Exhibit 2
PURCHASE AND SALE AGREEMENT
PURCHASE AND SALE AGREEMENT ("Agreement") made as of the 9th day of
September, 2002, between Access Solutions International, Inc., a Delaware
corporation with its principal place of business at 000 Xxx Xxx Xxxx, Xxxxx
Xxxxxxxxx, XX 00000, ("Seller"), and COMPUTER UPGRADE CORPORATION, a California
corporation with its principal place of business at 0000 Xxxxxxx Xxxxxx, Xxxxxx,
Xxxxxxxxxx 00000 ("Buyer").
W I T N E S S E T H:
WHEREAS, Seller desires to sell, assign, transfer, convey and deliver to
Buyer certain assets used in Seller's computer hardware and software maintenance
business (the "Business"); and
WHEREAS, Buyer desires to purchase such assets used in the Business; and
WHEREAS, Seller and Buyer desire to set forth in this Agreement the terms
of their agreements and understandings
NOW, THEREFORE, in consideration of the mutual promises set forth in this
Agreement, and for other good and valuable consideration, the receipt and
sufficiency of which is acknowledged, the parties agree as follows:
1. Purchase and Sale.
(a) Subject to and upon the terms and conditions set forth in this
Agreement, Seller hereby sells, assigns, transfers, conveys and delivers to
Buyer, and Buyer hereby acquires and purchases from Seller, the assets listed on
Exhibit A ("Assets"), for the purchase price set forth in Section 2.
(b) Buyer does not assume nor shall Buyer be obligated to pay, perform or
discharge any debts, liabilities, obligations, contracts, loans or undertakings
of Seller, whether fixed, unliquidated, absolute, contingent or otherwise,
except as set forth on Exhibit A.
(c) For purposes of this Agreement, the parties agree that the effective
date of the purchase and sale described herein is July 1, 2002 (the "Effective
Date").
2. Purchase Price.
(a) Seller agrees to pay to Buyer $262,656.00 ("Closing Purchase Price")
which represents one-half of the accrued but unearned maintenance gross margin
on the contracts listed in Exhibit A as of the Effective Date. Buyer commits to
reimburse Seller for any expenses (cost of goods sold and administrative) paid
for by the Seller applicable to the month of September and to pay any adjustment
required if the Pershing & Co. and/or Fleet Bank contracts terminate prior to
their scheduled expiration date due to the impact of the sale. buyer
acknowledges receipt of Seller's check in the amount of $262,656.00 in payment
of the Closing Purchase Price.
(b) For every contract with a customer listed on Exhibit A that is renewed
or extended during the time period beginning with the Effective Date and ending
on its second anniversary, Buyer also agrees to pay to Seller within fifteen
days following such extension or renewal one-half of the gross margin on the
contract, calculated in the same manner as in the gross margin analysis dated
July 31, 2002, so long as the maturity of the renewal or extension does not
extend beyond the second anniversary of the Effective Date. If the renewal or
extension extends beyond the second anniversary of the Effective Date, Buyer
also agrees to pay to Seller within fifteen days following such extension or
renewal one-half of the gross margin on the contract, but only for the prorated
amount from the date of the contract renewal or extension through the second
anniversary of the Effective Date.
(c) During the time period beginning on the Effective Date and ending on
its second anniversary, Buyer agrees to provide Seller with a written report, on
or before the 15th day of each calendar month summarizing the status of each
contract with a customer listed on Exhibit A and certified by an officer of
buyer as being true, accurate and complete.
3. Consultants.
Buyer has entered into mutually-acceptable consulting contracts, or assume
the existing consulting contracts, with Xxxxxxx Xxxxxx and Xxxxx Xxxxxxxxxxx,
for a two-year term, subject to earlier termination only for cause. Base salary
for each contract is $33,500 and $27,900 ($26,075 plus 7% sales tax),
respectively. Annual bonuses, if any, are to be negotiated between Buyer and
each consultant.
4. Employment Arrangements.
Buyer has entered into a mutually-acceptable employment agreement with
Xxxxxxx X. Xxxxxx, for a minimum one-year term, subject to earlier termination
only for cause. Base salary for the initial year is $70,000 and is subject to
satisfactory performance. Buyer also agrees to pay Xx. Xxxxxx a fee of 1% on new
and renewed maintenance contracts for these clients and 5% on any new ASI
business which he brings in. Buyer also agrees to pay 80% of his medical
insurance.
5. Default Under the Maintenance Agreements.
If Buyer defaults at any time under any of the maintenance contracts listed
in Exhibit A during the period starting on the Effective Date and ending on the
second anniversary of the Effective Date, all of the Assets (including, without
limitation, the maintenance contracts listed on Exhibit A) will be automatically
assigned back to Seller.
6. Access Link.
During the past several years, Seller has been developing a computer
software program known as "Access Link." As of the Effective Date, Buyer shall
hold all of Seller's right, title and interest to Access Link, including to the
source code thereof, and all of Seller's intellectual property rights therein
such as any applicable copyrights or trademarks. If Access Link becomes
operational within six months after the Effective Date and is sold or licensed
to Prudential, Seller will be due ninety percent (90%) of the sale price or
license amounts. The proceeds of any additional sales will belong to Buyer. All
derived maintenance fees associated with Access Link will be shared in the same
manner as all maintenance agreements.
7. Representations and Warranties of Seller.
Seller represents and warrants to Buyer that:
(a) This Agreement constitutes a valid and binding obligation of Seller,
enforceable against Seller in accordance with its terms.
(b) The execution and delivery of this Agreement and the consummation of
the transactions contemplated in this Agreement do not constitute, or with the
passage of time will not constitute, a default under any agreement to which
Seller is a party or by which it is bound or to which any of the Assets are
subject.
(c) There are: (i) no pending or threatened suits or proceedings, at law or
in equity, or before or by any governmental agency or arbitrator; and (ii) no
unsatisfied or outstanding judgments, orders, decrees, or stipulations affecting
Seller or to which he is or may become a party which would constitute or result
in a breach of any representation, warranty or agreement set forth in this
Agreement or interfere with Seller's ability to perform under this Agreement.
(d) Seller has paid all federal, state and local taxes required to be paid
by Seller to the extent due, and all deficiencies, interest, penalties, or other
additions to such taxes. Seller has filed all returns and reports concerning
taxes that he has been required to file, which returns and reports accurately
reflected the amounts of Seller's liability thereunder.
(e) Seller owns its entire right title and interest in the Assets and
Access Link, and, except for the maintenance contracts with Fleet and Pershing,
which require consent to be assigned, has full power and authority to convey
them to Buyer on the terms set forth in this Agreement. To the best of Seller's
knowledge, the Assets and Access Link are free and clear of any encumbrances,
whether voluntary or involuntary.
(f) Except as expressly set forth in this Agreement, Seller acknowledges
that the Assets will be sold to the Buyer "as is" and "where is" without any
warranties of quality or fitness.
8. Deliveries by Seller.
Simultaneously with the execution of this Agreement, Seller hereby delivers
to Buyer, receipt of which hereby is acknowledged by Buyer, the following
documents and items:
(a) A xxxx of Sale transferring the Assets to Buyer;
(b) A check in the amount of $262,656.00.
9. Deliveries by Buyer.
Simultaneously with the execution of this Agreement, Buyer hereby delivers
to Seller, receipt of which hereby is acknowledged by Seller, the following
documents and items:
(a) An Assumption Agreement evidencing buyer's agreement to assume the
obligations under the customer contracts listed on Exhibit A.
10. Cooperation.
Buyer and Seller agree to cooperate so as to execute any and all documents
reasonably requested by Buyer to further evidence the transfer of the Assets
from Seller to Buyer.
11. Survival of Representations and Warranties.
The representations and warranties made by Seller and Buyer under this
Agreement shall not survive the execution of this Agreement and the consummation
of the transactions contemplated hereunder.
12. General Provisions.
(a) No Waiver. Waiver of any provision of this Agreement, in whole or in
part, in any one instance shall not constitute a waiver of any other provision
in the same instance, nor any waiver of the same provision in another instance,
but each provision shall continue in full force and effect with respect to any
other then-existing or subsequent breach.
(b) Notice. Any notice required or permitted under this Agreement shall be
given in writing by postage prepaid, United States first class, registered or
certified mail, return receipt requested, to the parties at their respective
addresses specified above, or at such other address for a party as that party
may specify by notice. Notice shall be effective upon receipt.
(c) Miscellaneous. This Agreement: (i) may be executed in any number of
counterparts, each of which, when executed by both parties to this agreement
shall be deemed to be an original, and all of which counterparts together shall
constitute one and the same instrument; (ii) shall be governed by and construed
under the laws of the State of Rhode Island applicable to contracts made,
accepted, and performed wholly within the State of Rhode Island without
application of principles of conflicts of laws; (iii) constitutes the entire
agreement of the parties with respect to its subject matter, superseding all
prior oral and written communications, proposals, negotiations, representations,
understandings, courses of dealing, agreements, contracts, and the like between
the parties in such respect; (iv) may be amended, modified, or terminated, and
any right under this Agreement may be waived in whole or in part, only by a
writing signed by both parties of this Agreement; (v) contains headings only for
convenience, which headings do not form part, and shall not be used in
construction, of this Agreement; and (vi) shall bind and inure to the benefit of
the parties and their respective legal representatives, successors and assigns,
except that no party may delegate any of its obligations under this agreement or
assign this agreement, without the prior written consent of the other party.
Executed under seal as of the date first above written.
ACCESS SOLUTIONS INTERNATIONAL, INC.
By:_________________________________
Computer upgrade corporation
By:_________________________________
