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EXHIBIT 1
PURCHASE AGREEMENT
THIS PURCHASE AGREEMENT (this "AGREEMENT") is made as of November __,
1995 (the "EFFECTIVE DATE"), by and between International Microcomputer
Software, Inc., a California corporation with its principal offices at 1895 E.
Francisco Boulevard, San Rafael, California 94901 ("IMSI"), Computer Easy
International, Inc., a Utah corporation with its principal offices at 1350
Albert Street, Youngstown, Ohio ("COMPUTEREASY") and Forte Computer Easy, Inc.,
a Utah corporation with its principal offices at 1350 Albert Street, Youngstown,
Ohio ("FORTE"), hereinafter referred to jointly as "FORTE COMPUTER EASY").
RECITALS
A. ComputerEasy is engaged in the business of developing, publishing
and distributing consumer and business software products.
B. Subject to those exceptions disclosed in this Agreement,
ComputerEasy owns all right, title and interest in and to the Products, as
defined below.
C. ComputerEasy and IMSI entered into a Letter of Agreement dated
August 30, 1995 (as amended by Letter of Agreement dated September 18, 1995, the
"Letter of Agreement") which provided for the transfer of certain software
products and other assets of ComputerEasy to IMSI effective as of September 1,
1995. The Letter of Agreement contemplated a future formal agreement mutually
acceptable to the parties which would further define the terms and conditions of
the sale of the Products.
D. The Products are sold subject to certain rights contained in the
following described Agreements and contain certain software components duly
licensed to ComputerEasy for inclusion in the Products pursuant to the
Assignment and License Agreement dated July 28, 1994, between Napier Graphics,
Inc., and James M. Napier ("Assignor" and "Author" therein) and Computer Easy
International, Inc. ("Assignee" therein) (the "Napier Agreement") and
Distribution Agreement dated January 14, 1994, between Computer Easy
International Incorporated and FastCad Europe Limited and Polaron Engineering
Limited, and Republishing Agreement dated January 16, 1994, between Computer
Easy and SYBEX and FastCad Retail Products Limited, and Republishing Agreement
dated November 16, 1994, between Computer Easy and Markt & Technik GmbH and
FastCad Retail Products Limited (the "Remarketing Agreements"), a full and
complete copy of the Assignment Agreement and the Remarketing Agreement were
provided to IMSI before completion by IMSI of its due diligence to its
satisfaction before the end of the business day September 1, 1995. The Products
contain no other components in which any third party may claim superior or joint
ownership, nor are the Products a derivative work of any other software programs
not owned in their entirety by ComputerEasy.
E. ComputerEasy has granted standard rights, including without
limitation site licenses, in copies of the Programs of the Floorplan line of
software (but not the Windows 95 version in development) to third parties solely
pursuant to the End-User License Agreements ("End-User
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Agreements") contained in the samples of the boxes of the software products
which were taken by IMSI before completion of its due diligence, which End-User
Agreements continue to be in force and effect.
F. Disputes have arisen between the parties due to perceived breaches
of the Letter Agreement by the parties, all of which are resolved by this
Agreement.
NOW, THEREFORE, in consideration of the above recitals and the mutual
covenants hereinafter set forth, the parties hereto agree as follows:
AGREEMENT
1. PURCHASE AND SALE OF ASSETS.
1.1 DEFINITIONS. For purposes of this Agreement:
(a) PURCHASED ASSETS. "PURCHASED ASSETS" means, collectively,
all of the assets, documents, end-user names, rights and properties of
ComputerEasy described as the entire Floorplan line of products (including all
development on the Windows 95 version), Estimator Plus (new version in
development), Dream House product line, 3D Design product line, and all other
derivative products, or products related to the above products, if any (the
"Products") and all Intellectual Property, including all source code and object
code for all hardware platforms, software platforms and operating environments,
pertaining to the Products and a copy of ComputerEasy's retail customer list.
Purchased assets does not include any other of Computer Easy's product lines and
specifically excludes that software known as Math Climbers, Spell Castle,
ReadEasy and all ancillary materials related thereto. Purchased Assets shall not
include any items of inventory, material, supplies, merchandise or other items
the purchase of which would make the transaction contemplated by this Agreement
subject to any bulk sales or similar laws of any state. Except for the Purchased
Assets defined above, ComputerEasy represents and warrants that it does not have
any information or documents relating to registered users, market research or
other market or customer data, promotional and sales information or other
documentation, related to the Products. Purchased Assets include all assets
described above that ComputerEasy has in its control, custody or possession.
ComputerEasy warrants that such Purchased Assets include all assets described
above of ComputerEasy that were available to IMSI as of the date on which IMSI
completed its due diligence.
(b) INTELLECTUAL PROPERTY. "INTELLECTUAL PROPERTY" means and
includes, collectively, the rights to all patents and patent applications
(including but not limited to continuations, continuations-in-part, divisional
and reissues, whether or not applied for), trademarks (whether or not
registered) and trademark applications, trade names and service marks (whether
or not registered), copyrights (whether or not registered) and copyrights
applications, moral rights, mask works and mask work registrations and
applications therefore, computer software in object code and source code form,
licenses, sublicenses, and franchise agreements of ComputerEasy, and all
know-how, formulae, recipes, compositions of matter, processes, techniques,
confidential business information, designs, patterns, shapes, inventions
(whether or not patented or patentable), trade secrets, and other proprietary
information (including without limitation customer lists) and
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technology owned by or licensed to ComputerEasy to the extent same are available
to Computer Easy as of the date of Closing. ComputerEasy warrants that
Intellectual Property includes all intellectual property described above of
ComputerEasy that was available to IMSI as of the date on which IMSI completed
its due diligence. Computer Easy has obtained a release from James Napier and
Napier Graphics, Inc. releasing Computer Easy from liability of any type or
nature whatsoever, in accordance with the release attached herewith as Exhibit
"7".
(c) COMPUTEREASY INTELLECTUAL PROPERTY. "COMPUTEREASY
INTELLECTUAL PROPERTY" means and includes all Intellectual Property contained in
the Purchased Assets.
(d) COMPUTEREASY BUSINESS. "COMPUTEREASY BUSINESS" means the
business, properties, prospects, assets, liabilities or condition (financial or
otherwise) of ComputerEasy relating to the Purchased Assets as of the date of
Closing.
(e) "PROPRIETARY INVENTORY" means any inventory that includes
Intellectual Property, logos or references or other identifying information
(including words or symbols) relating to identification of one or more of the
Products, including but not limited to all inventories of diskettes, CDs,
packaging, manuals and product inserts for the Products, whether as finished
products or work in process (collectively, the "Proprietary Inventory").
1.2 AGREEMENT TO SELL AND PURCHASE THE PURCHASED-ASSETS. Subject to the
terms and conditions of this Agreement, and in reliance on the representations,
warranties and covenants set forth in this Agreement, Forte ComputerEasy agrees
to deliver to IMSI at the Closing (as defined in Section 2.3 hereof) all of the
Purchased Assets (which have not already been delivered by Computer Easy to
IMSI). At the Closing, IMSI shall deliver to Forte ComputerEasy a Cashier's
Check made payable solely to the order of Forte ComputerEasy with no
restrictions on payment, in the amount of $411,250.00, in good United States
funds, drawn on a major regional, national bank or other bank reasonably
acceptable to ComputerEasy, and ComputerEasy shall deliver to IMSI all of the
Purchased Assets which have not previously been transferred in reliance on the
Letter of Agreement. The delivery of the Purchased Assets and cashier's check
shall occur simultaneously at the Closing (as defined in Section 2.3 hereof).
1.3 TRANSFER OF PURCHASED ASSETS; PASSAGE OF TITLE; DELIVERY.
(a) TITLE PASSAGE. Upon the Closing, ComputerEasy will deliver
to IMSI all of the remaining Purchased Assets not previously delivered to IMSI;
and ComputerEasy will further execute and deliver to IMSI (i) the Assignments,
attached as Exhibits "2", "3" and "4", and (ii) trademark and copyright
assignments all of which are attached herewith and made a part hereof as
Exhibits "5" and "6".
(b) DELIVERY OF PURCHASED ASSETS FREE AND CLEAR OF
RESTRICTIONS, ETC. ComputerEasy hereby represents to IMSI that it owns, and will
convey to IMSI at the Closing, the Purchased Assets not previously conveyed,
free and clear of any and all restrictions, liabilities, obligations, liens or
encumbrances, other than those disclosed in Section D and E of the RECITALS to
this Agreement. To the extent available and practicable, Forte ComputerEasy
shall deliver the
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Products and other Purchased Assets electronically, to the extent Forte
ComputerEasy has such available in electronic form. IMSI shall cover any
expenses related to the electronic transfer.
(C) DESTRUCTION OF PROPRIETARY INVENTORY. Upon the Closing (as
defined in Section 2.3 hereof), ComputerEasy shall destroy all Proprietary
Inventory, and prior to such destruction, ComputerEasy shall make no use of such
Proprietary Inventory.
1.4 BULK SALE. ComputerEasy and IMSI each agree that the sale of the
Purchased Assets contemplated by the Agreement does not involve any sale or
transfer of material, supplies, merchandise or other inventory, or the sale of a
substantial part of equipment of ComputerEasy in connection with a bulk transfer
of inventory and it is the opinion of ComputerEasy and IMSI that the provisions
of Article 6 of the Uniform Commercial Code concerning bulk sales or any similar
provision do not apply. IMSI hereby waives any requirement for compliance with
the provisions of Article 6 of the Uniform Commercial Code concerning bulk sales
or any similar provision.
2. PURCHASE PRICE.
2.1 PURCHASE PRICE. IMSI and ComputerEasy hereby agree that the full
purchase price (the "PURCHASE PRICE") to be paid by IMSI to ComputerEasy for the
sale, transfer, conveyance and assignment of all the Purchased Assets to IMSI is
$686,250.00 to be paid by IMSI to ComputerEasy. Same shall consist of the
amounts set forth below, and shall be paid in the manner and at the time set
forth below:
(a) ComputerEasy ackowledges that IMSI has already paid
ComputerEasy $275,000.00 (the "PAID AMOUNT") as part
of the Purchase Price.
(b) At the Closing, ComputerEasy shall deliver all
Purchased Assets not previously delivered and any
necessary assignments and/or documentation as
attached herewith and set forth herein, and IMSI
shall simultaneously deliver a cashier's check in the
amount of $411,250.00 to ComputerEasy.
(c) As additional purchase price, if sales of the
Products exceeds $10 million in the period from
September 1, 1995 through December 31, 1998, an
additional $200,000.00 will be payable by IMSI to
Forte Computer Easy within thirty (30) days after the
end of the [month/quarter] in which sales have
exceeded such figure. IMSI shall forward to
ComputerEasy an annual sales account pertinent to
those Products, certified by IMSI's Chief Financial
Officer within 30 days after the end of each annual
audit period.
(d) IMSI does hereby grant ComputerEasy a stock option to
acquire 5,000 shares of Common Stock of IMSI at an
exercise price of $9.00 per share which was the
closing bid of the Common Stock on August 30, 1995 as
reported by the National Quotation Bureau, Inc., a
copy of which is attached hereto and made a part
hereof. Such option may be exercised in whole or in
part at any time or times after the Closing. IMSI and
ComputerEasy agree to execute such further documents
as the other party shall reasonably request to give
effect
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to such options within thirty (30) days after
Closing. Said option shall be valid for a period of
five (5) years from date of Closing.
2.2 VALUE OF PURCHASED ASSETS. The valuation of the Purchased Assets
shall comply with GAPP accounting rules. No party hereto will take any position
that varies from or is inconsistent therewith. Nothing herein contained will
impose on any party the duty or obligation to contest any action which any
taxing authority may take or any adjustment or change in such allocation which
any taxing authority may make or propose.
2.3 CLOSING. The Closing will take place at the offices of ComputerEasy
in Tempe, Arizona at 12:00 noon, P.S.T., on Friday, November 3, 1995.
3. NO ASSUMED LIABILITIES AND EXCLUDED LIABILITIES.
3.1 NO ASSUMED LIABILITIES. Except for the Assigned Agreements
(as defined in Section 4.4) IMSI is assuming no liability whatsoever of
ComputerEasy including without limitation any liabilities for returns of
products of ComputerEasy (including Products) from customers of ComputerEasy;
and all liabilities and obligations of ComputerEasy shall remain liabilities and
obligations (as the case may be) of ComputerEasy. The definition of "Purchased
Assets" set forth in this Agreement shall be interpreted so as not to include
any liabilities of ComputerEasy, except those of the Assigned Agreements.
Notwithstanding the foregoing, IMSI agrees to defend, indemnify and hold
ComputerEasy harmless from any sums and against any claims for payment for work
performed/money owing to DOC, Inc. as claimed by DOC, Inc. in the amount of
$5,634.00 per DOC, Inc.'s August 25, 1995 invoice/statement attached herewith as
Exhibit 1 and the Settlement Agreement/Release attached herewith as Exhibit 1.1.
3.2 NO OBLIGATIONS TO THIRD PARTIES. The execution and
delivery of this Agreement will not be deemed (i) to confer any rights upon any
person or entity other than the parties hereto, or (other than the parties
described in Section 1.3(b) of this Agreement and the Indemnities as defined in
Section 9.3 hereof, who are intended third-party beneficiaries hereof as to
Section 9 hereof), make any person or entity a third party beneficiary of this
Agreement, or (ii) to obligate the parties to any person or entity other than
the parties to this Agreement.
4. REPRESENTATION AND WARRANTIES OF COMPUTEREASY AND FORTE
Forte ComputerEasy represents and warrants that each of the following
is true and correct:
4.1 CORPORATE ORGANIZATION. Each of ComputerEasy and Forte is a
corporation duly organized, validly existing and in good standing under the laws
of the State of Utah. Forte ComputerEasy is qualified to transact business as a
foreign corporation, and is in good standing, in all jurisdictions where the
failure to be so qualified would materially adversely affect its business.
ComputerEasy has all necessary corporate power and authority to own and use the
Purchased Assets and to operate its business and has the power to enter into
this Agreement and to enter into all assignments or other documents that Forte
ComputerEasy is required to execute and delivery hereunder (the "COMPUTEREASY
ANCILLARY DOCUMENTS"). There are no permits, licenses, orders or approvals of
any federal, state and local governmental or regulatory body that are required
to be held
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by Forte ComputerEasy in order to execute and deliver this Agreement and perform
its obligations hereunder.
4.2 POWER AND AUTHORITY; NO DEFAULT UPON TRANSFER. The execution,
delivery and performance by Forte ComputerEasy of this Agreement and the
ComputerEasy Ancillary Documents, and the consummation of all the transactions
contemplated hereby and thereby, have or will have all necessary corporate
action of the Board of Directors. This Agreement, when executed and delivered by
Forte ComputerEasy, and the ComputerEasy Ancillary Documents, when executed and
delivered by Forte ComputerEasy, will be duly and validly executed and delivered
and will be the respective valid and binding obligations of Forte ComputerEasy,
enforceable against ComputerEasy in accordance with their respective terms.
4.3 TITLE. ComputerEasy has good and marketable title to all of the
Purchased Assets, free and clear of all mortgages, pledges, liens, licenses,
rights of possession, security interests, restrictions, encumbrances, charges,
title retention, conditional sale or other security arrangements and all claims
or agreements of any nature whatsoever, other than statutory liens in favor of
federal, state and local taxing authorities arising in the ordinary course of
business, securing the payment of taxes that are due and payable, or as
disclosed herein. Title to all the Purchased Assets is freely transferable by
ComputerEasy to IMSI without obtaining the consent or approval of any person or
party.
4.4 DISTRIBUTION AGREEMENTS, ETC. All distribution agreements, license
agreements, sales representative agreements of whatever nature or understandings
relating to the distribution, marketing or sale of any of the Products, either
in the United States or outside of the United States with respect to the
Products are terminable by IMSI without payment or penalty, and the transactions
contemplated by this Agreement do not require the consent of any third party to
such other agreement or understanding, except for the Distribution Agreement
dated January 14, 1994, between Computer Easy International Incorporated and
FastCad Europe Limited and Polaron Engineering Limited, and Republishing
Agreement dated January 16, 1994, between Computer Easy, Inc. and SYBEX and
FastCad Retail Products Limited, and Republishing Agreement dated November 16,
1994, between Computer Easy, Inc. and Markt & Technik GmbH and FastCad Retail
Products Limited (the "REMARKETING AGREEMENTS"), which ComputerEasy agrees to
assign to IMSI (collectively the "Assigned Agreements"). FastCad shall pay to
ComputerEasy all sales for products purchased by FastCad from ComputerEasy prior
to or on August 31, 1995. The Assignment of the FastCad Distribution Agreement
and the Assignment of the SYBEX and Markt & Technik Remarketing Agreements are
attached as Exhibits 2, 3 and 4 hereto. ComputerEasy agrees to deliver the
foregoing Assignments to IMSI. Fast Cad will pay royalties to Computer Easy for
sales through and including August 31, 1995. Dispute has arisen between IMSI and
Computer Easy as to which is to receive royalties from Fast Cad for the period
of September 1, 1995 through November 3, 1995. This dispute shall be submitted
to binding arbitration in Phoenix, Arizona pursuant to paragraph 9.4 of this
Agreement. Same shall be submitted on briefs with supporting documentation. No
testimony or oral argument will be utilized by either party. The losing party in
said arbitration shall be solely responsible for the arbitrators fee. Fast Cad
shall be instructed by each party to pay all royalties from sales occurring
between September 1, 1995 and November 3, 1995 inclusive, into an interest
bearing escrow account established with the arbitrator or with such other escrow
agent as the parties shall agree, with instruction that said funds and
accumulated interest thereon shall be released to the
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prevailing party immediately upon ruling by the arbitrator. In the event the
arbitration is not concluded by December 31, 1995 due to lack of diligence of
either party as determined by the arbitrator, then said arbitrator shall be
dismissed and the escrow fund released to the other party.
4.5 NATURE OF PURCHASED ASSETS; ABSENCE OF UNDISCLOSED LIABILITIES.
ComputerEasy owns all rights, title and interest in and to the Purchased Assets.
The Purchased Assets constitute all of the Intellectual Property, assets,
documents, rights and properties of Forte ComputerEasy relating to the defined
term "ComputerEasy Business". IMSI acknowledges that ComputerEasy has
substantial unpaid third party unsecured debt. However, except as set forth in
this Agreement or the Schedules hereto, there are no other debts, liabilities or
obligations of any nature (whether absolute, contingent, accrued, known,
unknown, due or to become due) which create a lien, encumbrance, security
interest or similar right relating to any of the Purchased Assets and such
creditors of ComputerEasy will have no rights against any Purchased Assets or
rights of recovery against IMSI as a result of the transfer of the Purchased
Assets to IMSI.
4.6 INTELLECTUAL PROPERTY.
(a) OWNERSHIP; NO NOTICE OF INFRINGEMENT. Forte ComputerEasy
owns, possesses, has the exclusive right to make, use, sell and license, has the
right to bring actions for the infringement of, and where necessary in Forte
ComputerEasy's judgment, Forte ComputerEasy has made timely and proper
application for, all Intellectual Property. There are no worldwide rights to
patents, patent applications (including but not limited to continuations,
continuations-in-part, divisional and reissues, whether or not applied for),
trademarks (whether or not registered), trademark applications, trade names or
service marks (whether or not registered), copyrights (whether or not
registered) or copyright applications, moral rights, mask works and mask work
registrations and applications therefor, computer software in object code or
source code form, licenses, sublicenses, or franchise agreements of
ComputerEasy, any know-how, formulae, recipes, compositions of matter,
processes, techniques, confidential business information, designs, patterns,
shapes, inventions (whether or not patented or patentable), trade secrets, or
other proprietary information (including without limitation customer lists) or
technology, relating to the Products or Purchased Assets other than those
included in the definition of Intellectual Property, Forte ComputerEasy has not
granted any third party any outstanding licenses or other rights to any of the
ComputerEasy Intellectual Property, except as disclosed herein, and ComputerEasy
is not liable, and has not made any contract or arrangement whereby it may
become liable, to any person for any royalty or other compensation for the use
of any ComputerEasy Intellectual Property. Forte ComputerEasy is not aware of
any infringement of any ComputerEasy Intellectual Property by any third party.
Forte ComputerEasy has not received notice of any claim that any Product or
ComputerEasy Intellectual Property infringes any Intellectual Property of any
third party except as disclosed herein. To the best of ComputerEasy's knowledge,
neither the Products nor the ComputerEasy Business as conducted to date
infringes (or will cause IMSI to infringe) or violate any of the patents,
trademarks, servicemarks, tradenames, copyrights, trade secrets, proprietary
rights or other intellectual property of any other person. To the best of Forte
ComputerEasy's knowledge, it is not using any confidential information or trade
secrets of any former employer or of any past or present employees engaged in
the ComputerEasy Business.
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(b) NONDISCLOSURE AGREEMENTS. All employees and consultants
who have had access to confidential information or trade secret information
concerning technology or products related to the ComputerEasy Business have
executed nondisclosure agreements in favor of Forte ComputerEasy requiring them
to maintain the confidentiality of such information, except where the failure to
have executed and delivered such agreements would not affect any rights in or to
the Purchased Assets. Copies of said agreements, to the extent available, are
attached herewith and made a part hereof.
4.7 BROKERAGE AND FINDER'S FEES. ComputerEasy has not employed any
broker, finder or agent, or agreed to pay or incur any brokerage fee, finder's
fee or commission with respect to the transactions contemplated by this
Agreement, or dealt with anyone purporting to act in the capacity of a broker,
finder or agent with respect thereto.
4.8 COMPLIANCE WITH LAWS. In the operation of the ComputerEasy
business, Forte ComputerEasy has, to the best knowledge of Forte ComputerEasy,
duly complied with all applicable laws, rules, regulations and orders of
federal, state, local and foreign governments (including but not limited to all
export control laws and regulations of the United States of America or any
governmental authority or agency of the United States government), and Forte
ComputerEasy is not in default with respect to any order, judgment, writ,
injunction, decree, award, rule or regulation of any court, governmental or
regulatory body or arbitrator which materially restrains or limits the
operations of the ComputerEasy Business or the use of the Purchased Assets.
4.9 TAXES. There will be no federal, state or local tax liens relating
to Forte ComputerEasy for which IMSI may be responsible or which may affect
IMSI's right to any of the Purchased Assets to be transferred to IMSI hereunder.
4.10 LITIGATION. There is no claim, action, suit or proceeding pending
or, to Forte ComputerEasy's knowledge, threatened against Forte ComputerEasy at
law, in equity, by way of arbitration or before any governmental department,
commission, board or agency that could have a material adverse effect on
ComputerEasy Business or the Purchased Assets. There are no judgments, decrees,
injunctions or orders of any court, governmental department, commission, agency,
instrumentality or arbitrator against Forte ComputerEasy affecting the Purchased
Assets or the ComputerEasy business. None of the Products or any other Purchased
Asset is the subject of any material pending or threatened claim for breach of
warranty or product liability.
4.11 CONTRACTS AND COMMITMENTS. Forte ComputerEasy is not in violation,
breach or default of any of contracts which violation, breach or default would
have a material adverse effect on the Purchased Assets or the ComputerEasy
Business. ComputerEasy has delivered to IMSI a true and correct copy of each
written contract. Other than the consents relating to the Napier Assignment and
the Assignments, no additional written consents of third parties are required to
assign and transfer all contracts to IMSI other than those obtained at or prior
to closing.
4.12 LABOR AND EMPLOYEE RELATIONS. There are no agreements between any
union, labor organization or other collective bargaining agent in respect of any
ComputerEasy employee or consultant.
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4.13 MATERIAL MISSTATEMENTS OR OMISSIONS. No representation or warranty
by Forte ComputerEasy in this Agreement, or in any document, statement,
certificate or schedule furnished or to be furnished to IMSI by (or on behalf
of) Forte ComputerEasy pursuant thereto, contains, or will when furnished
contain, any untrue statement of a material fact, or omits, or will then omit to
state, a material fact necessary to make any statement of facts contained herein
or therein not materially misleading.
5. COVENANTS OF IMSI.
5.1 CONFIDENTIAL INFORMATION. For purposes of this Agreement
"ComputerEasy Confidential Information" includes all confidential and
proprietary information of ComputerEasy prior to or after the Effective Date,
other than confidential or proprietary information that relates to the Purchased
Assets or the Products. ComputerEasy Confidential Information does not include
information that: (A) is disclosed by a third party having the legal right to
disclose such information and who owes no obligation of confidence to
ComputerEasy, or (B) is now, or later becomes part of the general public
knowledge or literature in the art, other than as a result of a breach of this
Agreement by IMSI, or (C) is independently developed by IMSI without the use of
any ComputerEasy Confidential Information. IMSI will use all reasonable efforts
to hold in confidence all ComputerEasy Confidential Information.
6. COVENANTS OF FORTE COMPUTEREASY AND COMPUTEREASY.
Forte ComputerEasy covenants and agrees with IMSI as follows:
6.1 FURTHER ASSURANCES. From and after the Closing, Forte ComputerEasy
will promptly execute and deliver to IMSI any and all such further assignments,
endorsements and other documents, if any, that IMSI is advised by counsel as
necessary in order to effect the transfer of Forte ComputerEasy's title to the
Purchased Assets to IMSI and the carrying out of the provisions of this
Agreement and to which Forte ComputerEasy's counsel is in agreement. Any such
documents are to be prepared and reviewed at IMSI's sole expense.
6.2 USE OF NAMES. Forte ComputerEasy has ceased to use the trademarks
and trade names used for the Products.
6.3 CONFIDENTIAL INFORMATION. Should ComputerEasy have confidential
information of IMSI, ComputerEasy agrees not to disclose such confidential
information to any third party and to keep such information confidential.
7. CONDITIONS TO DELIVERY OF CASHIER'S CHECK.
7.1 CONDITIONS TO IMSI'S OBLIGATIONS. ComputerEasy agrees to deliver to
IMSI all remaining Purchased Assets at or upon delivery by IMSI of the Cashier's
Check for $411,250.00 to ComputerEasy, which transfer of check and assets shall
be simultaneous.
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(a) CONSENTS OBTAINED. ComputerEasy will have obtained,
executed and delivered, as appropriate, all written and assignments, as are
attached herewith and made a part hereof.
(b) TRADEMARK AND COPYRIGHT ASSIGNMENTS. ComputerEasy shall
have executed and delivered to IMSI all trademark and copyright assignments or
any ComputerEasy Intellectual Property as provided by IMSI and as are, attached
as Exhibits 4 and 5 hereto.
7.2 CONDITIONS TO COMPUTEREASY'S OBLIGATIONS. The obligations of
ComputerEasy hereunder, to deliver the remaining Purchased Assets will be
subject to the satisfaction and fulfillment of each of the following conditions,
except as ComputerEasy may expressly waive the same in writing:
(a) DELIVERY OF PAYMENT AMOUNT. At the Closing, IMSI shall
deliver (simultaneously with the delivery of the Purchased Assets) the Payment
Amount as provided in Section 2.1 hereof.
(b) COMPLIANCE. The representations and warranties of IMSI set
forth in this Agreement shall be true and accurate in all material respects on
the date of this Agreement and as of the Closing, with the same force and effect
as if they had been made at the Closing; IMSI shall have complied in all
material respects with all covenants required to be performed or observed by it
before the Closing; and ComputerEasy shall have received a certificate to such
effect executed by IMSI's Chief Executive Officer.
8. REPRESENTATIONS AND WARRANTIES OF IMSI.
IMSI represents and warrants to ComputerEasy that each of the following
statements is true, accurate and correct:
8.1 CORPORATE ORGANIZATION. IMSI is a corporation duly organized,
validly existing, and in good standing under the laws of the State of
California. IMSI is duly qualified to transact business as a foreign
corporation, and is in good standing, in all jurisdictions where the failure to
be so qualified would materially adversely affect its business. IMSI has all
necessary corporate power and authority to own and use the Purchased Assets and
to operate its business. IMSI has the power to enter into this Agreement and to
enter into all documents that IMSI is required to execute and deliver hereunder
(the "IMSI ANCILLARY DOCUMENTS"), and IMSI holds all permits, licenses, orders
and approvals of all federal, state and local governmental or regulatory bodies
necessary and required therefor.
8.2 POWER AND AUTHORITY; NO DEFAULT UPON TRANSFER. The execution,
delivery and performance by IMSI of this Agreement and the IMSI Ancillary
Documents, and the consummation of all the transactions contemplated hereby and
thereby, have been duly and validly authorized by IMSI by all necessary
corporate action of the Board of Directors of IMSI. This Agreement, when
executed and delivered by IMSI, will be duly and validly executed and delivered
and will be the respective valid and binding obligations of IMSI enforceable
against IMSI in accordance with their respective terms. Neither the execution
and delivery of this Agreement by IMSI, nor the execution
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and delivery by IMSI of the IMSI Ancillary Documents, nor the performance by
IMSI of its respective obligations under this Agreement or the IMSI Ancillary
Documents, will (i) violate the Articles of Incorporation or Bylaws of IMSI,
(ii) result in a material violation or breach of, or permit any third party to
rescind any term or provision of, or constitute a default under, any loan, note,
indenture, mortgage, deed of trust, security agreement, lease or material
contract, contract, license, lease or other agreement to which IMSI is a party
or by which IMSI is bound or (iii) to the best knowledge of IMSI, violate in any
material respect any law, statute, rule or regulation or order, writ, judgment,
injunction or decree of any court, administrative agency or government body
applicable to IMSI.
8.3 BROKERAGE AND FINDER'S FEES. IMSI has not employed any broker,
finder or agent, or agreed to pay or incurred any brokerage fee, finder's fee or
commission with respect to the transactions contemplated by this Agreement, or
dealt with anyone purporting to act in the capacity of a broker, finder or agent
with respect thereto.
9. SURVIVAL OF WARRANTIES AND INDEMNIFICATION.
9.1 SURVIVAL OF WARRANTIES. The representations and warranties made by
Forte and IMSI ComputerEasy herein will survive the Closing.
9.2 INDEMNIFIED LOSSES. For the purposes of this Section 9, "LOSS" will
mean and include any and all liability, loss, damage, claim, expense, cost,
fine, fee, penalty, obligation or injury including, without limitation, those
resulting from any and all actions, suits, proceedings, demand, assessments,
judgments, awards or arbitrations, together with costs and expenses including
the fees of attorneys and other legal costs and expenses relating thereto,
(including without limitation costs of investigation, negotiation, prosecution,
defense or settlement) provided, however, that Loss will not include punitive or
exemplary damages.
9.3 INDEMNIFICATIONS BY COMPUTEREASY. Subject to the provisions and
limitations set forth in this Section 9, IMSI and ComputerEasy will defend,
indemnify and hold the other harmless, any parent, subsidiary or affiliate of
them and any director, officer, manager, employee, stockholder, member, interest
holder, partner, agent or attorney of the other, or of any parent, subsidiary or
affiliate of the other (collectively, the "INDEMNITEES") from and against and in
respect of any Loss which arises out of or results from the following (each an
"INDEMNIFIABLE LOSS" or an "INDEMNIFIABLE CLAIM"):
(a) the failure of Forte ComputerEasy or IMSI to perform any
liability, obligation or covenant required to be performed by it hereunder; or
(b) any breach by Forte ComputerEasy or IMSI of any of its
representations and warranties in this Agreement.
9.4 PROCEDURE FOR INDEMNIFICATION. If any action, suit or proceeding is
commenced against, or any claim or demand be asserted against, any Indemnitee in
respect of which such Indemnitee is entitled to demand indemnification under
Section 9.3 of this Agreement, then as a condition precedent thereto, such
Indemnitee will promptly notify the other party (the Indemnitor")
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in writing to that effect, providing reasonable detail as to the circumstances
and subject matter thereof; provided, that such notification provided by one
Indemnitee will be effective as to all Indemnitees, and provided further, that
the failure to so promptly notify the Indemnitor will not release the Indemnitor
from any liability which it may have to any Indemnitee unless the failure to
promptly notify prejudices the Indemnitor in any material respect. The
Indemnitor will have the right to assume the entire control of the defense,
compromise or settlement of such action, suit, proceeding or claim and including
the selection of counsel, subject to the right of each Indemnitee to participate
(at its expense and with counsel of such Indemnitee's choice) in the defense,
compromise or settlement of such action, suit, proceeding, claim or demand, and
in connection therewith, the Indemnitees will cooperate fully in all respects
with the Indemnitor in any such defense, compromise or settlement. The
Indemnitor will not compromise or settle any such action, suit, proceeding,
claim or demand without the prior written consent of the Indemnitees who have
made a written request to be so notified in such action, suit, proceeding, claim
or demand; provided that, if a firm written offer is made to settle any such
action, suit proceeding, claim or demand including a general release of all
claims against the Indemnitees and the Indemnitor proposes to accept such
settlement and any Indemnitee refuses to consent to such settlement, then (i)
the Indemnitor shall be excused from, and such indemnitee will be responsible
for, all further defense of, and the costs and expenses thereof, of such action,
suit, proceeding, claim or demand, and (ii) the maximum liability of the
Indemnitor with respect to such action, suit, proceeding, claim or demand will
be the amount of the proposed settlement, if the amount recovered from such
Indemnitee as a result of such action, suit, proceeding, claim or demand is
greater than the amount of the proposed settlement. So long as the Indemnitor is
defending in good faith any such action, suit, proceeding, claim or demand
asserted by a third party against the Indemnitees, the Indemnitees will not
settle or compromise such action, suit, proceeding, claim or demand without the
prior written consent of the Indemnitor, which consent will not be unreasonably
withheld or delayed. The Indemnitees will make available to the Indemnitor or
its agent all records and other materials in the Indemnitees' possession
reasonably required by the Indemnitor for contesting such indemnified claim or
demand. If the Indemnitor fails to promptly and adequately defend any such
action, suit, proceeding, claim or demand, then the Indemnitees may defend,
through counsel of their own choosing, such action, suit, proceeding, claim or
demand and settle such action, suit, proceeding, claim or demand and recover
from the Indemnitor the amount of such Losses. If the Indemnitor disputes the
Indemnitees' right to be indemnified for any Loss alleged by the Indemnitees,
then within ten (10) days after receiving the Indemnitees' notice of such
alleged Loss, the Indemnitor may submit such dispute to the American Arbitration
Association, and such dispute will be resolved through mandatory binding
arbitration before a single arbitrator (who will be a lawyer knowledgeable
regarding the personal computer software industry) in [Phoenix, Arizona] under
the Commercial Arbitration Rules of the American Arbitration Association then in
effect.
10. MISCELLANEOUS.
10.1 EXPENSES. Each of the parties hereto will bear its own expenses
(including without limitation attorneys' fees) in connection with the
negotiation and consummation of the transaction contemplated hereby.
10.2 NOTICES. Any notice required or permitted to be given under this
Agreement will be in writing and will be effective upon: (i) receipt if hand
delivered; (ii) the next business day after
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dispatch by fax transmission or nationally recognized overnight express courier
and addressed as set forth herein with proof of delivery; or (iii) three days
after dispatch by certified or registered United States Mail with return receipt
requested, postage prepaid, addressed as set forth herein.
(a) If to ComputerEasy or Forte:
Forte Computer Easy, Inc.
1350 Albert Street
Youngstown, OH 44505
Attention: Frank J. Amedia, President
Fax No.: (216) 746-5603
with a copy to:
Robert F. McNamara
Attorney at Law
12370 Cleveland Ave., N.W.
P.O. Box 867
Uniontown, OH 44685-0867
Fax No.: (216) 699-4803
(b) If to IMSI:
IMSI
1895 E. Francisco Blvd.
San Rafael, CA 94901
Attention: Martin Sacks or President
Fax No.: (415) 382-3565
10.3 ENTIRE AGREEMENT; CAPTIONS. This Agreement, the Schedules and
Exhibits hereto (which is incorporated herein by reference), together constitute
the entire agreement and understanding between the parties and there are no
other agreements or commitments with respect to the transactions contemplated
herein or therein. This Agreement supersedes any prior offer, agreement or
understanding between the parties with respect to the transactions contemplated
hereby and thereby including the Letter of Agreement, and is the binding
agreement of the parties. The captions in this Agreement are for convenience
only and will not be considered a part of or affect the construction or
intention of any provision of this Agreement.
10.4 AMENDMENT; WAIVER. Any term or provision of this Agreement may be
amended only by a writing signed by ComputerEasy and IMSI. The observance of any
term or provision of this Agreement may be waived (either generally or in a
particular instance and either retroactively or prospectively) only by a writing
signed by the party to be bound by such waiver. No waiver by a party of any
breach of this Agreement will be deemed to constitute a waiver of any other
breach or any succeeding breach.
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10.5 NO THIRD PARTY BENEFICIARIES. Nothing expressed or implied in this
Agreement is intended or will be construed, to confer upon or to give any
person, firm or corporation, other than the parties hereto, any rights or
remedies under or by reason of this Agreement.
10.6 EXECUTION IN COUNTERPARTS. For the convenience of the parties,
this Agreement may be executed in one or more counterparts, each of which will
be deemed an original but all of which together will constitute one and the same
instrument.
10.7 ASSIGNMENT. Notwithstanding any other term or provision of this
Agreement to the contrary, this Agreement may be assigned by any party hereto.
Any party may assign this Agreement (and all related agreements) by operation of
law or in connection with any merger, consolidation or sale of all or
substantially all of its assets or in connection with any similar transaction.
The Purchased Assets and each party's rights and obligations hereunder are
assignable by either party.
10.8 BENEFIT AND BURDEN. This Agreement will be binding upon, will
inure to the benefit of, and be enforceable by and against, the parties hereto
and their respective successors and permitted assigns.
10.9 GOVERNING LAW; CONSENT TO JURISDICTION. This Agreement will be
governed by and construed in accordance with the internal laws of the State of
Arizona and, where appropriate, applicable federal law. The parties hereto
submit to the exclusive jurisdiction and venue of any state or federal court
located in Maricopa County, Arizona, for the purposes of any action arising out
of or relating to this Agreement and agree that service of process in any such
action may be made in the manner provided herein for delivery of notices.
10.10 SEVERABILITY. If any provision of this Agreement is for any
reason and to any extent deemed to be invalid or unenforceable, then such
provision will not be voided but rather will be enforced to the maximum extent
then permissible under then applicable law and so as to reasonably effect the
intent of the parties hereto, and the remainder of this Agreement will remain in
full force and effect. Nothing herein will be deemed to contradict the
provisions of Sections 5.1 and 6.5 hereof.
10.11 ATTORNEYS' FEES. If judicial action is brought to enforce or
interpret any provision of this Agreement, the prevailing party will be entitled
to recover reasonable fees and costs of attorneys, including without limitation
costs, expenses and fees on any appeal, to be fixed in amount by the court.
10.12 CONFIDENTIALITY. The terms of the Agreement are confidential and
will not be released to any other third party unless in furtherance of
litigation or arbitration between the parties or unless required by a court
order, except that the terms of the Agreement may be disclosed by a party if
that party concludes in good faith that disclosure is required by state or
federal securities laws or regulations by regulatory authorities or required by
generally accepted accounting principles relating to the parties' financial
statements. Notwithstanding the foregoing, Computer Easy may, at its own
expense, disclose that IMSI has acquired the Products and Purchased Assets from
Computer Easy in a press release.
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10.13 RELEASE. Each party has alleged various breaches of the
underlying Letter Agreement. Each party releases the other from any liability,
damage, claim or action whatsoever arising from any such breach. Irrespective of
the above, should either party bring an action on this agreement against the
other party, which action fails, and during the course of those proceedings, the
filing party is found to have substantially and materially breached this
agreement itself, then any damages sustained by the non-filing party due to
breach of the earlier letter agreements, may be recovered by the non-filing
party from the filing party.
IN WITNESS WHEREOF, the parties hereto have executed and delivered this
Agreement by their duly authorized representatives as of the Effective Date.
INTERNATIONAL MICROCOMPUTER COMPUTER EASY, INTERNATIONAL,
SOFTWARE, INC. INC.
By: /s/ Martin Sacks By: /s/ Frank J. Amedia
----------------------------- ------------------------
Martin Sacks Frank J. Amedia
Chief Executive Officer Chief Executive Officer
FORTE COMPUTER EASY, INC.
By: /s/ Frank J. Amedia
-------------------------
Frank J. Amedia
Chief Executive Officer