details from the 8-k show final purchase terms including ROSS's opportunity to continue selling the Hr/Payroll on a commission basis.
"...Purchase Price. Subject to the terms and conditions of this Agreement, in full consideration for the Assets and in addition to Purchaser's assumption of the Assumed Liabilities, the Purchaser shall pay to Seller the amount of Six Million One Hundred Thousand Dollars ($6,100,000), less all (i) prepaid deferred services revenue of Seller which relates to the Assets as at February 28, 2001 (the "Seller's Pre-Paid Deferred Revenue"), (ii) outstanding unpaid accounts payable of Seller relating to the Assets as at February 28, 2001 (the "Accounts Payable"), (iii) maintenance fees received prior to the Closing Date which relate to maintenance contract renewals extending beyond February 28, 2001, and (iv) an amount equal to any rent unpaid for the Alameda, California or Ft. Worth, Texas facilities (collectively, the "Purchase Price"). The Purchase Price shall be payable on the date of Closing as follows: (a) the amount of Five Million One Hundred Thousand Dollars ($5,100,000) by wire transfer in immediately available funds to the account designated by Seller with appropriate wire transfer instructions received at least three (3) business days prior to the Closing Date; and (b) delivery on the Closing Date of an unsecured promissory note of Purchaser, in the form of Exhibit D annexed hereto, in the principal amount of One Million Dollars ($1,000,000), without interest, with a principal payment of Two Hundred Fifty Thousand Dollars ($250,000) on February 28, 2002 and a final principal payment of Seven Hundred Fifty Thousand Dollars ($750,000) on February 28, 2003.
2.5 Earnout. If Purchaser achieves new license revenue sales, including any monies from sales from companies listed in Exhibit E, known as the "Existing Sales Pipeline," during its first two (2) years in operation after the Closing Date, net of royalties paid, Seller shall be entitled to additional compensation as follows:
(a) Year One. If new license sales in Purchaser's first year of operation from the Closing Date reach Nine Million Eight Hundred Thousand Dollars ($9,800,000), Seller will be entitled to an additional payment of Seven Hundred and Fifty Thousand Dollars ($750,000). If sales in year one are below Nine Million Eight Hundred Thousand Dollars ($9,800,000) but above Eight Million Five Hundred Thousand Dollars ($8,500,000), Seller will be entitled to an additional payment of Two Hundred Fifty Thousand Dollars ($250,000). If sales in year one are below Eight Million Five Hundred Thousand Dollars ($8,500,000), Seller will receive no additional payment. Payments due at the end of year one under Sections 2.5 (a) and 2.5 (c) shall be paid no later than February 28, 2002.
(b) Year Two. If new license sales in Purchaser's second year of operation after the Closing Date reach Eleven Million Five Hundred Thousand Dollars ($11,500,000), Seller will receive an additional payment of Two Hundred Fifty Thousand Dollars ($250,000). If sales in year two are below Eleven Million Five Hundred Thousand Dollars ($11,500,000), Seller will receive no additional payment. Payments due at the end of year two under Sections 2.5 (b) and 2.5 (c) shall be paid no later than February 28, 2003.
(c) Additional Payments. For every Five Hundred Thousand Dollars ($500,000) in additional new license sales received by Purchaser above Nine Million Eight Hundred Thousand Dollars ($9,800,000) in year one, and above Eleven Million Five Hundred Thousand Dollars ($11,500,000) in year two, Seller will receive a bonus of One Hundred Thousand Dollars ($100,000). Additional payments under this Section 2.5 (c) will be capped at Two Hundred Fifty Thousand Dollars ($250,000) in year one and Five Hundred Thousand Dollars ($500,000) in year two...." |
