PURCHASE AND SALE AGREEMENT
THIS PURCHASE AND SALE AGREEMENT ("Agreement") is made and entered into
this 31st day of October 1995, by and between AMERICAN REGISTRATION SYSTEMS,
INC., an Indiana corporation ("ARS") and IMAGE TECHNOLOGY, INC., a Nevada
corporation ("ITI") on the following terms and conditions:
RECITALS
X. Xxxxxx M. Rousseff ("Rousseff") is an original inventor and owner of two
United States Patents referable to the design and development of digital imaging
and automated form dispensing machines for the automation of the process of
issuing and renewing motor vehicle licenses; these patents, previously issued by
the United States Patent and Trademark Office, more particularly are:
1. Patent No. 4,970,655 dated November 13, 1990 (Automatic Fee
Collecting And Receipt Dispensing System); and
2. Patent No. 5,349,534 dated September 20, 1994 (Automatic Form
Dispensing System).
B. By written assignments in proper form, Rousseff has previously
transferred Patent No. 4,970,655 and Patent No. 5,349,534 to ARS.
C. By Security and Pledge Agreement dated October 26, 1992, ARS previously
pledged to ITI, as security for a $1,250,000 indebtedness, (1) all of its then
issued and outstanding shares of common capital stock, and (2) the
above-described Patent No. 4,970,655 together with all ancillary intellectual
property pertaining thereto, including but not limited to all "know-how" trade
secrets, other trade secrets, trade names, trademarks, and related intellectual
property rights of any and every nature and description.
D. Subsequent to the execution of the afore-described Security and Pledge
Agreement, ARS defaulted in the payment of the underlying indebtedness secured
by such Security and Pledge Agreement, and pursuant to pledge sale effectuated
in compliance with all relevant requirements of the California Uniform
Commercial Code, ITI became, and now remains, the owner of all ARS stock as well
as the hereinabove described U. S. Patent No. 4,970,655. Following the
aforementioned pledge sale and at the insistence of ITI, ARS executed, in proper
form, a written assignment to ITI of U.S. Patent No. 4,970,655.
E. As a part of the assignment by Rousseff to ARS of Patent No. 5,349,534,
the parties entered into a Royalty Agreement whereby Rousseff is to be paid one
(sent per transaction during a period coextensive with the duration of Patent
No. 4,970,655.
F. ARS now desires to sell, assign and transfer to ITI all intellectual
property rights appurtenant or in any way pertaining to the above-described
Patent No. 5,349,534, and subject to the Royalty Agreement hereinabove
described.
NOW, THEREFORE, in consideration of the agreements and covenants and upon
the conditions set forth herein, the parties agree as follows:
1. Incorporation By Reference. The Recitals set forth hereinabove are
incorporated herein as though fully set forth.
2. Sale And Assignment Of Patent. Upon full payment by ITI to ARS of the
purchase price hereinbelow described, ARS hereby sells, assigns and transfers to
ITI all right, title and interest in and to U.S. Patent No. 5,349,534. ARS
intends by this sale transaction to accord to ITI all property rights pertaining
to such patent, including without limitation the right to utilize in such manner
as ITI may deem proper or expedient, all of the above-described intellectual
property rights, including the right to grant exclusive licenses and sublicenses
thereof, and the right to manufacture, have manufactured, use and sell any and
all equipment which may be produced under said patent, in the United States and
such other Countries or places in the world as ITI may select. Such use rights
shall include the entitlement of ITI to license or otherwise authorize the use
by franchisees, licensees, and/or sub-licensees for the remaining term of said
patent.
2.1 Termination Of Agreement. This Agreement and the rights of ITI
thereunder as set forth in 2 immediately hereinabove, may be terminated only in
accordance with Paragraph 6.1.1 below.
3. Purchase Consideration. In consideration for the sale by ARS of U.S.
Patent No. 5,349,534 to ITI, ITI shall pay to ARS the sum of Four Million
Dollars ($4,000,000). ITI shall pay this purchase consideration to ARS in cash
on October 31, 1996. Upon written request accompanied by evidence of
demonstrated need therefor, ITI may obtain reasonable extensions of this time
for payment of this purchase consideration, such time for payment, however, in
no event to extend beyond May 1, 1997. In addition to the cash consideration
above, ITI agrees immediately to assume all obligations under the Royalty
Agreement between Rousseff and ARS.
4. Warranty of Patent Rights. ARS hereby represents, covenants and warrants
to ITI that the patents identified in the Recitals above have been duly issued
and assigned as hereinabove set forth, and that all proprietary property rights
pertaining to U.S. Patent No. 5,349,534 are transferable to ITI without the
consent or approval of any person or entity other than ARS.
4.1 No Infringement. The use by ITI of the intellectual property
rights granted hereunder will not infringe upon any patent, trademark or
proprietary rights of any person or entity other than ARS.
5. Prosecution of Infringement Actions. Upon the effective date of this
Agreement, ARS authorizes ITI to file, and agrees to co-operate with ITI in the
prosecution of, such patent infringement and/or trade secret misappropriation
actions as may be necessary to protect from infringement the patent and other
proprietary rights granted hereunder. ARS agrees to join as a party plaintiff or
provide such other cooperation as may be necessary or reasonably required to
successfully pursue any such actions. ITI agrees to pay all such legal fees and
costs which are reasonably and necessarily incurred in the pursuit of any such
actions.
6. Term. This Agreement shall commence and become effective on the date of
its execution. Use, license and all other rights granted hereunder shall be
perpetual, for the term of U.S. Patent No. 5,349,534 unless terminated pursuant
to Paragraph 6.1 below, or otherwise limited by this Agreement.
6.1 Termination. Failure by ITI to pay the purchase consideration
specified in Paragraph 3 hereinabove, on or after October 31, 1996, and in no
event later than May 1, 1997, shall constitute an event of default subjecting
ITI to termination of all rights under this Agreement, and shall entitle ARS to
ai immediate re-assignment of U.S. Patent No. 5,349,534. On the occurrence of an
event of default as set forth above, ARS shall send notice of default and demand
for payment to ITI specifying the event(s) of default and notifying ITI that
failure to cure any such default(s) by payment of the full amount due will
result in termination of the sales transaction and all use, license and other
rights granted to ITI hereunder. Said notice of default shall be sent by Federal
Express, other overnight mail delivery service or by prepaid first-class US.
Mail, receipt requested, to the address for notice to ITI identified below. Said
notice of default shall be deemed served on the date of delivery to the
overnight delivery service or date of posting. ITI shall have thirty (30) days
from the date of service of notice of default in which to cure the event(s) of
default by payment in full of any and all amounts due to ARS. If cure is not
made in such time, the Agreement shall terminate without further action by ARS.
6.2 Result Of Termination. If the Agreement is terminated in
accordance with the provisions of Paragraph 6.1 above, ITI shall no longer have
any right, title or interest in or to U.S. Patent No. 5,349,534, nor any
entitlement to use, license, or otherwise utilize such patent and/or rights
pertaining thereto in any respect. By its execution of this Agreement, ITI
covenants and agrees that after any such termination and upon written demand by
ARS, ITI will execute and deliver, in proper form, a written re-assignment of
U.S. Patent No. 5,349,534 to ARS or its designee.
7. Assignment of Royalty Agreement. ARS hereby assigns to ITI that certain
Royalty Agreement previously entered into by ARS and Rousseff, whereby Rousseff
is to be paid one cent per transaction during a period co-existensive with the
duration of Patent No. 5,349,534.
7.1 Covenant of Further Assurance. The parties agree to execute and
deliver, or cause to be executed and delivered to the other party, such other
instruments and documents which may reasonably be requested or required to
effectuate the terms and provisions of this Agreement.
7.2 Notices. Any notice or document required or permitted to be served
hereunder by either party hereto may be served by mailing the same postpaid,
first-class mail to the other party at the party's last known address. Until
otherwise notified, the addresses for the parties hereto for the purpose of such
notice are as follows:
ARS: American Registration Systems, Inc.
0000 Xxxxxxxxxx Xxxxxx, Xxxxx 000
Xxxxxxxxx, XX 9202
Rousseff: Xxxxxx M. Rousseff
0000 Xx. Xxxxxxx Xxxx
Xxx Xxxxx, XX
ITI: Image Technology, Inc.
0000 Xxxxxxxxxx Xxxxxx, Xxxxx 000
Xxxxxxxxx, XX 00000
7.3 Governing Law. This Agreement shall be interpreted and construed
in accordance with the laws of the State of California.
7.4 Entire Agreement; Amendments and Waivers. This Agreement
constitutes the entire agreement between the parties hereto and supersedes in
all respects any prior agreement and understanding of the parties relating to
the subject matter hereof. No supplement, modification or waiver of the
Agreement shall be binding unless executed in writing by the party to be bound
thereby. No waiver of any of the provisions of this Agreement shall be deemed or
shall constitute a waiver of any other provision hereto (whether or not
similar), nor shall such waiver constitute a continuing waiver unless otherwise
expressly provided.
7.5 Severability. If any one or more of the provisions contained in
this Agreement or in any instrument referred to herein shall, for any reason, be
held to be invalid, illegal or unenforceable in any respect, (i) such provision
will be deemed amended to conform to applicable laws or such jurisdiction so as
to be valid and enforceable, or if it cannot be so amended without materially
altering the intention of the parties, it will be stricken, (ii) the validity,
legality and enforceability of such provisions will not in any way be affected
or impaired thereby in any other jurisdiction, (iii) such invalidity, illegality
or unenforceability shall not affect any other provision of this Agreement or
any other such instrument, and (iv) the remainder of this Agreement will remain
in full force and effect.
7.6 Headings. The headings of the Paragraphs herein are inserted for
convenience of reference only and are not intended to be a part of or to affect
the meaning or interpretation of this Agreement.
7.7 No Assignments. This Agreement may not be assigned by operation of
law or otherwise without the written consent of the other party hereto.
7.8 Attorneys' Fees. In the event either party hereto brings an action
to enforce or interpret the terms of this Agreement, the prevailing party shall
be entitled to his or its reasonable attorneys' fees and court costs reasonably
incurred in connection therewith.
7.9 Confidentiality. Each of the parties hereto shall maintain as
confidential, and shall not disclose to any third party, any confidential or
non-public information concerning the aforementioned patents, "know-how" trade
secrets, other trade secrets and/or intellectual property or other proprietary
rights appurtenant to the digital imaging and automated form dispensing machines
which constitute the subject of such intellectual proprietary rights, without
the prior written consent of the other party hereto. Any such disclosure to
agents, contractors, subcontractors of and purchasers from ITI which is
permitted with the written consent of ARS shall be accompanied by appropriate
confidentiality or non-disclosure agreements executed by any such third party
persons or entities.
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
duly executed and delivered as of the date and year first above written.
AMERICAN REGISTRATION SYSTEMS,
INC., an Indiana corporation
By:
IMAGE TECHNOLOGY, INC., a Nevada
corporation
By:
By:
ACCEPTANCE OF ASSIGNMENT OF ROYALTY AGREEMENTS
ITI hereby accepts the assignment by ARS of the two Royalty Agreements with
Rousseff hereinabove described, and agrees to be fully bound by and to perform
all terms, conditions and covenants thereof for the benefit of Rousseff.
IMAGE TECHNOLOGY, INC., a Nevada
corporation
By:
CONSENT TO ASSIGNMENT OF ROYALTY AGREEMENTS
Rousseff hereby consents to the assignment to ITI of his two Royalty
Agreements with ARS. AMERICAN REGISTRATION SYSTEMS, INC., an Indiana corporation
By:
XXXXXX M. ROUSSEFF
