Exhibit 10.44
ACQUISITION OF ASSETS
OF
REALBID LLC,
a California Limited Liability Company
by
COMPS INFOSYSTEMS, INC.,
a Delaware Corporation
November 6, 1998
*** Certain confidential portions of this Exhibit were omitted by means of
blackout of the text (the "Mark"). This Exhibit has been filed separately
with the Secretary of the Commission without the Mark pursuant to the
Company's Application Requesting Confidential Treatment under Rule 406 under
the Act.
TABLE OF CONTENTS
PAGE
ARTICLE 1 DEFINITIONS 1
1.1 Certain Definitions................................................ 1
ARTICLE 2 PURCHASE AND SALE OF PURCHASED ASSETS 3
2.1 Purchase and Sale of REALBID Assets................................ 3
2.2 Assumed Liabilities................................................ 5
2.3 Excluded Assets.................................................... 5
2.4 Purchase Price..................................................... 5
2.5 Closing Date....................................................... 5
2.6 Allocation of Aggregate Purchase Price............................. 5
2.7 Bulk Sales......................................................... 6
2.8 Sales and Use Taxes................................................ 6
2.9 Title.............................................................. 6
ARTICLE 3 REPRESENTATIONS AND WARRANTIES OF REALBID 6
3.1 Ownership of REALBID Interests..................................... 6
3.2 Organization and Good Standing..................................... 6
3.3 Authorization...................................................... 7
3.4 Equity Securities of REALBID....................................... 7
3.5 No Conflict or Violation........................................... 7
3.6 Consents and Approvals............................................. 7
3.7 Books and Records.................................................. 7
3.8 Financial Statements............................................... 7
3.9 Accounts Receivable................................................ 8
3.10 Absence of Certain Changes or Events............................... 8
3.11 Contracts and Commitments.......................................... 10
3.12 Insurance.......................................................... 10
3.13 Litigation......................................................... 10
3.14 Liabilities........................................................ 11
3.15 Compliance with Law................................................ 11
3.16 No Brokers......................................................... 11
3.17 No Other Agreements to Sell REALBID................................ 11
3.18 Tax Matters........................................................ 11
3.19 Employment Matters and Benefit Plans............................... 12
3.20 Transaction with Certain Persons................................... 13
3.21 Environmental Quality.............................................. 13
3.22 Certain Advances................................................... 14
3.23 Licenses and Permits............................................... 14
3.24 Proprietary Rights................................................. 14
3.25 Material Misstatements or Omissions................................ 16
3.26 Exclusive Dealing.................................................. 16
TABLE OF CONTENTS (CONTINUED)
PAGE
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3.27 Real Property...................................................... 17
3.28 Location of Purchased Assets....................................... 17
3.29 Prepaid Expenses................................................... 17
3.30 Certain Agreements................................................. 17
3.31 Year 2000 Compliance............................................... 17
3.32 Necessary Property................................................. 18
3.33 Bank Accounts...................................................... 18
3.34 Valuation of COMPS................................................. 18
3.35 Full Disclosure.................................................... 18
ARTICLE 4 REPRESENTATIONS AND WARRANTIES OF COMPS 18
4.1 Organization of COMPS.............................................. 18
4.2 Capitalization of COMPS............................................ 19
4.3 Authorization...................................................... 19
4.4 No Conflict or Violation........................................... 19
4.5 Consents and Approvals............................................. 20
4.6 No Brokers......................................................... 20
4.7 Litigation......................................................... 20
4.8 Liabilities........................................................ 20
4.9 Compliance with Law................................................ 20
4.10 COMPS Financial Statements......................................... 20
4.11 Absence of Certain Changes or Events for COMPS..................... 20
4.12 Full Disclosure.................................................... 21
ARTICLE 5 [INTENTIONALLY LEFT BLANK] 21
ARTICLE 6 CONDITIONS TO REALBID AND REALBID PRINCIPALS OBLIGATIONS 21
6.1 Representations, Warranties and Covenants.......................... 21
6.2 No Litigation or Governmental Proceedings.......................... 21
6.3 Delivery at the Closing............................................ 21
6.4 Material Adverse Change............................................ 22
ARTICLE 7 CONDITIONS TO COMPS' OBLIGATIONS 22
7.1 Representations, Warranties and Covenants.......................... 22
7.2 No Governmental Proceedings or Litigation.......................... 22
7.3 Third Party Consents............................................... 22
7.4 Delivery at Closing................................................ 22
7.5 Material Adverse Change............................................ 23
ARTICLE 8 ACTIONS BY COMPS AND THE REALBID PRINCIPALS AFTER THE CLOSING 23
8.1 Survival of Representations........................................ 23
8.2 Indemnification.................................................... 24
ARTICLE 9 MISCELLANEOUS 25
9.1 [Intentionally Left Blank]......................................... 25
9.2 Notices............................................................ 25
ii
TABLE OF CONTENTS (CONTINUED)
PAGE
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9.3 Choice of Law...................................................... 27
9.4 Entire Agreement; Amendments and Waivers........................... 27
9.5 Counterparts....................................................... 27
9.6 Expenses........................................................... 27
9.7 Invalidity......................................................... 27
9.8 Confidentiality.................................................... 27
9.9 Arbitration and Venue.............................................. 28
9.10 Announcements...................................................... 28
9.11 Construction....................................................... 28
9.12 Schedules and Exhibits not Attached................................ 29
9.13 Severability....................................................... 29
9.14 Assignment......................................................... 29
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ASSET PURCHASE AGREEMENT
THIS ASSET AGREEMENT (this "Agreement") is made and entered into as of
November 6, 1998 (the "Closing Date"), by and among COMPS INFOSYSTEMS, INC., a
Delaware corporation ("COMPS"), REALBID LLC, a California limited liability
company ("REALBID"), Emmett DeMoss, an individual ("DeMoss"), and Robert Potter,
an individual ("Potter," and together with DeMoss, the "REALBID Principals").
RECITALS
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WHEREAS, REALBID desires to sell to COMPS, and the REALBID Principals
desire to cause REALBID to sell to COMPS, and COMPS desires to purchase from
REALBID, substantially all of the assets, properties and rights of REALBID; and
WHEREAS, REALBID, the REALBID Principals and COMPS desire to make certain
representations, warranties, covenants and agreements in connection with such
purchase and sale.
NOW, THEREFORE, in consideration of the respective undertakings stated
herein, COMPS, REALBID and the REALBID Principals agree as follows:
ARTICLE 1
DEFINITIONS
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1.1 Certain Definitions. The terms in this Section 1.1, for all purposes
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of this Agreement, have the meaning herein specified:
(a) "Actions" shall have the meaning as defined in Section 3.13.
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(b) "Agreement" shall have the meaning as defined in the
introduction.
(c) "Balance Sheets" shall have the meaning as defined in Section
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3.8.(a).
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(d) "Business" means the business and operations of REALBID as
conducted immediately prior to Closing.
(e) "COMPS" shall have the meaning as defined in the introduction.
(f) "COMPS" Disclosure Schedule shall have the meaning as defined in
Section 4.
(g) "COMPS Group" shall have the meaning as defined in Section
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8.2(a).
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(h) Confidential Information" shall have the meaning as defined in
Section 9.8(c).
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(i) "Damages" shall have the meaning as defined in Section 8.2(e).
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(j) "Disclosure Schedule" shall have the meaning as defined in
Section 3.
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(k) "Employment Agreement" shall have the meaning as defined in
Section 6.3(b).
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(l) "Encumbrance" means any mortgage, pledge, assessment, security
interest, deed of trust, lease, lien, adverse claim, levy, charge or other
encumbrance of any kind, or any conditional sale or title retention agreement or
other agreement to give any of the foregoing in the future, except for Permitted
Encumbrances.
(m) "Financial Statements" shall have the meaning as defined in
Section 3.8.
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(n) "GAAP" shall have the meaning as defined in Section 3.8.
------------
(o) "General Assignment" shall have the meaning as defined in Section
6.3(d).
(p) "Hazardous Material" shall have the meaning as defined in Section
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3.21(a).
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(q) "Income Statements" shall have the meaning as defined in Section
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3.8(b).
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(r) "Industry Initiative" shall have the meaning as defined in
Section 3.26.
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(s) "Intellectual Property" shall have the meaning as defined in
Section 3.24(a).
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(t) "Knowledge of COMPS" shall mean the knowledge of any executive
officer of COMPS, in each case after due inquiry and reasonable investigation.
(u) "Knowledge of REALBID" shall mean the knowledge of any officer,
director or manager of REALBID, in each case after due inquiry and reasonable
investigation.
(v) "Knowledge of the REALBID Principals" shall mean the knowledge of
any REALBID Principal in each case after due inquiry and reasonable
investigation.
(w) "LLC" shall have the meaning as defined in Section 3.2.
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(x) "LOI" shall have the meaning as defined in Section 6.4.
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(y) "Material Adverse Effect" means for any person or entity, a
material adverse effect whether individually or in the aggregate (i) on the
business, operations, financial condition, assets and properties, liabilities or
prospects of such person or entity, or (ii) on the ability of such person or
entity to consummate the transactions contemplated hereby.
(z) "Non-Competition Agreement" shall have the meaning as defined in
Section 7.4(a).
(aa) "Other Contracts" shall have the meaning as defined in Section
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3.11.
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2
(bb) "Permitted Encumbrances" shall mean (a) liens, charges,
encumbrances and security interests (i) for taxes not yet due and payable or
being contested in good faith by appropriate proceedings or for which adequate
reserves have been established on the Financial Statements of REALBID or (ii)
arising in the ordinary course of business in connection with the equipment
leases listed as items 3 and 4 of Section 3.11 of the Disclosure Schedule,
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provided that such liens, charges, encumbrances and security interests do not
arise in connection with any default or breach of such equipment leases by
REALBID (including without limitation any failure by REALBID to pay fees due
under such leases in a timely manner); (b) with respect to real property,
easements, covenants, conditions and restrictions as to which no violation or
encroachment exists which could in the aggregate have a Material Adverse Effect
or which in the aggregate do not interfere or detract, in any material respect,
from the use or value of such real property; and (c) mechanics', materialmans',
suppliers', vendors' or similar security interests arising by operation of law
and in the ordinary course of business securing amounts which are not
delinquent.
(cc) "Plan" shall have the meaning as defined in Section 3.19(c).
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(dd) "properly perform the Year 2000 Processing" shall have the
meaning as defined in Section 3.31.
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(ee) "REALBID" shall have the meaning as defined in the introduction.
(ff) "REALBID Intellectual Property" shall have the meaning as defined
in Section 3.24(b).
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(gg) "REALBID Members' Shares" shall have the meaning as defined in
Section 3.1.
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(hh) "REALBID Principals" shall have the meaning as defined in the
introduction.
(ii) "Taxes" shall have the meaning as defined in Section 3.18(d).
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(jj) "Transaction" means the sale by REALBID of substantially all of
the assets, properties and rights of REALBID to COMPS, including the Employment
Agreements, the Non-Competition Agreements and the transactions contemplated
thereby.
(kk) "Year 2000 Processing" shall have the meaning as defined in
Section 3.31.
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ARTICLE 2
PURCHASE AND SALE OF PURCHASED ASSETS
-------------------------------------
2.1 Purchase and Sale of REALBID Assets. Subject to the terms and
-----------------------------------
conditions of this Agreement, at the Closing, REALBID agrees to grant, sell,
convey, assign, transfer and deliver to COMPS, and COMPS agrees to purchase and
acquire from REALBID, free and clear of any Encumbrance or adverse claim of any
kind whatsoever, except Permitted Encumbrances, all of REALBID's right, title,
and interest in and to all assets, properties, rights, leases, fixtures,
accessions, claims, contracts and interests of REALBID of every kind, type or
description, real,
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personal and mixed, tangible and intangible, wherever located and whether or not
specifically referred to in this Agreement, that are used in or pertain to the
Business (collectively, the "Purchased Assets"), including without limitation:
(a) the machinery, equipment, leasehold improvements, furniture and
fixtures, vehicles and other operating assets owned or leased by REALBID and
used in the Business as set forth in Schedule 2.1(a) attached hereto;
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(b) the miscellaneous supplies of REALBID used in connection with the
Business;
(c) all of REALBID's right, title and interest in and to license
agreements, supply agreements, sales and purchase agreements, real property
leases, orders and the other contracts and agreements, written or oral,
necessary for REALBID to operate the Business as set forth in Schedule 2.1(c)
---------------
attached hereto (and to the extent oral, accurately described in Schedule 3.11
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of the Disclosure Schedule the terms of such contract) (the "REALBID Assumed
Contracts");
(d) to the extent assignable, all licenses, permits, consents,
approvals, orders, certificates, authorizations, declarations and filings held
by REALBID necessary or incidental to the conduct of the Business set forth in
Schedule 2.1(d) attached hereto (the "REALBID Permits");
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(e) all of REALBID's customer lists, mailing lists, telephone
numbers, correspondence, credit, sales and other records, business and
accounting records, computer printouts, vendor lists, and sales and other
literature, operating data, and books, files, documents and records relating to
the Business (collectively, the "Books and Records"); provided, that REALBID
will retain certain Books and Records necessary for REALBID to wind up its
involvement in the Business and provide COMPS, at the sole cost and expense of
COMPS, with access to such Books and Records upon reasonable prior request and
during normal business hours as necessary to conduct the Business after the
Closing Date (as defined below);
(f) all right, title and interest in and to all of the REALBID
Intellectual Property (as defined below), including without limitation (i) all
of REALBID's rights to the name "REALBID" and variations thereof and all
trademarks, tradenames, service marks and goodwill associated therewith; (ii)
the domain name on the World Wide Web known as "realbid.com" and any successor
thereto; and (iii) all items set forth in Section 3.24 of the Disclosure
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Schedule (as defined below) and all improvements, modifications and other
Intellectual Property (as defined below) derived therefrom;
(g) all prepaid expenses, deposits and deferred items in effect as of
the Closing Date and from which COMPS may derive future benefit;
(h) all accounts, accounts receivable, notes and notes receivable
(collectively the "REALBID Account Receivables") of REALBID's Business as of the
Closing Date, including without limitation those which are not evidenced by
instruments or invoices, whether or not they have been earned by performance or
have been written off or reserved against as a
4
bad debt or doubtful account, together with all instruments and all documents of
title representing any of the foregoing and all right, title, security and
guaranties in favor of REALBID with respect to any of the foregoing, as
identified in Schedule 2.1(h) attached hereto;
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(i) the real properties leased or owned by REALBID set forth on
Schedule 2.1(i) attached hereto (the "Assumed Real Property");
(j) all cash and cash equivalents of REALBID as of the Closing Date;
and
(k) the goodwill and going concern value of REALBID's Business.
2.2 Assumed Liabilities. COMPS agrees to assume, satisfy and perform when
-------------------
due only those liabilities arising from all of the liabilities and obligations
of REALBID under the Purchased Assets which arise on or after the Closing Date
(the "Assumed Liabilities"). Except for the Assumed Liabilities, COMPS is not
required to, and shall not, assume, pay, perform, defend or discharge REALBID's
liabilities or obligations of any and every kind whatsoever, direct, indirect,
absolute, contingent, secured, unsecured, accrued or otherwise, whether known or
unknown, including without limitation (i) any accrued payroll, accrued payroll
taxes, accrued vacation, accrued sick pay and accrued workman's compensation
incurred by REALBID in connection with the operation of the Business, (ii) the
BAP Loan, the ERD Loan and the LLC Managers Accrued Fee (as such terms are
described in the Financial Statements) and (iii) any and all payables, costs and
expenses of REALBID incurred before the Closing Date including those payables,
costs and expenses set forth in the Financial Statements. Further, COMPS shall
not assume or agree to pay, perform or discharge, nor be responsible for, any
obligation or liability of REALBID with respect to breach by REALBID of any
contract or commitment or any action, suit or proceeding.
2.3 Excluded Assets. Notwithstanding Section 2.1 hereof, the Purchased
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Assets do not include the assets set forth on Schedule 2.3 attached hereto (the
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"REALBID Excluded Assets").
2.4 Purchase Price. As consideration for the Purchased Assets, COMPS
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agrees to (i) assume the Assumed Liabilities and (ii) pay, or cause to be paid,
to REALBID an aggregate purchase price in cash of One Hundred Sixty-Three
Thousand Dollars ($163,000) (the "Purchase Price. The Purchase Price shall be
delivered to REALBID at the Closing by wire transfer in immediately available
funds to an account designated by REALBID; and
2.5 Closing Date. The closing of the Transaction (the "Closing") shall be
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held at 10:00 A.M. local time on October 23, 1998 at the offices of COMPS, 9888
Carroll Centre Road, Suite 100, San Diego, California, or at such other time and
place as the parties shall mutually agree (the "Closing Date").
2.6 Allocation of Aggregate Purchase Price. As promptly as practicable
--------------------------------------
following the Closing Date, but in no event later than 30 days thereafter (the
"30-Day Period"), COMPS shall prepare and deliver to the REALBID Principals an
allocation schedule which sets forth the allocation of the Purchase Price plus
other relevant items for the transactions contemplated under this Agreement,
which allocation schedule shall be in compliance with Section 1060 of the
5
Internal Revenue Code and Regulations. During the 30-Day Period, COMPS shall
consult with the REALBID Principals in preparing such allocation schedule and
each of COMPS and the REALBID Principals shall use their best efforts to agree
upon a mutually acceptable allocation schedule. COMPS, REALBID and the REALBID
Principals, as applicable, will file all returns, reports, information returns
schedule or other documents (including any related or supporting information)
filed or required to be filed with respect to any taxing authority in a manner
consistent with such allocation.
2.7 Bulk Sales. COMPS hereby waives compliance by REALBID with the
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provisions of the applicable Bulk Sales Law of any state. REALBID and the
REALBID Principals, jointly and severally, warrant and agree to pay and
discharge when due all claims of creditors which could be asserted against COMPS
by reason of such noncompliance. REALBID and the REALBID Principals shall,
jointly and severally, indemnify and hold COMPS harmless from, against and in
respect of any Damages (as defined in Article 8 below) suffered or incurred by
COMPS by reason of the failure of REALBID to pay or discharge such claims.
2.8 Sales and Use Taxes. REALBID and the REALBID Principals shall be
-------------------
responsible for all sales and use taxes, if any, arising out of the sale of the
Purchased Assets to COMPS pursuant to this Agreement.
2.9 Title. Title to the Purchased Assets shall pass to COMPS at the
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Closing and the Purchased Assets shall be at the risk of REALBID prior to the
Closing.
ARTICLE 3
REPRESENTATIONS AND WARRANTIES OF REALBID
-----------------------------------------
Each of REALBID and the REALBID Principals, jointly and severally,
represents and warrants to COMPS as on the date hereof, except as set forth on
the disclosure schedule furnished to COMPS (the "Disclosure Schedule"),
specifically identifying the relevant section hereof, which exceptions shall be
deemed to be representations and warranties as if made in this Article 3
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(provided that the disclosure in such exceptions shall be true, complete and
correct), as follows:
3.1 Ownership of REALBID Interests. The REALBID Principals own
------------------------------
beneficially and of record all of the issued and outstanding interests/stock of
REALBID (the "REALBID Members' Shares"), consisting of the number of REALBID
Members' Shares listed opposite such REALBID Principal's name in Section 3.1 of
-----------
the Disclosure Schedule, free and clear of all Encumbrances, and have, and on
the Closing Date will have, good and valid title to such REALBID Members'
Shares.
3.2 Organization and Good Standing. REALBID is a limited liability
------------------------------
company ("LLC"), validly existing and in good standing under the laws of the
State of California, and has all requisite LLC power and LLC authority to
conduct the business in which it is now engaged and to own, lease, license and
use the assets and properties now owned, leased, licensed or used by it. REALBID
is duly qualified to do business as a foreign LLC and is in good standing in
each jurisdiction in which such qualification is necessary under the applicable
law as a result of the conduct of its business or the ownership of it properties
and where the failure to be so
6
qualified, singly or in the aggregate, would have a Material Adverse Effect on
the Business, financial condition of REALBID or the Purchased Assets. Each
jurisdiction, if any, in which REALBID is qualified to do business as a foreign
LLC is listed on Section 3.2 of the Disclosure Schedule, except where failure to
-----------
be qualified would not have a Material Adverse Effect on the Business or the
Purchased Assets. Section 3.2 of the Disclosure Schedule also contains a correct
-----------
and complete copy of REALBID's Operating Agreement as amended to date, that was
previously delivered to COMPS.
3.3 Authorization. REALBID and the REALBID Principals have all the
-------------
necessary power and authority and have taken all action necessary to enter into
this Agreement, to consummate the Transaction contemplated hereby and to perform
their respective obligations hereunder. This Agreement has been duly executed
and delivered by REALBID and the REALBID Principals and is a legal, valid and
binding obligation enforceable against REALBID and the REALBID Principals in
accordance with the terms herein, except as such enforceability may be limited
by (a) bankruptcy, insolvency, reorganization, moratorium or other similar laws,
or by equitable principles, relating to or limiting the rights of creditors
generally and (b) limitations imposed by law or equitable principles upon the
availability of specific performance, injunctive relief or other equitable
remedies.
3.4 Equity Securities of REALBID. The authorized equity securities of
----------------------------
REALBID consists solely of Eight Thousand (8,000) REALBID Members' Shares, of
which Eight Thousand (8,000) shares are issued and outstanding as of the date
hereof. All such issued and outstanding REALBID Members' Shares have been issued
to the REALBID Principals. The REALBID Members' Shares are duly authorized,
validly issued, fully paid and nonassessable, and issued in accordance with all
federal and state securities laws.
3.5 No Conflict or Violation. Except as described in Section 3.5 of the
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Disclosure Schedule, neither the execution and delivery of this Agreement by
REALBID or the REALBID Principals nor the consummation of the transactions
contemplated hereby will result in (a) a violation of or a conflict with any of
REALBID's charter documents; (b) a breach of, or a default under, or constitute
a basis for terminating any term or provision of any REALBID Assumed Contract;
(c) a conflict with or result in a violation or breach of any law, order,
judgment, license, statute or regulation applicable to REALBID or the Purchased
Assets; or (d) an imposition of any Encumbrance, restriction or charge on
REALBID or the Purchased Assets.
3.6 Consents and Approvals. Except as set forth in Section 3.6 of the
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Disclosure Schedule, no consent, approval or authorization of, or declaration,
filing or registration with, any governmental or regulatory authority, or any
other person or entity, is required to be had or obtained by REALBID or the
REALBID Principals in connection with the execution, delivery and performance of
this Agreement and the consummation of the Transaction contemplated hereby.
3.7 Books and Records. The Books and Records as made available by REALBID
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to COMPS are true, correct and complete.
3.8 Financial Statements. REALBID has delivered to COMPS the Balance
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Sheets (as defined below) and the related Income Statements (as defined below)
for REALBID
7
(collectively, the "Financial Statements"). The Financial Statements (i) are in
accordance with the Books and Records of REALBID, (ii) have been prepared with
the use of the software Quicken throughout the period covered thereby, (iii) to
the Knowledge of REALBID and the REALBID Principals, have been prepared in a
manner that is not materially different from generally accepted accounting
principles ("GAAP"), (iii) fairly, accurately and completely present the assets,
liabilities, Members' interests and financial position and the results of
operations of REALBID for the periods covered thereby and (iv) are true, correct
and complete. Section 3.8 of the Disclosure Schedule contains complete copies of
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the following Financial Statements including:
(a) REALBID's balance sheet for the year ended December 31, 1997 and
unaudited interim balance sheet for the period ended October 31, 1998
(collectively, the "Balance Sheets").
(b) REALBID's income statement for the year ended December 31, 1997;
and unaudited interim income statement for the period ended October 31, 1998
(collectively the "Income Statements").
3.9 Accounts Receivable. All of the REALBID Accounts Receivable shown on
-------------------
the Financial Statements or thereafter acquired arose in the usual and ordinary
course of business consistent with past practices, and the values at which such
REALBID Accounts Receivable are carried on the Books and Records of REALBID
reflect the accounts receivable valuation policy of REALBID which is consistent
with REALBID's past practice and, to the Knowledge of REALBID and the REALBID
Principals, is prepared in a manner that is not materially different from GAAP.
Such REALBID Accounts Receivables are bona fide receivables and are collectible,
legal, valid and binding obligations of the obligors, and to the Knowledge of
REALBID and the REALBID Principals, should be able to be collected by REALBID
without counterclaim or setoff.
3.10 Absence of Certain Changes or Events. Except as specifically set
------------------------------------
forth on Section 3.10 of the Disclosure Schedule, since September 30, 1998 and
------------
up to the Closing Date, REALBID and the REALBID Principals have conducted
business only in the ordinary and usual course and, there has not been any
material adverse change in, or any event or development which, individually or
together with other such events, could reasonably be expected to result in a
Material Adverse Effect on REALBID or the Purchased Assets including, without
limiting the generality of the foregoing, the events as described below.
(a) change in REALBID's condition (financial or otherwise), the
Purchased Assets, liabilities, working capital, reserves, earnings, business or
prospects, except for changes which have not, individually or in the aggregate,
been materially adverse, and, to the Knowledge of REALBID or the REALBID
Principals, any developments in the Business which could reasonably be expected
to have a Material Adverse Effect on the condition (financial or otherwise),
earnings, business or prospects the Business or the Purchased Assets;
(b) failure to operate the Business in the ordinary course so as to
use REALBID and the REALBID Principals' respective efforts to preserve the
Business and the
8
Purchased Assets intact and to preserve the goodwill of REALBID's suppliers,
customers and others having business relations with REALBID;
(c) sale, assignment for transfer of any of the Purchased Assets,
including the REALBID Intellectual Property, other than in the ordinary course
of business, consistent with past practices;
(d) additional indebtedness for borrowed money over Five Thousand
Dollars ($5,000) in the aggregate, without the express written consent of COMPS;
(e) hiring of individuals earning an annual compensation, including
salary, cash bonuses and commissions, in excess of Thirty Thousand Dollars
($30,000), without the express written consent of COMPS;
(f) material change in the terms or termination of any REALBID
Assumed Contract;
(g) amendments or changes to the charter documents of REALBID;
(h) individual capital expenditure or commitment, or series of
related capital expenditure or commitments, by REALBID or any of the REALBID
Principals outside of the ordinary course of business exceeding Five Thousand
Dollars ($5,000);
(i) destruction of, damage to or loss of any Purchased Assets or
other assets or properties material to the Business (whether or not covered by
insurance);
(j) material adverse change in a material customer relationship
including without limitation any cancellation or termination or notice of
termination or cancellation by any material customer of its relationship or a
material portion of its relationship with REALBID;
(k) labor trouble or claim of wrongful discharge or other unlawful
labor practice or action that would have a Material Adverse Effect on the
Business;
(l) material change in accounting methods or practices (including any
change in depreciation or amortization policies or rates) by REALBID;
(m) declaration, setting aside or payment of a dividend or other
distribution with respect to the capital stock of REALBID, or any direct or
indirect redemption, purchase or other acquisition by REALBID of any of its
capital stock;
(n) increase in the salary or other compensation payable or to become
payable to any of its (i) officers, managers or directors or (ii) employees or
advisors, or the declaration, payment or commitment or obligation of any kind
for the payment of a bonus or other additional salary or compensation to any
such person except for increases, payments or commitments in the ordinary course
of business consistent with past practices;
9
(o) waiver or release of any material right or claim of REALBID,
including any write-off or other compromise of any REALBID Account Receivable
other than in the ordinary course of business consistent with past practices;
(p) any Encumbrances or other restriction on any of the Purchased
Assets;
(q) delayed or postponed the payment of accounts payable or other
liabilities outside of the ordinary course of business; or
(r) any other event or condition which in any one case or in the
aggregate has or might reasonably be expected to have a Material Adverse Effect
on the Purchased Assets or the condition (financial or otherwise), earnings or
prospectus of the Business.
3.11 Contracts and Commitments. Section 3.11 of the Disclosure Schedule
------------------------- ------------
constitutes a correct and complete list of (i) all of the REALBID Assumed
Contracts and (ii) all other written and oral material contracts and material
commitments to which REALBID is a party or by which the Purchased Assets are
bound in any material respect (and, to the extent oral, accurately described the
terms of such contracts or commitments) (the "Other Contracts").
(a) The REALBID Assumed Contracts and the Other Contracts are, in all
material aspects, valid and legally binding obligations, enforceable in
accordance with their terms (subject to applicable bankruptcy, insolvency and
other laws effecting the enforceability of creditors rights generally).
(b) REALBID is current in the performance of all material obligations
required of it under any of the REALBID Assumed Contracts and the Other
Contracts.
(c) Except as stated on Section 3.11 of the Disclosure Schedule, to
------------
the Knowledge of REALBID and the REALBID Principals, no party with whom REALBID
has entered into one of the REALBID Assumed Contracts or the Other Contracts is
in material default in its performance thereunder or has materially breached any
terms thereof.
(d) All of the REALBID Assumed Contracts and the Other Contracts are
available to the officers, employees and representatives of COMPS for their
review and examination (and, to the extent oral, accurate written description of
the terms of such contracts are available.)
3.12 Insurance. REALBID has no insurance policies of any nature and no
---------
insurance policy of any nature is required by any federal, state, local or other
governmental or regulatory authorities to operate the Business or to own the
Purchased Assets nor is any insurance policy necessary or incidental to the
conduct of the Business or the ownership of the Purchased Assets.
3.13 Litigation. There is no action, order, writ, injunction, judgment,
----------
decree, claim, suit, litigation, proceeding, labor dispute, arbitral action,
investigation or similar dispute of any sort whatsoever (collectively,
"Actions") outstanding or pending or, to the Knowledge of REALBID and the
REALBID Principals, threatened or anticipated against, relating to or effecting
REALBID, the Purchased Assets or the Transaction contemplated by this Agreement.
REALBID and the REALBID Principals are not in default with respect to any
judgment, order,
10
writ, injunction or decree of any court or governmental agency, and there are no
unsatisfied judgments against REALBID, the Purchased Assets or the Business.
3.14 Liabilities. REALBID or the REALBID Principals have no liabilities or
-----------
obligations (absolute, accrued, contingent or otherwise), which may have an
adverse effect on the Business, the Purchased Assets, or this Transaction,
except the liabilities which are reflected and reserved against on the Financial
Statements or liabilities incurred in the ordinary course of business and
consistent with past practice since the last period covered in the Financial
Statements which have not had, and could not reasonably be expected to result,
individually or in the aggregate, in a Material Adverse Effect on REALBID or the
Purchased Assets.
3.15 Compliance with Law. REALBID and the REALBID Principals are in
-------------------
compliance with all applicable laws, statutes, ordinances and regulations in
effect as of the Closing Date whether federal, state or local, except where the
failure to comply would not have a Material Adverse Effect on the Business, the
Purchased Assets, the Transaction or prospects of REALBID. Neither REALBID nor
any of the REALBID Principals has received any written notice to the effect
that, or otherwise been advised that, it is not in compliance with any of such
statutes, regulations, orders, ordinances or other laws where the failure to
comply would have a Material Adverse Effect on the Business, prospects of
REALBID, the Purchased Assets or the transaction, and neither the REALBID
Principals nor REALBID has any reason to anticipate that any presently existing
circumstances are likely to result in violations of any such regulations which
would, in any one case or in the aggregate, have a Material Adverse Effect on
the Business, the Purchased Assets, the Transaction or prospects of REALBID.
3.16 No Brokers. Neither REALBID nor the REALBID Principals has paid, nor
----------
incurred any obligation to pay, any finder's fee, brokerage commission or
similar payment of any sort whatsoever in connection with the Transaction
contemplated by this Agreement. COMPS has not and will not have any obligation
to pay any broker's, finder's, investment broker's, financial advisor's or
similar fee in connection with this Agreement or the Transaction by reason of
any action taken by or on behalf of REALBID.
3.17 No Other Agreements to Sell REALBID. Neither REALBID nor the REALBID
-----------------------------------
Principals nor any affiliate or representative of REALBID has any obligation,
absolute or contingent, to any other person or firm to sell or encumber REALBID,
the Purchased Assets or to effect any sale, consolidation or other
reorganization of REALBID or to enter into any agreement with respect thereto,
nor has any such party had any discussion with any third party regarding any of
the foregoing.
3.18 Tax Matters
-----------
(a) REALBID is a limited liability company which is and at all times
has prepared all federal and state income tax returns and reports as a
partnership. No jurisdiction has at any time asserted or indicated that it may
assert that REALBID should be treated as an association taxable as a
corporation. REALBID has duly and timely filed all Tax reports and returns
required to be filed by, including all federal, state, local and foreign tax
returns and reports prior to the Closing. All such Tax returns were correct and
complete in all material respects when filed. All Taxes of REALBID or for which
REALBID could be held liable
11
(whether or not shown on any Tax return or report) have been paid in full. To
the Knowledge of REALBID and the REALBID Principals, REALBID has made adequate
provision in its financial statements in a manner not materially different from
GAAP, for the payment of all Taxes which may subsequently become due. All Taxes
which any Taxpayer has been required to collect or withhold at the time of the
Closing have been duly collected or withheld and, to the extent required, have
been or will be duly paid to the proper taxing authority. REALBID has not been a
member of an affiliated group filing a consolidated federal income Tax return.
The Company is not a party to any Tax allocation or sharing agreement.
(b) No audit is currently pending with respect to any Tax return or
report of REALBID, nor is any REALBID Principal aware of any information which
has caused or should cause them to believe that an audit by any Tax authority
may be forthcoming, and there are no claims which have been or may be asserted
relating to any of REALBID's Tax returns filed for any year which if determined
adversely would result in the assertion by any governmental agency of any
deficiency in Tax. There are no liens for Taxes on the Purchased Assets and all
Taxes due or payable, and all interest and penalties thereon, whether disputed
or not, which could result in the imposition of any lien on the Purchased Assets
or REALBID, have been paid in full. REALBID has not waived any statute of
limitations in respect of Taxes or agreed to any extension of time for the
assessment of any Tax. No claim has ever been made by an authority in a
jurisdiction where REALBID does not file Tax returns or reports that it is or
may be subject to taxation by that jurisdiction.
(c) REALBID does not have any liability for the Taxes of any other
Person (A) under Treasury Regulations (S) 1.1502-6 (or any similar provision of
state, local, or foreign law), (B) as a transferee or successor, (C) by
contract, or (D) otherwise.
(d) For the purpose of this Agreement, "Tax" means and includes any
federal, state, local or foreign income, sales, use, withholding, transfer,
payroll, excise, personal property, occupancy or other tax, levy, impost, fee,
imposition, assessment or charge imposed by or on behalf of any governmental
entity or any agency or instrumentality thereof, together with any related
addition to tax, interest or penalty thereon.
3.19 Employment Matters and Benefit Plans.
------------------------------------
(a) Except for the REALBID Principals, REALBID has no and never has
had any employees. REALBID has complied in all material respects with all
applicable laws relating to the employment of labor, including provisions
thereof relating to wages, hours, equal opportunity, collective bargaining, age
and sex discrimination and the withholding and payment of social security and
other taxes.
(b) None of the REALBID Principals is in violation of any term of any
employment contract, patent disclosure agreement, non-competition agreement, or
any restrictive covenant to a former employer relating to the right of any such
REALBID Principal because of the nature of the business conducted or presently
proposed to be conducted by REALBID or to the use of trade secrets or
proprietary information of others.
12
(c) REALBID has no and never has had any benefit plan, arrangement or
understanding of any kind ("Plan") nor is any REALBID Principal or his
respective affiliate entitled to any rights under any REALBID Plan or other
benefits or arrangements of REALBID of any kind, including but not limited to
payments of deferred compensation.
3.20 Transaction with Certain Persons. Except as set forth on Schedule
-------------------------------- --------
3.20, no officer, director or employee of REALBID or any member of any such
- ----
person's immediate family is presently a party to any transaction with REALBID
relating to the Business or the Purchased Assets, including without limitation,
any contract, agreement or other arrangement (i) providing for the furnishing of
services by, (ii) providing for the rental of real or personal property from, or
(iii) otherwise requiring payments to (other than for services as officers,
directors or employees of REALBID) any such person or corporation, partnership,
trust or other entity in which any such person has a substantial interest as a
shareholder, officer, director, trustee or partner.
3.21 Environmental Quality.
---------------------
(a) Hazardous Material. To the Knowledge of REALBID and the REALBID
------------------
Principals, no underground storage tanks are present under any property that is
a part of the Purchased Assets. No material amount of any substance that has
been designated by any governmental entity or by applicable federal, state or
local law to be radioactive, hazardous or otherwise to pose an unreasonable
danger to human health or the environment, including, without limitation, PCBs,
friable asbestos, petroleum, urea-formaldehyde and all substances listed as
hazardous substances pursuant to the Comprehensive Environmental Response,
Compensation, and Liability Act of 1980, as amended, or defined as a hazardous
waste pursuant to the United States Resource Conservation and Recovery Act of
1976, as amended and in effect as of the Closing Date, and the regulations
promulgated pursuant to said laws, (a "Hazardous Material"), but excluding
office, maintenance, shipping and janitorial supplies, are present as a result
of the actions of REALBID or, to the Knowledge of REALBID and the REALBID
Principals, as a result of any actions of any third party or otherwise, in, on
or under any property, including the land and the improvements, ground water and
surface water thereof, that REALBID has at any time owned, operated, occupied
or leased. Section 3.21 of the Disclosure Schedule lists all locations that
------------
REALBID formerly owned or leased where, to the Knowledge of REALBID and the
REALBID Principals, Hazardous Materials are present in a volume or concentration
that would reasonably be expected to have a Material Adverse Effect on the
Business or the Purchased Assets.
(b) Environmental Liabilities. No material action, proceeding,
-------------------------
revocation proceeding, amendment procedure, writ, injunction or claim is
pending, or to the Knowledge of REALBID and the REALBID Principals, threatened
concerning any Hazardous Material in, on or under any property owned or leased
REALBID. REALBID is not aware of any fact or circumstance that could involve
REALBID in any environmental litigation that would reasonably be expected to
have a Material Adverse Effect on the Business or the Purchased Assets or impose
upon REALBID any material environmental liability.
13
3.22 Certain Advances. No receivable of REALBID is owing by a director,
----------------
officer, or employee, consultant or shareholder of REALBID or owing by any
relative of any such person, other than for advances in the ordinary and usual
course of business to an officer or employee for reimbursable business expenses.
3.23 Licenses and Permits. Schedule 2.1(d) is a true and complete list of
-------------------- ---------------
all of the REALBID Permits. All such REALBID Permits are currently effective and
valid and have been validly issued. No additional permits or licenses are
necessary to enable REALBID to conduct the Business in compliance with all
applicable federal, state and local laws, except where failure to obtain such
licenses or permits would not have a Material Adverse Effect on the Business or
the Purchased Assets. Neither the execution, delivery or performance of this
Agreement nor the mere passage of time (except as specifically noted in the
Disclosure Schedule) will have any effect on the continued validity or
sufficiency of the REALBID Permits. There are no actions or proceedings pending
or, to the Knowledge of REALBID and the REALBID Principals, threatened which may
result in the revocation, cancellation, suspension, or any adverse modification
of any REALBID Permit.
3.24 Proprietary Rights.
(a) "Intellectual Property" consists of the following:
(i) all patents, trademarks, trade names, service marks, trade
dress, copyrights and any renewal rights therefor, mask works, net lists,
schematics, technology, inventions, manufacturing processes, supplier lists,
trade secrets, know-how, moral rights, computer software programs or
applications (in both source and object code form), applications and
registrations for any of the foregoing;
(ii) all software and firmware listings, and updated software
source code, and complete system build software and instructions related to all
software described herein;
(iii) all documents, records and files relating to design, end
user documentation, manufacturing, quality control, sales, marketing or customer
support for all intellectual property described herein;
(iv) all other tangible or intangible proprietary information
and materials; and
(v) all license and other rights in any third party product,
intellectual property, proprietary or personal rights, documentation, or
tangible or intangible property, including without limitation the types of
intellectual property and tangible and intangible proprietary information
described in sub-sections (i) through (iv) above.
(b) "REALBID Intellectual Property" consists of all Intellectual
Property described in sub-sections (a)(i)-(iv) in this Section 3.24 that are
----
owned or held by or on behalf of REALBID, and/or any REALBID Principal, or that
are being, and/or have been, used, or are currently under development for use,
in the business of REALBID as it has been, is currently anticipated or is
reasonably anticipated (as of the date of this Agreement and as of the Closing
14
Date) by REALBID and/or the REALBID Principals to be, conducted. Each REALBID
Principal shall specifically identify on Section 3.24 of the
------------
Disclosure Schedule any intellectual property as to which he asserts individual
rights and identify any Intellectual Property which he will not assign or
license to REALBID.
(c) Section 3.24 of the Disclosure Schedule lists: (i) all patents,
------------
copyrights, mask works, trademarks, service marks, trade dress, any renewal
rights for any of the foregoing, and any applications and registrations for any
of the foregoing, which are included in the REALBID Intellectual Property and
owned by or on behalf of REALBID; (ii) all material hardware products and tools,
software products and tools, and services that are currently published, offered,
or under development by REALBID; and (iii) all material licenses, sublicenses
and other agreements to which REALBID is a party and pursuant to which REALBID
or any other person is authorized to use the REALBID Intellectual Property or
exercise any other right with regard thereto.
(d) The REALBID Intellectual Property consists solely of items and
rights which are either: (i) owned by REALBID, (ii) in the public domain or
(iii) rightfully used and authorized for use by REALBID and its successors
pursuant to a valid license. All REALBID Intellectual Property which consists of
license or other rights to third party property is set forth in Section 3.24 of
------------
the Disclosure Schedule. REALBID has all rights in the REALBID Intellectual
Property necessary to carry out REALBID's current and former activities,
including without limitation rights to make, use, reproduce, modify, adapt,
create derivative works based on, translate, distribute (directly and
indirectly), transmit, display and perform publicly, license, rent, lease,
assign, and sell the REALBID Intellectual Property and products embodying the
REALBID Intellectual Property in all geographic locations and fields of use, and
to sublicense any or all such rights to third parties, including the right to
grant further sublicenses.
(e) REALBID and each REALBID Principal is not, nor as a result of the
execution or delivery of this Agreement, or performance of REALBID's obligations
hereunder, will REALBID be, in violation of any license, sublicense or other
agreement to which REALBID or any REALBID Principal is a party or otherwise
bound. Except as specifically described in Section 3.24 of the Disclosure
------------
Schedule, neither REALBID nor any REALBID Principal is obligated to provide any
consideration (whether financial or otherwise) to any third party, nor is any
third party otherwise entitled to any consideration, with respect to any
exercise of rights by REALBID or COMPS in the REALBID Intellectual Property.
(f) To the Knowledge of REALBID and the REALBID Principals, the use,
reproduction, modification, distribution, licensing, sublicensing, sale, or
any other exercise of rights in any product, work, technology, service or
process as used, provided or offered at any time, or as reasonably proposed by
REALBID and/or the REALBID Principals for use, reproduction, modification,
distribution, licensing, sublicensing, sale or any other exercise of rights, by
REALBID does not infringe any copyright, patent, trade secret, trademark,
service mark, trade name, firm name, logo, trade dress, mask work, moral right,
other intellectual property right, right of privacy or right in personal data of
any person. No claims (i) challenging the validity, effectiveness, or ownership
by REALBID of any of the REALBID Intellectual Property, or (ii) to the effect
that the use, reproduction, modification, manufacturing, distribution,
licensing, sublicensing, sale or any other exercise of rights in any product,
work, technology,
15
service or process as used, provided or offered at any time, or as currently
proposed or reasonably proposed (as of the date of this Agreement and as of the
Closing Date) by REALBID and/or the REALBID Principals for use, reproduction,
modification, distribution, licensing, sublicensing, sale or any other exercise
of rights, by REALBID infringes or will infringe on any intellectual property or
other proprietary or personal right of any person have been asserted or, to the
Knowledge of REALBID and each of the REALBID Principals, are threatened by any
person nor are there any valid grounds for any bona fide claim of any such kind.
All granted or issued patents and mask works and all registered trademarks
listed on Section 3.24 of the Disclosure Schedule and all copyright
------------
registrations held by REALBID are valid, enforceable and subsisting. To the
Knowledge of REALBID and the REALBID Principals, there is no unauthorized use,
infringement or misappropriation of any of the REALBID Intellectual Property by
any third party, employee or former employee.
(g) No parties other than REALBID possess any current or contingent
rights to any source code which is part of the REALBID Intellectual Property.
(h) Section 3.24 of the Disclosure Schedule lists all parties other
------------
than employees who have created any portion of, or otherwise have any rights in
or to, the REALBID Intellectual Property. REALBID has secured from all parties
who have created any portion of, or otherwise have any rights in or to, the
REALBID Intellectual Property valid and enforceable written assignments of any
such work or other rights to REALBID and has provided true and complete copies
of such assignments to COMPS.
(i) Section 3.24 of the Disclosure Schedule includes a true and
------------
complete list of each support and maintenance agreement relating to REALBID
Intellectual Property including without limitation the identity of the parties
entitled to receive such service or maintenance, the term of such agreements and
any other provisions relating to the termination of such agreements.
3.25 Material Misstatements or Omissions. No representations or warranties
-----------------------------------
by REALBID and the REALBID Principals in this Agreement, nor any document,
exhibit, statement, certificate or schedule furnished to COMPS pursuant hereto,
or in connection with the transactions contemplated hereby, contain or will
contain any untrue statement of a material fact, or omit or will omit to state
any material fact necessary to make the statements or facts contained therein
not misleading. REALBID and the REALBID Principals have disclosed all events,
conditions and facts materially affecting the Business, condition (financial or
otherwise) or prospects of such REALBID or the Purchased Assets.
3.26 Exclusive Dealing. REALBID and the REALBID Principals represent and
-----------------
warrant that they are not entertaining any bids, inquiries or other offers
toward a transaction with any other entity that would affect the ownership of
REALBID, and that they will continue not to do and will not orally or in writing
agree to any such transaction until this Agreement has been terminated. Any such
offers or indications of interest received by REALBID will be promptly disclosed
to COMPS. COMPS is aware that REALBID is involved in ongoing discussions with
certain brokerage firms who are formulating an Industry Initiative ("Industry
Initiative"), which discussions do not involve any purchase or sale of REALBID.
This initiative may or may not involve REALBID. REALBID will update COMPS on any
material developments regarding the
16
Industry Initiative. COMPS acknowledges and agrees that REALBID's participation
in the Industry Initiative will not constitute a breach of this Section 3.26.
------------
3.27 Real Property.
-------------
(a) Schedule 2.1(i) contains a complete and accurate list and legal
---------------
description of the Assumed Real Property.
Except as provided in Section 3.27 of the Disclosure Schedule, REALBID has
------------
good and marketable title to, or a valid leasehold interest in, all of the
Assumed Real Property, free and clear of all Encumbrances. Each lease with
respect to the Assumed Real Property is a legal, valid and binding agreement of
the party thereto, subsisting in full force and effect and enforceable in
accordance with its terms, and, except as set forth in Section 3.27 of the
------------
Disclosure Schedule, there is no, and none of REALBID Principals or REALBID has
received notice of any, default (or any condition or event which, after notice
or lapse of time or both, would constitute a default) thereunder. REALBID does
not owe any brokerage commissions with respect to any such Assumed Real
Property.
3.28 Location of Purchased Assets. The Disclosure Schedule contains a
----------------------------
complete and accurate schedule specifying the location of all of the Purchased
Assets, where applicable, as of the Closing Date. REALBID has good and
marketable title to, or a valid leasehold interest in all of the Purchased
Assets, free and clear of all Encumbrances. Except as set forth in the
Disclosure Schedule, the Purchased Assets being transferred to COMPS pursuant to
this Agreement include all the Intellectual Property necessary for the ownership
and operation of the Business as currently conducted.
3.29 Prepaid Expenses. All prepaid expenses of REALBID that are reflected
----------------
on the Financial Statements, and all prepaid expenses incurred by REALBID since
the last period covered in the Financial Statements and set forth in Section
-------
3.29 of the Disclosure Schedule, are bona fide prepaid expenses and represent
- ----
amounts due with respect to actual, arms-length transactions entered into in the
ordinary course of business of REALBID.
3.30 Certain Agreements. Except as disclosed in Section 3.30 of the
------------------ ------------
Disclosure Schedule or as contemplated by this Agreement, neither the execution
and delivery of this Agreement, nor the consummation of the Transaction
contemplated hereby will: (i) result in any payment by REALBID (including,
without limitation, severance, unemployment compensation, parachute payment,
bonus or otherwise) becoming due to any officer, director, employee or
independent contractor of REALBID or any REALBID Principal under any Plan,
agreement or otherwise, (ii) increase any benefits otherwise payable under any
Plan or agreement, or (iii) result in the acceleration of the time of payment or
vesting of any such benefits.
3.31 Year 2000 Compliance. For purposes of this Section: (i) "Year 2000
--------------------
Processing" means processing by the REALBID Intellectual Property that manage
and/or manipulate data involving dates, including single century formulas and
multi-century formulas and dates on or after January 1, 2000; and (ii) "properly
perform the Year 2000 Processing" means that REALBID Intellectual Property will
not cause an abnormally ending dating scenario within the application or result
in incorrect values generated involving such dates. REALBID and the
17
REALBID Principals warrant that (x) any version of the REALBID Intellectual
Property created and provided by REALBID shall properly perform Year 2000
Processing, and (y) to the Knowledge of REALBID and the REALBID Principals, all
other versions of the REALBID Intellectual Property provided by REALBID shall
properly perform Year 2000 Processing.
3.32 Necessary Property. The Purchased Assets constitute all of the assets
------------------
and properties necessary for the conduct of the Business in the manner and to
the extent presently conducted by REALBID.
3.33 Bank Accounts. Section 3.33 of the Disclosure Schedule contains a
------------- ------------
complete and accurate list of each deposit account or asset maintained by or on
behalf of REALBID with any bank, brokerage house or other financial institution,
specifying the name and address of the institution, the name under which the
account is maintained, the account number, and the name and title or capacity of
each person or entity authorized to have access thereto.
3.34 Valuation of COMPS. REALBID and the REALBID Principals agree and
------------------
acknowledge that (i) neither COMPS nor any representative of COMPS has made any
representation, whether written or oral, about, or taken any action or inaction
representing, the fair market value of the capital stock of COMPS, the stock
options of COMPS or any other valuation of COMPS and (ii) any valuation of the
capital stock of COMPS, the stock options of COMPS or any other valuation of
COMPS made by REALBID, the REALBID Principals or any representative of the
REALBID or the REALBID Principals (collectively, the "REALBID Group") were made
by REALBID Group based on their independent due diligence review of COMPS and
not in reliance on any discussions with or materials from COMPS (except for the
COMPS Financial Statements).
3.35 Full Disclosure. All information requested by COMPS and the
---------------
opportunity to enter into discussions with officers, employees and consultants
of REALBID, at or before the Closing Date have been made available to COMPS and
such information, together with the schedules, exhibits and any other agreements
and certificates executed and delivered by REALBID or any of the REALBID
Principals pursuant to this Agreement, does not contain any untrue statement of
material fact, or omits to state a material fact necessary to make the
statements or facts contained herein or therein not misleading in light of the
circumstances under which they were furnished.
ARTICLE 4
REPRESENTATIONS AND WARRANTIES OF COMPS
---------------------------------------
COMPS represents and warrants to REALBID and the REALBID Principals as of
the Closing Date, except as set forth on the disclosure schedule furnished to
REALBID and the REALBID Principals (the "COMPS Disclosure Schedule"),
specifically identifying the relevant section hereof, which exceptions shall be
deemed to be representations and warranties as if made in this Article 4
---------
(provided that the disclosure in such exceptions shall be true, correct and
complete), as follows:
4.1 Organization of COMPS. COMPS is a corporation duly organized, validly
---------------------
existing and in good standing under the laws of the State of Delaware, has full
corporate power
18
and authority to conduct its business in which it is now engaged and to own,
lease, license and use the properties and assets now owned, licensed or used by
it. COMPS is duly qualified to do business as a foreign corporation and is in
good standing in each jurisdiction in which such qualification is necessary
under the applicable law as a result of the conduct of its business or the
ownership of its properties and where the failure to be so qualified, singly or
in the aggregate, would have a Material Adverse Effect on COMPS.
4.2 Capitalization of COMPS. The authorized capital stock of COMPS
-----------------------
consists of (i) Twenty-Two Million Five Hundred Thousand (22,500,000) shares of
Class A Common Stock, par value $.01 per share, of which there were Four Million
Seven Hundred Seventy-Three Thousand Eight Hundred Sixty (4,773,860) shares
issued and outstanding as of October 28, 1998, (ii) Two Million Five Hundred
Thousand (2,500,000) shares of Class B Common Stock, par value $.01 per share,
of which there were Thirty-Three Thousand Five Hundred (33,500) shares issued
and outstanding as of October 28, 1998, and (iii) Five Million (5,000,000)
shares of Preferred Stock, par value $.01 per share, of which there were Four
Million Nine Hundred Eight Thousand One Hundred Twenty-Six (4,908,126) shares
issued or outstanding as of October 28, 1998. No shares of COMPS Class A or
Class B Common Stock or Preferred Stock have been issued since October 28, 1998
except pursuant to the exercise of stock options or warrants listed on Section
-------
4.2 of the COMPS Disclosure Schedule. All outstanding shares of COMPS Common
- ---
Stock and Preferred Stock are duly authorized, validly issued, fully paid and
non-assessable, and issued in accordance with all federal and state securities
laws. An aggregate of Thirty-Seven Thousand Three Hundred Twenty-Nine (37,329)
shares of COMPS Class A Common Stock and One Million Nine Hundred Forty-Seven
Thousand Two Hundred Eighty-Four (1,947,294) shares of COMPS Class B Common
Stock are issuable upon the exercise of COMPS options and warrants which were
outstanding as of October 28, 1998. All shares of COMPS Common Stock subject to
issuance as aforesaid, upon issuance on the terms and conditions specified in
the instruments pursuant to which they are issuable, would be duly authorized,
validly issued, fully paid and nonassessable.
4.3 Authorization. COMPS has all the necessary corporate power and
-------------
authority and has taken all corporate action necessary to enter into this
Agreement, to consummate the Transaction contemplated hereby and to perform its
obligations hereunder. This Agreement has been duly executed and delivered by
COMPS and is a legal, valid and binding obligation enforceable against COMPS in
accordance with the terms except as such enforceability may be limited by (a)
bankruptcy, insolvency, reorganization, moratorium or other similar laws, or by
equitable principles, relating to or limiting the rights of creditors generally
and (b) limitations imposed by law or equitable principles upon the availability
of specific performance, injunctive relief or other equitable remedies.
4.4 No Conflict or Violation. Except as described in Section 4.4, of the
------------------------ -----------
COMPS Disclosure Schedule, neither the execution and delivery of this Agreement
nor the consummation of the transactions contemplated hereby will result in (a)
a violation of or a conflict with any of COMPS' charter documents; (b) a breach
of, or a default under, or constitute a basis for terminating any term or
provision of any contract, agreement, indebtedness, lease to which COMPS is a
party (c) a violation by COMPS of any law, order or judgment; or (d) an
imposition of any encumbrance, restriction or charge on COMPS.
19
4.5 Consents and Approvals. Except as set forth in Section 4.5 of the
---------------------- -----------
COMPS Disclosure Schedule, no consent, approval or authorization of, or
declaration, filing or registration with, any governmental or regulatory
authority, or any other person or entity, is required to be had or obtained by
COMPS in connection with the execution, delivery and performance of this
Agreement and the consummation of the Transaction contemplated hereby.
4.6 No Brokers. COMPS has not paid nor incurred any obligation to pay, any
----------
finder's fee, brokerage commission or similar payment of any sort whatsoever in
connection with the Transaction contemplated by this Agreement. REALBID has no
and will have no obligation to pay any broker's, finder's, investment broker's,
financial advisor's or similar fee in connection with this Agreement or the
Transaction by reason of any action taken by or on behalf of COMPS.
4.7 Litigation. There is no action, order, writ, injunction, judgment,
----------
decree, claim, suit, litigation, proceeding, labor dispute, arbitral action,
investigation or similar dispute of any sort whatsoever outstanding or pending
or, to the Knowledge of COMPS, threatened or anticipated against, relating to,
effecting or which would have reasonable potential to obstruct or prevent the
consummation of the Transaction contemplated by this Agreement.
4.8 Liabilities. COMPS has no liabilities or obligations (absolute,
-----------
accrued, contingent or otherwise), which may have had an adverse effect on this
Transaction, except the liabilities which are reflected and reserved against on
the COMPS' financial statements or liabilities incurred in the ordinary course
of business and consistent with past practice which have not had, and could not
reasonably be expected to result, individually or in the aggregate, in a
Material Adverse Effect on the Transaction.
4.9 Compliance with Law. COMPS is in compliance with all applicable laws,
-------------------
statutes, ordinances and regulations in effect as of the Closing Date, whether
federal, state or local, except where the failure to comply would not have a
Material Adverse Effect on the Transaction. COMPS has not received any written
notice to the effect that, or otherwise been advised that, it is not in
compliance with any of such statutes, regulations, orders, ordinances or other
laws where the failure to comply would have a Material Adverse Effect on the
Transaction, and COMPS has no reason to anticipate that any presently existing
circumstances are likely to result in violations of any such regulations which
would, in any one case or in the aggregate, have a Material Adverse Effect on
the Transaction.
4.10 COMPS Financial Statements. COMPS has delivered to REALBID its
--------------------------
balance sheets for the year ended December 31, 1997 and the related income
statements for the year ended December 31, 1997 (collectively, the "COMPS
Financial Statements"). The COMPS Financial Statements (i) are in accordance
with the books and records of COMPS, (ii) have been prepared in conformity with
GAAP for the periods covered thereby, (iii) fairly, accurately and completely
present the assets, liabilities and financial position and the results of
operations of COMPS for the periods covered thereby and (iv) are true, correct
and complete.
4.11 Absence of Certain Changes or Events for COMPS. Except as
----------------------------------------------
specifically set forth on Section 4.11 of the COMPS Disclosure Schedule, since
------------
December 31, 1997 and up to the Closing Date, COMPS has conducted business only
in the ordinary and usual course and, there has not been any material adverse
change in, or any event or development which,
20
individually or together with other such events, could reasonably be expected to
result in a Material Adverse Effect on COMPS..
4.12 Full Disclosure. All information requested by REALBID and the
---------------
opportunity to enter into discussions with officers, employees and consultants
of COMPS, at or before the Closing Date have been made available to REALBID and
such information, together with the schedules, exhibits and any other agreements
and certificates executed and delivered by COMPS pursuant to this Agreement,
does not contain any untrue statement of material fact, or omits to state a
material fact necessary to make the statements or facts contained herein or
therein not misleading in light of the circumstances under which they were
furnished.
ARTICLE 5
[INTENTIONALLY LEFT BLANK]
--------------------------
ARTICLE 6
CONDITIONS TO REALBID AND REALBID PRINCIPALS OBLIGATIONS
--------------------------------------------------------
The obligations of REALBID and the REALBID Principals to consummate the
Transaction provided for hereby are subject, in the reasonable discretion of
REALBID, to the satisfaction, on or prior to the Closing Date, of each of the
following conditions:
6.1 Representations, Warranties and Covenants. All representations and
-----------------------------------------
warranties of COMPS contained in the Agreement (including the COMPS Disclosure
Schedule) shall be true and correct at and as of the Closing Date and COMPS
shall have performed all agreements and covenants required to be performed by it
prior to or at the Closing Date.
6.2 No Litigation or Governmental Proceedings. There shall be no
-----------------------------------------
litigation or proceeding pending or threatened against COMPS for the purpose on
enjoining or preventing the consummation of the Agreement or otherwise claiming
that such consummation is unlawful, an there shall be no governmental
investigation or inquiry pending or threatened which in good faith judgment of
REALBID or the REALBID Principals, might lead to or result in any litigation or
proceeding of the nature referred to above.
6.3 Delivery at the Closing. COMPS shall have delivered to the REALBID
-----------------------
Principals at the Closing:
(a) One Hundred Sixty-Three Thousand Dollars ($163,000) by wire
transfer in immediately available funds to the account specified by REALBID.
(b) The employment agreements by and between COMPS and each of DeMoss
and Potter, respectively, substantially in the form of Exhibit 6.3(b) attached
--------------
hereto and by this reference incorporated herein (the "Employment
Agreements"), duly executed by COMPS.
(c) Stock option agreements in connection with the issuance of the
options referenced in The Employment Agreements for DeMoss and Potter, duly
executed by COMPS.
21
(d) Assignment and Assumption Agreement by and between COMPS and
REALBID substantially in the form of Exhibit 6.3(d) attached hereto and by this
--------------
reference incorporated herein (the "General Assignment"), duly executed by
COMPS.
(e) A certificate of an officer of COMPS substantially in the form of
Exhibit 6.3(e) attached hereto and by this reference incorporated herein, to
- --------------
evidence compliance with Section 6.1.
-----------
(f) (i) Certified copies of the Certificate of Incorporation and
Bylaws of COMPS and (ii) certificates of good standing for COMPS issued by the
appropriate governmental office of its state of incorporation and each state in
which it is qualified to do business.
(g) Such other documents as REALBID may reasonably request for the
purpose of facilitating the consummation of the Transaction.
6.4 Material Adverse Change. Since December 31, 1997, there shall have
-----------------------
been no material adverse change in the business of COMPS, except such changes or
circumstances as are contemplated, disclosed or required by the terms of this
Agreement.
ARTICLE 7
CONDITIONS TO COMPS' OBLIGATIONS
--------------------------------
The obligations of COMPS to consummate the Transaction provided for hereby
are subject, in the reasonable discretion of COMPS, to the satisfaction, on or
prior to the Closing Date, of each of the following conditions:
7.1 Representations, Warranties and Covenants. All representations and
-----------------------------------------
warranties of REALBID and REALBID Principals contained in the Agreement
(including the Disclosure Schedule) shall be true and correct at and as of the
Closing Date and REALBID and the REALBID Principals shall have performed all
agreements and covenants required to be performed by them prior to or at the
Closing Date.
7.2 No Governmental Proceedings or Litigation. There shall be no
-----------------------------------------
litigation or proceeding pending or threatened against REALBID or the REALBID
Principals for the purpose on enjoining or preventing the consummation of the
Agreement or otherwise claiming that such consummation is unlawful, an there
shall be no governmental investigation or inquiry pending or threatened which in
good faith judgment of REALBID or the REALBID Principals, might lead to or
result in any litigation or proceeding of the nature referred to above
7.3 Third Party Consents. REALBID shall have obtained all consents,
--------------------
approvals and waivers from third parties and governmental and regulatory
authorities necessary or appropriate to permit REALBID to perform its
obligations hereunder and to consummate the Transaction hereby shall have been
obtained, including without limitation the consents necessary for REALBID to
assign the REALBID Assumed Contracts to COMPS.
7.4 Delivery at Closing. REALBID and the REALBID Principals shall have
-------------------
delivered to COMPS at the Closing:
22
(a) Non-Competition Agreements by and between COMPS and each of the
REALBID Principals and REALBID respectively, substantially in the form of
Exhibit 7.4(a) attached hereto and by this reference incorporated herein (the
- --------------
"Non-Competition Agreements"), duly executed by each of the REALBID Principals
and REALBID.
(b) Employment Agreements for DeMoss and Potter, duly executed by each of
DeMoss and Potter.
(c) Certified copies of the chartered documents and the operating
agreement of REALBID and (ii) certificates of good standing for REALBID issued
by the appropriate governmental office of its state of domicile and each state
in which it is qualified to do business.
(d) A certificate of the an officer of REALBID substantially in the form
of Exhibit 7.4(d) attached hereto and by this reference incorporated herein, to
--------------
evidence compliance with Section 7.1.
-----------
(e) An original bill of sale substantially in the form of Exhibit 7.4(e)
--------------
attached hereto and by this reference incorporated herein, duly executed by
REALBID.
(f) The General Assignment duly executed by REALBID.
(g) An original assignment substantially in the form of Exhibit 7.4(g)
--------------
attached hereto and by this reference incorporated herein of all the REALBID
Intellectual Property.
(h) A general release and waiver substantially in the form of Exhibit
-------
7.4(h) attached hereto and by this reference incorporated herein, duly executed
- ------
by Institutional Real Estate, Inc. and Geoffrey Dohrmann.
(i) Possession of all of the Purchased Assets, including all Books and
Records relating to the Purchased Assets.
(j) Such other documents as COMPS may reasonably request for the purpose
of facilitating the consummation of the Transaction.
7.5 Material Adverse Change. Since the date of the LOI, there shall have
-----------------------
been no material adverse change in the Business of REALBID, except such changes
or circumstances as are contemplated, disclosed or required by the terms of the
Agreement.
ARTICLE 8
ACTIONS BY COMPS AND THE REALBID PRINCIPALS AFTER THE CLOSING
-------------------------------------------------------------
8.1 Survival of Representations. The representations and warranties of
---------------------------
COMPS, REALBID and the REALBID Principals contained herein shall survive the
Closing Date and shall thereafter continue in full force and effect for a period
of twenty-four (24) months following the Closing Date, without regard to any
investigation made by any of the parties hereto.
23
8.2 Indemnification.
---------------
(a) By the REALBID Principals. The REALBID Principals shall,
-------------------------
jointly and severally, indemnify, save and hold harmless COMPS, and its
officers, directors, employees, agents, successors, affiliates and assigns and
their respective representatives (collectively, the "COMPS Group") from and
against any and all Damages, incurred in connection with, arising out of,
resulting from or incident to (i) any breach of any covenant, representation,
warranty or agreement or the inaccuracy of any representation, made by REALBID
and/or the REALBID Principals in or pursuant to this Agreement, (ii) any
liability, obligation or commitment of any nature (absolute, accrued, contingent
or otherwise) relating to the Business and arising out of transactions entered
into or events occurring prior to the Closing.
(b) By COMPS. COMPS shall indemnify and save and hold harmless the
--------
REALBID Principals, its affiliates and its and their respective representatives
from and against any and all Damages incurred in connection with or arising out
of or resulting from or incident to (i) any breach of any covenant,
representation, warranty or agreement or the inaccuracy of any representation,
made by COMPS in or pursuant to this Agreement or (ii) any liability, obligation
or commitment of any nature (absolute, accrued, contingent or otherwise)
relating to the business and arising out of transactions entered into or events
occurring subsequent to the Closing which are not the subject of a matter
covered in Section 8.2(a) or (iii) any claims arising out of the personal
--------------
guarantees of Potter and DeMoss with respect to the equipment leases listed as
items 3 and 4 of Section 3.11 of the Disclosure Schedule, provided that such
claims are a result of a breach of such equipment leases by COMPS.
(c) Assistance. The REALBID Principals and COMPS shall cooperate
----------
with one another in all reasonable respects, at their own cost, risk and
expense, in the investigation, prosecution, trial, and defense of any lawsuit,
claim, proceeding, arbitration or action that is subject to indemnification
hereunder.
(d) Defense of Claims. If any lawsuit or enforcement action is
-----------------
filed against any party entitled to the benefit of indemnity hereunder, written
notice thereof shall be given to the indemnifying party as promptly as practical
(and in any event within fifteen (15) days after the service of the citation or
summons); that the failure of any indemnified party to give timely notice shall
not effect the rights to indemnification hereunder except to the extent that the
indemnifying party demonstrates actual damage caused by such failure. After such
notice, if the indemnifying party shall acknowledge in writing to the
indemnified party that the indemnifying party shall be obligated under the terms
of its indemnity hereunder in connection with such lawsuit or action, then the
indemnified party shall be entitled, if it so elects, to take control of the
defense and investigation of such lawsuit or action and to employ and engage
attorneys of its own choice to handle and defend the same, at the indemnifying
party's cost, risk and expense unless (i) the indemnifying party and the
indemnified party has been advised in writing by counsel that there may be one
or more legal defenses available to such indemnified that are different from or
additional to those available to the indemnifying party, and to compromise or
settle such claim, which compromise or settlement shall be made only with the
written consent of the indemnifying party, such consent not to be unreasonably
withheld. If the indemnified party notifies the indemnifying party that it does
not want to assume the defense or it fails to assume the defense of such claim
within fifteen (15) days after receipt of notice of the claim pursuant to
24
this Section 8.2, not to assume the defense, then the indemnifying party will be
-----------
entitled to take control of the defense, at its own cost, risk and expense;
provided, however, that such claim shall not be compromised or settled without
the written consent of the indemnified party, which consent shall not be
unreasonably withheld. In the event the indemnified party assumes defense of the
claim, the indemnified party will keep the indemnifying party reasonably
informed of the progress of any such defense, compromise or settlement. The
indemnifying party shall be liable for any settlement of any action effected
pursuant to and in accordance with this Section 8.2 and for any final judgment
-----------
(subject to any right of appeal), and the indemnifying party agrees to indemnify
and hold harmless an indemnified party from and against any Damages of such
settlement of judgment.
(e) Damages. The term "Damages" as used in this Section 8.2 shall
------- -----------
mean all costs, losses (including, without limitation, diminution in value),
taxes, diminutions in value, liabilities, damages, lawsuits, deficiencies,
claims and expenses (whether or not arising out of third party claims),
including without limitation, interest, penalties, costs of mitigation, lost
profits and other losses resulting from any shutdown or curtailment of
operations, reasonable attorneys' fees and all amounts paid in investigation,
defense or settlement of any of the foregoing. Damages are not limited to
matters asserted by third parties against REALBID and the REALBID Principals or
COMPS in the absence of third party claims. Payments by REALBID and the REALBID
Principals or COMPS of amounts for which they are indemnified hereunder shall
not be a condition precedent to recovery. The parties' obligation to indemnify
one another shall not limit any other rights, including without limitation,
rights of contribution they may have with respect to each other under statute or
common law.
(f) Limitation on Indemnification
-----------------------------
(i) REALBID and the REALBID Principals shall have no liability
for amounts payable to any member of the COMPS Group pursuant their
indemnification obligations in this Article until the total of all exceeds
-------
Twenty-Five Thousand Dollars ($25,000) in the aggregate after which the
indemnification obligations of REALBID and the REALBID Principals shall include
all such Damages as if this Section 8.2(f)(i) were not part of this Agreement.
-----------------
(ii) REALBID and the REALBID Principals shall have no liability
to any member of the COMPS Group pursuant to their indemnification obligations
in this Article 8 to the extent that the total of all paid by REALBID and the
---------
REALBID Principals in the aggregate to members of the COMPS Group pursuant to
such indemnification obligations exceeds Three Hundred Thousand Dollars
($300,000); provided, however, that this clause (ii) shall not apply to any
-------- ------- -----------
intentional breach by REALBID or any REALBID Principals of any covenant or
agreement of such Seller.
ARTICLE 9
MISCELLANEOUS
-------------
9.1 [INTENTIONALLY LEFT BLANK]
9.2 Notices. All notices, requests and other communications hereunder must
-------
be in writing and will be deemed to have been duly given only if delivered
personally against written
25
receipt or by facsimile transmission with answer back confirmation or mailed
(postage prepaid by certified or registered mail, return receipt requested) or
by overnight courier to the parties at the following addresses or facsimile
numbers:
If to COMPS, addressed to:
COMPS InfoSystems, Inc.
9888 Carroll Centre Road, Suite 100
San Diego, CA 92126
Facsimile No.: (619) 684-3292
Attn: Christopher Crane
With a copy to:
Brobeck, Phleger & Harrison LLP
550 West "C" Street, Suite 1200
San Diego, CA 92101
Facsimile No.: (619) 234-3848
Attn: Craig S. Andrews, Esq.
If to REALBID or the REALBID Principals addressed to:
REALBID LLC
700 Larkspur Landing Circle, Suite 199
Larkspur, CA 94939
Facsimile No.: (415) 464-4944
Attn: Mr. Emmett DeMoss & Mr. Robert Potter
With a copy to:
Luce, Forward, Hamilton & Scripps LLP
600 West Broadway, Suite 2600
San Diego, CA 92101
Facsimile No.: (619) 232-8311
Attn: Dennis J. Doucette, Esq.
All such notices, requests and other communications will (i) if delivered
personally to the address as provided in this Section 9.2, be deemed given upon
-----------
delivery, (ii) if delivered by facsimile transmission to the facsimile number as
provided in this Section 9.2, be deemed given upon receipt, and (iii) if
-----------
delivered by mail in the manner described above to the address as provided in
this Section 9.2, be deemed given upon receipt (in each case regardless of
-----------
whether such notice, request or other communication is received by any other
person to whom a copy of such notice, request or other communication is to be
delivered pursuant to this Section). Any party from time to time may change its
address, facsimile number or other information for the purpose of notices to
that party by giving notice specifying such change to the other parties hereto.
26
9.3 Choice of Law. This Agreement shall be construed, interpreted and the
-------------
rights of the parties determined in accordance with the laws of the State of
California, without reference to the choice of law provisions thereof.
9.4 Entire Agreement; Amendments and Waivers. This Agreement, together
----------------------------------------
with all schedules and exhibits hereto, constitutes the complete, final and
exclusive statement of the terms of the agreement among the parties pertaining
to the subject matter hereof and supersedes all prior agreements,
understandings, negotiations and discussions of the parties. No modification or
rescission of this Agreement shall be binding unless executed in writing by the
party to be bound thereby. No waiver of any of the provisions of this Agreement
shall be deemed or shall constitute a waiver of any other provision hereof
(whether or not similar), nor shall such waiver constitute a continuing waiver
unless otherwise expressly provided.
9.5 Counterparts. This Agreement may be executed in one or more
------------
counterparts, each of which shall be deemed an original, but all of which
together shall constitute one and the same instrument.
9.6 Expenses. Except as expressly provided herein, each party hereto shall
--------
pay its own legal, accounting, and other expenses incident to this Agreement and
to any action taken by such party in preparation for carrying this Agreement
into effect.
9.7 Invalidity. In the event that any one or more of the provisions
----------
contained in this Agreement or in any other instrument referred to herein,
shall, for any reason, be held to be invalid, illegal or unenforceable in any
respect, then to the maximum extent permitted by law, such invalidity,
illegality or unenforceability shall not effect any other provision or this
Agreement or nay other such instrument.
9.8 Confidentiality.
---------------
(a) Except as and to the extent required by law, the parties hereto
will not disclose or use, and will direct their respective representatives not
to disclose or use to the detriment of the other parties, any Confidential
Information (as defined below) with respect to such other party furnished, or to
be furnished, by such other party or its representatives to the disclosing party
or its representatives at any time or in any manner other than in connection
with the transaction contemplated in this Agreement. Notwithstanding the
foregoing, Confidential Information shall not include any information which is
generally known to the public or to companies in businesses similar to the
Business, or which later, through no act of the disclosing party, becomes
generally known.
(b) Upon consummation of this Agreement, REALBID shall (a) return to
COMPS, or shall destroy in a manner satisfactory to COMPS, all tangible forms of
Confidential Information provided by COMPS, including any and all copies
thereof, and those portions of any documents, memoranda, notes, studies and
analyses prepared by or on behalf of REALBID or any of its directors, officers,
employees, advisors or representatives that incorporate or are derived from such
Confidential Information, and (b) immediately cease, and shall cause its
directors, officers, employees, partners, advisors and representatives to cease,
use of such
27
Confidential Information as well as any information or materials that
incorporate or are derived from such Confidential Information.
(c) "Confidential Information" means all of the following (whether or
not reduced to writing and whether or not patentable or protected by copyright):
(i) any and all trade secrets concerning the business and affairs of any person
or entity, product specifications, data, know-how, formulae, compositions,
processes, designs, sketches, photographs, graphs, drawings, samples, inventions
and ideas, past, current and planned research and development, current and
planned manufacturing and distribution methods and processes, customer lists,
current and anticipated customer requirements, price lists, market studies,
business plans, computer software and programs (including object code and source
code), computer software and database technologies, systems, structures and
architectures (and related processes, formulae, compositions, improvements,
derivatives, devices, know-how, inventions, discoveries, concepts, ideas,
designs, methods and information) of a person or entity and any other
information, however, documented, of a person or entity that is a trade secret
within the meaning of any and all applicable state and federal trade secret
laws; (ii) any and all information concerning the business and affairs of a
person or entity (which includes historical financial statements, financial
projections and budgets, historical and projected sales, capital spending
budgets and plans, the names and backgrounds of key personnel and personnel
training and techniques and materials), however documented; and (iii) any and
all notes, analysis, compilations, studies, summaries, and other material
prepared by or for a person or entity containing or based, in whole or in part,
on any information included in the foregoing.
9.9 Arbitration and Venue. Any controversy or claim arising out of or
---------------------
relating to this Agreement or the making, performance or interpretation thereof
shall be submitted to arbitration in San Diego, California, pursuant to the
rules and procedures of the American Arbitration Association before a panel of
three arbitrators. The ruling of the arbitrator shall be final, and judgment
thereon may be entered in any court having jurisdiction. If any question is
submitted to a court of law for resolution, then the Superior Court of the
County of San Diego, California, or the United States District Court having
jurisdiction in the County of San Diego, shall be the exclusive court of
competent jurisdiction for the resolution of such question. Each party will bear
one half of the cost of the arbitration filing and hearing fees, and the cost of
the arbitrator. Each party will bear its own attorneys' fees, unless otherwise
decided by the arbitrator. The parties understand and agree that the arbitration
shall be instead of any civil litigation and that the arbitrator's decision
shall be final and binding to the fullest extent permitted by law and
enforceable by any court having jurisdiction thereof. Each party shall be
entitled to pre-hearing discovery as provided in California Code of Civil
Procedure Section 1283.05.
9.10 Announcements. Neither COMPS, REALBID, the REALBID Principals nor any
-------------
of their respective affiliates shall issue or authorize to be issued any press
release or similar announcement concerning the Letter of Intent, this Agreement,
or the Transaction contemplated hereby, without the prior written approval of
the parties hereto.
9.11 Construction. No provision of this Agreement shall be construed in
------------
favor of or against any party on the ground that such party or its counsel
drafted the provision. Any remedies provided for herein are not exclusive of any
other lawful remedies which may be
28
available to either party. This Agreement shall at all times be construed so as
to carry out the purposes stated herein.
9.12 Schedules and Exhibits not Attached. Any item disclosed hereunder
-----------------------------------
(including in any schedule or exhibit hereto or thereto) shall be deemed
disclosed for all purposes hereof irrespective of the specific representation or
warranty to which it is explicitly referenced. Without limiting the generality
of the foregoing, the fact that any disclosure on any of the schedules or
exhibits hereto or thereto is not required to be disclosed in order to render
the applicable representation or warranty to which it relates true, or that the
absence of such disclosure on the schedules or exhibits hereto or thereto would
not constitute a breach of such representation or warranty, shall not be deemed
or construed to expand the scope of any representation or warranty hereunder or
to establish a standard of disclosure in respect of any representation or
warranty.
9.13 Severability. If any term, provision, covenant or restriction of this
------------
letter is held by an arbitrator or a court of competent jurisdiction to be
invalid, void or unenforceable, the remainder of the terms, provisions,
covenants and restrictions contained within this letter will remain in full
force and effect and will in no way be affected, impaired or invalidated.
9.14 Assignment. This Agreement and all right hereunder shall not be
----------
assignable by any party without the prior written consent of the other party,
except by will or the laws of descent and distribution. Subject to the
foregoing, all of the terms of this Agreement shall be binding upon and inure to
the benefit of an be enforceable by the parties and their respective heirs,
executors, administrators, personal representatives, successors and permitted
assigns. Except as expressly stated, nothing herein shall be deemed to confer
any benefit upon any person or business entity that is not a party to this
Agreement. Notwithstanding the foregoing, COMPS may assign its rights under this
Agreement to a wholly owned subsidiary.
29
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
duly executed as of the day and year first above written.
COMPS InfoSystems, Inc., REALBID LLC,
a Delaware corporation a California limited liability
company
By: /s/ Christopher A. Crane By: /s/ Robert A. Potter
-------------------------------------- --------------------------------
Christopher A. Crane Robert A. Potter, Manager
President and Chief Executive Officer
By: /s/ Emmett DeMoss
--------------------------------
Emmett DeMoss, Manager
THE REALBID PRINCIPALS
/s/ Robert Potter
-----------------------------------
Robert Potter
/s/ Emmett DeMoss
-----------------------------------
Emmett DeMoss
Exhibit 6.3(b)
--------------
Forms of Employment Agreements
See Exhibit 10.17 to Registration Statement on Form S-1
Exhibit 6.3(d)
--------------
Form of Assignment and Assumption Agreement
See Exhibit 10.39 to Registration Statement on Form S-1
Exhibit 6.3(e)
--------------
Form of COMPS Officer Certificate
CERTIFICATE OF OFFICER
COMPS INFOSYSTEMS, INC.
This Certificate is delivered pursuant to Section 6.3(e) of that certain
Asset Purchase Agreement (the "Agreement"), dated as of __________________,
1998, by and among COMPS InfoSystems, Inc., REALBID LLC, Emmett DeMoss and
Robert Potter. Capitalized terms used herein without definition shall have the
same meaning as set forth in the Agreement.
I, ________________________, do hereby certify that I am the duly elected,
qualified and acting ______________________ of COMPS and as such, am authorized
to execute this Certificate on its behalf, and I further certify that:
1. All representations and warranties of COMPS contained in the Agreement
are true and correct on and as of the date hereof COMPS has performed all
agreements and covenants in a timely manner required to be performed by it prior
to or on the date hereof.
2. No actions or proceedings have been instituted or threatened which
question the validity or legality of the transactions contemplated by the
Agreement.
3. All Permits, authorizations, consents, approvals and waivers from third
parties and governmental or regulatory authorities and other persons or entities
necessary or appropriate to permit COMPS to perform its obligations hereunder
and to consummate the transactions contemplated by the Agreement have been
obtained.
IN WITNESS WHEREOF, I have executed this Certificate as of the Closing
Date, this ____ day of November, 1998.
By:__________________________
Name:________________________
Title:_______________________
Exhibit 7.4(a)
--------------
Forms of Non-Competition Agreements
See Exhibit 10.19 to Registration Statement on Form S-1
Exhibit 7.4(d)
--------------
Form of REALBID Officer Certificate
CERTIFICATE OF OFFICER
REALBID LLC
This Certificate is delivered pursuant to Section 7.4(d) of that certain
Asset Purchase Agreement (the "Agreement"), dated as of __________________,
1998, by and among COMPS InfoSystems, Inc., REALBID LLC, Emmett DeMoss and
Robert Potter. Capitalized terms used herein without definition shall have the
same meaning as set forth in the Agreement.
I, ________________________, do hereby certify that I am the duly elected,
qualified and acting ______________________ of REALBID and as such, am
authorized to execute this Certificate on its behalf, and I further certify
that:
1. All representations and warranties of REALBID and the REALBID
Principals contained in the Agreement are true and correct on and as of the date
hereof and REALBID and the REALBID Principals have performed all agreements and
covenants in a timely manner required to be performed by them prior to or on the
date hereof.
2. No actions or proceedings have been instituted or threatened which
question the validity or legality of the transactions contemplated by the
Agreement.
3. All Permits, authorizations, consents, approvals and waivers from third
parties and governmental or regulatory authorities and other persons or entities
necessary or appropriate to permit REALBID and the REALBID Principals to perform
their respective obligations hereunder and to consummate the transactions
contemplated by the Agreement have been obtained.
IN WITNESS WHEREOF, I have executed this Certificate as of the Closing
Date, this ____ day of November, 1998.
By:______________________
Name:____________________
Title:___________________
Exhibit 7.4(e)
--------------
Form of Bill of Sale
THIS BILL OF SALE dated as of ____________, 1998, is being executed
and delivered by REALBID LLC, a California limited liability company, Emmett
DeMoss, and Robert Potter (collectively, "Sellers") pursuant to that certain
Asset Purchase Agreement dated as of November 6, 1998 (the "Purchase
Agreement"), by and among Sellers and COMPS InfoSystems, Inc., a Delaware
corporation ("Buyer"). The execution and delivery of this Bill of Sale is a
condition to Buyer's obligations under the Purchase Agreement.
NOW, THEREFORE, for good and valuable consideration, the receipt and
sufficiency of which is hereby acknowledged, Sellers hereby agree as follows:
1. Capitalized terms used herein but not defined herein shall have
the meanings assigned such terms in the Purchase Agreement.
Subject to the terms and conditions set forth in the Purchase
Agreement, Sellers hereby grants, sell, convey, assign, transfer and deliver to
Buyer, and Buyer hereby acquires from Sellers, free and clear of any Encumbrance
or adverse claim of any kind whatsoever (except Permitted Encumbrances), all of
REALBID LLC's ("REALBID") right, title, and interest in and to all assets,
properties, rights, leases, fixtures, accessions, claims, contracts and
interests of REALBID of every kind, type or description, real, personal and
mixed, tangible and intangible, wherever located and whether or not specifically
referred to in this Agreement, that are used in or pertain to the Business
(collectively, the "Purchased Assets"), including without limitation:
(a) the machinery, equipment, leasehold improvements, furniture
and fixtures, vehicles and other operating assets owned or leased by REALBID and
used in the Business as set forth in Schedule 2.1(a) to the Purchase Agreement;
---------------
(b) the miscellaneous supplies of REALBID used in connection
with the Business;
(c) REALBID's right, title and interest in and to license
agreements, supply agreements, sales and purchase agreements, real property
leases, orders and the other contracts and agreements, written or oral,
necessary for REALBID to operate the Business as set forth in Schedule 2.1(c) to
---------------
the Purchase Agreement (and to the extent oral, accurately described in Schedule
--------
3.11 of the Disclosure Schedule the terms of such contract;
- ----
(d) to the extent assignable, all licenses, permits, consents,
approvals, orders, certificates, authorizations, declarations and filings held
by REALBID necessary or incidental to the conduct of the Business set forth in
Schedule 2.1(d) to the Purchase Agreement;
- ---------------
(e) all of REALBID's customer lists, mailing lists, telephone
numbers, correspondence, credit, sales and other records, business and
accounting records, computer printouts, vendor lists, and sales and other
literature, operating data, and books, files, documents
and records relating to the Business (collectively, the "Books and Records");
provided, that REALBID will retain certain Books and Records necessary for
REALBID to wind up its involvement in the Business and provide COMPS, at the
sole cost and expense of COMPS, with access to such Books and Records upon
reasonable prior request and during normal business hours as necessary to
conduct the Business after the Closing Date (as defined below);
(f) all right, title and interest in and to all of the REALBID
Intellectual Property, including without limitation (i) all of REALBID's rights
to the name "REALBID" and variations thereof and all trademarks, tradenames,
service marks and goodwill associated therewith, (ii) the domain name on the
World Wide Web known as "realbid.com" and any successor name thereto and (iii)
all items set forth in Section 3.24 of the Disclosure Schedule and all
------------
improvements, modifications and other Intellectual Property derived therefrom;
(h) all prepaid expenses, deposits and deferred items in effect
as of the Closing Date and from which COMPS may derive future benefit;
(i) all accounts, accounts receivable, notes and notes
receivable of REALBID's Business as of the Closing Date, including without
limitation those which are not evidenced by instruments or invoices, whether or
not they have been earned by performance or have been written off or reserved
against as a bad debt or doubtful account, together with all instruments and all
documents of title representing any of the foregoing and all right, title,
security and guaranties in favor of REALBID with respect to any of the
foregoing, as identified in Schedule 2.1(h) to the Purchase Agreement;
---------------
(j) the real properties leased or owned by REALBID set forth on
Schedule 2.1(i) to the Purchase Agreement;
(k) all cash and cash equivalents of REALBID as of the Closing
Date; and
(l) the goodwill and going concern value of REALBID's Business.
2. Buyer hereby waives compliance by Sellers with the provisions of
the bulk transfer laws of any state. Sellers warrant and agree to pay and
discharge when due all claims of creditors which could be asserted against Buyer
by reason of such noncompliance. Pursuant to the terms of the Purchase
Agreement, Sellers shall indemnify and hold Buyer harmless from, against and in
respect of (and shall on demand reimburse Buyer for) any Damages suffered or
incurred by Buyer by reason of the failure of Sellers to pay or discharge such
claims.
3. From time to time after the date hereof, Sellers will execute and
deliver, or cause its affiliates to execute and deliver, to Buyer such
instruments of sale, transfer, conveyance, assignment and delivery, and such
consents, assurances, powers of attorney and other instruments as may be
reasonably requested by Buyer or its counsel in order to vest in the Company all
right, title and interest of Seller in and to the Purchased Assets and otherwise
in order to carry out the purpose and intent of this Bill of Sale.
2
4. Notwithstanding any other provisions of this Bill of Sale to the
contrary, nothing contained in this Bill of Sale shall in any way supersede,
modify, replace, amend, change, rescind, waive, exceed, expand, enlarge or in
any way affect the provisions, including warranties, covenants, agreements,
conditions, representations or, in general any of rights and remedies, and any
of the obligations and indemnifications of Sellers or Buyer set forth in the
Purchase Agreement nor shall this Bill of Sale expand or enlarge any remedies
under the Purchase Agreement including without limitation any limits on
indemnification specified therein. This Bill of Sale is intended only to effect
the transfer of certain property transferred pursuant to the Purchase Agreement
and shall be governed entirely in accordance with the terms and conditions of
the Purchase Agreement.
5. This Bill of Sale shall in all respects be construed in
accordance with and governed by the laws of the State of California without
giving effect to its conflicts-of-laws principles (other than any provisions
thereof validating the choice of the laws of the State of California in the
governing law).
6. This Bill of Sale may be executed by the parties herein in
separate counterparts and by facsimile, each of which when so executed and
delivered shall be an original, but all such counterparts and facsimile shall
together shall constitute one and the same instrument.
[SIGNATURE PAGE TO FOLLOW]
3
IN WITNESS WHEREOF, Sellers have caused this Bill of Sale to be
executed and delivered on the date and year first written above.
REALBID LLC,
a California limited liability company
By:_____________________________________
Robert A. Potter, Manager
By:_____________________________________
Emmett DeMoss, Manager
________________________________________
Emmett DeMoss
________________________________________
Robert A. Potter
[SIGNATURE PAGE TO THE BILL OF SALE]
Exhibit 7.4(g)
--------------
Form of Intellectual Property Assignment
See Exhibit 10.40 to Registration on Form S-1
Exhibit 7.4(h)
--------------
Form of General Release and Waiver
GENERAL RELEASE AND WAIVER
--------------------------
THIS RELEASE (this "Agreement"), effective as of November ___, 1998,
is entered into by and among Institutional Real Estate, Inc., a California
corporation ("IREI"), Geoffrey Dohrmann, in his individual capacity ("Mr.
Dohrmann"), COMPS INFOSYSTEMS, INC., a Delaware corporation ("COMPS"), and
REALBID LLC, a California limited liability company ("REALBID");
WHEREAS, Mr. Dohrmann is the majority shareholder and President of
IREI;
WHEREAS, IREI owns twenty-five percent (25%) of the membership
interest in REALBID;
WHEREAS, IREI claims to be entitled to certain consideration from the
sale by REALBID of substantially all of its assets to COMPS pursuant to that
certain Asset Purchase Agreement dated November 6, 1998 by and among COMPS,
REALBID, Emmett DeMoss and Robert Potter;
WHEREAS, the parties to this Agreement intend and desire to avoid the
risks and expenses attendant upon litigation of such dispute and to effect and
accomplish a full and final settlement of all rights, claims and demands IREI or
Mr. Dohrmann may have against COMPS and/or REALBID;
NOW, THEREFORE, the parties hereto, in and for the consideration of
the representations, promises, and agreements contained herein, do agree as
follows:
1. Concurrently with the execution and delivery of this Agreement by
IREI and Mr. Dohrmann, COMPS shall grant IREI stock options to purchase that
number of shares of COMPS Class B Common Stock equal to 1.25% of the issued and
outstanding shares of COMPS Class B Common Stock as of the date hereof as
consideration for a release and waiver by IREI and Mr. Dohrmann pursuant to
Section 2 and Section 3 hereof.
2. IREI, on behalf of itself, as well as on behalf of its past and
present directors, shareholders, officers, employees, agents, predecessors,
successors, attorneys, representatives, affiliates, partners, joint venturers
and assigns, if any, and Mr. Dohrmann, on behalf of himself, as well as on
behalf of his past and present agents, employees, successors, attorneys,
representatives, affiliates, partners, joint venturers and assigns, if any,
hereby forever release, acquit and discharge, COMPS and REALBID, as well as
their respective past and present directors, officers, managers, members,
shareholders, agents, employees, successors, attorneys, representatives,
affiliates, partners, joint venturers and assigns, if any, from any and all
claims, demands, actions, causes of action, cross claims, counter claims,
obligations, indemnities, contributions, suits, debts, sums, accounts,
controversies, damages, costs, attorneys'
fees, defenses, and liabilities of any kind whatsoever, whether in law or in
equity, whether contractual, common law, statutory, federal, state, or otherwise
(collectively, "Claims"), whether known or unknown, whether suspected to exist
or not, that IREI or Mr. Dohrmann has, ever had, or hereafter may have or claim
to have, against COMPS or REALBID or any of their respective past and present
directors, officers, managers, members, shareholders, agents, employees,
successors, attorneys, representatives, affiliates, partners, joint venturers
and assigns, if any.
3. IREI and Mr. Dohrmann may have Claims against COMPS and REALBID,
as well as their respective past and present directors, officers, managers,
members, shareholders, partners, affiliates, joint venturers, agents, employees,
successors, attorneys, and assigns, if any, of which, at the time this Agreement
is executed, IREI or Mr. Dohrmann has no knowledge or suspicion. However, the
parties hereby agree and represent that this Agreement is specifically intended
to, and does, extend to any and all such Claims, whether or not known, claimed,
or suspected by IREI or Mr. Dohrmann, and, therefore, IREI and Mr. Dohrmann, on
behalf of themselves, as well as on behalf of their respective past and present
directors, officers, agents, employees, successors, attorneys, and assigns, if
any, hereby expressly waive with respect to the claims described in this Section
3 the benefits of Section 1542 of the California Civil Code which provides:
"A GENERAL RELEASE DOES NOT EXTEND TO CLAIMS WHICH THE
CREDITOR DOES NOT KNOW OR SUSPECT TO EXIST IN HIS FAVOR AT
THE TIME OF EXECUTING THE RELEASE, WHICH IF KNOWN BY HIM
MUST HAVE MATERIALLY AFFECTED HIS SETTLEMENT WITH THE
DEBTOR."
4. This Agreement is a release and compromise of disputed claims and
none of the parties hereto by its execution of this Agreement is making an
admission of liability or against their respective interest.
5. The terms of this Agreement shall be binding on and inure to the
benefit of each of the directors, officers, manager, agents, employees,
successors, attorneys, and assigns, if any, of each of the parties hereto.
6. If any legal action or any arbitration or other proceeding is
brought for the enforcement of this Agreement, or because of an alleged dispute,
breach, default, or misrepresentation in connection with any of the provisions
of this Agreement, the successful or prevailing party or parties shall be
entitled to recover reasonable attorneys' fees and other costs incurred in that
action or proceeding, in addition to any other relief to which it or they may be
entitled.
7. Each party hereto hereby acknowledges that it has sought or has
the right, ability or opportunity to seek the advice of legal counsel prior to
the execution of this Agreement.
8. This Agreement shall be governed by and construed in accordance
with the laws of the State of California.
2
9. If any term, provision, covenant or restriction of this Agreement
is held by an arbitrator or a court of competent jurisdiction to be invalid,
void or unenforceable, the remainder of the terms, provisions, covenants and
restrictions contained within this agreement will remain in full force and
effect and will in no way be affected, impaired or invalidated.
10. This Agreement constitutes the complete, final and exclusive
statement of the terms of the Agreement among the parties hereto pertaining to
the subject matter hereof and supersedes all prior agreements, understandings,
negotiations and discussions of the parties hereto. No amendment, modification
or recession of this Agreement shall be binding unless executed in writing by
the party to be bound thereby. No waiver of this Agreement shall be deemed or
shall constitute a waiver of any other provision hereof (whether or not
similar), nor shall such waiver constitute a continuing waiver unless otherwise
expressly provided.
11. Each party hereto, at the request of any of the other parties
hereto, shall execute and deliver such other instruments and do and perform such
other acts and things as may be necessary or desirable for effecting completely
the consummation of this Agreement and the transactions contemplated hereby.
12. This Agreement may be executed in any number of counterparts and
by facsimile, each of which shall be deemed an original, but all such
counterparts shall constitute but one and the same instrument, and this
Agreement shall become effective upon the execution and delivery of a
counterpart hereof by each of the parties hereto.
[Signature Page To Follow]
3
IN WITNESS WHEREOF, the parties have executed this Agreement as of the
date first above set forth.
COMPS INFOSYSTEMS, INC.,
a Delaware Corporation
DATED: November ___, 1998 By:_____________________________
Name:___________________________
Title:__________________________
REALBID LLC,
a California limited liability company
DATED: November ___, 1998 By:_____________________________
Robert Potter, Manager
DATED: November ___, 1998 By:_____________________________
Emmett DeMoss, Manager
INSTITUTIONAL REAL ESTATE, INC.,
a California corporation
DATED: November ___, 1998 By:_____________________________
Name:___________________________
Title:__________________________
DATED: November ___, 1998 ________________________________
Geoffrey Dohrmann
4
COMPS DISCLOSURE SCHEDULES
Section 4.1 ORGANIZATION OF COMPS.
---------------------
None.
Section 4.2 CAPITALIZATION.
--------------
No options or warrants were exercised between October 28, 1998 and the
Closing Date.
Section 4.3 AUTHORIZATION.
-------------
None
Section 4.4 NO CONFLICT OR VIOLATION.
------------------------
Mr. Christopher Crane is a partner in a partnership that owns the building
where COMPS' San Diego office is located.
Section 4.5 CONSENTS AND APPROVALS.
----------------------
Under the Loan Agreement dated September 24, 1996 by and between COMPS
InfoSystems, Inc.and Venture Lending & Leasing, Inc. (the "Lender"), the
Lender's prior written consent is required for COMPS to consummate the
Transactions.
Section 4.6 NO BROKERS.
----------
None
Section 4.7 LITIGATION.
----------
None
Section 4.8 LIABILITIES.
-----------
None
Section 4.9 Compliance with Law.
None
Section 4.10 COMPS Financial Statements.
None
COMPS DISCLOSURE SCHEDULE
PAGE 2
Section 4.11 Absence of Certain Changes or Events for COMPS.
None
Section 4.12 Full Disclosure.
None
SCHEDULE 2.1(A)
Fixed Assets
SCHEDULE 2.1(A)
Fixed Assets
All of the computer equipment described in Items 3 and 4 of Section 3.11 of
the Disclosure Schedule and one fax machine located at REALBID's offices, 700
Larkspur Landing Circle, Suite 199, Larkspur, California 94939.
SCHEDULE 2.1(C)
REALBID Assumed Contracts
SCHEDULE 2.1(C)
REALBID ASSUMED CONTRACTS
Each of the contracts and agreements described in Items 1, 3, 4, 5, 6 and 7
of Section 3.11 of the Disclosure Schedule.
SCHEDULE 2.1(D)
REALBID Permits
SCHEDULE 2.1(D)
REALBID PERMITS
None.
SCHEDULE 2.1(H)
REALBID Accounts Receivables
SCHEDULE 2.1(H)
REALBID ACCOUNTS RECEIVABLES
See attached.
REALBID LLC
A/R Aging Detail
As of October 31, 1998
Type Date Num P.O.# Name Terms Due Date Class
Current
Invoice 10/7/98 108 *** Net 30 11/6/98 Brokers
Invoice 10/12/98 109 *** Net 30 11/11/98 Brokers
Invoice 10/12/98 110 *** Net 30 11/11/98 Brokers
Invoice 10/30/98 113 *** Net 30 11/29/98 Brokers
Total Current
1 - 30
Invoice 9/1/98 71 *** Net 30 10/1/98 Realty Advis....
Invoice 9/3/98 72 *** Net 30 10/3/98 Brokers
Invoice 10/7/98 107 *** 10/7/98 Life Insuranc...
Invoice 9/18/98 74 *** Net 30 10/8/98 Brokers
Payment 10/9/98 ***
Invoice 9/15/98 77 *** Net 30 10/15/98 Brokers
Invoice 9/15/98 78 *** Net 30 10/15/98 Brokers
Invoice 9/15/98 80 *** Net 30 10/15/98 Builders/Dev....
Invoice 9/15/98 81 *** Net 30 10/15/98 Realty Advis....
Invoice 9/15/98 84 *** Net 30 10/15/98 Brokers
Invoice 9/23/98 95 *** Net 30 10/23/98 Realty Advis....
Invoice 9/29/98 102 *** Net 30 10/29/98 Brokers
Invoice 10/30/98 114 *** 10/30/98 Brokers
Invoice 10/30/98 115 *** 10/30/98
Total 1 - 30
31 - 60
Invoice 8/18/98 65 *** Net 30 9/17/98 Realty Advis....
Invoice 9/23/98 94 *** 9/23/98 Brokers
Invoice 9/23/98 96 *** 9/23/98 Brokers
Invoice 9/23/98 98 *** 9/23/98 Corporation
Invoice 8/27/98 69 *** Net 30 9/26/98 Brokers
Invoice 8/28/98 67 *** Net 30 9/27/98 Brokers
Invoice 9/28/98 101 *** 9/28/98 Life Insuranc....
Total 31 - 60
61 - 90
Invoice 7/20/98 55 *** Net 30 8/19/98 Brokers
Total 61 - 90
greater
than 90
Invoice 4/24/98 24 *** 4/26/98 Realty Advis
Invoice 5/14/98 33 *** Net 30 6/13/98 Brokers
Invoice 5/27/98 38 *** Net 30 6/26/98 Realty Advis
Invoice 5/27/98 39 *** Net 30 6/26/98 Broker
Total greater than 90
TOTAL
Type Aging Open Balance
Current
Invoice 2,500.00
Invoice 2,500.00
Invoice 2,500.00
Invoice 2,500.00
------------
Total Current 10,000.00
1 - 30
Invoice 30 3,000.00 (1)
Invoice 28 2,500.00
Invoice 24 2,500.00
Invoice 23 2,500.00 (2)
Payment -1,000.00 (3)
Invoice 16 500.00
Invoice 16 500.00
Invoice 16 2,500.00
Invoice 16 2,500.00
Invoice 16 2,500.00 (4)
Invoice 8 2,500.00
Invoice 2 2,500.00
Invoice 1 2,500.00
Invoice 1 2,500.00
------------
Total 1 - 30 28,000.00
31 - 60
Invoice 44 2,500.00
Invoice 38 2,500.00
Invoice 38 1,500.00
Invoice 38 2,000.00 (7)
Invoice 35 750.00
Invoice 34 5,000.00
Invoice 33 2,500.00
------------
Total 31 - 60 16,750.00
61 - 90
Invoice 73 1,750.00 (5)
------------
Total 61 - 90 1,750.00
greater
than 90
Invoice 190 1,500.00
Invoice 140 4,000.00 (6)
Invoice 123 2,500.00
Invoice 123 2,500.00
------------
Total greater than 90 10,500.00
TOTAL 67,800.00
*** Portions of this page have been omitted pursuant to a request for
Confidential Treatment and filed separately with the Commission.
SCHEDULE 2.1(I)
Assumed Real Property
SCHEDULE 2.1(I)
ASSUMED REAL PROPERTY
The leasehold interest described in Item 1 of Schedule 3.11 of the
Disclosure Schedule.
SCHEDULE 2.3
Excluded Assets
SCHEDULE 2.3
EXCLUDED ASSETS
All office furniture and filing cabinets and the color printer located at
REALBID's offices, 700 Larkspur Landing Circle, Suite 199, Larkspur, California
94939.
REALBID DISCLOSURE SCHEDULE
---------------------------
REALBID, LLC
DISCLOSURE SCHEDULE
DATED OCTOBER 28, 1998
Section 3.1 Ownership of REALBID Interests
------------------------------
Emmett DeMoss: 3,000 Members' Shares
Robert Potter: 3,000 Members' Shares
Institutional Real Estate, Inc.: 2,000 Member's Shares
SECTION 3.2 Organization and Good Standing
------------------------------
None.
SECTION 3.2 Authorization
-------------
None.
SECTION 3.4 Equity Securities of REALBID
----------------------------
None.
SECTION 3.5 No Conflict or Violation
------------------------
See Section 3.6 hereof.
SECTION 3.6 Consents and Approvals
----------------------
1. Consent of Landlord with respect to lease referenced in Item 1
of Section 3.11 hereof is required for assignment.
2. Consent of Lessor with respect to the equipment leases
referenced in Items 3 and 4 of Section 3.11 hereof is required
for assignment
SECTION 3.7 Books and Records
-----------------
None.
SECTION 3.8 Financial Statements
--------------------
See attached financial statements: (a) balance sheets as of December 31,
1997 and October 31, 1998; and (b) income statements for the year ended
December 31, 1997 and for the period ended October 31, 1998.
SECTION 3.9 Accounts Receivable
-------------------
None.
SECTION 3.10 Absence of Certain Changes or Events
------------------------------------
None.
SECTION 3.11 Contracts and Commitments
-------------------------
List of Assumed Contracts and Other Contracts:
- ---------------------------------------------
1. Office Sublease and Service Agreement dated July 6, 1998 between
Executive Business Network, Inc. d/b/a/ Executive Business Centers and
REALBID, LLC for premises located at 700 Larkspur Landing Circle,
Suite 199, Larkspur, California 94939.
2. Contribution Agreement dated July 1, 1997 by and among REALBID and the
REALBID Principals.
3. Business Lease Agreement (Lease #521542) between Dana Commercial
Credit Corporation and REALBID for computer equipment listed on
Schedule A thereto.
4. Business Lease Agreement (Lease #535079) between Dana Commercial
Credit Corporation and REALBID for computer equipment described
therein.
5. Web Hosting and Maintenance Agreement dated January 1, 1998 between
REALBID and RealPage Communications, Inc. ("RealPage").
6. Marketing Services Agreement dated August 15, 1997 between REALBID and
Prudential Insurance Company of America.
7. Oral Agreements All of REALBID's customer agreements with the
exception of the agreement reference in Item 6 of this Section 3.11
are oral agreements whereby REALBID posts the subject property at its
web site and then broadcasts the availability of the property for sale
to buyers whose acquisition parameters meet the characteristics of the
property. See Schedule 2.1(h) for a list of clients for which REALBID
has an oral agreement and see Attachment 3.11(7)-A hereto.
SECTION 3.11(A)
None.
SECTION 3.11(B)
See Section 3.12 hereof.
SECTION 3.11(C)
None.
SECTION 3.11(D)
None.
SECTION 3.12 Insurance
---------
The lease listed as Item 1 of Section 3.11 hereof requires that REALBID
maintain bodily injury insurance of at least $300,000 per person and $1,000,000
per occurrence and property damage insurance of at least $200,000 per accident
or occurrence. REALBID does not maintain such insurance.
The leases listed as Items 3 and 4 of Section 3.11 hereof require REALBID
to pay, and REALBID has paid, a risk charge of 125% of the original equipment
cost until REALBID obtains insurance for such equipment.
SECTION 3.13 Litigation
----------
None.
SECTION 3.14 Liabilities
-----------
None.
SECTION 3.15 Compliance with Law
-------------------
REALBID has not complied with local ordinances (if any) requiring REALBID
to maintain a business license or similar permit.
SECTION 3.16 No Brokers
----------
None.
SECTION 3.17 No Other Agreements to Sell REALBID
-----------------------------------
None.
SECTION 3.18 Tax Matters
-----------
None.
SECTION 3.19 Employment Matters and Benefit Plans
------------------------------------
None.
SECTION 3.20 Transaction with Certain Persons
--------------------------------
None.
SECTION 3.21 Environmental Quality
---------------------
None.
SECTION 3.22 Certain Advances
----------------
None.
SECTION 3.23 Licenses and Permits
--------------------
None.
SECTION 3.24 Proprietary Rights
------------------
(a) None.
(b) None.
(c) (i) Service mark for "REALBID" (application No. 75/277,110), filed
with U.S. Patent and Trademark Office), copyrighted material
including information and text on REALBID's website and
REALBID's buyer profile database, domain name of
"www.realbid.com" and any and all software developed by
RealPage Communications, Inc. in connection with the agreement
listed as Item 5 of Section 3.11 hereof.
(ii) See "Attachment 3.24(c)" attached hereto for a description of
the services offered by REALBID.
(iii) See Item 5 of Section 3.11 hereof.
(d) None.
(e) None.
(f) None.
(g) None.
(h) None.
(i) See item 5 of Section 3.11 hereof. Pursuant to the terms of such
agreement, RealPage has agreed to implement, support, host and maintain
REALBID's website. Such agreement has a term of one year commencing on January
1, 1998 and may be terminated by either REALBID or RealPage upon 30 days' prior
written notice.
SECTION 3.25 Material Misstatements or Omissions
-----------------------------------
None.
SECTION 3.26 Exclusive Dealing
-----------------
None.
SECTION 3.27 Lease
-----
See lease listed as Item 1 of Section 3.11 hereof.
SECTION 3.28 Location of Purchased Assets
----------------------------
The Purchased Assets are located at 700 Larkspur Landing Circle, Suite 199,
Larkspur, California 94939.
The computer equipment reference in Items 3 and 4 of Section 3.11 hereof is
subject to the equipment leases referenced therein and the Assumed Real Property
is subject to the lease referenced in Item 1 of Section 3.11 hereof.
SECTION 3.29 Prepaid Expenses
----------------
None.
SECTION 3.30 Certain Agreements
------------------
None.
SECTION 3.31 Year 2000 Compliance
--------------------
None.
SECTION 3.32 Necessary Property
------------------
The Excluded Assets are currently used in operation of REALBID's business.
SECTION 3.33 Bank Accounts
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Wells Fargo Bank
100 Bon Air Center
Greenbrea, California 94904
Account Name: REALBID, LLC
Account Number: Basic Business Checking Branch Plan 0224-352427
Authorized Access: Manager REALBID Emmett DeMoss
Manager REALBID Robert Potter
SECTION 3.34 Valuation of Comps
------------------
None.
SECTION 3.35 Full Disclosure
---------------
None.
REALBID LLC
BALANCE SHEET
As of December 31, 1997
ASSETS
Current Assets
Checking/Savings
Wells Fargo 9.66
Wells Fargo Checking 1,584.51
Total Checking/Savings 1,594.17
Total Current Assets 1,594.17
Other Assets
Organization Costs 3,687.28
Total Other Assets 3,678.28
TOTAL ASSETS 5,272.45
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LIABILITIES & EQUITY
Liabilities
Current Liabilities
Accounts Payable
Accounts Payable -750.00
Total Accounts Payable -750.00
Other Current Liabilities
BAP Lease 12,881.97
ERD Lease 20,000.00
LLC Managers Accrued Fee 150,000.00
Total Other Current Liabilities 182,901.97
Total Current Liabilities 182,151.97
Total Liabilities 182,151.97
Equity
Net Income -176,879.52
Total Equity -176,879.52
TOTAL LIABILITIES & EQUITY 5,272.45
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REALBID LLC
BALANCE SHEET
As of October 31, 1998
ASSETS
Current Assets
Checking/Savings
Wells Fargo Checking 7,481.24
Total Checking/Savings 7,481.24
Accounts Receivable
Accounts Receivable 67,000.00
Total Accounts Receivable 67,000.00
Total Current Assets 74,481.24
Other Assets
Organization Costs 3,687.28
Total Other Assets 3,678.28
TOTAL ASSETS 78,159.52
-----------
LIABILITIES & EQUITY
Liabilities
Current Liabilities
Accounts Payable
Accounts Payable 1,050.98
Total Accounts Payable 1,050.98
Other Current Liabilities
BAP Lease 18,776.79
ERD Lease 26,875.02
LLC Managers Accrued Fee 324,000.00
Total Other Current Liabilities 369,651.81
Total Current Liabilities 370,702.79
Total Liabilities 370,702.79
Equity
Retained Earnings -176,879.52
Net Income -115,663.75
Total Equity -292,543.27
TOTAL LIABILITIES & EQUITY 78,159.52
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REALBID LLC
PROFIT AND LOSS
June through December 1997
Ordinary Income/Expenses
Income
Marketing Service Fee 15,500.00
Total Income 15,500.00
Gross Profit 15,500.00
Expenses
Bank Service Charges 46.00
LLC Managers Fee 150,000.00
Professional Fees
Legal Fees 24,859.14
Total Professional Fees 24,859.14
Rent 7,881.97
Uncategorized Expenses 0.00
Web Site Hosting & Maintenance 9,615.00
Total Expense 192,402.11
Net Ordinary Income -176,902.11
Other Income/Expense
Other Income
Interest Earned 0.22
Total Other Income 0.22
Net Other Income 0.22
Net Income -176,901.89
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REALBID LLC
PROFIT AND LOSS
January through October, 1998
Ordinary Income/Expenses
Income
Marketing Service Fee 223,166.00
Total Income 223,166.00
Cost of Goods Sold
Cost of Goods Sold 20,910.00
Total COGS 20,910.00
Gross Profit 202,256.00
Expenses
Bank Service Charges 108.01
Data Base Modifications 705.00
Direct Property Service Cost
Broadcasting Expenses 4,518.25
Posting Expense 8,605.00
Total Direct Property Service Cost 13,123.25
____ and Subscriptions 500.00
Leased Equipment - Computers 2,360.30
Licenses and Permits 10.00
LLC Managers Fee 250,000.00
Office Expense 16.36
Professional Fees
Accounting 900.00
Legal Fees 3,553.16
Total Professional Fees 4,453.16
Promotions 1,345.00
Rent 28,279.97
Taxes
State 800.00
Total Taxes 800.00
Telephone 400.57
Travel & Ent. 7,568.14
Uncategorized Expenses 0.00
Web Site Hosting & Maintenance 8,250.00
Total Expense 317,919.76
Net Ordinary Income -115,663.76
Other Income/Expense
Other Income
Interest Earned 0.01
Total Other Income 0.01
Net Other Income 0.01
Net Income -115,663.75
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Attachment 3.11 (7) - a
The attached sheet reflects the outstanding account receivables as of October
31, 998 for REALBID. The following comments pertain to these receivables:
Generally, all work assignments into by REALBID are by oral contracts. Upon
completion of an assignment (Generally when information about a subject property
is "broadcast" to specific categories of REALBIDS data base.) an invoice is
issued to the client. In the normal course of business the invoice is for a
fixed amount and due upon receipt. Industry practice however is payment within
30 60 days. Upon certain occasions REALBID will deviate from its normal practice
of billing in order to obtain a new client, experiment with a new category of
property, encourage greater volume from an existing client, etc. The notes below
relate to those invoices that were created by a deviation from REALBIDS normal
billing policy (See the attached A/R Aging Detail report with identifying
numbers corresponding to the footnotes below.)
1. Staubach Retail Investments: This is a new client. REALBID offered him to
be the judge as to whether to pay based upon our value added. Upon recent
inquiry he said he liked the service would use it again and was continuing
to market the property; consequently the amount and timing of the payment
is uncertain.
2. Stephen N. Frankel Real Estate: REALBID proceeded with this transaction
based upon the client paying $500 upon completion of the broadcast and
$2,500 upon the "closing" of the property. The $500 has been paid. There
has not been a "closing". Consequently the timing is uncertain.
3. Prudent Realty Advisors: Prudential inadvertently paid us twice for the
same assignment. They instructed us to hold the money and give them a
credit on the next assignment.
4. Grubb & Ellis (Florence Business Park): The terms for this transaction
were $1,250 upon broadcast and $1,250 upon close. The broker is optimistic
about a close, the timing of which is uncertain.
5. CBRichard Ellis (John Hancock Portfolio): The terms of this transaction
were $1,750 upon the broadcast and an additional $1,750 upon the close of
the property. The initial payment has been made and the broker is
optimistic about the sale of the property the timing of which is uncertain.
6. Manekin Brokerage: The terms for this transaction were $4,000 upon
closing. The closing has occurred, payment has been made (subsequent to
October 31st .) and the cash is in the bank.
7. Boeing: The terms of this transaction are $2,500 upon the close of the
portfolio. The portfolio just fell out of escrow, consequently the timing
of payment is uncertain.
REALBID LLC
A/R Aging Detail
As of October 31, 1998
Type Date Num P.O.# Name Terms Due Date Class
Current
Invoice 10/7/98 108 *** Net 30 11/6/98 Brokers
Invoice 10/12/98 109 *** Net 30 11/11/98 Brokers
Invoice 10/12/98 110 *** Net 30 11/11/98 Brokers
Invoice 10/30/98 113 *** Net 30 11/29/98 Brokers
Total Current
1 - 30
Invoice 9/1/98 71 *** Net 30 10/1/98 Realty Advis....
Invoice 9/3/98 72 *** Net 30 10/3/98 Brokers
Invoice 10/7/98 107 *** 10/7/98 Life Insuranc...
Invoice 9/18/98 74 *** Net 30 10/8/98 Brokers
Payment 10/9/98 ***
Invoice 9/15/98 77 *** Net 30 10/15/98 Brokers
Invoice 9/15/98 78 *** Net 30 10/15/98 Brokers
Invoice 9/15/98 80 *** Net 30 10/15/98 Builders/Dev....
Invoice 9/15/98 81 *** Net 30 10/15/98 Realty Advis....
Invoice 9/15/98 84 *** Net 30 10/15/98 Brokers
Invoice 9/23/98 95 *** Net 30 10/23/98 Realty Advis....
Invoice 9/29/98 102 *** Net 30 10/29/98 Brokers
Invoice 10/30/98 114 *** 10/30/98 Brokers
Invoice 10/30/98 115 *** 10/30/98
Total 1 - 30
31 - 60
Invoice 8/18/98 65 *** Net 30 9/17/98 Realty Advis....
Invoice 9/23/98 94 *** 9/23/98 Brokers
Invoice 9/23/98 96 *** 9/23/98 Brokers
Invoice 9/23/98 98 *** 9/23/98 Corporation
Invoice 8/27/98 69 *** Net 30 9/26/98 Brokers
Invoice 8/28/98 67 *** Net 30 9/27/98 Brokers
Invoice 9/28/98 101 *** 9/28/98 Life Insuranc...
Total 31 - 60
61 - 90
Invoice 7/20/98 55 *** Net 30 8/19/98 Brokers
Total 61 - 90
greater
than 90
Invoice 4/24/98 24 *** 4/26/98 Realty Advis....
Invoice 5/14/98 33 *** Net 30 6/13/98 Brokers
Invoice 5/27/98 38 *** Net 30 6/26/98 Realty Advis....
Invoice 5/27/98 39 *** Net 30 6/26/98 Broker
Total greater than 90
TOTAL
Type Aging Open Balance
Current
Invoice 2,500.00
Invoice 2,500.00
Invoice 2,500.00
Invoice 2,500.00
------------
Total Current 10,000.00
1 - 30
Invoice 30 3,000.00 (1)
Invoice 28 2,500.00
Invoice 24 2,500.00
Invoice 23 2,500.00 (2)
Payment -1,000.00 (3)
Invoice 16 500.00
Invoice 16 500.00
Invoice 16 2,500.00
Invoice 16 2,500.00
Invoice 16 2,500.00 (4)
Invoice 8 2,500.00
Invoice 2 2,500.00
Invoice 1 2,500.00
Invoice 1 2,500.00
------------
Total 1 - 30 28,000.00
31 - 60
Invoice 44 2,500.00
Invoice 38 2,500.00
Invoice 38 1,500.00
Invoice 38 2,000.00 (7)
Invoice 35 750.00
Invoice 34 5,000.00
Invoice 33 2,500.00
------------
Total 31 - 60 16,750.00
61 - 90
Invoice 73 1,750.00 (5)
------------
Total 61 - 90 1,750.00
greater
than 90
Invoice 190 1,500.00
Invoice 140 4,000.00 (6)
Invoice 123 2,500.00
Invoice 123 2,500.00
------------
Total greater than 90 10,500.00
TOTAL 67,800.00
*** Portions of this page have been omitted pursuant to a request for
Confidential Treatment and filed separately with the Commission.
Attachment 3.24(c)
REALBID is a disposition marketing tool that can help quickly identify, contact,
inform and capture potential investors and help organize competitive, efficient
and orderly sales by leveraging current communication technology. Here is how
it works.
First we develop a Web site specifically for the property using your executive
summary. This will usually include property information, maps, site plans,
pictures, summary financials, broker contact information and confidentiality
agreement. For complete Posting Instructions please click here. Current
----
examples can be viewed at the Bid Center.
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We then identify and match investors with that property using REALBID's Buyer
-----
Profile database. The investors whose profiles are in REALBID's database
- -------
transacted over $50 billion last year. It includes the specific investment
criteria of the pension fund managers, REITs, opportunistic funds, private
investors and insurance companies. (Go to Buyer Profile to include or update
-------------
your investment objectives in the database.)
A broadcast announcement is then sent to matched investors by email, fax or
phone. The announcement briefly describes the disposition, identifies the
broker and invites investors to view property and market information, execute
the confidentiality agreement and register online or to contact the broker
directly. You control exposure and access by choosing one of three increasingly
restrictive broadcast protocols. All questions, registrations and responses are
directed to the broker for processing.
REALBID automates and accelerates the disposition process and provides an extra
level of assurance that you are achieving highest price and the most efficient
execution.
REALBID does not:
. Participate in commissions,
. Act as a broker,
. Negotiate with potential investors nor
. Independently prepare any sales documentation
The standard price for a REALBID posting and broadcasting is $3,500 per
property. On average that represents less than 3 basis points. Significant price
breaks are offered for contracts that involve multiple transactions.
CONTACT INFORMATION:
Please contact us directly via any of the following:
Email: Bob Potter
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Telephone: (415) 464-4916
Fax: (415) 464-4944
Address: 700 Larkspur Landing Circle, Suite #199, Larkspur, CA 94939