Assignment of License - S.T.E.P.S. Inc. and NetGateway Inc.
ASSIGNMENT OF LICENSE
THIS ASSIGNMENT OF LICENSE (this "ASSIGNMENT") is made as of the 1st day
of April, 1998, by and between S.T.E.P.S., Inc., a Utah corporation
("ASSIGNOR"), in favor of NetGateway, Inc., a Nevada corporation ("ASSIGNEE").
FOR VALUE RECEIVED, Assignor hereby grants, conveys, transfers and
assigns to Assignee all of Assignor's rights, titles and interests in, to and
under that certain Courseware Reproduction Licensing Agreement dated as of
October 29, 1997 by and between Assignor and Prosoft I-Net Solutions, Inc., a
Nevada corporation ("PROSOFT"), as amended by that certain Amendment No. 1 to
Courseware Reproduction Licensing Agreement dated as of November 4, 1997 by
and between Assignor and Prosoft, together with any and all other amendments,
extensions or renewals thereof (the "CONTRACT").
In exchange for the assignment of the License set forth herein, Assignee
shall pay to Assignor the consideration described on EXHIBIT A hereto, the
terms and conditions of which are incorporated herein by reference, which
EXHIBIT A sets forth the complete understanding between the parties regarding
the consideration to be paid by Assignee to Assignor hereunder.
Assignor hereby agrees to indemnify, protect, defend and hold harmless
Assignee from and against any and all claims, liabilities, losses, costs,
damages or expenses (including, without limitation, reasonable attorneys'
fees and costs) arising out of or resulting from any breach or default by
Assignor under the terms of the License arising on or prior to the date
hereof.
Assignor hereby covenants that it will, at any time and from time to
time, upon written request therefor, at Assignee's sole expense and without
the assumption of any additional liability thereby, execute and deliver to
Assignee, its successors and assigns, any new or confirmatory instruments and
take such further acts as Assignee may reasonably request to fully evidence
the assignment contained herein and to enable Assignee, its successors and
assigns to fully realize and enjoy the rights and interests assigned hereby.
Assignee hereby accepts the foregoing assignment and agrees to assume,
pay, perform and discharge, as and when due, all of the agreements and
obligations of Assignor under the License arising and to be performed or
discharged after the date hereof, and agrees to be bound by all of the terms
and conditions of the License.
The provisions of this Assignment shall be binding upon the successors
and assigns of Assignor and Assignee, and shall inure to the benefit of the
successors and assigns of Assignor and Assignee, respectively.
This Assignment may be executed in any number of counterparts, each of
which
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shall be deemed an original, but all of which when taken together shall
constitute one and the same instrument. The signature page of any counterpart
may be detached therefrom without impairing the legal effect of the
signature(s) thereon and attached to any other counterpart identical thereto
except having additional signature pages attached to it. This Assignment
shall be construed, interpreted and applied in accordance with the laws of
the State of California. This Assignment sets forth the complete
understanding regarding its subject matter and supersedes all prior
agreements, understandings and communications, oral and written, between the
parties regarding the subject matter hereto.
IN WITNESS WHEREOF, Assignor and Assignee have caused their duly
authorized representatives to execute this Assignment as of the date first
above written.
ASSIGNOR: S.T.E.P.S., INC.,
a Utah corporation
By: Scott Beebe
---------------------------
Name: SCOTT BEEBE
Its: Vice President
ASSIGNEE: NETGATEWAY,
a Nevada corporation
By: Donald M. Corliss, Jr.
---------------------------
Name: DONALD M. CORLISS, JR.
Its: President
THE ASSIGNMENT SET FORTH HEREIN IS HEREBY ACKNOWLEDGED, ACCEPTED AND AGREED
TO:
PROSOFT I-NET SOLUTIONS, INC.,
a Nevada Corporation
By:
-------------------------------
Name: JERRILL M. BAIRD
Its: Chief Executive Officer
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EXHIBIT A
CONSIDERATION
As consideration for the assignment of the Contract set forth in
the attached Assignment, Assignee hereby grants, conveys and transfers to
Assignor one million (1,000,000) shares of common stock (the "SECURITIES") of
Assignee, subject to the terms and conditions set forth in this EXHIBIT A.
For purposes hereof, Assignor shall be referred to as the "HOLDER", and
Assignee shall be referred to as the "ISSUER".
1. REPRESENTATIONS, WARRANTIES, ACKNOWLEDGMENTS AND COVENANTS OF THE
HOLDER.
1.1 PURCHASE FOR HOLDER'S ACCOUNT. The Holder represents and
warrants to the Issuer that the Holder will hold the Securities for its own
account, with no present intention of distributing or reselling the
Securities or any part thereof, and that the Holder is prepared to bear the
economic risk of retaining the Securities for an indefinite period.
1.2 RESTRICTED SECURITIES. The Holder understands, agrees and
acknowledges that:
(a) The transfer of the Securities has not been registered
under the Securities Act of 1933, as amended and may be amended from time to
time (the "Act"), and the Securities must be held indefinitely unless the
Securities are subsequently registered under the Act or an exemption from
such registration is available, and the Issuer is under no obligation to
register the Securities. The Holder agrees that the Securities will not be
sold or offered for sale without registration under said Act or the
availability of an exemption therefrom, nor in violation of any other law of
the United States of America or any state. The Holder is familiar with the
provisions of Rules 701 and 144, each promulgated under the Act, which, in
substance, permit limited public resale of "restricted securities" acquired,
directly or indirectly, from the issuer thereof, in a non-public offering,
subject to the satisfaction of certain conditions;
(b) The share certificate representing the Securities will be
stamped with the legends specified in Section 1.3 hereof; and
(c) The Issuer will make a notation in its records of the
aforementioned restrictions on transfer and legends.
1.3 LEGENDS. All certificates representing any of the Securities
are subject to the provisions of this Assignment and shall have endorsed
thereon the following legends:
THE SHARES REPRESENTED BY THIS CERTIFICATE ARE SUBJECT TO CERTAIN
RESTRICTIONS UPON TRANSFER AS SET FORTH IN AN ASSIGNMENT OF CONTRACTS
DATED MAY __, 1998 BETWEEN THE ISSUER AND THE REGISTERED HOLDER,
COPIES OF WHICH ARE ON FILE AT THE PRINCIPAL OFFICE OF THE ISSUER.
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THESE SECURITIES HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT
0F 1933. THEY MAY NOT BE SOLD, OFFERED FOR SALE, PLEDGED OR
HYPOTHECATED IN THE ABSENCE OF AN EFFECTIVE REGISTRATION STATEMENT
AS TO THE SECURITIES UNDER SAID ACT OR AN OPINION OF COUNSEL
SATISFACTORY TO THE ISSUER THAT SAID REGISTRATION IS NOT REQUIRED.
In addition, the certificates shall bear any other legend which the
Issuer deems to be necessary or appropriate under the securities laws of any
state.
1.4 FURTHER LIMITATIONS ON DISPOSITION. Without in any way limiting
the restrictions set forth above, the Holder further agrees that in no event
shall it make any disposition of all or any portion of the Securities unless
and until:
(a) The Holder shall have notified the Issuer of the proposed
disposition and shall have furnished the Issuer with a detailed statement of
the circumstances surrounding the proposed disposition; and
(b) If requested by the Issuer, the Issuer shall have
received, at the Issuer's expense, an opinion of counsel to the Issuer to the
effect that such disposition will not require registration of such Securities
under the Act or qualification under any applicable state securities laws.
1.5 VIOLATION OF RESTRICTIONS. With respect to any Securities which
shall have been sold or transferred in violation of any of the provisions set
forth in this Assignment, the Issuer shall not be required (i) to reflect
such transfer on its books, or (ii) to treat as owner of such Securities or
to accord the right to vote as such owner or to pay dividends to any
transferee to whom such Securities shall have been so transferred.
1.6 MARKET STAND-OFF. The Holder agrees that, in connection with an
initial public offering by the Issuer of its equity securities pursuant to a
Registration Statement filed under the Act, the Holder will not sell, make
any short sale or loan, hypothecate, pledge, grant any option for the
purchase of or otherwise dispose of any Securities without the prior written
consent of the Issuer and its underwriters, for a period not to exceed one
hundred eighty (180) days from the effective date of such registration if
requested by the Issuer or such underwriters.
2. REPRESENTATIONS, WARRANTIES AND COVENANTS OF ASSIGNEE
2.1 STOCK SPLITS. If, from time to time: (i) there is any stock
dividend or liquidating dividend of cash and/or property, stock split or
other change in the character or amount of any of the outstanding securities
of the Issuer; or (ii) there is any consolidation, merger or sale of all, or
substantially all, of the assets of the Issuer, then, and in such event, all
new, substituted or additional securities or other property to which the
Holder is entitled by reason of its ownership of the Securities shall be
immediately subject to the terms of this Assignment and be included in the
term "Securities" for all purposes and with the same force and effect as the
Securities of Common Stock to be issued hereunder.
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2.2 REPLACEMENT OF INSTRUMENTS. Upon receipt by the Issuer of
evidence reasonably satisfactory to it of the ownership of and the loss,
theft, destruction or mutilation of any certificate or instrument evidencing
any of the Securities, and (a) in the case of loss, theft or destruction,
upon receipt by the Issuer of indemnity reasonably satisfactory to it
(provided that, if the owner of the same is a commercial bank or an
institutional lender or investor, its own agreement of indemnity shall be
deemed to be satisfactory), or (b) in the case of mutilation, upon surrender
and cancellation thereof, the Issuer, at its expense, will execute, register
and deliver, in lieu thereof, a new certificate or instrument for (or
covering the purchase of) an equal number of Securities.
2.3 REPRESENTATIONS AND WARRANTIES. In connection with the
issuance of the Securities to the Holder, the Issuer hereby represents and
warrants to, and covenants with, the Holder as follows:
(a) The Issuer is a corporation duly organized, validly
existing and in good standing under the laws of the State of Nevada. Neither
the Issuer nor any of its shareholders has adopted or taken any action in
contemplation of any plan of liquidation or dissolution of the Issuer. The
Issuer has provided the Holder with true, complete and correct copies of the
Articles of Incorporation and Bylaws of the Issuer as in effect on the date
hereof.
(b) The Issuer has the requisite corporate power and
authority to execute, deliver and carry out this Assignment, and all other
instruments, documents and agreements contemplated or required by the
provisions of this Assignment to be executed, delivered or carried out by the
Issuer. The Issuer has all requisite corporate power and authority under the
laws of the jurisdiction of its incorporation to own and operate its
properties and to carry on its business as now conducted and as presently
proposed to be conducted. The Board of Directors of the Issuer have taken all
necessary corporate action to approve this Assignment, and to authorize the
execution, delivery and performance of this Assignment by the Issuer, the
issuance by the Issuer of the Securities and the consummation of the
transactions contemplated hereby. This Assignment has been duly and properly
executed and delivered by the Issuer and constitutes the legally valid and
binding obligation of the Issuer, enforceable against it in accordance with
its terms.
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SUBLICENSE AGREEMENT
This Sublicense Agreement (the "Agreement") is entered into as of April
1, 1998 (the "Effective Date"), by and between S.T.E.P.S., Inc., a Utah
corporation ("STEPS"), and NetGateway, a Nevada corporation ("NetGateway").
WHEREAS, STEPS and Prosoft I-Net Solutions, Inc., a Nevada corporation
("Prosoft") have entered into the Courseware Reproduction License Agreement
dated October 29, 1997, as amended pursuant to the Amendment No. 1 to
Courseware Reproduction License Agreement dated as of November 4, 1997 and
the Amendment No. 2 to Courseware Reproduction License Agreement dated as of
January 20, 1998 (such agreement, together with these amendments and any
other existing or future amendments, replacements, modifications or
supplements thereof, being referred to herein as the "License"); and
WHEREAS, STEPS and NetGateway wish to enter into an agreement whereby
STEPS will sublicense its rights to NetGateway under the License to
NetGateway.
NOW, THEREFORE, in consideration of the terms and conditions set forth
below and other sufficient consideration, the parties hereto agree as follows:
1. STEPS hereby grants and assigns to NetGateway a sublicense to all of
its rights and interests under the License, including, without limitation,
its rights thereunder with respect to the Courseware Titles (as defined in
the License).
2. The term of this Agreement shall be from the date hereof until the
date that the License is terminated in accordance with its terms.
3. As total consideration for the grant of the sublicense set forth
herein, NetGateway shall pay to STEPS, on or before the Payment Dates (as
defined below), all amounts owing and payable by STEPS to Prosoft on and
after the Effective Date under the License. As used herein, a "Payment Date"
shall mean 2 business dates before any day that STEPS is required to make a
payment to Prosoft under the License.
4. Prosoft, by signing the signature block set forth below, hereby
approves the grant of the sublicense upon the terms set forth herein,
provided that nothing in this Agreement shall relieve STEPS of any of its
obligations under the License. Prosoft and STEPS agree to provide NetGateway
with any written notification sent by either such party to the other party
under the License to NetGateway's office located at 300 Oceangate, 5th Floor,
Long Beach, CA 90802, Attention: Donald M. Corliss, Jr. Prosoft, STEPS and
NetGateway further agree that NetGateway shall have the right to add its
trade dress and/or branding to the Courseware (on either an exclusive basis
or on a co-branded basis with Prosoft, in NetGateway's discretion), and
NetGateway shall have the right to sell site-licenses to end-user customers
with respect to the Courseware (in which such customer pays a flat-fee and is
permitted to reproduce the Courseware in a manner that is not inconsistent
with the terms of the License), provided that Prosoft shall have approved
such trade dress or site-licensing, as the case may be (whether on an
exclusive or co-branded basis), which approval shall not be unreasonably
withheld.
5. This Agreement shall be governed by and construed in accordance with
the laws of the State of Texas, without regard to the conflict of laws
provisions thereof.
6. This Agreement supersedes all prior agreements between the parties
regarding the subject matter hereof and sets forth the entire agreement of
the parties concerning such subject matter. The
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7. This Agreement may be executed in one or more counterparts, which
together will constitute one agreement.
8. STEPS and NetGateway agree that all disputes and controversies
arising out of, or in any manner relating to, this Agreement which the
parties do not resolve in good faith within thirty (30) days after either of
the parties notifies the other of its desire to arbitrate such dispute or
controversy shall be settled by arbitration by the American Arbitration
Association in accordance with its then prevailing Commercial Arbitration
Rules. Such arbitration shall be conducted in Orange County, California. The
award or decision made in such arbitration shall be binding upon the parties
and judgment upon the award may be made in any court having jurisdiction. The
prevailing party shall be entitled to recover from the other party all
reasonable costs and expenses of arbitration.
9. NetGateway shall have the right to approve in writing any future
amendments, modifications, supplements or extensions of the License between
Prosoft and STEPS.
IN WITNESS WHEREOF, the parties have caused this Agreement to be
executed by duly authorized representatives as of the date set forth above.
S.T.E.P.S., INC.,
a Utah corporation
Steps, Inc.
By: /s/ R. Scott Beebe VP
-------------------------------
Name: R. Scott Beebe
Title: Vice President
NETGATEWAY,
a Nevada corporation
By: /s/ Donald M. Corliss, Jr.
-------------------------------
Name: Donald M. Corliss, Jr.
Title: President
AGREED TO AND ACKNOWLEDGED:
PROSOFT I-NET SOLUTIONS, INC.,
a Nevada corporation
By: /s/ Jerrill M. Baird
----------------------------------
Name: Jerrill M. Baird
Title: Chairman