,132
PER UNIT $23.74 $13.77 $5.51 $18.11 $2.25 $6.96 $11.95 $8.96 $9.69
BUILDING/UTILITIES EXPENSE
Utilities $6,714 $7,253 $7,789 $7,235 $16,692 $9,100 $14,649 $69,432 $94,275
Rent $2,420 $2,435 $2,435 $3,888 $10,600 $10,600 $10,600 $42,978 $55,138
TOTAL $9,134 $9,688 $10,224 $11,123 $27,292 $19,700 $25,249 $112,410 $149,413
PER UNIT $10.21 $9.90 $8.74 $10.66 $8.30 $9.14 $25.50 $10.68 $9.84
OTHER EXPENSES
Material/Supplies $1,542 $7,196 $6,854 $4,703 $21,419 $10,813 $22,605 $75,132 $86,603
Bad Debt $9,376 $0 $4,710 $0 $0 $7,000 $8,000 $29,086 $73,091
Fees $51,071 $1,619 $2,982 $2,280 $4,111 $3,418 $337 $65,818 $86,155
Legal $0 $907 $11,802 $1,578 $886 $131 $776 $16,080 $28,740
Other $4,544 $1,711 $6,597 $3,155 $5,195 $2,007 $25,320 $48,529 $56,854
TOTAL $66,533 $11,433 $32,945 $11,716 $31,611 $23,369 $57,038 $234,645 $331,443
PER UNIT $74.34 $11.68 $28.16 $11.23 $9.61 $10.84 $57.61 $22.30 $21.82
TOTAL OPERATING EXPENSES
$AMT $240,911 $169,856 $235,704 $218,774 $237,942 $267,724 $322,482 $1,693,393 $2,532,814
PER UNIT $269.17 $173.50 $201.46 $209.75 $72.34 $124.18 $325.74 $160.94 $166.76
INCOME BEFORE NON-CASH ITEMS ($100,504) ($32,302) ($82,989) ($79,198) ($31,688) ($52,062) ($134,015) ($512,758) ($668,759)
PER UNIT ($112.29) ($32.99) ($70.93) ($75.93) ($9.63) ($24.15) ($135.37) ($48.73) ($44.03)
DEPR/AMORT $5,483 $4,969 $4,939 $5,624 $7,472 $7,698 $7,779 $43,964 $61,873
PER UNIT $6.13 $5.08 $4.22 $5.39 $2.27 $3.57 $7.86 $4.18 $4.07
NET INCOME/(LOSS)
$AMT ($105,987) ($37,271) ($87,928) ($84,822) ($39,160) ($59,760) ($141,794) ($556,722) ($730,632)
PER UNIT ($118.42) ($38.07) ($75.15) ($81.33) ($11.91) ($27.72) ($143.23) ($52.91) ($48.11)
--------------------------------------------------------------------------------------------------------
23
------------------------------------------------------------------------------------------------------
POST ACQUISTION 2000
------------------------------------------------------------------------------------------------------
Jan-00 Feb-00 Mar-00 Apr-00 May-00 Jun-00 Jul-00
EMPLOYEES
Permanent 46 49 49 49 52 52 52
Temp/Equiv (40hrs) 3 5.5 5.6 5.4 7.6 8 6
TOTAL 49 54.5 54.6 54.4 59.6 60 58
Sale Days 20 21 23 20 22 22 20
P & L SALES
Units 1331 1405 1073 1274 1417 879 1339
$AMT $214,069 $185,459 $219,790 $202,467 $206,258 $188,856 $192,164
PER UNIT $160.83 $132.00 $204.84 $158.92 $145.56 $214.85 $143.51
COST OF SALES
$AMT $7,306 $4,358 $9,075 $12,397 $28,073 $10,123 $22,096
PER UNIT $5.49 $3.10 $8.46 $9.73 $19.81 $11.52 $16.50
GROSS PROFIT
$AMT $206,763 $181,101 $210,715 $190,070 $178,185 $178,733 $170,068
PER UNIT $155.34 $128.90 $196.38 $149.19 $125.75 $203.34 $127.01
PERSONNEL EXPENSE
Salaries $188,936 $217,852 $135,906 $205,379 $183,792 $181,975 $188,515
Taxes/Benefits $28,036 $27,703 $17,971 $26,087 $25,275 $27,117 $25,540
Temporary $5,746 $10,325 $21,149 $11,196 $15,640 $16,527 $12,389
TOTAL $222,718 $255,880 $175,026 $242,662 $224,707 $225,619 $226,444
PER UNIT $167.33 $182.12 $163.12 $190.47 $158.58 $256.68 $169.11
ADVERTISING/MARKETING/
TRADESHOWS
Advertising $3,659 $14,203 $55,028 $27,379 $38,718 $12,969 $26,308
Marketing $4,054 $6,720 $9,393 $12,279 $18,636 $28,211 -$13,429
Trade Shows $4,276 $10,481 $11,814 $8,867 $6,521 $3,064 $13,901
TOTAL $11,989 $31,404 $76,235 $48,525 $63,875 $44,244 $26,780
PER UNIT $9.01 $22.35 $71.05 $38.09 $45.08 $50.33 $20.00
TRAVEL - ALL
Business $11,272 $14,713 $22,684 $8,769 $12,891 $17,605 $10,982
Trade Show 0 3151 8693 3463 4448 8214 6512
TOTAL $11,272 $17,864 $31,377 $12,232 $17,339 $25,819 $17,494
PER UNIT $8.47 $12.71 $29.24 $9.60 $12.24 $29.37 $13.06
BUILDING/UTILITIES EXPENSE
Utilities $22,718 $12,481 $15,497 $20,594 $14,354 $13,932 $12,899
Rent $10,600 $10,600 $10,600 $10,664 $10,664 $10,664 $10,664
TOTAL $33,318 $23,081 $26,097 $31,258 $25,018 $24,596 $23,563
PER UNIT $25.03 $16.43 $24.32 $24.54 $17.66 $27.98 $17.60
OTHER EXPENSES
Material/Supplies $6,418 $3,872 $9,557 $11,697 $17,574 $8,046 $7,577
Bad Debt $754 $3,720 $1,086 -$1,526 -$18,694 -$2,911 $4,445
Fees $2,642 $4,827 $5,647 $5,027 $3,641 $5,109 $5,148
Legal $0 $0 $1,720 $0 $0
Other $10,268 $18,924 $4,348 $18,259 $1,219 $5,177 $5,437
TOTAL $20,082 $31,343 $22,358 $33,457 $3,740 $15,421 $22,607
PER UNIT $15.09 $22.31 $20.84 $26.26 $2.64 $17.54 $16.88
TOTAL OPERATING EXPENSES
$AMT $299,379 $359,572 $331,093 $368,134 $334,679 $335,699 $316,888
PER UNIT $224.93 $255.92 $308.57 $288.96 $236.19 $381.91 $236.66
INCOME BEFORE NON-CASH ITEMS ($92,616) ($178,471) ($120,378) ($178,064) ($156,494) ($156,966) ($146,820)
PER UNIT ($69.58) ($127.03) ($112.19) ($139.77) ($110.44) ($178.57) ($109.65)
DEPR/AMORT $11,485 $13,563 $12,982 $4,970 $11,510 $11,457 $11,966
PER UNIT $8.63 $9.65 $12.10 $3.90 $8.12 $13.03 $8.94
NET INCOME/(LOSS)
$AMT ($104,101) ($192,034) ($133,360) ($183,034) ($168,004) ($168,423) ($158,786)
PER UNIT ($78.21) ($136.68) ($124.29) ($143.67) ($118.56) ($191.61) ($118.59)
------------------------------------------------------------------------------------------------------
----------------------------------------------------------------------------------
2000
------------------------------------------------------------------
Aug-00 Sep-00 Oct-00 Nov-00 Dec-00 Y-T-D
EMPLOYEES
Permanent 52 51 49 49 44 49.5
Temp/Equiv (40hrs) 5.2 5.9 5.1 11.1 8.5 6.4
TOTAL 57.2 56.9 54.1 60.1 52.5 55.9
Sale Days 23 20 22 20 20 253
P & L SALES
Units 1674 1712 1550 1042 1812 16508
$AMT $233,684 $290,021 $259,064 $272,846 $278,764 $2,743,442
PER UNIT $139.60 $169.40 $167.14 $261.85 $153.84 $166.19
COST OF SALES
$AMT $18,616 $23,202 $22,582 $30,133 $22,176 $210,137
PER UNIT $11.12 $13.55 $14.57 $28.92 $12.24 $12.73
GROSS PROFIT
$AMT $215,068 $266,819 $236,482 $242,713 $256,588 $2,533,305
PER UNIT $128.48 $155.85 $152.57 $232.93 $141.60 $153.46
PERSONNEL EXPENSE
Salaries $186,082 $170,997 $188,328 $184,515 $220,508 $2,252,785
Taxes/Benefits $23,400 $24,506 $25,287 $25,531 $25,203 $301,656
Temporary $10,718 $12,114 $10,419 $23,004 $17,621 $166,848
TOTAL $220,200 $207,617 $224,034 $233,050 $263,332 $2,721,289
PER UNIT $131.54 $121.27 $144.54 $223.66 $145.33 $164.85
ADVERTISING/MARKETING/
TRADESHOWS
Advertising $9,569 $15,882 $688 $4,831 $27,813 $237,047
Marketing $3,600 $13,849 $7,123 $4,238 $38,545 $133,219
Trade Shows $5,353 $1,229 $4,894 $821 $1,766 $72,987
TOTAL $18,522 $30,960 $12,705 $9,890 $68,124 $443,253
PER UNIT $11.06 $18.08 $8.20 $9.49 $37.60 $26.85
TRAVEL - ALL
Business $15,721 $8,334 $16,233 $7,525 $13,550 $160,279
Trade Show 14804 5201 3332 3606 4445 $65,869
TOTAL $30,525 $13,535 $19,565 $11,131 $17,995 $226,148
PER UNIT $18.23 $7.91 $12.62 $10.68 $9.93 $13.70
BUILDING/UTILITIES EXPENSE
Utilities $14,723 $12,188 $18,700 $12,612 $13,546 $184,244
Rent $10,664 $22,240 $16,020 $4,046 $10,656 $138,082
TOTAL $25,387 $34,428 $34,720 $16,658 $24,202 $322,326
PER UNIT $15.17 $20.11 $22.40 $15.99 $13.36 $19.53
OTHER EXPENSES
Material/Supplies $6,565 $11,538 $24,474 $15,465 $17,018 $139,801
Bad Debt -$2,420 $5,371 $13,724 $33,177 $11,504 $48,230
Fees $20,848 $3,994 -$6,786 $3,417 $8,380 $61,894
Legal $0 $1,720
Other $2,111 -$3,294 -$2,957 $2,030 $7,898 $69,420
TOTAL $27,104 $17,609 $28,455 $54,089 $44,800 $321,065
PER UNIT $16.19 $10.29 $18.36 $51.91 $24.72 $19.45
TOTAL OPERATING EXPENSES
$AMT $321,738 $304,149 $319,479 $324,818 $418,453 $4,034,081
PER UNIT $192.20 $177.66 $206.12 $311.73 $230.93 $244.37
INCOME BEFORE NON-CASH ITEMS($106,670) ($37,330) ($82,997) ($82,105) ($161,865) ($1,500,776)
PER UNIT ($63.72) ($21.80) ($53.55) ($78.80) ($89.33) ($90.91)
DEPR/AMORT $12,062 $12,240 $12,888 $12,826 $12,106 $140,055
PER UNIT $7.21 $7.15 $8.31 $12.31 $6.68 $8.48
NET INCOME/(LOSS)
$AMT ($118,732) ($49,570) ($95,885) ($94,931) ($173,971) ($1,640,831)
PER UNIT ($70.93) ($28.95) ($61.86) ($91.10) ($96.01) ($99.40)
----------------------------------------------------------------------------------
24
SCHEDULE E-1
------------
INTELLECTUAL PROPERTY
---------------------
CURRENT PRODUCTS:
-----------------
PC Charge Pro
PC CHARGE EXPRESS
-----------------
PC Charge Dev Kit
PC Charge Payment Server
PC Charge Dev Kit Suite
▇▇▇▇ Server
▇▇▇▇ ST
DISCONTINUED PRODUCTS OR BRAND NAMES:
-------------------------------------
IP Charge
Active Charge
Virtual Charge
Secure Charge
Win Charge
REGISTERED DOMAINS:
-------------------
▇▇▇▇▇▇▇▇▇.▇▇▇
▇▇▇▇▇▇▇▇.▇▇▇
▇▇▇▇▇▇▇▇.▇▇▇
▇▇-▇▇▇▇▇▇.▇▇▇
▇▇-▇▇▇▇▇▇.▇▇▇
TRADEMARKS:
-----------
PC-Charge (with and without the dash/space)
25
SCHEDULE E-2
TANGIBLE ASSESTS
VENDOR LIFE YRS ATE COST MONTHLY
------ -------- --- ---- -------
000-1101-000-000
----------------
COMPUTER EQUIPMENT:
-------------------
Great Plains Dynamics Software Great Plains 7/17/97 1,070.00 29.72
Disk Copier Champion 1/20/97 3,382.00 93.94
SUB TOTAL 97 4,452.00 123.66
AMSTech / Laptop Infotel 2/27/98 3,973.05 110.36
BASICS PC w/Monitor, etc. Infotel 2/13/98 1,098.48 30.51
Palm Pilot MAC Warehouse 2/24/98 353.95 9.83
Monitors Best Buy 3/03/98 778.00 21.61
Floppy Drive, Printer Cover Infotel 4/23/98 729.80 20.27
Various Computer Equip Infotel 4/01/98 758.84 21.08
Monitor, Computer, Modem Infotel 6/29/98 1,049.91 29.16
Laptop, Infotel 6/15/98 3,518.70 97.74
Computer, Monitor Infotel 6/25/98 1,998.47 55.51
Computer, Modem, Network Hub Infotel 7/29/98 1,669.66 46.38
Laptop Circuit City 7/27/98 1,907.99 53.00
Various Computer Equip Infotel 8/30/98 3,389.58 106.04
Computer Equipment Infotel 9/16/98 1,289.15 35.81
Laptop Lan Card ▇▇▇▇▇ 9/01/98 773.59 21.49
CD Burner Media Source 0/31/98 16,907.00 469.64
Computer Infotel 0/31/98 $ 1,904.75 52.91
Computers Infotel 0/16/98 $ 7,761.32 202.31
Computer Equipment Infotel 0/31/98 $ 4,946.78 137.71
Computer Equipment Infotel 1/30/98 $ 2,657.07 73.81
Computer Equipment Infotel 2/31/98 $ 2,060.66 57.24
SUB TOTAL 98 $ 59,526.75 $ 1,652.41
Computer Equipment Infotel 2/03/99 $ 3,230.69 89.74
Computer Equipment Infotel 5/30/99 $ 2,733.34 75.83
26
Computer Equipment Infotel 6/30/99 $ 2,013.00 55.92
Computer Equipment Various 7/31/99 $ 16,364.85 454.58
Computer Equipment Various 8/31/99 $ 24,652.72 684.80
Computer Equipment Various 9/30/99 $ 27,522.58 764.52
Computer Equipment Various 0/30/99 $ 31,592.51 877.57
Computer Expense Various 1/15/99 $ 4,655.04 129.31
Computer Expense Various 2/31/99 $ 26,317.72 731.05
SUB TOTAL 99 $ 139,082.45 $ 3,863.32
VENDOR LIFE YRS ATE COST MONTHLY
------ -------- --- ---- -------
Computer Entre 1/25/00 $ 1,370.58 38.07
Computers Entre 1/28/00 $ 6,745.84 187.38
Computers Entre 2/28/00 $ 4,276.04 118.78
Computers Entre 3/07/00 $ 12,343.70 342.88
Computers Entre 3/07/00 $ 2,538.70 70.52
Computers Entre 3/07/00 $ 286.20 7.95
Computers Dell 3/14/00 $ 7,922.44 220.07
Computers ▇▇▇▇▇▇▇ ▇▇▇▇▇ 3 4/11/00 $ 1,520.00 42.22
Computers* Dell 3 4/17/00 $ 5,269.26 146.38
Computers Entre 3 4/25/00 $ 4,377.80 121.61
Computers Dell 3 4/28/00 $ 3,150.32 87.51
Computers Dell 3 4/28/00 $ 9,259.10 257.20
Computers Dell 3 5/30/00 $ 3,652.76 101.47
Computers Dell 3 5/31/00 $ 3,050.68 84.75
Computers Dell 3 5/31/00 $ 1,715.09 47.65
Entry Server IBM 5 7/31/00 $ 4,473.00 74.55
Printer Entre 3 7/31/00 $ 1,117.24 31.04
Desktop Computers (2) Dell 3 7/31/00 $ 3,743.92 104.00
Laptop Computer (1) Dell 3 7/31/00 $ 3,508.60 97.47
Phone Sysytem Intertell 7 7/31/00 $ 3,757.66 44.74
Printer CDW 3 7/31/00 $ 1,328.96 36.92
Desktop Computers (1) Dell 3 7/31/00 $ 2,658.49 73.85
Printer Entre 3 7/31/00 $ 1,117.24 31.04
Phone System/adj to accrual Intertell 7 8/31/00 $ 96.19 1.14
Entry Server additional owed IBM 5 8/31/00 $ 268.38 4.47
27
Laptop Computer (1) Dell 3 9/29/00 $ 2,853.52 79.26
Laptop Computer (2) Dell 3 9/29/00 $ 6,128.93 170.24
Desktop - 2 Dell 3 9/29/00 $ 2,808.99 78.02
Support Line IBM 3 0/31/00 $ 1,323.27 36.76
Laptop (1) Dell 3 0/31/00 $ 2,774.02 77.06
Laptop (2) ($30 Rebate 01/01) Dell 3 0/31/00 $ 5,952.64 166.18
Processor for ISIS AMEX/HP 3 1/07/00 $ 840.69 23.35
Laptop (1) Dell 3 1/21/00 $ 2,961.64 82.26
SUB TOTAL 2000 $ 115,191.89 $ 3,086.79
-----------------------------
GRAND TOTAL COMPUTER EQUIPMENT $ 318,253.09 $ 8,726.18
------------- -------------
VENDOR DATE COST MONTHLY
------ ---- ---- -------
000-1102-000-000
OFFICE EQUIPMENT:
-----------------
Filing Cabinets (3) Office Depot 6/30/98 417.28 11.59
SUB TOTAL 98 417.28 11.59
Filing Cabinets , Chairs Office Depot 5/30/99 2,626.00 72.94
Office Depot Office Depot 9/30/99 808.33 22.45
▇▇▇▇ ▇▇▇▇▇ KMC 2/09/99 35,556.57 987.68
Furniture ▇▇▇▇ ▇▇▇▇▇ 2/09/99 20,012.45 555.90
SUB TOTAL 99 59,003.35 1,638.97
Telephone Headsets ▇▇▇▇ 3/02/00 2,565.64 71.27
Telephone Headsets ▇▇▇▇ 3/02/00 2,353.00 65.36
Paper Shredder Staples 3 7/31/00 1,344.34 37.35
Shrink Wrapper Alles Southeast 3 0/31/00 4,764.70 132.35
SUB TOTAL 2000 11,027.68 306.33
-----------------------------
GRAND TOTAL OFFICE EQUIP 70,448.31 1,956.89
------------- -------------
28
-----------------------------
SUB-TOTAL COMPUTER & OFFICE 388,701.40 10,683.07
------------- -------------
000-1103-000-000
LEASEHOLD IMPROVEMENTS
Blinds ▇▇▇▇▇▇▇'▇ Rods 3 12/9/99 2777.11 77.14
Shelves - Shipping Weimar Const 5 8/18/00 2800.00 46.66
Programable Thermostats ▇▇▇▇▇▇ 5 8/30/00 754.50 12.57
-----------------------------
SUB TOTAL LEASEHOLD IMP 6,331.61 136.37
------------- -------------
GRAND TOTAL 395,033.01 10,819.44
============= =============
29
GO SOFTWARE ASSETS
------------------
BUILDING A
----------
APC UPS'es 8 HP 2500 Ct Color Printer 1
Canon PC-6RE Copier 1 HP 870 Cse Laser Printer 1
Chair - High back leather 4 HP Laserjet 2100 laser printers 1
Chair - Old Leather high back 1 HP Laserjet 3100 laser printers 2
Cisco 2500 Router 1 HP ProServe 12-port hub 1
Cisco 2600 Router 1 Intertel Phone System 1
Cisco Catalyst 2900 Switches 3 Kentrox CSU/DSU 1
Cisco Fasthub 400's 6 Large Garbage Cans 2
Cisco Pix Firewall 1 Large wooden reception desk 1
Coffee Machines 2 Lexmark Optra 1620 Laser Printer 1
Cubicles 30 Lexmark Optra 1625 Laser Printer 1
Desk - Computer 2 Meeting Room Table 1
Desk - Wooden Small 2 Metal Bookshelves 8
30
Desk Executive (▇. ▇▇▇▇▇▇) 1 Metal Storage Shelf 1
Desks - Executive Metal 2 Microwave Ovens 2
Desks - Standard Office 12 Office Chairs Fixed Leg with arms 6
Dev Support Lab Tables 3 Office Chairs Fixed Leg without arms 24
DocSeal Laminator 1 Office Chairs Rolling with arms 39
Executive wooden desks 4 Office Chairs Rolling without arms 11
Fax machine (Brother) in Sales area 1 Overhead projector 1
Fax machine (may not work) 1 Radio for Hold Music 1
Fax machine in secretary's cubicle 1 Reception area wing back chairs 2
File Cabinet - 3 drawer 1 Round recption area table 1
File Cabinets - 2 drawer 4 Short Folding Tables - Short 9
File Cabinets - 4 drawer 5 Small rolling book shelf 1
Folding Tables - Long 4 Tall Metal Storage Cabinets 2
Full Size Refrigerator 1 Toaster 1
Wooden Bookshelves 9
BUILDING B
----------
PC CHARGE
---------
15" Monitors 3 Lexmark Z52 Color Printer - ▇▇▇▇ 1
17" Monitor 1 Long Folding Table 1
APC UPS 1 Mainbox Rack 1
Chairs with Arms 16 Rolling Meeting Room Tables 3
Computer Projectors 2 Round Folding Table 1
Cubicles 12 Short Folding Table 1
Fixed Leg Chairs with Arms 6 Small TV with VCR Player 1
Intertel Phone System Slave System 1 Tall Black Filing Cabinet 1
Larger TV for monitoring PCC calls 1 Training Room Table 2
Lexmark Optra T612 Printer 1 TV Stand 1
Cisco 24 port hubs 2
31
SHIPPING
--------
3-drawer file cabinet 1 Large Garbage Cans 3
4-drawer file cabinets 3 Large paper shredder 1
CD Burners 2 Lexmark Optra T612 laser printer 1
Clamco Shrink Wrap machine 1 Metal Bookshelf 1
Dymo LabelWriter EL60 1 Metal Shelves (Sit atop shipping tables) 2
Fans 2 Office chairs - no arms 2
Fixed leg office chair - no arms 1 Office chairs - with arms 2
Floppy disk replicator 1 Office Desks 2
Foldmate Letter folder 1 Older manual shrink wrap machine 1
Hand Truck - 2-wheel 1 Shipping Tables 6
Hand Truck - 4-wheel 1 Short folding table 1
HP Laserjet 3100 printer 1 Step stool 1
LabelWriter XL Plus 1 Wood Bookshelf 1
Ladder w/hand rail 1
32
MONITOR PERI-
BUILDING CID MGHZ RAM HD1 HD2 MANUF. MODEL LT0/DT1 SIZE PHERAL(S)
-------- --- ---- --- --- --- ------ ----- ------- ---- ---------
GO SOFTWARE EQUIPMENT
A - GO Software D04 700 128 20G X Compaq Persario DESKTOP 15
A - GO Software Q03 700 128 20G X Compaq Persario DESKTOP 17
A - GO Software D01 500 128 10G X Dell Dimension DESKTOP 17
A - GO Software Q04 600 128 10G X Dell Dimension DESKTOP 15
A - GO Software S07 600 128 10G X Dell Dimension DESKTOP 17
A - GO Software V03 600 256 20G X Dell Optiplex DESKTOP 14
A - GO Software F01 667 128 14G X Dell Generic DESKTOP 17
A - GO Software S04 667 128 12G X Dell DESKTOP 17
A - GO Software M03 667 128 14G X Dell DESKTOP 17
A - GO Software D16 128 X Dell Optiplex DESKTOP 15
A - GO Software I05 128 38G 38G Dell Optiplex DESKTOP SB
A - GO Software I06 128 9G X Dell Demension DESKTOP SB
A - GO Software DevSup Lab 500 128 10G Dell Dimension DESKTOP 15
A - GO Software A04 200 96 8G X Generic DESKTOP 14
A - GO Software V09 200 96 9G X Generic DESKTOP 17
A - GO Software D09 233 64 6.3G X Generic DESKTOP 17
A - GO Software V10 ▇▇▇ ▇▇▇ ▇▇ X Generic DESKTOP 0
A - GO Software F02 433 64 6G X Generic DESKTOP 17
A - GO Software D10 433 64 16G X Generic DESKTOP
A - GO Software Q02 450 64 10G X Generic DESKTOP 17
A - GO Software D05 500 128 13G X Generic DESKTOP 17
A - GO Software D07 500 196 12G X Generic DESKTOP 17
A - GO Software D11 600 128 20G X Generic DESKTOP
A - GO Software V08 600 96 9G X Generic DESKTOP 17
A - GO Software M01 600 160 13G X Generic Ultra DESKTOP 17
A - GO Software V02 600 64 13G X Generic Ultra DESKTOP 0
A - GO Software V07 600 64 13G X Generic DESKTOP 17
A - GO Software S01 PIII 128 13G X Generic DESKTOP 17
A - GO Software D03 128 17G X Generic DESKTOP 17
A - GO Software D03 128 17G X Generic DESKTOP 17
A - GO Software V06 X Generic DESKTOP 17
A - GO Software S06 96 X Generic DESKTOP 15
A - GO Software S09 X Generic DESKTOP
A - GO Software I07 128 6G X Generic DESKTOP SB
A - GO Software F03 500 128 13G X HP Vectra DESKTOP 17
A - GO Software D08 500 128 10G X HP Vectra DESKTOP 17
A - GO Software D13 500 128 13G X HP Vectra DESKTOP 17
33
A - GO Software S03 500 128 13G X HP Vectra DESKTOP 17
A - GO Software M02 500 196 13G X HP Vectra DESKTOP 17
A - GO Software I02 550 256 18GR0 X HP LH3 DESKTOP SB Sure Store DD3
A - GO Software I03 550 768 18GR0 X HP LH3 DESKTOP SB
A - GO Software I01 550x2 512 18x2R0 36x2R0 HP LH3 DESKTOP SB
A - GO Software V01 600 64 13G X HP Vectra DESKTOP 17
A - GO Software V05 ▇▇▇ ▇▇▇ ▇▇ X HP Vectra DESKTOP 17
A - GO Software A03 600 128 13G X HP Vectra DESKTOP 17
A - GO Software D18 256 18G-R0 18G-R0 HP NetserverE60 DESKTOP 15
A - GO Software I04 196 9R0 X HP LC3 DESKTOP SB
A - GO Software DevSup Lab IBM AS400e DESKTOP 15
A - GO Software D17 SPARC 256 X Sun Ultra5 DESKTOP 15
A - GO Software DevSup Lab PII 64 3G Ultra DESKTOP 15
A - GO Software DevSup Lab Pii 32 3G Ultra DESKTOP 15
A - GO Software DevSup Lab ? 256 ? Ultra DESKTOP none
A - GO Software DevSup Lab PII 64 3G White Box DESKTOP 15
A - GO Software S08 X AMS Ultra LAPTOP
A - GO Software D19 226 64 X AMS TECH Roadster LAPTOP
A - GO Software A01 600 256 12G X Dell Inspiron LAPTOP
A - GO Software D06 700 128 10G X Dell Inspirion LAPTOP
A - GO Software D12 700 128 10G X Dell Inspiron LAPTOP
A - GO Software D14 700 128 20G X Dell Inspiron LAPTOP Docking
A - GO Software V04 700 128 18G X Dell Inspiron LAPTOP
A - GO Software Q01 700 256 10G X Dell Inspiron LAPTOP
A - GO Software S02 700 128 18.6G X Dell Insprion 5000 LAPTOP
A - GO Software ▇▇▇ ▇▇▇ X Generic LAPTOP
A - GO Software F04 400 X Generic LAPTOP
A - GO Software D02 X Generic LAPTOP
A - GO Software A02 ▇▇▇ ▇▇▇ ▇▇ X HP Omni Book 900 LAPTOP Docking
A - GO Software D15 200 96 6G X Sony Vaio LAPTOP
B - GO - PC Charge ▇▇▇▇ ▇▇▇▇▇▇ 700 128 10G Compaq DESKTOP 17 Speakers
B - GO - PC Charge ▇▇▇▇▇ 700 128 10G Compaq DESKTOP 17 Speakers
B - GO - PC Charge ▇▇▇ ▇▇▇▇▇▇ 600 128 10G Dell Dimension DESKTOP 17
B - GO - PC Charge Mafia 500 128 13G Dell Optiplex DESKTOP 17
B - GO - PC Charge ▇▇▇▇ ▇▇▇▇▇▇ 732 128 10G Dell Optiplex DESKTOP 17
B - GO - PC Charge ▇▇▇▇▇▇ 500 128 10G Dell Dimension DESKTOP 17
B - GO - PC Charge ▇▇▇▇ 500 128 10G Dell Dimension DESKTOP 17 Speakers
B - GO - PC Charge ▇▇▇▇▇ 731 128 14G Dell Optiplex DESKTOP 17 Speakers
B - GO - PC Charge ▇▇▇▇▇▇▇ ▇▇▇▇▇ 667 128 14G Dell Optiplex DESKTOP 17 Speakers
34
B - GO - PC Charge ▇▇▇▇ ▇▇▇▇▇▇▇▇ 667 128 14G Dell Optiplex DESKTOP 17 Speakers
B - GO - PC Charge ▇▇▇▇▇▇ ▇▇▇▇▇ 667 128 14G Dell Optiplex DESKTOP 17 Speakers
B - GO - PC Charge ▇▇▇▇▇ ▇▇▇▇▇▇ 667 128 14G Dell Optiplex DESKTOP 17 Speakers
B - GO - PC Charge ▇▇▇▇▇ - Test 667 128 14G Dell Optiplex DESKTOP 17 Speakers
B - GO - PC Charge ▇▇▇▇▇ ▇▇▇▇▇▇▇ 500 128 13G HP Vectra DESKTOP 17
B - GO - PC Charge ▇▇▇▇▇▇▇ 500 128 10G HP Vectra VL DESKTOP 17 Speakers
B - GO - PC Charge Not Assigned 600 128 10G Ultra DESKTOP 17
B - GO - PC Charge ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇ PII 96 10g Ultra DESKTOP 17
B - GO - PC Charge Double Office 350 32 2G Ultra DESKTOP 15
B - GO - PC Charge ▇▇▇▇▇ ▇▇▇▇▇▇▇▇ 600 64 12G Ultra DESKTOP 17
B - GO -Shipping ? 64 13G Basics DESKTOP 15
B - GO -Shipping ▇▇▇▇▇ ▇▇▇▇▇▇▇▇ 600 256 14G Dell Optiplex DESKTOP 17 Speakers
B - GO -Shipping 667 128 14G Dell Optiplex DESKTOP 15
B - GO -Shipping ▇▇▇▇▇▇▇ 500 130 14G HP Vectra VL DESKTOP 15 Speakers
B - GO -Shipping ▇▇▇ ▇▇▇ ▇▇ Ultra DESKTOP 15
B - GO -Shipping ? 64 14G Ultra DESKTOP 15
35
SCHEDULE F
----------
MATERIAL CONTRACTS
------------------
MAJOR PRODUCT/SERVICE CONTRACT/AGREEMENTS:
------------------------------------------
KeyCorp - Contract Programming
Verifone - License
IVI Checkmate - License
Sage - License
BankServ (ACH)
Givex Canada (Gift Cards)
Virtual Purchase Card, Inc
OTHER PRODUCT/SERVICE CONTRACT/AGREEMENT:
-----------------------------------------
National Processing Company (NPC)
Bridgestone
Regis
ESCROW AGREEMENT:
-----------------
DSI Technology Escrow Services
CREDIT CARD PROCESSING AGREEMENTS:
----------------------------------
American Express
Nova - Visa/Mastercard
Discover Card
BUILDING/EQUIPMENT LEASES
-------------------------
JRW Development - Building Lease
Mita Copier Lease
Pitney ▇▇▇▇▇ System lease - Shipping/Postage
TELEPHONE SERVICE PROVIDERS
---------------------------
KMC Telecom (CLEC)
Sprint (T1)
ADVERTISING:
------------
▇▇▇▇▇▇▇▇ Communications Group
36
SCHEDULE G
EMPLOYEES / INDEPENDENT CONTRACTORS
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HIRE DATE EMPLOYEES TITLE
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ADMINISTRATION
7/7/99 ▇▇▇▇ ▇▇▇▇▇▇▇▇ General Manager/ Vice President
10/1/98 ▇▇▇▇▇ ▇▇▇▇▇▇▇ Manager, Human Resources
2
FINANCE AND SHIPPING
1/3/00 ▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇ Chief Financial Officer
8/16/99 Dell ▇▇▇▇▇▇ Finance Manager
ACCOUNTING
1/24/00 ▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇ Accounting Manager
10/1/98 ▇▇▇▇▇ ▇▇▇▇▇▇ Admin. Acct. Technician
SHIPPING
11/29/99 ▇▇▇▇▇ ▇▇▇▇▇▇▇ Shipping / Billing Technician
12/20/99 ▇▇▇▇▇▇▇ ▇▇▇▇ Shipping / Billing Technician
6
DEVELOPMENT
4/5/99 ▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇▇ Mgr, Development
10/1/98 ▇▇▇▇▇▇▇ ▇▇▇▇▇▇ Developer II
11/8/99 ▇▇▇▇ ▇▇▇▇▇▇▇ Developer I
12/9/98 ▇▇▇▇▇ ▇▇▇▇▇▇ Developer I
8/30/99 ▇▇▇▇▇▇ ▇▇▇▇▇▇▇ Developer I
1/24/00 ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇ Developer I
3/20/00 ▇▇▇▇ ▇▇▇▇▇▇ Developer I
1/3/00 ▇▇▇▇▇▇▇ ▇▇▇▇▇ Developer I
8
SUPPORT SERVICES OPERATIONAL SUPPORT SERVICES
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9/7/99 ▇▇▇▇▇ ▇▇▇▇▇▇▇▇ Mgr., Operations/Support Services
1
DEVELOPER SUPPORT
1/31/00 ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇ Applications Engineer
4/30/01 Open Applications Engineer
4/23/01 Open Applications Engineer
3
SYSTEM ADMINISTRATION
2/5/98 ▇▇▇▇▇▇ ▇'▇▇▇▇▇▇▇▇ IS Manager
1
QUALITY ASSURANCE
8/18/99 ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇ QA Manager
1
TECHNICAL SUPPORT
4/28/99 ▇▇▇▇ ▇▇▇▇▇▇▇▇ Customer Service Supervisor - PC Charge
3/22/99 ▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇. Technical Support Rep.- PC Charge
5/8/00 ▇▇▇▇▇▇ ▇▇▇▇▇ Technical Support Rep. - PC Charge
5/8/00 ▇▇▇▇▇▇▇ Small Technical Support Rep. - PC Charge
8/1/00 ▇▇▇ ▇▇▇▇▇▇ Technical Support Rep. - PC Charge
8/2/00 ▇▇▇▇▇ ▇▇▇▇▇▇ Technical Support Rep. - PC Charge
8/1/00 ▇▇▇▇▇▇▇ ▇▇▇▇▇ Technical Support Rep. - PC Charge
4/25/01 ▇▇▇▇ ▇▇▇▇▇▇ Technical Support Rep. - PC Charge
8
OUTSIDE SALES
7/1/00 ▇▇▇▇ ▇▇▇▇▇▇ Sales Manager - West
8/3/98 ▇▇▇▇▇ ▇▇▇▇▇ Sales Manager - POS/ISV reseller
2
INSIDE SALES
6/18/99 ▇▇▇ ▇▇▇▇ Inside Sales Manager
1/4/99 ▇▇▇▇▇▇▇ ▇▇▇▇▇▇ Team Leader
9/13/99 ▇▇▇▇ ▇▇▇▇▇▇ Inside Sales II
12/13/99 ▇▇▇▇▇▇▇ ▇▇▇▇▇ Technical Support Mgr.
1/13/00 ▇▇▇▇▇▇▇ ▇▇▇▇▇ Inside Sales Rep
5
PRODUCT SUPPORT
4/4/01 Open Director, Product Management
1/4/99 ▇▇▇▇▇ ▇▇▇▇▇▇▇▇ Marketing Communications Specialist
10/27/99 ▇▇▇▇▇ ▇▇▇▇ Technical Support Rep.
1/3/00 ▇▇▇▇▇ ▇▇▇▇▇▇ Marketing Relationship Manager
4
41 Total