EXHIBIT 10.13
ASSET PURCHASE AGREEMENT
THIS AGREEMENT is made on August 30, 2002 between Integral Vision,
Inc., a Michigan corporation located at 00000 Xxxxx Xxxxx Xxxxxx, Xxxxxxxxxx
Xxxxx, Xxxxxxxx 00000 ("Seller") and DaTARIUS Technologies, Inc., a California
corporation located at 00000 Xxxxx Xxxxxxx, Xxxxx 000, Xxxxxx, XX 00000
("Buyer").
BACKGROUND
A. Seller is engaged in the business of developing and manufacturing
inspection systems for the optical disc industry including an Optical
Disc Scanner System, an Identification Code Verification System, a
Screen and Offset Printed Label Inspection System, and an Optical Disc
Orientation System (the "Business"). Buyer desires to purchase, and
Seller desires to sell to Buyer, the Purchased Assets (as defined in
Section 1) on the terms and subject to the conditions of this
Agreement.
B. The parties acknowledge that the Seller is engaged in business lines
other than the Business, including but not limited to, inspection of
small flat panel displays, and the sale of various hardware and
software packages that can be configured to allow end users and
integrators to develop their own solutions to many simple vision
inspection applications ("Unrelated Business") and this Asset Purchase
Agreement does not include any assets of such Unrelated Business,
including those assets which are used in both the Business and the
Unrelated Business, unless specifically identified as being purchased
as part of this Agreement.
C. Seller has also agreed not to compete with Buyer in the conduct of the
Business as provided in a non-competition agreement in substantially
the form as attached in Schedule 5.a (the "Non-Competition Agreement").
AGREEMENTS
NOW, THEREFORE, in consideration of the Background and the terms and
conditions set forth in this Agreement, the Seller and Buyer agree as follows:
1. Assets Purchased. At the Effective Date, Seller shall sell, assign,
convey, transfer, set over, and deliver to Buyer all of the following
assets, rights, and interests used in, useable in or relating
exclusively to the operation of the Business, free and clear of all
liabilities, security interests, claims, liens and encumbrances, and
would include the following (collectively, the "Purchased Assets"):
a. Good and saleable inventory used for the Business (the
"Inventory"), as may be required by Buyer from time to time
and so long as Seller has such Inventory available; but until
such Inventory is ordered for purchase by
Buyer, it shall remain the property of Seller subject to the
right to purchase by Buyer at the price identified in Section
4.a.i below.
b. Except as provided on Schedule 1.B, all Seller's right, title,
benefit, and interest in and to any patent, trademark, trade
name, service xxxx, copyright or software used in the
Business, whether registered or unregistered, and any
applications therefor, and any inventions, discoveries,
improvements, designs, prototypes, trade secrets,
manufacturing and engineering drawings, process sheets,
specifications, bills of material, formulae and secret and
confidential processes, know-how, technology, and other
industrial property (whether patentable or unpatentable) used
in the Business (the "Intellectual Property").
c. The full benefit of:
i. Any and all purchase orders placed with and accepted
by Seller on or before the Effective Date (as
hereinafter defined in Section 10.a.) in connection
with the Business that have not been completely
performed or filled before the Effective Date,
covering the purchase from Seller of products to be
supplied by Seller in the Business, or covering the
rendition by Seller of service on products supplied
by Seller in the Business and including all deposits,
progress payments, and credits of the Business, as
set forth on Schedule 1.c.i; and
ii. The purchase orders listed on Schedule 1.c.ii placed
by Seller prior to the Effective Date in connection
with the Business that have not been completely
performed before the Effective Date, covering
Seller's purchase of supplies or materials in the
ordinary course of business.
(All the items listed in this Section 1.c are the "Contracts and
Commitments").
d. The fixed assets listed on Schedule 1.d, which are being
purchased "as is/where is".
e. All information, files, records, lists, data, recorded
knowledge, telephone and fax numbers, addresses and internet
addresses which pertain to customers, suppliers, advertising,
promotional materials, sales, service, delivery, internal
organization or operation of the Business;
f. All rights under any written or oral contract, agreement,
personal or real property lease, purchase option, customer
order, plan, instrument, document, commitment, arrangement,
undertaking or authorization of the Business listed on
Schedule 1.f;
g. All certificates, licenses and permits relating to operation
of the Business listed on Schedule 1.g, to the extent
transferable to Buyer;
h. All security deposits and similar items in connection with the
Business, in the amount accrued as of the Effective Date
listed on Schedule 1.h.
i. Any and all goodwill connected with the Business, but
excluding the phone and fax numbers of the Business, the
business e-mail addresses of employees of the Business, and
the internet address and web site of the Business.
j. All of Seller's rights to the names "AID" and "Automatic
Inspection Devices."
Seller shall update all Schedules described in this Section 1, where
appropriate, as of the Effective Date.
2. Excluded Assets. Buyer is not purchasing any Excluded Assets from
Seller. "Excluded Assets" means:
a. All of Seller's books of account (although copies of such
books and records relating to the Business shall, on
reasonable request made by Buyer or representatives of Buyer,
be provided to Buyer);
b. Claims for refunds of federal and state income taxes, tax
credits of any kind resulting from operation of the Business
prior to the Closing Date;
c. Cash or cash equivalents in transit, in hand or in bank
accounts;
d. All prepaid insurance of the Business; and
e. The accounts receivable of the Business.
f. Patents as to which Buyer is specifically granted only a
license, as listed on Schedule 1B; and
g. Any assets of the nature listed in Section 1 above that are
not used exclusively in the Business.
3. Liabilities Assumed. Seller agrees that Buyer assumes no liabilities of
Seller, whether accrued, absolute, contingent, known, unknown, or
otherwise, except that Buyer would assume and take the Purchased Assets
subject to the following liabilities relating to the Business which
Buyer agrees to assume:
a. Liabilities arising out of all existing or pending orders of
Seller's customers as listed on Schedule 1.c.i;
b. Liabilities arising out of all existing or pending Seller
purchase orders as of the Closing Date (as hereinafter defined
in Section 10.a.) as listed on Schedule 1.c.ii;
c. Liabilities of the Business arising from and after the Closing
Date; and
d. Other liabilities of the Business specifically identified as
liabilities of Buyer elsewhere in this Purchase Agreement.
The items listed in this Section 3 are "Assumed Liabilities". Buyer shall not
assume or become responsible for, and Seller shall remain liable for, any and
all liabilities or obligations of Seller which are not Assumed Liabilities
(collectively, the "Retained Liabilities").
4. Purchase Price for Purchased Assets.
a. Purchase Price. The purchase price to be paid by Buyer to
Seller for the Purchased Assets and the Non-Competition
Agreement pursuant to Section 5.a (the "Purchase Price")
shall, in addition to the Assumed Liabilities, be as follows:
i. Inventory. For the Inventory, Seller's "Standard
Cost," which is defined as the cost listed in
Seller's M2M inventory control system as of July 16,
2002, to be paid at the time of use of such Inventory
and be due upon Buyer's receipt of invoice.
ii. Fixed Assets. For the fixed assets listed on Schedule
1.D, Twenty Five Thousand ($25,000.00US) US Dollars.
iii. Remaining Purchased Assets. For the balance of the
Purchased Assets, including the covenant not to
compete pursuant to the Noncompetition Agreement, a
royalty, to be paid for the two years following the
Closing Date, equal to eighteen percent (18%) of the
net sale price to Buyer (net sale price is final
invoice price less freight, duties and commissions)
on any sales of systems included in the Business or
systems that perform similar functions (the
"Royalty").
b. Payment of Purchase Price.
i. Payment at Closing. Buyer shall pay the Purchase
Price set forth in 4.a.ii. and One Hundred Thousand
($100,000.00US) US Dollars representing an advance
under the Royalty as described in Section 4.a.iii.
above (the "Advanced Royalty") on the Closing Date by
delivering to Seller the amount of One Hundred Twenty
Five Thousand Dollars and No Cents US ($125,000.00US)
by cashier's or certified check or wire transfer
("Readily Available Funds").
ii. Payment Following Closing. Buyer shall pay the
Royalty for the 24-month period following the Closing
Date. Until the Advanced Royalty has been accounted
for, the portion of the Royalty payment equal to ten
percent (10%) of net sales will be in the form
of a credit against the Advanced Royalty and the
portion of the Royalty payment equal to eight percent
(8%) of net sales will be paid in cash to Buyer.
Buyer will issue a statement of sales/royalty due no
later than two weeks following the end of the month
in which such sales are made. Seller will issue an
invoice to Buyer for the amount of Royalty due, which
invoice will be paid by Buyer on or before the end on
the next month, a maximum of 60 days following the
end of the month in which such sales are made.
c. Allocation of Purchase Price. The Purchase Price shall be
allocated among the Purchased Assets in accordance with
attached Schedule 4.C. Buyer and Seller agree to file all
returns and reports in a manner consistent with the
allocations in this Section.
5. Related Agreements.
a. Non-Competition Agreement. At the Closing, Seller shall
execute and deliver to Buyer the Non-Competition Agreement in
the form attached as Schedule 5.a.
b. Transition Assistance Agreement. The Transition Assistance
Agreement attached hereto as Schedule 5.b. covering the use of
certain of the Seller's personnel and services during a
transition period.
c. License Agreements. The License Agreements attached as
Schedules 1.b-a and 1.b-b granting Buyer and Seller,
respectively, a paid-up, nonexclusive, world-wide license in
certain specified patents.
(All of the Agreements contained in this Section 5 are hereinafter
referred to collectively as "Related Agreements.")
6. Delivery Free of Encumbrances. Seller shall deliver good title to the
Purchased Assets free and clear of all mortgages, liens, claims,
demands, charges, options, equity interests, leases, tenancies,
easements, pledges, security interests, and other encumbrances
("Encumbrances"), except for any Assumed Liability which results in any
Encumbrance.
7. Preclosing Actions. Before the Effective Date:
a. Conduct of Business. Seller shall carry on and conduct the
Business only in the ordinary course consistent with past
practices, without any change in the policies, practices, and
methods that Seller pursued before the date of this Agreement.
Seller will use its best efforts to preserve the Business
organization intact; to preserve the relationships with
Seller's customers, suppliers, and others having business
dealings with it; and to preserve the services of Seller's
agents and representatives. Without limitation of the
foregoing, (i) Seller shall not undertake any action without
the prior written consent of Buyer that, if taken before the
date of this Agreement,
would have been required to be disclosed on any Schedule to
this Agreement; and (ii) Seller shall not alter the physical
content or character of any of the Business's inventories so
as to affect the nature of the Business or result in a change
in the total dollar valuation of the inventories or otherwise
take action or refrain from taking action that would result in
any change in the Purchased Assets or Assumed Liabilities,
other than in the ordinary course of business consistent with
past practices.
b. Accuracy of Representations and Warranties and Satisfaction of
Conditions. Seller shall immediately advise Buyer in writing
if (i) Seller's representations or warranties are untrue or
incorrect in any material respect or (ii) Seller becomes aware
of the occurrence of any event or of any state of facts that
results in any of the representations and warranties of Seller
being untrue or incorrect as if Seller were then making them.
Seller will not take any action, or omit to take any action,
that would cause Seller's representations and warranties set
forth in this Agreement to be untrue or incorrect as of the
Effective Date. Seller will use its best efforts to cause all
conditions within its control that are set forth in Section 8
to be satisfied as promptly as practicable under the
circumstances.
8. Conditions Precedent to Buyer's Obligations. Buyer's obligation to
consummate the transactions contemplated by this Agreement is subject
to the fulfillment (or waiver by Buyer) before or at the Closing of
each of the following conditions:
a. Accuracy of Representations and Warranties. The
representations and warranties of Seller contained in this
Agreement and all Related Agreements shall be true and correct
at and as of the Closing Date as though such representations
and warranties were made on that date, and Buyer shall have
received a certificate to such effect signed by the President
or a Vice President of Seller.
b. Performance of Covenants. The Seller shall have in all
respects performed and complied with all covenants,
agreements, and conditions that this Agreement and all related
documents require to be performed or complied with before or
on the Closing Date, specifically including all of the Related
Agreements referred to in Section 5, and Buyer shall have
received a certificate to such effect signed by the President
or a Vice President of Seller.
c. No Casualty. Prior to the Closing Date, Seller shall not have
incurred, or be threatened with, a liability or casualty that
would impair the value of the Purchased Assets.
d. Instruments of Transfer, etc. Effective as of the Effective
Date, Seller shall have delivered to Buyer all bills of sale,
general instruments of
transfer,conveyances, assurances, transfers, assignments,
approvals, consents, and any other instruments and documents
containing the usual and customary covenants and warranties of
title and that shall be convenient, necessary, or reasonably
required to effectively transfer the Purchased Assets to Buyer
with good title, free and clear of all Encumbrances.
e. No Litigation. No action, suit, proceeding, or investigation
shall have been instituted before any court or governmental
body, or instituted by any governmental agency, (i) to
restrain or prevent the carrying out of the transactions
contemplated by this Agreement, or (ii) that might affect
Buyer's right to own, operate, and control the Purchased
Assets after the Effective Date.
f. Approvals. The Board of Directors and shareholders of the
Buyer shall have taken the necessary actions to approve this
transaction.
g. Other Documents and Instruments. Buyer shall have received
such other documents and instruments as it has reasonably
requested.
h. Approvals by Buyer's Counsel. Buyer's counsel shall reasonably
approve all legal matters and the form and substance of all
documents that Buyer or Seller is to deliver at the Closing.
9. Conditions Precedent to Seller's Obligations. Seller's obligations to
consummate the transactions contemplated by this Agreement are subject
to the fulfillment of each of the following conditions before or at the
Closing Date:
a. Accuracy of Representations and Warranties. Buyer's
representations and warranties contained in this Agreement and
all Related Agreements shall be true and correct at and as of
the Closing Date as though such representations and warranties
were made at the Closing and Seller shall have received a
certificate to such effect signed by the President or a Vice
President of Buyer.
b. Performance of Covenants. Prior to and at the Closing Date,
Buyer shall have in all respects performed and complied with
its obligations under all the covenants, agreements, and
conditions that this Agreement and all Related Agreements
require and Buyer shall have received a certificate to such
effect signed by the President or a Vice President of Seller.
c. Board Approval. The Board of Directors of the Seller shall
have taken the necessary action approving this transaction.
10. Closing Matters.
a. Closing. The closing of the transactions contemplated in this
Agreement (the "Closing") shall take place at the offices of
Xxxxxx Xxxxxxx Xxxxx &
Xxxxxxxx,P.C. at 0000 Xxxxxxx Xxxxxxx, Xxxxxx, Xxxxxxxx at
10:00 a.m. US Eastern Standard Time on August 30, 2002 or at
such other place and/or on such other date as the parties may
agree upon (the "Closing Date"). The sale and the transfer of
the assets being transferred will be effective at 12:00
midnight US Eastern Daylight Time on August 30, 2002
("Effective Date").
b. Updated Schedules. Certain Schedules will need to be up-dated
to the Effective Date. This shall include, without limitation,
Schedules 1.c.i (Customer Orders), 1.c.ii (Vendor Orders) and
11.p (Progress Payments). All schedules shall be updated as
necessary such that each such schedule is accurate and
complete as of the Closing Date.
c. Certain Closing Expenses; Prorations. Seller shall be liable
for and shall pay all US, Michigan, and local sales, use,
excise, and documentary stamp taxes and all other taxes,
duties, or other like charges properly payable on and in
connection with Seller's conveyance and transfer of the
Purchased Assets to Buyer. It is agreed, however, that Buyer
shall be responsible for any VAT, export or import taxes
associated with transferring any Inventory or Fixed Assets.
Personal property taxes and other service contracts assumed by
Buyer shall be prorated ratably as of the Effective Date. To
the extent practicable, all such prorations shall be computed
and paid at the Closing, and to the extent not practicable, as
soon as practicable thereafter.
d. Further Assurances. Seller shall cooperate with and assist
Buyer with the transfer of the Purchased Assets under this
Agreement and take all other reasonable actions to assure that
the Business is smoothly transferred to Buyer. From time to
time after the Effective Date, Seller shall, at the request of
Buyer, execute and deliver such additional conveyances,
transfers, documents, instruments, assignments, applications,
certifications, papers, and other assurances that Buyer
requests as necessary, appropriate, convenient, useful or
desirable to effectively carry out the intent of this
Agreement and to transfer the Purchased Assets to Buyer.
11. Seller's Representations and Warranties. As of the Closing, the Seller
represents and warrants to Buyer, and acknowledges and confirms, that
Buyer is relying on these representations and warranties in entering
into this Agreement:
a. Organization and Standing. Seller is a corporation duly
organized, validly existing, and in good standing under the
laws of the State of Michigan, and Seller has all requisite
power and authority (corporate and otherwise) to own its
properties and conduct its business as it is now being
conducted. The copies of Seller's articles of incorporation
and bylaws, as amended to date, which have been delivered to
Buyer, are correct and complete and are in full force and
effect.
b. Authorization. Seller has all requisite power and authority
(corporate and otherwise), all requisite legal capacity (i) to
execute, deliver, and perform this Agreement and the Related
Agreements and (ii) to consummate the transactions
contemplated under this Agreement and the Related Agreements.
Seller has taken, or will have taken at the time of the
Closing, all necessary corporate action (including the
approval of its board of directors) to approve the execution,
delivery, and performance of this Agreement and the Related
Agreements to be executed and delivered by it and the
consummation of the transactions contemplated in this
Agreement. This Agreement is, and the Related Agreements when
executed and delivered by the parties to them, will be legal,
valid, and binding obligations of the Seller, enforceable
against the Seller in accordance with their respective terms,
except as such enforcement may be limited by bankruptcy,
insolvency, moratorium, or similar laws relating to the
enforcement of creditors' rights and by general principles of
equity (regardless of whether such enforceability is
considered in a proceeding at law or in equity).
c. Existing Agreements and Governmental Approvals.
i. The execution, delivery, and performance of this
Agreement and the Related Agreements and the
consummation of the transactions contemplated by
them:
1. Do not and will not violate any provisions of
any law applicable to the Seller, the Business,
or the Purchased Assets;
2. As of the Closing, does not and will not
conflict with, result in the breach or
termination of any provision of, or constitute a
default under (in each case whether with or
without the giving of notice or the lapse of
time or both) Seller's Articles of Incorporation
or Bylaws, or any indenture, mortgage, lease,
deed of trust, or other instrument, contract, or
agreement or any order, judgment, arbitration
award, or decree to which the Seller is a party
or by which it or any of its assets and
properties are bound (including, without
limitation, the Purchased Assets); and
3. Do not and will not result in the creation of
any Encumbrance on the Seller's properties,
assets, or Business (including, without
limitation, the Purchased Assets).
ii. Except as provided in Schedule 11.c, no approval,
authority, or consent of, or filing by, the Seller
with, or notification to, any federal, state, or
local court, authority, or governmental or
regulatory body or agency or any other corporation,
partnership, individual, or other entity is
necessary:
1. To authorize the execution and delivery of this
Agreement or any of the Related Agreements by
the Seller,
2. To authorize the consummation of the
transactions contemplated by this Agreement or
any of the Related Agreements by the Seller, or
3. To continue Buyer's use and operation of the
Purchased Assets after the Effective Date.
d. No Insolvency. No insolvency proceeding of any character,
including, without limitation, bankruptcy, receivership,
reorganization, composition, or arrangement with creditors,
voluntary or involuntary, affecting Seller or any of its
assets or properties is pending or, to the Best Knowledge of
Seller, threatened. Seller has not taken any action in
contemplation of, or that would constitute the basis for, the
institution of any such insolvency proceedings. For the
purposes of this Agreement, the phrase "Best Knowledge of
Seller," or words of similar import, means such knowledge as
the shareholders, officers, directors and those individuals
responsible for the day-to-day operations of Seller would have
after the exercise of due inquiry into the matter in question.
e. No Undisclosed Liabilities. Except as otherwise disclosed
inattached Schedule 11.e or any other schedules to this
Agreement, to the Best of Seller's Knowledge, Seller does not
have any liabilities or obligations related to the Business,
whether accrued, absolute, contingent, or otherwise, and there
exists no fact or circumstance that could give rise to any
such liabilities or obligations in the future.
f. Conduct of Business. Except as otherwise disclosed on attached
Schedule 11.f or any schedules to this Agreement, since March
31, 2002, Seller has not, in connection with the Business:
i. Entered into, materially amended, or terminated any
contract, license, lease, commitment, or permit,
involving the Business, except in the ordinary course
of business consistent with past practices;
ii. Incurred or become subject to any obligation or
liability (absolute, accrued, contingent, or
otherwise), involving the Business, except (1) in the
ordinary course of business consistent with past
practices and (2) in connection with the performance
of this Agreement;
iii. Mortgaged, pledged, or subjected to any Encumbrance
any of the Purchased Assets;
iv. Sold, transferred, or agreed to sell or transfer any
asset, property, or business; canceled or agreed to
cancel any debt or claim; or waived any right
involving the Business, except in the ordinary course
of business consistent with past practices;
v. Disposed of or permitted to lapse any Intellectual
Property of the Business;
vi. Experienced any damage, destruction, or loss (whether
or not covered by insurance) affecting its
properties, assets, business or prospects, or any
material deterioration in the operating condition of
any assets of Seller;
vii. Made or authorized any capital expenditures in excess
of $10,000.00;
viii. Suffered any adverse change or any threat of any
adverse change in any of Seller's relations with, or
loss or threat of loss of, any of Seller's material
suppliers, clients or customers;
ix. Made any write-offs as uncollectible any notes or
accounts receivable of Seller or any write-offs of
the value of any assets or inventory by Seller other
than in immaterial amounts or in the ordinary course
of business consistent with past practices;
x. Made any change in any method of accounting or
keeping its books of account or accounting practices;
xi. Entered into any other transaction other than in the
ordinary course of business consistent with past
practices in connection with the Business; and
xii. Agreed or committed to do any of the foregoing.
g. No Adverse Changes. Since March 31, 2002 there has not been,
to the best knowledge of Seller, any occurrence, condition, or
development that has materially adversely affected, or is
likely to materially adversely affect, operations, prospects,
results of operations or condition (financial or other) of the
Business, or the Purchased Assets.
h. Contracts. Except for the contracts, commitments or leases
listed on Schedules 1.c.i, 1.c.ii, 11.h, or any other schedule
of this Agreement, Seller is not a party to nor bound by any
agreement or commitment that affects the Business, the
Purchased Assets, or the Assumed Liabilities which has a value
of more than $10,000 or will last for more than one year from
the Effective Date (all these contracts and commitments
referred to as "Significant Contracts"). All Significant
Contracts are in full force and effect and are valid and
binding obligations of the parties thereto in
accordance with their respective terms. No default or alleged
default exists on the part of Seller, or, to the Best
Knowledge of Seller, on the part of any other party, under any
of the Significant Contracts. True and complete copies of all
Significant Contracts have been delivered to Buyer. Except as
identified on Schedule 11.h, each Significant Contract which
is being assigned to or assumed by Buyer is assignable by
Seller to Buyer without the consent of any other party
thereto.
i. Title to Purchased Assets. Seller is the sole and absolute
owner of the Purchased Assets and has good title to all of the
Purchased Assets, which are, or will be at the time of the
Closing, free and clear of any and all Encumbrances. Schedule
11.i lists or describes all property used in the conduct of
the Business that is owned by or an interest in which is
claimed by any other person (whether a customer, supplier, or
other person) and for which Seller is responsible, together
with copies of all related agreements. All such assets are
situated on the Premises or other of Seller's facilities and
are in such condition that upon return to its owner, Buyer
will not be liable in any amount to the owner.
j. Condition of Fixed Assets. Buyer acknowledges that it is
buying the Fixed Assets "as is/where is" and Seller makes no
warranty as to the condition of such assets.
k. Taxes.
i. For the purposes of this Section, "Tax" or "Taxes"
shall mean all foreign, federal, state, county,
local, and other taxes (including, without
limitation, income taxes; premium taxes;
single-business taxes; excise taxes; sales taxes; use
taxes; value-added taxes; gross receipts taxes;
franchise taxes; ad valorem taxes; real estate taxes;
severance taxes; capital levy taxes; transfer taxes;
stamp taxes; employment, unemployment, and
payroll-related taxes; withholding taxes; and
governmental charges and assessments), and include
interest, additions to tax, and penalties.
ii. As it relates to the Business and the Purchased
Assets, Seller has filed on a timely basis all Tax
returns it is required to file under foreign,
federal, state, or local law and has paid or
established an adequate reserve with respect to all
Taxes for the periods covered by such returns. All
tax returns and reports filed by Seller are true,
correct and complete. No agreements have been made by
or on behalf of Seller for any waiver or for the
extension of any statute of limitations governing the
time of assessment or collection of any Taxes. Seller
and its officers have received no notice of any
pending or threatened audit by the IRS or any
foreign, state or local agency related to Seller's
Tax returns or Tax liability for any period, and no
claim for assessment or collection of Taxes has
been asserted against Seller. There are no federal,
federal, state, or local tax liens outstanding
against any of Seller's assets (including, without
limitation, the Purchased Assets) or the Business.
l. Litigation. There are no claims, disputes, actions, suits,
proceedings, or investigations pending or, to the Best
Knowledge of the Seller, threatened against or affecting
Seller, involving the Business or the Purchased Assets.
m. Product Liability. No known defect or deficiency exists in any
of the products manufactured or sold by Seller in the
Business, or in any finished Inventory of the Business, that
could give rise to any liabilities or claims for breach of
warranty, product liability, or similar liabilities or claims.
n. Compliance with Laws. At all times prior to the Closing Date,
Seller has complied with all laws, orders, regulations, rules,
decrees, and ordinances affecting to any extent or in any
manner any aspects of the Business or the Purchased Assets.
o. Suppliers and Customers.
i. A complete and accurate list of all component or
inventory suppliers or vendors of products or
services to Seller in connection with the Business
aggregating more than $10,000.00 (at cost) during
calendar year 2001, and the address of each supplier
or vendor and the amount sold to Seller during that
period, is set forth in Schedule 11.o.i. The names of
any suppliers of goods or services with respect to
which practical alternative sources of supply are not
available on comparable terms and conditions are
separately listed in Schedule 11.o.i.
ii. A complete and accurate list of each of Seller's
customers aggregating more than $10,000.00 in
revenues to Seller during calendar year 2001 in
connection with the Business, the address of each
customer, and the amount each customer purchased from
Seller during calendar year 2001 is set forth in
Schedule 11.o.ii.
iii. Seller has no information that might reasonably
indicate that any customer, supplier or vendor of
Seller intends to cease purchasing from, selling to,
or dealing with Seller. No information has been
brought to the attention of Seller that might
reasonably lead it to believe that any customer or
supplier intends to alter, in any material respect,
the amount of its purchases or sales or the extent of
its dealings with Seller, or would alter in any
material respect its purchases from, sales to, or
dealings with Buyer in the event that the
transactions contemplated by this Agreement are
consummated.
p. Progress Payments. Schedule 11.p contains a true and complete
list and description of all security deposits, progress
payments, and the like that Seller has received relating in
any way to any purchase orders, leases, or other agreements
that are part of the Business.
q. No Brokers. Seller has not engaged, and is not responsible for
any payment to, any finder, broker, or consultant in
connection with the transactions contemplated by this
Agreement.
r. Intellectual Property. Schedule 11.r lists all Intellectual
Property of the Seller that Seller directly or indirectly
owns, licenses, uses, requires for use, or controls in whole
or in part and all licenses and other agreements allowing
Seller to use the intellectual property of third parties in
connection with the Business. Seller does not own, directly or
indirectly, or use any patents, copyrights, trademarks, or
service marks in the Business except as listed. Except as set
forth in Schedule 11.r, Seller is the sole and exclusive owner
of the Intellectual Property, free and clear of all
Encumbrances. Buyer acknowledges that the nonowned software
listed on Schedule 11.r is readily available in the open
market and will not be transferred by Seller. Except as set
forth in Schedule 11.r or any other schedule to this
Agreement, to the Best Knowledge of the Seller:
i. none of the Seller's Intellectual Property infringes on any other
person's intellectual property and no activity of any other person
infringes on any of the Intellectual Property.
ii. Seller's manufacturing and engineering drawings, process sheets,
specifications, bills of material, trade secrets, "know-how," and like
data used in the Business are in such form and of such quality that
they can, following the Effective Date, be used in the process of
designing, producing, manufacturing, assembling, and selling the
products and providing the services previously provided by Seller so
that such products and services meet applicable specifications and
conform with the quality standards Seller previously met or was
required to meet.
iii. The Intellectual Property is all that is necessary for the operation of
the Business as it is currently conducted.
iv. All of the issued Patents are currently in compliance with formal legal
requirements of United States laws (including payment of filing,
examination and maintenance fees and proofs of working or use), are
valid and enforceable, and are not subject to any maintenance fees or
taxes or actions falling due within ninety (90) days after the Closing
Date.
v. No Patent has been or is now involved in any interference, reissue,
reexamination, or opposition proceeding.
vi. There is no potentially interfering patent or patent application of any
third party.
vii. All products made, used or sold under the Patents have been marked with
the proper patent notice.
s. Books and Records. The minute books, financial and accounting
records and other business records of Seller are accurate and
complete in all material respects. Buyer may obtain copies, at
its own expense, of any records of Seller reasonably required
by Buyer to operate the Business.
t. Disclosure. No representation or warranty by Seller contained
in this Agreement, and no statement contained in a Schedule or
any other document, certificate or other instrument delivered
to or to be delivered by or on behalf of Seller pursuant to
this Agreement, contains or will contain any untrue statement
of a material fact or omits or will omit to state any material
fact necessary, in light of the circumstances under which it
was or will be made, in order to make the statements herein or
therein not misleading. Seller has disclosed to Buyer all
information which it considers material relating to the
Business, the Purchased Assets and the Assumed Liabilities.
12. Buyer's Representations and Warranties. Buyer represents and warrants
to Seller that:
a. Organization and Standing. Buyer is a stock corporation duly
incorporated and in good standing in Austria, and Buyer has
all the requisite power and authority (corporate and
otherwise) to own its properties and to conduct its business
as it is now being conducted.
b. Authorization. Buyer has taken all necessary corporate action
(i) to duly approve the execution, delivery, and performance
of this Agreement and the Related Agreements and (ii) to
consummate any related transactions. Buyer has duly executed
and delivered this Agreement. This Agreement is, and the
Related Agreements when executed and delivered by the parties
to them will be, legal, valid, and binding obligations of
Buyer, enforceable against Buyer in accordance with their
respective terms, except as such enforcement may be limited by
bankruptcy, insolvency, moratorium, or similar laws relating
to the enforcement of creditor's rights and by general
principles of equity (regardless of whether such
enforceability is considered in a proceeding at law or in
equity).
c. Existing Agreements and Governmental Approvals.
i. The execution, delivery, and performance of this
Agreement and the Related Agreements and the
consummation of the transactions contemplated by
them:
1. Do not and will not violate any provisions of
any law applicable to Buyer;
2. Do not and will not conflict with, result in the
breach or termination of any provision of, or
constitute a default under (in each case whether
with or without the giving of notice or the
lapse of time, or both) Buyer's Articles of
Incorporation or Bylaws (or its Austrian
equivalent) or any indenture, mortgage, lease,
deed of trust, or other instrument, contract, or
agreement or any order, judgment, arbitration
award, or decree to which Buyer is a party or by
which it or any of its assets and properties are
bound.
d. No Additional Approval. No approval, authority, or consent of,
or filing by Buyer with, or notification to, any federal,
state, or local court, authority, or governmental or
regulatory body or agency or any other corporation,
partnership, individual, or other entity is necessary:
i. To authorize Buyer's execution and delivery of this
Agreement and Related Agreements; or
ii. To authorize Buyer's consummation of the transactions
contemplated by this Agreement and the Related
Agreements.
13. Employees. Buyer may interview and hire Seller's employees employed in
the Business. It is agreed, however, that any employee so hired by
Buyer who wishes to return to employment by Seller without solicitation
by Seller may be rehired by Seller. Seller agrees to use its best
efforts to cause the following individuals to become employees of
Buyer:
Xxxxx Xxxxx -- Product Sales Manager
Xxxx Xxxxxxx -- Sales
Xxxx Xxxxx -- European Sales
Xxxx Xxxxxx -- Service Engineer
Xxxxx Xxxxxxx -- Service Engineer
14. Indemnification.
a. Seller. Seller shall defend, indemnify, and hold harmless
Buyer and its directors, officers, shareholders, successors,
and assigns from and against any and all costs, losses,
claims, suits, actions, assessments, diminution in value,
liabilities, fines, penalties, damages (compensatory,
consequential, and other), and expenses (including reasonable
legal fees) (collectively, "Damages") in connection with or
resulting from:
i. Any Retained Liabilities.
ii. Any inaccuracy in any representation or breach of any
warranty of Seller contained in this Agreement or any
Related Agreement.
iii. Any failure by Seller to perform or observe in full,
or to have performed or observed in full, any
covenant, agreement, or condition to be performed or
observed by Seller under this Agreement or any
Related Agreement.
Provided, however, such indemnification shall be limited to
the total of the Purchase Price plus all monies paid by Buyer
under any Related Agreement.
b. Buyer. Buyer shall defend, indemnify, and hold harmless Seller
and its directors, officers, shareholders, successors, and
assigns from and against any and all Damages in connection
with or resulting from:
i. All debts, liabilities, and obligations of Buyer,
whether accrued, absolute, contingent, known, unknown
or otherwise, including the Assumed Liabilities.
ii. Any inaccuracy in any representation or breach of any
warranty of Buyer contained in this Agreement or any
Related Agreement.
iii. Any failure by Buyer to perform or observe in full,
or to have performed or observed in full, any
covenant, agreement, or condition to be performed or
observed by the Buyer under this Agreement or any
Related Agreement.
Provided, however, such indemnification shall be limited to
the total of the Purchase Price plus all monies paid by Buyer
under any Related Agreement.
c. Notice of Claim. Each person entitled to indemnification under
this Section 14 (the "Indemnified Party") shall give notice to
the party required to provide indemnification (the
"Indemnifying Party") promptly after such Indemnified Party
has actual knowledge of any claim as to which indemnity may be
available or sought, and shall permit the Indemnifying Party
to participate in the defense of any such claim or any
resulting litigation, and the Indemnifying Party may
participate in such defense at such party's expense. The
failure of any Indemnified Party to give the notice required
by this Agreement shall not relieve the Indemnifying Party of
its obligations unless such failure results in actual
detriment to the Indemnifying Party. In the event that a claim
or litigation is partially, but not wholly covered by an
indemnity set forth in this Section 14 the Indemnified and the
Indemnifying Parties shall share in the resulting losses in
proportion to their respective liabilities. Except with the
consent of each Indemnified Party, which consent shall not be
unreasonably withheld, no Indemnifying Party shall consent to
the entry of any
judgment or enter into any settlement which does not include a
release of such Indemnified Party from all liability in
respect to such claim or litigation to the extent it is
covered by the indemnity in this Section 14.
d. Limit of Liability.
i. Neither party shall have any liability (for
indemnification or otherwise) under this Section 14
until the aggregate amount of such Damages exceeds
Twenty Five Thousand Dollars and No Cents
($25,000.00).
15. Expenses. Each of the parties shall pay all of the costs that it incurs
incident to the preparation, execution, and delivery of this Agreement
and the performance of any related obligations, whether or not the
transactions contemplated by this Agreement shall be consummated,
except that all such costs and all liabilities of Seller other than the
Assumed Liabilities, including, without limitation, Tax liabilities,
shall be paid out of the proceeds of the Purchase Price.
16. Risk of Loss. The risk of loss of or damage to the Purchased Assets
from fire or other casualty or cause shall be on Seller at all times up
to the Effective Date, and it shall be the responsibility of Seller to
repair, or cause to be repaired, and to restore the property to the
condition it was before the loss or damage.
17. Seller's Name. Seller agrees that from and after the Effective Date,
Buyer shall have all of the rights that Seller has to use in or in
connection with the conduct of any business (whether carried on by it
directly or through any related corporation) the names "AID" and
"Automatic Inspection Devices" ("Names"); any part or portion of the
Names, either alone or in combination with one or more other words; or
any variation of the Names. Seller agrees to take or cause to be taken
any and all steps or actions that shall be or become permissible,
proper, or convenient to enable or permit Buyer to use any rights that
Seller has to the Names, or any part or portion of the Name, either
alone or in combination with one or more other words. After the
Effective Date, Seller agrees that it will not use either directly or
indirectly the Names or any name that may be confused with the Names.
18. Termination.
a. This Agreement may be terminated at any time before the
Closing Date as follows:
i. By Buyer and Seller in a written instrument.
ii. By either Buyer or Seller if the Closing does not
occur on or prior to the Closing Date.
iii. By Buyer or Seller if there has been a material
breach of any of the representations or warranties
set forth in this Agreement on the
part of the other, and this breach by its nature
cannot be cured before the Closing.
iv. By Buyer or Seller if there has been a breach of any
of the covenants or agreements set forth in this
Agreement on the part of the other, and this breach
is not cured within ten (10) business days after the
breaching party receives written notice of the breach
from the other party.
b. If terminated as provided in this Section 18, this Agreement
shall forthwith become void and have no effect, except for
Sections 18.c and except that no party shall be relieved or
released from any liabilities or damages arising out of such
party's breach of any provision of this Agreement or of the
Confidentiality Agreement between the parties dated April
2001.
c. Buyer warrants and agrees that if this Agreement is terminated
pursuant to Section 18 through the fault of, or as a result of
a breach by, Buyer, each party will not, during the two (2)
year period following the termination, directly or indirectly
solicit any employee of the other party to leave the other
party's employment.
19. Miscellaneous Provisions.
a. Representations and Warranties. All representations,
warranties, and agreements made by the parties pursuant to
this Agreement shall survive the consummation of the
transactions contemplated by this Agreement for two (2) years
after the Closing date.
b. Notices. All notices, demands, and requests required or
permitted to be given under the provisions of this Agreement
shall be in writing and shall be deemed given (i) when
personally delivered or sent by facsimile transmission to the
party to be given the notice or other communication or (ii) on
the business day following the day such notice or other
communication is sent by overnight courier to the following:
If to Seller: CEO
Integral Vision, Inc.
00000 Xxxxx Xxxxx Xxxxxx,
Xxxxxxxxxx Xxxxx, Xxxxxxxx 00000
(000) 000-0000 Phone Number
(000) 000-0000 Fax Number
If to Buyer: CEO
DaTarius Technologies, Inc.
00000 Xxxxx Xxxxxxx, Xxxxx 000
Xxxxxx, XX 00000
x00 0000 0000000 Phone Number
x00 0000 000 000 Fax Number
or to such other address or facsimile number that the parties
may designate in writing.
c. Assignment. Neither Seller nor Buyer shall assign this
Agreement, or any interest in it, without the prior written
consent of the other, except that Buyer may assign this to an
affiliated company of Buyer which is controlled by Buyer;
provided, in such case, all of Buyer's obligations under this
Agreement or any Related Agreement shall be guaranteed by
Buyer.
d. Parties in Interest. This Agreement shall inure to the benefit
of, and be binding on, the named parties and their respective
successors and permitted assigns, but not any other person.
e. Choice of Law. This Agreement shall be governed, construed,
and enforced in accordance with the laws of the State of
Michigan, without regard to choice of law. All legal actions
brought concerning this Agreement or any dispute hereunder
shall be brought only in the courts of the State of Michigan,
County of Oakland, or in the federal courts located in such
state. Both parties submit to venue and jurisdiction in these
courts.
f. Counterparts. This Agreement may be signed in any number of
counterparts with the same effect as if the signature on each
counterpart were on the same instrument.
g. Entire Agreement. This Agreement, all Related Agreements and
all related documents, schedules, exhibits, or certificates
represent the entire understanding and agreement between the
parties with respect to the subject matter and supersede all
prior agreements or negotiations between the parties. This
Agreement may be amended, supplemented, or changed only by an
agreement in writing that makes specific reference to this
Agreement and that is signed by the party against whom
enforcement of any such amendment, supplement, or modification
is sought.
h. Arbitration.
i. Any dispute, controversy, or claim arising out of or
relating to this Agreement or relating to the breach,
termination, or invalidity of this Agreement, whether
arising in contract, tort, or otherwise, shall at the
request of any party be resolved in binding
arbitration.
Any arbitration shall proceed in accordance with the
current Commercial Arbitration Rules (the
"Arbitration Rules") of the American Arbitration
Association ("AAA") to the extent that the
Arbitration Rules do not conflict with any provision
of this Section.
ii. No provision of or the exercise of any rights under
this Section shall limit the right of any party to
seek and obtain provisional or ancillary remedies
(such as injunctive relief, attachment, or the
appointment of a receiver) from any court having
jurisdiction before, during, or after the pendency of
an arbitration proceeding under this Section. The
institution and maintenance of any such action or
proceeding shall not constitute a waiver of the right
of any party (including the party taking the action
or instituting the proceeding) to submit a dispute,
controversy, or claim to arbitration under this
Section.
iii. Any award, order, or judgment made pursuant to
arbitration shall be deemed final and may be entered
in any court having jurisdiction over the enforcement
of the award, order, or judgment.
iv. The arbitration shall be held before one arbitrator
knowledgeable in the general subject matter of the
dispute, controversy, or claim and selected by AAA in
accordance with the Arbitration Rules.
v. The arbitration shall be held at the office of AAA
located in Detroit, Michigan (as the same may be from
time to time relocated), or at another place the
parties agree on.
vi. In any arbitration proceeding under this Section,
subject to the award of the arbitrator(s), each party
shall pay all its own expenses and an equal share of
the fees and expenses of the arbitrator. The
arbitrator shall have the power to award recovery of
costs and fees (including reasonable attorney fees,
administrative and AAA fees, and arbitrator's fees)
among the parties as the arbitrator determine to be
equitable under the circumstances.
The parties have executed this Agreement effective on the date set
forth on the first page of this Agreement.
SELLER BUYER
Integral Vision, Inc. DaTARIUS Technologies, Inc.
By: By:
---------------------------------- --------------------------------
Xxxxxxx X. Xxxxx Xxxxx Xxxxxxx
Its: Chairman Its: Authorized Signer