Exhibit 10.01
ASSET PURCHASE AGREEMENT
BY AND BETWEEN
JINKHOLD, LTD.
A United Kingdom Corporation
21 Tudor Street
London
#06286236
(Purchaser)
And
ANDRONICS, LTD.
A Northern Ireland Corporation
20 Balliniska Road
Springtown, BT48 0NA
#NI 17460
(Seller)
ASSET PURCHASE
AGREEMENT
THIS ASSET PURCHASE
AGREEMENT (this “ Agreement ”)
is entered into as of the date set forth below (the “
Execution Date ”), by and between
Jinkhold, Ltd ., a corporation duly
organized under the laws of the United Kingdom (“
Jinkhold ” or the “
Purchaser ”), Andronics,
Ltd ., a corporation duly organized under the laws
of Northern Ireland (“ Andronics
” or the “ Seller ”) and
Robert Andrews , an individual residing in
Northern Ireland and a founder of Andronics (“
Andrews ”). Jinkhold,
Andronics and Andrews are hereinafter at times collectively
referred to as the “ Parties
.”
RECITALS:
WHEREAS,
the Purchaser’s success requires ongoing access to and
control over the development and use of certain key
technologies;
WHEREAS,
the Seller is engaged in the business of providing two-way
global data solutions for the monitoring and control of
customers’ remote assets (the “
Business ”);
WHEREAS,
the Seller desires to sell to the Purchaser significant Assets
(defined in Section 1) and transfer employees engaged in the
ongoing operations of the Business (the “
Continuing Operations ”);
and
WHEREAS,
the Purchaser desires to acquire the Assets of the Seller in
exchange for cash and/or stock of SARS Corporation, a
corporation duly organized under the laws of the state of
Nevada (“ SARS ”) and other
valuable Consideration (defined in Section 4).
NOW,
THEREFORE, for and in consideration of the premises, and the
mutual covenants and agreements contained herein, and other
good and valuable consideration, the receipt and sufficiency
of which are hereby acknowledged, the parties hereto,
intending to be legally bound, agree as follows:
1. Assets
Purchased . The following properties, as
described below in Sections 1.1 - 1.5, are collectively
referred to herein as the “ Assets
”:
1.1
Assets . The Seller agrees to sell to the
Purchaser and the Purchaser agrees to purchase from the
Seller, on the terms and conditions set forth in this
Agreement, all of the Assets listed and identified in
Schedule 1.1 , annexed hereto and made apart
hereof. Additionally, the Assets listed on
Schedule 1.1 include all due and outstanding accounts
receivable by the Seller as of the Closing Date and all
outstanding work-in-progress listed on Schedule 1.1 or
otherwise.
1.2
Employees . At the Closing (defined below),
the Seller agrees to reassign all current employees of the
Seller involved in the ongoing operations of the Business to
the Purchaser. A list of these employees is set
forth on Schedule 1.2 , annexed hereto and made apart
hereof (the “ Employees
”).
1.3
Contracts . At the Closing, the benefit of
the Seller’s Contracts (defined below) shall be
transferred to the Purchaser. The burden of the
Contracts shall be novated to the Purchaser simultaneously on
the Closing Date. The Contracts and all novations
are set forth and included on Schedule 1.3 , annexed
hereto and made apart hereof (the “
Contracts ”).
1.3.1 No
Violation of Existing Agreements. Neither the execution and
delivery of Agreement, nor the consummation of the
transactions contemplated hereby, will conflict with or (with
or without notice and/or lapse of time) result in a
termination, breach, impairment or violation of any
Contract. Seller has received all necessary
consents to enable the transfer of the Contracts to the
Purchaser.
1.4
Intellectual Property . On or before the
Closing, the Seller agrees to transfer ownership and title of
all intellectual property and intellectual property
agreements of the Seller to the Purchaser. A list
of this property is set forth on Schedule 1.4 ,
annexed hereto and made apart hereof. As used
herein, the term “ Intellectual
Property ” shall mean all worldwide industrial
and intellectual property rights, including, without
limitation, patents, patent applications, patent rights,
trademarks, trademark applications, trade names, service
marks, service mark applications, copyright, copyright
applications, franchises, licenses, inventories, know-how,
trade secrets, customer lists, proprietary processes and
formulae, all source and object code, algorithms, structure,
display screens, layouts, inventions, development tools and
all documentation and media constituting, describing or
relating to the above, including, without limitation,
manuals, memoranda and records.
1.5
Goodwill . On or before the Closing, the
Seller agrees to transfer all goodwill of the Seller to the
Purchaser. A list of this goodwill is set forth on
Schedule 1.5 , annexed hereto and made apart
hereof.
2. Excluded
Assets . All other forms of assets not
included on Schedules 1.1 – 1.5 will remain the
sole property of the Seller, and Seller shall retain all the
rights, title and interests to these assets, including but
not limited to the statutory books and records of
Andronics.
3.
Liabilities Assumed . The Purchaser agrees
to assume and pay, discharge or perform, as appropriate, all
liabilities directly attached to the Assets listed on
Schedule 3 (the “ Assumed
Liabilities ”). The obligations of
the Purchaser under this section are subject to whatever
rights the Purchaser may have under this Agreement or
otherwise for breach by the Seller of any representation,
warranty, covenant or agreement contained in this Agreement,
including but not limited to any right of indemnification
provided by this Agreement.
3.1
Offset . Any liabilities not listed on
Schedule 3 shall remain the sole obligation of the
Seller and Robert Andrews. In the event that undisclosed
liabilities arise or are uncovered within one (1) year after
the Closing Date (the “ Undisclosed
Liabilities ”), the Undisclosed Liabilities
United States Dollar amount shall be offset first, by one (1)
share of unvested Andrews Monthly Options, defined in Section
4.6; second, by one (1) share of unvested Andrews Quarterly
Options, defined in Section 4.6; and third, by one (1)
Convertible Debenture, defined in Section 4.2, United States
Dollar for every One United States Dollar ($1.00 USD) of
Undisclosed Liability, with partial dollar amounts rounded up
to the nearest dollar (collectively, the “
Offset ”).
4.
Consideration . In consideration of the
sale, transfer and conveyance to the Purchaser of the Assets
and the Assumed Liabilities, Purchaser shall submit the
following to the Seller on the Closing Date (collectively
referred to herein as the “
Consideration ”):
4.1 Stock
. Fifty thousand (50,000) shares of restricted
SARS common stock, $0.001 par value per share (“
SARS Common Stock
”);
4.2
Convertible Debentures . Convertible
debentures in the total aggregate principal amount of Seven
Hundred Twenty-Two Thousand Two Hundred United States Dollars
($722,000 USD) (the “ Convertible
Debentures ”). The Convertible
Debentures shall include the following terms: (i) the
interest rate shall be ten percent (10%) compounded annually,
(ii) the Convertible Debenture shall automatically convert
into shares of SARS Common Stock (the “
Conversion ”) one (1) year from the
date the Convertible Debenture was executed (the “
Debenture Maturity Date ”), (iii) the
exercise price shall be One United States Dollar ($1.00 USD)
per share, a form of Convertible Debenture is annexed hereto
and made apart hereof as Exhibit A . The
Convertible Debentures shall be issued to the individuals
and/or entities listed on Schedule 4.2 .
4.3 Assumption of Tax
Liability . Purchaser agrees to assume
Seller’s tax liability to HM Revenue & Customs
Service up to, but not to exceed, Two Hundred Thousand Pounds
(£200,000 GPB).
5.
Payment of Consideration . On or before the
Closing Date, the Purchaser shall transfer, or direct its
agent to transfer, the Consideration, referred to in Sections
4.1 and 4.2, to the Seller.
6.
Adjustments . In regards to the Assets, the
operation of the Seller’s Business and related income
and expenses up to the close of business on the day before
the Closing Date shall be for the account of the Seller and
thereafter for the account of the Purchaser.
7. Value
Added Tax (“ VAT
”).
7.1 The Parties
intend that the Value Added Tax Act 1994 Section 49 (“
Section 49 ”) and the Value Added Tax
(Special Provisions) Order 1995/1268 Article 5 (“
Article 5 ”) shall apply to the
transactions contemplated herein. The Parties shall use
all reasonable endeavours to ensure that the transactions
contemplated herein are not treated as a supply of goods
or a supply of services for the purposes of VAT and pursuant
to Section 49 and Article 5.
7.2 On or
before the Closing Date, Andronics shall deliver to the
Purchaser all records relating to the Business referred to in
Section 49.
7.3 If VAT is
chargeable on the transfer of any of the Assets pursuant to
this Agreement, then, subject to the receipt by the Buyer of
a valid VAT invoice or invoices relating to those assets, the
Buyer shall pay to the Seller (in addition to the
Consideration referred to in Section 2.1) an amount equal to
the amount of VAT payable in respect of them together with
any penalty or interest incurred for late payment of the tax
thereif.
8.
Employees .
8.1 The Parties
acknowledge that the Employees' contracts of
employment shall automatically transfer to the Purchaser
pursuant to the Transfer of Undertaking (Protection of
Employment) Regulations 1981 (as amended) (the “
Regulations
”). Additionally, the Seller acknowledges
that (i) no employee of the Purchaser has an employment
agreement; and (ii) no employee of the Seller shall be
granted an employment agreement.
8.2 The
Purchaser shall be responsible for and undertakes to
indemnify and keep the Seller indemnified from and against
all accrued holiday pay entitlements and accrued holiday
entitlements of the Employees which have accrued prior to the
Closing Date.
8.3 Unless
actions for the claim(s) arise before the Closing Date, the
Purchaser shall have no recourse against the Seller in
respect of any claim made by or in relation to the Employees
whether by virtue of the assumption of Undertakings
(Protection of Employment) Regulations 1981, the Collective
Redundancies and Transfer of Undertakings (Protection of
Employment) (Amendment) Regulations 1999 or arising under
contract, statute, regulation, directive or
otherwise.
8.4 Beginning
on the Closing Date, the Purchaser shall be responsible
for the payment of all wages and salaries due, any related
pay-as-you-earn, National Insurance or deductions in respect
of the Employees.
8.5 The Seller
undertakes to indemnify and keep the Purchaser indemnified
from and against all liabilities, obligations, costs, claims
and demands arising from or in respect of any of the
Employees, insofar as and to the extent that the same was
caused by any act or omission by the Seller prior to the
Closing Date.
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8.6
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All
the obligations of the Seller under or in connection with the
contracts of employment of the Employees arising in respect of any
event or period on or prior to the Closing Date shall be performed
and discharged by the Seller and the Seller shall indemnify the
Purchaser from and against any and all actions, proceedings, costs,
claims, expenses, demands, damages, awards (whether of compensation
or otherwise), fines, penalties, judgements, order and liabilities
whatsoever (including, without limitation, national insurance and
pension entitlements and any liability to pay accrued holiday pay)
which:
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8.6.1 relate
to or arise out of or in connection with the employment or
dismissal of any of the Employees or any other employee by
the Seller or any other person or any act or omission by the
Seller or any associate of the Seller or any other event
occurring on or prior to the Closing Date for which the
Purchaser is liable by reason of the operation of the
Regulations or other measure having the force of law;
or
8.6.2 (whether
or not in respect of a period before or after the Closing
Date) relate to any contract of employment of any employee of
the Seller or any other person (other than any of the
Employees) in respect of which the Purchaser is liable as a
result of the Regulations or Directive 77/187 of the Council
of European Communities or the termination of any such
contract (and in this connection the Purchaser shall
terminate such contacts of employment promptly on becoming
aware of the same); or
8.6.3 arise
from any failure by the Seller to comply with its obligations
made or contemplated by the Regulations.
8.7 The Seller
undertakes to authorise and hereby authorises each of the
Employees to disclose to the Purchaser after the Closing Date
all information in his or her possession relating to the
Business notwithstanding any term of his or her employment
with the Seller (whether express or implied) which would
otherwise preclude him or her from so doing.
8.8 Should
any liabilities, obligations, costs, claims and demands
arising from or in respect of any of the Employees, insofar
as and to the extent that the same was caused by any act or
omission by the Seller prior to the Closing Date (the
“ Employee Liabilities ”), arise
on or after the Closing Date, the Employee Liabilities shall
be subject to the Offset defined in Section 3.1.
9.
Closing .
9.1 Time
and Place . The closing of the sale and
purchase of the Assets (the “ Closing
”) shall take place at The Otto Law Group, PLLC, at
5:00 p.m. PST on or before November 15, 2007 (the “
Closing Date ”), or at such other time
as the Parties may mutually agree and upon which time all (i)
closing conditions; (ii) closing covenants; and (iii)
outstanding exhibits and schedules have been completed,
attached hereto and fully satisfied. This
Agreement may be executed in any number of counterparts, each
of which will be an original as regards any party whose
signature appears thereon and all of which together will
constitute one and the same instrument. This Agreement will
become binding when one or more counterparts hereof,
individually or taken together, will bear the signatures of
each of the Parties reflected hereon as
signatories. The “ Execution
Date ” shall be defined as the date this
Agreement is executed by the Parties.
9.2
Obligations of Seller at the Closing . At
the Closing, the Seller shall execute, or cause to be
executed, and shall deliver to the Purchaser the
following:
9.2.1 Such documents as
the Purchaser may reasonably request for the purpose of (A)
evidencing the accuracy of any of Seller’s
representations and warranties, (B) evidencing the
performance by Seller of, or the compliance by Seller with,
any covenant or obligation required to be performed or
complied with by it, (C) evidencing the satisfaction of any
condition referred to in this Agreement, or (D) otherwise
facilitating the consummation or performance of any of the
transactions contemplated in this Agreement.
9.2.2 The Seller shall
provide the Purchaser an accounting of all prepayments
received from customers in respect of any of the Contracts to
the extent that such prepayments exceed the actual costs (if
any) incurred by the Seller in partially performing such
Contracts prior to the Closing Date.
9.2.3 Rent,
water, electricity, telephone charges, salaries, wages,
accrued holiday pay and other outgoings and costs of a
periodical nature which relate to periods commencing before
the Closing Date and ending after the Closing Date shall be
apportioned on a time basis and those referable to the period
ended on the Closing Date shall be borne by the Seller and
those referable to the period commencing on the day following
the Closing Date shall be borne by the
Purchaser.
9.3
Obligations of Purchaser at the Closing
. At the Closing, the Purchaser shall execute, or
cause to be executed, and shall deliver to the Seller the
following:
9.3.1 Such
documents as the Seller may reasonably request for the
purpose of (A) evidencing the accuracy of any representation
or warranty of the Purchaser, (B) evidencing the performance
by the Purchaser of, or the compliance by the Purchaser with,
any covenant or obligation required to be performed or
complied with by the Purchaser, (C) evidencing the
satisfaction of any condition referred to in this Agreement,
or (D) otherwise facilitating the consummation or performance
of any of the transactions contemplated in this agreement;
and
9.3.2 A
release of the obligations of the Seller under previously
executed promissory notes in the aggregate total amount of
Six Hundred Eighty-Two Thousand Three Hundred
Ninety-Eight United States Dollars and Ninety-Two
Cents ($682,398.92USD) (the “ Notes
”). A schedule of the Notes is annexed
hereto and made apart hereof on Schedule 9.3.2
.
9.4
Collateral Events . At the Closing, the
Parties acknowledge that the Operating Agreement (“
Operating Agreement ”) dated February
7, 2007 and the Licensing Agreements (the “
Licensing Agreement ”), dated February
7, 2007 executed by and between the Seller, Veritas Solutions,
Inc. and Secure Asset Reporting Services, Inc. shall be
terminated and cancelled according to the terms set
forth in the Operating Agreement and Licensing Agreement,
respectively. A fully executed copy of the
Operating Agreement and the Licensing Agreements is annexed
hereto and made apart hereof as Exhibits C and D
.
9.5
Possession . Simultaneously with such
deliveries, Seller shall take all action necessary or
appropriate to put Purchaser in actual possession and
operating control of the Assets.
10.
Seller’s Obligation Prior to Closing
.
10.1
Seller’s Operation of Business Prior to Closing
. The Seller agrees that between the Execution
Date and the Closing Date (the “ Interim
Period ”), the Seller will:
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10.1.1 Continue
to operate and maintain the Assets that are the subject of this
Agreement in the usual and ordinary course and in substantial
conformity with all applicable laws, ordinances, regulations, rules
or orders, and will use its best efforts to preserve the Assets and
preserve the Assets with its customers, suppliers and others having
business relations with the Seller.
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10.1.2 Not
assign, sell, lease or otherwise transfer, dispose or vary any of
the Assets, whether now owned or hereafter acquired, except in the
normal and ordinary course of business and in connection with its
normal operation.
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10.1.3 Maintain
all of its Assets other than inventories in their present
condition, reasonable wear and tear and ordinary usage excepted,
and maintain the inventories at levels normally
maintained.
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10.1.4 Not
engage any new Employee in the Business (save that the Seller may
do so if such Employee’s contract of employment will not
transfer to the Purchaser on or as a result of the Closing) or take
any step to vary the contract of employment of any Employee or take
any steps which would entitle any Employee to terminate his
employment without notice or in circumstances amounting to
constructive dismissal.
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10.1.5 The
Seller covenants with and undertakes to the Purchaser that it will
as soon as reasonably practicable notify the Purchaser in writing
of any matter or thing which arises and becomes known to it in the
Interim Period which constitutes a breach of any of the Warranties
set out in Section 14.
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11. Access
to Premises and Information . At a reasonable
time prior to the Closing Date, the Seller shall provide the
Purchaser and its representatives with reasonable access
during business hours to the Assets, titles, contracts and
records of the Seller and furnish such additional information
concerning the Seller’s business to the Purchaser may
reasonably request from time to time.
12.
Covenants of Seller Prior to Closing .
12.1
Conditions and Best Efforts . The Seller
will use its best efforts to effectuate the transactions
contemplated by this Agreement and to fulfill all the
conditions of the Seller’s obligations under this
Agreement, and shall do all acts and things as may be
required to carry out the Seller’s obligations and to
consummate this Agreement.
12.2
Confidential Information . If for any
reason the transactions contemplated by this Agreement fail
to consummate, the Purchaser shall not disclose to third
parties any confidential information received from the Seller
in the course of investigating, negotiating and performing
the transactions contemplated by this Agreement.
12.3
Financial Statements . On or before the
Closing Date, the Seller shall supply the Purchaser with
financial statements through September 30, 2007, of which
shall include, but is not limited to, (i) balance sheet, (ii)
profit and loss statement, (iii) detailed accounts receivable
(also to be attached as a part of Schedule 1.1), (iv)
detailed accounts payable (also to be attached as a part of
Schedule 3), (v) detailed inventory schedule (also to be
attached as a part of Schedule 1.1) and (vi) other customary
disclosures or as may be requested.
13.
Covenants of Purchaser Prior to Closing .
13.1
Conditions and Best Efforts . The Purchaser
will use its best efforts to effectuate the transactions
contemplated by this Agreement and to fulfill all the
conditions of the Purchaser’s obligations under this
Agreement, and shall do all acts and things as may be
required to carry out the Purchaser’s obligations and
to consummate this Agreement.
13.2
Confidential Information . If for any
reason the transactions contemplated by this Agreement fail
to consummate, the Purchaser shall not disclose to third
parties any confidential information received from the Seller
in the course of investigating, negotiating and performing
the transactions contemplated by this
Agreement. The Parties recognize that they have
received and will receive confidential information concerning
the other during the course of the negotiations, preparations
and due diligence the transaction contemplated herein.
Accordingly, the Parties each: (a) shall use its respective
best efforts to prevent the unauthorized disclosure of any
confidential information concerning the other that was or is
disclosed during the course of such negotiations,
preparations and due diligence; and (b) shall not make use of
or permit to be used any such confidential information other
than for the purpose of effectuating the Agreement and
related transactions. The obligations of this section will
not apply to information that: (a) is or becomes part of the
public domain other than by fault of the receiving party; (b)
is disclosed by the disclosing party to third parties without
restrictions on disclosure; (c) is received by the receiving
party from a third party without breach of a contractual or
fiduciary nondisclosure obligation to the other party; or (d)
is required to be disclosed by law, provided that the
receiving party shall give at least two (2) days’ prior
written notice to the disclosing party of such disclosure
required by law. If this Agreement is terminated, all copies
of documents containing confidential information shall be
returned by the receiving party to the disclosing
party.
14.
Representations and Warranties of the Seller
. The Seller represents and warrants to the
Purchaser as follows:
14.1
Corporate Existence . The Seller is now,
and on the Closing Date shall be, a corporation duly
organized, validly existing and in good standing under the
laws of Northern Ireland, has all requisite corporate power
and authority to own its properties and assets and carry on
its business and is in good standing in each jurisdiction in
which such qualification is required.
14.2
Corporation Power and Authorization . The
Seller has full corporate authority to execute and deliver
this Agreement and any other agreement to be executed and
delivered by the Seller in connection herewith, and to carry
out the transactions contemplated hereby. The
execution and delivery of this Agreement and the consummation
of the transactions contemplated hereby have been duly
authorized by all necessary corporate and shareholder
action. No other corporate proceedings by the
Seller are necessary to authorize this Agreement or the
carrying out of the transactions contemplated
hereby. The Seller has consulted its own financial
advisor, tax advisor and accountant, as necessary or
desirable, as to matters concerning this
Agreement. This Agreement constitutes a valid and
binding Agreement of the Seller in accordance with its
terms.
14.3
Conflict with Other Agreements, Consents and Approvals
. With respect to (i) any corporate or entity
formation documents, such as the articles of incorporation,
bylaws or similar documents of the Seller, (ii) any
applicable law, statute, rule or regulation, (iii) any
contract to which the Seller is a party or may be bound, or
(iv) any judgment, order, injunction, decree or ruling of any
court or governmental authority to which the Seller is a
party or subject, the execution and delivery by the Seller of
this Agreement and any other agreement to be executed and
delivered by the Seller in connection herewith and the
consummation of the transactions contemplated hereby will not
(a) result in any violation, conflict or default, or give to
others any interest or rights, including rights of
termination, cancellation or acceleration, or (b) require any
authorization, consent, approval, exemption or other action
by any court or administrative or governmental body which has
not been obtained, or any notice to or filing with any court
or administrative or governmental body which has not been
given or done.
14.4
Compliance with Law . The Seller’s
use and occupancy of the Assets, wherever located, has been
in compliance with all applicable governmental laws or
ordinances, the non-compliance with which, or the violation
of which, might have a material adverse affect on the Assets,
the Assumed Liabilities or the financial condition, results
of operations or anticipated business prospects of the
Purchaser, and the Seller has received no claim or notice of
violation with respect thereto. Without in any way
limiting the generality of the foregoing, the Seller is in
compliance with, and is subject to no liabilities under, any
and all applicable laws, governmental rules, ordinances,
regulations and orders pertaining to the presence,
management, release, discharge or disposal of toxic or
hazardous waste material or substances, pollutants (including
conventional pollutants) and contaminants. The
Seller has obtained all material permits, licenses,
franchises and other authorizations necessary for the conduct
of its business.
14.5 Tax
and Other Returns and Reports . (i) All tax
returns and reports (including without limitation all income
tax, payroll, unemployment compensation, sales and use,
excise, privilege, property, ad valorem, franchise, license
and school) required to be filed by the Seller by the Closing
(“ Tax Returns ”) have been
filed with the appropriate governmental agencies in all
jurisdictions in which such returns and reports are required
to be filed, and all such returns and reports properly
reflect the taxes of the Seller for the periods covered
thereby; and (ii) all taxes, assessments, interest,
penalties, deficiencies, fees and other governmental charges
or impositions, including those enumerated above with respect
to the Tax Returns, which are called for by the Tax Returns,
or which are claimed to be due from the Seller by notice from
any taxing authority, or upon or measured by its properties,
assets or income, have been properly accrued or paid by or at
the Closing if then due and payable. The amount of
tax payable by the Seller on the profits of the Business in
the last two accounting periods of the Seller has not
depended to a material extent on any agreement with any tax
authority not being an agreement based on strict application
of any relevant legislation.
14.5.1
Accounts . The accounts of the Seller
relating to the Business for the financial year ended on
February 28, 2007 comply with the requirements of the
Companies Order 1989 (or when the Companies Act 2006 is
brought into force) Companies Act 2006. The
accounts have been prepared in accordance with all applicable
Statements of Standard Accounting Practice and (to the extent
that none are applicable) with generally accepted accounting
principles and practices applied consistently. They show a
true and fair view of the assets and liabilities of the
Business as at that date, including contingent, unquantified
or disputed liabilities, and of the results of the Business
for the financial period ended on February 28,
2007. The accounting and other records of the
Business are up to date and contain complete and accurate
details of all transactions of the Business.
14.6
Intellectual Property Rights .
14.6.1 The
Seller owns, possesses or has the right to use all
intellectual property rights necessary or required to conduct
its business as presently conducted, or otherwise used by the
Seller. There are no subsisting licenses or other
agreements under which the Seller has granted to any third
party any rights or interest in connection with the
Intellectual Property or any rights to any know-how or
confidential information relating to the
Business.
14.6.2 No royalties or
other amounts are payable by the Seller to other persons by
reason of the ownership or the use of the any intellectual
property owned or used by the Seller.
14.6.3 (i) To
the best knowledge of the Seller, no product or service
related to the Seller’s business and marketed and sold
by the Seller violates any license or infringes upon any
intellectual property rights of others, (ii) the Seller has
not received any notice that any such product or service
conflicts with any intellectual property rights of others,
and (iii) to the best knowledge of the Seller, there is no
reasonable basis to believe that any such violation,
infringement or conflict may exist.
14.6.4 The Seller is not
a party to, or subject to, any contract which currently
requires, or upon the passage of time or occurrence of an
event or contingency (whether of default or otherwise) will
require, the conveyance or disclosure of secret processes or
formulae related to, any intellectual property of the
Seller.
14.6.5 All
computer hardware and software included among the Assets and
currently used and/or necessary to the conduct of the
Seller’s business, are in good working
order.
14.6.6 Except as
described in Schedules 1.1-1.5 , the Seller has
obtained and delivered to the Purchaser all consents and
approvals of third parties necessary to duly transfer to the
Purchaser all of the Seller’s rights, title and
interest in and to all of its intellectual property included
among the Assets.
14.7
Contracts . The Seller is not a party to or
subject to any contract that involves (i) agency,
distributorship, franchising, marketing rights, information
sharing, manufacturing rights, servicing or maintenance; (ii)
partnership, joint venture or similar arrangement; (iii) the
purchase, conditional sale, credit sale, lease, hiring or
similar arrangement; (iv) committing Andronics to capital
expenditures; (v) disabling Andronics’ complete
performance with the terms of any Contract entered into
within (6) months from the date of execution; (vi) the supply
of goods and/or services by or to the Seller on terms under
which retrospective or future discounts, price reductions or
other financial incentives are given by or to the Seller
dependent upon the level of purchases or any other fact;
(vii) terms not on “arm’s length;” and
(viii) a loss-making nature.
14.7.1 The
Seller is not in default under any of the Contracts or in
respect of any other obligation or restriction binding upon
it in relation to the Business. No threat or claim of default
has been made and no threat or claim is outstanding against
the Seller under any of the Contracts or any other agreement
or arrangement to which the Seller is a party relating to the
Business or the Assets and there is nothing, whereby any of
the Contracts or other agreement or arrangement, that may be
terminated or rescinded by any other party.
14.7.2 During
the twelve (12) months immediately preceding Closing Date,
there has been no substantial change in the bases or terms on
which any person is prepared to do business with the Seller
in relation to the Business. No substantial
customer or supplier of the Business has ceased or
substantially reduced its business with the Seller and no
indication has been received by the Seller that there will be
any such change, cessation or reduction.
14.8
Litigation . The Seller has no knowledge of
any claim, litigation, proceeding or investigation pending or
threatened against the Seller that might result in any
material adverse change in the Business or condition of the
Assets being conveyed under this Agreement.
14.9
Assets . The items included on Schedule
1.1 are to the best of the Seller’s knowledge fit
for their intended purpose and are of satisfactory quality,
are not obsolete, slow moving or likely to realize less than
book value, and are sufficient for the normal requirements of
the Business. The work-in-progress is at its normal level
having regard to current orders. The raw material,
packaging materials and finished goods are at their normal
level having regard to the current trading requirements of
the Business. All of the items comprising the
fixed Assets are in a good and safe state of repair and
condition and satisfactory working order, are adequate and
not surplus to the requirements of the Business, and would
not be expected to require replacement within a period of
twelve (12) months after the Closing Date.
14.9.1
Title to Assets . The Seller holds good and
marketable title to the Assets, free and clear of
restrictions on or conditions to transfer or assignment, and
free and clear of liens, pledges, charges or
encumbrances.
14.10
Employees . No changes have been made since
February 7, 2007 in the terms of employment of the Employees
a
