ASSET PURCHASE AGREEMENT
THIS ASSET PURCHASE AGREEMENT (this "Agreement') is made effective as of May 1,
2002, by and between INTERNATIONAL TEST SYSTEMS, INC., a Delaware corporation,
with its principal place of business at 00000 Xxxxxxx Xxx, Xxxxx 000, Xxx
Xxxxxxx, Xxxxx 00000 ("Purchaser" or "Buyer"), and PENSAR TECHNOLOGIES, LLC
("Pensar" or "Seller"), with its mailing address at 00000 Xxxxxxx Xxx, Xxxxx
000, Xxx Xxxxxxx, Xxxxx 00000.
This Agreement supercedes the Distributorship Agreement and all amendments
to the Distributorship Agreement between Purchaser and Seller. This Agreement
contemplates a transaction in which the Purchaser will purchase all of the
assets, including, but not limited to proprietary technology that enables the
design and production of hardware and software products that, when coordinated,
are used to test and troubleshoot components of printed circuit boards (the
"Assets") (excluding all liabilities of Seller unless otherwise agreed by the
parties) from Seller in return for shares of Purchaser's common stock, the
assumption of liabilities in the amount of $28,832, and the forgiveness of debt
in the amount of $10,438.
NOW, THEREFORE, in consideration of the premises and the mutual promises
made herein, and in consideration of the representations, warranties, and
covenants contained herein, the parties agree as follows:
1. Definitions. As used in this Agreement, the following terms have the
meanings indicated:
1.01.Assets. The Assets to be sold and transferred by Seller to Purchaser
pursuant to this Agreement consist of the Assets more specifically detailed in
Schedule 1.01 of this Agreement. The Assets shall include, but not be limited
to, the items discussed in sections a-c, the following (irrespective if they are
set forth on Schedule 1.01):
a. The benefits of all amounts previously paid by Seller for advertising,
design fees, services, or interest relating to the Assets, to the extent they
extend or are to be performed after the Closing;
2. Seller's rights under all contracts relating to the Assets;
c. All trade secrets, licenses, sublicenses, inventions, patents,
copyrights, copyrightable works, mask works, trade names, business names,
trademarks, trade dress and other intangible assets used by Seller relating to
software and hardware products used to test and troubleshoot components of
printed circuit boards.
1.02. Closing. The consummation of the transactions contemplated by this
Agreement.
1.03. Liabilities. Those liabilities of Seller to be assumed by Purchaser
pursuant to this Agreement, which consist of those liabilities of Seller
specifically disclosed on Schedule 1.03. Purchaser shall not assume any
liabilities, contingent or certain of Seller, unless disclosed in the manner
provided in this paragraph 1.03. In addition, Purchaser is not assuming (i) any
expenses, liabilities, or obligations of Seller arising out of the execution and
delivery of this Agreement and the consummation of the transactions contemplated
hereby (nor may Seller pay any of such expenses out of the Assets), (ii) any
liabilities or obligations of Seller relating to taxes attributable to the
transactions contemplated hereby or the conduct of Seller's business, except for
any accrued sales tax attributable to this asset acquisition, or (iii) any
obligation of Seller to pay a fee to any agent, broker, or finder.
1.04. Material Adverse Effect. Any change in the financial condition or
operation of the business that would materially effect Seller's business
adversely, including, but not limited to, material changes to management,
business conditions, or financial standing.
2. Agreement to Sell and Purchase. Subject to the terms and conditions of
this Agreement, Purchaser agrees to purchase, and Seller agrees to sell,
transfer, convey, assign, and deliver to Purchaser at Closing, the Assets, free
and clear of all liabilities, liens, conditions, and encumbrances, except those
liabilities listed in Schedule 1.03.
2.01. The Closing. The Closing of the transactions contemplated by this
Agreement shall be effective upon the execution date of this Agreement.
3. Purchase Price. The purchase price in consideration of the sale,
transfer, conveyance, assignment, and delivery of the Assets to Purchaser,
subject to the terms and conditions of this Agreement, shall be 300,000 shares
of Purchaser's common stock, the assumption of liabilities of Seller in the
amount of $28,832, and the forgiveness of commissions owed by Seller to
Purchaser in the amount of $10,438.
3.01. Consideration. The consideration of 300,000 shares of Purchaser's
common stock, the assumption by Purchaser of Seller liabilities in the amount of
$28,832, and the forgiveness of commissions owed by Seller to Purchaser in the
amount of $10,438 shall constitute all of the consideration to be paid by
Purchaser in connection with the transactions contemplated by this Agreement.
4. Assumption of Liabilities. In connection with the purchase of the Assets
hereunder, Purchaser hereby specifically assumes only those Liabilities of
Seller specifically disclosed on Schedule 1.03. Purchaser shall not assume any
liabilities, contingent or certain, of Seller except pursuant to the provisions
of Section 1.03. and this Section 4 of this Agreement.
5. Representations and Warranties of Seller. Seller hereby agrees,
represents, and warrants to Purchaser, on the date of this Agreement and on the
Closing Date, as follows:
5.01. Intellectual Property. Seller hereby agrees, represents, and warrants
to Purchaser, on the date of this Agreement as follows:
5.01.01. Seller is the beneficial owner of the Assets and has good and
marketable title to and the absolute right to sell, assign, and transfer
the Assets to Purchaser, free and clear of any interests, security
interest, claims, liens, pledges, penalties, charges, encumbrances,
buy-sell agreements, or other rights of any party whatsoever of every kind
and character except those items listed in Schedule 1.03. Upon delivery of
and payment of the purchase price in accordance with this Agreement, good
and marketable title thereto shall be delivered to Purchaser, free and
clear of any interest, security interest, claims, liens, pledges,
penalties, charges, encumbrances, buy-sell agreements, or other rights of
any party whatsoever. Each item of intellectual property ("Intellectual
Property") owned or used by Seller immediately prior to the Closing
hereunder will be owned or available for use by the Buyer on identical
terms and conditions immediately subsequent to the Closing hereunder.
Seller has taken all necessary and desirable action to maintain and protect
each item of Intellectual Property that it owns or uses.
5.01.02. Seller has not interfered with, infringed upon, misappropriated,
or otherwise come into conflict with any Intellectual Property rights of
third parties, and Seller has never received any charge, complaint, claim,
demand, or notice alleging any such interference, infringement,
misappropriation, or violation (including any claim that Seller must
license or refrain from using any Intellectual Property rights of any third
party). No third party has interfered with, infringed upon,
misappropriated, or otherwise come into conflict with any Intellectual
Property rights of Seller.
5.01.03. Schedule 5.01.03 identifies each patent, trademark, registration
or copyright registration issued to Seller with respect to any of its
Intellectual Property, identifies each pending patent application or
application for registration which Seller has made with respect to any of
its Intellectual Property, and identifies each license, agreement, or other
permission which Seller has granted to any third party with respect to any
of its Intellectual Property (together with any exceptions). Seller has
delivered to the Buyer correct and complete copies of all such patents,
registrations, applications, licenses, agreements, and permissions (as
amended to date) and has made available to the Buyer correct and complete
copies of all other written documentation evidencing ownership and
prosecution (if applicable) of each such item. Schedule 5.01.03 also
identifies each trade name, trademark or service xxxx, whether registered
or unregistered, used by Seller in connection with any of its businesses.
With respect to each item of Intellectual Property required to be
identified in Schedule 5.01.03:
(a) Seller solely possesses all rights, title and interest in and to the
assets, free and clear of any security interest, license, or other
restriction;
(b) the Assets are not subject to any outstanding injunction, judgment,
order, decree, ruling, or charge;
(c) no action, suit, proceeding, hearing, investigation, charge, complaint,
claim, or demand is pending or threatened which challenges the legality,
validity, enforceability, use, or ownership of the Assets;
(d) Seller has never agreed to indemnify any person or persons for or
against any interference, cancellation, infringement, misappropriation, or
other conflict with respect to the Assets.
(e) Seller does hereby agree to sign and otherwise execute any further
documents or instruments which may be necessary, lawful and proper in the
preparation, filing, prosecution, issuance or registration of any patents,
trademarks or copyrights relating to or arising from the Assets, including
, without limitation, any continuation, continuation in part, substitution,
divisional, reissue, renewal, opposition, cancellation, term extension or
enforcement action.
5.02. Due Authorization; Consent of Third Parties. Seller has the full
right, power, legal capacity, and authority to enter into and perform Seller's
obligations under this Agreement. Seller does not need the consent of any third
parties to execute this Agreement. This Agreement constitutes a legal and
binding obligation of Seller, and is valid and enforceable against Seller in
accordance with its terms.
5.03. Absence of Liens. The Assets are free and clear of restrictions on
any security interest or conditions to transfer or assignment, and are free and
clear of liens, pledges, charges, encumbrances, equities, claims, conditions, or
restrictions, except for any lien for current taxes not yet due and payable.
5.04. Litigation. There is not any suit, action, arbitration, mediation or
legal, administrative, or other proceeding or governmental investigation,
pending or, to the best of Seller's knowledge, threatened (in the form of
threats made to representatives of Seller), against or affecting Seller or any
of the Assets.
5.05. Insurance. Seller is not in default with respect to any provisions of
any insurance policy or indemnity bond and has not failed to give any notice or
present any claim thereunder in due and timely fashion, which failure or
failures to give such notice or present such claim, individually or in the
aggregate, could materially adversely affect the Assets.
5.06. Contracts, Agreements and Instruments. Schedule 5.06 accurately and
completely sets forth the following contracts and agreements which Seller has
furnished to Purchaser:
5.06.01. True and correct copies of all material contracts, agreements
and other instruments; and
5.06.02. True and correct written descriptions of all service,
material supply, distribution, agency, financing or other arrangements or
understandings.
Except for matters which, in the aggregate, would not have a Material
Adverse Effect or are otherwise disclosed in the Agreement, to the knowledge of
Seller, no other party to any such contract, agreement, instrument, leases, or
license is now in violation or breach of, or in default with respect to
complying with, any material provision thereof, and each such contract,
agreement, instrument, lease, or license contained in the Schedules attached
hereto is in full force and effect and is the legal, valid, and binding
obligation of the parties thereto and is enforceable as to them in accordance
with its terms.
5.07. Permits and Licenses. Seller has all permits, licenses, and other
similar authorizations necessary for the conduct of its business as now being
conducted by it, and it is not in default in any respect under any such permits,
licenses, or authorizations. All permits, licenses, and other similar
authorizations necessary for the conduct of Seller's business as now being
conducted by them as set forth in Schedule 5.07.
5.08. No Defaults. The consummation of the transactions contemplated by
this Agreement will not result in or constitute any of the following: (i) a
breach of any term or provision of any other agreement of Seller that will not
be waived or released at Closing; (ii) an event that will not be waived or
released at Closing and that would permit any party to terminate any agreement
or to accelerate the maturity of any indebtedness or other obligation of Seller;
(iii) the creation or imposition of any lien, charge, or encumbrance on any of
the Assets; or (iv) a violation of any law or any rule or regulation of any
administrative agency or governmental body of any order, writ, injunction or
decree of any court, administrative agency or governmental body to which Seller
is subject.
5.09. No Prohibited Payments. Neither Seller nor any employee, or agent of
Seller, has made or authorized any payment of funds of Seller or on behalf of
Seller prohibited by law, and no funds of Seller have been set aside to be used
for any payment prohibited by law.
5.10. Completeness of Disclosure. No representation or warranty and no
Schedule, Exhibit, or certificate prepared by Seller pursuant hereto and no
statement made or other document prepared by Seller and furnished to Purchaser
by Seller contains any untrue statement of a material fact or omits or will omit
any material fact necessary in order to make the statements contained therein
not misleading.
6. Representations and Warranties of Purchaser. Purchaser hereby agrees,
represents, and warrants to Seller, on the date of this Agreement as follows:
6.01. Organization. Purchaser is a corporation duly organized and validly
existing under the laws of the jurisdiction of its incorporation.
6.02. Due Authorization; Third Party Consents. Purchaser has the right,
power, legal capacity, and authority to enter into and perform its obligations
under this Agreement and to perform its obligations hereunder. This Agreement
constitutes a legal and binding obligation of the Purchaser, and is valid and
enforceable in accordance with its terms.
7. Conditions to Obligations of Purchaser. The obligations of Purchaser
under this Agreement are subject, at the option of Purchaser, to the following
conditions:
7.01. Closing Documents. In connection with the Closing, Seller shall
deliver to Purchaser the following items:
7.01.01. Bills of sale, endorsements, assignments, drafts, checks and other
instruments of transfer in form and substance reasonably satisfactory to
Purchaser and its counsel in order to transfer all right, title and
interest in the Assets to Purchaser;
7.01.02. Original evidences of title or ownership of the Assets;
7.01.03. Original data and records relating to the Assets;
7.01.04. Evidence (including, if applicable, the delivery of duly executed
UCC-3 Termination Statements) reasonably satisfactory to Purchaser and its
counsel, of the satisfaction and discharge by Seller of all existing liens,
claims, and encumbrances upon or affecting the Assets. Such other
instruments and documents in form and content reasonably satisfactory to
counsel for Purchaser, as may be necessary or appropriate to (i)
effectively transfer and assign to and vest in Purchaser good and
marketable title to the Assets and/or to consummate more effectively the
transactions contemplated hereby and (ii) in order to enable Purchaser to
determine whether the conditions to Seller's obligations under this
Agreement have been met and otherwise to carry out the provisions of this
Agreement.
7.02. Contractual Consents Needed. The parties to this Agreement shall have
obtained at or prior to the Closing all consents required for the consummation
of the transactions contemplated by this Agreement from any party to any
contract, agreement, instrument, license, arrangement, or understanding to which
any of them is a party, or to which any of their respective businesses,
properties, or assets are subject, except where the failure would not have a
Material Adverse Effect.
8. Conditions to Obligations of Seller. The obligations of Seller under
this Agreement are subject, at the option of Seller, to the following
conditions:
8.01. Board Approval. The Board of Directors of Purchaser shall have
approved the transactions contemplated herein.
9. Covenants and Agreements of Seller. Seller covenants and agrees to
execute assignments to reflect the assignment of Intellectual Property.
10. Miscellaneous.
10.01. Further Actions. At any time and from time to time, the parties
agree, at their expense, to take such actions and to execute and deliver such
documents as may be reasonably necessary to effectuate the purposes of this
Agreement.
10.02. Availability of Equitable Remedies. Since a breach of the provisions
of this Agreement could not adequately be compensated by money damages, the
parties shall be entitled before, and only before, Closing, in addition to any
other right or remedy available to them, to an injunction restraining such
breach or a threatened breach and to specific performance of any such provision
of this Agreement; and in either case, no bond or other security shall be
required in connection therewith, and the parties hereby consent to the issuance
of such an injunction and to the ordering of specific performance.
10.03. Survival. The covenants, agreements, representations, and warranties
contained in or made pursuant to this Agreement shall survive for a period of 15
months from the Closing date, irrespective of any investigation made by or on
behalf of any party (the "Survival Date"). No claim for indemnification may be
brought pursuant to this Section 10.03 unless asserted by written notice as
provided herein by the party claiming indemnification on or before the Survival
Date.
10.04. Modification. The Agreement and the schedules and exhibits attached
hereto set forth the entire understanding of the parties with respect to the
subject matter hereof supersede all existing agreements among them concerning
such subject matter, and may be modified only by a written instrument duly
executed by the Parties.
10.05. Notices. Any notice or other communication required or permitted
to be given hereunder shall be in writing and shall be mailed by certified mail,
return receipt requested (or by the most nearly comparable method if mailed from
or to a location outside of the United States), or delivered against receipt to
the party to whom it is to be given at the address of such party set forth in
the preamble or signature pages to this Agreement. Any notice or other
communication given by certified mail (or by such comparable method) shall be
deemed given at the time of mailing (or comparable act), except for a notice
changing a party's address, which will be deemed given at the time of receipt
thereof.
10.06. Waiver. Any waiver by any party of a breach of any provision of
this Agreement shall not operate as or be construed to be a waiver of any other
breach of that provision or of any breach of any other provision of this
Agreement. The failure of a party to insist upon strict adherence to any term of
this Agreement on one or more occasions will not be considered a waiver or
deprive that party of the right thereafter to insist upon strict adherence to
that term or any other term of this Agreement. Any waiver must be in writing
and, in the case of a corporate party, be authorized by a resolution of the
Board of Directors or by an officer of the waiving party.
10.07. Binding Effect. The provisions of this Agreement shall be binding
upon and inure to the benefit of each party's respective successors, assigns,
heirs, and personal representatives.
10.08. No Third-Party Beneficiaries. This Agreement does not create, and
shall not be construed as creating, any rights enforceable by any person not a
party to this Agreement.
10.09. Severability. If any provision of this Agreement is invalid,
illegal, or unenforceable, the balance of this Agreement shall remain in effect,
and if any provision is inapplicable to any person or circumstance, it shall
nevertheless remain applicable to all other persons and circumstances.
10.10. Headings. The headings of this Agreement are solely for convenience
of reference and shall be given no effect in the construction or interpretation
of this Agreement.
10.11. Counterparts, Governing Law. This Agreement may be executed in any
number of counterparts, each of which shall be deemed an original, but all of
which together shall constitute one and the same instrument. It shall be
governed by and construed in accordance with the laws of the State of Texas
without giving effect to conflict of laws.
10.12. Indemnification. Seller shall indemnify, defend and hold harmless
Purchaser and each of its officers, directors, agents and affiliates from and
against any damage, loss, claim, liability, cost or expense, including fees and
disbursements of counsel, accountants, experts and other consultants
(collectively, "Damages"), resulting from, arising out of, based upon or
occasioned by any misstatement or omission from any representation by, or any
breach of warranty, covenant or agreement of Seller contained herein.
10.13. Indemnification Procedures. Promptly after receipt by Purchaser, on
the one hand, or Seller on the other hand (in any such case, the "Indemnitee"),
of notice of any action, suit, proceeding, audit, claim or potential claim (any
of which is hereinafter individually referred to as a "Circumstance"), which
could give rise to a right to indemnification for damages pursuant to Section
10.12, the Indemnitee shall give the party who may become obligated to provide
indemnification hereunder (the "Indemnitor") written notice describing the
Circumstance in reasonable detail; provided, that failure of an Indemnitee to
give such notice to the Indemnitor shall not relieve the Indemnitor from any of
its indemnification obligations hereunder unless (and then only to the extent)
that the failure to give such notice prejudices the defense of the Circumstance
by the Indemnitee. Such Indemnitor shall have the right, at its option and upon
its acknowledgment to the Indemnitee of Indemnitor's liability to indemnify
Indemnitee in respect of such asserted liability, to compromise or defend, at
its own expense and by its own counsel, any such matter involving the asserted
liability of the Indemnitee; provided, that any such compromise (i) shall
include as an unconditional term thereof the giving by the claimant or the
plaintiff to such Indemnitee of a release from all liability in respect of such
claim and (ii) shall not result in the imposition on the Indemnitee of any
remedy other than monetary damages to be paid in full by the Indemnitor pursuant
to this Section 10.13. If any indemnitor shall undertake to compromise or defend
any such asserted liability, it shall promptly notify the Indemnitee of its
intention to do so, and the Indemnitee agrees to, and to cause its own
independent counsel to, cooperate fully with the Indemnitor and its counsel in
the compromise of, or defense against, any such asserted liability. All
reasonable out-of-pocket costs and expenses incurred by the Indemnitee in
connection with such cooperation (including, without limitation, the reasonable
fees and expenses of the Indemnitee's own independent counsel) shall be borne by
the Indemnitor. In any event, the Indemnitee shall have the right to participate
with its own counsel (the reasonable fees and expenses of which will be borne by
Indemnitor) in the defense of such asserted liability; provided that if with
respect to a Circumstance, Indemnitor shall have acknowledged Indemnitor's
liability to indemnify Indemnitee if and to the extent of any loss arising out
of such Circumstance and Indemnitor shall be diligently defending such matter,
Indemnitor shall not be obligated to indemnify Indemnitee for the cost of
Indemnitee's participation in such defense, including Indemnitee's attorney's
fees. Under no circumstances shall the Indemnitee compromise any such asserted
liability without the written consent of the Indemnitor (which consent shall not
be unreasonably withheld), unless the Indemnitor shall have failed or refused to
undertake the defense of any such asserted liability after a reasonable period
of time has elapsed following the notice of a Circumstance received by such
Indemnitor pursuant to this Section 10.13.
10.14 Right to Set-Off. Purchaser shall have the right to set off any
Damages, as defined in Section 10.12, against the amount to be paid by Purchaser
pursuant to Section 3.01 hereof.
IN WITNESS WHEREOF, the parties have duly executed this Agreement
effective as of the date written in the preamble of this Agreement.
INTERNATIONAL TEST SYSTEMS, INC.
By: /s/ Xxxxx X. Birmingham
---------------------------------
Name:Xxxxx X. Birmingham
Title: President
PENSAR TECHNOLOGOIES, LLC
By: /s/ Xxxxx X. Birmingham
---------------------------------
Name:Xxxxx X. Birmingham
Title: President
SCHEDULE 1.01
List of Assets
Technology, including Intellectual Property, Copyrights and trademarks know
as the CircuiTest 2000S and 2100 In-Circuit Test System (See: Schedule
5.01.03 attached hereto).
Inventory of parts and Completed CircuiTest Systems in the Inventory dated
May 1, 2002.
Accounts Receivable of $3,000
SCHEDULE 1.03
Assumed Liabilities
Name: Balance as of May 1, 2002
Citibank MasterCard $13,902
US Bank Visa $11,505
Office Max Credit Card $ 1,583
Dell Financial $ 1,404
American Express $ 438
TOTAL $28,832
SCHEDULE 5.01.03.
Intellectual Property
That property, including any and all copyrights, patents and intellectual
property which constitutes the family of Products designed and manufactured by
Pensar Technologies, LLC known at the CircuiTest 2000S and 2100 Scanner
Expansion and 2100 Shorts/Opens Adapter Interface (S/OAI).
SCHEDULE 5.06
Material Contracts, etc.
None
SCHEDULE 5.07
Permits and Licenses
None
