ASSET PURCHASE AGREEMENT
BY
AND BETWEEN
JINKHOLD,
LTD.
A
United Kingdom Corporation
▇▇
▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇
#06286236
(Purchaser)
And
ANDRONICS,
LTD.
A
Northern Ireland Corporation
▇▇
▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇▇▇▇,
▇▇▇▇ ▇▇▇
#NI
17460
(Seller)
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 ▇▇▇▇▇▇ ▇▇▇▇▇▇▇, an individual residing in Northern Ireland
and a founder of Andronics (“▇▇▇▇▇▇▇”). Jinkhold,
Andronics and ▇▇▇▇▇▇▇ are hereinafter at times collectively referred to as
the
“Parties.”
7.1 The
Parties intend that
the Value Added Tax ▇▇▇ ▇▇▇▇ 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.
8.1 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.
9.2.1
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.
9.3.1 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.
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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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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.
14.7.1 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.
18.3.1 One
million
(1,000,000) shares shall vest monthly beginning upon the Closing Date (
“▇▇▇▇▇▇▇ Monthly Options”).
18.3.2 Five
hundred
thousand (500,000) shares shall vest quarterly upon meeting the revenue
projections listed in Schedule 18.3.2 and in the following
amounts:
Quarter
1: 50,000 options
vest
Quarter
2: 100,000 options vest
Quarter
3: 150,000 options vest
Quarter
4: 200,000 options vest
If
any
revenue projections are not met for any given quarter, the option amount
for
that quarter, less ten percent (10%), shall be added to the fourth quarter’s
total. If the fourth quarter goals are not met, that quarters entire
option amount (whether or not accrued options have been added to the fourth
quarter) shall be forfeited. Section 18.3.2 shall be hereinafter
defined as “▇▇▇▇▇▇▇ Quarterly Options.”
▇▇▇▇▇▇
▇▇▇▇▇▇▇ covenants to pay to the Purchaser (or as the Purchaser may direct)
an
amount equal to any liability of the Purchaser (or any other person) to pay
income tax or national insurance contributions (both employers and employees)
(a
“Relevant Tax Liability”) arising as a result of the grant,
exercise, assignment or release of the ▇▇▇▇▇▇▇ Options or as the result of
the
acquisition, holding or disposal of SARS Common Stock by ▇▇.
▇▇▇▇▇▇▇. In connection therewith, ▇▇. ▇▇▇▇▇▇▇ and the Purchaser agree
that:
(i) if
so requested by the Purchaser at any time after the Closing Date, ▇▇. ▇▇▇▇▇▇▇
shall enter into an election under Section 431 of the Income Tax (Earnings
and
▇▇▇▇▇▇▇▇) ▇▇▇ ▇▇▇▇ in respect of any SARS Common Stock acquired by ▇▇. ▇▇▇▇▇▇▇
pursuant to the option; and
(ii) it
shall be a condition of the exercise of the ▇▇▇▇▇▇▇ Options that ▇▇. ▇▇▇▇▇▇▇
shall remit to the Purchaser (or as it may direct) in cleared funds the amount
of any Relevant Tax Liability or make such other arrangements for the discharge
of such Relevant Tax Liability as the Board of Directors of the Purchaser
may in
its absolute discretion think fit.
The
Seller’s indemnity obligations
under this Section 22.2 shall be subject to the following: (i) if any claim
is
asserted against the Purchaser that would give rise to a claim by the Purchaser
against the Seller for indemnification under the provisions of this Section,
then the Purchaser shall promptly give written notice to the Seller concerning
such claim and the Seller shall, at no expense to the Purchaser, defend the
claim, and (ii) the Seller shall not be required to indemnify the Purchaser
for
an amount that exceeds the fair market value of the Purchase Price paid by
the
Purchaser under this Agreement.
23.1 No
claim shall be brought by the Purchaser against the Seller unless notice
in
writing has been given to the Seller as soon as reasonably practicable, and
in
any event within twenty-eight (28) days after the Purchaser becomes aware
of the
grounds for a claim and on or before the first anniversary of this Agreement
specifying the nature of the claim in reasonably sufficient detail and so
far as
practicable the amount claimed.
23.2 Any
claim shall become fully barred and unenforceable after the second anniversary
of this Agreement unless proceedings in respect of that claim have been
commenced. For this purpose, proceedings shall not be deemed to have been
commenced unless they have been issued and served upon the Seller.
23.4
The Purchaser shall have no claim
whatever against the Seller: (i) if and to the extent that the breach on
which
the claim is based occurs as a result of any legislation not in force on
the
Execution Date that takes effect retrospectively or any increase in the rates
of
taxation in force at that date, or as a consequence of a change in the
interpretation of the law in any jurisdiction after the Execution Date; (ii)
if
and to the extent that the breach on which the claim is based would not have
arisen but for any voluntary act, omission, transaction or arrangement by
or
with the Purchaser or any person connected with the Purchaser after the Closing
Date otherwise than in the ordinary course of conducting the Business which
the
Purchaser knew or ought reasonably to have known could give rise to a claim;
(iii) to the extent that the claim arises only as a result of any changes
after
the Closing Date in the accounting bases, policies or methods used by the
Purchaser to value any of its assets, or; (iv) to the extent that the claim
relates to any loss for which the Purchaser is indemnified by insurance or
for
which it would have been indemnified if at the relevant time the Purchaser
had
maintained valid and adequate insurance cover that is normally effected by
prudent companies carrying on a business similar to the Business.
23.5 No
claim shall be made
by the Purchaser if the fact, omission, circumstance or occurrence giving
rise
to the claim has been fully and fairly disclosed to the Purchaser in this
Agreement.
23.7 Should
the Purchaser
receive any payment or benefit from any policy of insurance or any third
party
other than the Seller as a result of the circumstances giving rise to a claim,
and the Seller has made any payment to the Purchaser in respect of that claim,
the Purchaser shall, as soon as practicable after receipt, reimburse the
Seller
an amount which is the lesser of the amount of the payment or benefit received
from the insurer or other third party and the payment received from the Seller,
having deducted all costs, charges and expenses reasonably incurred by the
Purchaser in obtaining the payment or benefit.
23.8 If
any potential claim
arises by reason of a liability that is contingent only, the Seller shall
not be
under any obligation to make any payment for that claim until such time as
the
contingent liability becomes actual.
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If
to Purchaser:
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Jinkhold,
Ltd.
c/o
SARS Corporation
__________________________
__________________________
__________________________
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With
a Copy to:
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The
▇▇▇▇ Law Group, PLLC
Attn:
▇▇▇▇▇ ▇▇▇▇
▇▇▇
▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇,
▇▇ ▇▇▇▇▇
▇▇▇▇▇▇
▇▇▇▇▇▇
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If
to Seller:
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Andronics,
Ltd.
▇▇▇▇
▇▇ ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇
Springtown
Industrial Estate
Londonderry
Northern
Ireland
BT48
ONA
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With
a Copy to:
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▇▇▇▇▇▇
▇▇▇▇▇▇▇
▇ ▇▇▇▇▇▇
▇▇▇▇▇▇
▇▇▇▇▇▇▇▇▇▇▇
▇▇▇▇▇▇
▇▇▇▇▇▇▇▇▇▇▇
▇▇▇▇
▇▇▇
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or
at any
other address as any party may, from time to time, designate by notice given
in
compliance with this section.
24.8
Titles
and
Captions. All articles, sections and paragraph titles or captions
contained in this Agreement are for convenience only and shall not be deemed
part of the context nor affect the interpretation of this
Agreement.
24.17.1 If
the Purchaser
makes a payment or suffers a loss
(the “Loss") in respect of which the
Purchaser is entitled to be indemnified or otherwise compensated by the Seller
under this Agreement and payment so made by the Seller
(the “Payment") is subject to tax in the
hands of the Purchaser or a withholding on account of tax, the Seller shall
pay
to the Purchaser such additional amount as ensures that the Purchaser is
left
with the same amount as it would have been entitled to receive in the absence
of
any such tax liability or withholding PROVIDED THAT the Seller shall not
be
under any obligation to make an increased payment under this Section 24.17.1
to
the extent the Loss is deductible in computing the Purchaser's tax liability
in
respect of the Payment.
24.17.2 Any
additional
payment due by the Seller to the Purchaser under Section 24.17.1 shall be
payable by the Seller on the later of:
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(i)
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five
(5) business days before the last date on which the Purchaser can
discharge the tax liability arising as a result of the Payment
without
incurring a liability for penalties or interest
thereon;
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(ii)
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five
(5) business days after written demand has been made in respect
thereof by
the Purchaser.
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24.17.3 If
an increased
amount is paid to the Purchaser under Section 24.17.1 and the Purchaser later
obtains a credit or deduction in respect of the Loss in computing its tax
liability the Purchaser shall reimburse (to the extent it can do so without
prejudice to its ability to retain the credit or deduction) to the Seller
within
five (5) business days of utilising credit or deduction the lesser
of:
(i) the
increased amount so paid; and
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(ii)
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the
amount the Purchaser saves in tax as a consequence of utilising
the credit
or deduction.
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[Signature
page to follow]
DATE:
October 26, 2007
SELLER:
ANDRONICS, LTD.
By: /s/
▇▇▇▇▇▇
▇▇▇▇▇▇▇
Name: ▇▇▇▇▇▇
▇▇▇▇▇▇▇
Title:
▇▇▇▇▇▇▇:
▇▇▇▇▇▇
▇▇▇▇▇▇▇
By: /s/
▇▇▇▇▇▇
▇▇▇▇▇▇▇
Name:
▇▇▇▇▇▇ ▇▇▇▇▇▇▇
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Title:
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PURCHASER:
JINKHOLD,
LTD.
By: /s/
▇▇▇▇▇▇▇
▇▇▇▇▇▇▇
Name:
▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇
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Title:
Director
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EXHIBITS
AForm
of
Convertible Debenture
BOperating
Agreement
CLicensing
Agreement
DLease
Agreement
SCHEDULES
1.1List
of Assets (including assumed Accounts Receivable)
1.2List
of Employees
1.3List
of Contracts (including British Petroleum Novation)
1.4List
of Intellectual Property
1.5List
of Goodwill
3.0Assumed
Liabilities (including Excluded Liabilities)
4.2Convertible
Debenture Holders
9.3.2Promissory
Notes
18.3.2Revenue
Projections for ▇▇▇▇▇▇▇ Quarterly Options
Exhibit
A
Form
of Convertible Debenture
[The
Form of Convertible Debenture
appears on the following pages]SARS
CORPORATION
10%
CONVERTIBLE DEBENTURE
No.
[insert debenture #] [date] , 2007
$
[value] [location]
SARS
CORPORATION (“Maker” or the “Company”) hereby promises to pay to the order of
[name of debenture holder] or his , her, its assigns (“Holder”), the sum of
[value] United States Dollars ($XX,XXX), with interest at the rate of ten
percent (10%) per annum until paid. All outstanding principal and
accrued and unpaid interest shall become due twelve months from the date
upon
which this 10% Convertible Debenture (“Debenture”) is executed (the “Maturity
Date”). All payments due and owning under this Debenture shall be
subject to the terms and conditions set forth herein.
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1.
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The
Debenture is issued pursuant to that certain Asset Purchase Agreement (the
“Agreement”), dated the same date as first set forth herein, by and between
Andronics, Ltd. and Jinkhold, Ltd., a wholly owned subsidiary of the Maker,
which is hereby incorporated by reference.
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2.
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The
Company shall keep at its principal office a register in which the Company
shall
provide for the registration of the Holder of the Debenture or for the
registration of a transfer of the Debenture to a different Holder.
Upon
receipt of evidence reasonably satisfactory to the Company of the loss, theft,
destruction or mutilation of the Debenture and, in the case of any such loss,
theft or destruction, upon receipt of an indemnity bond in such reasonable
amount as the Company may determine (or if such Debenture is held by the
original Holder, of an unsecured indemnity agreement reasonably satisfactory
to
the Company) or, in the case of any such mutilation, upon surrender and
cancellation of such Debenture, the Company will make and deliver, in lieu
of
such lost, stolen, destroyed or mutilated Debenture, a new Debenture of like
tender and unpaid principal amount and dated as of the date to which interest
has been paid on the Debenture so lost, stolen, destroyed or
mutilated.
The
Company may deem and treat the person in whose name any Debenture is registered
as the absolute owner and Holder of such Debenture for the purpose of receiving
payment of the principal of and interest on such Debenture and for the purpose
of any notices, waivers or consents thereunder, whether or not such Debenture
shall be overdue, and the Company shall not be affected by notice to the
contrary. Payments with respect to any Debenture shall be made only
to the registered Holder thereof.
The
Company may, as a condition of payment of all or any of the principal of,
and
interest on, the Debenture, or its conversion, require Holder to present
the
Debenture for notation of such payment and, if the Debenture be paid in full
or
converted at the election of Holder as herein provided, require the surrender
hereof.
The
Company, in its sole discretion, may subordinate the Debenture to any Senior
Debt of the Company. For purposes of the Debenture, “Senior Debt”
shall mean all indebtedness for all principal, fees, expenses, interest,
penalties, post-bankruptcy petition interest, and all other amounts payable
for
money borrowed.
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7.
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At
any
time prior to or at the Maturity Date, at the option of the Holder, all
principal and accrued interest due on this Debenture (the “Convertible Amount”)
may be converted at $1.00 USD per share. Upon the Maturity Date, all
outstanding principal and accrued interest shall automatically convert into
common stock of the Company.
The
Conversion Amount shall be adjusted downward in the event the Company issues
common stock (or securities exercisable for convertible into or exchangeable
for
common stock) at a price below the Conversion Amount, to a price equal to
such
issue price.
Upon
the
Company’s receipt of written notice of Holder’s election to convert the
Debenture or upon the Maturity Date, the principal amount of this Debenture
plus
any accrued interest shall be deemed converted into such number of shares
of the
Company’s Common Stock as determined pursuant to Section 7, and no further
payments shall thereafter accrue or be owing under the Debenture. The
entire balance due and owing under the Debenture must be converted to Common
Stock; no partial conversions will be allowed. Holder shall return
this Debenture to the Company at the address set forth below, or such other
place as the Company may require in writing. Within ten (10)
days after receipt of this Debenture, the Company shall cause to be issued
in
the name of and delivered to Holder at the address set forth above, or to
such
other address as to which Holder shall have notified the Company in writing,
a
certificate evidencing the securities to which Holder is entitled. No
fractional securities will be issued upon conversion of the
Debenture. If on conversion of the Debenture a fraction of a security
results, the Company shall round up the total number of securities to be
issued
to Holder to the nearest whole number.
|
9.
|
Any
notice required or desired to be given under this Agreement shall be in writing
and shall be deemed given when personally delivered, sent by an overnight
courier service, or sent by certified or registered mail to the addresses
set
forth below, or such other address as to which one party may have notified
the
other in such manner.
|
10.
|
The
following will be “Events of Default” under the Debenture: (a) the
Company shall default on the payment of principal or interest on the Debenture
or on any other indebtedness of the Company when due; (b) the Company shall
default on the observance or performance of any other covenant set forth
in the
Debenture; (c) the Company shall issue any indebtedness senior to the Debenture
or grant any security for any other indebtedness (other than in connection
with
operating leases such as stand-alone office equipment leases); (d) the Company
shall become insolvent or file a voluntary petition in bankruptcy (or have
such
a petition filed against it) or have an assignment for the benefit of creditors
or other creditor arrangement or similar event occur with respect to it or
its
assets; or (e) failure to comply with any other term or condition of the
Debenture, which shall not have been cured within ten (10) business days
receipt
of written notice to the Company.
Upon
Default, and at the option of Holder, or Holder’s successors or assigns, with
fifteen (15) days written notice to the Company, demand or presentment, Holder
may (i) accelerate all amounts due and owing under this Debenture and demand
payment immediately and/or (ii) declare the right to exercise any and all
remedies available to Holder under applicable law.
|
11.
|
(a) 10%
per annum calculated using a 360-day year composed of 12 30-day months, payable
in full, unless otherwise converted to common stock in the Company, at maturity
or conversion.
(b) The
Company agrees that all Conversion Shares shall be fully paid and
non-assessable. Maker shall pay upon demand any and all expenses,
including reasonable attorney fees, incurred or paid by Holder of this Debenture
without suit or action in attempting to collect funds due under this Debenture
or in connection with the issuance of the Conversion Shares. In the
event an action is instituted to enforce or interpret any of the terms of
this
Debenture including but not limited to any action or participation by Maker
in,
or in connection with, a case or proceeding under the Bankruptcy Code or
any
successor statute, the prevailing party shall be entitled to recover all
expenses reasonably incurred at, before and after trial and on appeal or
review,
whether or not taxable as costs, including, without limitation, attorney
fees,
witness fees (expert and otherwise), deposition costs, copying charges and
other
expenses.
(c) All
parties to this Debenture hereby waive presentment, dishonor, notice of dishonor
and protest. All parties hereto consent to, and Holder is hereby
expressly authorized to make, without notice, any and all renewals, extensions,
modifications or waivers of the time for or the terms of payment of any sum
or
sums due hereunder, or under any documents or instruments relating to or
securing this Debenture, or of the performance of any covenants, conditions
or
agreements hereof or thereof or the taking or release of collateral securing
this Debenture. Any such action taken by Holder shall not discharge
the liability of any party to this Debenture.
(d) This
Debenture shall be governed by and construed in accordance with the laws
of the
state of California without regard to conflict of law principles.
(e) All
payments due and owing under this Debenture shall be delivered to the
following:
[name
of holder]
[address
of holder]
[city,
state, ZIP]
IN
WITNESS WHEREOF, the parties hereto execute this Convertible Debenture as
of
this ____ day of_______, 2007.
Maker: SARS,
Corporation
____________________________
By:
▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
Its: Chief
Executive
Officer
|
Holder:
[name]
Holder’s
address: [address]
[city,
state, ZIP]
|
|
|
Maker’s
address: SARS,
Corporation
Attn:
▇▇▇▇▇▇▇ ▇.
▇▇▇▇▇▇▇
▇▇▇
▇▇▇▇▇
▇▇▇▇▇▇ ▇▇, ▇▇▇▇
▇▇▇▇▇
▇▇▇▇▇▇▇▇,
▇▇ ▇▇▇▇▇ ▇▇▇
|
With
a copy
to: The
▇▇▇▇ Law Group, PLLC
Attn:
▇▇▇▇▇ ▇. ▇▇▇▇
▇▇▇
▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇
▇▇▇▇
▇▇▇▇▇▇▇,
▇▇ ▇▇▇▇▇
▇▇▇
|
_________,
2007
SARS
Corporation
▇▇▇
▇▇▇▇▇ ▇▇▇▇▇▇
▇▇, ▇▇▇▇
▇▇▇▇▇
▇▇▇▇▇▇▇▇,
▇▇ ▇▇▇▇▇ ▇▇▇
Attention:
▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
RE: SARS,
Corporation (the “Company”) Convertible Debenture
Dear
▇▇.
▇▇▇▇▇▇▇:
I,
________________________, am the
holder of convertible debenture #___ of the Company, issued on ______________,
200__ for $____________ (the “Debenture”). The original Debenture is
enclosed and attached hereto. Subject to Section 8 of the Debenture,
I wish to convert the entire principal and any accrued interest into such
number
of shares of the Company’s common stock as determined pursuant to Section 7 of
the Debenture. I understand that by converting the Debenture into common
stock,
no further payments shall thereafter accrue or owe under the
Debenture.
Once
the Debenture is converted into
common stock of the Company, please direct the Company’s transfer agent to
submit the stock certificates to the following street address:
_____________________
_____________________
_____________________
_____________________
Phone:
_______________
Please
do not hesitate to contact me at
the above referenced phone number if you need further
assistance. Thank you for your time.
Sincerely,
_____________________
Enclosure
Exhibit
B
Operating
Agreement
[the
Operating Agreement appears on the following pages]
OPERATING
AGREEMENT
THIS
OPERATING AGREEMENT (this “Agreement”) is entered into as of
this ___ day
of January, 2007 (the “Execution Date”), between Andronics,
Ltd. (“Andronics”), Veritas Solutions, Inc.
(“VSI”) and Secure Asset Reporting Services, Inc., a wholly
owned subsidiary of VSI (“SARS”). Collectively
referred to herein as the “Parties.”
ARTICLE
I
(a) If
the Asset Purchase closes and becomes effective within six (6) of the Execution
Date of this Agreement, the Note amount (and any additional amended amounts
thereto) shall be applied against the Purchase Price and the Note shall
be
cancelled in its entirety.
ARTICLE
II
ARTICLE
III
(a) SARS
shall execute consulting services agreements with the Andronics Consultants
to
perform its obligations under this Agreement because they possess such
qualifications, knowledge and experience in the provision of the tasks
to which
they are assigned as would be required for comparable positions and tasks
in
competitive businesses. SARS shall provide appropriate training to
such personnel as and when required in order to facilitate the efficient
and
knowledgeable performance of services under this Agreement. SARS
shall monitor the performance of such personnel and shall take such action
as is
necessary to remedy promptly any deficiencies in such performance.
(b) The
Andronics Consultants shall render all services hereunder as an independent
contractor and shall not hold itself out as an agent of VSI or SARS. Nothing
herein shall be construed to create or confer upon the Andronics Consultants
the
right to make contracts or commitments for or on behalf of VSI or
SARS.
(a) Andronics
shall maintain (whether by acquisition or lease) suitable facilities and
equipment for the efficient and effective performance of operating the
Services
and Assets (the “Duties”). Such facilities and
equipment shall be kept in good working order, normal wear and tear
excepted.
(b) SARS
shall be responsible for all costs associated with the Duties.
3.4 Insurance. The
Andronics Consultants shall obtain, and maintain during the term of this
Agreement, insurance for the Assets against such risks and in such amounts
as
are carried by similar businesses in similar circumstances.
(a) Except
to the extent otherwise expressly provided, VSI and SARS shall, in the
performance of its obligations and duties under this Agreement, exercise
and use
a degree of care and skill that a similarly situated service provider would
exercise and use in providing services in similar circumstances.
(b) VSI
and SARS shall use reasonable commercial efforts to broaden the geographic
penetration of the Services.
ARTICLE
IV
FEES;
COMPENSATION
ARTICLE
V
(a) A
party may terminate this Agreement by notice to the other party in the
event
that: (i) the other party (the “Defaulting Party”) shall fail
to perform, or shall breach, any of its obligations set forth in this Agreement,
and such failure shall continue for thirty (30) days after written notice
thereof has been given to the Defaulting Party, or if the breach is not
capable
of cure within such thirty (30) days, reasonable efforts to cure have not
been
undertaken; or (ii) the other party (1) makes any general assignment for
the
benefit of creditors, (2) initiates or is the subject of a request to initiate
a
bankruptcy or insolvency proceeding under any provision of law, including
the
United States Bankruptcy Code, that is intended to liquidate or rehabilitate
such other party, and is not dismissed within sixty (60) days, (3) files,
or is
the subject of a filing (that is not dismissed within sixty (60) days)
with a
court of competent jurisdiction for the appointment of a receiver, guardian,
conservator or similar officer, or (4) is rendered or declared insolvent;
and a
termination hereunder shall be effective, if no cure has occurred thirty
days
after notice has been given to such other party.
(b) Upon
written notice to Andronics, VSI and SARS may terminate this Agreement
in the
event that the Asset Purchase fails to close within six (6) months of the
Execution Date.
ARTICLE
VI
ARTICLE
VII
(a) Each
party shall indemnify and hold the other party and its officers, directors,
agents and employees harmless from and against any and all claims, demands,
actions, losses, liabilities, costs, expenses (including reasonable legal
fees
and expenses), suits and proceedings of any nature whatsoever arising from
the
gross negligence or willful misconduct of the indemnifying party that arise
out
of or are in any manner connected with its performance under this Agreement,
except to the extent such claim, demand, action, loss, liability, expense,
suit
or proceeding is attributable to the gross negligence, willful misconduct,
or
breach of this Agreement by, the party seeking indemnification
hereunder.
(b) VSI
and SARS shall indemnify and hold Andronics and its officers, directors,
agents
and employees harmless from and against any and all claims, demands, actions,
losses, liabilities, expenses (including reasonable legal fees and expenses),
suits and proceedings arising from VSI’s or SARS’
performance involving the Duties and/or the Services.
ARTICLE
VIII
ARTICLE
IX
If
to Andronics and/or the Andronics Consultants:
If
to VSI
or
SARS: Veritas
Solutions, Inc.
▇▇▇
▇▇▇▇▇ ▇▇▇▇▇▇
▇▇, ▇▇▇▇▇
▇▇▇▇
▇▇▇▇▇▇▇▇,
▇▇ ▇▇▇▇▇
Attn: ▇▇▇▇▇▇▇
▇▇▇▇▇▇▇
Fax: (▇▇▇)
▇▇▇-▇▇▇▇
with
a
copy
to: The
▇▇▇▇ Law Group, PLLC
▇▇▇
▇▇▇▇▇
▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇
▇▇▇▇▇▇▇,
▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attn: ▇▇▇▇▇
▇. ▇▇▇▇
Fax: (▇▇▇)
▇▇▇-▇▇▇▇
VERITAS
SOLUTIONS, INC.
By:
▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇
Title:
Director and CEO
SECURE
ASSET REPORTING SERVICES, INC.
By:
▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇
Title:
Director and CEO
ANDRONICS
LTD.
By:
Its:
Exhibit
A
Assets
and Licensed Property
Exhibit
B
Andronics
Consultants
Exhibit
C
Note
Exhibit
C
Licensing
Agreement
[the
Licensing Agreement appears on the following pages]
LICENSING
AGREEMENT
THIS
EXCLUSIVE PATENT AND INTELLECTUAL PROPERTY LICENSING AGREEMENT (the
“Licensing Agreement”), made and entered into this ___ day
of January,
2007 (the “Execution Date”), between Andronics, Ltd.
(“Andronics” or the “Licensor”), Veritas
Solutions, Inc. (“VSI”) and Secure Asset Reporting Services,
Inc., a wholly owned subsidiary of VSI (“SARS”). VSI
and SARS are collectively referred to as the
“Licensee.”
NOW,
THEREFORE, for and in consideration of the foregoing, the warranties
and representations herein contained and other good and valuable consideration,
the receipt of which is hereby acknowledged, the parties hereto have agreed
and
do hereby agree as follows:
ARTICLE
I
DEFINITIONS
.
|
a.
|
Unless
otherwise defined below, capitalized terms shall have the meaning
as set
forth in the Operating Agreement. The following terms, as used
herein, have the following
meanings:
|
“Bankruptcy
Event” means any of the following events: (a) Licensee commences a case
or other proceeding under any bankruptcy, reorganization, arrangement,
adjustment of debt, relief of debtors, dissolution, insolvency or liquidation
or
similar Law of any jurisdiction relating to Licensee; (b) there is commenced
against Licensee any such case or proceeding that is not dismissed within
sixty
(60) days after commencement; (c) Licensee is adjudicated insolvent or
bankrupt,
or any order of relief or other order approving any such case or proceeding
is
entered; (d) Licensee suffers any appointment of any custodian or the like
for
it or any substantial part of its property that is not discharged or stayed
within sixty (60) days; (e) Licensee makes a general assignment for the
benefit
of creditors; (f) Licensee fails to pay, or states that it is unable to
pay or
is unable to pay, its debts generally as they become due; (g) Licensee
calls a meeting of its creditors with a view to arranging a composition,
adjustment or restructuring of its debts; or (h) Licensee, by any act or
failure
to act, indicates its consent to, approval of or acquiescence in any of
the
foregoing or takes any corporate or other action for the purpose of effecting
any of the foregoing.
“Contracts”
means all contracts, agreements, arrangements, understandings, leases,
licenses,
commitments, sales and purchase orders and other instruments.
“Governmental
Entity” means any Federal, state or local or any foreign governmental,
regulatory or administrative authority, agency, official, body or commission
or
any court, tribunal or arbitral body.
“Knowledge
of Licensor” shall mean that Licensor is actually aware of a fact or a
matter.
“Law”
means any Federal, state, foreign or local statute, law, ordinance, regulation,
rule, code, order, judgment, decree, other requirement or rule of law of
the
United States or any other jurisdiction and any other similar act or
law.
“Lien”
means any mortgage, liability, lien (including any tax lien), obligation,
pledge, charge, security interest or encumbrance of any kind.
“Licensed
Property” means the assets listed on Exhibit A under the heading
“Licensed Property” attached to the Operating Agreement.
“Material
Adverse Effect” means any change in or effect on the Purchased Assets
that, individually or in the aggregate (taking into account all other such
changes or effects), is, or is reasonably likely to be, materially adverse
to
the value of the Purchased Assets individually or taken as a whole.
“Person”
means an individual, corporation, partnership, association, trust or other
entity or organization, including a government or political subdivision
or an
agency or instrumentality thereof.
ARTICLE
II
2.1 Exclusive
License. Licensor hereby grants, bargains, assigns, licenses,
conveys and setsover to the Licensee an exclusive world-wide license to
utilize
the Licensed Patents and the claims set forth therein and the Licensed
Intellectual Property for the purpose of developing, manufacturing (directly
or
through subcontractors), marketing and selling products incorporating the
inventions contained in the Licensed Patents and Licensed Intellectual
Property
and for the purposes of sub-licensing the Licensed Patents and Licensed
Intellectual Property. Notwithstanding any provision to the contrary
set forth in this Agreement, (i) any sub-licenses to be granted under this
Agreement by Licensee first shall be approved in writing by the Licensor
and
shall be granted in an enforceable written agreement, of which Licensor
is a
third-party beneficiary, that contain terms and conditions at least as
restrictive as all of the terms and conditions set forth in this Agreement,
and
(ii) promptly following the execution of any such sub-license, Licensee
shall
provide Licensor with a copy of the same.
a. Notwithstanding
anything to the contrary in this Section or elsewhere in this Agreement,
all
rights granted to Licensee in this Agreement shall be subject to the terms
and
conditions of any and all existing licenses and other obligations related
to the
Licensed Property existing at the time the Agreement is entered
into.
b. Licensee
acknowledges and agrees that, (i) the Licensed Property and all goodwill
associated therewith are and shall remain the sole property of Licensor,
(ii)
nothing in this Agreement shall convey to Licensee any right of ownership
in the
Licensed Property, (iii) Licensee shall not in any manner take any action
and
shall ensure that none of its permitted sub-licensees take any action,
that
disparages or would impair the value of, or goodwill associated with, the
Licensed Property and (iv) all rights not expressly granted to Licensee
are
reserved to Licensor. Licensee acknowledges and agrees that all use
of the Licensed Property by Licensee shall inure to the benefit of
Licensor.
a. Licensor
and Licensee agree that throughout the term of this License Agreement (and
any
extensions thereof) that Licensee may engage in research and development
activities that produce new formulas, methods, inventions, techniques,
properties or products that enhance the Licensed Property (“Licensee
Enhancements”). In the event Licensee develops such Licensee
Enhancements, then Licensor shall retain ownership of such Licensee Enhancements
and the Licensee Enhancements shall not be deemed to be a part of the Licensed
Property and Licensor shall have all right, title and interest in and to
any of
the Licensee Enhancements.
b. Licensor
and Licensee agree that throughout the term of this License Agreement (and
any
extensions thereof) that Licensor may engage in research and development
activities that produce new formulas, methods, inventions, techniques,
properties or products that enhance the Licensed Property (“Licensor
Enhancements”). When Licensor develops such Licensor
Enhancements, the Licensor Enhancements shall not be deemed to be a part
of the
Licensed Property and shall not be deemed to have been licensed to Licensee
in
accordance with the terms of this License Agreement.
a. Assignment.
Except as provided in this Section 2.8, neither Licensor nor Licensee may
assign
their rights and obligations under this Licensing Agreement to any other
person.
For purposes of this Section 2.8, the granting of a security interest in
the
rights created under this Licensing Agreement constitutes an assignment.
Licensor may assign Licensor’s rights under this Licensing Agreement to any
person or entity, but may assign its obligations under this Licensing Agreement
to another person, in whole or in part, only with the prior written consent
of
Licensee, which consent shall not be unreasonably withheld. Any refusal
to
consent to an assignment of the obligations of the Licensor that would
interfere
with the Licensor’s personal performance of the duties set forth in Section 2.4
of this Licensing Agreement or that would defeat or jeopardize protection
of the
Licensed Patents shall not be deemed unreasonably withheld. Licensee may
assign
Licensee’s rights and obligations under this Agreement to any third person
(including a business entity which Licensee controls on the date of the
assignment) without the prior consent of the Licensor. For the purposes
of this
Section 2.8, the term “assignment” shall include the granting of a security
interest in the rights created under this Licensing Agreement and any change
in
voting control of a business entity. An assignee receiving an assignment
of
rights and obligations under this Licensing Agreement shall have the same
rights
to further assign interests and obligations under this Licensing Agreement
as
did the assignee’s assignor.
b. Sub-licensing
and Distribution. Licensor and Licensee agree that Licensee shall
have the right to sub-license the Licensed Patents and Licensed Intellectual
Property and to enter into distribution agreements with respect to products
manufactured utilizing inventions contained in the Licensed Patents and
Licensed
Intellectual Property to such persons and on such terms as Licensee deems
appropriate. Licensor and Licensee agree that during the term of this Licensing
Agreement (including any extensions thereof), Licensee shall have the sole
right
and responsibility to contact, discuss, negotiate and execute sub-licensing
and
distribution agreements with sub-licensees and potential
sub-licensees. No such agreement shall be permitted to cover a term
longer than the remaining term of this Licensing Agreement in effect on
the date
the sub-licensing or distribution agreement is executed and in effect absent
the
prior written consent of Licensor. Licensee shall provide Licensor with
a copy
of each such agreement within thirty (30) days of the agreement’s execution.
Each agreement shall provide that notifications by one party to the sub-license
agreement to the other shall also require the party giving the notice to
the
other party to also send a copy of the notice to the Licensor. In the event
that
this License Agreement terminates prior to the termination of any sub-license
agreement (either because Licensor has consented to a term for the sub-license
agreement that exceeds the term of this License Agreement in effect on
the date
of execution of the sub-license agreement or because of the termination
of this
License Agreement other than upon the normal expiration of its term), the
rights
of the sub-licensee under the sub-license agreement shall remain in full
force
and effect. From the date of termination of this Licensing Agreement
through the date of termination of the sub-licensing agreement, remittances
required to be made by the sub-licensee to the Licensee shall continue
to be
made to the Licensee and remittances due from Licensee to Licensor with
respect
to any such sub-license shall continue to be made as though this Licensing
Agreement was still in full force and effect.
2.9 Rights
and Duties Upon Termination; Return of Materials. Within thirty (30) days of
the termination of this Licensing Agreement, each party to this Licensing
Agreement that has possession of or control over any confidential or proprietary
information of the other party shall return to the other party all written
and
otherwise recorded or stored matter containing confidential or proprietary
information, including both original matter and all copies thereof; provided,
that each party’s legal counsel may retain one copy of any such information in
its files solely for the purpose of identifying information to be protected
under applicable confidentiality provisions. For purposes of the foregoing,
Licensee shall not be deemed to be in possession or control of confidential
or
proprietary information in possession of sub-licensees with a right to
retain
such information during the term of their sub-license agreement following
termination of this Licensing Agreement.
ARTICLE
III
Licensor
hereby represents and warrants to Licensee that all such exceptions to
be
referenced to a specific representation set forth in this Article III,
or shall
be deemed to be referenced to a specific representation in which such exception
would be appropriate and reasonably apparent from the context, as of the
date
hereof, that:
. Licensor
is a corporation organized under the law of Northern Ireland and has the
requisite power and authority to own, lease and operate these properties,
except
for such failures to be so qualified that could not reasonably be expected
to,
individually result in a Material Adverse Effect.
. Licensor
has utilized the Purchased Assets in the ordinary course consistent with
past
practices, and there has not been:
a. any
Material Adverse Effect or any event, occurrence, development or state
of
circumstances or facts known to Licensor which could reasonably be expected
to
result in a Material Adverse Effect;
b. any
event
that could reasonably be expected to prevent or materially delay the performance
of the obligations of Licensor pursuant to this Agreement;
c. any
incurrence, assumption or guarantee by Licensor of any indebtedness for
borrowed
money with respect to the Licensed Property other than in the ordinary
course of
business and in amounts and on terms consistent with past
practices;
d. any
creation or other incurrence of any Lien on any Licensed Property or any
failure
to discharge or satisfy any such Lien or pay or satisfy any material obligation
or liability (whether absolute, accrued, contingent or otherwise) relating
to or
affecting the Purchased Assets;
e. any
transaction or Contract entered into by Licensor relating to any Licensed
Property (including the acquisition or disposition of any assets) or any
relinquishment by Licensor of any such Contract or other right relating
to any
Licensed Property, in either case, other than transactions and commitments
in
the ordinary course of business consistent with past practices and those
contemplated by this Agreement;
f. any
settlement, waiver, release, assignment or compromise relating to or affecting
any material action, suit, proceeding, claim arbitration or litigation
affecting
the Licensed Property;
g. any
sale
or transfer of any of the Licensed Property (including, without limitation,
any
disposition or license of any Proprietary Rights) except for inventory
sold in
the ordinary course of business consistent with past practices or cancellation
of any material debts or claims relating to the Licensed Property or waiver
of
any rights relating thereto;
h. any
authorization of, or agreement entered into or commitment made to do any
of the
foregoing.
. No
Licensed Property is subject to any Lien. Upon consummation of the
transactions contemplated hereby, Licensee will have acquired good and
marketable title in and to, or a valid leasehold interest in, each of the
Licensed Property, free and clear of all Liens.
. There
are no liabilities relating to or affecting the Licensed Property of any
kind
whatsoever, whether accrued, contingent, absolute, determined, determinable
or
otherwise, and there is no existing condition, situation or set of circumstances
which could reasonably be expected to result in such a liability other
than
liabilities that, individually or in the aggregate, would result in a Material
Adverse Effect with respect to the Licensed Property.
. There
is no action, suit, claim, investigation or proceeding (or any basis therefore)
pending against, or to the Knowledge of Licensor, threatened against, or
relating to or affecting, any Licensed Property before any court or arbitrator
or any Governmental Entity, and to the Knowledge of Licensor, there are
no
existing acts or circumstances that could reasonably be expected to result
in
such an action, suit, claim, investigation or proceeding. Licensor is
not subject to any outstanding order, writ, injunction or decree which
could
reasonably be expected to have, individually or in the aggregate, a Material
Adverse Effect or materially interfere with Licensor’s ability to consummate the
transactions contemplated hereby.
.
|
a.
|
Licensor
is not a party to or subject to:
|
1. Any
Contract that substantially limits the freedom of Licensor to compete in
any
line of business or with any Person or in any area or to own, operate,
sell,
transfer, pledge or otherwise dispose of or encumber any Licensed Property
or
that would so limit the freedom of Licensee after the Closing Date;
or
2. Any
material Contract not made in the ordinary course of business that relates
to or
affects the Licensed Property.
. Licensor
is not in violation of, Licensor has not violated, and to the Knowledge
of
Licensor, Licensor is not under investigation with respect to or been threatened
to be charged with or given notice of any violation of, any Law or judgment,
order or decree entered by any court, arbitrator or Governmental Entity,
applicable to the Licensed Property or the conduct of the
Business. No violation of any Law relating to or affecting any
Licensed Property currently exists or has existed at any time. There
are no developments relating to or affecting any of the Licensed Property
pending or threatened, which might reasonably be expected to materially
detract
from the value of such Licensed Property, materially interfere with any
present
or intended use of any such Licensed Property or result in a Material Adverse
Effect with respect to the marketability of such Licensed Property.
.
a. All
patents (including, without limitation, all U.S. and foreign patents, patent
applications (including provisional applications), invention disclosures
and any
and all divisions, continuations, continuations-in-part, re-issues,
re-examinations and extensions thereof), design rights, trademarks, trademark
applications (including intent to use filings), trade names and service
marks
(whether or not registered), trade dress, logos, copyrights (whether or
not
registered) and any renewal rights therefore, sui generis database rights,
statistical models, technology, inventions, supplier lists, trade secrets,
know-how, databases, technical documentation, mask works, registrations
and
applications for any of the foregoing and all other tangible and intangible
proprietary information, materials and associated goodwill (collectively,
“Proprietary Rights”) that are held by or have been or are
planned to be used in (including in the development of) the Business and/or
in
any product, technology or process (i) currently being or formerly manufactured,
published or offered by the Licensor or (ii) currently under development
for
possible future manufacturing, publication, marketing or other use by the
Licensor, are hereinafter referred to as the “Licensor Proprietary
Rights.”
b. The
Licensor Proprietary Rights contain only those items and rights that
are: (i) owned by the Licensor; (ii) in the public domain; or (iii)
rightfully used by the Licensor pursuant to a valid and enforceable license
or
other similar agreement (the Licensor Proprietary Rights which are used
pursuant
to sub-section; (iii) are referred to as “Licensor Licensed
Proprietary Rights”). The
Licensor has all rights in Licensor Proprietary Rights owned by the Licensor
and
in Licensor Licensed Proprietary Rights necessary (and had all rights necessary
to carry out its former activities at the time such activities were being
conducted), including, to the extent required to carry out such activities,
rights to make, use, reproduce, modify, adopt, create derivative works
based on,
translate, distribute (directly and indirectly), transmit, display and
perform
publicly, license, rent and lease and, other than with respect to Licensor
Licensed Proprietary Rights, assign and sell Licensor Proprietary
Rights.
c. To
the
Knowledge of Licensor, the use, reproduction, manufacturing, distribution,
licensing, sub-licensing, sale or any other exercise of rights in any Licensor
Proprietary Rights, product, activity, technology or process as now used
or
offered for use, licensing or sale by the Licensor does not, directly or
indirectly, infringe on any rights in any Proprietary Rights or other
proprietary right of any person, anywhere in the world. No claims or
investigations, (i) challenging or threatening the validity, enforceability,
effectiveness or ownership by the Licensor of any Licensor Proprietary
Rights or
(ii) to the effect that the use, manufacturing, distribution, licensing,
sublicensing, sale or any other exercise of rights in any Licensor Proprietary
Rights, product, activity, technology or process as now used by the Licensor
directly or indirectly infringes any Proprietary Rights or other proprietary
right of any person, have been asserted or threatened by any
person. All of the rights within Licensor Proprietary Rights are
enforceable and subsisting. To the Knowledge of Licensor, there is no
unauthorized use, infringement or misappropriation of any Licensor Proprietary
Rights by any third-party, employee, former employee or contract
worker.
d. The
Licensor has taken all appropriate measures to protect the proprietary
nature of
the Licensor Proprietary Rights and to maintain in confidence all trade
secrets
and confidential information owned or used by the Licensor.
e. Except
as
would not otherwise materially impair the Licensor’s ability to account for,
enforce its rights under, make use of, understand or memorialize the Licensor
Proprietary Rights, the Licensor has taken all steps, in accordance with
normal
industry practice, to preserve and maintain notes and records relating
to
Licensor Proprietary Rights and to cause the same to be readily understood,
identified and available.
f. The
Licensor Proprietary Rights are free and clear of any and all
Liens.
g. All
data
which has been collected, stored, maintained or otherwise used by the Licensor
has been collected, stored, maintained and used in accordance with all
applicable U.S. and foreign Laws, rules, regulations, guidelines and industry
standards. The Licensor has not received a notice of noncompliance with
applicable data protection laws, rules, regulations, guidelines or industry
standards.
3.9 Licensed
Patents: Representations and Warranties; Third-Party Infringement Claims
Defense; Prosecution of Infringement Claims Against Third-parties; Right
of Set
Off; When Failure to Establish Validity Becomes Grounds for Terminating
Payments.
a. Licensor
Representations and Warranties Respecting Licensed
Patents. Licensor represents and warrants to Licensee that, (i)
the Licensed Patents do not infringe on the patent rights of any third-party,
(ii) Licensor is the sole owner of the Licensed Patents and Licensed
Intellectual Property, (iii) Licensor has granted no other license(s) that
permit any other person or entity to develop, manufacture, exploit, sub-license
or otherwise use the inventions used in the Licensed Patents and Licensed
Intellectual Property and will grant no other such license(s) or use rights
to
any third-party during the term of this Licensing Agreement (or any extensions
thereof), (iv) Licensor has neither applied for nor obtained foreign Licensed
Patents with respect to the inventions contained in the Licensed Patents
and
Licensed Intellectual Property and during the term of this Licensing Agreement
(or any extensions thereof) will not apply for or obtain any such foreign
Licensed Patents (except with the prior written consent of Licensee on
such
terms and conditions as Licensee in its sole discretion finds acceptable),
(v)
Licensee will not undertake modifications of the Licensed Patents through
which
essentially similar processes, products or techniques may be implemented
that
would be competitive with processes or techniques employed or products
produced
by Licensee utilizing the Licensed Patents and/or Licensed Intellectual
Property
and (vi) Licensor has not and during the term of this Licensing Agreement
(or
any extensions thereof) will not engage in or encourage the development
of
competing products, processes or techniques under the Licensed Patents
or other
similar Licensed Patents either in the United States or any foreign
patent jurisdiction.
b. Third-party
Infringement Claims Defense. In the event that any third-party
asserts that the Licensed Patents infringe on the third-party’s patent rights,
it shall be the Licensor’s obligation to defend such infringement claim and to
conform Licensee’s continued right to develop, manufacture and sell products
based on the claims set forth in the Licensed Patents and to sub-license
the
Licensed Patents. Licensor and Licensee agree to make each other aware
of any
third-party infringement claim within thirty (30) days of being made aware
of
the claim by the third-party. Licensor shall defend against any such
infringement claim at Licensor’s own cost and expense. In the event that
Licensor fails to defend such infringement claim, Licensee shall have the
right
(but not the obligation) to defend against such claim and Licensor hereby
appoints Licensee its attorney-in-fact to defend against any such infringement
claim and in Licensee’s sole discretion, to take all acts with respect to the
claim (and its settlement) which Licensee deems appropriate. Licensor agrees
to
cooperate fully with Licensee in connection with any such defense (including,
but not by way of limitation, by joining in any such defense).
c. Prosecution
of Third-parties for Infringement of Licensed Patents. In the
event that Licensor or Licensee become aware of any potential infringement
of
the Licensed Patents by any third-party, Licensor and Licensee agree to
make
each other aware of any such potential infringement within fifteen (15)
days of
becoming aware of the potential infringement. Licensor and Licensee agree
that
it shall be Licensee’s right (but not its obligation) to warn third-parties of
potential infringements of the Licensed Patents during the term of this
Licensing Agreement (including and extensions thereof) and Licensor agrees
to
assist Licensee in the prosecution of any patent infringement claim (including,
but not by way of limitation, by joining in the prosecution of any such
claim).
Licensor hereby appoints Licensee its attorney-in-fact for purposes of
prosecuting any such patent infringement claims. Any such patent infringement
claims shall be conducted at the expense of the Licensee.
d. Set
Off. In the event Licensee undertakes the defense of a patent
infringement claim or the prosecution of a patent infringement claim, Licensee
shall be entitled to recover Licensee’s expenses (including court costs,
reasonable attorneys’ fees and reasonable expert witness’ fees, settlement
payments and fees or royalties paid to third-parties in settlement of
infringement claims) as a set off against other amounts owning to Licensor
by
Licensee under this License Agreement (including fees payable this Licensing
Agreement). Licensor and Licensee agree that this right of set off exists
in
addition to, any other rights Licensee may have at law or in equity to
recover
such expenses from Licensor or any third-party.
e. Patent
Prosecution and Maintenance. Except as otherwise provided in this
Licensing Agreement, Licensor may proceed with the prosecution of patent
applications with respect to inventions independently developed by Licensor
at
Licensor’s own discretion and at Licensor’s own cost. Licensee may
proceed with prosecution of patent applications with respect to patentable
products and techniques developed during product development under this
License
Agreement at Licensee’s own discretion and expense and without receiving the
consent or approval of Licensor; provided, however, that if the new inventions
that are the subjects of such patent applications utilize elements of the
Licensed Patents, such patent applications may be prosecuted by Licensee
only
with the approval and participation of Licensor on such terms
(including expense, royalty and fee sharing) as may be mutually
agreed to by Licensor and Licensee.
f. Grounds
for Terminating Payments Pertaining to Licensed
Patents. Licensee’s right to terminate payments required under
Sections 2.2 of this Licensing Agreement in the event that that the Licensed
Patents licensed hereunder are found invalid or unenforceable shall arise
only
upon a “final adjudication” of such invalidity or unenforceability. For purposes
of this Section 3.8(f), “final adjudication” shall mean an
adjudication or determination by a trial court or a court of appeal, which
adjudication or determination shall be final and binding. Notwithstanding
the
foregoing, Licensor and Licensee agree that from the time that either Licensor
or Licensee is on notice of any assertion of a third-party patent infringement
claim until any such final adjudication, all payments required to be made
to
Licensor under Sections 2.2 shall be made instead into an escrow account
to be
held there pending final adjudication of the third-party claim. Upon such
final
adjudication, the sums held in escrow will be distributed as follows: first,
if
defense of any such action is undertaken by Licensee under this Licensing
Agreement, to reimburse Licensee of expenses incurred (including court
costs and
reasonable attorneys and expert witness fees) in the defense; second, to
pay the
third-party any amount to which the third-party becomes entitled as a
consequence of the settlement or final adjudication of the third-party’s claim;
and finally, if any amounts remain after the payments referred to above,
to
Licensor. Interest earned on the amounts held in escrow shall be and remain
the
property of Licensee. Nothing herein contained shall be construed as a
limitation upon any rights Licensee may otherwise have under this Licensing
Agreement, at law or in equity, arising from Licensor’s breach of any
representation or warranty contained in this Licensing Agreement.
ARTICLE
IV
Licensee
hereby represents and warrants to Licensor, all such exceptions to be referenced
to a specific representation set forth in this Article IV, or shall be
deemed to
be referenced to a specific representation in which such exception would
be
appropriate and reasonably apparent from the context, as of the date hereof,
that:
. Licensee
is a corporation duly organized, validly existing and in good standing
under the
laws of the State of Washington and has the requisite corporate power and
authority to own, lease and operate its properties and to carry on its
business
as it is now being conducted. Licensee is duly qualified or licensed
to do business, and is in good standing (to the extent applicable), in
each
jurisdiction where the character of the properties owned, leased or operated
by
it or the nature of its business makes such qualification or licensing
necessary, except for such failures to be so qualified and in good standing
that
could not reasonably be expected to, individually or in the aggregate,
result in
a material adverse effect on the Licensee.
. Licensee
has the necessary corporate power and authority to execute and deliver
this
Agreement, to perform its obligations hereunder and thereunder, and to
consummate the transactions contemplated hereby and thereby. The
execution, delivery and performance by Licensee of this Agreement, and
the
consummation by Licensee of the transactions contemplated hereby and thereby
have been duly authorized by all necessary corporate action on the part
of
Licensee and no further corporate action on the part of Licensee is necessary
to
authorize this Agreement or to consummate the transactions contemplated
hereby
or thereby. This Agreement has been duly executed and delivered by
Licensee and constitutes valid and binding agreements of Licensee, enforceable
against Licensee in accordance with their respective terms.
. The
execution, delivery and performance by Licensee of this Agreement, and
the
consummation by the Licensee of the transactions contemplated hereby and
thereby, do not and will not require any action by or in respect of, or
filing
with, any Governmental Entity, except where the failure to take such action
or
obtain authorizations, consents or approvals or to make such filings would
not
reasonably be expected to, individually or in the aggregate, result in
a
material adverse effect on the Licensee.
. The
execution, delivery and performance by Licensee of this Agreement, and
the
consummation by the Licensee of the transactions contemplated hereby and
thereby, do not and will not, (i) contravene or conflict with the certificate
of
incorporation or bylaws of Licensee, (ii) contravene or conflict with or
constitute a violation of any provision of any Law, judgment, injunction,
order
or decree binding upon or applicable to Licensee; or (iii) constitute a
default
under or give rise to any right of termination, cancellation or acceleration
of
any right or obligation of Licensee or to a loss of any material benefit
relating to Licensee’s business to which Licensee is entitled under any
provision of any material Contract binding upon Licensee or by which any
of
Licensee’s assets is or may be bound; except, in each case, for violations and
defaults that, individually and in the aggregate, could not reasonably
be
expected to have or result in a material adverse effect on the Licensee,
or
materially impair the ability of Licensee to perform its obligations
hereunder.
ARTICLE
V
a. Licensee
Indemnity. Licensee shall defend, indemnify, save and hold
harmless Licensor from all losses, claims, suits, damages, costs, fees
and
expenses (including attorneys fees) resulting from or arising out of any
act or
omission of Licensee related to this Licensing Agreement. Licensor shall
promptly notify Licensee of any loss, claim or suit for which indemnification
is
sought hereunder. A failure to give such prompt notification shall act
as a
waiver of Licensor’s rights under this Section 5.1(a).
b. Licensor
Indemnity. Licensor shall defend, indemnify, save and hold
harmless Licensee from all losses, claims, suits, damages, costs, fees
and
expenses (including attorneys fees) resulting from or arising out of any
act or
omission of Licensor relating to this Licensing Agreement or from a breach
by
Licensor of any representation, warranty or covenant contained in this
Licensing
Agreement. Licensee shall promptly notify Licensee of any loss, claim or
suit
for which indemnification is sought hereunder. A failure to give such prompt
notification shall act as a waiver of Licensee’s rights under this Section
5.1(b).
c. Dispute
Resolution. In the event of a dispute between the parties as to
any material term herein, the parties shall first attempt to resolve the
dispute
informally. If, after ten (10) days, the parties are unsuccessful,
the Parties agree to mediate their dispute, with each party appointing
one (1)
mediator to represent itself. If, after fifteen (15) days of the
mediation’s commencement, no resolution is reached, the parties shall submit to
mandatory binding arbitration in any controversy or claim arising out of,
or
relating to, the Agreement or any breach hereof. Such arbitration
shall be conducted in accordance with the commercial arbitration rules
of the
American Arbitration Association in effect at that time, and the parties
agree
to be bound by any judgment, determination or award rendered by the
arbitrator. The arbitrator is hereby authorized to award to the
prevailing party the costs (including reasonable attorneys’ fees and expenses)
of any such arbitration. The parties further agree that any mediation
and arbitration meetings may be held via teleconference.
If
to
Andronics:
If
to VSI
or
SARS: Veritas
Solutions, Inc.
▇▇▇
▇▇▇▇▇ ▇▇▇▇▇▇
▇▇, ▇▇▇▇▇
▇▇▇▇
▇▇▇▇▇▇▇▇,
▇▇ ▇▇▇▇▇
Attn: ▇▇▇▇▇▇▇
▇▇▇▇▇▇▇
Fax: (▇▇▇)
▇▇▇-▇▇▇▇
with
a
copy
to: The
▇▇▇▇ Law Group, PLLC
▇▇▇
▇▇▇▇▇
▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇
▇▇▇▇▇▇▇,
▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attn: ▇▇▇▇▇
▇. ▇▇▇▇
Fax: (▇▇▇)
▇▇▇-▇▇▇▇
Any
notice given pursuant to this Section 5.5 shall be effective upon the date
of
actual receipt by the addressee, as evidenced by a return receipt or other
similar written confirmation. Either party hereto may, from time to time,
by
advance written notice given in accordance with and pursuant to this Section
5.5, designate a substitute address for the receipt of notices under this
Licensing Agreement.
[Signature
Page to Follow]
This
License Agreement may be executed by the parties individually or in any
combination, by facsimile and in two (2) or more counterparts, each of
which
shall be deemed an original and all of which shall together constitute
one and
the same agreement.
VERITAS
SOLUTIONS, INC.
By:
▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇
Title:
Director and CEO
SECURE
ASSET REPORTING SERVICES, INC.
By:
▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇
Title:
Director and CEO
ANDRONICS
LTD.
By:
Its:
Exhibit
D
Lease
Agreement
[the
Lease Agreement appears on the following
pages]
Schedule
1.1
List
of Assets
|
Fixed
asset register - equipment (depn @ 20% sl pa)
|
|
|
Details
|
Acqn
date
|
|
Kingswood
software
|
28/02/98
|
|
Inmac
cables
|
31/05/98
|
|
Aurora-2
PCs
|
31/05/98
|
|
Compaq
cpmpr equip(NIIB)
|
31/08/98
|
|
Tracking
system (ex PMH)
|
31/08/98
|
|
Equip-Computer
Workbench
|
31/08/98
|
|
Equipment
- visa
|
30/09/98
|
|
Equip-Micro
Warehouse
|
30/09/98
|
|
Equip-Digital
Workshop
|
31/10/98
|
|
Equipment-visa
|
30/11/98
|
|
Inmac-compr
equip
|
31/12/98
|
|
Inmac-compr
equip
|
31/12/98
|
|
Inmac-compr
equip
|
31/12/98
|
|
Equip-Micro
Warehouse
|
31/12/98
|
|
Equip-Micro
Warehouse
|
31/01/99
|
|
Mapinfo
|
28/02/99
|
|
MapExtreme-4
PCs (NIIB)
|
28/02/99
|
|
Inmac-hardware
upgrades
|
31/05/99
|
|
CPC-fax
machine
|
31/05/99
|
|
CPC
file holder
|
31/05/99
|
|
Phone
socket
|
31/05/99
|
|
M
▇▇▇▇▇-phone
|
31/05/99
|
|
Sundry
equipment
|
31/05/99
|
|
Colour
laserjet printer
|
31/07/99
|
|
BT
phones
|
31/07/99
|
|
RS
- drill
|
31/08/99
|
|
RS
- drill set
|
31/08/99
|
|
15"
monitor
|
31/08/99
|
|
Router
|
15/09/99
|
|
Osciliscope
|
26/10/99
|
|
Label
machine
|
05/11/99
|
|
Wavecomm
modems
|
10/11/99
|
|
Photocopier
|
16/11/99
|
|
SX3
computer equipment
|
16/11/99
|
|
Mobile
tech equip
|
29/11/99
|
|
Mobile
phones
|
10/12/99
|
|
Soldering
station
|
14/12/99
|
|
Mobile
phone
|
14/12/99
|
|
Cisco
1600 PS
|
06/01/00
|
|
Mobile
phone
|
19/01/00
|
|
RS
232 cable
|
16/02/00
|
|
Nokia
phone
|
17/02/00
|
|
Nokia
phone
|
26/02/00
|
|
SX3
computer equipment
|
06/03/00
|
|
Sony
Vaio laptop
|
08/03/00
|
|
Antenna
tester
|
10/03/00
|
|
Remote
mouse
|
21/03/00
|
|
2
X
compiuters
|
27/03/00
|
|
Ladders
|
05/04/00
|
|
Socket
set
|
05/04/00
|
|
Capture
board
|
14/04/00
|
|
Dual
speed hub
|
14/04/00
|
|
Tapered
hole cutter
|
09/05/00
|
|
Computer
|
17/05/00
|
|
Server
cabinet
|
23/05/00
|
|
B&Q
equipment
|
29/05/00
|
|
Computer
|
30/06/00
|
|
▇▇▇▇▇▇
|
05/07/00
|
|
Gateway
PC
|
07/08/00
|
|
GDC
boundary data
|
08/08/00
|
|
56k
modem
|
24/08/00
|
|
Monitor
|
12/10/00
|
|
Gate
pendants
|
17/11/00
|
|
Calculators
|
30/11/00
|
|
Dell
PCs x 2
|
19/12/00
|
|
HP
Scanjet
|
27/01/01
|
|
Computer
(2nd hand)
|
02/02/01
|
|
Budget
DIY equip
|
06/02/01
|
|
Clickman
|
09/02/01
|
|
Heatgun
|
14/02/01
|
|
Computer
equip
|
15/01/00
|
|
Antenna
x 3
|
23/03/00
|
|
PC
|
09/03/00
|
|
Coldfusion
software
|
29/03/00
|
|
Equipment
|
30/04/00
|
|
Scanner
|
31/03/01
|
|
10GB
hard disk
|
30/04/01
|
|
Steam
cleaner
|
30/04/01
|
|
20GB
HDD
|
31/05/01
|
|
10GB
hard disk
|
30/06/01
|
|
Compaq
server/instn
|
30/09/01
|
|
2
display systems
|
30/11/01
|
|
Fax/printer
|
30/11/01
|
|
Answerphone
|
30/11/01
|
|
Adaptor
cards
|
31/01/02
|
|
Laptop
|
07/06/02
|
|
Spider
engineer-equip
|
30/05/02
|
|
Phones
|
30/05/02
|
|
Credit
card-sundry equip
|
31/08/02
|
|
Computer
mouse ps2
|
16/09/02
|
|
Multimeter
|
30/09/02
|
|
Iomega
software
|
04/10/02
|
|
UPS
for server
|
14/10/02
|
|
Phones
*2
|
15/10/02
|
|
Solder
irons
|
01/11/02
|
|
Cables
and adapter
|
15/11/02
|
|
Laptops
*3
|
19/12/02
|
|
17"
monitors x 2
|
22/09/03
|
|
Phone
upgrade
|
29/10/03
|
|
Car
phone adaptor
|
30/09/03
|
|
Rechargeable
spotlight
|
14/11/03
|
|
Sundry
equipment
|
27/02/04
|
|
Laptop
|
04/04/03
|
|
Comb
binder
|
12/06/03
|
|
Backup
machine
|
30/04/04
|
|
Mobile
phones and accessories
|
05/05/04
|
|
Drills
and accessories
|
25/06/04
|
|
OKI
printer
|
13/01/05
|
|
Sundry
equipment
|
28/02/05
|
|
Ladder
|
25/03/05
|
|
Nokia
phone kits
|
16/06/05
|
|
Linux
server IBM 346
|
08/08/05
|
|
B4250
printer
|
01/03/05
|
|
IBM
Server
|
08/01/07
|
|
Uninterrupted
power supply
|
08/01/07
|
|
Laptop
computer (2)
|
08/01/07
|
|
Fixed
asset register - fixtures and fittings (depn @ 20% sl
pa)
|
|
|
Details
|
Acqn
date
|
|
Fiesta
blinds
|
07/05/99
|
|
CPC
operators chairs
|
31/05/99
|
|
ADT
intruder alarm system
|
28/05/99
|
|
Graphix-signs
|
14/06/99
|
|
CPC
conf room chairs
|
15/06/99
|
|
CPC
operators chairs
|
16/06/99
|
|
Fridge
|
04/08/99
|
|
World
map
|
06/09/99
|
|
Stands
|
13/12/99
|
|
Shelving
|
21/12/99
|
|
Desks
|
28/04/00
|
|
Desks
|
01/05/00
|
|
Chairs
and bookshelves
|
29/06/00
|
|
Exhibition
stands
|
22/11/99
|
|
NOBO
board
|
27/04/00
|
|
Filing
cabinet
|
28/01/00
|
|
Display
equipment
|
31/03/01
|
|
Filing
cabinet
|
31/05/01
|
|
Fireproof
safe
|
31/05/01
|
|
External
ashtrays x 2
|
31/12/01
|
|
Gate
automation system
|
18/10/02
|
|
Storage
bins
|
19/06/02
|
|
Operator
chair
|
23/09/02
|
|
Armchairs
x 2
|
11/04/03
|
|
Fan
Heaters x 2
|
23/11/05
|
|
Fixed
asset register - motor vehicles (depn @ 25% sl
pa)
|
|
|
Details
|
Acqn
date
|
|
Fiat
Brava-KUI 4809
|
06/03/00
|
|
BMW
C1-KUI 7002
|
27/11/00
|
|
Reg
no KUI 2222
|
31/03/01
|
|
Fixed
asset register - premises expenditure (depn @ 2% sl
pa)
|
|
|
Details
|
Acqn
date
|
|
Building
work (▇'▇▇▇▇▇ Bros)
|
31/05/99
|
|
Renovations
(▇'▇▇▇▇▇ Bros)
|
01/10/02
|
Schedule
1.1 Continued
Assumed
Accounts Receivable
|
Forex
Rate
|
0.492
|
0.682
|
72,064.37
|
10,566.12
|
52,338.93
|
9,159.33
|
144,128.75
|
||||||
|
Invoice
GBP
|
VAT
GBP
|
Euros
Invoice
|
Euros
VAT
|
Invoice
GBP to Total$
|
VAT
GBP to Total$
|
Euros
Invoice to Total$
|
Euros
VAT to Total$ VAT
|
*Total
Orbcomm Invoices
|
|||||
|
October
|
9,520.44
|
1,666.06
|
11,499.40
|
2,012.40
|
19,350.49
|
3,386.30
|
16,861.29
|
2,950.73
|
|||||
|
November
|
9,956.56
|
1,742.39
|
12,262.95
|
2,146.02
|
20,236.91
|
3,541.44
|
17,980.87
|
3,146.66
|
|||||
|
December
|
10,229.08
|
1,790.08
|
11,932.80
|
2,088.24
|
20,790.81
|
3,638.37
|
17,496.77
|
3,061.94
|
|||||
Schedule
1.2
List
of Employees
|
|
Forename
|
Dept
|
|
Surname
|
||
|
▇▇▇▇▇▇▇
|
▇▇▇▇▇▇▇▇
|
Admin
|
|
▇▇▇▇▇▇▇
|
▇▇▇▇▇▇
|
Directors
- 7001
|
|
▇▇▇▇▇▇▇
|
▇▇▇▇
▇▇▇▇▇▇
|
Sales/Marketing
- 6001
|
|
▇▇▇▇▇▇▇▇
|
▇▇▇▇▇▇▇
|
Sales/Marketing
- 6001
|
|
▇▇▇▇▇
|
▇▇▇▇▇
|
Development
Engineers - 7003
|
|
▇▇▇▇▇
|
▇▇▇▇▇▇
|
Productive
- 6000
|
|
▇▇▇▇▇▇▇▇▇
|
▇▇▇▇▇▇
|
Development
Engineers - 7003
|
|
▇▇▇▇▇▇
|
▇▇▇▇▇▇▇▇▇▇▇
|
Development
Engineers - 7003
|
|
▇▇▇▇▇
|
▇▇▇▇▇▇
|
Web
Design - 7003
|
|
▇▇▇▇▇▇▇▇▇
|
▇▇▇▇▇
|
Directors
- 7001
|
|
*▇▇▇▇▇▇▇▇▇
|
▇▇▇▇
▇▇▇▇▇
|
Web
Design - 7003
|
|
▇▇▇▇▇
|
▇▇▇▇
▇▇▇▇▇▇
|
Productive
- 6000
|
|
▇▇▇▇▇▇▇▇
|
▇▇▇▇▇
|
Web
Design - 7003
|
|
Strawhorne
|
▇▇▇▇
▇▇▇▇▇▇
|
Development
Engineers - 7003
|
|
Thomson
|
▇▇▇▇▇▇
▇▇▇▇▇
|
Productive
- 6000
|
|
**▇▇▇▇▇▇
|
▇▇▇▇
|
Development
Engineers - 7003
|
*▇▇.
▇▇▇▇▇▇▇▇▇ was hired as a summer intern after February 7, 2007 but is no
longer
on the payroll.
**▇▇.
▇▇▇▇▇▇ was engaged after February 7, 2007 but has since resigned his
position.
Schedule
1.3
List
of Contracts
|
Contract
No.
|
Parties
|
Date
|
||
|
LPG-06-TELE-29
|
BP
International, Ltd.
|
and
|
Andronics,
Ltd.
|
9/18/2006
|
Schedule
1.4
List
of Intellectual Property
|
Intellectual
Property
|
Book
Value
|
|
Software
Development for internal proprietary asset-tracking
system
|
$1,550,300
|
|
LEOCATE,
Trade ▇▇▇▇ No. 2232925
|
|
|
UTILITY-EYE,
Trade ▇▇▇▇ No. 003292687
|
|
|
Andronics,
Ltd. trade name
|
|
|
Andronics,
Ltd. logo
|
|
Schedule
1.5
List
of Goodwill
|
Goodwill
|
|
|
All
Andronics, Ltd. customers and recurring
revenue,including:
|
|
|
Quinns
– Leocate
|
|
|
CSL
– Fixed sites
|
|
|
BP
– LPG Product
|
|
Schedule
3
Assumed
Liabilities
(including
Excluded Liabilities)
|
Accepted
AP Workpaper
|
||||||||||||
|
Andronics
Total AP
|
$334,058.10
|
|||||||||||
|
(-)
Offsetting Items
|
$ -
|
|||||||||||
|
(-)
Unaccepted AP
|
$26,866.85
|
|||||||||||
|
(=)
Total Accepted AP
|
$ 307,191.25
|
|||||||||||
|
Andronics
|
Limited
|
$
|
1
|
rates
as of 12/11/2007
|
||||||||
|
Date:
|
12/7/2007
|
£
|
0.492
|
######
|
Aged
|
Analysis
|
||||||
|
Report
|
Date:
|
€
|
0.682
|
From:
|
Include
|
transactions:
|
||||||
|
A/C
|
Name
|
Turnover
|
Balance
|
Future
|
Current
|
Period
1
|
Period
2
|
Period
3
|
Older
|
US$
|
||
|
1890CARK
|
1890
CarKits
|
1,107.63
|
459.77
|
0
|
0
|
459.77
|
0
|
0
|
0
|
$944.86
|
||
|
AIRMAR$
|
Airmar
Technology Corporation
|
992.91
|
1,401.86
|
0
|
0
|
29.38
|
0
|
0
|
1,372.48
|
$2,880.93
|
||
|
AIRTRICI
|
Airtricity
Energy Supply (NI) Limited
|
1,146.05
|
175.79
|
0
|
0
|
175.79
|
0
|
0
|
0
|
$361.26
|
||
|
APBMACHI
|
APB
Machinery Moving
|
315
|
158.63
|
0
|
0
|
0
|
52.88
|
105.75
|
0
|
$326.00
|
||
|
AUTOSECU
|
Auto
Security Installations
|
1,863.14
|
137.92
|
0
|
0
|
0
|
0
|
0
|
137.92
|
$283.44
|
||
|
BALLYGOW
|
Aquaporte
Limited
|
507.8
|
43.84
|
0
|
-43.84
|
43.84
|
43.84
|
0
|
0
|
$90.09
|
||
|
BAUGHWEE
|
▇▇▇▇▇
& ▇▇▇▇▇▇ NDT
|
1,283.00
|
1,507.53
|
0
|
0
|
0
|
1,507.53
|
0
|
0
|
$3,098.09
|
||
|
▇▇▇▇▇▇▇
|
▇▇▇▇▇▇▇
bv
|
1,894.29
|
1,894.29
|
0
|
0
|
1,894.29
|
0
|
0
|
0
|
$3,892.91
|
||
|
BT
|
British
Telecommunications Plc
|
3,161.82
|
384.26
|
0
|
384.26
|
0
|
0
|
0
|
0
|
$789.68
|
||
|
CHAMBCOM
|
Londonderry
Chamber of Commerce
|
50
|
82.25
|
0
|
0
|
0
|
58.75
|
0
|
23.5
|
$169.03
|
||
|
CHUBB
|
Chubb
(NI) Ltd
|
121.83
|
143.15
|
0
|
0
|
0
|
0
|
143.15
|
0
|
$294.18
|
||
|
COILTECH
|
Coil
Tech UK Ltd
|
60.5
|
71.09
|
0
|
0
|
71.09
|
0
|
0
|
0
|
$146.10
|
||
|
CPC
|
CPC
Office Supplies Limited
|
299.12
|
48.7
|
0
|
10.86
|
37.84
|
0
|
0
|
0
|
$100.08
|
||
|
CSI
|
CSI
(Ireland) Ltd
|
9,663.00
|
767.28
|
0
|
0
|
0
|
0
|
0
|
767.28
|
$1,576.82
|
||
|
DAVINCI
|
Da
Vinci's Hotel
|
348.94
|
368
|
0
|
0
|
0
|
0
|
368
|
0
|
$756.27
|
||
|
DHL96
|
DHL
Express
|
5,137.72
|
3,811.53
|
0
|
0
|
2,076.28
|
0
|
1,552.84
|
182.41
|
$7,832.98
|
||
|
DIGIKEY
|
▇▇.▇▇▇▇▇▇▇.▇▇▇
|
0
|
-281.88
|
0
|
-108.42
|
-173.46
|
0
|
0
|
0
|
$0.00
|
||
|
ESENDEX
|
Esendex
UK
|
1,108.47
|
-141
|
0
|
-141
|
0
|
0
|
0
|
0
|
$0.00
|
||
|
ESS
|
Electronic
& Security Services Ltd
|
957.84
|
1,125.46
|
0
|
0
|
0
|
0
|
0
|
1,125.46
|
$2,312.91
|
||
|
EXPEDIT
|
Expeditors
International
|
7,079.42
|
1,357.13
|
0
|
0
|
0
|
781.38
|
0
|
575.75
|
$2,789.01
|
||
|
FARNELLE
|
Farnell
Electronic Components Ltd
|
2,587.78
|
826.75
|
0
|
0
|
473.25
|
353.5
|
0
|
0
|
$1,699.03
|
||
|
GENEVAPA
|
Geneva
Palexpo
|
0
|
0
|
0
|
0
|
0
|
0
|
0
|
0
|
$0.00
|
||
|
GLOBINC
|
Globalstar,
Inc.
|
6,558.83
|
6,057.05
|
0
|
0
|
1,248.81
|
4,808.24
|
0
|
0
|
$12,447.70
|
||
|
GMCNICHL
|
▇▇▇▇
▇▇▇▇▇▇▇▇▇
|
26,250.00
|
1,510.00
|
0
|
180
|
510
|
820
|
0
|
0
|
$3,103.16
|
||
|
GSG
|
Resource
|
204.53
|
216.79
|
0
|
0
|
0
|
0
|
81.8
|
134.99
|
$445.52
|
||
|
HDLELECT
|
HDL
Electronics Ltd
|
2,668.95
|
3,136.06
|
0
|
0
|
1,870.21
|
1,265.85
|
0
|
0
|
$6,444.84
|
||
|
IDEXPO
|
IDEXPO
|
0
|
0
|
0
|
0
|
0
|
0
|
0
|
0
|
$0.00
|
||
|
IFSCOURI
|
IFS
Courier Express Ltd
|
7,811.96
|
693.22
|
0
|
0
|
147.68
|
378.46
|
167.08
|
0
|
$1,424.62
|
||
|
IFSGLOBA
|
IFS
Global Logistics Ltd
|
6,987.36
|
1,714.48
|
0
|
121.63
|
401.9
|
623.39
|
370.75
|
196.81
|
$3,523.39
|
||
|
IMPERIAL
|
Imperial
Connector Systems Ltd
|
1,027.50
|
-247.81
|
0
|
0
|
0
|
0
|
0
|
-247.81
|
$0.00
|
||
|
ITS
|
Intertek
Testing Services
|
1,240.00
|
1,457.00
|
0
|
0
|
0
|
0
|
0
|
1,457.00
|
$2,994.25
|
||
|
JMTC
|
JMTC
Ltd
|
0
|
318.62
|
0
|
0
|
0
|
0
|
0
|
318.62
|
$654.79
|
||
|
▇▇▇▇▇▇▇▇
|
▇▇▇▇▇▇▇▇
Printing Limited
|
339
|
398.33
|
0
|
0
|
398.33
|
0
|
0
|
0
|
$818.60
|
||
|
KEEPSOLU
|
Keep
Solutions Simple
|
5,280.00
|
1,116.25
|
0
|
0
|
916.5
|
199.75
|
0
|
0
|
$2,293.98
|
||
|
KMCCAULE
|
▇▇▇▇▇▇▇▇
▇▇▇▇▇▇▇ Chartered Accountants
|
12,125.00
|
14,246.88
|
0
|
8,225.00
|
4,700.00
|
0
|
0
|
1,321.88
|
$29,278.42
|
||
|
LIMAVADY
|
Limavady
Gear Company Limited
|
15,628.00
|
7,207.45
|
0
|
0
|
0
|
0
|
690.9
|
6,516.55
|
$14,811.86
|
||
|
LJNDESIG
|
LJN
Designs
|
750
|
470
|
0
|
0
|
0
|
0
|
470
|
0
|
$965.89
|
||
|
MATRIX
|
Matrix
Telematics Ltd
|
841.44
|
988.69
|
0
|
0
|
0
|
0
|
0
|
988.69
|
$2,031.83
|
||
|
MULTIBUK
|
Multiband
Antennas Limited
|
105
|
-0.21
|
0
|
-0.21
|
0
|
0
|
0
|
0
|
$0.00
|
||
|
NITRONIC
|
Nitronica
|
1,941.69
|
1,371.28
|
0
|
705.76
|
665.52
|
0
|
0
|
0
|
$2,818.08
|
||
|
NTL
|
NTL
Business Credit Control
|
7,881.00
|
7,402.50
|
0
|
0
|
0
|
7,402.50
|
0
|
0
|
$15,212.70
|
||
|
NUSTARTE
|
Nu-Start
Electronics
|
13,409.58
|
8,031.69
|
0
|
0
|
0
|
8,031.69
|
0
|
0
|
$16,505.73
|
||
|
▇▇
|
▇▇
(▇▇) Limited
|
7,197.14
|
347.31
|
0
|
214.99
|
368.54
|
-209.37
|
-320.81
|
293.96
|
$713.75
|
||
|
ORANGE
|
Orange
|
19,543.82
|
5,079.65
|
0
|
0
|
3,082.14
|
-0.55
|
0
|
1,998.06
|
$10,439.07
|
||
|
ORBCOMM
|
Orbcomm
Global L.P.
|
0
|
-292.18
|
0
|
0
|
0
|
0
|
0
|
-292.18
|
$0.00
|
||
|
ORBCOMML
|
Orbcomm
LLC
|
2,533.63
|
13,073.41
|
0
|
0
|
371.51
|
0
|
0
|
12,701.90
|
$26,866.85
|
||
|
PESTCTRL
|
North
West Pest & Rodent Control Service
|
162
|
190.35
|
0
|
190.35
|
0
|
0
|
0
|
0
|
$391.18
|
||
|
POWERACT
|
Power
Action
|
12,551.54
|
-1,627.61
|
0
|
0
|
-3,093.41
|
0
|
0
|
1,465.80
|
$3,012.33
|
||
|
QUAKE$
|
Quake
Global INC
|
9,641.21
|
204.63
|
0
|
0
|
0
|
0
|
204.63
|
0
|
$420.53
|
||
|
RAPIDELE
|
Rapid
Electroncs
|
1,091.41
|
0.29
|
0
|
0
|
0.29
|
0
|
0
|
0
|
$0.60
|
||
|
RCA
|
Rates
Collection Agency
|
4,504.71
|
900.94
|
0
|
0
|
0
|
0
|
0
|
900.94
|
$1,851.50
|
||
|
ROCHESTE
|
Rochester
Gauges International S.A
|
0
|
38.03
|
0
|
0
|
0
|
0
|
0
|
38.03
|
$0.00
|
||
|
RORYMCIN
|
▇▇▇▇
▇▇▇▇▇▇▇▇
|
609.6
|
178
|
0
|
0
|
0
|
0
|
0
|
178
|
$0.00
|
||
|
RS
|
RS
Components Limited
|
75.7
|
16.61
|
0
|
0
|
0
|
16.61
|
0
|
0
|
$34.13
|
||
|
▇▇▇▇▇▇▇▇
|
▇▇▇▇▇▇▇▇
Joblink
|
45
|
105.76
|
0
|
0
|
0
|
0
|
0
|
105.76
|
$0.00
|
||
|
SAFT
|
SAFT
Ltd
|
31,900.00
|
13,771.00
|
0
|
0
|
0
|
0
|
0
|
13,771.00
|
$28,300.45
|
||
|
SAGE
|
Sage
(UK) Ltd
|
2,112.50
|
1,240.80
|
0
|
-124.7
|
60
|
0
|
0
|
1,305.50
|
$2,549.94
|
||
|
SARSINC
|
SARS
Inc
|
57,090.00
|
25,318.67
|
0
|
0
|
0
|
20,327.50
|
5,287.50
|
-296.33
|
$0.00
|
||
|
SARSINC$
|
SARS
Inc $
|
139,150.18
|
138,300.42
|
0
|
0
|
0
|
0
|
7,362.25
|
130,938.17
|
$0.00
|
||
|
SCAPACK
|
SCA
Packaging Ireland
|
0
|
-2,570.38
|
0
|
0
|
0
|
0
|
0
|
-2,570.38
|
$0.00
|
||
|
SECTRAC€
|
Sectrack
NV
|
0
|
3.59
|
0
|
0
|
0
|
0
|
0
|
3.59
|
$0.00
|
||
|
SELECTTR
|
Selective
Travel Management
|
14,576.92
|
3,875.76
|
0
|
0
|
1,585.00
|
2,290.76
|
0
|
0
|
$7,964.98
|
||
|
STELLAR$
|
Stellar
Satellite Communciations Ltd
|
0
|
610.33
|
0
|
0
|
0
|
0
|
0
|
610.33
|
$1,254.27
|
||
|
STEPTOEJ
|
Steptoe
& ▇▇▇▇▇▇▇
|
0
|
-96.68
|
0
|
0
|
0
|
0
|
0
|
-96.68
|
$0.00
|
||
|
SYSTEM
|
System
Design Technology Ltd
|
292.5
|
29,141.89
|
0
|
0
|
0
|
0
|
-424.76
|
29,566.65
|
$59,888.80
|
||
|
TMOBILE
|
T-Mobile
(UK) Ltd
|
54,662.93
|
7,611.25
|
0
|
7,611.25
|
0
|
0
|
0
|
0
|
$15,641.70
|
||
|
TNT
|
TNT
UK Limited
|
0
|
42.41
|
0
|
0
|
0
|
0
|
0
|
42.41
|
$87.16
|
||
|
TRAKM8
|
Trakm8
Limited
|
-825
|
8,272.67
|
0
|
0
|
0
|
0
|
0
|
8,272.67
|
$17,000.97
|
||
|
TRFASTEN
|
TR
Fastenings
|
532.61
|
-2,048.48
|
0
|
0
|
0
|
0
|
-2,079.75
|
31.27
|
$0.00
|
||
|
TWTLOG
|
TWT
Logistics Limited
|
480
|
564
|
0
|
0
|
141
|
0
|
423
|
0
|
$1,159.06
|
||
|
UNITEDWA
|
SITA
(Northern Ireland) Limited
|
665.68
|
82.53
|
0
|
0
|
82.53
|
0
|
0
|
0
|
$169.61
|
||
|
UPS
|
U.P.S.
Limited
|
1,334.34
|
122.54
|
0
|
0
|
122.54
|
0
|
0
|
0
|
$251.83
|
||
|
VODAFONE
|
Vodafone
Ireland Limited
|
5,015.64
|
2,325.80
|
0
|
0
|
0
|
0
|
704.63
|
1,621.17
|
$4,779.70
|
||
|
▇▇▇▇▇▇
|
▇▇▇▇▇▇
Limited
|
4,504.50
|
2,099.93
|
0
|
0
|
0
|
0
|
0
|
2,099.93
|
$4,315.52
|
||
|
XELLEXBA
|
Xellex
Battery Co Ltd - $
|
3,329.76
|
-6,110.98
|
0
|
0
|
0
|
0
|
0
|
-6,110.98
|
$0.00
|
||
|
ZENITH
|
Zenith
|
350
|
411.25
|
0
|
0
|
411.25
|
0
|
0
|
0
|
$845.15
|
||
|
Totals:
|
523,864.42
|
311,614.13
|
0
|
17,225.93
|
19,078.41
|
48,752.71
|
15,106.96
|
211,450.12
|
$334,058.10
|
|||
Schedule
4.2
Convertible
Debenture Holders
|
Principal
Amount:
|
Holder:
|
|
Four
Hundred Eighty-Nine Thousand United States Dollars ($489,000
USD)
|
▇▇▇▇▇▇▇
▇▇▇▇▇▇▇
|
|
▇▇▇
▇▇▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇ Dollars ($150,000
USD)
|
▇▇▇▇▇▇
▇▇▇▇▇
|
|
Thirteen
Thousand United States Dollars ($13,000 USD)
|
Vehicle
Services (▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇)
|
|
Seventy
Thousand United States Dollars ($70,000 USD)
|
Independent
Northern Ireland
|
Schedule
4.6.2
Revenue
Projection Schedule for ▇▇▇▇▇▇▇ Quarterly Options
|
Quarter
1
|
Quarter
2
|
Quarter
3
|
Quarter
4
|
|
$500,000
USD
|
$1,000,000
USD
|
$1,150,000
USD
|
$1,350,000
USD
|
Schedule
9.3.2
Schedule
of Promissory Notes
|
Date
of Promissory Note:
|
Promissory
Note Number:
|
Principal
Amount of Promissory Note:
|
|
12/19/06
|
#1
|
$16,045.00
|
|
2/16/07
|
#2
|
$23,000.00
|
|
2/16/07
|
#3
|
$2,292.00
|
|
3/2/07
|
#4
|
$10,000.00
|
|
3/26/07
|
#5
|
$21,772.18
|
|
4/26/07
|
#6
|
$40,000.00
|
|
5/1/07
|
#7
|
$44,720.00
|
|
5/11/07
|
#8
|
$27,105.00
|
|
5/3/07
|
#9
|
$69,689.82
|
|
5/8/07
|
#9
|
-$34,694.20
|
|
5/10/07
|
#9
|
-$35,031.62
|
|
5/25/07
|
#10
|
$16,000.00
|
|
6/19/07
|
#11
|
$507.00
|
|
6/22/07
|
#12
|
$3,127.19
|
|
6/26/07
|
#13
|
$893.00
|
|
6/26/07
|
#14
|
$43,025.72
|
|
6/29/07
|
#15
|
$34,000.00
|
|
7/19/07
|
#16
|
$35,880.00
|
|
7/20/07
|
#17
|
$1,585.51
|
|
7/31/07
|
#18
|
$45,955.88
|
|
7/31/07
|
#19
|
$20,000.00
|
|
7/31/07
|
#20
|
$4,676.00
|
|
8/6/07
|
#21
|
$43,141.00
|
|
9/30/07
|
#22
|
$38,156.65
|
|
9/30/07
|
#23
|
$8,015.00
|
|
9/30/07
|
#24
|
$83,650.00
|
|
9/21/07
|
#25
|
$42,757.79
|
|
9/30/07
|
#26
|
$16,980.00
|
|
9/30/07
|
#27
|
$59,150.00
|
|
Total:
|
$682,398.92
|