1
Exhibit 2
ASSET PURCHASE AGREEMENT
THIS AGREEMENT, dated as of January 15, 1999, is by and among Barrister
Information Systems Corporation, a Delaware corporation with its principal place
of business at ▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇ ("Purchaser"), and Icon
Technology LLC, a California limited liability company with its principal place
of business at ▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇ #▇▇▇▇, ▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
("Seller"), and ▇▇▇ ▇▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇ and ▇▇▇▇▇▇ Guild (together,
the "Principals").
WHEREAS, Seller is engaged in the business of consulting and in
designing, engineering, writing and distributing computer software including
source code and object code (collectively the "Seller's Business"); and
WHEREAS, a portion of Seller's Business is certain consulting
activities and the production and distribution of LegalHouse software, source
code, object code and related software, software services and support products
(the "LegalHouse Business"); and
WHEREAS, Purchaser desires to acquire from Seller and Seller desires to
transfer to Purchaser substantially all of the assets used by Seller in the
operation of the LegalHouse Business upon the terms and conditions contained in
this Agreement;
NOW, THEREFORE, in consideration of the mutual promises set forth in
this Agreement, and for other good and valuable consideration, the receipt and
adequacy of which are acknowledged, the parties hereto agree as follows:
1. Defined Terms. In this Agreement, capitalized terms shall have
the following meanings:
(a) "Shares" shall mean the shares of Series E Preferred Stock
of Purchaser, convertible into Common Stock, to be paid as the Purchase
Price (including shares of Common Stock issued upon conversion
thereof).
(b) "Books and Records" shall mean each copy of any book,
computer disk, document, file, list, magnetic tape, record and other
tangible item relating to the LegalHouse Business or customers or
suppliers of, or any other Person having contracts or other business
relationships with, Seller that relate, directly or indirectly, to the
LegalHouse Business including, but not limited to, license labels,
programmer reference material and programmer notebooks, machine
readable copies of all support materials such as datasheets, contracts,
pricing information, marketing materials, presentations, marketing
plans, internet and intranet documents, advertising, trade show support
materials and news releases but excluding any physical media containing
the source code relating to the Products.
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(c) "Customer Contracts" shall mean each contract, whether
oral or written, between Seller and any other Person pursuant to which
such Person has agreed to purchase or license Products, or be supplied
with services relating to the LegalHouse Business and which is listed
on Schedule 1(c) hereto.
(d) "Effective Date" or "Closing Date" shall mean the date of
the Closing.
(e) "Encumbrances" shall mean any claim, lien, pledge, option,
charge, easement, security interest, right-of-way, encumbrance or other
right of any Person.
(f) "Goodwill" shall mean the goodwill of Seller relating to
the LegalHouse Business.
(g) "Governmental Authority" shall mean any federal, state,
local or foreign government, or any political subdivision of any of the
foregoing, or any court, agency or other entity, body, organization or
group, exercising any executive, legislative, judicial, quasi-judicial,
regulatory or administrative function of government or any
supernational body (including the European Union).
(h) "Intellectual Property Rights" shall mean each copyright,
patent, service ▇▇▇▇, brand name, trademark, trade secret and other
intellectual property right used by Seller to publish and distribute,
or otherwise used in, the Products or other aspects of the LegalHouse
Business as of the date of this Agreement.
(i) "Assumed Liabilities" shall mean the liabilities of Seller
assumed by Purchaser, not otherwise excluded in this Agreement,
consisting of (i) those liabilities incurred by Seller in the normal
course of business at or prior to the Closing (including trade
payables, accrued compensation (including liabilities related to the
assets described in clause (xi) of Section 1(o)), (ii) future lease
payments on Seller's lease of premises at ▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇ #▇▇▇▇,
▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇ and (iii) those additional liabilities of Seller
set forth on Schedule 1(i).
(j) "Licensed Property" shall mean each copyright, patent,
service ▇▇▇▇, brand name, trademark, trade secret and other
intellectual property right used by Seller in conjunction with the
Products or the LegalHouse Business .
(k) "Permits" shall mean each authorization, approval,
consent, license and permit of Seller that relates to the LegalHouse
Business, if any.
(l) "Person" shall mean any corporation, Governmental
Authority, individual, limited liability company, partnership, trust or
other entity.
(m) "Products" shall mean the source code, object code and
various software and materials described as follows:
(i) all LegalHouse software, source code and object
code;
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(ii) all LegalHouse system setup and
configuration software, source code and
object code;
(iii)) all tools, utilities, companion products,
documentation and sales materials related to
or used with all of the items above.
(n) "Purchase Price" shall mean (ii) 2,500 shares of
Purchaser's Series E Preferred Stock (convertible into 2,500,000 shares
of Purchaser's Common Stock as further set forth in the Certificate of
Designation attached hereto as Exhibit A (the "Series E Certificate of
Designation").
(o) "Purchased Assets" shall mean all right, title and
interest of Seller in and to the following:
(i) the Books and Records;
(ii) the Customer Contracts;
(iii) the Consulting Contracts, except as
limited herein;
(iv) the Goodwill;
(v) the Intellectual Property Rights;
(vi) the Products;
(vii) the Tangible Personal Property;
(viii) the Permits;
(ix) accounts and notes receivable;
(x) cash in excess of $10,000.00, if
any:
(xi) all unbilled revenue including
unbilled work in progress and
unbilled LegalHouse product sales;
and
(xii) all claims and causes of action
(except those arising out of this
Agreement and the transactions
related thereto).
(p) "Purchaser Related Agreements" shall mean each agreement,
instrument and other writing listed in Section 10 or 11 of this
Agreement, or otherwise contemplated by this Agreement, to be executed
by Purchaser.
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(q) "Series E Preferred Stock" shall mean the Series E
Preferred Stock of Purchaser having the rights, preferences and
privileges set forth in the Series E Certificate of Designation.
(r) "Consulting Contracts" shall mean the agreements with
customers, whether written or oral, listed on Schedule 1(t) attached
hereto, entered into by Seller for certain consulting and/or
engineering work, support and/or maintenance.
(s) "Tangible Personal Property" shall mean all of the
equipment, computers, telecommunication equipment, furniture and
decoration items used in the operation of Seller's Business and which
are listed on Schedule 1(u) to this Agreement.
2. Sale of Assets and Operation of LegalHouse Business.
(a) Subject to the terms and conditions set forth in
this Agreement, Seller shall assign, convey, deliver, sell and transfer
to Purchaser, and Purchaser shall acquire from Seller, the Purchased
Assets, free and clear of all Encumbrances, effective as of the opening
of business on the Effective Date. The parties agree that all revenues
and expenses accrued in connection with the LegalHouse Business on or
after the Effective Date shall be for the account of Purchaser, and
that the LegalHouse Business shall be operated for the benefit of
Purchaser on and after the Effective Date. On the Effective Date,
Seller shall provide a closing balance sheet on the accrued accounting
basis in a form mutually acceptable to both parties. Subject to the
terms and conditions set forth in this Agreement and with no further
action required by Purchaser or Seller, Purchaser shall assume the
Assumed Liabilities upon the Closing.
(b) The source code for the Products will be
transmitted by network wire from disk media owned by Seller (which disk
media shall hereinafter be referred to as "Seller Media") to tape media
owned by Purchaser. The Seller Media will not be sold, transferred or
delivered to Purchaser, notwithstanding anything to the contrary in
this Agreement or any ▇▇▇▇ of Sale related thereto, but will remain the
property of Seller and in its possession. Upon written instructions
from Purchaser, Seller will immediately erase the Seller Media and
certify same to Purchaser and certify that no copies have been made or
retained by Seller, its employees or independent contractors, or
Principals. The retention of the Seller Media by Seller shall not imply
any retention of ownership or other rights to source code for the
Products, the ownership of which shall pass to Purchaser upon the
Closing.
(c) The fair market value of the Tangible Personal
Property is $12,000.
3. Purchase Price.
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(a) General. The Series E Preferred Stock shall
automatically convert into 2,500,000 shares (as adjusted for stock
splits, stock dividends and the like) of Common Stock in accordance
with the terms of the Series E Certificate of Designation upon approval
of the Shareholders of Purchaser at Purchaser's 1999 Annual Meeting of
Shareholders (or, if no such approval is required by the rules and
regulations of the American Stock Exchange, then immediately).
Purchaser will register the Common Stock shares on terms at least as
favorable as those that may be granted from time to time to other
holders of Common Stock of Purchaser (or securities exercisable or
convertible thereinto). The Shares will be restricted from sale as
follows (each period of time measured from the date hereof):
(i) After one year Seller and/or
Principals may sell 10% of the Shares.
(ii) After two years Seller and/or
Principals may sell an additional 15% of the Shares.
(iii) After three years Seller and/or
Principals may sell an additional 20% of the Shares.
(iv) After four years Seller and/or
Principals may sell an additional 25%of the Shares.
(v) After five years Seller and/or
Principals may sell an additional 30% of the Shares.
After one year, all of the Shares shall become immediately available
for sale in the event of termination of employment of a Principal by Purchaser
for convenience (with respect to the portion of the Shares held by such
Principal) or the acquisition of Purchaser (including, without limitation, the
consolidation or merger of Purchaser with or into any other entity, or any other
transaction or series of transactions in which the stockholders of Purchaser
immediately prior to such consolidation, merger or transactions own less than
50% of the Purchaser's voting power after such consolidation, merger or
transactions (an "Acquisition Event")) or the sale of all or substantially all
of the Software business of Purchaser. The Share certificates will be
appropriately legended to reflect the substance of the above provisions of
restriction.
(b) Payment of Purchase Price. Stock certificates
representing the Purchase Price shall be delivered to Seller at the
Closing.
4. Non-Assumed Items. Purchaser is not purchasing, and shall not
assume, and shall not be liable to perform on, any Consulting Contracts, whether
written or oral, which require Purchaser's unauthorized access to or
unauthorized use of the proprietary, confidential or intellectual property,
products or information of any competitor to Purchaser ("Restricted Consulting
Contracts"). Purchaser is not, pursuant to this Agreement, assuming any
indebtedness, liability or obligation of Seller whatsoever with respect to said
Restricted Consulting Contracts.
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5. Taxes. Seller and Purchaser shall each pay one-half of all
applicable transfer, sales, use or other similar taxes imposed as a result of
the transfer of the Purchased Assets and any deficiency, interest or penalty
with respect to such taxes.
6. Closing. The closing of the transaction contemplated by this
Agreement shall be held, at 1:00 P.M., Eastern Time, on January __, 1999 and
following the satisfaction or waiver of all conditions to each party's
obligation to close the transaction as set forth herein, at the offices of
Purchaser, or any other time, date and place that Purchaser and Seller shall
mutually agree (the "Closing").
7. Representations and Warranties of Seller. Except as set forth on
the Schedule of Exceptions attached as Exhibit B hereto("Seller's Schedule of
Exceptions"), Seller hereby represents and warrants to Purchaser as follows:
(a) Status. Seller (1) is a limited liability company
duly formed and organized, validly existing and in good standing under
the laws of the State of California, (2) has full power and authority
to conduct its business as it is currently being conducted and to own
and lease its assets and (3) is duly qualified to do business in, and
is in good standing under the laws of each jurisdiction in which such
qualification is necessary as a result of the conduct of its business
and the ownership of its properties.
(b) Authorization. Seller has all necessary power
and authority and has taken all action necessary to execute, deliver
and perform this Agreement . The execution, delivery and performance of
this Agreement has been duly authorized by all appropriate limited
liability company action.
(c) Enforceable. This Agreement has been duly
executed and delivered by Seller and constitutes a legal, valid and
binding obligation of Seller enforceable against Seller in accordance
with its terms, except that the validity, binding effect or
enforceability of this Agreement may be limited or otherwise affected
by (i) any bankruptcy, insolvency or other similar law affecting the
enforcement of creditors' rights and remedies generally or (ii) the
discretion of the appropriate court with respect to specific
performance, injunctive relief or other terms of equitable remedies.
(d) Title. Seller is the true owner of good and clear
title to the Purchased Assets and shall assign, deliver, convey, sell
and transfer to Purchaser at the Closing good and marketable title to
the Purchased Assets, free and clear of all Encumbrances.
(e) No Conflict or Violation. The execution, delivery
and performance of this Agreement shall not result in (i) a violation
of or a conflict with any provision of the articles of organization or
operating or similar agreement of Seller, (ii) a breach of or a default
under any provision of, or result in the acceleration of any
obligations under any agreement, contract, indebtedness, encumbrance,
commitment, license, franchise, permit, authorization or consent to
which Seller is a party or by which
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Seller is bound, (iii) a violation by Seller of any applicable law or
any rule, order or judgment of any court or other Governmental
Authority or (iv) the creation of any Encumbrance on any of the
Purchased Assets.
(f) Consents. No consent, approval or authorization
of, or declaration, filing or registration with, any Governmental
Authority or any other Person is required to be made or obtained by
Seller in connection with the execution, delivery and performance of
this, except the consent of ▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇ & ▇▇▇▇▇▇▇▇ LLP to the sale
of the Products and the assignment to Purchaser of the License
Agreement between ▇▇▇▇▇▇▇, Phleger & ▇▇▇▇▇▇▇▇ LLP and Seller with
respect to the Products.
(g) Proceedings. There is no claim, demand, action,
suit, litigation, dispute, order, writ, injunction, judgment,
assessment, decree, grievance, arbitral action, investigation or
proceeding pending or, to the knowledge of Seller or Principals,
threatened against or relating to the transactions contemplated by this
Agreement
(h) Taxes. All taxes (including, but not limited to,
income, property, sales, use, franchise, added value, withholding and
social security taxes) imposed by any Governmental Authority or other
taxing authority that are due or payable by Seller, and all interest
and penalties on such taxes, whether or not disputed by Seller or
Principals, have been paid in full. All tax returns required to be
filed are correct in all material respects and have been duly and
timely filed. Neither Seller nor Principals have received and no claim
has been made within the last five (5) years by any Governmental
Authority in a jurisdiction where Seller does not file a tax return
that it is or may be subject to taxation by that jurisdiction. All
taxes required to have been withheld in connection with amounts paid or
owing to any employee, independent contractor, creditor, stockholder or
third-party have been withheld. There are no Encumbrances on any of the
Purchased Assets that arose in connection with any failure (or alleged
failure) to pay any tax.
(i) No Changes. Seller has not encumbered or
disposed of, or contracted to encumber or dispose of, any of the
Purchased Assets.
(j) Absence of Certain Changes or Events. Since
September 25, 1998, there has not been (a) any change, or any
development or combination of developments of which management of the
Seller has knowledge, which Seller has not disclosed to Purchaser in
writing, which has had or would reasonably be expected to have a
material adverse effect on the business, condition, assets, results of
operations or prospects (a "Material Adverse Effect") of , Seller, (b)
any damage, destruction or loss, whether or not covered by insurance
which has had or would reasonably be expected to have a Material
Adverse Effect on Seller or (c) any legal proceeding pending or, to the
knowledge of , Seller threatened, against or affecting Seller which,
alone or in the aggregate, has had or would reasonably be expected to
have a Material Adverse Effect on Seller
(k) Litigation. There is neither any claim, action,
suit, arbitration, investigation or other proceeding, nor any order,
decree, injunction, judgment or writ, pending, in effect or, to the
knowledge of Seller, threatened against or relating to Seller
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the Purchased Assets, the LegalHouse Business, this Agreement, the
Seller Related Agreements, or the transactions contemplated by this
Agreement.
(l) Tangible Personal Property and Products. The
Tangible Personal Property is, taken as a whole, in reasonable working
order and adequate for its intended use, ordinary wear and tear
accepted. The Products, taken as a whole, substantially conform to
their documentation and functional specifications (a copy of which is
attached hereto as Exhibit D hereto), and including compliance of the
Products with operation into and through year 2000.
(m) Compliance with Laws. To its knowledge, and
Seller has received no notice and has no reason to believe otherwise,
Seller has complied with each law, rule, regulation, ordinance, order,
injunction, judgment, decree and writ applicable to it, its business,
assets, operations or the Purchased Assets. Seller and Principals have
not received any notice to the effect that, or otherwise been advised
that, Seller is not in compliance with any applicable law, rule,
regulation, ordinance, order, injunction, judgement, decree and writ
applicable to it, and Seller and Principals have no reason to
anticipate that any presently existing circumstances might result in
any violation of any such law, rule, regulation, ordinance, order,
injunction, judgement, decree or writ.
(n) Intellectual Property Rights. Seller has all
right, title and interest (including, but not limited to, all
copyrights, patents, service marks, trademarks and other intellectual
property rights) (or has a valid license) to conduct the LegalHouse
Business as it is currently conducted and such conduct does not
infringe any right, title or interest (including, but not limited to,
any copyright, patent, service ▇▇▇▇, trademark or other intellectual
property right) of any Person. Seller has delivered to Purchaser
correct and complete copies of all patents, registrations,
applications, licenses and agreement and all other written
documentation evidencing ownership of Seller and prosecution by
Purchaser (if applicable) of all its intellectual property rights in
the LegalHouse Business. Other than routine indemnities given to
distributors, sales representatives, dealers and customers, Purchaser
has no current obligation to indemnify any Person for or against any
interference, infringement, misappropriation, or other conflict with
any intellectual property rights. The installation, operation, training
of users of, or use of the Products, does not violate the patent,
service ▇▇▇▇, trademark copyright rights or confidential rights or
trade secrets or intellectual property rights of any third party.
(o) Customer Contracts. Seller has delivered true
and correct copies of all available Customer Contracts to Purchaser.
Each of the Customer Contracts is enforceable against the Customer and,
to the knowledge of Seller , each other party thereto, in accordance
with its terms except that such enforcement may be limited by such
other parties (i) bankruptcy, insolvency, reorganization, moratorium or
similar law now or hereafter in effect relating to creditors' rights or
(ii) the discretion of the appropriate court with respect to specific
performance, injunctive relief or other terms of equitable remedies. To
the knowledge of Seller , neither Seller nor any other party to a
Customer Contract is in default thereunder or in breach thereof, and
Seller has not during
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the past two years obtained or been granted any waiver of or under any
provision of any Customer Contract. There exists no event, occurrence,
condition or act which constitutes or, with the giving of notice or the
lapse of time would be or become a default by Seller, or to the
knowledge of Seller and Principals, any other party under any Customer
Contract.
(p) Business Records. No records of accounts,
personnel records or other business records for the past five years
relating to the LegalHouse business or Products have been destroyed and
all such records are available, upon request, from Seller.
(q) No Brokers. Seller has not entered into any
agreement with any Person that will result in the obligation of
Purchaser or Seller to pay any finder's fee, brokerage commission or
similar payment in connection with the transaction contemplated by this
Agreement.
(r) Material Misstatements or Omissions. None of
the representations or warranties by Seller in this Agreement contains
any untrue statement of a material fact or omits to state any material
fact necessary to make the statements or facts contained therein not
misleading.
(s) Investment. Seller (i) understand that the Shares
have not been registered under the Securities Act of 1933, as amended
(the "Securities Act"), or under any state securities laws, and are
being offered and sold in reliance upon federal and state exemptions
for transactions not involving any public offering, (ii) is acquiring
the Shares solely for its own account for investment purposes, and not
with a view to the distribution thereof (except to the Principals),
(iii) is sophisticated investors with knowledge and experience in
business and financial matters (iv) has received certain information
concerning Purchaser and has had the opportunity to obtain additional
information as desired in order to evaluate the merits and the risks
inherent in holding the Shares and (v) is able to bear the economic
risk and lack of liquidity inherent in holding the Shares.
(8) Representations and Warranties of Purchaser. Purchaser hereby
represents and warrants to Seller and the Principals as follows:
(a) Status. Purchaser (i) is a corporation duly
incorporated, validly existing and in good standing under the laws of
the State of Delaware and (ii) has full power and authority to conduct
its business which is presently being conducted and to own or lease its
assets.
(b) Authorization. Purchaser has all necessary
corporate power and authority and has taken all corporate action
necessary to execute, deliver and perform this Agreement and the
Purchaser Related Agreements. The execution, delivery and performance
of this Agreement and the Purchaser Related Agreements have been duly
authorized by the board of directors of Purchaser.
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(c) Enforceable. Each of this Agreement and the
Purchaser Related Agreements has been duly executed and delivered by
Purchaser and is a legal, valid and binding obligation of Purchaser,
enforceable against Purchaser in accordance with its terms, except that
the validity, binding effect or enforceability of this Agreement or any
of the Purchaser Related Agreements may be limited or otherwise
affected by (i) any bankruptcy, insolvency or other similar law
affecting the enforcement of creditors' rights and remedies generally
or (ii) . the discretion of the appropriate court with respect to
specific performance, injunctive relief or other terms of equitable
remedies.
(d) No Conflict or Violation. The execution, delivery
and performance of this Agreement and each of the Purchaser Related
Agreements shall not result in (i) a violation of or a conflict with
any provision of the articles or certificate of incorporation
(including any certificates of designation) or by-laws of Purchaser,
(ii) a breach of, or a default under, any term or provision of any
agreement to which Purchaser is a party or (iii) a violation of any
applicable law, rule, order or judgment of any court or other
Governmental Authority.
(e) Consents. No consent, approval or authorization
of, or declaration, filing or registration with, any Governmental
Authority or any other Person is required to be made or obtained by
Purchaser in connection with the execution, delivery and performance of
this Agreement or any of the Purchaser Related Agreements.
(f) Capitalization. The authorized capital stock of
Purchaser consists of: 20,000,000 shares of Common Stock, $0.24 par
value per share, of which 8,225,737 shares are issued and outstanding;
and 2,000,000 shares of Preferred Stock, $1.00 par value per share, of
which 2,500 shares have been designated as Series E Preferred Stock, of
which no shares are issued and outstanding (excluding the Shares to be
issued at the Closing), and of which 1,997,500 shares remain
undesignated Preferred Stock. All the issued and outstanding shares of
Purchaser are validly issued, fully paid and nonassessable and free of
preemptive rights. Schedule 8(f) hereto lists all outstanding options
and warrants of Purchaser (including owner, quantity and exercise
price), which in the aggregate are exercisable to purchase a total of
1,397,928 shares of Purchaser's Common Stock. Except as set forth
above, there are not any shares of capital stock of Purchaser
authorized, issued or outstanding or any outstanding subscriptions,
options, warrants, stock appreciation rights, calls, rights,
convertible securities or other securities convertible into,
exchangeable for, or evidencing the right to subscribe for, any shares
of the capital stock of Purchaser. Purchaser has delivered to Seller
complete and accurate copies of Purchaser's Certificate of
Incorporation (including all amendments and certificates of designation
thereto) and Bylaws.
(g) SEC Filings. Purchaser has provided Seller
with copies of each report, schedule, registration statement and
definitive proxy statement (including all exhibits thereto) filed by
Purchaser with the Securities and Exchange Commission (the
"Commission") on or after March 31, 1997 (the "Purchaser SEC Reports"),
which are all
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the forms, reports and documents required to be filed by Purchaser with
the Commission since such date. Purchaser's SEC Reports (i) complied
with the requirements of the Securities Act or the Securities Exchange
Act of 1934, as amended, as the case may be, at the times they were
filed, (or if amended or superseded by a filing prior to the date of
this Agreement then or the date of such filing) and (ii) did not at and
as of the time they were filed (or if amended or superseded by a filing
prior to the date of this Agreement then on the date of such filing)
contain any untrue statement of a material fact or omit to state a
material fact required to be stated therein or necessary in order to
make the statements therein, in light of the circumstances under which
they were made, not misleading.
(h) Financial Statements. Each of the sets of
financial statements (including, in each case, any notes thereto)
contained in the Purchaser SEC Reports was prepared in accordance with
generally accepted accounting principles applied on a consistent basis
throughout the periods involved and fairly presents the financial
position of Purchaser as at the respective dates thereof and the
consolidated results of their operations and cash flows for the periods
indicated, except that the unaudited interim financial statements were
or are subject to normal year-end audit adjustments which were not or
are not expected to be material in amount.
(i) No Undisclosed Liabilities. To the best of the
Purchaser's knowledge, Purchaser has no liabilities or obligations of
any nature (whether absolute, accrued, contingent or otherwise), except
for the liabilities or obligations reflected or reserved against in the
balance sheet contained in Purchaser's report on Form 10-Q for the
quarter ended September 25, 1998 and current liabilities incurred in
the ordinary course of business since such date.
(j) Absence of Certain Changes or Events. Since
September 25, 1998, there has not been (a) any change, or any
development or combination of developments of which management of the
Purchaser has knowledge, which Purchaser has not disclosed to Seller in
writing, which has had or would reasonably be expected to have a
material adverse effect on the business, condition, assets, results of
operations or prospects (a "Material Adverse Effect") of Purchaser, (b)
any damage, destruction or loss, whether or not covered by insurance
which has had or would reasonably be expected to have a Material
Adverse Effect on Purchaser or (c) any legal proceeding pending or, to
the knowledge of Purchaser, threatened, against or affecting Purchaser
which, alone or in the aggregate, has had or would reasonably be
expected to have a Material Adverse Effect on Purchaser.
(k) Validity of Shares. The Shares when issued by
Purchaser pursuant to the terms of this Agreement, will be duly
authorized, validly issued, fully paid and non-assessable, will be
issued in compliance with applicable federal and state securities laws
and will be free and clear of all liens, encumbrances and adverse
claims.
(l) Litigation. There is neither any claim,
action, suit, arbitration, investigation or other proceeding pending,
nor any order, decree, injunctions, judgment or writ, whether pending,
in effect or, to the knowledge of Purchaser, threatened, against
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or relating to Purchaser, this Agreement, any of the Purchaser Related
Agreements or the transaction contemplated by this Agreement.
(m) Intellectual Property Rights. Purchaser has all
right, title and interest (including, but not limited to, all
copyrights, patents, service marks, trademarks and other intellectual
property rights) (or has a valid license) to conduct its business as it
is currently conducted and such conduct does not infringe any right,
title or interest (including, but not limited to, any copyright,
patent, service ▇▇▇▇, trademark or other intellectual property right)
of any Person. Purchaser has delivered to Seller correct and complete
copies of all patents, registrations, applications, licenses and
agreement and all other written documentation evidencing ownership of
Purchaser and prosecution by Purchaser (if applicable) of all its
intellectual property rights. Other than routine indemnities given to
distributors, sales representatives, dealers and customers, Purchaser
has no current obligation to indemnify any Person for or against any
interference, infringement, misappropriation, or other conflict with
any intellectual property rights. The installation, operation, training
of users of, or use of the products of Purchaser, does not violate the
patent, service ▇▇▇▇, trademark copyright rights or confidential rights
or trade secrets or intellectual property rights of any third party.
(n) Board Approval. Purchaser's Board of Directors
has determined (i) in its reasonable business judgment that the
Agreement is fair from a financial point of view to, and in the best
interests of Purchaser, and , (ii) to recommend that the stockholders
of Purchaser approve (x) any and all proposals as may be necessary to
cause the conversion of the Series E Preferred Stock to Common Stock at
Purchaser's next annual meeting of stockholders in accordance with the
Series E Certificate of Designation and the satisfaction of the
American Stock Exchange rules with respect to such conversion and (y)
the issuance of the Shares to Seller.
(o) Tax Free Reorganization. Schedule 8(o) hereto
accurately sets forth the names of certain stockholders of Purchaser,
the number of shares of Purchaser's Common Stock owned by each such
stockholder immediately prior to the Closing, the additional shares of
Common Stock purchased by each such stockholder at the Closing pursuant
to a Transferors Agreement in the form attached hereto as Exhibit E
and the number of shares of Purchaser's Common Stock owned by each such
stockholder immediately after the Closing. To the best of Purchaser's
knowledge, immediately after the Closing, the total number of shares of
Common Stock owned by such stockholders plus shares of Common Stock
issuable upon conversion of the Shares will exceed 80% of the
outstanding capital stock of Purchaser. To the knowledge of Purchaser,
Purchaser has not taken and has not agreed to, and does not plan, to
take any action that would prevent the transaction contemplated by this
Agreement from qualifying as a tax-free reorganization under Section
351 of the Internal Revenue Code of 1986, as amended (the "Code").
(p) Preferred Stock. The rights, preferences and
privileges of the Series E Preferred are as set forth on the Series E
Certificate of Designation , which Certificate has not been modified,
superceded or amended. Purchaser has delivered to
Page 12 of 25
13
Seller herewith irrevocable proxies to of ▇▇▇ ▇▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇▇ and
Icon representing _________ shares of Purchaser's Common Stock in favor
of any and all proposals as may be necessary to cause the conversion of
the Series E Preferred Stock to Common Stock in accordance with the
Series E Certificate of Designation and the satisfaction of the
American Stock Exchange rules with respect to such conversion and
against any and all proposals which could impair the foregoing.
(q) No Brokers. Purchaser has not entered into any
agreement with any Person that will result in the obligation of
Purchaser or Seller to pay any finder's fee, brokerage commission or
similar payment in connection with the transaction contemplated by this
Agreement.
(r) Material Misstatements or Omissions. None of the
representations or warranties by Purchaser in this Agreement contains
any untrue statement of a material fact or omits to state any material
fact necessary to make the statements or facts contained therein not
misleading.
(9) Covenants and Conduct of the Parties.
(a) Employment.
(i) Purchaser may offer employment to any Person
previously or presently employed by Seller in connection with the
LegalHouse Business; provided, however, that Purchaser shall not have
any obligation to make any such offer of employment. Nothing contained
in this Section shall be construed to affect any right Purchaser may
have after the Effective Date to terminate the employment of, or change
the salary or benefits of, any employee at any time, except as may be
agreed between the employee and Purchaser whether or not covered by
collective bargaining agreement, to the extent consistent with
applicable law.
(ii) No provision of this Agreement shall confer upon
any present or former employee, consultant or subcontractor of Seller,
any union, collective bargaining agent or other Person any right or
remedy (including, but not limited to, any right to employment, or
continued employment, for any specified period or any right to any
particular benefit in connection with any employment) of any nature
pursuant to or by reason of this Agreement.
(iii) Seller shall be responsible for providing all
notices and other communications to employees, consultants and
subcontractors of Seller, that may be required under applicable law,
including without limitation the laws of the State of California.
Purchaser shall assume no indebtedness, obligation or liability with
respect to any employee, consultant or subcontractor of Seller
(including, but not limited to, any severance obligation, payroll or
unemployment tax, or pension, profit-sharing, health insurance or other
employee benefit liabilities, or any obligations set forth on Seller's
Schedule of Exceptions, but excluding obligations arising from Seller's
contracts with
Page 13 of 25
14
such persons which have been expressly assumed in writing by Purchaser
at the time of closing.
(b) Non-competition and Nondisclosure.
(i) During the period beginning on the Effective Date
and ending on the earlier to occur of (i) five (5) years after the
Effective Date or (ii) with respect to each Principal, three (3) years
after the termination of such Principal's employment with Seller, but
in no event not to be less than one (1) year after termination of such
Principal's employment with Seller should such termination of
Principal's employment occur at any time on or after five (5) years
after the Effective Date, Seller and Principal shall not (except as
employees of Purchaser), directly or indirectly, for their own account
or as an agent, employee, officer, director, trustee, consultant or
member, partner, shareholder or other equity holder of any Person,
engage in any LegalHouse Related Business, as such term is hereinafter
defined, anywhere in the world. "LegalHouse Related Business" shall
mean the sale, licensing, or distribution of the LegalHouse Finance and
Management System or similar products or services or consulting with
respect thereto. Seller and Principals acknowledge that the terms of
this subparagraph 9(b)(i) are fair and reasonable in the context of
this Asset sale and this Agreement. In the event of a breach by
Purchaser of its obligations to Seller under this Agreement and if such
breach remains uncured 30 days after written notice of the same to
Purchaser, then Sellers obligations under this Section 9(b)(i) shall
immediately terminate. In the event of a breach by Purchaser of its
obligations under this Agreement that would prevent or impair the
conversion of the Shares to Common Stock in accordance with the Series
E Certificate of Designation and if such breach remains uncured 30 days
after written notice of the same to Purchaser, then the Principals
obligations under this Section 9(b)(i) shall immediately terminate.
(ii) During the period beginning on the Effective
Date and ending ten (10) years after the Effective date, Seller and
Principals shall not disclose to any Person other than Purchaser any
information concerning Seller's marketing plans or strategies, pricing,
customers, suppliers, technical data, development plans or strategies,
or other business information pertaining to the LegalHouse Related
Business.
(iii) Further Assurances. After the Closing,
Purchaser and Seller and Principals each agree to take whatever further
reasonable action is necessary and to execute whatever further
documents, instruments of assignment, transfer, conveyance or
authorization and agreements as may be reasonably requested by
Purchaser or by Seller or by Principals in order to fulfill the intent
of this Agreement.
(iv) Notwithstanding anything to the contrary
contained elsewhere in this Agreement, Seller and Principals will not
bring with them or provide to Purchaser any information, data, records
or documents which contain or represent the confidential information,
or trade secrets or intellectual property of any third party or as to
which Seller or Principals owe an obligation of confidentiality and/or
nonuse to any third party, except on consent of such third party.
Page 14 of 25
15
(c) Employment Agreements. At the Closing, each of the
Principals will each enter into a employment agreement with Purchaser
in the form attached hereto as Exhibit F. The provisions of this
Agreement shall control over any inconsistent provisions contained in
the employment agreements. On Closing, upon Seller's recommendation,
Purchaser will offer consultants currently engaged by Seller as
employees and/or independent contractors (including but not limited to
▇▇▇▇▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇▇
▇▇▇▇▇, and ▇▇▇▇▇ ▇▇▇▇▇▇) employment and upon employment with Purchaser
each will enter into a non-competition agreement with Purchaser on
essentially the same terms that Purchaser has with its current
employees. Seller agrees to use commercially reasonable efforts to
cause such consultants to accept such employment. The employment
offered to said consultants will include participation in all
applicable employee benefit plans of Purchaser.
(d) After execution of this Agreement, in connection with
implementing the LegalHouse Finance and Management Information System,
Seller and Principals agree to abide by and follow the guidelines set
forth in Schedule 9(d).
(e) Board of Directors. The Board of Directors of Seller
will , include ▇▇▇ ▇▇▇▇▇▇▇ upon the Closing. ▇▇. ▇▇▇▇▇▇▇'▇ term as a
director expires at the year 2000 annual meeting of shareholders. So
long as ▇▇. ▇▇▇▇▇▇▇ owns at least 5% of the outstanding Common Stock of
Purchaser (determined on an "as converted" basis), then Purchaser
agrees to nominate ▇▇. ▇▇▇▇▇▇▇ for membership to the Board of Directors
of Purchaser.
(f) Press Releases. Neither Seller nor Purchaser shall issue
any press release announcing, describing or any way relating to the
transactions contemplated by this Agreement until such press release
has been reviewed and consented to by the other party, which consent
shall not be unreasonably withheld.
(g) Restricted Consulting Contracts. After the execution
of this Agreement, Seller will not engage in Restricted Consulting
Contracts (as defined in Section 4 of this Agreement) without the prior
written consent of Purchaser. Purchaser agrees to cooperate with Seller
and Principals, at no expense to Purchaser, to permit routine
maintenance and support of Purchaser's existing customers, so long as
such routine maintenance does not violate or potentially violate the
intellectual property rights of any third party without such third
party's express written consent.
(h) Tax Liability. In the event that the acquisition of
Seller's Assets by Purchaser results in a current tax liability to the
Principals, then Purchaser will use its best efforts to enable the
Principals to secure the funds to cover the tax liability, including
for example, at Purchaser's sole discretion: registering a sufficient
number of the shares acquired by Seller so as to permit a sale of stock
to cover such tax liability; or Purchaser will utilize best efforts to
assist Principals in procuring a prime rate loan to the Principals to
cover such tax liability; or by another mutually acceptable technique
to cover such tax liability.
Page 15 of 25
16
(i) Notwithstanding anything to the contrary contained
elsewhere in this Agreement, Seller and Principals will not bring with
them or provide to Purchaser any information, data, records or
documents which contain or represent the confidential information or
trade secrets or intellectual property of any third party or as to
which Seller or Principals owe an obligation of confidentiality and/or
non-use to any third party, except on consent of such third party.
(j) Purchaser shall (i) include among the proposals to be
considered at its 1999 Annual Meeting of Stockholders, a proposal in
satisfaction of the applicable rules and regulations of the American
Stock Exchange to cause the Shares to convert to Common Stock in
accordance with the terms of the Certificate of Designation upon the
approval of such proposal, (ii) cause such 1999 Annual Meeting of
Stockholders to be held no later than September 30, 1999 and (iii) not
attempt to amend its Certificate of Incorporation or the Series E
Certificate of Designation or participate in any Acquisition Event or
take any other voluntary action that has the effect of avoiding or
delaying the rights of the holders of the Series E Preferred Stock and
the conversion thereof to Common Stock, but shall at all times in good
faith assist in carrying out all such actions as may be reasonably
necessary or appropriate in order to protect the rights of the holders
of the Series E Preferred Stock and the conversion thereof to Common
Stock against impairment.
(k) Purchaser shall not make any redemption,
repurchase, payment of dividends or other distribution with respect to
Purchaser's Common Stock without a corresponding redemption,
repurchase, payment of dividends or other distribution to the Series E
Preferred Stock.
10. Conditions to Seller's Obligations. The obligation of Seller to
consummate the transaction contemplated by this Agreement is subject, in the
sole discretion of Seller, to the satisfaction, on or prior to the Closing, of
each of the following conditions (any of which may, in the sole discretion of
Seller, be waived in whole or in part):
(a) Representations, Warranties and Obligations.
All representations and warranties of Purchaser contained in this
Agreement shall be true and correct in all respects as of the Closing
and Purchaser shall have performed all obligations to be performed by
it as of the Closing pursuant to this Agreement.
(b) Performance. All covenants, agreements and
obligations and all conditions precedent on the part of Purchaser to be
performed hereunder or at or prior to the Closing shall have been duly
performed and complied with in all material respects.
(c) Bringdown Certificate. Purchaser shall have
furnished Seller with a certificate executed by an officer of
Purchaser, bearing the date of the Closing and stating that (i) all
representations and warranties made by Purchaser and contained in this
Agreement are true and accurate in all material respects as of the date
of the Closing, and
Page 16 of 25
17
(ii) all terms, conditions and provisions of this Agreement to be met
by Purchaser prior to the date of the Closing have been complied with
in all material respects.
(d) Consents. All approvals, consents, permits and
waivers necessary for Purchaser to perform pursuant to this Agreement
shall have been obtained.
(e) Absence of Investigations and Proceedings. No
investigation, proceeding or action is pending which purports to
challenge the validity of this Agreement or the consummation of the
transactions contemplated hereby. No investigation, proceeding or
action shall have been initiated by any government agency with respect
to the acquisition or its legality under any antitrust law.
(f) Tax Free Transaction. Such additional shares of
Purchaser's Common Stock shall have been sold so that the transaction
contemplated by this Agreement shall qualify as a tax free
reorganization under Section 351 of the Code.
11. Conditions to Purchaser's Obligations. The obligation of
Purchaser to consummate the transaction contemplated by this Agreement is
subject, in the sole discretion of Purchaser, to the satisfaction, on or prior
to the Closing, of each of the following conditions (any of which may, in the
sole discretion of Purchaser, be waived in whole or in part):
(a) Representations, Warranties and Obligations.
All representations and warranties of Seller contained in this
Agreement shall be true and correct in all respects as of the Closing,
and Seller shall have performed all obligations to be performed by them
as of the Closing Date pursuant to this Agreement.
(b) Consents. All approvals, consents, permits,
releases and waivers necessary for Seller to transfer the Products and
Purchased Assets free and clear of any Encumbrances, , pursuant to this
Agreement, shall have been obtained.
(c) Bringdown Certificate. Seller shall deliver to
Purchaser a certificate executed by Seller bearing the date of the
Closing and stating that (i) all representations and warranties made by
Seller and contained in this Agreement are true and accurate in all
material respects as of the date of the Closing, and (ii) all terms,
conditions and provisions of this Agreement to be met by Seller prior
to the date of the Closing have been complied with in all material
respects.
(d) Transfer of Purchased Assets and Grant of
License. Seller shall have transferred, delivered and set over
possession of all the real and personal property (tangible and
intangible) and records and other assets constituting the Purchased
Assets.
(e) Absence of Investigations and Proceedings. No
investigation, proceeding or action is pending which purports to
challenge the validity of this Agreement or the consummation of the
transactions contemplated hereby. No investigation, proceeding or
action shall have been initiated by any government agency with respect
to the acquisition or its legality under any antitrust law.
Page 17 of 25
18
(f) The execution of employment agreements with
each of the Principals, for a period following closing on terms
mutually acceptable.
(g) Receipt of the consent of Seller's landlord to
the assignment of the real property lease for Seller's current offices.
12. Survival. All representations and warranties made by Seller and
Purchaser in this Agreement shall survive the Closing. All obligations of
Seller, Principals and Purchaser pursuant to this Agreement shall survive the
Closing and remain in effect until performed (including, but not limited to, the
obligations of Seller not to compete with Purchaser and indemnify Purchaser
pursuant to this Agreement).
13. Indemnification.
(a) Indemnification by Seller and Principals. Seller
and Principals (collectively, the "Indemnifying Parties") shall,
jointly and severally, indemnify and hold Purchaser harmless from and
against each cost, damage, expense, loss, indebtedness, liability,
deficiency or damage incurred by Purchaser (including, but not limited
to, fees and disbursements of counsel to Purchaser) (i) by reason of
any warranty or representation given by Seller in this Agreement being
untrue or misleading in any respect or (ii) for the failure of Seller
to comply with the bulk sale transfer provisions of the Uniform
Commercial Code ("Damages") or (iii) by the failure of Seller or
Principals to comply with any covenant set forth in this Agreement and
specifically in Sections 7 and 9.
(b) Claims. Except as otherwise set forth in this
Agreement, in order for Purchaser to be entitled to any indemnification
provided in this Section 13, in connection with a claim made by any
Person other than Purchaser, Purchaser shall notify Indemnifying
Parties in writing of such claim promptly after receipt by Purchaser of
written notice of such claim. If Seller notifies Purchaser within 30
days from the receipt of the foregoing notice that it wishes to defend
against such claim, then Seller shall have the right to assume and
solely control the defense, solely at Seller's expense, of such claim
and Purchaser shall cooperate fully with Seller in such defense. In the
event that Seller assumes the defense of such claim, Seller shall not
make any settlement with respect to any such claim without the consent
of Purchaser, which consent shall not be unreasonably withheld.
(c) The Indemnifying Parties shall not be required to
make any indemnification payment pursuant to this Section 13 until such
time that the total amount of all Damages suffered by Purchaser exceeds
$50,000 in the aggregate.
(d) The maximum aggregate liability of the
Indemnifying Parties hereunder shall be limited to the value of the
Shares (as determined pursuant to clause (f) below) but in no event
more than $2.5 Million Dollars (which may be fully satisfied by the
return to Purchaser of all of the unsold Shares plus any proceeds from
the sale of any
Page 18 of 25
19
sold Shares). Subject to the foregoing, after the distribution of the
Shares to the Principals, the aggregate liability of the Principals
hereunder shall be allocated among the Principals according to the
percentages set forth on Schedule 13(e) hereto. (which may be fully
satisfied .as to any Principal by such Principal returning to Purchaser
the unsold Shares distributed to such Principal plus any proceeds from
the sale thereof). Prior to the distribution of the Shares to the
Principals, the Principals shall have no liability hereunder.
(e) In the event any Indemnifying Party shall have
any liability to Purchaser, such Indemnifying Party may satisfy such
liability in whole or in part by delivering to Purchaser shares of (i)
Series E Preferred Stock having a deemed value per share of (a) the
Common Stock Price times (b) 1,000 (as adjusted for stock splits, stock
dividends and the like) and/or (ii) Common Stock of Purchaser having a
deemed value per share of the Common Stock Price. The Common Stock
Price shall be determined as the average closing price of the Common
Stock on the American Stock Exchange (or other principal trading
exchange, market or forum) for the five consecutive trading days in the
period ending the on the trading day immediately prior to the date such
shares are delivered.
(f) Exclusive Remedy. Except for acts constituting
fraud, the indemnification provided in this Section 13 shall be the
exclusive remedy of Purchaser under this Agreement, including, without
limitation, any right of set-off, and no claim or cause of action by
Purchaser shall be enforceable unless made in accordance with the
procedures set forth in this Section 13 and prior to 24 months after
the Closing Date.
14. Dispute Resolution.
(a) Binding Arbitration. Any dispute, claim or
controversy of whatever nature arising out of or relating to the
provisions of this Agreement or any Employment Agreements
(collectively, the "Arbitrable Provisions"), including, without
limitation, any action or claim based on tort, contract, or statute, or
concerning the interpretation, effect, termination, validity,
performance and/or breach of any of the Arbitrable Provisions, shall be
resolved by final and binding arbitration administered by the American
Arbitration Association subject to its Commercial Arbitration Rules.
Notwithstanding the foregoing or any other provision contained in this
Section 14, the parties shall have the right to request provisional
relief from a court of competent jurisdiction.
Venue for any such arbitration shall be Erie County, New York. Claims
exceeding $50,000 exclusive of interest shall be determined by a panel
of three arbitrators. Each party shall select one arbitrator for the
panel within 60 days after the filing of a claim. The parties shall
mutually agree upon the third member of the panel, who must be a
computer expert, within 30 days thereafter. If no agreement is reached
by the end of such period, then the Association shall appoints a
computer expert as the third member of the panel within an additional
30 days thereafter. The arbitrators shall not have the authority
Page 19 of 25
20
to award punitive damages. Any award shall include all applicable
interest and attorney's fees, costs and expenses including the expenses
of arbitration, of the prevailing party and shall be enforceable in any
court of competent jurisdiction. This agreement shall be governed by,
and the arbitrator(s) shall apply, the laws of the State of New York
except for its principles of conflict of laws.
(b) Survival. The provisions in this Section 14 shall survive
and apply in all events, including, without limitation, after the
breach, repudiation and/or termination of the Arbitrable Provisions.
(c) Notice. Any notice or document required to be served by
one party on the other party under this Section 14 shall be served in
accordance with the provisions of this Agreement or the Employment
Agreement, as the case may be. After a party appears in the arbitration
proceeding through its attorney, all further service shall be made upon
that party's attorney.
(d) Finality of Award. The award of the arbitrator shall be
final and binding upon the parties without appeal or review except as
permitted by New York law. Any party may apply to any court of
competent jurisdiction for confirmation and entry of judgment based on
said award. In connection with any application to confirm, correct or
vacate the arbitration award, any appeal of any order rendered pursuant
to any such application, or any other action required to enforce the
arbitration award, the prevailing party shall be entitled to recover
its reasonable attorneys' fees, disbursements and costs incurred in
such post-award activities.
15. Miscellaneous.
(a) Notices. Unless otherwise provided in this
Agreement, any notice, request, instruction or other communication to
be given pursuant to this Agreement shall be in writing and (i)
delivered personally, (ii) mailed by certified mail, postage prepaid,
return receipt requested or (iii) sent by telecopy, with a confirmation
sent via one of the methods described in clause (i) or (ii) of this
sentence, as follows:
If to Purchaser, addressed to:
Barrister Information Systems Corporation
Attn: ▇▇▇▇ ▇. ▇▇▇▇▇▇▇, Esq.
▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Telecopier: (▇▇▇) ▇▇▇-▇▇▇▇
With a copy to:
▇▇▇▇▇▇▇, ▇▇▇▇, ▇▇▇▇▇▇▇, ▇▇▇▇▇ & Goodyear, LLP
Attn: ▇▇▇▇ ▇▇▇, Esq.
1800 One M & T Plaza
Page 20 of 25
21
▇▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Telecopier: (▇▇▇) ▇▇▇-▇▇▇▇
If to Seller, addressed to:
Icon Technology LLC
Attn: ▇▇▇ ▇▇▇▇▇▇▇
▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇ #▇▇▇▇
▇▇▇ ▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Telecopier: (▇▇▇) ▇▇▇-▇▇▇▇
With a copy to:
▇▇▇▇▇▇ Godward LLP
Attn: ▇▇▇▇▇ ▇▇▇▇▇▇▇, Esq.
Five Palo Alto Square
▇▇▇▇ ▇▇ ▇▇▇▇▇▇ ▇▇▇▇
▇▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇
Telecopier: (▇▇▇) ▇▇▇-▇▇▇▇
Any party may designate in a writing to any other party any other address or
telecopy number to which, and any other Person to whom or which a copy of, any
such notice, request, instruction or other communication should be sent.
(a) Applicable Law. This Agreement shall be
interpreted and the rights of the parties determined in accordance with
the laws of the State of New York, without regard to principles of
conflicts of law.
(b) Venue. Any legal action or other legal proceeding
relating to this Agreement or the enforcement of any provision of this
Agreement or the transactions related thereto shall be brought or
otherwise commenced in any state court located in the City of Buffalo,
New York or in the federal district court located in the City of
Buffalo, New York. Each party to this Agreement:
(i) expressly and irrevocably consents and
submits to the jurisdiction of the New York state and federal courts
(and the appellate courts having jurisdiction over appeals from actions
in said courts) in connection with any such legal proceeding which the
other party has properly brought or commenced in accordance with this
subsection (c);
(ii) agrees that said New York state and
federal courts in which the other party has properly brought or
commenced in accordance with this subsection (c) shall be deemed to be
a convenient forum; and
Page 21 of 25
22
(iii) agrees not to assert (by way of
motion, as a defense or otherwise), in any such legal proceeding
commenced in any state or federal court which the other party has
properly brought or commenced in accordance with this subsection (c)
any claim that such party is not subject personally to the jurisdiction
of such court, that such legal proceeding has been brought in an
inconvenient forum, that the venue of such proceeding is improper or
that this Agreement or the subject matter thereof may not be enforced
in or by such court.
(d) Assignability. This Agreement, and the rights and
liabilities created by or arising under this Agreement, shall be
assignable by Purchaser without the consent of Seller. Upon such
assignment and assumption, all of the rights, title, and interest and
the liabilities and obligations of Purchaser created by or arising
under this Agreement shall thereupon cease and be of no further force
and effect whatsoever with respect to Purchaser, and shall vest instead
in Purchaser's assignee. This Agreement, and the rights and obligations
created by or arising under this Agreement, may not be assigned by
Seller in any case.
(e) Expenses. Purchaser shall pay at the Closing the
reasonable fees and reasonable disbursements owed as a direct result of
Seller having received legal counsel or business advice for purposes of
the negotiation and consummation of the transactions contemplated by
this Agreement. Except for such fees and disbursements and as otherwise
set forth in this Agreement, each of Seller, Principals, and Purchaser
shall pay its or his legal advice, or own business advice, accounting
and other expenses in connection with the transactions contemplated by
this Agreement.
(f) Headings. The headings of the sections of this
Agreement are inserted for convenience of reference only and shall not
affect the interpretation of this Agreement.
(g) Waiver. No failure of Seller or Purchaser to
require, and no delay by Seller or Purchaser in requiring, the other to
comply with any provision of this Agreement shall constitute a waiver
of the right to require such compliance. No failure of Seller or
Purchaser to exercise, and no delay by Seller or Purchaser in
exercising, any right or remedy under this Agreement shall constitute a
waiver of such right or remedy. No waiver by Seller, Principals or
Purchaser of any right or remedy under this Agreement shall be
effective unless made in writing. Any waiver by Seller, Principals or
Purchaser of any right or remedy under this Agreement shall be limited
to the specific instance and shall not constitute a waiver of such
right or remedy in the future.
(h) Binding. This Agreement shall be binding upon
Seller, Principals and Purchaser and upon each successor and assignee
of Seller and Purchaser and shall inure to the benefit of, and be
enforceable by, Seller and Purchaser and each successor and assignee of
Seller and Purchaser.
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(i) Entire Agreement. This Agreement contains the
entire agreement among Seller, Principals and Purchaser with respect to
the subject of this Agreement, and supersedes each course of conduct
previously pursued, accepted or acquiesced in, and each oral agreement
and representation previously made, by Seller, Principals and Purchaser
with respect thereto, whether or not relied or acted upon.
(j) Partial Invalidity Shall Not Affect Other
Provisions - parties to Renegotiate Provision. In the event any term or
provision of this Agreement shall be deemed by a court of competent
jurisdiction to be overly broad in scope, duration or area of
applicability, such court shall have the power and is hereby authorized
and requested, to limit such scope, duration or area of applicability,
or all of them so that such term or provision is not overly broad, and
to enforce the same as so limited. Subject to the foregoing sentence,
in the event any provision of this Agreement shall be held invalid or
unenforceable for any reason, such invalidity or unenforceability shall
attach only to such provision and shall not affect or render invalid
any other provision of this Agreement, and the invalid provision shall
be replaced by a provision which the parties agree to fully negotiate
and substitute for the invalid provision, which, being valid, comes
closest to the intention underlying the invalid provision.
(k) Modification. No course of performance or other
conduct hereafter pursued, accepted or acquiesced in, and no oral
agreement or representation made in the future, by Seller, Principals
or Purchaser whether or not relied or acted upon, and no usage of
trade, whether or not relied or acted upon, shall modify or terminate
this Agreement, impair or otherwise affect any obligation of Seller or
Purchaser pursuant to this Agreement or otherwise operate as a waiver
of any such right or remedy. No modification of this Agreement or
waiver of any such right or remedy shall be effective unless made in
writing duly executed by Seller and Purchaser.
(l) Execution. This Agreement may be executed in one
or more counterparts, each of which shall be deemed an original and all
of which taken together shall constitute one and the same instrument.
Any party may execute this Agreement by facsimile signature and the
other parties shall be entitled to rely on such facsimile signature as
evidence that this Agreement has been duly executed by such party. Any
party executing this Agreement by facsimile signature shall immediately
forward to the other parties an original signature page by overnight
mail; provided, however, that the failure to do so will not affect the
binding effect of this Agreement on such party.
(m) Schedule of Exceptions. Seller's Schedule of
Exceptions is intended solely to qualify and limit the representations
and warranties of Seller contained in this Agreement and shall not be
deemed to constitute or be construed as an admission against or by
Seller, Purchaser or the Principals.
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IN WITNESS WHEREOF, Purchaser and Seller and Principals have duly
executed this Agreement as of the date indicated at the beginning of this
Agreement.
BARRISTER INFORMATION SYSTEMS CORPORATION
By: _____________________________ Title: ________________________
▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇▇ President
ICON TECHNOLOGY LLC
By: _____________________________ Title: Member
▇▇▇ ▇▇▇▇▇▇▇
By: _____________________________ Title: Member
▇▇▇ ▇▇▇▇▇
By: _____________________________ Title: Member
Stuart Guild
By: _____________________________ Title: Member
▇▇▇▇ ▇▇▇▇
PRINCIPALS
-----------------------------
▇▇▇ ▇▇▇▇▇▇▇
-----------------------------
▇▇▇ ▇▇▇▇▇
-----------------------------
Stuart Guild
-----------------------------
▇▇▇▇ ▇▇▇▇
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LIST OF SCHEDULES
Schedule 1(c) Customer Contracts
Schedule 1(i) Assumed Liabilities
Schedule 1(t) Consulting Contracts
Schedule 1(u) Tangible Personal Property
Schedule 8(f) Schedule of Purchaser's Options and Warrants
Schedule 8(o) Schedule of Purchasers of Common Stock
Schedule 13(e) Indemnification Allocation
LIST OF EXHIBITS
Exhibit A Series E Certificate of Designation
Exhibit B Schedule of Exceptions
Exhibit C Product Documentation and Functional Specifications
Exhibit D Post-Closing Operational Guidelines
Exhibit E Common Stock Purchase Agreement
Exhibit F Form of Employment Agreement
Page 25 of 25
