ASSET PURCHASE AGREEMENT BY AND BETWEEN JINKHOLD, LTD. A United Kingdom Corporation
Exhibit
10.01
BY
AND BETWEEN
JINKHOLD,
LTD.
A
United Kingdom Corporation
00
Xxxxx Xxxxxx
Xxxxxx
#06286236
(Purchaser)
And
ANDRONICS,
LTD.
A
Northern Ireland Corporation
00
Xxxxxxxxxx Xxxx
Xxxxxxxxxx,
XX00 0XX
#NI
17460
(Seller)
THIS
ASSET PURCHASE AGREEMENT (this
“Agreement”) is entered into as of the date set forth below
(the “Execution Date”), by and between Jinkhold,
Ltd., a corporation duly organized under the laws of the United Kingdom
(“Jinkhold” or the “Purchaser”),
Andronics, Ltd., a corporation duly
organized under the laws of
Northern Ireland (“Andronics” or the “Seller”)
and Xxxxxx Xxxxxxx, an individual residing in Northern Ireland
and a founder of Andronics (“Xxxxxxx”). Jinkhold,
Andronics and Xxxxxxx are hereinafter at times collectively referred to as
the
“Parties.”
RECITALS:
WHEREAS,
the Purchaser’s success requires ongoing access to and control over the
development and use of certain key technologies;
WHEREAS,
the Seller is engaged in the business of providing two-way global data solutions
for the monitoring and control of customers’ remote assets (the
“Business”);
WHEREAS,
the Seller desires to sell to the Purchaser significant Assets (defined in
Section 1) and transfer employees engaged in the ongoing operations of the
Business (the “Continuing Operations”); and
WHEREAS,
the Purchaser desires to acquire the Assets of the Seller in exchange for
cash
and/or stock of SARS Corporation, a corporation duly organized under the
laws of
the state of Nevada (“SARS”) and other valuable Consideration
(defined in Section 4).
NOW,
THEREFORE, for and in consideration of the premises, and the mutual covenants
and agreements contained herein, and other good and valuable consideration,
the
receipt and sufficiency of which are hereby acknowledged, the parties hereto,
intending to be legally bound, agree as follows:
1. Assets
Purchased. The following properties, as described below in
Sections 1.1 - 1.5, are collectively referred to herein as the
“Assets”:
1.1 Assets. The
Seller agrees to sell to the Purchaser and the Purchaser agrees to purchase
from
the Seller, on the terms and conditions set forth in this Agreement, all
of the
Assets listed and identified in Schedule 1.1, annexed hereto and made
apart hereof. Additionally, the Assets listed on Schedule 1.1 include
all due and outstanding accounts receivable by the Seller as of the Closing
Date
and all outstanding work-in-progress listed on Schedule 1.1 or
otherwise.
1.2 Employees. At
the Closing (defined below), the Seller agrees to reassign all current employees
of the Seller involved in the ongoing operations of the Business to the
Purchaser. A list of these employees is set forth on Schedule
1.2, annexed hereto and made apart hereof (the
“Employees”).
1.3 Contracts. At
the Closing, the benefit of the Seller’s Contracts (defined below) shall be
transferred to the Purchaser. The burden of the Contracts shall be
novated to the Purchaser simultaneously on the Closing Date. The
Contracts and all novations are set forth and included on Schedule 1.3,
annexed hereto and made apart hereof (the
“Contracts”).
1.3.1 No
Violation of
Existing Agreements. Neither the execution and delivery of Agreement, nor
the
consummation of the transactions contemplated hereby, will conflict with
or
(with or without notice and/or lapse of time) result in a termination, breach,
impairment or violation of any Contract. Seller has received all
necessary consents to enable the transfer of the Contracts to the
Purchaser.
1.4 Intellectual
Property. On or before the Closing, the Seller agrees to transfer
ownership and title of all intellectual property and intellectual property
agreements of the Seller to the Purchaser. A list of this property is
set forth on Schedule 1.4, annexed hereto and made apart
hereof. As used herein, the term “Intellectual
Property” shall mean all worldwide industrial and intellectual property
rights, including, without limitation, patents, patent applications, patent
rights, trademarks, trademark applications, trade names, service marks, service
xxxx applications, copyright, copyright applications, franchises, licenses,
inventories, know-how, trade secrets, customer lists, proprietary processes
and
formulae, all source and object code, algorithms, structure, display screens,
layouts, inventions, development tools and all documentation and media
constituting, describing or relating to the above, including, without
limitation, manuals, memoranda and records.
1.5 Goodwill. On
or before the Closing, the Seller agrees to transfer all goodwill of the
Seller
to the Purchaser. A list of this goodwill is set forth on Schedule
1.5, annexed hereto and made apart hereof.
2. Excluded
Assets. All other forms of assets not included on Schedules
1.1 – 1.5 will remain the sole property of the Seller, and Seller shall
retain all the rights, title and interests to these assets, including but
not
limited to the statutory books and records of Andronics.
3. Liabilities
Assumed. The Purchaser agrees to assume and pay, discharge or
perform, as appropriate, all liabilities directly attached to the Assets
listed
on Schedule 3 (the “Assumed
Liabilities”). The obligations of the Purchaser under this
section are subject to whatever rights the Purchaser may have under this
Agreement or otherwise for breach by the Seller of any representation, warranty,
covenant or agreement contained in this Agreement, including but not limited
to
any right of indemnification provided by this Agreement.
3.1 Offset. Any
liabilities not listed on Schedule 3 shall remain the sole obligation of
the Seller and Xxxxxx Xxxxxxx. In the event that undisclosed liabilities
arise
or are uncovered within one (1) year after the Closing Date (the
“Undisclosed Liabilities”), the Undisclosed Liabilities United
States Dollar amount shall be offset first, by one (1) share of unvested
Xxxxxxx
Monthly Options, defined in Section 4.6; second, by one (1) share of unvested
Xxxxxxx Quarterly Options, defined in Section 4.6; and third, by one (1)
Convertible Debenture, defined in Xxxxxxx 0.0, Xxxxxx Xxxxxx Dollar for every
One United States Dollar ($1.00 USD) of Undisclosed Liability, with partial
dollar amounts rounded up to the nearest dollar (collectively, the
“Offset”).
4. Consideration. In
consideration of the sale, transfer and conveyance to the Purchaser of the
Assets and the Assumed Liabilities, Purchaser shall submit the following
to the
Seller on the Closing Date (collectively referred to herein as the
“Consideration”):
4.1 Stock. Fifty
thousand (50,000) shares of restricted SARS common stock, $0.001 par value
per
share (“SARSCommon Stock”);
4.2 Convertible
Debentures. Convertible debentures in the total aggregate
principal amount of Seven Hundred Xxxxxx-Xxx Xxxxxxxx Xxx Xxxxxxx Xxxxxx
Xxxxxx
Dollars ($722,000 USD) (the “Convertible
Debentures”). The Convertible Debentures shall include the
following terms: (i) the interest rate shall be ten percent (10%) compounded
annually, (ii) the Convertible Debenture shall automatically convert into
shares
of SARS Common Stock (the “Conversion”) one (1) year from the
date the Convertible Debenture was executed (the “Debenture Maturity
Date”), (iii) the exercise price shall be One United States Dollar
($1.00 USD) per share, a form of Convertible Debenture is annexed hereto
and
made apart hereof as Exhibit A. The Convertible Debentures
shall be issued to the individuals and/or entities listed on Schedule
4.2.
4.3 Assumption
of Tax
Liability. Purchaser agrees to assume Seller’s tax liability to
HM Revenue & Customs Service up to, but not to exceed, Two Hundred Thousand
Pounds (£200,000 GPB).
5. Payment
of Consideration. On or before the Closing Date, the Purchaser
shall transfer, or direct its agent to transfer, the Consideration, referred
to
in Sections 4.1 and 4.2, to the Seller.
6. Adjustments. In
regards to the Assets, the operation of the Seller’s Business and related income
and expenses up to the close of business on the day before the Closing Date
shall be for the account of the Seller and thereafter for the account of
the
Purchaser.
7. Value
Added Tax
(“VAT”).
7.1 The
Parties intend that
the Value Added Tax Xxx 0000 Section 49 (“Section 49”) and the
Value Added Tax (Special Provisions) Order 1995/1268 Article 5 (“Article
5”) shall apply to the transactions contemplated herein. The
Parties shall use all reasonable endeavours to ensure that the transactions
contemplated herein are not treated as a supply of goods or a supply of
services for the purposes of VAT and pursuant to Section 49 and Article
5.
7.2 On
or before the
Closing Date, Andronics shall deliver to the Purchaser all records relating
to
the Business referred to in Section 49.
7.3 If
VAT is chargeable on
the transfer of any of the Assets pursuant to this Agreement, then, subject
to
the receipt by the Buyer of a valid VAT invoice or invoices relating to those
assets, the Buyer shall pay to the Seller (in addition to the Consideration
referred to in Section 2.1) an amount equal to the amount of VAT payable
in
respect of them together with any penalty or interest incurred for late payment
of the tax thereif.
8. Employees.
8.1 The
Parties acknowledge
that the Employees' contracts of employment shall automatically transfer to
the Purchaser pursuant to the Transfer of Undertaking (Protection of Employment)
Regulations 1981 (as amended) (the
“Regulations”). Additionally, the Seller
acknowledges that (i) no employee of the Purchaser has an employment agreement;
and (ii) no employee of the Seller shall be granted an employment
agreement.
8.2 The
Purchaser shall be
responsible for and undertakes to indemnify and keep the Seller indemnified
from
and against all accrued holiday pay entitlements and accrued holiday
entitlements of the Employees which have accrued prior to the Closing
Date.
8.3 Unless
actions for the
claim(s) arise before the Closing Date, the Purchaser shall have no recourse
against the Seller in respect of any claim made by or in relation to the
Employees whether by virtue of the assumption of Undertakings (Protection
of
Employment) Regulations 1981, the Collective Redundancies and Transfer of
Undertakings (Protection of Employment) (Amendment) Regulations 1999 or arising
under contract, statute, regulation, directive or otherwise.
8.4 Beginning
on the Closing
Date, the Purchaser shall be responsible for the payment of all wages and
salaries due, any related pay-as-you-earn, National Insurance or deductions
in
respect of the Employees.
8.5 The
Seller undertakes to
indemnify and keep the Purchaser indemnified from and against all liabilities,
obligations, costs, claims and demands arising from or in respect of any
of the
Employees, insofar as and to the extent that the same was caused by any act
or
omission by the Seller prior to the Closing Date.
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8.6
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All
the obligations of the Seller under or in connection with the contracts
of
employment of the Employees arising in respect of any event or
period on
or prior to the Closing Date shall be performed and discharged
by the
Seller and the Seller shall indemnify the Purchaser from and against
any
and all actions, proceedings, costs, claims, expenses, demands,
damages,
awards (whether of compensation or otherwise), fines, penalties,
judgements, order and liabilities whatsoever (including, without
limitation, national insurance and pension entitlements and any
liability
to pay accrued holiday pay) which:
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8.6.1 relate
to or arise
out of or in connection with the employment or dismissal of any of the Employees
or any other employee by the Seller or any other person or any act or omission
by the Seller or any associate of the Seller or any other event occurring
on or
prior to the Closing Date for which the Purchaser is liable by reason of
the
operation of the Regulations or other measure having the force of law;
or
8.6.2 (whether
or not in
respect of a period before or after the Closing Date) relate to any contract
of
employment of any employee of the Seller or any other person (other than
any of
the Employees) in respect of which the Purchaser is liable as a result of
the
Regulations or Directive 77/187 of the Council of European Communities or
the
termination of any such contract (and in this connection the Purchaser shall
terminate such contacts of employment promptly on becoming aware of the same);
or
8.6.3 arise
from any
failure by the Seller to comply with its obligations made or contemplated
by the
Regulations.
8.7 The
Seller undertakes to
authorise and hereby authorises each of the Employees to disclose to the
Purchaser after the Closing Date all information in his or her possession
relating to the Business notwithstanding any term of his or her employment
with
the Seller (whether express or implied) which would otherwise preclude him
or
her from so doing.
8.8 Should
any liabilities, obligations, costs, claims and demands arising from or in
respect of any of the Employees, insofar as and to the extent that the same
was
caused by any act or omission by the Seller prior to the Closing Date (the
“Employee Liabilities”), arise on or after the Closing Date,
the Employee Liabilities shall be subject to the Offset defined in Section
3.1.
9. Closing.
9.1 Time
and
Place. The closing of the sale and purchase of the Assets (the
“Closing”) shall take place at The Xxxx Law Group, PLLC, at
5:00 p.m. PST on or before November 15, 2007 (the “Closing
Date”), or at such other time as the Parties may mutually agree and
upon which time all (i) closing conditions; (ii) closing covenants; and (iii)
outstanding exhibits and schedules have been completed, attached hereto and
fully satisfied. This Agreement may be executed in any number of
counterparts, each of which will be an original as regards any party whose
signature appears thereon and all of which together will constitute one and
the
same instrument. This Agreement will become binding when one or more
counterparts hereof, individually or taken together, will bear the signatures
of
each of the Parties reflected hereon as signatories. The
“Execution Date” shall be defined as the date this Agreement is
executed by the Parties.
9.2 Obligations
of Seller
at the Closing. At the Closing, the Seller shall execute, or
cause to be executed, and shall deliver to the Purchaser the
following:
9.2.1
Such documents as the Purchaser
may reasonably request for the purpose of (A) evidencing the accuracy of
any of
Seller’s representations and warranties, (B) evidencing the performance by
Seller of, or the compliance by Seller with, any covenant or obligation required
to be performed or complied with by it, (C) evidencing the satisfaction of
any
condition referred to in this Agreement, or (D) otherwise facilitating the
consummation or performance of any of the transactions contemplated in this
Agreement.
9.2.2
The Seller shall provide the
Purchaser an accounting of all prepayments received from customers in respect
of
any of the Contracts to the extent that such prepayments exceed the actual
costs
(if any) incurred by the Seller in partially performing such Contracts prior
to
the Closing Date.
9.2.3 Rent,
water,
electricity, telephone charges, salaries, wages, accrued holiday pay and
other
outgoings and costs of a periodical nature which relate to periods commencing
before the Closing Date and ending after the Closing Date shall be apportioned
on a time basis and those referable to the period ended on the Closing Date
shall be borne by the Seller and those referable to the period commencing
on the
day following the Closing Date shall be borne by the Purchaser.
9.3 Obligations
of
Purchaser at the Closing. At the Closing, the Purchaser shall
execute, or cause to be executed, and shall deliver to the Seller the
following:
9.3.1 Such
documents as the
Seller may reasonably request for the purpose of (A) evidencing the accuracy
of
any representation or warranty of the Purchaser, (B) evidencing the performance
by the Purchaser of, or the compliance by the Purchaser with, any covenant
or
obligation required to be performed or complied with by the Purchaser, (C)
evidencing the satisfaction of any condition referred to in this Agreement,
or
(D) otherwise facilitating the consummation or performance of any of the
transactions contemplated in this agreement; and
9.3.2 A
release of the
obligations of the Seller under previously executed promissory notes in the
aggregate total amount of Six Hundred Eighty-Two Thousand Three Hundred
Ninety-Eight United States Dollars and Ninety-Two Cents
($682,398.92USD) (the “Notes”). A schedule of the
Notes is annexed hereto and made apart hereof on Schedule
9.3.2.
9.4
Collateral Events. At the Closing, the Parties acknowledge
that the Operating Agreement (“Operating Agreement”) dated
February 7, 2007 and the Licensing Agreements (the “Licensing
Agreement”), dated February 7, 2007 executed by and between the Seller,
Veritas Solutions, Inc. and Secure Asset Reporting Services, Inc. shall be
terminated and cancelled according to the terms set forth in the
Operating Agreement and Licensing Agreement, respectively. A fully
executed copy of the Operating Agreement and the Licensing Agreements is
annexed
hereto and made apart hereof as Exhibits C and D.
9.5 Possession. Simultaneously
with such deliveries, Seller shall take all action necessary or appropriate
to
put Purchaser in actual possession and operating control of the
Assets.
10. Seller’s
Obligation
Prior to Closing.
10.1 Seller’s
Operation
of Business Prior to Closing. The Seller agrees that between the
Execution Date and the Closing Date (the “Interim Period”), the
Seller will:
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10.1.1 Continue
to operate and maintain the Assets that are the subject of this
Agreement
in the usual and ordinary course and in substantial conformity
with all
applicable laws, ordinances, regulations, rules or orders, and
will use
its best efforts to preserve the Assets and preserve the Assets
with its
customers, suppliers and others having business relations with
the
Seller.
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10.1.2 Not
assign, sell, lease or otherwise transfer, dispose or vary any
of the
Assets, whether now owned or hereafter acquired, except in the
normal and
ordinary course of business and in connection with its normal
operation.
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10.1.3 Maintain
all of its Assets other than inventories in their present condition,
reasonable wear and tear and ordinary usage excepted, and maintain
the
inventories at levels normally
maintained.
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10.1.4 Not
engage any new Employee in the Business (save that the Seller may
do so if
such Employee’s contract of employment will not transfer to the Purchaser
on or as a result of the Closing) or take any step to vary the
contract of
employment of any Employee or take any steps which would entitle
any
Employee to terminate his employment without notice or in circumstances
amounting to constructive
dismissal.
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10.1.5 The
Seller covenants with and undertakes to the Purchaser that it will
as soon
as reasonably practicable notify the Purchaser in writing of any
matter or
thing which arises and becomes known to it in the Interim Period
which
constitutes a breach of any of the Warranties set out in Section
14.
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11. Access
to Premises
and Information. At a reasonable time prior to the Closing Date,
the Seller shall provide the Purchaser and its representatives with reasonable
access during business hours to the Assets, titles, contracts and records
of the
Seller and furnish such additional information concerning the Seller’s business
to the Purchaser may reasonably request from time to time.
12. Covenants
of Seller
Prior to Closing.
12.1 Conditions
and Best
Efforts. The Seller will use its best efforts to effectuate the
transactions contemplated by this Agreement and to fulfill all the conditions
of
the Seller’s obligations under this Agreement, and shall do all acts and things
as may be required to carry out the Seller’s obligations and to consummate this
Agreement.
12.2 Confidential
Information. If for any reason the transactions contemplated by
this Agreement fail to consummate, the Purchaser shall not disclose to third
parties any confidential information received from the Seller in the course
of
investigating, negotiating and performing the transactions contemplated by
this
Agreement.
12.3 Financial
Statements. On or before the Closing Date, the Seller shall
supply the Purchaser with financial statements through September 30, 2007,
of
which shall include, but is not limited to, (i) balance sheet, (ii) profit
and
loss statement, (iii) detailed accounts receivable (also to be attached as
a
part of Schedule 1.1), (iv) detailed accounts payable (also to be attached
as a
part of Schedule 3), (v) detailed inventory schedule (also to be attached
as a
part of Schedule 1.1) and (vi) other customary disclosures or as may be
requested.
13. Covenants
of
Purchaser Prior to Closing.
13.1 Conditions
and Best
Efforts. The Purchaser will use its best efforts to effectuate
the transactions contemplated by this Agreement and to fulfill all the
conditions of the Purchaser’s obligations under this Agreement, and shall do all
acts and things as may be required to carry out the Purchaser’s obligations and
to consummate this Agreement.
13.2 Confidential
Information. If for any reason the transactions contemplated by
this Agreement fail to consummate, the Purchaser shall not disclose to third
parties any confidential information received from the Seller in the course
of
investigating, negotiating and performing the transactions contemplated by
this
Agreement. The Parties recognize that they have received and will
receive confidential information concerning the other during the course of
the
negotiations, preparations and due diligence the transaction contemplated
herein. Accordingly, the Parties each: (a) shall use its respective best
efforts
to prevent the unauthorized disclosure of any confidential information
concerning the other that was or is disclosed during the course of such
negotiations, preparations and due diligence; and (b) shall not make use
of or
permit to be used any such confidential information other than for the purpose
of effectuating the Agreement and related transactions. The obligations of
this
section will not apply to information that: (a) is or becomes part of the
public
domain other than by fault of the receiving party; (b) is disclosed by the
disclosing party to third parties without restrictions on disclosure; (c)
is
received by the receiving party from a third party without breach of a
contractual or fiduciary nondisclosure obligation to the other party; or
(d) is
required to be disclosed by law, provided that the receiving party shall
give at
least two (2) days’ prior written notice to the disclosing party of such
disclosure required by law. If this Agreement is terminated, all copies of
documents containing confidential information shall be returned by the receiving
party to the disclosing party.
14. Representations
and
Warranties of the Seller. The Seller represents and warrants to
the Purchaser as follows:
14.1 Corporate
Existence. The Seller is now, and on the Closing Date shall be, a
corporation duly organized, validly existing and in good standing under the
laws
of Northern Ireland, has all requisite corporate power and authority to own
its
properties and assets and carry on its business and is in good standing in
each
jurisdiction in which such qualification is required.
14.2 Corporation
Power
and Authorization. The Seller has full corporate authority to
execute and deliver this Agreement and any other agreement to be executed
and
delivered by the Seller in connection herewith, and to carry out the
transactions contemplated hereby. The execution and delivery of this
Agreement and the consummation of the transactions contemplated hereby have
been
duly authorized by all necessary corporate and shareholder action. No
other corporate proceedings by the Seller are necessary to authorize this
Agreement or the carrying out of the transactions contemplated
hereby. The Seller has consulted its own financial advisor, tax
advisor and accountant, as necessary or desirable, as to matters concerning
this
Agreement. This Agreement constitutes a valid and binding Agreement
of the Seller in accordance with its terms.
14.3 Conflict
with Other
Agreements, Consents and Approvals. With respect to (i) any
corporate or entity formation documents, such as the articles of incorporation,
bylaws or similar documents of the Seller, (ii) any applicable law, statute,
rule or regulation, (iii) any contract to which the Seller is a party or
may be
bound, or (iv) any judgment, order, injunction, decree or ruling of any court
or
governmental authority to which the Seller is a party or subject, the execution
and delivery by the Seller of this Agreement and any other agreement to be
executed and delivered by the Seller in connection herewith and the consummation
of the transactions contemplated hereby will not (a) result in any violation,
conflict or default, or give to others any interest or rights, including
rights
of termination, cancellation or acceleration, or (b) require any authorization,
consent, approval, exemption or other action by any court or administrative
or
governmental body which has not been obtained, or any notice to or filing
with
any court or administrative or governmental body which has not been given
or
done.
14.4 Compliance
with
Law. The Seller’s use and occupancy of the Assets, wherever
located, has been in compliance with all applicable governmental laws or
ordinances, the non-compliance with which, or the violation of which, might
have
a material adverse affect on the Assets, the Assumed Liabilities or the
financial condition, results of operations or anticipated business prospects
of
the Purchaser, and the Seller has received no claim or notice of violation
with
respect thereto. Without in any way limiting the generality of the
foregoing, the Seller is in compliance with, and is subject to no liabilities
under, any and all applicable laws, governmental rules, ordinances, regulations
and orders pertaining to the presence, management, release, discharge or
disposal of toxic or hazardous waste material or substances, pollutants
(including conventional pollutants) and contaminants. The Seller has
obtained all material permits, licenses, franchises and other authorizations
necessary for the conduct of its business.
14.5 Tax
and Other
Returns and Reports. (i) All tax returns and reports (including
without limitation all income tax, payroll, unemployment compensation, sales
and
use, excise, privilege, property, ad valorem, franchise, license and school)
required to be filed by the Seller by the Closing (“Tax
Returns”) have been filed with the appropriate governmental agencies in
all jurisdictions in which such returns and reports are required to be filed,
and all such returns and reports properly reflect the taxes of the Seller
for
the periods covered thereby; and (ii) all taxes, assessments, interest,
penalties, deficiencies, fees and other governmental charges or impositions,
including those enumerated above with respect to the Tax Returns, which are
called for by the Tax Returns, or which are claimed to be due from the Seller
by
notice from any taxing authority, or upon or measured by its properties,
assets
or income, have been properly accrued or paid by or at the Closing if then
due
and payable. The amount of tax payable by the Seller on the profits
of the Business in the last two accounting periods of the Seller has not
depended to a material extent on any agreement with any tax authority not
being
an agreement based on strict application of any relevant
legislation.
14.5.1 Accounts. The
accounts of the Seller relating to the Business for the financial year ended
on
February 28, 2007 comply with the requirements of the Companies Order 1989
(or
when the Companies Xxx 0000 is brought into force) Companies Xxx
0000. The accounts have been prepared in accordance with all applicable
Statements of Standard Accounting Practice and (to the extent that none are
applicable) with generally accepted accounting principles and practices applied
consistently. They show a true and fair view of the assets and liabilities
of
the Business as at that date, including contingent, unquantified or disputed
liabilities, and of the results of the Business for the financial period
ended
on February 28, 2007. The accounting and other records of the
Business are up to date and contain complete and accurate details of all
transactions of the Business.
14.6 Intellectual
Property Rights.
14.6.1 The
Seller owns, possesses or has the right to use all intellectual property
rights
necessary or required to conduct its business as presently conducted, or
otherwise used by the Seller. There are no subsisting licenses or
other agreements under which the Seller has granted to any third party any
rights or interest in connection with the Intellectual Property or any rights
to
any know-how or confidential information relating to the Business.
14.6.2
No royalties or other amounts
are payable by the Seller to other persons by reason of the ownership or
the use
of the any intellectual property owned or used by the Seller.
14.6.3
(i) To the best
knowledge of the Seller, no product or service related to the Seller’s business
and marketed and sold by the Seller violates any license or infringes upon
any
intellectual property rights of others, (ii) the Seller has not received
any
notice that any such product or service conflicts with any intellectual property
rights of others, and (iii) to the best knowledge of the Seller, there is
no
reasonable basis to believe that any such violation, infringement or conflict
may exist.
14.6.4
The Seller is not a party to,
or subject to, any contract which currently requires, or upon the passage
of
time or occurrence of an event or contingency (whether of default or otherwise)
will require, the conveyance or disclosure of secret processes or formulae
related to, any intellectual property of the Seller.
14.6.5 All
computer
hardware and software included among the Assets and currently used and/or
necessary to the conduct of the Seller’s business, are in good working
order.
14.6.6
Except as described in
Schedules 1.1-1.5, the Seller has obtained and delivered to the Purchaser
all consents and approvals of third parties necessary to duly transfer to
the
Purchaser all of the Seller’s rights, title and interest in and to all of its
intellectual property included among the Assets.
14.7 Contracts. The
Seller is not a party to or subject to any contract that involves (i) agency,
distributorship, franchising, marketing rights, information sharing,
manufacturing rights, servicing or maintenance; (ii) partnership, joint venture
or similar arrangement; (iii) the purchase, conditional sale, credit sale,
lease, hiring or similar arrangement; (iv) committing Andronics to capital
expenditures; (v) disabling Andronics’ complete performance with the terms of
any Contract entered into within (6) months from the date of execution; (vi)
the
supply of goods and/or services by or to the Seller on terms under which
retrospective or future discounts, price reductions or other financial
incentives are given by or to the Seller dependent upon the level of purchases
or any other fact; (vii) terms not on “arm’s length;” and (viii) a loss-making
nature.
14.7.1 The
Seller is not in
default under any of the Contracts or in respect of any other obligation
or
restriction binding upon it in relation to the Business. No threat or claim
of
default has been made and no threat or claim is outstanding against the Seller
under any of the Contracts or any other agreement or arrangement to which
the
Seller is a party relating to the Business or the Assets and there is nothing,
whereby any of the Contracts or other agreement or arrangement, that may
be
terminated or rescinded by any other party.
14.7.2 During
the twelve
(12) months immediately preceding Closing Date, there has been no substantial
change in the bases or terms on which any person is prepared to do business
with
the Seller in relation to the Business. No substantial customer or
supplier of the Business has ceased or substantially reduced its business
with
the Seller and no indication has been received by the Seller that there will
be
any such change, cessation or reduction.
14.8 Litigation. The
Seller has no knowledge of any claim, litigation, proceeding or investigation
pending or threatened against the Seller that might result in any material
adverse change in the Business or condition of the Assets being conveyed
under
this Agreement.
14.9 Assets. The
items included on Schedule 1.1 are to the best of the Seller’s knowledge
fit for their intended purpose and are of satisfactory quality, are not
obsolete, slow moving or likely to realize less than book value, and are
sufficient for the normal requirements of the Business. The work-in-progress
is
at its normal level having regard to current orders. The raw
material, packaging materials and finished goods are at their normal level
having regard to the current trading requirements of the
Business. All of the items comprising the fixed Assets are in a good
and safe state of repair and condition and satisfactory working order, are
adequate and not surplus to the requirements of the Business, and would not
be
expected to require replacement within a period of twelve (12) months after
the
Closing Date.
14.9.1 Title
to
Assets. The Seller holds good and marketable title to the Assets,
free and clear of restrictions on or conditions to transfer or assignment,
and
free and clear of liens, pledges, charges or encumbrances.
14.10 Employees. No
changes have been made since February 7, 2007 in the terms of employment
of the
Employees and the Seller is not under any legal or moral obligation to make
any
such change. There are no amounts owing to any present or former
officers or employees of the Seller in respect of the Business and none of
them
is entitled to accrued holiday pay other than in respect of the Seller's
current
holiday year. Except as provided at schedule 1.2, No employee has
been engaged by the Seller in relation to the Business since February 7,
2007
and no person employed by the Seller at or since that date has ceased, or
given
or received notice to cease, to be so employed or will be entitled to give
such
notice as a result of the provisions of this Agreement. The Seller
has maintained adequate and suitable records regarding the service of each
of
the Employees and complied with all agreements for the time being relating
to
them. There is no recognition, wage bargaining or other collective or
other agreement or arrangement in force or proposed between the Seller and
any
trade union or similar organization, there is no dispute (current or threatened)
between the Seller and any trade union or similar organization and there
has
been no industrial action affecting the Business during the past five (5)
years. The Seller is and has been at all times in compliance with all
legislation, regulations and codes of practice in relation to the Employees,
and
no orders, awards or other notices have been served on and no other enforcement
or similar proceedings have been taken against the Seller pursuant to any
legislation, regulations or codes of practice in respect of the
Employees. All of the Employees (and all other workers involved in
the Business) are legally entitled to be in and work in the United
Kingdom. No retirement, death or disability benefit scheme for
present or former officers or employees or their dependants is in existence,
no
proposals have been announced and the Seller is not under any legal or moral
obligation to establish any such scheme.
14.11 Accuracy
of
Representations and Warranties. None of the representations or
warranties of the Seller contain or will contain any untrue statement of
a
material fact or omit or will omit or misstate a material fact necessary
in
order to make statements in this Agreement not misleading. The Seller
knows of no fact that has resulted in a material change in the business,
operations or assets of the Seller that has not been set forth in this Agreement
or otherwise disclosed to the Purchaser.
15. Representations
and Warranties of Purchaser. The Purchaser represents and
warrants as follows:
15.1 Corporate
Existence. The Purchaser is now, and on the Closing Date will be,
a corporation duly organized, validly existing and in good standing under
the
laws of the United Kingdom, has all requisite corporate power and authority
to
enter into this Agreement and perform its obligations hereunder.
15.2 Authorization. The
Purchaser has full corporate authority to execute and deliver this Agreement
and
any other agreement to be executed and delivered by the Purchaser in connection
herewith, and to carry out the transactions contemplated hereby. The
execution and delivery of this Agreement and the consummation of the
transactions contemplated hereby have been duly authorized by all necessary
corporate and shareholder action. No other corporate proceedings by
the Purchaser will be necessary to authorize this Agreement or the carrying
out
of the transactions contemplated hereby. This Agreement constitutes a
valid and binding Agreement of the Seller, in accordance with its
terms. The Purchaser has consulted its own financial advisor, tax
advisor and accountant, as necessary or desirable, as to matters concerning
this
Agreement.
15.3 Conflict
with Other
Agreements, Consents and Approvals. With respect to (i) the
articles of incorporation, bylaws or similar document of the Purchaser, (ii)
any
applicable law, statute, rule or regulation, (iii) any contract to which
the
Purchaser is a party or may be bound, or (iv) any judgment, order, injunction,
decree or ruling of any court or governmental authority to which the Purchaser
is a party or subject, the execution and delivery by the Purchaser of this
Agreement and any other agreement to be executed and delivered by the Purchaser
in connection herewith and the consummation of the transactions contemplated
hereby will not (a) result in any violation, conflict or default, or give
to
others any interest or rights, including rights of termination, cancellation
or
acceleration, or (b) require any authorization, consent, approval, exemption
or
other action by any court or administrative or governmental body which has
not
been obtained, or any notice to or filing with any court or administrative
or
governmental body which has not been given or done.
15.4 Employees
of
Andronics. The Purchaser has had the opportunity to examine full and
accurate details of the 'employee liability information' (as defined in the
Regulations). Additionally, the Seller has supplied the Purchaser
with the following: (i) the identity of the Employees; (ii) the ages of the
Employees; (iii) the information contained in the written statements of
employment particulars for the Employees; (iv) the information relating to
any
collective agreements that apply to the Employees, where the procedures set
out
in the Employment Xxx 0000 (Dispute Resolution) Regulations 2004 apply; (v)
instances within the preceding two (2) years of any disciplinary action taken
by
the Seller in respect of any of the Employees or of any grievances raised
by any
of the Employees; (vi) instances of any legal action taken by any of the
Employees against the Seller in the preceding two (2) years; and (vii) instances
of potential legal actions that may be brought by any of the Employees against
the Seller where the Seller has reasonable grounds to believe such actions
might
occur.
15.5 Accuracy
of
Representations and Warranties. None of the representations or
warranties of the Purchaser contain or will contain any untrue statement
of a
material fact or omit or will omit or misstate a material fact necessary
in
order to make the statements contained herein not misleading.
16. Conditions
Precedent to Purchaser’s Obligations. The obligation of the
Purchaser to purchase the Assets is subject to the fulfillment, prior to
or at
the Closing Date, of each of the following conditions, any one or portion
of
which may be waived in writing by the Purchaser:
16.1 Representations,
Warranties and Covenants of Seller. The representations and
warranties of the Seller contained herein and any other documents delivered
by
the Seller in connection with this Agreement shall be true and correct in
all
material respects at the Closing; and the Seller shall have performed all
obligations and complied with all agreements, undertakings, covenants and
conditions required by this Agreement to be performed or complied with by
it or
prior to the Closing.
16.2 Licenses
and
Permits. The Purchaser shall have obtained all licenses and
permits from public authorities necessary to authorize the ownership and
operation of the business of the Seller.
16.3 Conditions
of the
Business. There shall have been no material adverse change in the
manner of operation of the Seller’s business prior to the Closing
Date.
16.4 No
Suits or
Actions. At the Closing Date no suit, action or other proceeding
shall have been threatened or instituted to restrain, enjoin or otherwise
prevent the consummation of this Agreement or the contemplated
transactions.
17. Conditions
Precedent to Obligations of the Seller. The obligations of the
Seller to consummate the transactions contemplated by this Agreement are
subject
to the fulfillment, prior to or at the Closing Date, of each of the following
conditions, any one or a portion of which may be waived in writing by the
Seller;
17.1 Representations,
Warranties and Covenants of Purchaser. All representations and
warranties made in this Agreement by the Purchaser shall be true as of the
Closing Date as fully as though such representations and warranties had been
made on and as of the Closing Date, and the Purchaser shall not have violated
or
shall not have failed to perform in accordance with any covenant contained
in
this Agreement.
18. Covenants
Subsequent to the Closing Date.
18.1 Lease
Agreement. A lease agreement with Xxxxxx and Xxxxxxxx Xxxxxxx for
the lease of the property consisting of the current Andronics offices, located
at Xxxx 00 Xxxxxxxxx Xxxx, Springtown Industrial Estate, Xxxxxxxxxxx, Xxxxxxxx
Xxxxxxx XX00 0XX. The monthly facilities rental pursuant to the lease
agreement shall be Ten Thousand Pounds (₤10,000 GBP) per month for the term of
the lease. The Parties shall reasonably agree upon the lease
agreement terms on or before the Closing Date. Upon the Closing Date,
a copy of the lease agreement shall be attached hereto as Exhibit D and
made apart hereof.
18.2 Advisory
Board. The Purchaser acknowledges the personal liability of
Xxxxxx Xxxxxxx in connection with the Six Hundred Fifty Thousand Pound (£650,000
GBP) personal guarantee made for the benefit of Andronics. At the
Closing, Xxxxxx Xxxxxxx shall be appointed to the advisory board of Secure
Asset
Reporting Services, Inc. Xx. Xxxxxxx shall serve as an advisory board
director until the earlier of (i) his resignation, (ii) appointment of his
successor or (iii) his termination.
18.3 Common
Stock
Options. For services rendered to Andronics after the Closing
Date, Xxxxxx Xxxxxxx shall be entitled to acquire SARS Common Stock equal
to the
total aggregate amount of one million five hundred thousand (1,500,000) shares
at One United States Cent ($0.01 USD) per share (the “Xxxxxxx
Options”). The Xxxxxxx Options must be exercised before the end of the
first quarter immediately preceding the twelve (12) month period the options
vested in or they are forfeited. The Xxxxxxx Options shall vest in
accordance with the following:
18.3.1 One
million
(1,000,000) shares shall vest monthly beginning upon the Closing Date (
“Xxxxxxx Monthly Options”).
18.3.2 Five
hundred
thousand (500,000) shares shall vest quarterly upon meeting the revenue
projections listed in Schedule 18.3.2 and in the following
amounts:
Quarter
1: 50,000 options
vest
Quarter
2: 100,000 options vest
Quarter
3: 150,000 options vest
Quarter
4: 200,000 options vest
If
any
revenue projections are not met for any given quarter, the option amount
for
that quarter, less ten percent (10%), shall be added to the fourth quarter’s
total. If the fourth quarter goals are not met, that quarters entire
option amount (whether or not accrued options have been added to the fourth
quarter) shall be forfeited. Section 18.3.2 shall be hereinafter
defined as “Xxxxxxx Quarterly Options.”
Xxxxxx
Xxxxxxx covenants to pay to the Purchaser (or as the Purchaser may direct)
an
amount equal to any liability of the Purchaser (or any other person) to pay
income tax or national insurance contributions (both employers and employees)
(a
“Relevant Tax Liability”) arising as a result of the grant,
exercise, assignment or release of the Xxxxxxx Options or as the result of
the
acquisition, holding or disposal of SARS Common Stock by Xx.
Xxxxxxx. In connection therewith, Xx. Xxxxxxx and the Purchaser agree
that:
(i) if
so requested by the Purchaser at any time after the Closing Date, Xx. Xxxxxxx
shall enter into an election under Section 431 of the Income Tax (Earnings
and
Xxxxxxxx) Xxx 0000 in respect of any SARS Common Stock acquired by Xx. Xxxxxxx
pursuant to the option; and
(ii) it
shall be a condition of the exercise of the Xxxxxxx Options that Xx. Xxxxxxx
shall remit to the Purchaser (or as it may direct) in cleared funds the amount
of any Relevant Tax Liability or make such other arrangements for the discharge
of such Relevant Tax Liability as the Board of Directors of the Purchaser
may in
its absolute discretion think fit.
19. Non-Competition,
Non-Solicitation.
19.1 Non-Competition. Seller
agrees that, without both the disclosure to and the written approval of the
Board of Directors of SARS Corporation, it shall not, directly or indirectly,
engage or be interested in (whether as a principal, lender, employee, officer,
director, partner, venturer, consultant or otherwise) any business(es) that
is
competitive with the business being conducted by the Purchaser, without the
express written approval of the Board of Directors of SARS
Corporation.
19.2 Non-Solicitation. Seller
agrees that, without the prior written consent of the Company’s Board of
Directors, for a period of two (2) years after the Closing Date, it shall
not,
directly or indirectly disturb, entice, or in any other manner persuade,
any
Employee of the Seller or Purchaser to discontinue that person’s or firm’s
relationship with the Business if the Employee(s) were employed by the Seller
at
any time during the twelve (12) month period prior to the Closing
Date.
20. Purchaser’s
Acceptance. The Purchaser represents and acknowledges that it has
entered into this Agreement on the basis of its own examination, personal
knowledge and opinion of the value of the business. The Purchaser has
not relied on any representations made by the Seller other than those specified
in this Agreement. The Purchaser further acknowledges the Seller has
not made any agreement or promise to repair or improve any of the leasehold
improvements, equipment or other personal property being sold to the Purchaser
under this Agreement, and that the Purchaser takes all such property in the
condition existing on the Execution Date, except as otherwise provided in
this
Agreement.
21. Risk
of Loss. The risk of loss, damage or destruction to any of the
equipment, inventory or other personal property to be conveyed to the Purchaser
under this Agreement shall be borne by the Seller up to the time of
Closing. In the event of such loss, damage or destruction, the
Seller, to the extent reasonable, shall replace the lost property or repair
or
cause to repair the damaged property to its condition prior to the
damage. If replacement, repairs or restorations are not completed
prior to Closing, then the purchase price shall be adjusted by an amount
agreed
upon by the Purchaser and the Seller that will be required to complete the
replacement, repair or restoration following Closing. If the
Purchaser and the Seller are unable to agree, then the Purchaser, at its
sole
option and notwithstanding any other provision of this Agreement, upon notice
to
the Seller, may rescind this Agreement and declare it to be of no further
force
and effect, in which event there shall be no Closing of this Agreement and
all
the terms and provisions of this Agreement shall be deemed null and
void. If, prior to Closing, any of the real properties that are the
subject of the leases to be assumed by the Purchaser are materially damaged
or
destroyed, then the Purchaser may rescind this Agreement in the manner provided
above unless arrangements for repair satisfactory to all parties involved
are
made prior to Closing.
22. Indemnification
and Survival.
22.1 Survival
of
Representations and Warranties. All representations and
warranties made in this Agreement shall survive the Closing of this Agreement,
except that any party to whom a representation or warranty has been made
in this
Agreement shall be deemed to have waived any misrepresentation or breach
of
representation or warranty of which such party had knowledge prior to
Closing. Any party learning of a misrepresentation or breach of
representation or warranty under this Agreement shall immediately give written
notice thereof to all other parties to this Agreement. The
representations and warranties in this Agreement shall terminate two (2)
years
from the Closing Date, and such representations or warranties shall thereafter
be without force or effect, except any claim with respect to which notice
has
been given to the party to be charged prior to such expiration
date.
22.2 Seller’s
Indemnification. The Seller hereby agrees to indemnify and hold
the Purchaser, it successors and assigns harmless from and against: (i) Any
and
all damages, losses, claims, liabilities, deficiencies and obligations of
every
kind and description, contingent or otherwise, arising out of or related
to the
operation of the Seller’s business prior to the close of business on the day
before the Closing Date, except for damages, losses, claims, liabilities,
deficiencies and obligations of the Seller expressly assumed by the Purchaser
under this Agreement or paid by insurance maintained by the Seller or the
Purchaser, (ii) any and all damage or deficiency resulting from any material
misrepresentation, breach of warranty or covenant, or nonfulfillment of any
agreement on the part of the Seller under this Agreement, and (iv) any and
all
actions, suits, claims, proceedings, investigation, audits, demands,
assessments, fines, judgments, costs and other expenses (including, without
limitation, reasonable audit and attorneys fees) incident to any of the
foregoing.
The
Seller’s indemnity obligations
under this Section 22.2 shall be subject to the following: (i) if any claim
is
asserted against the Purchaser that would give rise to a claim by the Purchaser
against the Seller for indemnification under the provisions of this Section,
then the Purchaser shall promptly give written notice to the Seller concerning
such claim and the Seller shall, at no expense to the Purchaser, defend the
claim, and (ii) the Seller shall not be required to indemnify the Purchaser
for
an amount that exceeds the fair market value of the Purchase Price paid by
the
Purchaser under this Agreement.
22.3 Purchaser’s
Indemnification. The Purchaser agrees to defend, indemnify, and
hold harmless the Seller from and against (i) any and all claims, liabilities
and obligations of every kind and description arising out of or related to
the
operation of the business following Closing or arising out of the Purchaser’s
failure to perform obligations of the Seller assumed by the Purchaser pursuant
to this Agreement; (ii) any and all damage or deficiency resulting from any
material misrepresentation, breach of warranty or covenant, or nonfulfillment
of
any agreement on the part of the Purchaser under this Agreement, and (iii)
any
and all actions, suits, claims, proceedings, investigation, audits, demands,
assessments, fines, judgments, costs and other expenses (including, without
limitation, reasonable audit and attorneys fees) incident to any of the
foregoing.
23. Disputes. In
the event of a dispute between the Parties as to any material term herein,
the
Parties shall first attempt to resolve the dispute informally.
23.1 No
claim shall be brought by the Purchaser against the Seller unless notice
in
writing has been given to the Seller as soon as reasonably practicable, and
in
any event within twenty-eight (28) days after the Purchaser becomes aware
of the
grounds for a claim and on or before the first anniversary of this Agreement
specifying the nature of the claim in reasonably sufficient detail and so
far as
practicable the amount claimed.
23.2 Any
claim shall become fully barred and unenforceable after the second anniversary
of this Agreement unless proceedings in respect of that claim have been
commenced. For this purpose, proceedings shall not be deemed to have been
commenced unless they have been issued and served upon the Seller.
23.3 Attorneys'
Fees. If any action, suit or proceeding is commenced to
establish, maintain, or enforce any right or remedy under this Agreement,
the
party not prevailing therein shall pay, in addition to any damages or other
award, all reasonable attorneys' fees and litigation expenses incurred therein
by the prevailing party.
23.4
The Purchaser shall have no claim
whatever against the Seller: (i) if and to the extent that the breach on
which
the claim is based occurs as a result of any legislation not in force on
the
Execution Date that takes effect retrospectively or any increase in the rates
of
taxation in force at that date, or as a consequence of a change in the
interpretation of the law in any jurisdiction after the Execution Date; (ii)
if
and to the extent that the breach on which the claim is based would not have
arisen but for any voluntary act, omission, transaction or arrangement by
or
with the Purchaser or any person connected with the Purchaser after the Closing
Date otherwise than in the ordinary course of conducting the Business which
the
Purchaser knew or ought reasonably to have known could give rise to a claim;
(iii) to the extent that the claim arises only as a result of any changes
after
the Closing Date in the accounting bases, policies or methods used by the
Purchaser to value any of its assets, or; (iv) to the extent that the claim
relates to any loss for which the Purchaser is indemnified by insurance or
for
which it would have been indemnified if at the relevant time the Purchaser
had
maintained valid and adequate insurance cover that is normally effected by
prudent companies carrying on a business similar to the Business.
23.5 No
claim shall be made
by the Purchaser if the fact, omission, circumstance or occurrence giving
rise
to the claim has been fully and fairly disclosed to the Purchaser in this
Agreement.
23.6 Conduct
of
Claims. Should the Purchaser become aware of any grounds that might give
rise to a claim, having given notice to the Seller in accordance with Section
23.1, the Purchaser (i) shall not make any admission of liability or agreement
or compromise with any party without prior consultation with and the agreement
of the Seller, which shall not be unreasonably withheld or delayed; (ii)
should
the claim result from or arise from a dispute with a third party, take such
action to avoid, dispute, resist, appeal, compromise or contest the dispute
as
the Seller may reasonably request and at the Seller's expense; (iii) shall
make
available to the Seller all information reasonably required and available
to
enable the Seller to avoid, dispute, resist, appeal, compromise or contest
the
claim and any liability connected with the claim; and (iv) shall not be obliged
to take any action which on a reasonable view is likely materially to prejudice
the Business or the Purchaser.
23.7 Should
the Purchaser
receive any payment or benefit from any policy of insurance or any third
party
other than the Seller as a result of the circumstances giving rise to a claim,
and the Seller has made any payment to the Purchaser in respect of that claim,
the Purchaser shall, as soon as practicable after receipt, reimburse the
Seller
an amount which is the lesser of the amount of the payment or benefit received
from the insurer or other third party and the payment received from the Seller,
having deducted all costs, charges and expenses reasonably incurred by the
Purchaser in obtaining the payment or benefit.
23.8 If
any potential claim
arises by reason of a liability that is contingent only, the Seller shall
not be
under any obligation to make any payment for that claim until such time as
the
contingent liability becomes actual.
24. Miscellaneous
Provisions.
24.1 Notices. All
notices, requests, demands, claims, consents and other communications required
or permitted under this Agreement shall be in writing. Any notice,
request, demand, claim, communication or consent under this Agreement shall
be
deemed duly given if (and shall be effective two (2) business days after)
it is
sent by certified mail and addressed to the intended recipient as set forth
below:
|
If
to Purchaser:
|
Jinkhold,
Ltd.
c/o
SARS Corporation
__________________________
__________________________
__________________________
|
|
With
a Copy to:
|
The
Xxxx Law Group, PLLC
Attn:
Xxxxx Xxxx
000
Xxxxx Xxxxxx, Xxxxx 0000
Xxxxxxx,
XX 00000
Xxxxxx
Xxxxxx
|
|
If
to Seller:
|
Andronics,
Ltd.
Xxxx
00 Xxxxxxxxxx Xxxx
Springtown
Industrial Estate
Londonderry
Northern
Ireland
BT48
ONA
|
|
With
a Copy to:
|
Xxxxxx
Xxxxxxx
0 Xxxxxx
Xxxxxx
Xxxxxxxxxxx
Xxxxxx
Xxxxxxxxxxx
XX00
0XX
|
or
at any
other address as any party may, from time to time, designate by notice given
in
compliance with this section.
24.2 Time. Time
is of the essence of this Agreement.
24.3 Survival. Any
of the terms and covenants contained in this Agreement which require the
performance of either party after the Closing shall survive the Closing and
delivery of the Assets.
24.4 Waiver. Failure
of either party at any time to require performance of any provision of this
Agreement shall not limit the party’s right to enforce the provision, nor shall
any waiver of any breach of any provision be a waiver of any succeeding breach
of any provision or a waiver of the provision itself for any other
provision.
24.5 Assignment. Except
as otherwise provided within this Agreement, neither party hereto may transfer
or assign this Agreement without the prior written consent of the other
party.
24.6 Governing
Law. This Agreement shall be governed by and construed in
accordance with the laws of Northern Ireland, without giving effect to the
conflicts of law principles thereof.
24.7 Venue. The
parties to this Agreement agree that any action on this Agreement shall be
brought in a court of competent jurisdiction located in Northern
Ireland.
24.8
Titles
and
Captions. All articles, sections and paragraph titles or captions
contained in this Agreement are for convenience only and shall not be deemed
part of the context nor affect the interpretation of this
Agreement.
24.9 Entire
Agreement. This Agreement contains the entire understanding between and
among the Parties and supersedes any prior understandings and agreements
among
them respecting the subject matter of this Agreement.
24.10 Construction. The
Parties have participated jointly in the negotiation and drafting of this
Agreement. In the event an ambiguity or question of intent or
interpretation arises, this Agreement shall be construed as if drafted jointly
by the parties and no presumption or burden of proof shall arise favoring
or
disfavoring any party by virtue of the authorship of any of the provisions
of
this Agreement. Any reference to any statute or law shall be deemed
also to refer to all rules and regulations promulgated thereunder, unless
the
context requires otherwise. The word “including” shall mean including
without limitation.
24.11 Prior
Agreements. This document is the entire, final and complete
agreement of the Parties pertaining to the purchase of the Assets, and
supersedes and replaces all prior or existing written and oral agreements
between the parties or their representatives relating to the
Assets.
24.12 Modifications
Must Be in Writing. This Agreement may not be changed
orally. All modifications of this Agreement must be in writing and
must be signed by each party.
24.13 Agreement
Binding. This Agreement shall be binding upon the heirs,
executors, administrators, successors and assigns of the Parties
hereto.
24.14 Further
Action. The Parties hereto shall execute and deliver all
documents, provide all information and take or forbear from all such action
as
may be necessary or appropriate to achieve the purposes of this
Agreement.
24.15 Good
Faith, Cooperation and Due Diligence. The Parties hereto
covenant, warrant and represent to each other good faith, complete cooperation,
due diligence and honesty in fact in the performance of all obligations of
the
Parties pursuant to this Agreement. All promises and covenants are
mutual and dependent.
24.16 Counterparts. This
Agreement may be executed by facsimile and in several counterparts, and all
so
executed shall constitute one Agreement, binding on all the Parties hereto
even
though all the Parties are not signatories to the original or the same
counterpart.
24.17 Savings
Clause. If any provision of this Agreement, or the application of
such provision to any person or circumstance, shall be held invalid, the
remainder of this Agreement, or the application of such provision to persons
or
circumstances other than those as to which it is held invalid, shall not be
affected thereby.
24.16 Consultation. The
Parties acknowledge that each has been advised to seek legal consultation
regarding this Agreement and has either retained or had sufficient opportunity
to retain such legal representation and hereby waives insufficiency of legal
consultation or representation as a claim or defense in any action arising
out
of this Agreement. Except as otherwise provided in this Agreement,
each Party shall bear its own attorneys’ fees and costs incurred in this matter
through the Closing Date of execution of this Agreement.
24.17 Grossing
Up.
24.17.1 If
the Purchaser
makes a payment or suffers a loss
(the “Loss") in respect of which the
Purchaser is entitled to be indemnified or otherwise compensated by the Seller
under this Agreement and payment so made by the Seller
(the “Payment") is subject to tax in the
hands of the Purchaser or a withholding on account of tax, the Seller shall
pay
to the Purchaser such additional amount as ensures that the Purchaser is
left
with the same amount as it would have been entitled to receive in the absence
of
any such tax liability or withholding PROVIDED THAT the Seller shall not
be
under any obligation to make an increased payment under this Section 24.17.1
to
the extent the Loss is deductible in computing the Purchaser's tax liability
in
respect of the Payment.
24.17.2 Any
additional
payment due by the Seller to the Purchaser under Section 24.17.1 shall be
payable by the Seller on the later of:
|
|
(i)
|
five
(5) business days before the last date on which the Purchaser can
discharge the tax liability arising as a result of the Payment
without
incurring a liability for penalties or interest
thereon;
|
|
|
(ii)
|
five
(5) business days after written demand has been made in respect
thereof by
the Purchaser.
|
24.17.3 If
an increased
amount is paid to the Purchaser under Section 24.17.1 and the Purchaser later
obtains a credit or deduction in respect of the Loss in computing its tax
liability the Purchaser shall reimburse (to the extent it can do so without
prejudice to its ability to retain the credit or deduction) to the Seller
within
five (5) business days of utilising credit or deduction the lesser
of:
(i) the
increased amount so paid; and
|
|
(ii)
|
the
amount the Purchaser saves in tax as a consequence of utilising
the credit
or deduction.
|
24.18 Costs. Each
party hereto shall pay its own costs and expenses in relation to the preparation
and execution of this Agreement and all documents ancillary hereto.
[Signature
page to follow]
IN
WITNESS WHEREOF, the Parties have executed and delivered this Agreement as
of
the Execution Date set forth below.
DATE:
October 26, 2007
SELLER:
ANDRONICS,
LTD.
By: ________________________________
Name: Xxxxxx
Xxxxxxx
Title:
XXXXXXX:
XXXXXX
XXXXXXX
By: ________________________________
Name:
Xxxxxx Xxxxxxx
|
|
Title:
|
PURCHASER:
JINKHOLD,
LTD.
By: ________________________________
Name:
Xxxxxxx Xxxxxxx
|
|
Title:
CEO
|
EXHIBITS
AForm
of
Convertible Debenture
BOperating
Agreement
CLicensing
Agreement
DLease
Agreement
SCHEDULES
1.1List
of Assets (including assumed Accounts Receivable)
1.2List
of Employees
1.3List
of Contracts (including British Petroleum Novation)
1.4List
of Intellectual Property
1.5List
of Goodwill
3.0Assumed
Liabilities (including Excluded Liabilities)
4.2Convertible
Debenture Holders
9.3.2Promissory
Notes
18.3.2Revenue
Projections for Xxxxxxx Quarterly Options
Exhibit
A
Form
of Convertible Debenture
[The
Form of Convertible Debenture appears
on the following pages]SARS CORPORATION
10%
CONVERTIBLE DEBENTURE
No.
[insert debenture #] [date] , 2007
$
[value] [location]
SARS
CORPORATION (“Maker” or the “Company”) hereby promises to pay to the order of
[name of debenture holder] or his , her, its assigns (“Holder”), the sum of
[value] United States Dollars ($XX,XXX), with interest at the rate of ten
percent (10%) per annum until paid. All outstanding principal and
accrued and unpaid interest shall become due twelve months from the date
upon
which this 10% Convertible Debenture (“Debenture”) is executed (the “Maturity
Date”). All payments due and owning under this Debenture shall be
subject to the terms and conditions set forth herein.
|
1.
|
Agreement.
|
The
Debenture is issued pursuant to that certain Asset Purchase Agreement (the
“Agreement”), dated the same date as first set forth herein, by and between
Andronics, Ltd. and Jinkhold, Ltd., a wholly owned subsidiary of the Maker,
which is hereby incorporated by reference.
|
2.
|
Register.
|
The
Company shall keep at its principal office a register in which the Company
shall
provide for the registration of the Holder of the Debenture or for the
registration of a transfer of the Debenture to a different Holder.
|
3.
|
Loss
Theft, Destruction or Mutilation of the
Debenture.
|
Upon
receipt of evidence reasonably satisfactory to the Company of the loss, theft,
destruction or mutilation of the Debenture and, in the case of any such loss,
theft or destruction, upon receipt of an indemnity bond in such reasonable
amount as the Company may determine (or if such Debenture is held by the
original Holder, of an unsecured indemnity agreement reasonably satisfactory
to
the Company) or, in the case of any such mutilation, upon surrender and
cancellation of such Debenture, the Company will make and deliver, in lieu
of
such lost, stolen, destroyed or mutilated Debenture, a new Debenture of like
tender and unpaid principal amount and dated as of the date to which interest
has been paid on the Debenture so lost, stolen, destroyed or
mutilated.
|
4.
|
Registered
Holder.
|
The
Company may deem and treat the person in whose name any Debenture is registered
as the absolute owner and Holder of such Debenture for the purpose of receiving
payment of the principal of and interest on such Debenture and for the purpose
of any notices, waivers or consents thereunder, whether or not such Debenture
shall be overdue, and the Company shall not be affected by notice to the
contrary. Payments with respect to any Debenture shall be made only
to the registered Holder thereof.
|
5.
|
Surrender
of the Debenture.
|
The
Company may, as a condition of payment of all or any of the principal of,
and
interest on, the Debenture, or its conversion, require Holder to present
the
Debenture for notation of such payment and, if the Debenture be paid in full
or
converted at the election of Holder as herein provided, require the surrender
hereof.
|
6.
|
Subordination.
|
The
Company, in its sole discretion, may subordinate the Debenture to any Senior
Debt of the Company. For purposes of the Debenture, “Senior Debt”
shall mean all indebtedness for all principal, fees, expenses, interest,
penalties, post-bankruptcy petition interest, and all other amounts payable
for
money borrowed.
|
7.
|
Conversion.
|
At
any
time prior to or at the Maturity Date, at the option of the Holder, all
principal and accrued interest due on this Debenture (the “Convertible Amount”)
may be converted at $1.00 USD per share. Upon the Maturity Date, all
outstanding principal and accrued interest shall automatically convert into
common stock of the Company.
The
Conversion Amount shall be adjusted downward in the event the Company issues
common stock (or securities exercisable for convertible into or exchangeable
for
common stock) at a price below the Conversion Amount, to a price equal to
such
issue price.
8. Mechanics
of Conversion.
Upon
the
Company’s receipt of written notice of Holder’s election to convert the
Debenture or upon the Maturity Date, the principal amount of this Debenture
plus
any accrued interest shall be deemed converted into such number of shares
of the
Company’s Common Stock as determined pursuant to Section 7, and no further
payments shall thereafter accrue or be owing under the Debenture. The
entire balance due and owing under the Debenture must be converted to Common
Stock; no partial conversions will be allowed. Holder shall return
this Debenture to the Company at the address set forth below, or such other
place as the Company may require in writing. Within ten (10)
days after receipt of this Debenture, the Company shall cause to be issued
in
the name of and delivered to Holder at the address set forth above, or to
such
other address as to which Holder shall have notified the Company in writing,
a
certificate evidencing the securities to which Holder is entitled. No
fractional securities will be issued upon conversion of the
Debenture. If on conversion of the Debenture a fraction of a security
results, the Company shall round up the total number of securities to be
issued
to Holder to the nearest whole number.
|
9.
|
Notice.
|
Any
notice required or desired to be given under this Agreement shall be in writing
and shall be deemed given when personally delivered, sent by an overnight
courier service, or sent by certified or registered mail to the addresses
set
forth below, or such other address as to which one party may have notified
the
other in such manner.
|
10.
|
Default.
|
The
following will be “Events of Default” under the Debenture: (a) the
Company shall default on the payment of principal or interest on the Debenture
or on any other indebtedness of the Company when due; (b) the Company shall
default on the observance or performance of any other covenant set forth
in the
Debenture; (c) the Company shall issue any indebtedness senior to the Debenture
or grant any security for any other indebtedness (other than in connection
with
operating leases such as stand-alone office equipment leases); (d) the Company
shall become insolvent or file a voluntary petition in bankruptcy (or have
such
a petition filed against it) or have an assignment for the benefit of creditors
or other creditor arrangement or similar event occur with respect to it or
its
assets; or (e) failure to comply with any other term or condition of the
Debenture, which shall not have been cured within ten (10) business days
receipt
of written notice to the Company.
Upon
Default, and at the option of Holder, or Holder’s successors or assigns, with
fifteen (15) days written notice to the Company, demand or presentment, Holder
may (i) accelerate all amounts due and owing under this Debenture and demand
payment immediately and/or (ii) declare the right to exercise any and all
remedies available to Holder under applicable law.
|
11.
|
Miscellaneous.
|
(a) 10%
per annum calculated using a 360-day year composed of 12 30-day months, payable
in full, unless otherwise converted to common stock in the Company, at maturity
or conversion.
(b) The
Company agrees that all Conversion Shares shall be fully paid and
non-assessable. Maker shall pay upon demand any and all expenses,
including reasonable attorney fees, incurred or paid by Holder of this Debenture
without suit or action in attempting to collect funds due under this Debenture
or in connection with the issuance of the Conversion Shares. In the
event an action is instituted to enforce or interpret any of the terms of
this
Debenture including but not limited to any action or participation by Maker
in,
or in connection with, a case or proceeding under the Bankruptcy Code or
any
successor statute, the prevailing party shall be entitled to recover all
expenses reasonably incurred at, before and after trial and on appeal or
review,
whether or not taxable as costs, including, without limitation, attorney
fees,
witness fees (expert and otherwise), deposition costs, copying charges and
other
expenses.
(c) All
parties to this Debenture hereby waive presentment, dishonor, notice of dishonor
and protest. All parties hereto consent to, and Holder is hereby
expressly authorized to make, without notice, any and all renewals, extensions,
modifications or waivers of the time for or the terms of payment of any sum
or
sums due hereunder, or under any documents or instruments relating to or
securing this Debenture, or of the performance of any covenants, conditions
or
agreements hereof or thereof or the taking or release of collateral securing
this Debenture. Any such action taken by Holder shall not discharge
the liability of any party to this Debenture.
(d) This
Debenture shall be governed by and construed in accordance with the laws
of the
state of California without regard to conflict of law principles.
(e) All
payments due and owing under this Debenture shall be delivered to the
following:
[name
of holder]
[address
of holder]
[city,
state, ZIP]
IN
WITNESS WHEREOF, the parties hereto execute this Convertible Debenture as
of
this ____ day of_______, 2007.
Maker: SARS,
Corporation
____________________________
By:
Xxxxxxx X. Xxxxxxx
Its: Chief
Executive
Officer
|
Holder:
[name]
Holder’s
address: [address]
[city,
state, ZIP]
|
|
|
Maker’s
address: SARS,
Corporation
Attn:
Xxxxxxx X.
Xxxxxxx
000
000xx
Xxxxxx XX, 00xx
Xxxxx
Xxxxxxxx,
XX 00000 XXX
|
With
a copy
to: The
Xxxx Law Group, PLLC
Attn:
Xxxxx X. Xxxx
000
Xxxxx Xxxxxx, Xxxxx
0000
Xxxxxxx,
XX 00000
XXX
|
_________,
2007
SARS
Corporation
000
000xx Xxxxxx
XX, 00xx
Xxxxx
Xxxxxxxx,
XX 00000 XXX
Attention:
Xxxxxxx X. Xxxxxxx
RE: SARS,
Corporation (the “Company”) Convertible Debenture
Dear
Xx.
Xxxxxxx:
I,
________________________, am the
holder of convertible debenture #___ of the Company, issued on ______________,
200__ for $____________ (the “Debenture”). The original Debenture is
enclosed and attached hereto. Subject to Section 8 of the Debenture,
I wish to convert the entire principal and any accrued interest into such
number
of shares of the Company’s common stock as determined pursuant to Section 7 of
the Debenture. I understand that by converting the Debenture into common
stock,
no further payments shall thereafter accrue or owe under the
Debenture.
Once
the Debenture is converted into
common stock of the Company, please direct the Company’s transfer agent to
submit the stock certificates to the following street address:
_____________________
_____________________
_____________________
_____________________
Phone:
_______________
Please
do not hesitate to contact me at
the above referenced phone number if you need further
assistance. Thank you for your time.
Sincerely,
_____________________
Enclosure
Exhibit
B
Operating
Agreement
[the
Operating Agreement appears on the following pages]Exhibit
C
Licensing
Agreement
[the
Licensing Agreement appears on the following pages]Schedule
1.1
List
of Assets
|
Fixed
asset register - equipment (depn @ 20% sl pa)
|
|
|
Details
|
Acqn
date
|
|
Kingswood
software
|
28/02/98
|
|
Inmac
cables
|
31/05/98
|
|
Aurora-2
PCs
|
31/05/98
|
|
Compaq
cpmpr equip(NIIB)
|
31/08/98
|
|
Tracking
system (ex PMH)
|
31/08/98
|
|
Equip-Computer
Workbench
|
31/08/98
|
|
Equipment
- visa
|
30/09/98
|
|
Equip-Micro
Warehouse
|
30/09/98
|
|
Equip-Digital
Workshop
|
31/10/98
|
|
Equipment-visa
|
30/11/98
|
|
Inmac-compr
equip
|
31/12/98
|
|
Inmac-compr
equip
|
31/12/98
|
|
Inmac-compr
equip
|
31/12/98
|
|
Equip-Micro
Warehouse
|
31/12/98
|
|
Equip-Micro
Warehouse
|
31/01/99
|
|
Mapinfo
|
28/02/99
|
|
MapExtreme-4
PCs (NIIB)
|
28/02/99
|
|
Inmac-hardware
upgrades
|
31/05/99
|
|
CPC-fax
machine
|
31/05/99
|
|
CPC
file holder
|
31/05/99
|
|
Phone
socket
|
31/05/99
|
|
M
Xxxxx-phone
|
31/05/99
|
|
Sundry
equipment
|
31/05/99
|
|
Colour
laserjet printer
|
31/07/99
|
|
BT
phones
|
31/07/99
|
|
RS
- drill
|
31/08/99
|
|
RS
- drill set
|
31/08/99
|
|
15"
monitor
|
31/08/99
|
|
Router
|
15/09/99
|
|
Osciliscope
|
26/10/99
|
|
Label
machine
|
05/11/99
|
|
Wavecomm
modems
|
10/11/99
|
|
Photocopier
|
16/11/99
|
|
SX3
computer equipment
|
16/11/99
|
|
Mobile
tech equip
|
29/11/99
|
|
Mobile
phones
|
10/12/99
|
|
Soldering
station
|
14/12/99
|
|
Mobile
phone
|
14/12/99
|
|
Cisco
1600 PS
|
06/01/00
|
|
Mobile
phone
|
19/01/00
|
|
RS
232 cable
|
16/02/00
|
|
Nokia
phone
|
17/02/00
|
|
Nokia
phone
|
26/02/00
|
|
SX3
computer equipment
|
06/03/00
|
|
Sony
Vaio laptop
|
08/03/00
|
|
Antenna
tester
|
10/03/00
|
|
Remote
mouse
|
21/03/00
|
|
2
X
compiuters
|
27/03/00
|
|
Ladders
|
05/04/00
|
|
Socket
set
|
05/04/00
|
|
Capture
board
|
14/04/00
|
|
Dual
speed hub
|
14/04/00
|
|
Tapered
hole cutter
|
09/05/00
|
|
Computer
|
17/05/00
|
|
Server
cabinet
|
23/05/00
|
|
B&Q
equipment
|
29/05/00
|
|
Computer
|
30/06/00
|
|
Xxxxxx
|
05/07/00
|
|
Gateway
PC
|
07/08/00
|
|
GDC
boundary data
|
08/08/00
|
|
56k
modem
|
24/08/00
|
|
Monitor
|
12/10/00
|
|
Gate
pendants
|
17/11/00
|
|
Calculators
|
30/11/00
|
|
Dell
PCs x 2
|
19/12/00
|
|
HP
Scanjet
|
27/01/01
|
|
Computer
(2nd hand)
|
02/02/01
|
|
Budget
DIY equip
|
06/02/01
|
|
Clickman
|
09/02/01
|
|
Heatgun
|
14/02/01
|
|
Computer
equip
|
15/01/00
|
|
Antenna
x 3
|
23/03/00
|
|
PC
|
09/03/00
|
|
Coldfusion
software
|
29/03/00
|
|
Equipment
|
30/04/00
|
|
Scanner
|
31/03/01
|
|
10GB
hard disk
|
30/04/01
|
|
Steam
cleaner
|
30/04/01
|
|
20GB
HDD
|
31/05/01
|
|
10GB
hard disk
|
30/06/01
|
|
Compaq
server/instn
|
30/09/01
|
|
2
display systems
|
30/11/01
|
|
Fax/printer
|
30/11/01
|
|
Answerphone
|
30/11/01
|
|
Adaptor
cards
|
31/01/02
|
|
Laptop
|
07/06/02
|
|
Spider
engineer-equip
|
30/05/02
|
|
Phones
|
30/05/02
|
|
Credit
card-sundry equip
|
31/08/02
|
|
Computer
mouse ps2
|
16/09/02
|
|
Multimeter
|
30/09/02
|
|
Iomega
software
|
04/10/02
|
|
UPS
for server
|
14/10/02
|
|
Phones
*2
|
15/10/02
|
|
Solder
irons
|
01/11/02
|
|
Cables
and adapter
|
15/11/02
|
|
Laptops
*3
|
19/12/02
|
|
17"
monitors x 2
|
22/09/03
|
|
Phone
upgrade
|
29/10/03
|
|
Car
phone adaptor
|
30/09/03
|
|
Rechargeable
spotlight
|
14/11/03
|
|
Sundry
equipment
|
27/02/04
|
|
Laptop
|
04/04/03
|
|
Comb
binder
|
12/06/03
|
|
Backup
machine
|
30/04/04
|
|
Mobile
phones and accessories
|
05/05/04
|
|
Drills
and accessories
|
25/06/04
|
|
OKI
printer
|
13/01/05
|
|
Sundry
equipment
|
28/02/05
|
|
Ladder
|
25/03/05
|
|
Nokia
phone kits
|
16/06/05
|
|
Linux
server IBM 346
|
08/08/05
|
|
B4250
printer
|
01/03/05
|
|
IBM
Server
|
08/01/07
|
|
Uninterrupted
power supply
|
08/01/07
|
|
Laptop
computer (2)
|
08/01/07
|
|
Fixed
asset register - fixtures and fittings (depn @ 20% sl
pa)
|
|
|
Details
|
Acqn
date
|
|
Fiesta
blinds
|
07/05/99
|
|
CPC
operators chairs
|
31/05/99
|
|
ADT
intruder alarm system
|
28/05/99
|
|
Graphix-signs
|
14/06/99
|
|
CPC
conf room chairs
|
15/06/99
|
|
CPC
operators chairs
|
16/06/99
|
|
Fridge
|
04/08/99
|
|
World
map
|
06/09/99
|
|
Stands
|
13/12/99
|
|
Shelving
|
21/12/99
|
|
Desks
|
28/04/00
|
|
Desks
|
01/05/00
|
|
Chairs
and bookshelves
|
29/06/00
|
|
Exhibition
stands
|
22/11/99
|
|
NOBO
board
|
27/04/00
|
|
Filing
cabinet
|
28/01/00
|
|
Display
equipment
|
31/03/01
|
|
Filing
cabinet
|
31/05/01
|
|
Fireproof
safe
|
31/05/01
|
|
External
ashtrays x 2
|
31/12/01
|
|
Gate
automation system
|
18/10/02
|
|
Storage
bins
|
19/06/02
|
|
Operator
chair
|
23/09/02
|
|
Armchairs
x 2
|
11/04/03
|
|
Fan
Heaters x 2
|
23/11/05
|
|
Fixed
asset register - motor vehicles (depn @ 25% sl
pa)
|
|
|
Details
|
Acqn
date
|
|
Fiat
Brava-KUI 4809
|
06/03/00
|
|
BMW
C1-KUI 7002
|
27/11/00
|
|
Reg
no KUI 2222
|
31/03/01
|
|
Fixed
asset register - premises expenditure (depn @ 2% sl
pa)
|
|
|
Details
|
Acqn
date
|
|
Building
work (X'Xxxxx Bros)
|
31/05/99
|
|
Renovations
(X'Xxxxx Bros)
|
01/10/02
|
Schedule
1.1 Continued
Assumed
Accounts Receivable
[to
be attached hereto on or before the Closing Date]
[Shall
also include financial statements through September 30, 2007, of which shall
include, but is not limited to, (i) balance sheet, (ii) profit and loss
statement and (iii) detailed inventory schedule]
Schedule
1.2
List
of Employees
|
|
Forename
|
Dept
|
|
Surname
|
||
|
Xxxxxxx
|
Xxxxxxxx
|
Admin
|
|
Xxxxxxx
|
Xxxxxx
|
Directors
- 7001
|
|
Xxxxxxx
|
Xxxx
Xxxxxx
|
Sales/Marketing
- 6001
|
|
Xxxxxxxx
|
Xxxxxxx
|
Sales/Marketing
- 6001
|
|
Xxxxx
|
Xxxxx
|
Development
Engineers - 7003
|
|
Xxxxx
|
Xxxxxx
|
Productive
- 6000
|
|
Xxxxxxxxx
|
Xxxxxx
|
Development
Engineers - 7003
|
|
Xxxxxx
|
Xxxxxxxxxxx
|
Development
Engineers - 7003
|
|
Xxxxx
|
Xxxxxx
|
Web
Design - 7003
|
|
XxXxxxxxx
|
Xxxxx
|
Directors
- 7001
|
|
*XxXxxxxxx
|
Xxxx
Xxxxx
|
Web
Design - 7003
|
|
Xxxxx
|
Xxxx
Xxxxxx
|
Productive
- 6000
|
|
Xxxxxxxx
|
Xxxxx
|
Web
Design - 7003
|
|
Strawhorne
|
Xxxx
Xxxxxx
|
Development
Engineers - 7003
|
|
Thomson
|
Xxxxxx
Xxxxx
|
Productive
- 6000
|
|
**Xxxxxx
|
Xxxx
|
Development
Engineers - 7003
|
*Xx.
XxXxxxxxx was hired as a summer intern after February 7, 2007 but is no
longer
on the payroll.
**Xx.
Xxxxxx was engaged after February 7, 2007 but has since resigned his
position.
Schedule
1.3
List
of Contracts
|
Contract
No.
|
Parties
|
Date
|
||
|
LPG-06-TELE-29
|
BP
International, Ltd.
|
and
|
Andronics,
Ltd.
|
9/18/2006
|
[British
Petroleum Novation (original contract referenced above) shall be attached
hereto
on or before the Closing Date]
Schedule
1.4
List
of Intellectual Property
|
Intellectual
Property
|
Book
Value
|
|
Software
Development for internal proprietary asset-tracking
system
|
$1,550,300
|
|
LEOCATE,
Trade Xxxx No. 2232925
|
|
|
UTILITY-EYE,
Trade Xxxx No. 003292687
|
|
|
Andronics,
Ltd. trade name
|
|
|
Andronics,
Ltd. logo
|
|
Schedule
1.5
List
of Goodwill
|
Goodwill
|
|
|
All
Andronics, Ltd. customers and recurring
revenue,including:
|
|
|
Quinns
– Leocate
|
|
|
CSL
– Fixed sites
|
|
|
BP
– LPG Product
|
|
Schedule
3
Assumed
Liabilities
(including
Excluded Liabilities)
[Waiting
on current schedule of assumed and excluded liabilities from SARS and Accounts
Payable, Assumed and Excluded Liabilities and Accounts Payable shall be attached
hereto on or before the Closing Date]
Schedule
4.2
Convertible
Debenture Holders
|
Principal
Amount:
|
Holder:
|
|
Four
Hundred Eighty-Nine Thousand United States Dollars ($489,000
USD)
|
Xxxxxxx
Xxxxxxx
|
|
Xxx
Xxxxxxx Xxxxx Xxxxxxxx Xxxxxx Xxxxxx Dollars ($150,000
USD)
|
Xxxxxx
Xxxxx
|
|
Thirteen
Thousand United States Dollars ($13,000 USD)
|
Vehicle
Services (Xxxxxx Xxxxxxxx)
|
|
Seventy
Thousand United States Dollars ($70,000 USD)
|
Invest
Northern Ireland
|
Schedule
4.6.2
Revenue
Projection Schedule for Xxxxxxx Quarterly Options
|
Quarter
1
|
Quarter
2
|
Quarter
3
|
Quarter
4
|
|
$500,000
USD
|
$1,000,000
USD
|
$1,150,000
USD
|
$1,350,000
USD
|
[Supporting
documentation to follow,
shall
be included in document on or before Closing Date]
Schedule
9.3.2
Schedule
of Promissory Notes
|
Date
of Promissory Note:
|
Promissory
Note Number:
|
Principal
Amount of Promissory Note:
|
|
12/19/06
|
#1
|
$16,045.00
|
|
2/16/07
|
#2
|
$23,000.00
|
|
2/16/07
|
#3
|
$2,292.00
|
|
3/2/07
|
#4
|
$10,000.00
|
|
3/26/07
|
#5
|
$21,772.18
|
|
4/26/07
|
#6
|
$40,000.00
|
|
5/1/07
|
#7
|
$44,720.00
|
|
5/11/07
|
#8
|
$27,105.00
|
|
5/3/07
|
#9
|
$69,689.82
|
|
5/8/07
|
#9
|
-$34,694.20
|
|
5/10/07
|
#9
|
-$35,031.62
|
|
5/25/07
|
#10
|
$16,000.00
|
|
6/19/07
|
#11
|
$507.00
|
|
6/22/07
|
#12
|
$3,127.19
|
|
6/26/07
|
#13
|
$893.00
|
|
6/26/07
|
#14
|
$43,025.72
|
|
6/29/07
|
#15
|
$34,000.00
|
|
7/19/07
|
#16
|
$35,880.00
|
|
7/20/07
|
#17
|
$1,585.51
|
|
7/31/07
|
#18
|
$45,955.88
|
|
7/31/07
|
#19
|
$20,000.00
|
|
7/31/07
|
#20
|
$4,676.00
|
|
8/6/07
|
#21
|
$43,141.00
|
|
9/30/07
|
#22
|
$38,156.65
|
|
9/30/07
|
#23
|
$8,015.00
|
|
9/30/07
|
#24
|
$83,650.00
|
|
9/21/07
|
#25
|
$42,757.79
|
|
9/30/07
|
#26
|
$16,980.00
|
|
9/30/07
|
#27
|
$59,150.00
|
|
Total:
|
$682,398.92
|
