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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the Securities Exchange Act o f 1934
May 15, 2001
Date of Report
(Date of earliest event reported)
TEAM SPORTS ENTERTAINMENT, INC.
-------------------------------
(Exact name of registrant as specified in its charter)
Delaware 0-23100 22-2649848
-------- -------- ----------
(State or other jurisdiction (Commission (IRS Employer
of incorporation) File Number) Identification No.)
1111 South Main, Suite 127, Grapevine, TX 76051
------------------------------------------------
(Address of principal executive offices)
(817) 410-5708
--------------
Registrant's telephone number
ITEM 2 ACQUISITION OR DISPOSITION OF ASSETS
ACQUISITION OF MAXX MOTORSPORTS, INC.
- -------------------------------------
On May 15, 2001, the Team Sports Entertainment, Inc. ("Team" or the "Company")
(formerly Logisoft Corp.) completed the acquisition of Maxx Motorsports, Inc.
("MAXX") by issuing 7,750,000 shares of its common stock. A special committee
of the independent Directors of Team reviewed and approved the acquisition.
There were no material previous relationships between the Company and the
sellers of MAXX.
MAXX through its wholly owned subsidiary, Team Racing Auto Circuit, LLC
("TRAC") will own, operate, and sanction a stock car racing league designed to
provide content for television and tracks while expanding the existing base of
stock car fans. TRAC will initially consist of multi-car teams, strategically
positioned in major North American television markets located near major
motorsports venues. Each team will represent the city or state where it is
located. The initial TRAC racing season, planned to start in 2003, will
consist of a regular season race schedule, a playoff race schedule, and a
Championship Race. TRAC will incorporate the use of aerodynamically identical
cars (Aerostock), fuel-injection engines and other innovative competition
standards to increase parity among the teams without diminishing the
entertainment value. TRAC intends to attract multiple manufacturers who
currently are involved in motorsports worldwide, but may not be currently
involved in the major stock car racing series in America.
TRAC will be structured as a single-entity league to allow for centralized
management, economies of scale in purchasing, strict operational standards and
cost controls at the team level. Revenue sharing systems will be enacted to
ensure parity and fair allocation of revenue among teams.
Initial TRAC funds will be derived through the sales of operating rights to
city/state-based racing teams. Racing team owners will own and operate each
city/state team and will be responsible for developing its fan base. TRAC will
seek strategic alliances with companies in the areas of television,
sports/entertainment marketing and public relations. Once racing begins, TRAC
will generate revenue through event ticket sales, league corporate
sponsorships, television and other multimedia contracts, merchandise sales,
licensing/royalty fees, team fees/dues, and sales of additional expansion
teams.
TRAC's long-term business plan includes expanding its team base not only in
North America, but also internationally.
2
DISPOSITION OF LOGISOFT COMPUTER PRODUCTS CORP. AND
- ---------------------------------------------------
ESTOREFRONTS.NET CORP
- ---------------------
On May 15, 2001 and pursuant to the agreement to acquire MAXX, the Company
completed the sale of its interest in its wholly owned subsidiaries, Logisoft
Computer Products Corp. and eStorefronts.net Corp (collectively referred to as
the "Former Subsidiaries"). The Former Subsidiaries were purchased by a group
of Team shareholders led by Robert Lamy, the founder of the Former
Subsidiaries, in return for 12,000,000 shares of Team common stock. The
Company has retired the Team shares received from the Lamy group. A special
committee of the independent Directors of Team reviewed and approved the
transaction.
EQUITY FUNDING
- --------------
In addition to completing the acquisition of Maxx, and as a part of the
definitive stock purchase agreement, Team has received $7,125,000 in equity
funding. In return for the $7,125,000 in cash received by Team, the Company
issued 28,500,000 shares of its common stock. In addition, the company issued
warrants to the investors entitling them to purchase a total of 14,250,000
shares at a purchase price of $1.00 per share.
ITEM 7. FINANCIAL STATEMENTS AND EXHIBITS
No financial statements are filed herewith. The Registrant shall file
financial statements by amendment hereto not later than 60 days after the date
that this initial report on Form 8-K must be filed.
3
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
Registrant has duly caused this report to be signed on its behalf by the
undersigned hereunto duly authorized.
TEAM SPORTS ENTERTAINMENT, INC.
By/s/ Terry Washburn
--------------------
Terry Washburn
Chief Executive Officer
Date: May 29, 2001
4
EXHIBITS
Exhibit Page
Number Description Number
10.1 Agreement and Plan of Reorganization by and among Logisoft 6
Corp., Jon Pritchett, M.E. Durschlag, Charles Jeter,
William Bradshaw, Robert Stadel, Dan Neppl, Cale
Yarborough, Godley Morris Group, LLC, Brian Leahy, Lance
Leslie, Richard Clark and Robert Wussler. The Registrant
has not filed the exhibits and schedules to the Agreement
and Plan of Reorganization on the basis that these are not
material for the purpose of this filing; however,
Registrant agrees to furnish such documents to the
Securities and Exchange Commission upon request.
10.2 Amended and Restated Agreement and Plan of Corporate 28
Separation. The Registrant has not filed the exhibits and
schedules to the Agreement and Plan of Reorganization on
the basis that these are not material for the purpose of
this filing; however, Registrant agrees to furnish such
documents to the Securities and Exchange Commission upon
request.
5
EXHIBIT 10.1
AGREEMENT AND PLAN OF REORGANIZATION BY AND AMONG
LOGISOFT CORP., JON PRITCHETT, M.E. DURSCHLAG,
CHARLES JETER AND WILLIAM BRADSHAW, ROBERT STADEL,
DAN NEPPL, CALE YARBOROUGH, GODLEY MORRIS GROUP, LLC,
BRIAN LEAHY, LANCE LESLIE, RICHARD CLARK and ROBERT WUSSLER
THIS AGREEMENT AND PLAN OF REORGANIZATION ("Agreement") is entered into
this 9th of May, 2001, by and among LOGISOFT CORP., a Delaware corporation
(hereinafter referred to as "Buyer"); and JON PRITCHETT, M.E. DURSCHLAG,
CHARLES JETER, WILLIAM BRADSHAW, ROBERT STADEL, DAN NEPPL, CALE YARBOROUGH,
GODLEY MORRIS GROUP, LLC, BRIAN LEAHY, LANCE LESLIE, RICHARD CLARK and ROBERT
WUSSLER or their assigns (hereinafter collectively referred to as "Seller"),
being all of the shareholders of MAXX MOTORSPORTS, INC., a South Carolina
corporation (hereafter referred to as "Company").
WHEREAS, Seller is the owner of record and beneficially owns Ten Thousand
(10,000) shares of the issued and outstanding shares of Common Stock of the
Company (the "Shares"); and
WHEREAS, the Shares represent 100% of all the issued and outstanding
shares of the Company; and
WHEREAS, Seller desires to sell all of the Shares to Buyer, and Buyer
desires to purchase the Shares, upon the terms and conditions set forth herein;
WHEREAS, the parties intend that the exchange of Shares for shares of
Buyer's common stock, as contemplated herein, qualify as a tax free transaction
under Section 368 of the Internal Revenue Code;
NOW, THEREFORE, in consideration of the mutual promises and covenants
contained herein, and for other good and valuable consideration, the receipt,
adequacy and sufficiency of which are hereby acknowledged, and subject to the
accuracy of the representations and warranties of the parties, the parties
hereto agree as follows:
I.
SALE AND PURCHASE OF THE SHARES
1.1 SALE AND PURCHASE. Subject to the terms and conditions hereof, at
the Closing (as defined in paragraph 1.2 below), Seller agrees to sell, assign,
transfer, convey and deliver to Buyer, and Buyer agrees to purchase from
Seller, the Shares listed in Exhibit "A", attached hereto, which together
constitute 100% of the issued and outstanding Shares of Common Stock of the
Company.
6
1.2 CLOSING. The purchase shall be consummated at a closing ("Closing")
to take place on or before May 15, 2001 ("Closing Date"). The closing of this
purchase shall be concurrent with the closing of the Agreement and Plan of
Corporate Separation described in 1.5 below.
1.3 PURCHASE PRICE. The aggregate purchase price ("Purchase Price") for
the Shares shall be Seven Million Seven Hundred Fifty Thousand (7,750,000)
shares of common stock of the Buyer ("Buyer Shares"). The purchase price
shall be paid at Closing by issuance and delivery of Buyer's Shares to Seller
against receipt of certificates representing the Shares, duly endorsed for
transfer to Buyer.
1.4 ALLOCATION OF SHARES. All shares of stock of Buyer to be issued to
Seller pursuant to this Agreement shall be issued to the respective Sellers in
proportion to their respective ownership of stock of the Company as described
in Exhibit "A" hereto.
1.5 OTHER AGREEMENTS. At the Closing, the indicated parties shall
execute and deliver the following additional agreements in substantially the
form attached hereto:
1.1-Employment Agreement between Buyer and Jon Pritchett attached hereto as
Exhibit "B".
1.2-Stock Purchase Agreement between Buyer and Maxx Motorsports Liability
Group attached hereto as Exhibit "C".
1.3-Agreement and Plan of Corporate Separation between Buyer, Logisoft
Computer Products Corp., eStorefronts.net Corp. and the Lamy Group as defined
in that agreement (the "Split-Off") attached hereto as Exhibit"D".
1.4-Employment Agreements between Company, M.E. Durschlag and Charles Jeter
attached hereto as Exhibits "E" and "F", respectively.
1.5-Stock certificates representing all of the Shares, duly endorsed to Buyer
and in blank or assignments separate from certificates, transferring the Shares
from Seller to Buyer.
1.6 BASIC AGREEMENTS AND TRANSACTIONS DEFINED. This Agreement and
other agreements listed in paragraph 1.5, are sometimes referred to as the
"Basic Agreement". The transactions contemplated by the Basic Agreement are
sometimes referred to as the "Transactions".
7
II.
REPRESENTATIONS AND WARRANTIES
2.1 REPRESENTATIONS AND WARRANTIES OF SELLER. Each Seller represents and
warrants to Buyer as follows:
(a) TITLE TO THE SHARES. At Closing, Seller shall own of record and
beneficially the number of the Shares listed in Exhibit "A", of the
Company, free and clear of all liens, encumbrances, pledges, claims,
options, charges and assessments of any nature whatsoever, with full right
and lawful authority to transfer the Shares to Buyer. No person has any
preemptive rights or rights of first refusal with respect to any of the
Shares. There exists no voting agreement, voting trust, or outstanding
proxy with respect to any of the Shares. There are no outstanding rights,
options, warrants, calls, commitments, or any other agreements of any
character, whether oral or written, with respect to the Shares.
(b) AUTHORITY. Seller has full power and lawful authority to
execute and deliver the Basic Agreements and to consummate and perform the
Transactions contemplated thereby. The Basic Agreements constitute (or
shall, upon execution, constitute) valid and legally binding obligations
upon Seller, enforceable in accordance with their terms. Neither the
execution and delivery of the Basic Agreements by Seller, nor the
consummation and performance of the Transactions contemplated thereby,
conflicts with, requires the consent, waiver or approval of, results in a
breach of or default under, or gives to others any interest or right of
termination, cancellation or acceleration in or with respect to, any
agreement by which Seller is a party or by which Seller or the Company or
any of his respective properties or assets are bound or affected.
(c) INVESTMENT INTENT. Seller is acquiring the Shares for his own
account, for investment purposes only, and not with a view to the sale or
distribution of any part thereof, and Seller has no present intention of
selling, granting participation in, or otherwise distributing the same.
Seller understands the specific risks related to an investment in the
Buyer Shares, especially as it relates to the financial performance of the
Company.
2.2 REPRESENTATIONS AND WARRANTIES OF COMPANY. The Company
represents and warrants to Buyer as follows:
(A) ORGANIZATION. The Company is a corporation duly incorporated, validly
existing and in good standing under the laws of the state of South Carolina.
The Company has all requisite corporate power and authority to own, lease
and operate its properties and to carry on its business. The Company is
duly qualified and in good standing as a foreign corporation in each
jurisdiction where its ownership of property or operation of its business
requires qualification.
(B) AUTHORIZED CAPITALIZATION. The authorized capitalization of
8
the Company consists of One Hundred Thousand (100,000) shares of Common
Stock, no par value, of which Ten Thousand (10,000) shares have been
issued and are outstanding. The Shares have been duly authorized,
validly issued, are fully paid and nonassessable with no personal
liability attaching to the ownership thereof and were offered, issued,
sold and delivered by the Company in compliance with all applicable state
and federal laws. The Company does not have any outstanding rights,
options, warrants, calls, commitments, conversion or any other agreements
of any character, whether oral or written, obligating it to issue any
shares of its capital stock, whether authorized or not. The Company is
not a party to and is not bound by any agreement, contract, arrangement or
understanding, whether oral or written, giving any person or entity any
interest in, or any right to share, participate in or receive any portion
of, the Company's income, profits or assets, or obligating the Company to
distribute any portion of its income, profits or assets.
(c) AUTHORITY. The Company has full power and lawful authority to
execute and deliver the Basic Agreements and to consummate and perform the
Transactions contemplated thereby. The Basic Agreements constitute (or
shall, upon execution, constitute) valid and legally binding obligations
upon the Company, enforceable in accordance with their terms. Neither the
execution and delivery of the Basic Agreements by the Company, nor the
consummation and performance of the Transactions contemplated thereby,
conflicts with, requires the consent, waiver or approval of, results in a
breach of or default under, or gives to others any interest or right of
termination, cancellation or acceleration in or with respect to, any
agreement by which the Company is a party or by which the Company or any
of its properties or assets are bound or affected.
(d) COMPANY FINANCIAL STATEMENTS. The Company Financial Statements
are complete in all material respects, were prepared in accordance with
generally accepted accounting principles applied on a basis consistent
with prior periods and fairly present the financial position of the
Company as of March 31, 2001.
(e) NO UNDISCLOSED LIABILITIES. Except as set forth in the Company
Financial Statements previously delivered to Buyer and as set forth on
Exhibit "B", Seller is not aware of any liabilities for which the Company
is liable or will become liable in the future.
(f) RACING LEAGUE. Prior to Closing, the Company shall have
legally established the Team Racing Auto Circuit (TRAC") Racing League, a
copy of its charter is attached hereto as Exhibit "G".
(g) TAXES. The Company has filed all federal, state, local tax and
other returns and reports which were required to be filed with respect to
all taxes, levies, imposts, duties, licenses and registration fees,
charges or withholdings of every nature whatsoever ("Taxes"), and their
exists a substantial basis in law and fact for all positions taken in such
reports. No waivers of periods of limitation are in effect with respect
to any taxes arising from and attributable to the ownership of properties
or operations of the business of the Company.
9
(h) PROPERTIES. The Company has good and marketable title to all
its personal property, equipment, processes, patents, copyrights,
trademarks, franchises, licenses and other properties and assets (except
for items leased or licensed to the Company), including all property
reflected in the Company Financial Statements (except for assets reflected
therein which have been sold in the normal course of its business where
the proceeds from such sale or other disposition have been properly
accounted for in the financial statements of the Company), in each case
free and clear of all liens, claims and encumbrances of every kind and
character, except as set forth in Exhibit "H". The Company has no
ownership interest in any real property. The assets and properties owned,
operated or leased by the Company and used in its business are in good
operating condition in all material respects, reasonable wear and tear
excepted, and suitable for the uses for which intended.
(i) BOOKS AND RECORDS. The books and records of the Company are
complete and correct in all material respects, have been maintained in
accordance with good business practices and accurately reflect in all
material respects the business, financial condition and results of
operations of the Company as set forth in the Company Financial
Statements.
(j) INSURANCE. Exhibit "I" contains an accurate and complete list
and brief description of all performance bonds and policies of insurance,
including fire and extended coverage, general liability, workers
compensation, products liability, property, and other forms of insurance
or indemnity bonds held by the Company. The Company is not in default
with respect to any provisions of any such policy or indemnity bond and
has not failed to give any notice or present any claim thereunder in due
and timely fashion. All policies of insurance and bonds are: (1) in full
force and effect; (2) are sufficient for compliance by the Company with
all requirements of law and of all agreements and instruments to which the
Company is a party; (3) are valid, outstanding and enforceable; (4)
provide adequate insurance coverage for the assets, business and
operations of the Company in amounts at least equal to customary coverage
in the Company's industry; (5) will remain in full force and effect
through the Closing; and (6) will not be affected by, and will not
terminate or lapse by reason of, the transactions contemplated by this
Agreement.
(k) MATERIAL CONTRACTS. Except as set forth in Exhibit "J", the
Company has no purchase, sale, commitment, or other contract, the breach
or termination of which would have a materially adverse effect on the
business, financial condition, results of operations, assets, liabilities,
or prospects of the Company.
10
(l) AUTHORIZATIONS. The Company has no licenses, permits, approvals
and other authorizations from any governmental agencies and any other
entities that are necessary for the conduct of its business, except as set
forth in Exhibit "K" which contains a list of all licenses, permits,
approvals, and other authorizations, as well as a list of all copyrights,
patents, trademarks, tradenames, servicemarks, franchises, licenses and
other permits, each of which is valid and in full force and effect.
(m) NO POWERS OF ATTORNEY. The Company has no powers of attorney or
similar authorizations outstanding.
(n) COMPLIANCE WITH LAWS. The Company is not in violation of any
federal, state, local or other law, ordinance, rule or regulation
applicable to its business, and have not received any actual or threatened
complaint, citation or notice of violation or investigation from any
governmental authority.
(o) COMPLIANCE WITH ENVIRONMENTAL LAWS. The Company is in
compliance with all applicable pollution control and environmental laws,
rules and regulations. The Company has no environmental licenses, permits
and other authorizations held by the Company relative to compliance with
environmental laws, rules and regulations.
(p) NO LITIGATION. There are no material actions, suits, claims,
complaints or proceedings pending or threatened against the Company, at
law or in equity, or before or by any governmental department, commission,
court, board, bureau, agency or instrumentality; and there are no facts
which would provide a valid basis for any such action, suit or proceeding.
There are no orders, judgments or decrees of any governmental authority
outstanding which specifically apply to the Company or any of its assets.
11
(q) VALIDITY. All contracts, agreements, leases and licenses to
which the Company is a party or by which it or any of its properties or
assets are bound or affected, are valid and in full force and effect; and
no breach or default exists, or upon the giving of notice or lapse of
time, or both, would exist, on the part of the Company or by any other
party thereto.
(r) NO ADVERSE CHANGES. Since March 31, 2001, there have been no
actual or threatened developments of a nature that is materially adverse
to or involves any materially adverse effect upon the business, financial
condition, results of operations, assets, liabilities, or prospects of the
Company.
(s) FINANCIAL CONDITION. Immediately after the Closing, the
Company assets shall include,
but not be limited to a $50,000 organization cost for establishment of the
TRAC Racing League and no liabilities except for those listed on Exhibit
"L."
(t) FULL DISCLOSURE. All statements of Company contained in the
Basic Agreements and in any other written documents delivered by or on
behalf of the Company to Buyer are true and correct in all material
respects and do not omit any material fact necessary to make the
statements contained therein not misleading in light of the circumstances
under which they were made. There are no facts known to Company which
could have a materially adversely affect upon the business, financial
condition, results of operations, assets, liabilities, or prospects of the
Company, which have not been disclosed to Buyer in the Basic Agreements.
3. REPRESENTATIONS AND WARRANTIES OF BUYER. Buyer represents and
warrants to Seller and Company as follows:
(a) ORGANIZATION. The Buyer is a corporation duly incorporated,
validly existing and in good standing under the laws of the state of
Delaware. The Buyer has all requisite corporate power and authority to
own, lease and operate its properties and to carry on its business. The
Buyer is duly qualified and in good standing as a foreign corporation in
each jurisdiction where its ownership of property or operation of its
business requires qualification.
(b) AUTHORIZED CAPITALIZATION. The authorized capitalization of the
Buyer at Closing will consist of Sixty Million (60,000,000) shares of
Common Stock, $.0001 par value, of which Thirty-One Million Six Thousand
Eight Hundred Seventy-Five (31,006,875) shares will be issued and
outstanding. All shares have been duly authorized, validly issued, are
fully paid and nonassessable with no personal liability attaching to the
ownership thereof and were offered, issued, sold and delivered by the
Buyer in compliance with all applicable state and federal laws. Buyer is
not a party to and is not bound by any agreement, contract, arrangement or
understanding, whether oral or written, giving any person or entity any
interest in, or any right to share, participate in or receive any portion
of, the Buyer's income, profits or assets, or obligating the Buyer to
distribute any portion of its income, profits or assets.
12
(c) AUTHORITY. Buyer has full power and lawful authority to execute
and deliver the Basic Agreements and to consummate and perform the
Transactions contemplated thereby. The Basic Agreements constitute (or
shall, upon execution, constitute) valid and legally binding obligations
upon Buyer, enforceable in accordance with their terms. Neither the
execution and delivery of the Basic Agreements by Buyer, nor the
consummation and performance of the Transactions contemplated thereby,
conflicts with, requires the consent, waiver or approval of, results in a
breach of or default under, or gives to others any interest or right of
termination, cancellation or acceleration in or with respect to, any
agreement by which Buyer is a party or by which Buyer or any of its
respective properties or assets are bound or affected.
(d) BUYER'S FINANCIAL STATEMENTS. The Buyer's Financial Statements
as filed in its 10-KSB on April 2, 2001are complete, were prepared in
accordance with generally accepted accounting principles applied on a
basis consistent with prior periods and fairly present the financial
position of the Buyer as of December 31, 2000.
(e) NO UNDISCLOSED LIABILITIES. Except as set forth in the Buyer's
Financial Statements previously delivered to Seller and as set forth on
Exhibit "M", Buyer is not aware of any material liabilities for which the
Buyer is liable or will become liable in the future.
(f) TAXES. Except as set forth in Exhibit "N", the Buyer has filed
all federal, state, local tax and other returns and reports which were
required to be filed with respect to all taxes, levies, imposts, duties,
licenses and registration fees, charges or withholdings of every nature
whatsoever ("Taxes"), and their exists a substantial basis in law and fact
for all positions taken in such reports. No waivers of periods of
limitation are in effect with respect to any taxes arising from and
attributable to the ownership of properties or operations of the business
of the Company.
(g) PROPERTIES. The Buyer has good and marketable title to all its
personal property, equipment, processes, patents, copyrights, trademarks,
franchises, licenses and other properties and assets (except for items
leased or licensed to the Buyer), including all property reflected in the
Buyer's Financial Statements (except for assets reflected therein which
have been sold in the normal course of its business where the proceeds
from such sale or other disposition have been properly accounted for in
the financial statements of the Buyer), in each case free and clear of all
liens, claims and encumbrances of every kind and character, except as set
forth in Exhibit "O". The Buyer, after completion the Split-Off, will
have no ownership interest in any real property. The assets and
properties owned, operated or leased by the Buyer and used in its business
are in good operating condition, reasonable wear and tear excepted, and
suitable for the uses for which intended.
13
(h) BOOKS AND RECORDS. The books and records of the Buyer are
complete and correct in all material respects, have been maintained in
accordance with good business practices and accurately reflect in all
material respects the business, financial condition and results of
operations of the Buyer as set forth in the Buyer's Financial Statements.
(i) INSURANCE. Exhibit "P" contains an accurate and complete list
and brief description of all performance bonds and policies of insurance,
including fire and extended coverage, general liability, workers
compensation, products liability, property, and other forms of insurance
or indemnity bonds held by the Buyer. The Buyer is not in default with
respect to any provisions of any such policy or indemnity bond and has not
failed to give any notice or present any claim thereunder in due and
timely fashion. All policies of insurance and bonds are: (1) in full
force and effect; (2) are sufficient for compliance by the Buyer with all
requirements of law and of all agreements and instruments to which the
Buyer is a party; (3) are valid, outstanding and enforceable; (4) provide
adequate insurance coverage for the assets, business and operations of the
Buyer in amounts at least equal to customary coverage in the Buyer's
industry; (5) will remain in full force and effect through the Closing.
However, the transactions contemplated by this Agreement may affect the
policies listed on Exhibit "P".
(j) TRANSACTIONS WITH CERTAIN PERSONS. Except as disclosed in
Exhibit "Q", the Buyer has no outstanding agreement, understanding,
contract, lease, commitment, loan or other arrangement with any officer,
director or 10% shareholder of the Buyer or any Affiliate (as defined
herein) of any such person. For purposes of this Agreement, the term
"Affiliate" shall be defined as follows: An Affiliate of a specified
Person is (i) any Person that directly or indirectly through one or more
intermediaries controls or is controlled by or is under common control
with such specified person, (ii) any Person which is an officer, director,
partner or trustee of, or serves in a similar capacity with respect to,
such specified Person, (iii) any Person which is directly or indirectly
the owner of more than ten percent (10%) of any class of equity securities
of such specified Person and (iv) the parents, siblings, children or
spouse of such specified Person. Additionally, for purposes of this
Agreement, the term "Person" shall mean: Any individual, corporation,
business trust, estate, trust, partnership, limited partnership,
association, joint venture, limited liability company, governmental
subdivision, agency or instrumentality or any other legal or commercial
entity."
(k) MATERIAL CONTRACTS. The Buyer has no purchase, sale,
commitment, or other contract, the breach or termination of which would
have a materially adverse effect on the business, financial condition,
results of operations, assets, liabilities, or prospects of the Buyer.
(l) AUTHORIZATIONS. The Buyer has no licenses, permits, approvals
and other authorizations from any governmental agencies and any other
entities that are necessary for the conduct of its business, except as set
forth in Exhibit "R" which contains a list of all licenses, permits,
approvals, and other authorizations, as well as a list of all copyrights,
patents, trademarks, tradenames, servicemarks, franchises, licenses and
other permits, each of which is valid and in full force and effect.
14
(m) NO POWERS OF ATTORNEY. The Buyer has no powers of attorney or
similar authorizations outstanding.
(n) COMPLIANCE WITH LAWS. The Buyer is not, and as a result of the
transactions contemplated hereby, will not be, in violation of any
federal, state, local or other law, ordinance, rule or regulation
applicable to its business, and has not received any actual or threatened
complaint, citation or notice of violation or investigation from any
governmental authority, including the Securities and Exchange Commission.
(o) COMPLIANCE WITH ENVIRONMENTAL LAWS. The Buyer is in compliance
with all applicable pollution control and environmental laws, rules and
regulations. The Buyer has no environmental licenses, permits and other
authorizations held by the Buyer relative to compliance with environmental
laws, rules and regulations.
(p) LITIGATION. Except as disclosed in Exhibit "S", there are no
material actions, suits, claims, complaints or proceedings pending or
threatened against the Buyer, at law or in equity, or before or by any
governmental department, commission, court, board, bureau, agency or
instrumentality; and there are no facts which would provide a valid basis
for any such action, suit or proceeding. There are no orders, judgments
or decrees of any governmental authority outstanding which specifically
apply to the Company or any of its assets.
(q) VALIDITY. All contracts, agreements, leases and licenses to
which the Buyer is a party or by which it or any of its properties or
assets are bound or affected, are valid and in full force and effect; and
no breach or default exists, or upon the giving of notice or lapse of
time, or both, would exist, on the part of the Buyer or by any other party
thereto.
(r) FINANCIAL CONDITION. At Closing, the Buyer's assets shall
consist of Eight Million One Thousand Two Hundred Fifty Dollars
($8,001,250) in cash, short-term investments and other assets, including
all assets to operate the chips computer service business and the Buyer's
accrued but unpaid liabilities shall not exceed $30,000 at Closing.
(s) FULL DISCLOSURE. All statements of Buyer contained in the Basic
Agreements and in any other written documents delivered by or on behalf of
the Buyer to Seller are true and correct in all material respects and do
not omit any material fact necessary to make the statements contained
therein not misleading in light of the circumstances under which they were
made. There are no facts known to Buyer which could have a materially
adversely affect upon the business, financial condition, results of
operations, assets, liabilities, or prospects of the Buyer, which have not
been disclosed to Buyer in the Basic Agreements.
15
III.
COVENANTS
3.1 COVENANTS OF COMPANY. Company covenants and agrees that from the
date hereof to the Closing without the prior written consent of Buyer:
(a) ORDINARY COURSE OF BUSINESS. Company will operate the business
of the Company only in the ordinary course and will use their best efforts
to preserve the Company's business, organization, goodwill and
relationships with persons having business dealings with them.
(b) MAINTAIN PROPERTIES. Company will maintain its properties in
good working order, repair and condition (reasonable wear and use
excepted) and cause the Company to take all steps reasonably necessary to
maintain in full force and effect its patents, trademarks, servicemarks,
trade names, brand names, copyrights and other intangible assets.
(c) COMPENSATION. Company will not (1) enter into or alter any
employment agreements; (2) grant any increase in compensation other than
normal merit increases consistent with the Company's general prevailing
practices to any officer or employee; or (3) enter into or alter any labor
or collective bargaining agreement or any bonus or other employee fringe
benefit.
(d) NO INDEBTEDNESS. Company will not create, incur, assume,
guarantee or otherwise become liable with respect to any obligation for
borrowed money, indebtedness, capitalized lease or similar obligation,
except in the ordinary course of business consistent with past practices
where the entire net proceeds thereof are deposited with and used by and
in connection with the business of the Company.
(e) MAINTAIN BOOKS. Company will maintain its books, accounts and
records in the usual, regular ordinary and sound business manner and in
accordance with generally accepted accounting principles applied on a
basis consistent with past practices.
(f) NO AMENDMENTS. Company will not amend its corporate charter or
bylaws (or similar documents) without prior consent of Buyer and Company
will maintain their corporate existence, licenses, permits, powers and
rights in full force and effect.
(g) TAXES AND ACCOUNTING MATTERS. Company will file when due all
federal, state and local tax returns and reports which shall be accurate
and complete, including but not limited to income, franchise, excise, ad
valorem, and other taxes with respect to its business and properties, and
to pay as they become due all taxes or assessments, except for taxes for
which adequate reserves are established and which are being contested in
good faith by appropriate proceedings. Company will not change their
accounting methods or practices or any depreciation, amortization or
inventory valuation policies or practices.
16
(h) NO DISPOSITION OR ENCUMBRANCE. Except in the ordinary course of
business consistent with past practice. Company will not (1) dispose of
or encumber any of its properties and assets, (2) discharge or satisfy any
lien or encumbrance or pay any obligation or liability (fixed or
contingent) except for previously scheduled repayment of debt, (3) cancel
or compromise any debt or claim, (4) transfer or grant any rights under
any concessions, leases, licenses, agreements, patents, inventions,
proprietary technology or process, trademarks, servicemarks or copyrights,
or with respect to any know-how, or (5) enter into or modify in any
material respect or terminate any existing license, lease, or contract.
(i) INSURANCE. Company will maintain in effect all its current
insurance policies.
(j) NO SECURITIES ISSUANCES. Company will not issue any shares of
any class of capital stock, or enter into any contract, option, warrant or
right calling for the issuance of any such shares of capital stock, or
create or issue any securities convertible into any securities of the
Company except for the transactions contemplated herein.
(k) NO DIVIDENDS. Company will not declare, set aside or pay any
dividends or other distributions of any nature whatsoever.
(l) CONTRACTS. Company will not enter into or assume any contract,
agreement, obligation, lease, license, or commitment except in the
ordinary course of business consistent with past practice or as
contemplated by this Agreement.
(m) NO BREACH. Company will not do any act or omit to do any act
which would cause a breach of any contract, commitment or obligation of
the Company.
(n) DUE COMPLIANCE. Company will not comply with all laws,
regulations, rules and ordinances applicable to it and to the conduct of
its business.
(o) NO WAIVERS OF RIGHTS. Company will not amend, terminate or
waive any material right whether or not in the ordinary course of
business.
(p) CAPITAL COMMITMENTS. Company will not make or commit to make
any capital expenditure, capital addition or capital improvement.
(q) NO RELATED PARTY TRANSACTIONS. Company will not make any loans
to, or enter into any transaction, agreement, arrangement or understanding
or any other nature with, any officer, director or employee of the
Company.
17
(r) NOTICE OF CHANGE. Company will promptly advise Buyer in
writing of any material adverse change, or the occurrence of any event
which involves any substantial possibility of a material adverse change,
in the business, financial condition, results of operations, assets,
liabilities or prospects of the Company.
(s) CONSENTS. Company will use its, best good faith efforts to
obtain the consent or approval of each person or entity whose consent or
approval is required for the consummation of the Transactions contemplated
hereby and to do all things necessary to consummate the Transactions
contemplated by the Basic Agreements.
3.2 COVENANTS OF BUYER. Buyer covenants and agrees that from the date
hereof to the Closing without the prior written consent of Seller:
(a) ORDINARY COURSE OF BUSINESS. Buyer will operate the business in
the ordinary course and will use their best efforts to preserve the
Company's business, organization, goodwill and relationships with persons
having business dealings with them.
(b) MAINTAIN PROPERTIES. Buyer will maintain all of its properties
in good working order, repair and condition (reasonable wear and use
excepted) and cause all steps reasonably necessary to maintain in full
force and effect its patents, trademarks, servicemarks, trade names, brand
names, copyrights and other intangible assets.
(c) COMPENSATION. Buyer will not (1) enter into or alter any
employment agreements; (2) grant any increase in compensation other than
normal merit increases consistent with the Company's general prevailing
practices to any officer or employee; or (3) enter into or alter any labor
or collective bargaining agreement or any bonus or other employee fringe
benefit.
(d) NO INDEBTEDNESS. Buyer will not create, incur, assume,
guarantee or otherwise become liable with respect to any obligation for
borrowed money, indebtedness, capitalized lease or similar obligation,
except in the ordinary course of business consistent with past practices
where the entire net proceeds thereof are deposited with and used by and
in connection with the business of the Company.
(e) MAINTAIN BOOKS. Buyer will maintain its books, accounts and
records in the usual, regular ordinary and sound business manner and in
accordance with generally accepted accounting principles applied on a
basis consistent with past practices.
(f) NO AMENDMENTS. Buyer will not amend its corporate charter or
bylaws (or similar documents) without prior consent of Seller and will
cause the Company to maintain its corporate existence, licenses, permits,
powers and rights in full force and effect.
18
(g) TAXES AND ACCOUNTING MATTERS. Buyer will file when due all
federal, state and local tax returns and reports which shall be accurate
and complete, including but not limited to income, franchise, excise, ad
valorem, and other taxes with respect to its business and properties, and
to pay as they become due all taxes or assessments, except for taxes for
which adequate reserves are established and which are being contested in
good faith by appropriate proceedings. Buyer will not permit the Company
to change their accounting methods or practices or any depreciation,
amortization or inventory valuation policies or practices.
(h) NO DISPOSITION OR ENCUMBRANCE. Except as provided for in the
Agreement and Plan of Corporate Separation and in the ordinary course of
business consistent with past practice, Buyer will not (1) dispose of or
encumber any of its properties and assets, (2) discharge or satisfy any
lien or encumbrance or pay any obligation or liability (fixed or
contingent) except for previously scheduled repayment of debt, (3) cancel
or compromise any debt or claim, (4) transfer or grant any rights under
any concessions, leases, licenses, agreements, patents, inventions,
proprietary technology or process, trademarks, servicemarks or copyrights,
or with respect to any know-how, or (5) enter into or modify in any
material respect or terminate any existing license, lease, or contract.
(i) INSURANCE. Buyer will maintain in effect all its current
insurance policies.
(j) NO DIVIDENDS. Buyer will not declare, set aside or pay any
dividends or other distributions of any nature whatsoever.
(k) CONTRACTS. Buyer will not enter into or assume any contract,
agreement, obligation, lease, license, or commitment except in the
ordinary course of business consistent with past practice or as
contemplated by this Agreement.
(l) NO BREACH. Buyer will not do any act or omit to do any act
which would cause a breach of any contract, commitment or obligation.
(m) DUE COMPLIANCE. Buyer will comply with all laws, regulations,
rules and ordinances applicable to it and to the conduct of its business.
(n) CAPITAL COMMITMENTS. Buyer will not make or commit to make any
capital expenditure, capital addition or capital improvement.
(o) NOTICE OF CHANGE. Buyer will promptly advise Seller in writing
of any material adverse change, or the occurrence of any event which
involves any substantial possibility of a material adverse change, in the
business, financial condition, results of operations, assets, liabilities
or prospects of the Buyer.
19
(p) CONSENTS. Buyer will use its best good faith efforts to obtain
the consent or approval of each person or entity whose consent or approval
is required for the consummation of the Transactions contemplated hereby
and to do all things necessary to consummate the Transactions contemplated
by the Basic Agreements.
IV.
CONDITIONS PRECEDENT TO THE
OBLIGATIONS OF BUYER TO CLOSE
The obligation of Buyer to close the Transactions contemplated hereby is
subject to the fulfillment by Seller prior to Closing of each of the following
conditions, which may be waived in whole or in part by Buyer:
4.1 COMPLIANCE WITH REPRESENTATIONS, WARRANTIES AND COVENANTS. The
representations and warranties of Seller contained in this Agreement shall have
been true and correct when made and shall be true and correct as of the Closing
with the same force and effect as if made at the Closing. Seller shall have
performed all agreements, covenants and conditions required to be performed by
Seller prior to the Closing.
4.2 NO ADVERSE CHANGE. There shall have been no event which has had or
may have a material adverse effect upon the business, financial condition,
results of operation, assets, liabilities or prospects of the Company.
4.3 NO LEGAL PROCEEDINGS. No suit, action or other legal or
administrative proceeding before any court or other governmental agency shall
be pending or threatened seeking to enjoin the consummation of the Transactions
contemplated hereby.
4.4 DOCUMENTS TO BE DELIVERED BY SELLER. Seller shall have delivered the
following documents:
(a) Stock certificates representing all of the Shares, duly endorsed
to Buyer and in blank or accompanied by duly executed stock powers, copies
of which are attached as Exhibit "A".
(b) A copy of (i) the Certificate of Incorporation of the Company,
certified as correct by the Company; and (ii) the Bylaws of the Company
certified as correct by the Company; and (iii) a certificate of the South
Carolina Tax Commission, Franchise Tax Division, to the effect that the
Company is in good standing and has paid all franchise taxes in such
state;
20
(c) All corporate and other records of or applicable to the Company
included but not limited to, current and up-to-date minute books, stock
transfer books and registers, books of accounts, leases and material
contracts.
(d) Such other documents or certificates as shall be reasonably
required by Buyer or its counsel in order to close and consummate this
Agreement.
V.
CONDITIONS PRECEDENT TO THE
OBLIGATIONS OF SELLER TO CLOSE
The obligation of Seller to close the Transactions is subject to the
fulfillment prior to Closing of each of the following conditions, any of which
may be waived in whole or in part by Seller:
5.1 COMPLIANCE WITH REPRESENTATIONS, WARRANTIES AND COVENANTS. The
representations and warranties made by Buyer in this Agreement shall have been
true and correct when made and shall be true and correct in all material
respects at the Closing with the same force and effect as if made at the
Closing, and Buyer shall have performed all agreements, covenants and
conditions required to be performed by Buyer prior to the Closing.
5.2 NO LEGAL PROCEEDINGS. No suit, action or other legal or
administrative proceedings before any court or other governmental agency shall
be pending or threatened seeking to enjoin the consummation of the Transactions
contemplated hereby.
5.3. DOCUMENTS TO BE DELIVERED BY BUYER.
(a) A copy of (i) the Articles of Incorporation of the Buyer, certified
as correct by the Buyer; and (ii) the Bylaws of the Buyer certified
as correct by the Buyer;
(b) All corporate and other records of or applicable to the Buyer
included but not limited to, current and up-to-date minute books,
stock transfer books and registers, books of accounts, leases and
material contracts.
(c) Such other documents or certificates as shall be reasonably required
by Buyer or its counsel in order to close and consummate this
Agreement.
5.4 Payments. Seller shall have received from Buyer all Common Stock to
be issued at the Closing by Buyer.
5.5 NO ADVERSE CHANGE. There shall have been no event which has had or
may have a material adverse
effect upon the business, financial condition, results of operation, assets,
liabilities or prospects of the Buyer.
21
VI.
MODIFICATION, WAIVERS, TERMINATION
AND EXPENSES
6.1 MODIFICATION. Buyer and Seller may amend, modify or supplement this
Agreement in any manner as they may mutually agree in writing.
6.2 WAIVERS. Buyer and Seller may in writing extend the time for or
waive compliance by the other with any of the covenants or conditions of the
other contained herein.
6.3 TERMINATION AND ABANDONMENT. This Agreement may be terminated and
the purchase of the Shares may be abandoned before the Closing:
(a) By the mutual consent of Seller and Buyer;
(b) By Buyer, if the representations and warranties of Seller set
forth herein shall not be accurate, or the conditions precedent set forth
in Article IV shall have not have been satisfied, in all material
respects; or
(c) By Seller, if the representations and warranties of Buyer set
forth herein shall not be accurate, or the conditions precedent set forth
in Article V shall not have been satisfied in all material respects.
Termination shall be effective on the date of receipt of written notice
specifying the reasons therefor.
VII.
MISCELLANEOUS
7.1 REPRESENTATIONS AND WARRANTIES TO SURVIVE. Unless otherwise
provided, all of the representations and warranties contained in this Agreement
and in any certificate, exhibit or other document delivered pursuant to this
Agreement shall survive the Closing for a period of two (2) years. No
investigation made by any party hereto or their representatives shall
constitute a waiver of any representation or warranty, and no such
representation or warranty shall be merged into the Closing.
22
7.2 BINDING EFFECT OF THE BASIC AGREEMENTS. The Basic Agreements and the
certificates and other instruments delivered by or on behalf of the parties
pursuant thereto, constitute the entire agreement between the parties. The
terms and conditions of the Basic Agreements shall inure to the benefit of and
be binding upon the respective heirs, legal representatives, successor and
assigns of the parties hereto. Nothing in the Basic Agreements, expressed or
implied, confers any rights or remedies upon any party other than the parties
hereto and their respective heirs, legal representatives and assigns.
7.3 APPLICABLE LAW. The Basic Agreements are made pursuant to, and will
be construed under, the laws of the State of Delaware.
7.4 NOTICES. All notices, requests, demands and other communications
hereunder shall be in writing and will be deemed to have been duly given when
delivered or mailed, first class postage prepaid:
(a) If to Seller, to:
Maxx Motorsports, Inc.
Attn: M. E. Durschlag, President
3620 Pelham Road, PMB #310
Greenville, SC 29615
Telephone: (864) 987-0600
Fax: (864) 987-5011
(b) If to Buyer, to:
Logisoft Corp.
Attn: Terry Washburn, Director
1701West NW Highway
Grapevine, TX 76051
Telephone: (817) 329-5011
Fax: (817) 329-5012-4025
With a copy to:
Mr. G. David Gordon
G. David Gordon & Associates, P.C.
23
One Memorial Place
7633 East 63rd Place, Suite 210
Tulsa, OK 74133
Telephone: (918) 254-4997
Fax: (918) 254-2988
These addresses may be changed from time to time by written notice to the
other parties.
7.5 HEADINGS. The headings contained in this Agreement are for reference
only and will not affect in any way the meaning or interpretation of this
Agreement.
7.6 COUNTERPARTS. This Agreement may be executed in counterparts, each
of which will be deemed an original and all of which together will constitute
one instrument.
7.7 SEVERABILITY. If any one or more of the provisions of this Agreement
shall, for any reason, be held to be invalid, illegal or unenforceable under
applicable law this Agreement shall be construed as if such invalid, illegal or
unenforceable provision had never been contained herein. The remaining
provisions of this Agreement shall be given effect to the maximum extent then
permitted by law.
7.8 FORBEARANCE; WAIVER. Failure to pursue any legal or equitable remedy
or right available to a party shall not constitute a waiver of such right, nor
shall any such forbearance, failure or actual waiver imply or constitute waiver
of subsequent default or breach.
7.9 ATTORNEYS' FEES AND EXPENSES. The prevailing party in any legal
proceeding based upon this Agreement shall be entitled to reasonable attorneys'
fees and expenses and court costs.
7.10 EXPENSES. Each party shall pay all fees and expenses incurred by it
incident to this Agreement and in connection with the consummation of all
transactions contemplated by this Agreement.
7.11 INTEGRATION. This Agreement and all documents and instruments
executed pursuant hereto merge and integrate all prior agreements and
representations respecting the Transactions, whether written or oral, and
constitute the sole agreement of the parties in connection therewith. This
Agreement has been negotiated by and submitted to the scrutiny of both Seller
and Buyer and their counsel and shall be given a fair and reasonable
interpretation in accordance with the words hereof, without consideration or
weight being given to its having been drafted by either party hereto or its
counsel.
IN WITNESS WHEREOF, the undersigned parties hereto have duly executed this
Agreement on the date first written above.
24
"BUYER"
LOGISOFT CORP.
By:
Terry Washburn, Chairman
Special Directors Committee
"COMPANY"
MAXX MOTORSPORTS, INC.
By:
-------------------------
M.E. Durschlag, President
25
"SELLER"
---------------
Jon Pritchett
---------------
M.E. Durschlag
---------------
Charles Jeter
---------------
William Bradshaw
---------------
Robert Stadel
---------------
Dan Neppl
---------------
Cale Yarborough
---------------
Brian Leahy
---------------
Lance Leslie
26
-------------------------
Richard T. Clark, Trustee
---------------
Robert Wussler
THE GODLEY MORRIS GROUP, LLC
By:
---------------------------------
Billy Morris, President
27
EXHIBIT 10.2
AMENDED AND RESTATED AGREEMENT AND PLAN OF CORPORATE SEPARATION
AGREEMENT made on May 15, 2001, among Logisoft Corp., a Delaware
corporation ("Parent"), Logisoft Computer Products Corp., a New York
corporation ("Logisoft"), eStorefronts.net Corp., a New York corporation
("eStorefronts"), Robert E. Lamy ("R. Lamy"), William Lamy ("W. Lamy"), Scott
M. Fox ("Fox") and Robert Ballard ("Ballard", and together with R. Lamy, W.
Lamy and Fox, the "Lamy Shareholders") and the "Logisoft Investors", as defined
below.
WHEREAS, on March 10, 2000, Parent entered into an Agreement and Plan of
Reorganization (the "2000 Logisoft Agreement") with R. Lamy, W. Lamy, Michael
Pruitt ("Pruitt") and Ballard providing for the acquisition of all the issued
and outstanding shares of Logisoft by Parent in exchange for stock of Parent
pursuant to a tax deferred merger as described in Section 368(a)(2)(E) of the
Internal Revenue Code (the "Code");
WHEREAS, on March 10, 2000, Parent entered into an Agreement and Plan of
Reorganization (the "2000 eStorefronts Agreement") with R. Lamy, W.
Lamy, Ballard, Fox, Walter Rob, James Tusty, David White, David
Wilkerson and Jeff Sorenson providing for the acquisition of all of
the issued and outstanding shares of eStorefronts by Parent in
exchange for stock of Parent pursuant to a tax deferred merger as
described in Section 368(a)(2)(E) of the Code;
WHEREAS, both the 2000 Logisoft Agreement and the 2000 eStorefronts
Agreement were closed in accordance with their respective terms as of March 10,
2000;
WHEREAS, on March 10, 2000, certain individuals and entities acquired an
aggregate of 5,500,000 shares of Parent stock at $1.00 per share in a private
28
placement of securities (the "2000 Private Placement") conducted by Parent in
order to meet the cash capital requirement that was a condition to closing
under the 2000 Logisoft Agreement and the 2000 eStorefronts Agreement;
WHEREAS, since March 10, 2000, Logisoft and eStorefronts have been wholly
owned subsidiaries of Parent;
WHEREAS, serious disputes between the Lamy Shareholders and other major
shareholders of Parent with respect to the conduct of the business of Logisoft
and eStorefronts have created a situation which has adversely affected the
normal operation of that business [See Rev. Rul. 69-460, 1969- 2 CB 51];
WHEREAS, to resolve the dispute and remove the shareholder disagreement,
Parent has entered into an Agreement, dated May 9, 2001 with Maxx Motorsports,
Inc. ("Maxx") providing for the acquisition by Parent of all of the issued and
outstanding stock in Maxx (the "Maxx Transaction"), a pre-condition to the
closing of which requires that Parent dispose of the business, other than the
division known as CHIPS Computer Services ("CHIPS"), currently conducted by
Logisoft and eStorefronts (the "Business") in return for the number of shares
in Parent held by the Lamy Group (defined below) as indicated on Schedule B
(described below) [See Rev.Rul. 72-530, 1972-2 CB 212];
WHEREAS, certain shareholders who are passive investors in Parent have
elected to exchange all or a portion of their shares in the Parent for shares
of Logisoft in accordance with the terms of this Agreement in order to have a
continuing investment in Logisoft (the "Logisoft Investors" and, together with
the Lamy Shareholders, the "Lamy Group");
29
WHEREAS, in order to meet the closing condition of the Maxx Transaction,
Parent now wishes to exchange (the "Split-Off") all of the issued and
outstanding shares of Logisoft and eStorefronts for all the shares of Parent
held by the Lamy Shareholders and that a portion of the shares of Parent held
by the Logisoft Investors, all as noted on Schedule B attached hereto setting
out the number of Parent shares to be transferred and the number of Logisoft
shares to be received in exchange by each shareholder in the Lamy Group;
WHEREAS, Parent, Logisoft and eStorefronts and the Lamy Group entered
into an Agreement and Plan of Corporate Separation dated April 24,
2001 relating to the Split-Off, and now wish to amend that agreement
in certain respects (pursuant to the powers of the Members'
Representative described in Paragraph 9 of the Agreement) and restate
in its entirety the Agreement as so amended;
NOW, THEREFORE, it is agreed as follows:
1. TRANSFER OF CHIPS BUSINESS. On or prior to the Closing Date (as
hereafter defined), Logisoft shall transfer and assign to Parent a
division of the business as conducted by Logisoft, now known as CHIPS
Computer Services, and all of the employees, assets and liabilities
related thereto, all as more particularly described on Schedule A. Such
transfer is being made to divide the business to allow the Logisoft stock
to be distributed in exchange for the Parent shares held by the Lamy Group
as indicated on Schedule B [See Rev. Rul. 64-147, 1964-1 CB 136].
2. CAPITAL CONTRIBUTION. On or prior to the Closing Date, Parent shall
make a cash capital contribution to Logisoft and / or eStorefronts in the
amount of all of its cash and cash equivalents, plus short term
investments, plus notes receivable (Keystone sale and others), current and
future interests in all trade names, trademarks (including applications
for trademarks), tag lines and other assets, less the sum of $1,000,000,
of cash, short term investment, prepaid expenses and notes receivable and
no more than $25,000 in accrued expenses as determined immediately prior
to the Closing and as more particularly described on Schedule A. In
addition, to the extent that immediately prior to the Closing there shall
exist any intercompany loan receivable due from Logisoft or eStorefronts
to Parent, such loan shall be converted into a capital contribution by
Parent to Logisoft and eStorefronts, as the case may be. Such capital
contributions are being made in order to equalize the value of the
Logisoft stock to be distributed in exchange for the Parent shares held by
the Lamy Group as indicated on Schedule B [See Rev. Rul. 64-102, 1964-1 CB
136].
30
3. TRANSFER OF ESTOREFRONTS SHARES. On the Closing Date, in addition to
the capital contribution described in Paragraph 2, Parent shall transfer
and assign all the issued and outstanding shares of eStorefronts to
Logisoft in order to: (i) equalize the value of the Logisoft stock to be
distributed in exchange for the Parent shares held by the Lamy Group as
indicated on Schedule B [See Rev. Rul. 64-102, 1964-1 CB 136]; and (ii)
allow one management team to coordinate and effectively manage the two
companies.
4. EXCHANGE OF LOGISOFT SHARES. On the Closing Date, Parent shall transfer
and assign 100 shares of Logisoft, constituting all of the issued and
outstanding shares of Logisoft, to the Lamy Group, and the Lamy Group
shall transfer an assign to Parent the number of shares of Parent common
stock as indicated on Schedule B. The parties intend to adopt this
Agreement as a tax-free plan of reorganization and to consummate the
foregoing exchange in accordance with the provisions of Section 355 of the
Code. The parties have negotiated the exchange on an arm's-length basis,
and on the premise that the value of the Parent common stock to be
received in the exchange is equal to the value of the Logisoft common
stock to be surrendered in exchange therefor. Unless advised by tax
counsel that doing so is required under applicable law, the parties shall
not take a position on any tax returns inconsistent with this Paragraph 4.
At the Closing, Parent and the Lamy Group shall execute and deliver
certificates in the forms of Schedules C and D attached hereto. The
provisions and representations in such certificates and contained or
referred to in this Paragraph 4 shall survive until the expiration of the
applicable statute of limitations.
31
5. REPRESENTATIONS AND WARRANTIES.
a. Parent represents and warrants to the Lamy Group that (i) Parent
has full power and authority to enter into this Agreement, (ii) the
execution, delivery and performance of this Agreement has been duly
approved by all necessary or appropriate corporate action under Delaware
law and Parent's Articles of Incorporation and By-Laws for an "interested
director" transaction, (iii) this Agreement has been duly executed by
Parent and constitutes a valid and binding obligation of Parent
enforceable in accordance with its terms, and (iv) the 100 shares of
Logisoft to be transferred by Parent to the Lamy Group under Paragraph 4
hereof are, and on the Closing Date will be, all of the issued and
outstanding shares of Logisoft, which shares are and shall be fully paid,
nonassessable and free and clear of any liens or encumbrances.
b. The Lamy Group, severally and not jointly, represent and warrant
that the shares of Parent stock described on Schedule B, to be transferred
by each of them to Parent under Paragraph 4 hereof are, and on the Closing
Date will be, fully paid, non-assessable and free and clear of any liens
or encumbrances.
c. All the parties represent and warrant to each other that (i)
they are familiar with the financial position and condition of Parent,
Logisoft and eStorefronts and the business and financial operations of
Parent, Logisoft and eStorefronts since March 10, 2000; they have had
sufficient access to each named company and their respective premises,
management, books and records and have had sufficient opportunity to
consult with his/her/its professional advisors and to examine all
information he/she/it deems appropriate concerning Parent, Logisoft or
eStorefronts, respectively and he/she/it does not desire any further
information in order to make an informed decision concerning the
transactions contemplated by this Agreement; (ii) the parties hereby
ratify and confirm, as among the parties to this Agreement, all acts of
all of the named companies since March 10, 2000; (iii) there have been no
intercompany charges among Parent, Logisoft or eStorefronts, with the
exception of charges for interest on advances, reimbursement for services
rendered, and payments for merchandise, all in the normal course of
business; and (iv) the effects of the consolidated corporate income tax
returns filed by Parent, including the operations of Logisoft and
32
eStorefronts, have been fully accounted for among the companies by means
of appropriate charges or credits.
6. INTERIM CONDUCT. From the date of this Agreement until the Closing
Date, (i) Logisoft and eStorefronts shall carry on their businesses in
substantially the same manner as heretofore and, except with the approval
of Parent and the Lamy Group, neither Logisoft nor eStorefronts shall
incur or agree to incur any obligations, other than in the ordinary course
of business, or make any capital expenditures, except for ordinary
repairs, renewals, or replacements; and (ii) none of the parties hereto
shall take any action or fail to take any action, the result of which can
or may render any representation or warranty to be untrue or inaccurate in
any material respect.
7. CONDITIONS TO CLOSING. Each party's obligations hereunder are subject
to the fulfillment or satisfaction, on and as of the Closing Date, of each
of the following conditions:
a. The representations and warranties set forth in Paragraphs 4 and
5 shall be true and accurate in all material respects on and as of the
Closing Date;
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b. Each party shall have performed and complied in all material
respects with all of its covenants contained in this Agreement on or
before the Closing;
c. There shall be no order, decree, or ruling by any court or
governmental agency or threat thereof, or any other fact or circumstance,
which would prohibit or render illegal the transactions contemplated by
this Agreement;
d. No litigation or proceeding shall be overtly threatened or
pending to enjoin or prevent the consummation of any of the transactions
contemplated by this Agreement; and
e. The closing of the Maxx transaction shall occur concurrently
with the Closing under this Agreement.
8. CLOSING. Closing of the transfers contemplated by this Agreement is
contingent on the determination by the accountants and attorneys to the
Lamy Group to the effect that none of them will recognize gain or income
upon consummation of the transactions and exchanges provided for in this
Agreement. The Closing shall take place at Parent's principal office at
3:00 p.m. on May 15, 2001, or at such other place, time and date as the
parties shall mutually agree. At the Closing, and as a condition thereof,
the following documents and instruments shall be executed and delivered in
form and substance mutually satisfactory to the parties: (i) evidence of
completion of the transfers contemplated by Paragraphs 1, 2 and 3; (ii)
duly executed stock powers together with the original stock certificates
assigning to Parent the Parent stock owned by the Lamy Group as described
in Schedule B; (iii) duly executed stock powers together with the original
stock certificates assigning to the Lamy Group the Logisoft stock as
described in Schedule B; (iv) duly executed certificates including the
representations set forth in Schedules C and D; (v) duly executed
resignations of R. Lamy and Fox from the Board of Directors of Parent and
of each of the current officers of Parent; (vi) duly executed general
releases by R. Lamy, W. Lamy, Fox, Ballard, M Bailey and J. Van Heel in
favor of Parent; and (vii) a duly executed general release by Parent in
favor of R. Lamy, W. Lamy, Fox, Ballard, M Bailey and J. Van Heel and each
other member of the Lamy Group.
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9. DESIGNATION OF REPRESENTATIVE. Each member of the Lamy Group (for
himself, itself and his/its heirs, executors, personal representatives,
successors and assigns) hereby irrevocably constitutes and appoints R Lamy
or his substitute (designated as provided below) as the Members'
Representative, his/its agent and attorney in fact for all purposes under
this Agreement specifically including, without limitation, his appointment
as agent and attorney in fact to (i) modify, amend or otherwise change
this Agreement, or any of its terms or provisions, with the written
consent of the owners of not less than 60% of the shares of Parent common
stock held by the Lamy Group; provided that such modification, amendment
or change of this Agreement shall not change the amount of consideration
to be received by any such member of the Lamy Group hereunder (unless he
shall have himself consented thereto) or the percentage required to
change, amend or modify this Agreement, (ii) give consents and give or
receive notices hereunder, (iii) the receipt of all Logisoft stock for the
account of each member of the Lamy Group pursuant to the provisions of
this Agreement. In the event of the death, physical or mental incapacity
or inability to serve of a Members' Representative, the members of the
Lamy Group shall elect a substitute Members' Representative, upon the vote
of members who hold not less than 60% of the shares of Parent common stock
held by the Lamy Group. The Members' Representative (and any substitutes
therefor) hereby accept such appointment by their signatures at the end of
this Agreement. Upon the delivery to the Members' Representative of the
Logisoft stock required to be delivered hereunder, Parent shall be
released and discharged of and from any further liability or obligation to
the members of the Lamy Group, or any of them, in connection with the
consideration so delivered. If at any time there is no Member's
Representative, Parent may deal directly with the members of the Lamy
Group.
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10 POST-CLOSING MATTERS.
a. Parent understands, acknowledges and agrees that the Lamy Group
intends to and may enter into certain transactions with respect to the
stock of Logisoft and eStorefronts received in the transactions pursuant
to this Agreement, that may be considered to be a disposition within the
meaning of Section 355 (e) of the Code. In connection therewith, Parent
may incur and shall be solely responsible to pay, the tax generated
thereby, without contribution, payment or indemnification from Logisoft,
eStorefronts or any member of the Lamy Group.
b. In order to effect the transition of the welfare benefit plans
of Logisoft employees, subsequent to the effective date of this Agreement
and until such date as Logisoft determines, the employees of Logisoft and
its subsidiary, that are eligible for certain welfare benefit plans as of
the effective date of this Agreement, will continue to receive the
benefits provided by those welfare benefit plans sponsored by Parent,
including, but not limited to its long-term disability plan and its group
life insurance plan, although the period of such continued participation
may not exceed 120 days. Specifically excluded from this provision is the
Logisoft Corp. 2000 Stock Option Plan and the Logisoft 401(k) Plan. As a
result of the Split-Off, Logisoft will cease participation in the Logisoft
401(k) Plan. Employees will be fully vested in all contributions, whether
paid or accrued, to the Logisoft 401(k) Plan as of the date of the Split-
Off.
11. NAME CHANGE. Parent agrees to change its name as soon as possible
after the Closing of this Agreement, but in no case later than 30 days
after Closing, and to cease using the name "Logisoft" or any trade names
used by the continuing businesses of Logisoft or eStorefronts immediately
upon the effectiveness of its name change.
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12. FINANCIAL STATEMENTS; TAX ALLOCATIONS.
a. In conjunction with the potential transactions to be entered into
by the Lamy Group, as described in paragraph 10 of this Agreement, Post-
Closing Matters, the Parent agrees to provide the Lamy Group and Logisoft
with combined financial statements of the businesses being transferred to
the Lamy Group, prepared in accordance with U.S. GAAP as of and for the
years ended December 31, 2000 and 1999 and the three and nine-month
periods ended March 31, 2001. The Parent agrees to engage Bonadio & Co.
to perform an audit of combined financial statements as of and for the
twelve-month periods ended December 31, 2000 and 1999, at Parent's
expense. These audited combined financial statements shall be delivered
to the Lamy Group and Logisoft within three days of the execution of this
Agreement, with draft statements being delivered when available. The
combined financial statements for the periods ending March 31, 2001 shall
be delivered to the Lamy Group and Logisoft on or before May 10, 2001.
Parent agrees to provide all reasonable assistance to the Lamy Group and
Logisoft, including access to accounting and other records, in connection
with the Lamy Group's pursuit of such transactions and the general
operation of its business.
b. Immediately before the split-off, items of income, gain, loss,
deduction, and credit will be taken into account as required by the
applicable intercompany transaction regulations (See 1.1502-13).
Further, Parent's loss account with respect to the Logisoft stock will be
included in income immediately before the distribution (See 1.1502-19).
Logisoft will succeed to a portion of the consolidated net operating loss
since it was a member of Parent's consolidated group and incurred net
operating losses contributing to the consolidated net operating loss.
(See 1.1502-21). The earnings and profits of Parent following the split-
off of Logisoft will be allocated as provided in Section 312(h) of the
Code. (See Regs. 1.312-10(b)).
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13 MISCELLANEOUS TERMS.
a. It is understood and agreed that neither Parent nor any member
of the Lamy Group has or have made any representations to each other as to
the tax status or tax effect of the transactions contemplated by this
Agreement, and each of the parties hereto is therefore separately taking
counsel as to such matters and each is assuming the tax, if any, which may
be incurred by reason of the carrying out of the terms and provisions
hereof.
b. All representations and warranties contained herein shall
survive the execution and delivery of this Agreement, the Closing and the
transactions contemplated hereunder.
c. Parent hereby agrees to indemnify, defend and hold harmless each
member of the Lamy Group to the fullest extent permitted and in the manner
provided by Delaware law and the Parent's Articles of Incorporation and By-
Laws, and shall, in connection therewith, periodically advance expenses
(including attorneys' fees) to the fullest extent permitted by applicable
law. In furtherance thereof, Parent covenants and agrees to maintain
Directors and Officers liability insurance coverage, on a claims made
basis, which will insure the foregoing indemnity obligation, with the
policy limits and terms substantially equivalent to those in effect at the
date hereof.
d. Parent, Logisoft and eStorefronts agree to cooperate after the
Closing in responding to any claims asserted against any one of them that
relates to the pre-Closing period to the extent that all or a subset of
the entities are named in such action. In addition, the parties will
share any proceeds recovered from insurance policies carried pre-closing
or any "tail" policies purchased by the parties to provide continuing
coverage for events that occurred prior to the Closing, in relation to the
amounts that the parties are required to pay for such claims.
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e. This Agreement shall be binding upon the inure to the benefit of
each of the parties hereto and their respective successors and assigns.
f. This Agreement shall be construed and enforced in accordance
with the laws of the State of New York applicable to contracts made and
performed wholly within such state, without regard to conflict of laws
principles. This Agreement shall be construed according to its fair
meaning, the language used shall be deemed the language chosen by the
parties hereto to express their mutual intent, and no presumption or rule
of strict construction will be applied against any party hereto.
g. No waiver of this Agreement or any part hereof shall be
effective unless in writing and signed by the party or parties sought to
be charged therewith. A waiver by any party of a breach of any provision
of this Agreement shall not operate as, nor be construed as, a waiver of
any subsequent breach hereof.
h. This Agreement contains the entire understanding between or
among the parties hereto and supersedes any prior understanding, memoranda
or other written or oral agreements between or among any of them
respecting the within subject matter. There are no representations,
agreements, arrangements or understandings, oral or written, between or
among any of the parties relating to the subject matter of this Agreement,
which are not fully expressed herein.
i. The headings contained in this Agreement are inserted for
convenience only and do not constitute a part of this Agreement.
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j. None of the provisions of this Agreement shall be for the
benefit of, or enforceable by, any person or entity not a party hereto.
LOGISOFT CORP.
BY: ---------------------------------
LOGISOFT COMPUTER PRODUCTS CORP.
BY: ---------------------------------
ESTOREFRONTS.NET CORP.
BY: ----------------------------------
AS REPRESENTATIVES OF THE LAMY GROUP PURSUANT TO
PARAGRAPH 9
---------------------------------
R Lamy
---------------------------------
W Lamy
---------------------------------
R Ballard
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