AGREEMENT
THIS AGREEMENT made this 20th day of November,
1996, by and between Xxxxxx X. Xxxxxxx and
(hereinafter "Transferor") and International Automated
Systems, Inc., a Utah corporation, (hereinafter "IAS")
WITNESSETH:
WHEREAS, Transferor owns the items of personal
property listed on Exhibit A (hereinafter collectively
referred to as the "Assets");
WHEREAS, IAS and Transferor agree that it would be
to their mutual benefit for IAS to receive from
Transferor the Assets in exchange for 6,000,000 shares
of IAS restricted common stock and 1,000,000 shares of
Series A Preferred Stock with voting rights of 10 votes
per share; and
WHEREAS, previously IAS and Transferor have
discussed the acquisition of certain assets from the
Transferor and the Board of Directors of IAS adopted
certain minutes pertaining to the purchase and
acquisition of certain assets from Transferor.
NOW THEREFORE, in consideration of the promises
and of the mutual covenants herein contained, the
parties hereto hereby agree as follows:
1. (REPRESENTATIONS AND WARRANTIES OF TRANSFEROR)
Transferor hereby represents and warrants to IAS that:
a) He, as investor, has complete title and
owns as of the date hereof, and as of the Closing Date
hereinafter provided will own the Assets free and clear
of all liens, charges and encumbrances except those
assets previously assigned to IAS.
b) He is not a defendant, nor a plaintiff,
against whom a counterclaim has been asserted, in any
litigation, pending or threatened, other than the
litigation filed in the United States District Court
for the District of Utah captioned Xxxxxxx Xxxxxxx
et al. v. International Automated Systems, Inc. Civil
No. 2:96CV0583C and a Formal Order for a private
investigation issued by the Securities and Exchange
Commission, File No. D-2043, dated July 25, 1996, and
there has not been any material claim made or asserted
against him nor are there any proceedings threatened or
pending before any federal, state or municipal
government, or any department, board, body or agency
thereof, involving him, except as disclosed in Exhibit
"B".
c) Transferor is not in default under any
material agreement to which it is a party nor in the
payment of any obligation.
d) This Agreement has been duly executed by
Transferor and the execution and performance of this
Agreement will not violate, or result in a breach of,
or constitute a default in any agreement, instrument,
judgment order or decree to which Transferor is a party
or to which Transferor is subject nor will such
execution and performance constitute a violation of or
conflict with any fiduciary to which Transferor is
subject.
e) All representations and warranties made
by Transferor in connection with the transactions
contemplated hereunder shall be truthful and not
misleading.
f) Transferor has no liens filed against
him by any governmental authority, commission,
department, or agency.
g) Transferor warrants that the ideas for
the Assets were conceived by him and that he developed
the assets with his own funds or he advanced funds to
IAS for such Asset development.
h) Transferor warrants to the best of his
knowledge that he is in compliance with all relevant
statutes, laws, regulations, and administrative rules
regarding the Assets.
2. (REPRESENTATIONS AND WARRANTIES OF IAS) IAS
represents and warrants that:
a) It is a corporation duly organized and
validly existing and in good standing under the laws of
the State of Utah; has an authorized capitalization of
50,000,000 shares comprised of 5,000,000 shares of
preferred stock, no par value per share and 45,000,000
shares of common stock, no par value per share, of
which there are issued and outstanding 9,158,089 shares
of common stock, no par value per share as of March 31,
1996, and IAS has the corporate authority, right, and
power to enter into this Agreement.
b) IAS represents that it is also a
defendant in the litigation and private investigation
referenced at paragraph 1 (a) of this Agreement. IAS
expressly makes no representations regarding the final
outcome, or adjudication, or determination which may
result from the litigation. Also, IAS received a
subpoena from the Securities and Exchange Commission
for the production of certain of its records and that
the subpoena was issued pursuant to a formal order of
private investigation regarding the Company and its
president.
3. (CLOSING) The Closing of this Agreement shall
proceed on November 15, 1996, at 000 Xxxxx 000 Xxxx,
Xxxxxxxx Xxxx, Xxxx, or at such other place as
designated and determined between the parties, as
follows:
a) IAS shall undertake and perform all
necessary requirements to issue the 6,000,000 shares of
common stock and 1,000,000 shares of Series A Preferred
Stock and IAS shall deliver instructions to its
transfer agent to issue certificates evidencing
the aforementioned shares to Transferor and the
certificates so issued shall bear a restrictive legend
prohibiting the transfer by the holder without first
complying with the Securities Act of 1933, as amended,
or Rule 144 promulgated thereunder. In addition, IAS
shall file with the Utah Division of Corporations all
documents required to authorize the issuance of the
Series A Preferred Stock which Series when issued shall
provide that each share of the 1,000,000 shares of
Series A Preferred Stock, no par value per share, and
each share shall be entitled to ten votes per share and
that the shares of Series A Preferred Stock shall vote
with the shares of common stock as to all matters.
b) Transferor shall do the following: (1)
present a certification that Transferor has clear title
and unencumbered ownership of the Assets, (2) present
an executed investment letter in the form mutually
agreed upon by the parties, and (3) execute bills of
sale or other documents transferring the Assets to IAS.
c) As a continuing obligation and duty to
IAS for the purchase of the Assets, Transferor
expressly covenants and promises that he will execute
as may be required in the future all documents
necessary to effect the transfer of the Assets to IAS.
4. (TAX TREATMENT) IAS expressly makes no
warranty to Transferor regarding any possible tax
treatment of his sale of the Assets which any
governmental entity may accord the transaction.
IAS to the extent practicable will do all acts and will
cooperate to the extent possible to assist Transferor
to receive favorable tax treatment to him.
5. (BANKRUPTCY) If any proceeding under the
Bankruptcy Act, as amended, is commenced by or against
the Company, or if IAS is adjudged insolvent, or if a
receiver is appointed in any proceeding, or if any
court or governmental agency restricts, removes, or
forbids Transferor from working and/or operating within
IAS in conjunction with the heretofore transferred
Assets, Transferor shall immediately without further
action on his part and without any court order or
proceeding, receive back all right, title and interest
to the Assets, but only upon the occurrence of any of
the aforesaid events.
6. (EFFECTIVE DATE) The parties agree that the
sale, transfer of all title and interest and conveyance
of the Assets shall be given effect as of June 30,
1996.
7. (CONDITIONS TO CLOSING) The obligations of
IAS and Transferor to complete the transactions
provided for herein shall be subject to the performance
of all their respective agreements to be performed
hereunder on or before the Closing, to the material
truth and accuracy of the respective representations
and warranties of IAS and Transferor contained herein,
and to the further conditions that:
(a) All representations and warranties of
IAS and Transferor contained in this Agreement are
substantially true and correct on and as of the Closing
with the same effect as if made on and as of said date.
(b) As of the Closing there shall have been
no material adverse change in the affairs, business,
property or financial condition of IAS or Transferor
and shall so certify in writing.
(c) All of the agreements and covenants
contained in this Agreement that are to be complied
with, satisfied and performed by each of the parties
hereto on or before the Closing, shall, in all material
respects, have been complied with, satisfied and
performed.
8. (ADDITIONAL COVENANTS) During the period
between the date hereof and the Closing, IAS shall
conduct its business and operations in the same manner
in which the same have heretofore been conducted.
During such period, unless it has received written
consent thereto from the other party, neither IAS nor
Transferor will:
(a) Incur any obligation, liability or
commitment, absolute or contingent, other than current
liabilities incurred in the ordinary and usual course
of business.
(b) Declare or pay and dividends on or make
any distributions in respect of, or issue, purchase or
redeem any of its shares of stock except in accordance
with this Agreement.
(c) Subject any of its properties to a
mortgage, pledge or lien, except in the usual and
ordinary course of business.
(d) Sell or transfer any of its properties,
except in the usual and ordinary course of business.
(e) Make any investment of a capital nature,
except in the usual and ordinary course of business.
(f) Enter into any long-term contracts or
commitments or modify or terminate any existing
agreements, except in the usual and ordinary course of
business.
(g) Use any of its assets or properties
except for proper corporate purposes.
(h) Sell, contract to sell or issue any
equity or debt securities.
9. (MERGER CLAUSE) This Agreement
supersedes all prior agreements and understandings
between the parties and may not be changed or
terminated orally, and no attempted change, termination
or waiver of any of the provisions hereof shall be
binding unless in writing and signed by the parties
hereto.
10. (GOVERNING LAW) This Agreement shall be
governed by and construed according to the laws of the
State of Utah.
11. (ATTORNEY) This Agreement has been drafted
and prepared by the firm of Xxxxxx, Xxxxxx & Xxxxxxx,
which firm represents exclusively IAS. Transferor has
had the opportunity to seek counsel, advice, and
direction from his attorney. The firm representing IAS
is not representing in any manner the interests of
Transferor.
12. (SUCCESSOR AND ASSIGNS) The Assets, after
closing, may be assigned, in whole or in part, to an
independent entity or a subsidiary or subsidiaries of
IAS. This Agreement may also be assigned by any of the
parties hereto to any other party, person or entity
without written notification to the other party. This
Agreement shall extend to and be binding upon the
successors, heirs and assigns of the respective parties
hereto.
13. (FORCE MAJEURE) Neither party shall be in
default of this Agreement or liable to the other party
for any delay or default in performance where
occasioned by any cause of any kind to the extent such
cause is beyond its control, including but not limited
to, armed conflict or economic dislocation, civil
disorder of any kind, action of any civil or military
authorities (including priorities and allocations),
fires, floods and accidents.
14. (HEADINGS) Headings in this Agreement are
for the convenience of the parties only and they shall
not be deemed to change or alter the meaning of any
section, paragraph, or part of this Agreement.
15. (SEVERABILITY) Every restriction or
limitation in this Agreement is severable any any other
possible future finding by a duly constituted authority
that a particular provision herein is invalid, the
parties hereto have made this agreement with the clear
intention of continuing to perform all provisions
hereof which have not been found invalid. The parties
agree to consult about modification of any provision of
the Agreement that may be found invalid by such duly
constituted authority. All other valid clauses are
operative and shall be enforced.
IN WITNESS WHEREOF, the parties hereto have caused
this Agreement to be executed the day and year first
above written.
Dated this 20 day of November, 1996.
INTERNATIONAL AUTOMATED SYSTEMS, INC.
ATTEST:
Xxxx Xxxxxxx Xxxxxx Xxxxxxx
Secretary President
ACKNOWLEDGMENT
STATE OF UTAH )
: ss.
UTAH COUNTY )
On this 20 day of November 1996, before me the
undersigned officer, personally appeared Xxxxxx X.
Xxxxxxx and Ina Xxxxx Xxxxxxx, known personally to me
to be the President and Secretary, respectively, of the
above-named corporation, and that they, as such
officers, being authorized so to do, executed the
foregoing instrument for the purposes therein
contained, by signing the name of the corporation
by themselves as such officers.
IN WITNESS WHEREOF, I have hereunto set my hand
and official seal.
NOTARY PUBLIC
My Commission Expires: Residing at:
TRANSFEROR:
Xxxxxx X. Xxxxxxx
State of Utah )
)
County of Utah )
Subscribed and sworn to before me this 20 day of
November, 1996.
Notary Public
Agreement between International Automated Systems,
Inc., and Xxxxxx Xxxxxxx
EXHIBIT A
The following is a description of the Assets:
I. Automatic Fingerprint Identification Machine
("AFIM") technologies including present patents,
designs, contracts, hardware and software as related
to, but not limited to the following:
1)Time clocks,
2)Controlled access security devices,
3)Government agencies and programs' access (i.e. EBT,
Social Security, food stamps, welfare, etc.),
4)Membership identification,
5)Citizenship of naturalization identification,
6)Live scanner for law enforcement (I.e., criminal
identification, fraudulent activities, etc.),
7)Financial transaction security,
8)Records security (i.e., medical, financial, personal,
etc.)
9)Computer, network or internet security,
10)Automated car rental,
11)Automated ticket sales (i.e., planes, buses, trains,
movies, amusement parks, concerts, etc.)
12)Automated gas pumps, vending machines, and
convenience stores, and
13)Any identification and/or verification devices and
applications not mentioned above.
II. Digital Wave Modulation ("DWM") technologies
including present patents and patents pending, designs,
contracts, hardware, and software as related to but not
limited to the following:
1)High speed pot line modem from outside unit to
central phone office,
2)Medium speed modem for long distance communication,
3)Cable modem,
4)Cellular phone communication,
5)Magnetic storage mediums (i.e., tape recorders, VCR,
hard drives, floppy drives, etc.)
6)Stereo communication,
7)Television communication,
8)Satellite communication,
9)All other communication devices, recording mediums
and methods of transferring data not mentioned above
using DWM technology.
III. Monies and funds advanced to International
Automated Systems, Inc., used to develop the above
technologies or for other purposes, in the amount of
$468,458. The amount of $647,458 as of June 30,
1996, which Xx. Xxxxxxx advanced to the Company is
specifically excluded from this transaction by the
parties and shall not be considered a part of the
Assets subject to the Agreement.
Agreement between International Automated Systems,
Inc., and Xxxxxx Xxxxxxx
Exhibit B
None.
GENERAL XXXX OF SALE
KNOWN ALL MEN BY THESE PRESENTS that Xxxxxx
Xxxxxxx ("Transferor") for valuable consideration
hereby exchanges, conveys, transfers, assigns and
delivers to International Automated Systems, Inc., a
Nevada corporation, (the "Company") all right, title
and interest in and to the following assets, to wit:
I. Automatic Fingerprint Identification Machine
("AFIM")technologies including present patents,
designs, contracts, hardware and software as related
to, but not limited to the following:
1)Time clocks,
2)Controlled access security devices,
3)Government agencies and programs' access (i.e.
EBT,Social Security, food stamps, welfare,
etc.),
4)Membership identification,
5)Citizenship of naturalization identification,
6)Live scanner for law enforcement (I.e., criminal
identification, fraudulent activities, etc.),
7)Financial transaction security,
8)Records security (i.e., medical, financial,
personal, etc.)
9)Computer, network or internet security,
10)Automated car rental,
11)Automated ticket sales (i.e., planes, buses,
trains, movies, amusement parks, concerts,
etc.)
12)Automated gas pumps, vending machines, and
convenience stores, and
13)Any identification and/or verification devices
and applications not mentioned above; AND
II. Digital Wave Modulation ("DWM") technologies
including present patents and patents pending, designs,
contracts, hardware, and software as related to but not
limited to the following:
1)High speed pot line modem from outside unit to
central phone office,
2)Medium speed modem for long distance
communication,
3)Cable modem,
4)Cellular phone communication,
5)Magnetic storage mediums (i.e., tape recorders,
VCR, hard drives, floppy drives, etc.)
6)Stereo communication,
7)Television communication,
8)Satellite communication,
9)All other communication devices, recording
mediums and methods of transferring data not
mentioned above using DWM technology; AND
III. Monies and funds advanced to International
Automated Systems, Inc., used to develop the above
technologies or for other purposes, in the amount of
$468,458.
and to have and to hold said assets, property and
rights unto the Company, its assigns and successors
forever.
Transferor hereby promises, warrants and
represents that he has complete and unencumbered
ownership of the foregoing assets set forth above
except as previously assigned to the Company.
Transferor is not hereby transferring or conveying
any other assets not specifically set forth herein
including but not limited to advances to the Company as
of June 30, 1996, in the amount of $647,458, and said
assets shall be retained by Transferor.
IN WITNESS WHEREOF, Transferor hereby has caused
this document to be signed and executed individually
this 20 day of November, 1996.
TRANSFEROR:
XXXXXX XXXXXXX
State of Utah )
)ss.
County of Utah )
On this 20 day of November, 1996, before me, the
undersigned, a notary public, Xxxxxx Xxxxxxx appeared
and being sworn, subscribed and acknowledged that he
executed the within instrument as his free and
voluntary act.
Notary Public
