PART II - OTHER INFORMATION
Item 6. Exhibits and Reports on Form 8-K
(a) Exhibit
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PURCHASE AND SALE AGREEMENT
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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:
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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.
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(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.
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(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.
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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.
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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.
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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.
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(d) 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: /s/ Xxxxxx X. Xxxxxxx
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Xxxxxx X. Xxxxxxx
Chairman
Computer upgrade corporation
By: /s/ Xxxx Xxxx
Xxxx Xxxx
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President & CEO
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(b) Reports on Form 8-K
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Current Report on form 8-K was filed on September 18, 2002 (reporting
the sale of maintenance contracts and approval of the plan of complete
liquidation and dissolution of the "Company").
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