STOCK PURCHASE AGREEMENT
by and between
APPLIED DIGITAL SOLUTIONS, INC.,
Buyer,
and
▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇▇▇,
▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇▇
and
BEARPEN LIMITED PARTNERSHIP,
Sellers
Dated November 13, 2000
STOCK PURCHASE AGREEMENT
THIS STOCK PURCHASE AGREEMENT (the "Agreement") is entered
into as of November 13, 2000, by and between Applied Digital Solutions, Inc., a
Missouri corporation ("Buyer"), and ▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇▇▇ ("▇▇▇▇▇▇▇▇▇▇▇"),
▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇▇ and Bearpen Limited Partnership, a Delaware limited
partnership (the "Partnership" and, collectively, "Sellers") (Buyer and Sellers
each a "Party" and together "Parties").
RECITALS
Buyer desires to purchase from Sellers, on the following terms
and conditions, the SYCM Shares (as defined below) of SysComm International
Corporation, a Delaware corporation (the "Company" or "SYCM"); and
Sellers desire to sell to Buyer, on the following terms and
conditions, the SYCM Shares.
NOW, THEREFORE, in consideration of the recitals and the
mutual covenants, representations, warranties, conditions, and agreement
hereinafter expressed, the Parties agree as follows:
ARTICLE I
PURCHASE AND SALE
1.1. The SYCM Shares. Upon the terms and subject to the
conditions set forth in this Agreement, at the Closing (as defined below), the
Sellers shall sell and deliver to Buyer, free and clear of all security
interests, claims, and restrictions, and Buyer shall purchase and accept from
Sellers, the shares of SYCM common stock reflected on Schedule 1.1 consisting of
an aggregate of two million five hundred seventy thousand (2,570,000) shares of
SYCM common stock now held by Sellers (the "SYCM Shares").
1.2 Consideration. The consideration that Buyer shall pay
Sellers for the SYCM Shares, the obligations of Sellers under Article VI, and
the other rights of Buyer hereunder, to be allocated pursuant to instructions
delivered by Spielberger to the Buyer no later than three (3) business days
prior to Closing, shall be an aggregate value of $4,500,000, payable in part in
shares of the Buyer's common stock, and in part in cash. At the closing of the
purchase of the SYCM Shares (the "Closing"), Buyer will deliver to Sellers (a)
cash in an amount (the "Cash") equal to the cash received by Buyer from the
Company upon the closing of the transactions contemplated by that certain Stock
Purchase Agreement by and between the Company and the Buyer executed
concurrently herewith (the "IPC Agreement"), less Thirty-Six Thousand Nine
Hundred Dollars ($36,900), and (b) shares of the Buyer's common stock with an
aggregate value equal to the difference between Four Million Five Hundred
Thousand Dollars ($4,500,000) and the value of the Cash (the "ADS Shares"), the
number of the ADS Shares to be delivered to Sellers shall be calculated using as
the per share value thereof the average of the closing price for the Buyer's
common stock for the ten (10) consecutive trading days ending on the
second-to-last business day prior to the Closing (the "Closing Date Average
Price").
1.3 Closing; Cooperation. The Closing shall take place at the
office of ▇▇▇▇▇ ▇▇▇▇ LLP, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ at 10:00 a.m.
local time on November 17, 2000, or, if the conditions to the Closing are not by
then satisfied, upon satisfaction of such conditions, the date on which the
Closing actually occurs being referred to herein as the "Closing Date." Each
Party shall reasonably cooperate, as to matters under such Party's control, in
the satisfaction of conditions to the obligations of the Parties at the Closing;
provided, that the foregoing shall not require either Party to waive any
condition herein to its obligations at the Closing or to incur any substantial
cost not otherwise required hereunder.
1.4 Deliveries of Sellers at Closing. Subject to the
conditions to Sellers' obligations in Article V, at the Closing, Sellers shall
deliver to Buyer a certificate or certificates evidencing the SYCM Shares, duly
endorsed or accompanied by a duly executed stock power, together with the
documents identified in Article IV, duly executed by Sellers.
1.5 Deliveries of Buyer at Closing. Subject to the conditions
to Buyer's obligations in Article IV, at the Closing, Buyer shall deliver to
Sellers the Cash, by wire transfer of immediately available funds, a certificate
or certificates evidencing the ADS Shares, newly issued or duly endorsed or
accompanied by a duly executed stock power, and the documents identified in
Article V, duly executed by Buyer.
1.6 Reconciliation. The parties acknowledge that the amount of
the cash received by the Buyer under the IPC Agreement may be subject to
adjustment thereunder. In the event such amount is adjusted, a similar
adjustment shall be made under this Agreement, pursuant to which Buyer shall be
entitled to reimbursement in cash by Sellers for the excess amount paid by Buyer
at Closing, with a corresponding increase in the number of ADS Shares to be
delivered to Sellers.
ARTICLE II
REPRESENTATIONS AND WARRANTIES OF SELLERS
Sellers, jointly and severally, hereby make the following
representations and warranties to Buyer, each of which is true and correct on
the date hereof and each of which shall survive the Closing:
2.1 Power and Authority. Each Seller has the power and
capacity to execute and deliver this Agreement, to perform such Seller's
obligations hereunder, and to consummate the transactions contemplated hereby.
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2.2 Stock Ownership. Each Seller is the sole holder of record
and beneficial owner of the SYCM Shares as provided on Schedule 1.1. Sellers own
the SYCM Shares as set forth on Schedule 1.1, free and clear of all security
interests, claims, restrictions and voting agreements of any kind. Each of the
Sellers will transfer good and marketable title to the SYCM Shares which such
Seller owns, at the Closing, free and clear of all liens, security interests,
claims, restrictions and voting agreements.
2.3 Enforceability. This Agreement has been duly executed and
delivered by each Seller and constitutes a legal, valid and binding obligation
of each Seller, enforceable against each Seller in accordance with its terms.
2.4 No Violation; Consents. Except as set forth on Schedule
2.4, the execution and delivery of this Agreement by Sellers, the performance by
Sellers of the obligations hereunder and the consummation by Sellers of the
transactions contemplated by this Agreement will not (i) contravene any
provision of the articles of incorporation or bylaws of the Company or the
governing documents of the Partnership, (ii) violate or conflict with any law,
statute, ordinance, rule, regulation, decree, writ, injunction, judgment or
order of any governmental authority or of any arbitration award which is either
applicable to, binding upon or enforceable against the Company or any Seller,
(iii) conflict with, result in any breach of, or constitute a default (or an
event which would, with the passage of time or the giving of notice or both,
constitute a default) under, or give rise to a right to terminate, amend,
modify, abandon or accelerate, any contract which is applicable to, binding upon
or enforceable against the Company or any Seller, (iv) result in or require the
creation or imposition of any lien upon or with respect to any of the property
or assets of the Company, or (v) require the consent, approval, authorization or
permit of, or filing with or notification to, any governmental authority, any
court or tribunal or any other person, except any applicable filings required
under the ▇▇▇▇-▇▇▇▇▇-▇▇▇▇▇▇ Antitrust Improvements Act of 1976, as amended
("HSR"), and any filings with the Securities and Exchange Commission (the "SEC")
and other filings required to be made by Buyer.
2.5 Resignation of Directorship and Offices. Spielberger has
resigned from all offices and other positions with respect to SYCM, other than
his position as a director thereof.
2.6 Control Shares. Each of the Sellers and the Company has
taken all requisite action so that no provision of Delaware law or the Company's
certificate of incorporation shall limit the value or voting power of the SYCM
Shares post-Closing.
2.7 Corporate Existence and Qualification. The Company is a
corporation duly incorporated, validly existing, and in good standing under the
laws of the State of Delaware; it is duly qualified and in good standing in each
foreign jurisdiction in which the conduct of its business or its ownership or
leasing of property makes such qualification or licensing necessary. Schedule
2.7 sets forth a list of each jurisdiction in which the Company is so qualified.
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The Company has the corporate power and authority to own and use its properties
and to transact the business in which it is engaged.
2.8 Capitalization. The authorized capital stock of the
Company consists of 40,000,000 shares of common stock, par value $ 0.01 per
share, and 1,000,000 shares of preferred stock, par value $ 0.01 per share. As
of the date hereof, 5,616,278 shares are issued, 4,807,583 of which are
outstanding, and all of which have been duly authorized and validly issued and
are fully paid and non-assessable. Except as set forth on Schedule 2.8, there
are no contracts, options or other obligations, contingent or otherwise,
relating to the issuance, sale or transfer by the Company of any equity security
of the Company.
2.9 Subsidiaries. The Company owns of record and beneficially,
free and clear of all liens, all of the outstanding equity securities and other
securities of each entity (the "Subsidiaries") listed in Exhibit 22.1 to the
Company's Annual Report on Form 10-K for the fiscal year ended September 30,
1999 filed with the SEC on December 17, 1999 (the "Annual Report"). Each of the
Subsidiaries is a corporation, duly incorporated, validly existing and in good
standing under the laws of the jurisdiction of its incorporation and has all
requisite power and authority to carry on its business as now conducted and to
own its properties. Each Subsidiary is duly qualified to do business as a
foreign corporation and is in good standing in each jurisdiction in which the
conduct of its business or its ownership or leasing of property makes such
qualification or licensing necessary. No legend appears on any certificate
representing equity securities of any Subsidiary. All of the outstanding equity
securities of each Subsidiary have been duly authorized and validly issued, and
are fully paid and nonassessable. There are no contracts relating to the
issuance, sale or transfer of any equity security of any Subsidiary. Neither the
Company nor any Subsidiary owns or has any contract to acquire any securities or
ownership interest in any other business.
2.10 Property and Permits. Except as set forth on Schedule
2.10 or in the financial statements (or notes thereto) referenced in Section
2.11, the Company is the sole owner of all right, title, and interest in and to
all assets reflected on the current balance sheet included in the Annual Report
referred to below, free and clear of all mortgages, security interests, claims,
restrictions and other encumbrances, and there exists no restriction on the use
or transfer of such assets or property. No such assets or property are in the
possession of others and the Company holds no property on consignment. All
tangible such assets and property are in good condition and repair and fit for
their intended purpose, and are not in violation of applicable zoning or other
Law (as defined below). The Company holds all permits, licenses and other
approvals necessary to conduct the business in which it is engaged.
2.11 Financial Statements. The consolidated balance sheets and
the related consolidated statements of income, changes in stockholders' equity
and cash flows contained in the Company's annual report on Form 10-K for the
fiscal year ended September 30,1999 (the "Annual Report") and in all other
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documents filed by the Company with the SEC since September 30, 1999, presented
fairly in all material respects the consolidated financial position of the
Company, and the results of the consolidated operations and changes in
stockholders' equity and consolidated financial position of the Company and the
Subsidiaries for the respective fiscal periods or as of the respective dates
therein set forth (subject to possible ordinary year-end adjustments to any such
statements not reflecting a fiscal year or year-end date); each of such
statements (including the related notes where applicable) has been prepared in
accordance with generally accepted accounting principles consistently applied
during the periods involved ("GAAP"). The books and records of the Company and
the Subsidiaries have been, and are being, maintained in all material respects
in accordance with the GAAP and any other applicable legal and accounting
requirements and reflect only actual transactions.
2.12 Changes Since June 30, 2000. Except as set forth on
Schedule 2.12, since June 30, 2000, the Company has not (i) issued any capital
stock or other securities (including without limitation options or warrants),
with the exception of options to purchase common stock issued to employees
and/or agents of the Company; (ii) made any distribution of or with respect to
its capital stock or other securities or purchased or redeemed any of its
securities; (iii) paid any bonus to or increased the rate of compensation of any
of its officers or salaried employees or amended any other terms of employment
of such persons; (iv) sold, leased or transferred any of its properties or
assets other than in the ordinary course of business consistent with past
practice; (v) made or obligated itself to make capital expenditures out of the
ordinary course of business consistent with past practice; (vi) made any payment
in respect of its liabilities other than in the ordinary course of business
consistent with past practice; (vii) entered into any other transaction or been
subject to any event which has or may have a material adverse effect on the
Company; or (viii) agreed to do or authorized any of the foregoing.
2.13 (a) Compliance with Disclosure Requirements. Except as
otherwise disclosed in the Company's Annual Report, the Company has timely filed
all material reports, registrations and statements, together with any amendments
required to be made with respect thereto, that it was required to file since
September 30, 1997 to or with any governmental agency, including without
limitation the SEC. No document filed with the SEC since September 30, 1997
contains any untrue statement of material fact, or omits to state a material
fact necessary to make the statements therein, in the light of the circumstances
in which they were made, not misleading.
(b) Compliance with Nasdaq Continued Listing
Requirements. Except as specified in Schedule 2.13, (i) the Company is in
compliance with all applicable Nasdaq National Market continued listing
requirements, (ii) there are no proceedings pending or to the Company's
knowledge threatened against the Company relating to the continued listing of
the Company's common stock on the Nasdaq National Market and (iii) the Company
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has not received any notice of, nor to the knowledge of the Company is there any
basis for, the delisting of such common stock from the Nasdaq National Market.
2.14 Insurance. The Company maintains insurance coverage. All
policies of insurance to which the Company or any Subsidiary is a party: (a) are
validly issued, outstanding and enforceable; (b) are issued by an insurer that
is financially sound and reputable; (c) taken together, provide adequate
insurance coverage for the assets and the operations of the Company; and (d)
will continue in full force and effect following the Closing. The Company has
given notice to the insurer of all claims that may be insured thereby.
2.15 No Undisclosed Liabilities. The Company does not have any
material liabilities or obligations whatsoever, known or unknown, accrued,
absolute, contingent, or other, except (a) as disclosed in the Annual Report or
other fillings with the SEC since the Annual Report, or (b) to the extent they
arise in the ordinary course of the business of the Company and would not have
been required to be set forth therein had they existed on June 30, 2000: (i)
Taxes (as defined below) incurred since June 30, 2000 and (ii) performance and
payment obligations (but not liabilities for breach or violation) lawfully
incurred under arm's-length contracts for goods or services.
2.16 Taxes.
(a) The Company timely has filed or caused to be filed with
the appropriate Government entity all tax returns and reports required to be
filed by or on behalf of the Company, including estimated tax and informational
returns ("Tax Returns") and no Tax Returns have been amended. All Tax Returns
are true, correct, and complete.
(b) Except as noted on Schedule 2.16, all Taxes (whether or
not reflected in Tax Returns as filed) payable by the Company with respect to
all periods reflected on Tax Returns have been fully paid, and there are no
grounds for the assertion or assessment of any additional Taxes against the
Company or its assets with respect to such periods. All unpaid Taxes are
properly accrued on the books of the Company and will be so accrued on the
Company's balance sheet as of the Closing Date in an amount sufficient to pay
them in full when due.
(c) The Company has complied with all Laws relating to the
withholding of Taxes and the payment thereof (including, without limitation,
withholding of Taxes under Section 1441 and 1442 of the Internal Revenue Code of
1986, as amended (the "Code"), or similar provision under foreign laws), and has
timely and properly withheld from employee wages and paid over to the proper
Government all amounts required to be withheld and be paid over under applicable
Law.
(d) As used in this Agreement, "Taxes" means all taxes,
charges, fees, levies, or other like assessments, including without limitation
income, gross receipts, ad valorem, value added, premium, excise, real property,
personal property, windfall profit, sales, use, transfer, license, withholding,
6
employment, payroll, and franchise taxes imposed by: the United States or any
other nation, state, or bilateral or multilateral governmental authority, any
local governmental unit or subdivision thereof, or any branch, agency, or
judicial body thereof ("Government"); and shall include any interest, fines,
penalties, assessments, or additions to tax resulting from, attributable to, or
incurred in connection with any such Taxes or any contest or dispute thereof.
2.17 No Breach of Law or Governing Document. The Company is
not and has not been in default under or in breach or violation of any
applicable statute, law, treaty, convention, ordinance, decree, order,
injunction, rule, directive, or regulation of any Government ("Law") or the
provisions of any Government permit, franchise, or license, or any provision of
its certificate of incorporation or its bylaws. The Company has not received any
notice alleging such default, breach or violation. Neither the execution of this
Agreement nor the Closing do or will constitute or result in any such default,
breach or violation.
2.18 Litigation. Except as disclosed in the Annual Report, or
on Schedule 2.18, there is no action, suit, or other legal or administrative
proceeding or governmental investigation pending, or threatened against, by or
affecting the Company or any Seller, or any of their properties or assets, which
alone or in the aggregate would have a material adverse effect upon the Company,
or which questions the validity or enforceability of this Agreement or the
transactions contemplated hereby, and there is no basis for any of the
foregoing. There are no outstanding orders, injunctions, decrees or stipulations
issued by any governmental authority in any proceeding to which the Company or
any Seller is or was a party which have not been complied with in full or which
continue to impose any material obligations on the Company or such Seller.
2.19 Intellectual Property. Except as disclosed in the Annual
Report:
(a) The Company is the sole and exclusive owner of each
patent, trademark, trade name, service ▇▇▇▇, and copyrighted work, and
registrations thereof and applications therefor, trade secret, software program,
invention, proprietary process, and item of proprietary know-how and other
intellectual property, and all licenses, sublicenses, and agreements in respect
thereof, used or licensed by or to the Company, to which the Company is a party,
or which are otherwise included in the property of the Company (the
"Intellectual Property") and all such items are valid and subsisting;
(b) The Company is the exclusive owner of all internally
developed prospect lists, customer lists, projections, analyses, and market
studies, free and clear of all restrictions whatsoever, and has the unrestricted
right to use any other such materials used by the Company but not internally
developed;
(c) The ownership, use, licensing, purchase, or sale by or to
the Company of any of the Intellectual Property or of the other technology used
in the business of the Company does not conflict with, contravene, infringe
upon, interfere with, or violate any patent, trademark, copyright or other
7
intellectual property right of any third person or require the acquiescence,
agreement or consent of any third person; and
(d) The Intellectual Property and the other technology used in
the business of the Company are not subject to a challenge or claim of
infringement, interference or unfair competition or other claim and, to the
knowledge of Sellers or the Company, the Intellectual Property is not being
infringed upon or violated by any third person.
2.20 Officers and Directors. Set forth on Schedule 2.20 is a
list of: (a) all current directors of the Company, and (b) all current officers
(with office held) of the Company.
2.21 Governmental Approvals and Filings. No Seller nor the
Company is required to obtain any approval, consent, or authorization of, or to
make any declaration or filing with, any Government for the valid execution and
delivery of this Agreement or any other agreement to be delivered hereunder, the
purchase and sale of the SYCM Shares, or the performance or consummation of the
respective transactions contemplated hereby or thereby, except any applicable
filings required under HSR, and any filings with the SEC and other filings
required to be made by Buyer.
2.22 Purchase Entirely for Own Account. The ADS Shares to be
received by the Sellers hereunder will be acquired for the Sellers' own
accounts, not as nominee or agent, for investment purposes and not with a view
to, or for offer or sale in connection with directly or indirectly, any
distribution in violation of the Securities Act of 1933 (the "1933 Act") or any
other applicable securities law and with no intention of participating in the
formulation, determination of direction of the basic business decisions of the
Buyer. No Seller is a registered broker dealer or an entity engaged in the
business of being a broker dealer. No Seller has any intention of participating
in the formulation, determination or direction of the basic business decisions
of the Buyer.
2.23 Investment Experience. Each Seller acknowledges that it
can bear the economic risk and complete loss of its investment in the ADS Shares
and has such knowledge and experience in financial or business matters that it
is capable of evaluating the merits and risks of the investment contemplated
hereby.
2.24 Disclosure of Information. Each Seller has had access to
such financial and other information concerning the Buyer and the ADS Shares as
such Seller deems necessary in order to make a decision to acquire the ADS
Shares, including an opportunity to ask questions of and receive information
from the Buyer. Neither such inquiries nor any other due diligence investigation
conducted by the Sellers shall modify, amend or affect any Seller's right to
rely on the Buyer's representations and warranties contained in this Agreement.
8
2.25 Accredited Investor. Each Seller, other than the
Partnership, is an accredited investor as defined in Rule 501(a) of Regulation
D, as amended, under the 1933 Act.
2.26 Disclosure. Each Schedule and each document attached as
or on a Schedule, as well as the other information provided to the Buyer by or
on behalf of the Sellers, is true, correct, and complete. No representation or
warranty by Sellers in this Agreement or any Schedule referred to herein or in
any agreement to be delivered hereunder, and no information furnished to Buyer
by or on behalf of Sellers pursuant to or in connection with this Agreement
contains or will contain as of the Closing Date any untrue statement of a
material fact or any omission of a material fact necessary to make the
respective statements contained herein or therein, in light of the circumstances
under which the statements were made, not misleading.
2.27 Brokers; Finders. No Seller has incurred any obligation
for any finder's or broker's or agent's fees or commissions or similar
compensation in connection with the transactions contemplated hereby; the
parties acknowledge the obligations of the Company with respect to ▇▇▇▇▇▇▇▇ and
▇▇▇▇▇▇▇▇.
2.28 Restrictive Documents. No Seller is subject to any
charter, by-law, mortgage, lien, lease, agreement, instrument, order, law, rule,
regulation, judgment or decree or any other restriction which would prevent
consummation of the transactions contemplated by this Agreement.
2.29 Employee Benefit Matters.
(a) Schedule 2.29 lists all employee benefit plans (within the
meaning of Section 3(3) of the Employee Retirement Income Security Act of 1974,
as amended ("ERISA")) that are maintained or contributed to by the Company or
any Subsidiary or with respect to which the Company or any Subsidiary has or may
have any liability (the "Company Benefit Plans"). Except as set forth on
Schedule 2.29, each Company Benefit Plan has been established and maintained in
accordance with its terms and in compliance with all applicable laws, statutes,
orders, rules and regulations, including but not limited to ERISA and the Code.
Except as set forth on Schedule 2.29, each Company Benefit Plan that is intended
to be qualified under Section 401(a) of the Code is, and since its inception has
been, so qualified and a determination letter has been issued by the Internal
Revenue Service to the effect that each such Company Benefit Plan is so
qualified and that each trust forming a part of any such Company Benefit Plan is
exempt from tax pursuant to Section 501(a) of the Code and no circumstances
exist which could adversely affect this qualification or exemption.
(b) No Company Benefit Plan is an "employee pension benefit
plan" within the meaning of Section 3(2) of ERISA that is subject to Title IV of
ERISA.
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ARTICLE III
REPRESENTATIONS AND WARRANTIES OF BUYER
Buyer hereby makes the following representations and
warranties to Sellers, each of which is true and correct on the date hereof and
each of which shall survive the Closing:
3.1 Corporate Status. Buyer is a corporation, duly organized,
validly existing and in good standing under the laws of Missouri; it is duly
qualified and in good standing in each foreign jurisdiction in which the conduct
of its business or its ownership or leasing of property makes such qualification
or licensing necessary. The Buyer has the corporate power and authority to own
and use its properties and to transact the business in which it is engaged.
3.2 Corporate Power and Authority. Buyer has all requisite
power and authority to execute and deliver this Agreement, to perform its
obligations hereunder, and to consummate the transactions contemplated hereby.
Buyer has taken all action necessary to authorize its execution and delivery of
this Agreement, the performance of its respective obligations hereunder and the
consummation of the transactions contemplated hereunder.
3.3 Enforceability. This Agreement has been duly executed and
delivered by Buyer and constitutes a legal, valid and binding obligation of
Buyer, enforceable against Buyer in accordance with its terms.
3.4 No Violation. The execution and delivery of this Agreement
by Buyer, the performance by Buyer of the obligations hereunder and the
consummation by Buyer of the transactions contemplated by this Agreement will
not (i) contravene any provision of the articles of incorporation or bylaws of
Buyer, (ii) violate or conflict with any law, statute, ordinance, rule,
regulation, decree, writ, injunction, judgment or order of any governmental
authority or of any arbitration award which is either applicable to, binding
upon or enforceable against Buyer, (iii) conflict with, result in any breach of,
or constitute a default (or an event which would, with the passage of time or
the giving of notice or both, constitute a default) under, or give rise to a
right to terminate, amend, modify, abandon or accelerate, any contract which is
applicable to, binding upon or enforceable against Buyer, (iv) result in or
require the creation or imposition of any lien upon or with respect to any of
the property or assets of Buyer, or (v) require the consent, approval,
authorization or permit of, or filing with or notification to, any governmental
authority, any court or tribunal or any other person, except any applicable
filings required under HSR, and any filings with the SEC and other filings
required to be made by Buyer.
3.5 Capitalization. The authorized capital stock of the Buyer
consists of 245,000,000 shares of common stock, par value $ 0.001 per share, and
5,000,000 shares of preferred stock, par value $10.00 per share. As of November
9, 2000 (a) 102,101,653 shares of common stock were issued and outstanding, and
all of which have been duly authorized and validly issued and are fully paid and
10
non-assessable, (b) 503 shares of common stock were reserved for issuance in
exchange for certain exchangeable shares issued by Buyer's Canadian subsidiary
(c) 1 share of Class B Voting Preferred Stock all of which are outstanding which
has been duly authorized and validly issued and is fully paid and
non-assessable, and (d) 26,000 shares of Class C Preferred Stock all of which
are outstanding, and all of which have been duly authorized and validly issued
and are fully paid and non-assessable.
3.6 Issuance of Shares. Upon issuance to Sellers, the ADS
Shares, and the Additional Shares, if any, will be duly authorized, validly
issued, fully paid, and non-assessable.
3.7 Financial Statements. The consolidated balance sheets and
the related consolidated statements of income, changes in stockholders' equity
and cash flows contained in the Buyer's annual report on Form 10-K for the
fiscal year ended December 31, 1999 (the "ADSX 10-K") and in all other documents
filed by the Buyer with the SEC since December 31, 1999, presented fairly in all
material respects the consolidated financial position of the Buyer, and the
results of the consolidated operations and changes in stockholders' equity and
consolidated financial position of the Buyer and its subsidiaries for the
respective fiscal periods or as of the respective dates therein set forth
(subject to possible ordinary year-end adjustments to any such statements not
reflecting a fiscal year or year-end date); each of such statements (including
the related notes where applicable) has been prepared in accordance with
generally accepted accounting principles consistently applied during the periods
involved ("GAAP"). The books and records of the Buyer and its subsidiaries have
been, and are being, maintained in all material respects in accordance with the
GAAP and any other applicable legal and accounting requirements and reflect only
actual transactions. Notwithstanding the foregoing, the representations
contained in this Section 3.7 will not be deemed to refer to any information
contained in any applicable document filed with the SEC relating to the
business, operations, financial condition or results of operations of Bostek,
Inc. which was acquired by Buyer in 1999.
3.8 Changes Since June 30, 2000. Since June 30, 2000 and
through November 11, 2000 the Buyer has issued 42,659,952 shares of its common
stock, and, other than as disclosed in any document filed with the SEC, Buyer
has not (i) made any distribution of or with respect to its capital stock or
other securities or purchased or redeemed any of its securities; (ii) paid any
bonus to or increased the rate of compensation of any of its officers or
salaried employees or amended any other terms of employment of such persons;
(iii) sold, leased or transferred any of its properties or assets other than in
the ordinary course of business consistent with past practice; (iv) made or
obligated itself to make capital expenditures out of ordinary course of business
consistent with past practice; (v) made any payment in respect of its
liabilities other than in the ordinary course of business consistent with past
practice; (vi) entered into any other transaction or been subject to any event
which has or may have a material adverse effect on the Buyer; or (vii) agreed to
do or authorized any of the foregoing.
11
3.9 (a) Compliance with Disclosure Requirements. Except as
otherwise disclosed in the ADSX 10-K, the Buyer has timely filed all material
reports, registrations and statements, together with any amendments required to
be made with respect thereto, that it was required to file since September 30,
1997 to or with any governmental agency, including without limitation the SEC.
No document filed with the SEC since September 30, 1997 contains any untrue
statement of material fact, or omits to state a material fact necessary to make
the statements therein, in the light of the circumstances in which they were
made, not misleading.
(b) Compliance with Nasdaq Continued Listing Requirements.
(i) The Buyer is in compliance with all applicable Nasdaq National Market
continued listing requirements, (ii) there are no proceedings pending or to the
Buyer's knowledge threatened against the Buyer relating to the continued listing
of the Buyer's common stock on the Nasdaq National Market and (iii) the Buyer
has not received any notice of, nor to the knowledge of the Buyer is there any
basis for, the delisting of such common stock from the Nasdaq National Market.
3.10 No Undisclosed Liabilities. The Buyer does not have any
material liabilities or obligations whatsoever, known or unknown, accrued,
absolute, contingent, or other, except (a) as disclosed in the ADSX 10-K or
other filings with the SEC since the ADSX 10-K, or (b) to the extent they arise
in the ordinary course of the business of the Buyer and would not have been
required to be set forth therein had they existed on June 30, 2000: (i) Taxes
(as defined below) incurred since June 30, 2000 and (ii) performance and payment
obligations (but not liabilities for breach or violation) lawfully incurred
under arm's-length contracts for goods or services.
3.11 Investment Representation. Buyer is acquiring the SYCM
Shares for its own account, for investment and without any view to resale or
distribution of the SYCM Shares or any portion thereof.
3.12 Investment Experience. The Buyer acknowledges that it can
bear the economic risk and complete loss of its investment in the SYCM Shares
and has such knowledge and experience in financial or business matters that it
is capable of evaluating the merits and risks of the investment contemplated
hereby.
3.13 Disclosure of Information. The Buyer has had access to
such financial and other information concerning the Company and the SYCM Shares
as the Buyer deems necessary in order to make a decision to acquire the SYCM
Shares, including an opportunity to ask questions of and receive information
from the Company. Neither such inquiries nor any other due diligence
investigation conducted by the Buyer shall modify, amend or affect the Buyer's
right to rely on the Sellers' representations and warranties contained in this
Agreement.
3.14 Brokers, Finders. Buyer has not incurred any obligation
for any finder's or broker's or agent's fees or commissions or similar
compensation in connection with the transactions contemplated hereby.
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3.15 Restrictive Documents. Buyer is not subject to any
charter, by-law, mortgage, lien, lease, agreement, instrument, order, law, rule,
regulation, judgment or decree or any other restriction which would prevent
consummation of the transactions contemplated by this Agreement.
ARTICLE IV
CONDITIONS TO BUYER'S OBLIGATIONS
The obligations of Buyer at the Closing shall be subject to
the satisfaction at or prior to the Closing of each of the following conditions
(unless waived in writing by Buyer):
4.1 Accuracy of Representations and Warranties. Sellers'
representations and warranties set forth in Article II shall have been true and
correct in all material respects when made and shall be true and correct in all
material respects on the Closing Date as though such representations and
warranties were made at and as of such date and time.
4.2 Performance of Agreement. Sellers shall have fully
performed and complied with all covenants, conditions, and other obligations
under this Agreement to be performed or complied with by them at or prior to the
Closing.
4.3 No Adverse Change. There shall have been no material
adverse change in the Company's business, prospects or financial condition
between the date hereof and Closing.
4.4 Consents. Sellers shall have obtained the written consent
of IBM Credit Corporation, The Chase Manhattan Bank, and all other lenders and
parties to material contracts with the Company (excluding the consent of the
Town of Brookhaven Industrial Development Agency and the New York State Urban
Development Corporation, if otherwise required). The Chase Manhattan Bank shall
have also waived compliance with all covenants under the applicable agreements
to the extent required to permit the transactions contemplated hereby to be
consummated at least through December 31, 2000.
4.5 Certificate. Sellers shall have delivered to Buyer at the
Closing a certificate of Sellers, dated the Closing Date, to the effect that the
conditions set forth in Sections 4.1, 4.2, 4.3 and 4.4 have been satisfied. Such
certificate shall be deemed an additional representation and warranty of Sellers
hereunder.
4.6 Agreement with Company. The Company and the Buyer shall
have executed an agreement with respect to the Company's purchase of shares of
common stock of the Company's wholly-owned subsidiary, Information Products
Center, Inc., on terms satisfactory to Buyer, and the closing under such
agreement shall have occurred prior to or simultaneously with the Closing
hereunder.
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4.7 Insurance. The Company shall have ceased to pay premiums
under that certain insurance policy on the life of Spielberger, underwritten by
Connecticut Mutual Life Insurance Company and bearing policy number 4,893,151.
4.8 Board Resignations. All members of the Board of Directors
of the Company, other than ▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇▇▇, shall have resigned and ▇▇▇▇▇ ▇.
Loppert and Anat Ebbenstein shall have been appointed thereto.
ARTICLE V
CONDITIONS TO SELLERS' OBLIGATIONS
The obligations of Sellers at the Closing shall be subject to
the satisfaction at the Closing of the following conditions (unless waived in
writing by Sellers):
5.1 Accuracy of Representations and Warranties. Buyer's
representations and warranties set forth in Article III shall have been true and
correct in all material respects when made, and shall be true and correct in all
material respects on the Closing Date as though such representations and
warranties were made at and as of such date and time.
5.2 Performance of Agreement. Buyer shall have fully performed
and complied with all covenants, conditions, and other obligations under this
Agreement to be performed or complied with by it at or prior to the Closing.
5.3 No Adverse Change. There shall have been no material
adverse change in the Buyer's business, prospects or financial condition between
the date hereof and Closing.
5.4 Certificate. Buyer shall have delivered to Sellers at the
Closing a certificate of Buyer executed by an executive officer of Buyer, dated
the Closing Date, to the effect that the conditions set forth in Sections 5.1,
5.2 and 5.3 have been satisfied. Such certificate shall be deemed an additional
representation and warranty of Buyer hereunder.
5.5 Registration Statement. The Buyer shall have caused to be
filed with the SEC a registration statement on Form S-3 (or such other form as
is available for such a registration) covering the resale of at least 1,300,000
of the ADS Shares (the "Registration Statement"), such Registration Statement
shall have been declared effective, and such shares shall have been listed for
trading on the NASDAQ.
5.6 Agreement with Company. The Company shall have executed an
employment or consulting agreement providing Spielberger on terms no less
favorable to Spielberger than the following: (i) a five year term; (ii) payment
at a rate of $120,000 per year if Spielberger actively consults with the Company
or $60,000 per year if Spielberger requests or is requested to not actively
consult, provided that if Spielberger is requested not to actively consult and
such request is without cause (to be defined in any such agreement),
14
Spielberger's pay will remain at $120,000 per year; (iii) the ability to keep
the two vehicles currently being provided to Spielberger and have reasonable
expenses in connection therewith reimbursed, so long as Spielberger is actively
consulting for the Company; and (iv) the granting of the right to acquire
300,000 shares of the common stock of the Company at an exercise price equal to
the then market price thereof, in form attached hereto as Exhibit B.
ARTICLE VI
COVENANT NOT TO COMPETE
In consideration of the sale of the SYCM Shares and the
consummation of the transactions contemplated hereby, Sellers shall not,
individually or collectively, for five (5) years following the Closing Date,
operate or have financial interest in any business that competes, directly or
indirectly, with the business of the Company, except for passive investments
(less than 2% of outstanding shares) in publicly-held entities.
ARTICLE VII
ADDITIONAL COVENANTS OF THE PARTIES
7.1 Mandatory Registration. The Buyer shall use its best
reasonable efforts to cause the Registration Statement to be declared effective
by the SEC as soon as practicable, and to remain effective for at least one year
following the effective date thereof. If the number of ADS Shares held by the
Sellers at the time exceeds the remaining number of shares available for sale
under the Registration Statement, the Buyer shall use its reasonable best
efforts to include such excess shares in another registration statement as
promptly as practical following the Closing but in any event no later than
January 30, 2001, and will cause such registration statement to remain effective
for at least one year following the Closing.
7.2 Conduct of Business Before Closing. Until Closing Sellers
shall not, without the prior written consent of Buyer (a) fail to cause the
Company to operate in the ordinary course of business, (b) take or permit the
Company to take any action which would require a change or addition to or
deletion from the disclosures of Sellers pursuant to Article II hereof, or (c)
permit the Company to file any document with the SEC.
7.3 Restriction on Sales of ADS Shares. Each Seller agrees
that until the first anniversary of the Closing Date, the maximum number of
shares of common stock of ADS which Sellers, individually and collectively, will
sell on any single day shall not exceed 50,000. If prior to the first
anniversary of the Closing the outstanding shares of common stock of ADS are
increased, decreased, changed into or exchanged for a different number or kind
of shares or securities of ADS or shares of a different par value or without par
value, through reorganization, recapitalization, reclassification, stock
dividend, stock split, or reverse stock split, an appropriate and proportionate
adjustment shall be made in the number and/or kind of securities subject to the
foregoing limitation.
15
7.4 Public Disclosure. No Party to this Agreement shall (and
Sellers shall cause the Company not to) make any public disclosure of the terms
hereof or the transactions contemplated hereby without the prior written consent
of the other Party, except as required by law. In the event circumstances shall
change requiring, in the opinion of either Party, a public announcement, the
Party proposing to make the announcement will advise the other in advance and
will give the other Party the opportunity to comment on the form of the proposed
announcement. If the Closing does not occur, Buyer, and if the Closing does
occur, Sellers shall not disclose to any third person any confidential
information relating to the Company without the prior written consent of the
other Party.
7.5 Further Assurances. From and after the Closing, the
Parties shall do such acts and execute such documents and instruments as may be
reasonably required to make effective the transactions contemplated hereby.
7.6 Termination of the Agreement. If the Closing shall not
have occurred prior thereto, this Agreement may be terminated by a Party hereto
without further liability or obligation after December 7, 2000 if such Party is
not in breach or violation hereof.
7.7 Effect of Termination. The Parties agree that the sole
remedy available to a party terminating this Agreement pursuant to Section 7.6
hereof shall be limited to such party's right not to effect the transactions
contemplated hereby; provided, however, that notwithstanding the foregoing (i)
Section 7.4, this Section 7.7, Section 9.6 and Section 9.8 shall survive any
termination of this Agreement and (ii) no Party shall be relieved or released as
a result of such termination from any liabilities or damages arising out of its
willful breach of any provision of this Agreement.
ARTICLE VIII
INDEMNIFICATION
8.1 Indemnification of Buyer. Sellers, jointly and severally,
shall hold Buyer, and the shareholders, directors, officers, successors,
assigns, and agents of Buyer (the "Buyer Indemnified Persons"), harmless and
indemnify each of them from and against, and waives any claim for contribution
or indemnity with respect to, any and all claims, losses, damages, liabilities,
expenses or costs ("Losses"), plus reasonable attorneys' fees and expenses
incurred in connection with Losses and/or enforcement of this Agreement, plus
interest from the date incurred through the date of payment at two (2) percent
above the prime lending rate of Citibank, NA from time to time prevailing (in
all, "Indemnified Losses") incurred or to be incurred by any of them to the
extent resulting from or arising out of any breach or violation of Sellers'
representations, warranties, covenants, or agreements contained in this
Agreement, including provisions of this Article VIII.
16
8.2 Indemnification of Sellers. Buyer shall hold Sellers,
their permitted assigns and agents (the "Seller Indemnified Persons") harmless
and indemnify each of them from and against, and waives any claim for
contribution or indemnity with respect to, any and all Indemnified Losses
incurred or to be incurred by any of them, to the extent resulting from or
arising out of any breach or violation of Buyer's representations, warranties,
covenants and agreements contained in this Agreement, including the provisions
of this Article VIII.
8.3 Survival. The respective representations and warranties
made by the Parties in Articles II and III and certificates under Sections 4.4
and 5.4 shall survive the Closing Date but the right to bring a claim for
indemnification under this Article VIII shall expire on the second anniversary
of the Closing Date unless a claim with respect thereto shall have been made
pursuant to Section 8.1 or 8.2 prior to such date against the Party responsible
for indemnification hereunder (the "Indemnifying Party"); provided, that the
foregoing shall not apply to representations and warranties under Sections 2.1
or 2.2 or a certificate relating thereto, or to any intentional breach or
violation of any provision of this Agreement, which shall survive without
limitation hereunder.
8.4 Notice of Claim. In the event that Buyer seeks
indemnification on behalf of a Buyer Indemnified Person, or Sellers seek
indemnification on behalf of a Seller Indemnified Person, such Party seeking
indemnification (the "Indemnified Party") shall give written notice to the
Indemnifying Party specifying the facts constituting the basis for such claim
and the amount, to the extent known, of the claim asserted. The Indemnifying
Party shall pay the amount of any valid claim not more than ten days after the
Indemnified Party provides notice to the Indemnifying Party of such amount.
8.5 Right to Contest Claims of Third Persons. If an
Indemnified Party is entitled to indemnification hereunder because of a claim
asserted by any claimant (other than an indemnified person hereunder) ("Third
Person"), the Indemnified Party shall give the Indemnifying Party reasonably
prompt notice thereof after such assertion is actually known to the Indemnified
Party; provided, however, that the right of a person to be indemnified hereunder
in respect of claims made by a Third Person shall not be adversely affected by a
failure to give such notice unless, and then only to the extent that, an
Indemnifying Party is prejudiced thereby. The Indemnifying Party shall have the
right, upon written notice to the Indemnified Party, and using counsel
reasonably satisfactory to the Indemnified Party, to investigate, secure,
contest, or settle the claim alleged by such Third Person (a "Third-Person
Claim"), provided that the Indemnifying Party has unconditionally acknowledged
to the Indemnified Party in writing his or its obligation to indemnify the
persons to be indemnified hereunder with respect to such Third-Person Claim; the
Indemnified Party may thereafter participate in (but not control) the defense of
any such Third-Person Claim with its own counsel at its own expense, unless
separate representation is necessary to avoid a conflict of interest, in which
case such representation shall be at the expense of the Indemnifying Party.
Unless and until the Indemnifying Party so acknowledges his or its obligation to
indemnify, the Indemnified Party shall have the right, at its option, to assume
and control defense of the matter and to look to the Indemnifying Party for the
17
full amount of the costs of defense. The failure of the Indemnifying Party to
respond in writing to the aforesaid notice of the Indemnified Party with respect
to such Third-Person Claim within twenty (20) days after receipt thereof shall
be deemed an election not to defend the same. If the Indemnifying Party does not
so acknowledge his or its obligation to indemnity and assume the defense of any
such Third-Person Claim, (a) the Indemnified Party may defend against such
claim, in such manner as it may deem appropriate, including, but not limited to,
settling such claim, after giving notice of the same to the Indemnifying Party,
on such terms as the Indemnified Party may deem appropriate, and (b) the
Indemnifying Party may participate in (but not control) the defense of such
action, with its own counsel at its own expense. If the Indemnifying Party
thereafter seeks to question the manner in which the Indemnified Party defended
such Third-Person Claim or the amount or nature of any such settlement, the
Indemnifying Party shall have the burden to prove by clear and convincing
evidence that conduct of the Indemnified Party in the defense and/or settlement
of such Third-Person Claim constituted gross negligence or willful misconduct.
The Parties shall make available to each other all relevant information in their
possession relating to any such Third-Person Claim and shall cooperate in the
defense thereof.
8.6 Limitation of Indemnification. No Indemnified Party shall
be entitled to indemnification for any Losses unless such Indemnified Party has
sustained Losses which, in the aggregate, exceed $50,000, and then for all
Losses as provided above.
ARTICLE IX
MISCELLANEOUS PROVISIONS
9.1 Notice. All notices, requests, demands, and other
communications required or permitted under this Agreement shall be in writing
and shall be deemed to have been duly given and made upon being delivered either
by courier or fax delivery to the Party for whom it is intended, provided that a
copy thereof is deposited, postage prepaid, certified or registered mail, return
receipt requested, in the United States mail, bearing the address shown in this
Section 9.1 for, or such other address as may be designated in writing hereafter
by, such Party:
If to Buyer:
▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇, Esq.
Applied Digital Solutions, Inc.
▇▇▇ ▇▇▇▇▇ ▇▇▇▇ ▇▇▇, ▇▇▇▇▇ ▇▇▇
▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇
Telephone: (▇▇▇) ▇▇▇-▇▇▇▇
Fax: (▇▇▇) ▇▇▇-▇▇▇▇
18
With a copy to:
▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇, Esq.
▇▇▇▇▇ ▇▇▇▇ LLP
▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇
▇▇. ▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇-▇▇▇▇
Telephone: (▇▇▇) ▇▇▇-▇▇▇▇
Fax: (▇▇▇) ▇▇▇-▇▇▇▇
If to Sellers:
c/o ▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇▇▇
▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
With a copy to:
▇▇▇▇▇ ▇▇▇▇▇▇▇, Esq.
▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇
▇▇▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Telephone: (▇▇▇) ▇▇▇-▇▇▇▇
Fax: (▇▇▇) ▇▇▇-▇▇▇▇
9.2 Entire Agreement. This Agreement and the Schedules and
Exhibits hereto embody the entire agreement and understanding of the parties
hereto with respect to the subject matter hereof, and supersede all prior and
contemporaneous agreements and understandings relative to such subject matter.
9.3 Assignment; Binding Agreement. This Agreement and various
rights and obligations arising hereunder shall inure to the benefit of and be
binding upon Buyer, its successors, and permitted assigns and Sellers, their
legal representatives, successors, and permitted assigns. Neither this Agreement
nor any of the rights, interests, or obligations hereunder shall be transferred,
delegated, or assigned (by operation of law or otherwise) by any of the Parties
hereto without the prior written consent of the other Parties, except that Buyer
shall have the right to transfer and assign its rights hereunder to purchase the
SYCM Shares and any other rights or benefits afforded to it by this Agreement to
any entity which at the time of such transfer and assignment is controlled by
Buyer.
9.4 Counterparts. This Agreement may be executed
simultaneously in multiple counterparts, each of which shall be deemed an
original, but all of which taken together shall constitute one and the same
instrument. The parties agree that a copy of a signature sent by telecopier
shall be deemed an original for all purposes.
19
9.5 Headings; Interpretation. The article and section headings
contained in this Agreement are inserted for convenience only and shall not
affect in any way the meaning or interpretation of the Agreement. Each reference
in this Agreement to an Article, Section, Schedule or Exhibit, unless otherwise
indicated, shall mean an Article or a Section of this Agreement or a Schedule or
Exhibit attached to this Agreement, respectively. References herein to "days",
unless otherwise indicated, are to consecutive calendar days. All Parties have
participated substantially in the negotiation and drafting of this Agreement and
agree that no ambiguity herein should be construed against the draftsman.
9.6 Expenses. Sellers (and not the Company) shall pay all
costs and expenses incurred on behalf of themselves or the Company in connection
with the negotiation, preparation and execution of this Agreement and the
consummation of the transactions contemplated hereby, including, without
limitation, fees and expenses of attorneys, investment bankers and accountants.
Notwithstanding the foregoing, in connection with the Closing, the Buyer shall
cause to be paid the reasonable attorney's and accountant's fees incurred by
Sellers in connection herewith, up to a maximum of $50,000.
9.7 Remedies Cumulative. All rights and remedies of the
Parties under this Agreement are cumulative and without prejudice to any other
rights or remedies under Law.
9.8 Governing Law. This Agreement shall in all respects be
construed in accordance with and governed by the substantive laws of the State
of New York, without reference to its conflict of law rules.
* * * * * * * *
20
IN WITNESS WHEREOF, each of the Parties hereto has caused this
Agreement to be executed as of the date first above written.
BUYER:
Applied Digital Solutions, Inc.
By: /s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
--------------------------
Name: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
Title: Chairman and Chief Executive Officer
SELLERS:
By: /s/ ▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇▇▇
------------------------
▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇▇▇
By: /s/ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇▇
---------------------------
▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇▇
BEARPEN LIMITED PARTNERSHIP
By: /s/ ▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇▇▇
-------------------------
Name: ▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇▇▇
Title: a General Partner
By: /s/ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇▇
---------------------------
Name: ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇▇
Title: a General Partner
21
TABLE OF EXHIBITS AND SCHEDULES
Exhibit A Consulting Agreement
Exhibit B Warrant
Schedule 1.1 SYCM Common Stock and Options
Schedule 2.4 Consents
Schedule 2.7 Jurisdictions
Schedule 2.8 Contracts Relating to Issuance, Sale or Transfer of
Equity Securities
Schedule 2.10 Property
Schedule 2.12 Changes Since June 30, 2000
Schedule 2.13 Exceptions to Nasdaq representations
Schedule 2.16 Taxes Due
Schedule 2.18 Litigation
Schedule 2.20 Officers and Directors
Schedule 2.29 Employee Benefit Plans