EXHIBIT 99.1
STOCK PURCHASE AGREEMENT
By and Among
IP Metrics Software, Inc.
▇▇▇▇▇ ▇▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇,
▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇,
FalconStor AC, Inc.
and
FalconStor Software, Inc.
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Dated as of July 1, 2002
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STOCK PURCHASE AGREEMENT
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STOCK PURCHASE AGREEMENT (the "Agreement"), dated as of July 1, 2002
by and among IP Metrics Software, Inc., a Texas corporation ("IP"), ▇▇▇▇▇
▇▇▇▇▇▇▇▇ ("▇▇▇▇▇▇▇▇"), ▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇ ("▇▇▇▇▇▇▇▇▇"), ▇▇▇▇ ▇▇▇▇▇▇ ("▇▇▇▇▇▇"),
▇▇▇▇ ▇▇▇▇▇ ("▇▇▇▇▇," and together with ▇▇▇▇▇▇▇▇▇, Reyero and ▇▇▇▇▇, the
"Sellers"), FalconStor AC, Inc., a Delaware corporation (the "Buyer") and
FalconStor Software, Inc. a Delaware corporation (the "Parent").
W I T N E S S E T H:
WHEREAS, the Sellers own 800,000 shares (the "Shares") of IP common
stock ("IP Common Stock"), par value $.01 per share, which constitutes all of
the outstanding capital stock of IP; and
WHEREAS, the Buyer desires to purchase, and the Sellers desire to
sell all of the Shares, representing 100% of the issued and outstanding capital
stock of IP; and
WHEREAS, for accounting purposes it is intended that the
transactions contemplated hereby shall be accounted for as a purchase under
United States generally accepted accounting principles ("U.S. GAAP");
NOW, THEREFORE, in consideration of the premises and the
representations, warranties, and mutual covenants and agreements herein
contained, the parties hereby agree as follows:
ARTICLE I
SALE OF SHARES
Section 1.1 Delivery of Shares. On the terms and subject to the
conditions of this Agreement, on the Closing Date (as defined below), the Buyer
shall purchase 412,000 Shares from ▇▇▇▇▇▇▇▇, 160,000 Shares from ▇▇▇▇▇▇▇▇▇,
160,000 Shares from Reyero, and 68,000 Shares from ▇▇▇▇▇ for an amount equal to
the Purchase Price (as defined below) and each Seller shall sell his Shares to
the Buyer. On the Closing Date, each Seller will transfer, assign, convey and
deliver to the Buyer a certificate or certificates representing all of his
Shares. Each of the certificates shall be duly endorsed for transfer or
accompanied by appropriate stock powers duly executed, in either case in favor
of the Buyer.
Section 1.2 Purchase Consideration. The purchase price for each
Seller's Shares (the "Purchase Price") shall consist of $3.125 per Share, for an
aggregate payment by the Buyer of $2,500,000.00, plus, subject to the terms set
forth herein, an Earn Out Payment or the Alternative Payments (each as defined
below).
Section 1.3 Earn Out Payment.
(i) Earn Out. Sellers shall be entitled to receive, on a pro
rata basis based on their percentage ownership of IP (each Seller's "Pro Rata"
portion) prior to the Closing Date (as defined below), fifty percent (50%) of
all Qualified Revenues that are collected by Buyer, Parent or any of their
affiliates within forty-five (45) days of the Second Anniversary (the "Earn Out
Payment"). Such amounts collected on or before forty-five (45) days after the
First Anniversary shall be payable to the Sellers in cash within sixty (60) days
of the First Anniversary. Such amounts collected on or before forty-five (45)
days after the Second Anniversary shall be payable to the Sellers in cash within
sixty (60) days of the Second Anniversary.
(a) "Qualified Revenues" means the sum of all newly
billed (a) Net Sales of Products and Services, (b) license issue fees, license
maintenance fees, technology access fees, milestone payments or other
consideration (other than Net Sales) payable in respect of IP Technology
licenses and (c) damages, recoveries or other consideration awarded or payable
pursuant to any judgment or settlement related to or arising out of any third
party infringement, misappropriation or other violation of the IP Technology in
the Products.
(b) "Products" means the current family of IP NICexpress
products, and any other existing or later advanced version of such products
derived from or including all or any part of the IP NICexpress product or any
other IP Technology. Notwithstanding the foregoing, where new applications or
products are developed which make use of some or all of the Products and
additional materials or functionality other than the Products, the undersigned
parties agree to negotiate in good faith to determine which portions of such new
applications or products shall be considered "Products" as defined herein.
(c) "Services" means any and all services provided in
respect of any Product (including without limitation, customization,
development, installation, training, maintenance and support services).
(d) "Net Sales" means the gross amount collected by
Buyer, Parent or any other affiliate from any end user customer, reseller, OEM,
distributor or agent for any Product or Service (less amounts actually (i) paid
back for returned or defective Products or Services, (ii) paid for insurance,
postage, freight out, taxes, duties or tariffs (if included in the gross amount
invoiced) and (iii) paid for marketing incentive allowances). If any Product is
bundled with, or sold as part of a suite with, any of Parent's offerings and a
separate price is not charged for the Product ("Bundled Sale"), the Net Sales
for the Bundled Sale shall be the pro rata portion of the Bundled Sale
attributable to the Product based on the then current list prices for all parts
of the Bundled Sale, less any deductions as set forth above. For purposes of
illustration only, if a Product having a list price of $20 is bundled with
another Parent product having a list price of $80, and the suite is sold for
$90, then the Net Sale shall be ((20+80)/100)x90=18, less any deductions.
(e) "IP Technology" means any idea, concept, discovery,
invention, development, technology, work of authorship, trade secret, software,
firmware, tool, process, technique, know-how, data, plan, device, architecture,
specification, design, algorithm, program, code, documentation or other material
or information of IP on the date hereof, tangible or intangible, whether or not
it may be patented, copyrighted or otherwise protected (including all versions,
modifications, enhancements and derivative works thereof) and including any and
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all patent rights, copyright rights, trade secret rights and all other
intellectual and industrial property rights therein or thereto, of any sort,
throughout the world (including any application therefor).
(ii) Records, Statements and Payments. From the Closing Date
and until one (1) year after the Second Anniversary, Buyer shall keep (and shall
cause its distribution chain representatives, including Parent, to keep)
complete and accurate books and records of all Qualified Revenues and Earn Out
Payments (or as the case may be, Alternative Payments described below) due
hereunder.
(iii) Audit. From the Closing Date and until one (1) year
after the Second Anniversary, Sellers shall have the right, on seven (7) days
advance written notice and during regular business hours, to review the records,
statements and payments described in paragraph (ii) above. In addition, during
the same period, Sellers shall have the right upon thirty (30) days advance
written notice to Buyer, at their own expense (shared in Pro Rata portions), to
have an independent auditor (reasonably acceptable to Buyer) access, examine,
audit and copy Buyer's books and records (and those of its distribution chain
representatives) during reasonable business hours at Buyer's principal place of
business for the purpose of verifying the Earn Out Payments (and, if applicable,
the Alternative Payments) provided for in this Agreement. In the event any such
audit discloses an underpayment of more than five percent (5%) then, in addition
to the amount of such underpayment, Buyer shall promptly reimburse Sellers for
the costs and expenses in connection with the audit.
(iv) Alternative Payments.
(a) If on or before the First Anniversary there is a
Contingent Event (as defined below), then in lieu of the Earn Out Payment for
such period, the Sellers shall receive Pro Rata from Buyer or Parent (a) the
greater of (i) an aggregate payment of $500,000.00 in cash or (ii) the amount as
calculated above for the Earn Out Payment, and (b) an aggregate payment of
$500,000.00 in cash (the "First Year Payment" and an "Alternative Payment"). The
First Year Payment shall be made, if at all, within sixty (60) days of the First
Anniversary, unless the Contingent Event is one described in (c)(ii) or (iii)
below, in which case the First Year Payment shall be due and payable immediately
upon the occurrence of such Contingent Event.
(b) If after the First Anniversary and on or before the
Second Anniversary there is a Contingent Event, then, in addition to the Earn
Out Payment payable for the period up to the First Anniversary, Buyer or the
Parent shall pay the Sellers the greater of (i) an aggregate payment of
$500,000.00 in cash or (ii) the Earn Out Payment for the period after the First
Anniversary and ending on the Second Anniversary (the "Second Year Payment" and
an "Alternative Payment"). The Second Year Payment shall be made, if at all,
within sixty (60) days of the Second Anniversary, unless the Contingent Event is
one described in (c)(ii) or (iii) below, in which case the Second Year Payment
shall be due and payable immediately upon the occurrence of such Contingent
Event.
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(c) A "Contingent Event" shall mean any of:
(i) the discontinuation of the Products or distribution
of any of the Products at no or nominal charge (for example, a so called "loss
leader");
(ii) the cessation of business by Parent;
(iii) a Change of Control (as defined below) of Buyer or
Parent;
(iv) the failure of Buyer or Parent to maintain the
customary level of marketing exposure and buyer support in the marketplace for
the Products maintained by IP immediately prior to the Closing Date;
(v) the exclusive license or sublicense of the Products
or substantially all of the intellectual property relating to the Products to a
third party whereby Buyer or Parent forgoes the right to all revenue derived
from sales, licenses, leases or other transfers of the Products.
(d) A "Change in Control" shall mean, with respect to
Parent:
(i) the closing of the sale, transfer or other
disposition of all or substantially all of the Parent's assets;
(ii) the consummation of the merger or consolidation of
the Parent or a subsidiary of the Parent into or with another entity (except one
in which the holders of capital stock of the Parent as constituted immediately
prior to such merger or consolidation continue to hold at least 50% of the
voting power of the capital stock of Parent or the surviving or acquiring entity
in substantially the same proportions as their ownership of the voting power of
the capital stock of the Parent immediately prior to such merger); or
(iii) the closing of the acquisition, in one transaction
or a series of related transactions by a person or group of affiliated persons
(other than Parent, an affiliate of Parent or Buyer, or an underwriter of the
Parent's securities), of 50% or more of the outstanding voting stock of the
Parent.
(e) A "Change in Control" shall mean, with respect to
Buyer:
(i) the closing of the sale, transfer or other
disposition of all or substantially all of the Buyer's assets to a party other
than Parent or an affiliate of Buyer and Parent;
(ii) the consummation of the merger or consolidation of
the Buyer or a subsidiary into or with another entity other than the Parent or
an affiliate of Parent and Buyer (except one in which the holders of capital
stock of the Buyer as constituted immediately prior to such merger or
consolidation continue to hold at least 50% of the voting power of the capital
stock of the Buyer or the surviving or acquiring entity in substantially the
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same proportions as their ownership of the voting power of the capital stock of
the Buyer immediately prior to such merger); or
(iii) the closing of the acquisition, in one transaction
or a series of related transactions by a person or group of affiliated persons
(other than Parent, an affiliate of Parent or Buyer, or an underwriter of the
Buyer's securities), of 50% or more of the outstanding voting stock of the
Buyer.
ARTICLE II
CLOSING
The closing (the "Closing") of the transactions contemplated by this
Agreement shall take place as soon as practicable after satisfaction or waiver
of all conditions set forth herein at the offices of ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ Frome
▇▇▇▇▇▇▇▇▇▇ & Wolosky LLP, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇, or at such
other time and place as the Buyer and the Sellers shall agree (the date on which
such Closing occurs being herein referred to as the "Closing Date"). The first
anniversary of the Closing Date shall be referred to herein as the "First
Anniversary" and the period from the Closing Date through the First Anniversary
shall be referred to herein as the "First Year". The second anniversary of the
Closing Date shall be referred to herein as the "Second Anniversary" and the
period from the First Anniversary through the Second Anniversary shall be
referred to herein as the "Second Year".
ARTICLE III
REPRESENTATIONS AND WARRANTIES OF IP AND THE SELLERS
IP and each of the Sellers, jointly and severally, represents and
warrants to the Buyer, except as set forth on the Schedule of Exceptions
furnished to the Buyer and attached hereto as Schedule B (the "Schedule of
Exceptions"), which exceptions shall be deemed to be representations and
warranties as if made hereunder, as follows:
Section 3.1 Corporate Organization; Requisite Authority to Conduct
Business; Articles of Incorporation and By-Laws. IP is a corporation duly
organized, validly existing and in good standing under the laws of the State of
Texas. IP has provided the Buyer with true and complete copies of its articles
of incorporation (certified by the Secretary of State of the State of Texas) and
By-laws (certified by the Secretary of IP) as in effect on the date hereof.
Prior to the Closing, the minute books of IP will be delivered to the Buyer, and
will contain true and complete records of all meetings and consents in lieu of
meeting of IP's Board of Directors and of IP's stockholders since the
incorporation of IP, the date of IP's inception, which accurately reflect in all
respects all transactions referred to in such minutes and consents in lieu of
meeting, except where such failure would not cause an IP Material Adverse Effect
(as defined below) and except as disclosed on Schedule 3.1. IP has all corporate
power and authority to own, operate and lease its properties and to carry on its
business as the same is now being conducted, and is duly qualified or licensed
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to do business and is in good standing as a foreign corporation in every
jurisdiction in which the conduct of its business or the ownership or leasing of
its properties requires it to be so qualified or licensed, except where the
failure to be so qualified or licensed, individually or in the aggregate, will
not have a material adverse effect on the business, properties, prospects,
assets, liabilities, financial condition or operations of IP (an "IP Material
Adverse Effect").
Section 3.2 Capitalization and Shareholdings. The authorized capital
stock of IP consists of 800,000 shares of IP Common Stock, all of which are
issued and outstanding. The Sellers own all of the Shares free and clear of all
liens, claims or encumbrances. The Sellers have full right, power, legal
capacity and authority to transfer and deliver the Shares pursuant to this
Agreement. The capital stock of IP is duly authorized and all issued capital
stock has been duly and validly issued and is fully paid and non-assessable and
free of preemptive rights. IP does not have outstanding, and is not bound by or
subject to, any subscription, option, warrant, call, right, contract,
commitment, agreement, understanding or arrangement to issue any additional
shares of capital stock of IP, including any right of conversion or exchange
under any outstanding security or other instrument, and no shares are reserved
for issuance for any purpose.
Section 3.3 Subsidiaries, etc. IP does not own (directly or
indirectly) any equity interest in any corporation, partnership, limited
liability company, joint venture, affiliate, association or other entity.
Section 3.4 Authority Relative to and Validity of this Agreement. IP
has full corporate power and authority to execute and deliver this Agreement and
each Employment Agreement (as defined below) (this Agreement, together with the
Employment Agreements, the "Agreements") and to assume and perform all of its
obligations hereunder and thereunder. The execution and delivery of the
Agreements by IP and the performance by IP of its obligations hereunder and
thereunder have been duly authorized by its Board of Directors and stockholders
and no further authorization on the part of IP is necessary to authorize the
execution and delivery by it of, and the performance of its obligations under,
the Agreements. There are no corporate, contractual, statutory or other
restrictions of any kind upon the power and authority of IP or the Sellers to
execute and deliver the Agreements and to consummate the transactions
contemplated hereunder and thereunder and no action, waiver or consent by, or
notice to, any federal, state, municipal or other governmental department,
commission or agency ("Governmental Authority") is necessary to make the
Agreements valid instruments binding upon IP in accordance with their respective
terms. This Agreement has been duly executed and delivered by IP and each of the
Sellers. This Agreement constitutes, and the Employment Agreements, when
executed and delivered by IP and each respective Seller in accordance with their
respective terms will constitute, legal, valid and binding obligations of IP and
the Sellers, enforceable in accordance with their respective terms, except (i)
as such enforceability may be limited by or subject to any bankruptcy,
insolvency, reorganization, moratorium or other similar laws affecting
creditors' rights generally, (ii) as such obligations are subject to general
principles of equity and (iii) as rights to indemnity may be limited by federal
or state securities laws or by public policy.
Section 3.5 Required Filings and Consents; No Conflict. Neither IP
nor any Seller is required to submit any notice, report or other filing with any
Governmental Authority in connection with the execution, delivery or performance
of this Agreement or the Agreements. The execution, delivery and performance of
the Agreements by IP and the consummation of the transactions contemplated
hereby and thereby do not and will not (a) conflict with or violate any law,
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regulation, judgment, order or decree binding upon IP, (b) conflict with or
violate any provision of its articles of incorporation or Bylaws, or (c)
conflict with or result in a breach of any condition or provision of, or
constitute a default (or an event which with notice or lapse of time or both
would become a default) under, or result in the creation or imposition of any
lien, charge or encumbrance upon any properties or assets of IP pursuant to, or
cause or permit the acceleration prior to maturity of any amounts owing under,
any indenture, loan agreement, mortgage, deed of trust, lease, contract,
license, franchise or other agreement or instrument to which IP is a party or
which is binding upon IP or by which any of its properties are bound, except for
conflicts, breaches, defaults, events of default or impositions that would not
have an IP Material Adverse Effect. The execution, delivery and performance of
the Agreements by IP and the consummation of the transactions contemplated
hereby and thereby will not result in the loss of any license, franchise, legal
privilege or permit possessed by IP or give a right of termination to any party
to any agreement or other instrument to which IP is a party or by which any of
its properties are bound.
Section 3.6 Financial Statements. The following financial
statements, together with the notes thereto, have been previously delivered to
Buyer (collectively the "Financial Statements"):
(i) balance sheets of IP as of June 30, 2002 (the "Balance
Sheets"); and
(ii) statements of income and retained earnings and of cash
flows for the period of April 1 to June 30, 2002 (the "Income Statements").
The Financial Statements, as attached hereto as Exhibit 3.6, fairly
present in all material respects the financial condition of IP as of the dates
thereof with respect to the Balance Sheets and as to the periods then ended with
respect to the Income Statements and have been prepared in accordance with
generally accepted accounting principles consistently applied (except for the
omission of footnotes). IP has no liability or obligation of any kind or manner,
either liquidated, unliquidated, direct, accrued, absolute, contingent or
otherwise, whether due or to become due, which is materially in excess of what
was required to be reflected by generally accepted accounting principles
consistently applied, and which were not accurately reflected in all material
respects in the Financial Statements for the period ended June 30, 2002, except
for current liabilities arising in the ordinary and usual course of IP's
business subsequent to June 30, 2002, which are accurately reflected on its
books and records in a manner consistent with past practice.
Section 3.7 Absence of Certain Changes and Events. Since December
31, 2001, there has not been, with respect to IP, (i) any IP Material Adverse
Effect; (ii) any strike, picketing, work slowdown or labor disturbance; (iii)
any material damage, destruction or loss (whether or not covered by insurance)
with respect to any assets or properties; (iv) any redemption or other
acquisition by it of IP Common Stock or any declaration or payment of any
dividend or other distribution in cash, stock or property with respect thereto;
(v) any entry into any material commitment or transaction (including without
limitation, any borrowing or capital expenditure) other than in the ordinary
course of business or as contemplated by this Agreement; (vi) any transfer,
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assignment or sale of, or rights granted under, any material leases, licenses,
agreements, patents, trademarks, trade names, copyrights or other assets other
than those transferred, assigned, sold or granted in the ordinary course of
business and consistent with past practice; (vii) any mortgage, pledge, security
interest or imposition of any other encumbrance on any assets or properties
except in the ordinary course of business; any payment of any debts, liabilities
or obligations ("Liabilities") of any kind other than Liabilities currently due;
any cancellation of any debts or claims or forgiveness of amounts owed to IP; or
(viii) any change in accounting principles or methods (except insofar as may
have been required by a change in U.S. GAAP or as disclosed on Schedule 3.6).
Since December 31, 2001, IP has conducted its business only in the ordinary
course and in a manner consistent with past practice and has not made any
material change in the conduct of its business or operations except as agreed to
in writing by the Buyer or otherwise disclosed herein.
Section 3.8 Taxes and Tax Returns. (a) For purposes of this
Agreement, (i) the term "Taxes" shall mean all taxes, charges, fees, levies or
other assessments, including, without limitation, income, gross receipts,
excise, property, sales, license, payroll and franchise taxes, imposed by the
United States, or any state, local or foreign government or subdivision or
agency thereof whether computed on a unitary, combined or any other basis; and
such term shall include any interest and penalties or additions to tax; and (ii)
the term "Tax Return" shall mean any report, return or other information
required to be filed with, supplied to or otherwise made available to a taxing
authority in connection with Taxes.
(b) Except as disclosed on Schedule 3.8, IP has (i) duly filed
with the appropriate taxing authorities all Tax Returns required to be filed by
or with respect to IP, or are properly on extension and all such duly filed Tax
Returns are true, correct and complete in all material respects, and (ii) paid
in full or made adequate provisions for on its balance sheet (in accordance with
U.S. GAAP) all Taxes shown to be due on such Tax Returns. There are no liens for
Taxes upon the assets of IP except for statutory liens for current Taxes not yet
due and payable or which may thereafter be paid without penalty or are being
contested in good faith. IP has not received any notice of audit, is not
undergoing any audit of its Tax Returns, and has not received any notice of
deficiency or assessment from any taxing authority with respect to liability for
Taxes of IP which has not been fully paid or finally settled. There have been no
waivers of statutes of limitations by IP with respect to any Tax Returns which
relate to IP. IP has not filed a request with the Internal Revenue Service for
changes in accounting methods within the last two years which change would
effect the accounting for tax purposes, directly or indirectly, of IP.
Section 3.9 Employee Benefit Plans. Schedule 3.9 comprises a listing
of each bonus, stock option, stock purchase, benefit, profit sharing, savings,
retirement, liability, insurance, incentive, deferred compensation, and other
similar fringe or employee benefit plans, programs or arrangements for the
benefit of or relating to, any employee of, or independent contractor or
consultant to, and all other compensation practices, policies, terms or
conditions, whether written or unwritten (the "IP Employee Plans") which IP
presently maintains, to which IP presently contributes or under which IP has any
liability and which relate to employees or independent contractors of IP.
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Section 3.10 Title to Property. IP has good and marketable title, or
valid leasehold rights (in the case of leased property), to all real property
and all personal property purported to be owned or leased by it or used in the
operation of its business, free and clear of all encumbrances, excluding (i)
liens for taxes, fees, levies, imposts, duties or governmental charges of any
kind which are not yet delinquent or are being contested in good faith by
appropriate proceedings which suspend the collection thereof; (ii) liens for
mechanics, materialmen, laborers, employees, suppliers or other which are not
yet delinquent or are being contested in good faith by appropriate proceedings;
(iii) liens created in the ordinary course of business in connection with the
leasing or financing of office, computer and related equipment and supplies;
(iv) easements and similar encumbrances ordinarily created for ▇▇▇▇▇▇
utilization and enjoyment of property; and (v) liens or defects in title or
leasehold rights that either individually or in the aggregate do not and will
not have a IP Material Adverse Effect.
Section 3.11 Trademarks, Patents and Copyrights. (a) For purposes of
this Agreement, the term "IP Rights" shall mean all worldwide industrial and
intellectual property rights, including, without limitation, each patent, patent
rights, license, patent application, trade name, trademark, trade name and
trademark registration, copyright, copyright registration, copyright
application, service ▇▇▇▇, brand ▇▇▇▇ and brand name, trade secrets relating to
or arising from any proprietary process, formula, source or object code, owned
or possessed by IP. IP owns or has the right to use, sell or license all IP
Rights and such IP Rights are sufficient for the conduct of IP's businesses as
being conducted as of the date hereof or proposed to be conducted. Schedule 3.11
hereto lists each patent, patent right, patent application, tradename
registration, trademark registration, copyright registration, copyright
application, source and object code owned or possessed by IP;
(b) The execution, delivery and performance of this Agreement
and the consummation of the transactions contemplated hereby will not constitute
a material breach of any instrument or agreement governing any IP Rights, will
not cause the forfeiture or termination or give rise to a right of forfeiture or
termination of any IP Rights or impair the right of IP to use, sell or license
any IP Rights or any portion thereof;
(c) Neither the manufacture, marketing, license, sale or
intended use of any product currently licensed or sold by IP or currently under
development by IP violates any license or agreement between IP and any third
party relating to such product or infringes any intellectual property right of
any other party, and there is no pending or, to the best knowledge of IP,
threatened claim or litigation contesting the validity, ownership or right to
use, sell, license or dispose of any IP Right nor, to the best knowledge of IP
is there any basis for any such claim, nor has IP received any notice asserting
that any IP Right or the proposed use, sale, license or disposition thereof
conflicts or will conflict with the rights of any other party, nor, to the best
knowledge of IP, is there any basis for any such assertion; and
(d) IP has received no notice, and to the best knowledge of
IP, no current or prior officers, employees or consultants of IP claim an
ownership interest in any IP Rights as a result of having been involved in the
development of such property while employed by or consulting to IP or otherwise.
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Section 3.12 Legal Proceedings, Claims, Investigations, etc. There
is no legal, administrative, arbitration or other action or proceeding or
governmental investigation pending, or to the knowledge of IP or any Seller,
threatened, against IP, any director, officer or employee thereof relating to
IP's business. Neither IP nor any Seller has been informed of any violation of
or default under, any laws, ordinances, regulations, judgments, injunctions,
orders or decrees (including without limitation, any immigration laws or
regulations) of any court, governmental department, commission, agency,
instrumentality or arbitrator applicable to the business of IP. IP is not
currently subject to any material judgment, order, injunction or decree of any
court, arbitral authority, administrative agency or other governmental
authority. Section 3.13 Insurance. Schedule 3.13 hereto sets forth a list and
brief description of all existing insurance policies maintained by IP pertaining
to its business properties, personnel or assets. IP is not in default with
respect to any provision contained in any insurance policy, and has not failed
to give any notice or present any claim under any insurance policy in due and
timely fashion. Prior to the Closing, all such policies shall have been
delivered to the Buyer and are in full force and effect. All payments with
respect to such policies are current and IP has not received any notice
threatening a suspension, revocation, modification or cancellation of any such
policy.
Section 3.13 Insurance. Schedule 3.13 hereto sets forth a list and
brief description of all existing insurance policies maintained by IP pertaining
to its business properties, personnel or assets. IP is not in default with
respect to any provision contained in any insurance policy, and has not failed
to give any notice or present any claim under any insurance policy in due and
timely fashion. Prior to the Closing, all such policies shall have been
delivered to the Buyer and are in full force and effect. All payments with
respect to such policies are current and IP has not received any notice
threatening a suspension, revocation, modification or cancellation of any such
policy.
Section 3.14 Material Contracts. (a) Except as set forth in Schedule
3.14 hereto, IP is not a party to and is not bound by any contract or has any
commitment, whether written or oral and will result in payments in excess of
$5,000 or require material performance on the part of IP. Each of the contracts
and commitments set forth in Schedule 3.14 hereto is valid and existing, in full
force and effect and enforceable in accordance with its terms (subject to
equitable principles and limitations on indemnity) and there is no material
default or claim of default against IP or any notice of termination with respect
thereto. IP has complied in all material respects with all requirements of, and
performed all of its obligations under, such contracts and commitments. In
addition, no other party to any such contract or commitment is, to the best of
IP's knowledge, in default under or in breach of any material term or provision
thereof, and there exists no condition or event which, after notice or lapse of
time or both, would constitute a material default by any party to any such
contract or commitment. Copies of all the written documents and a synopsis of
all oral contracts and commitments described in Schedule 3.14 hereto have
heretofore been made available to the Buyer and such copies and synopses are
true and complete and include all amendments and supplements thereto and
modifications thereof to and including the date hereof.
(b) Except as set forth in Schedule 3.14 hereto or as
contemplated by this Agreement, IP is not a party to any oral or written (i)
agreement with any consultant, executive officer or other key employee the
benefits of which are contingent, or the terms of which are materially altered,
upon the occurrence of the transactions contemplated by this Agreement, or (ii)
agreement or plan, including any stock option plan and the like, any of the
benefits of which will be increased, or the vesting of the benefits of which
will be accelerated, by the occurrence of the transactions contemplated by this
Agreement.
Section 3.15 Certain Transactions. Neither IP, nor any officer,
director or any employee of IP, nor any member of any such person's immediate
family is presently a party to any material transaction with IP relating to the
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business of IP, including without limitation, any contract, agreement or other
arrangement (i) providing for the furnishing of services by, (ii) providing for
the rental of real or personal property from, or (ii) otherwise requiring
payments to (other than for services as officers, directors or employees of IP),
any such person or any corporation, partnership, trust or other entity in which
any such person has a substantial interest as a stockholder, officer, director,
trustee or partner.
Section 3.16 Broker. No broker, finder or investment banker is
entitled to any brokerage or finder's fee or other commission in connection with
the transactions contemplated hereby based on the arrangements made by or on
behalf of IP or the Sellers.
Section 3.17 Environmental Matters. (a) IP is not the subject of, or
being threatened to be the subject of (i) any enforcement proceeding, or (ii) to
the best of its knowledge, any investigation, brought in either case under any
Federal, state or local environmental law, rule, regulation, or ordinance at any
time in effect or (iii) to the best of its knowledge, any third party claim
relating to environmental conditions on or off the properties of IP. IP has not
been notified that it must obtain any permits and licenses or file documents for
the operation of its business under federal, state and local laws relating to
pollution protection of the environment. Except as set forth in Schedule 3.17
hereto, IP has not been notified of any conditions on or off the properties of
IP which will give rise to any liabilities, known or unknown, under any Federal,
state or local environmental law, rule, regulation or ordinance, or as the
result of any claim of any third party. For the purposes of this Section 3.17,
an investigation shall include, but is not limited to, any written notice
received by IP which relates to the onsite or offsite disposal, release,
discharge or spill of any waste, waste water, pollutant or contaminants.
(b) Except as set forth in Schedule 3.17 hereto, there are no
toxic wastes or other toxic or hazardous substances or materials, pollutants or
contaminants which IP has used, stored or otherwise held in or on any of the
facilities of IP, which, are present at or have migrated from the facilities,
whether contained in ambient air, surface water, groundwater, land surface or
subsurface strata. The facilities have been maintained by IP in material
compliance with all environmental protection, occupational, health and safety or
similar laws, ordinances, restrictions, licenses, and regulations. IP has not
disposed of or arranged (by contract, agreement or otherwise) for the disposal
of any material or substance that was generated or used by IP at any off-site
location that has been or is listed or proposed for inclusion on any list
promulgated by any Governmental Authority for the purpose of identifying sites
which pose a danger to health and safety. To the best of its knowledge, there
have been no environmental studies, reports and analyses made or prepared in the
last five years relating to the facilities of IP. IP has not installed any
underground storage tanks in any of its facilities and, to the best of IP's
knowledge, none of such facilities contain any underground storage tanks.
Section 3.18 Illegal Payments. Neither IP nor any Seller has,
directly or indirectly, paid or delivered any fee, commission or other sum of
money or item of property, however characterized, to any finder, agent,
government official or other party, in the United States or any other country,
which is in any manner related to the business or operations of IP, which IP
knows or has reason to believe to have been illegal under any federal, state or
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local laws or the laws of any other country having jurisdiction. IP has not
participated, directly or indirectly, in any boycotts affecting any of its
actual or potential customers.
Section 3.19 Compliance with Law. IP has complied in all respects
with all laws, rules, regulations, arbitral determinations, orders, writs,
decrees and injunctions which are applicable to or binding upon IP or its
properties, except where such failure would not cause an IP Material Adverse
Effect
Section 3.20 Accounts Receivable and Accounts Payable.
(i) All accounts and notes receivable (customer, vendor and
other) of IP as of June 30, 2002, are and will be valid and correct and
represent sales actually made (net of all applicable credits and rebates) in the
ordinary and usual course of business consistent with past practices. From June
30, 2002 to the date of this Agreement, there have been no accounts receivable
of IP converted to notes receivable or otherwise extended, except as set forth
in Schedule 3.20.
(ii) The accounts payable of IP represent amounts owed for
supplies, inventory and other assets, or services required for the ordinary
conduct of IP's business and have been paid in the ordinary course of business
consistent with past practice.
ARTICLE IV
REPRESENTATIONS AND WARRANTIES OF THE BUYER
The Buyer hereby represents and warrants to the Sellers and IP as
follows:
Section 4.1 Corporate Organization; Requisite Authority to Conduct
Business. The Buyer is a corporation duly organized, validly existing and in
good standing under the laws of the State of Delaware. The Buyer has provided
the Sellers with true and complete copies of its certificate of incorporation
(certified by the Secretary of State of the State of Delaware) and By-laws
(certified by the Secretary of the Buyer) as in effect on the date hereof. The
Buyer has full corporate power and authority to enter into the Agreements, to
perform its obligations hereunder and thereunder and to consummate the
transactions contemplated hereby and thereby; and each of the Agreements has
been duly authorized and approved by its Board of Directors and no further
action on the part of the Buyer is necessary to authorize the execution and
delivery by it of, and the performance of its obligations under, the Agreements.
There are no corporate, contractual, statutory or other restrictions of any kind
upon the power and authority of the Buyer to execute and deliver the Agreements
and to consummate the transactions contemplated hereunder and thereunder and no
action, waiver or consent by any Governmental Authority is necessary to make the
Agreements valid instruments binding upon the Buyer in accordance with their
respective terms.
Section 4.2 Execution and Delivery. The Buyer has full corporate
power and authority to execute and deliver the Agreements and to assume and
perform all of its obligations hereunder and thereunder. The execution and
delivery of the Agreements by the Buyer and the performance by the Buyer of its
obligations hereunder and thereunder have been duly authorized by its Board of
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Directors and the Parent and no further authorization on the part of the Buyer
is necessary to authorize the execution and delivery by it of, and the
performance of its obligations under, the Agreements. The Buyer is not required
to submit any notice, report or other filing with any Governmental Authority in
connection with the execution, delivery or performance of the Agreements. This
Agreement has been duly executed and delivered by the Buyer and the Parent and
constitutes, and the Employment Agreements, when executed and delivered by IP in
accordance with their respective terms will constitute, legal, valid and binding
obligations of the Buyer and the Parent, enforceable against the Buyer and the
Parent in accordance with their respective terms, except (i) as such
enforceability may be limited by or subject to any bankruptcy, insolvency,
reorganization, moratorium or other similar laws affecting creditors' rights
generally, (ii) as such obligations are subject to general principles of equity
and (iii) as rights to indemnity may be limited by federal or state securities
laws or by public policy.
Section 4.3 No Conflicts; Absence of Defaults. The execution,
delivery and performance of the Agreements by the Buyer and the Parent and the
consummation of the transactions contemplated hereby and thereby does not and
will not conflict with or violate (a) the Buyer's or the Parent's Certificate of
Incorporation or By-laws or (b) any material law, administrative regulation or
rule or court order, judgment or decree applicable to the Buyer or the Parent;
nor will the execution and delivery of this Agreement or the consummation of the
transaction contemplated hereby constitute a material breach of, or any event of
default under, any material contract or agreement to which the Buyer or the
Parent is bound, or by which the Buyer or the Parent may be bound or affected.
Section 4.4 Investment. The Buyer is acquiring the Shares solely for
its own account as an investment and not with a view to any distribution or
resale thereof within the meanings of such terms under the Securities Act.
Section 4.5 Capitalization. The authorized capital stock of the
Buyer consists of 1,000 shares of Common Stock. As of the date hereof, 1,000
shares of Common Stock are issued and outstanding, all of which are owned by
Parent.
Section 4.6 Subsidiaries. The Buyer does not own directly or
indirectly any equity interest in any corporation, partnership, limited
liability company, joint venture, association or other entity.
Section 4.7 No Undisclosed Liabilities. The Buyer has no material
debts, liabilities or obligations of any kind, whether accrued, absolute,
contingent or other, whether due or to become due, except as incurred in the
ordinary course of business, that would have a material adverse effect on the
Buyer.
Section 4.8 Broker. No broker, finder or investment banker is
entitled to any brokerage or finder's fee or other commission in connection with
the transactions contemplated hereby based upon the arrangements made by or on
behalf of the Buyer.
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ARTICLE V
CONDITIONS PRECEDENT TO OBLIGATIONS OF THE SELLERS
The obligations of the Sellers under this Agreement are subject to
the satisfaction, on or prior to the Closing Date, unless waived in writing, of
each of the following conditions:
Section 5.1 Representations and Warranties True. The representations
and warranties of the Buyer and the Parent contained in this Agreement shall be
true and correct in all material respects as of the date when made and at and as
of the Closing Date, with the same force and effect as if made on and as of the
Closing Date, and the Sellers shall have received a certificate to that effect
and as to the matters set forth in Section 5.2 hereof, dated the Closing Date,
from the President or Chief Executive Officer of the Buyer.
Section 5.2 Performance of Covenants. The Buyer shall have performed
or complied in all material respects with all agreements, conditions and
covenants required by this Agreement to be performed or complied with by it on
or before the Closing Date.
Section 5.3 No Proceedings. No preliminary or permanent injunction
or other order (including a temporary restraining order) of any state, federal
or local court or other governmental agency or of any foreign jurisdiction which
prohibits the consummation of the transactions which are the subject of this
Agreement or prohibits the Buyer's ownership of the Shares shall have been
issued or entered and remain in effect.
Section 5.4 Consents and Approvals. All filings and registrations
with, and notifications to, all federal, state, local and foreign authorities
required for consummation of the transactions contemplated by this Agreement
shall have been made, and all consents, approvals and authorizations of all
federal, state, local and foreign authorities and parties to material contracts,
licenses, agreements or instruments required for consummation of the
transactions contemplated by this Agreement shall have been received and shall
be in full force and effect.
Section 5.5 Material Changes. Since the date hereof, there shall not
have been any material adverse change in the business, operations, financial
condition, assets, liabilities, prospects or regulatory status of the Buyer.
ARTICLE VI
CONDITIONS PRECEDENT TO OBLIGATIONS OF THE BUYER
The obligations of the Buyer under this Agreement are subject to the
satisfaction, on or prior to the Closing Date, unless waived in writing, of each
of the following conditions:
Section 6.1 Representation and Warranties True. The representations
and warranties of IP and the Sellers contained in this Agreement shall be true
and correct in all material respects as of the date when made and at and as of
the Closing Date, with the same force and effect as if made on and as of the
Closing Date, and the Buyer shall have received a certificate to that effect and
as to the matters set forth in Section 6.2 hereof, dated the Closing Date, from
the President or Chief Executive Officer of IP and from each Seller.
Section 6.2 Performance of Covenants. IP and the Sellers shall have
performed or complied in all material respects with all agreements, conditions
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and covenants required by this Agreement to be performed or complied with by
them on or before the Closing Date.
Section 6.3 No Proceedings. No preliminary or permanent injunction
or other order (including a temporary restraining order) of any state, federal
or local court or other governmental agency or of any foreign jurisdiction which
prohibits the consummation of the transactions which are the subject of this
Agreement or prohibits the Buyer's ownership of the Shares or operation of IP's
business shall have been issued or entered and remain in effect.
Section 6.4 Consents and Approvals. All filings and registrations
with, and notifications to, all federal, state, local and foreign authorities
required for consummation of the transactions contemplated by this Agreement
shall have been made, and all consents, approvals and authorizations of all
federal, state, local and foreign authorities and parties to material contracts,
licenses, agreements or instruments required for consummation of the
transactions contemplated by this Agreement shall have been received and shall
be in full force and effect.
Section 6.5 Employment Agreements. The employment agreements between
each of Wilbanks, Dolecheck, Reyero, ▇▇▇▇▇▇▇ ▇▇▇▇ and FalconStor, Inc.,
substantially in the form of Annexes A-D attached hereto ("the Employment
Agreements"), shall have been executed by each party thereto.
Section 6.6 Intellectual Property Rights. Each of the Sellers shall
have executed a document substantially in the form of Annex E assigning all
worldwide industrial and intellectual property rights, including, without
limitation, each patent, patent rights, license, patent application, trade name,
trademark, trade name and trademark registration, copyright, copyright
registration, copyright application, service ▇▇▇▇, brand ▇▇▇▇ and brand name,
trade secrets relating to or arising from any proprietary process, formula,
source or object code, owned or possessed by the Seller.
Section 6.7 Opinion of IP's and the Sellers' Counsel. The Buyer
shall have received the opinion of ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇
& ▇▇▇▇▇▇▇▇▇, LLP, counsel to IP and the Sellers, dated the Closing Date, in form
reasonably satisfactory to the Buyer, substantially to the effect that: (i) IP
is a corporation duly organized, validly existing and in good standing under the
laws of the State of Texas; (ii) IP has the corporate power, and each Seller has
full legal right, power and authority, to enter into the Agreements and to
consummate the transactions, contemplated hereby and thereby; (iii) the
execution and delivery of the Agreements, and the consummation of the
transactions contemplated hereby and thereby have been duly authorized by
requisite corporate action taken on the part of IP; (iv) each of the Agreements
has been executed and delivered by IP and the Sellers and (assuming that each is
a valid and binding obligation of the other parties thereto) is a valid and
binding obligation of IP and the Sellers enforceable against IP and the Sellers
in accordance with its terms, except as enforceability may be limited by any
bankruptcy, insolvency and other laws affecting the enforcement of creditors'
rights generally, and as such enforceability is subject to general principles of
equity (regardless of whether such enforceability is considered in a proceeding
in equity or at law); and (v) the Shares are duly authorized, validly issued,
fully paid and nonassessable. Such opinion shall be limited to the laws of Texas
and United States federal law.
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Section 6.8 Material Changes. Since the date hereof, there shall not
have been any material adverse change in the business, operations, financial
condition, assets, liabilities, prospects or regulatory status of IP.
Section 6.9 Requisite Authority to Conduct Business. IP shall be
duly qualified or licensed to do business and shall be in good standing as a
foreign corporation in each jurisdiction in which the conduct of its business or
the ownership or leasing of its properties requires it to be so qualified or
licensed, except where the failure to be so qualified or licensed and in good
standing would not have a IP Material Adverse Effect.
Section 6.10 Redemption of Notes Payable. IP shall redeem
Convertible Promissory Notes payable to ▇▇▇▇▇▇▇▇ and ▇▇▇▇▇ no later than the day
before Closing.
Section 6.11 Cash Balance. The positive balance of the total
checking, savings or similar account (the "Checking Account") of IP at Closing
shall not be less than $100,000.00 net of regular Account Payables, regular
operating expense accrual, payment of notes payable, and IP's agreement to pay
$100,000.00 to ▇▇▇▇▇▇▇ ▇▇▇▇ prior to the Closing, and there shall be no liens on
such account and such amount shall not be offset by any liability or obligation
of any nature (whether liquidated, unliquidated, known or unknown, accrued,
absolute, contingent or otherwise and whether due or to become due). If the
amount available in the Checking Account of IP is less than $100,000.00 in
accordance with the foregoing sentence, then the aggregate payment by Buyer
shall be reduced on a dollar for dollar basis and the Purchase Price shall be
reduced accordingly.
ARTICLE VII
INDEMNIFICATION
Section 7.1 Indemnification by the Sellers. Subject to the limits
set forth in this Article VII, the Sellers, severally and not jointly, agree to
indemnify, defend and hold the Buyer, Parent and each of its and their directors
and officers harmless from and against any and all loss, liability, damage,
costs and expenses (including interest, penalties and attorneys' fees)
(collectively, "Losses") that the Buyer, Parent or any of their affiliates may
incur or become subject to arising out of or due to any inaccuracy of any
representation or the breach of any warranty or covenant of the Sellers or IP
contained in this Agreement. The Sellers will reimburse the Buyer, Parent and
each of its and their controlling person for any legal or any other expenses
reasonably incurred by them in connection with investigating or defending any
such loss, claim, liability, action or proceeding. Buyer or Parent shall have
the right offset the amount of any such loss, liability, cost or expenses
against any Earn Out payment owed to the Sellers.
Section 7.2 Indemnification by the Buyer. Subject to the limits set
forth in this Article VII, the Buyer and the Parent, severally and not jointly,
agree to indemnify, defend and hold the Sellers harmless from and against any
and all Losses that the Sellers may incur or become subject to arising out of or
due to any inaccuracy of any representation or the breach of any warranty or
covenant of the Buyer contained in this Agreement. The Buyer will reimburse the
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Sellers for any legal or other expenses reasonably incurred by him in connection
with investigating or defending any such loss, claim, liability, action or
proceeding.
Section 7.3 Survival. The representations and warranties of IP, the
Sellers and the Buyer set forth in Articles III and IV of this Agreement shall
survive the Closing until the Second Anniversary. The covenants and agreements
of the Sellers, the Buyer and IP shall not survive the Closing, except for the
covenants and agreements set forth under Article VII hereof.
Section 7.4 Limitations. No party shall assert any claim against the
other party or parties for indemnification hereunder with respect to any
inaccuracy or breach of such warranties, representations, covenants or
agreements unless and until the amount of all such claims shall exceed $15,000,
but after the $15,000 threshold is reached, each indemnified person shall be
entitled to be indemnified for the full amount of all claims arising hereunder;
provided, however, that in no event shall the aggregate indemnity under this
Article VII by any individual Seller exceed the net proceeds received by such
Seller pursuant to Section 1.2 of this Agreement; provided further that in no
event shall the aggregate indemnity payable under this Article VII by all
Sellers exceed the greater of $500,000.00 or 10% of the proceeds received by
Sellers pursuant to Section 1.2 of this Agreement. All indemnification
obligations of Sellers may be satisfied by payment in cash or by offset against
Earn Out payment still owed to Sellers.
Section 7.5 Third Party Claims. In order for a party (the
"indemnified party") to be entitled to any indemnification provided for under
this Agreement in respect of, arising out of, or involving a claim or demand or
written notice made by any third party against the indemnified party (a "Third
Party Claim") after the Closing Date, such indemnified party must notify the
indemnifying party (the "indemnifying party") in writing of the Third Party
Claim within 30 business days after receipt by such indemnified party of written
notice of the Third Party Claim; provided that the failure of any indemnified
party to give timely notice shall not affect his right of indemnification
hereunder except to the extent the indemnifying party has actually been
prejudiced or damaged thereby. If a Third Party Claim is made against an
indemnified party, the indemnifying party shall be entitled, if it so chooses,
to assume the defense thereof with counsel selected by the indemnifying party
(which counsel shall be reasonably satisfactory to the indemnified party). If
the indemnifying party assumes the defense of a Third Party Claim, the
indemnified party will cooperate in all reasonable respects with the
indemnifying party in connection with such defense, and shall have the right to
participate in such defense with counsel selected by it. The fees and
disbursements of such counsel, however, shall be at the expense of the
indemnified party; provided, however, that, in the case of any Third Party Claim
of which the indemnifying party has not employed counsel to assume the defense,
the fees and disbursements of such counsel shall be at the expense of the
indemnifying party. Notwithstanding the foregoing, the indemnity agreement
contained in this Article VII shall not apply to amounts paid in settlement of
claim, damage, liability or action if such settlement is effected without the
consent of the indemnifying party (which consent shall not be unreasonably
withheld).
Section 7.6 Reduction for Insurance. The gross amount which an
indemnifying party is liable to, for, or on behalf of the indemnified party
pursuant to this Article VII (the "Indemnifiable Loss") shall be reduced
(including, without limitation, retroactively) by any insurance proceeds
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actually recovered by or on behalf of such indemnified party related to the
Indemnifiable Loss. If an indemnified party shall have received or shall have
had paid on its behalf an indemnity payment in respect of an Indemnifiable Loss
and shall subsequently receive directly or indirectly insurance proceeds in
respect of such Indemnifiable Loss, then such indemnified party shall pay to
such indemnifying party the net amount of such insurance proceeds or, if less,
the amount of such indemnity payment.
ARTICLE VIII
TERMINATION, AMENDMENT AND WAIVER
Section 8.1 Termination. This Agreement may be terminated and the
transactions contemplated by this Agreement abandoned at any time prior to the
Closing:
(a) By mutual written consent of the Buyer, the Sellers and
IP;
(b) By either the Buyer or the Sellers if the transactions
contemplated by this Agreement shall not have been consummated on or before
August 31, 2002;
(c) By the Sellers if any condition specified in Article V
hereto has not been met or waived by the Sellers at such time as such condition
can no longer be satisfied; or
(d) By the Buyer if any condition specified in Article VI
hereto has not been met or waived by the Buyer at such time as such condition
can no longer be satisfied; or
(e) By either the Buyer, the Sellers or IP if a court of
competent jurisdiction or Governmental Authority shall have issued a final,
non-appealable order, decree or ruling or taken any other action (which order,
decree or ruling the parties hereto shall use their best efforts to lift), in
each case permanently restraining, enjoining or otherwise prohibiting the
transactions contemplated by this Agreement.
Section 8.2 Effect of Termination. In the event of any termination
of this Agreement in accordance with Section 8.1 hereof, this Agreement shall
forthwith become void and there shall be no liability under this Agreement on
the part of any party hereto or their respective affiliates, officers,
directors, employees or agents by virtue of such termination.
Section 8.3 Amendment. This Agreement may be amended by the written
agreement of the Buyer, the Sellers and IP.
ARTICLE IX
MISCELLANEOUS
Section 9.1 Expenses. All costs and expenses incurred in connection
with this Agreement and the transactions contemplated hereby shall be paid by
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the party incurring such costs and expenses regardless of the termination of
this Agreement or the failure to consummate the transactions contemplated
hereby.
Section 9.2 Notices. All notices, requests, demands and other
communications which are required or may be given under this Agreement shall be
in writing and shall be deemed to have been duly given when delivered personally
or by facsimile transmission, in either case with receipt acknowledged, or three
days after being sent by registered or certified mail, return receipt requested,
postage prepaid:
(a) If to the Buyer to:
FalconStor AC, Inc.
▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇ ▇▇▇
▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Attention: President
with a copy to:
▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ Frome ▇▇▇▇▇▇▇▇▇▇ & ▇▇▇▇▇▇▇ LLP
▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇▇ ▇▇▇▇▇▇▇, Esq.
(b) If to the Sellers, to the address listed on the signature pages
hereto, if to IP to:
IP Metrics Software, Inc.
▇▇▇ ▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇ ▇▇▇
▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
with a copy to:
▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ & ▇▇▇▇▇▇▇▇▇, LLP
▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Attention: ▇▇▇ ▇▇▇▇▇▇▇▇▇, Esq.
or to such other address as any party shall have specified by notice in writing
to the other in compliance with this Section 9.2.
Section 9.3 Entire Agreement. This Agreement constitutes the entire
agreement among the parties hereto with respect to the subject matter hereof and
thereof and supersedes all prior agreements, representations and understandings
among the parties.
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Section 9.4 Binding Effect, Benefits, Assignments. This Agreement
shall inure to the benefit of and be binding upon the parties hereto and their
respective successors and assigns; nothing in this Agreement, expressed or
implied, is intended to confer on any other person, other than the parties
hereto or their respective successors and assigns, any rights, remedies,
obligations or liabilities under or by reason of this Agreement. This Agreement
may not be assigned without the prior written consent of the other parties
hereto.
Section 9.5 Applicable Law. This Agreement and the legal relations
between the parties hereto shall be governed by and construed in accordance with
the laws of the State of New York, without regard to principles of conflicts of
law.
Section 9.6 Jurisdiction. The parties hereto agree to submit to the
jurisdiction of any Federal or state court located in the State of New York for
the purpose of resolving any action or claim arising out of the performance of
the provisions of this Agreement.
Section 9.7 Headings. The headings and captions in this Agreement
are included for purposes of convenience only and shall not affect the
construction or interpretation of any of its provisions.
Section 9.8 Counterparts. This Agreement may be executed
simultaneously in two or more counterparts, each of which shall be deemed an
original, but all of which together shall constitute one and the same
instrument.
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IN WITNESS WHEREOF, the parties hereto have executed this Agreement
as of the day and year hereinabove first set forth.
FalconStor AC, Inc.
By /s/ ▇▇▇▇▇▇▇ ▇▇▇▇ /s/ ▇▇▇▇▇ ▇▇▇▇▇▇▇▇
---------------------------------------- ----------------------------------
Name: ▇▇▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇▇
Title: Chief Executive Officer Address: ▇▇▇▇ ▇▇▇▇▇▇▇▇▇
▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
FalconStor Software, Inc.
By /s/ ▇▇▇▇▇▇▇ ▇▇▇▇ /s/ ▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇
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Name: ▇▇▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇
Title: Chief Executive Officer Address: ▇▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇.
▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
IP Metrics Software, Inc.
By: /s/ ▇▇▇▇▇ ▇▇▇▇▇▇▇▇ /s/ ▇▇▇▇ ▇▇▇▇▇▇
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Name: ▇▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇
Title: President and CEO Address: ▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
/s/ ▇▇▇▇ ▇▇▇▇▇
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▇▇▇▇ ▇▇▇▇▇
Address: c/o Dovetail Public Relations
▇▇▇▇▇ ▇▇▇ ▇▇▇▇▇ ▇▇▇▇., ▇▇▇. ▇▇
▇▇▇ ▇▇▇▇▇, ▇▇ ▇▇▇▇▇
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