ASSET PURCHASE AGREEMENT
BY AND BETWEEN
I.Q. BIOMETRIX CALIFORNIA, INC.
AND
CISYSTEMS, INC.
November 12, 2001
TABLE OF CONTENTS
(continued)
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TABLE OF CONTENTS
Page
ARTICLE I THE ACQUISITION......................................................1
1.1 Purchase of Assets...........................................1
1.2 Consideration................................................1
1.3 Closing......................................................2
ARTICLE II REPRESENTATIONS AND WARRANTIES OF SELLER............................2
2.1 Authority; Consents.........................................2
ARTICLE III REPRESENTATIONS AND WARRANTIES OF BUYER............................3
3.1 Organization, Standing and Power.............................3
3.2 Authority; Consents.........................................3
ARTICLE IV CONDITIONS TO THE ACQUISITION.......................................4
4.1 Conditions to Obligations of Seller..........................4
4.2 Conditions to the Obligations of Buyer.......................4
ARTICLE V GENERAL PROVISIONS...................................................5
5.1 Notices......................................................5
5.2 Counterparts.................................................5
5.3 Entire Agreement.............................................6
5.4 Amendment....................................................6
5.5 Expenses.....................................................6
5.6 Severability.................................................6
5.7 Other Remedies...............................................6
5.8 Governing Law................................................6
5.9 Rules of Construction........................................6
5.10 Facsimile....................................................6
EXHIBITS
Exhibit A.........Form of Common Stock Purchase Agreement
Exhibit B.........Xxxxx X. Xxxxxxxx Advisory Agreement
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ASSET PURCHASE AGREEMENT
This ASSET PURCHASE AGREEMENT (the "Agreement") is made and entered into
as of November 12, 2001 by and between I.Q. Biometrix California, Inc., a
California corporation ("Buyer"), and CISystems, Inc., a Delaware corporation
(the "Seller").
RECITALS
WHEREAS, the Boards of Directors of each the Seller and Buyer believe
it is in the best interests of each company and their respective shareholders
that Buyer acquire the assets set forth on Exhibit A (the "Acquisition").
NOW, THEREFORE, in consideration of the covenants, promises and
representations set forth herein, and for other good and valuable consideration,
the parties agree as follows:
ARTICLE I.........
THE ACQUISITION
1.1 Purchase of Assets.
(a) Purchase and Sale of Assets. On the terms and subject to the conditions set
forth in this Agreement, Seller will sell, convey, transfer, assign and
deliver to Buyer and Buyer will purchase and acquire from Seller on the
Closing Date (as defined below), all of Seller's right, title and interest
in all the assets of the Seller (the "Assets") free and clear of all liens,
pledges, charges, claims, security interests or other encumbrances of any
sort (collectively, the "Liens). SELLER EXPRESSLY DISCLAIMS ANY AND ALL
WARRANTIES, EXPRESS OR IMPLIED, INCLUDING WARRANTIES OF MERCHANTABILITY AND
FITNESS FOR A PARTICULAR PURPOSE, WITH RESPECT TO THE ASSETS.
(b) Assumption of Liabilities. Buyer shall not assume any liabilities or
obligations of Seller. Without limiting the foregoing, it is expressly
agreed that Buyer shall not assume any liabilities for employment, income,
sales, property or other taxes incurred or accrued by Seller prior to the
Closing Date. Buyer expressly is not assuming any obligations or
liabilities, whether accrued, absolute, contingent, matured, unmatured or
other, of Seller.
1.2 Consideration. Subject to the conditions set forth in this Agreement, at the
Closing (as defined below), as full payment for the transfer of the Assets by
Seller to Buyer, Buyer shall (i) execute and deliver the Common Stock Purchase
Agreement in substantially the form attached hereto as Exhibit A, (the "Stock
Purchase Agreement") and issue to Seller or its designee fully-paid,
nonassessable shares of Common Stock of the Company as called for by the Stock
Purchase Agreement; and (ii) execute and deliver the Xxxxx X. Xxxxxxxx Advisory
Agreement in substantially the form attached hereto as Exhibit B (the "Xxxxxxxx
Agreement").
Closing.
(a) Closing. The closing of the transactions contemplated by this Agreement
(the "Closing") shall be held at the offices of I.Q. Biometrix California, Inc.,
0000 Xxxxxx Xxx., Xxxxx X, Xxxxxx, Xxxxxxxxxx 00000 on November 12, 2001 or at
such other date, time and place upon which Buyer and Seller shall agree (the "
Closing Date").
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(b) Delivery. At the Closing:
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(i) Buyer and Seller shall deliver or cause to be delivered to one another the
Stock Purchase Agreement and the Xxxxxxxx Advisory Agreement. (ii) Buyer will
deliver or cause to be delivered to Seller a certificate or certificates,
registered in the name of Seller or its designee, representing the number of
shares of Common Stock of Buyer as required by the terms of the Common Stock
Purchase Agreement; and (iii) Seller and Buyer shall deliver or cause to be
delivered to one another such other instruments and documents necessary or
appropriate to evidence the due execution, delivery and performance of this
Agreement and the other Agreements referred to above.
(c) Taking of Necessary Action; Further Action. If, at any time after the
Closing Date, any further action is necessary or desirable to carry out the
purposes of this Agreement and to vest Buyer with full right, title and
possession to the Assets, the officers and directors of Seller are fully
authorized in the name Seller or otherwise to take, and will take, all such
lawful and necessary and/or desirable action.
ARTICLE II
REPRESENTATIONS AND WARRANTIES OF SELLER
Seller represents and warrants to Buyer as follows:
2.1 Authority; Consents. Seller has all requisite corporate power and authority
to enter into this Agreement and to which they are a party and to consummate the
transactions contemplated hereby. The execution and delivery of this Agreement
and the consummation of the transactions contemplated hereby (including the
exhibits to the Agreement) have been duly authorized by all necessary corporate
action on the part of Seller and no further action is required on the part of
Seller to authorize the Agreement and the transactions contemplated hereby. This
Agreement has been duly executed and delivered by Seller and constitutes the
valid and binding obligation of Seller, enforceable against each party in
accordance with its terms, except as such enforceability may be limited by
bankruptcy and similar laws and general principles of equity. The execution and
delivery of this Agreement by Seller does not, and, as of the Closing, the
consummation of the transactions contemplated hereby (including the exhibits to
the Agreement) will not, materially conflict with, or result in any material
violation of, or material default under (with or without notice or lapse of
time, or both), or give rise to a right of termination, cancellation or
acceleration of any obligation or loss of any benefit under (i) any provision of
the Certificate of Incorporation or Bylaws of Seller or (ii) any mortgage,
indenture, material lease, material contract or other material agreement or
other instrument, permit, concession, franchise, material license, judgment,
order, decree, statute, law, ordinance, rule or regulation applicable to Seller
or their respective properties or assets. No consent, waiver, approval, order or
authorization of, or registration, declaration or filing with, any court,
administrative agency or commission or other federal, state, county, local or
foreign governmental authority, instrumentality, agency or Commission having
jurisdiction over Seller ("Governmental Entity") or any third party, is required
by or with respect to Seller in connection with the execution and delivery of
this Agreement or the consummation of the transactions contemplated hereby.
ARTICLE III
REPRESENTATIONS AND WARRANTIES OF BUYER
Buyer represents and warrants to Seller as follows:
3.1 Organization, Standing and Power. Buyer is a corporation duly organized,
validly existing and in good standing under the laws of the State of California.
Buyer has all corporate power to own its properties and to carry on its business
as now being conducted and is duly qualified to do business and is in good
standing in each jurisdiction in which the failure to be so qualified would have
a material adverse effect on the ability of it to consummate the transactions
contemplated hereby.
3.2 Authority; Consents. Buyer has all requisite corporate power and authority
to enter into this Agreement and to consummate the transactions contemplated
hereby. The execution and delivery of this Agreement and the consummation of the
transactions contemplated hereby (including the exhibits to the Agreement) have
been duly authorized by all necessary corporate action on the part of Buyer and
no further action is required on the part of the Buyer to authorize the
Agreement and the transactions contemplated hereby. This Agreement has been duly
executed and delivered by Buyer and constitutes the valid and binding obligation
of Buyer, enforceable in accordance with its terms except as such enforceability
may be limited by bankruptcy or similar laws and general principles of equity.
The execution and delivery of this Agreement by Buyer does not, and, as of the
Closing, the consummation of the transactions contemplated hereby (including the
exhibits to the Agreement) will not, materially conflict with, or result in any
material violation of, or material default under (with or without notice or
lapse of time, or both), or give rise to a right of termination, cancellation or
acceleration of any obligation or loss of any benefit under (i) any provision of
the Certificate of Incorporation or Bylaws of the Buyer or (ii) any mortgage,
indenture, material lease, material contract or other material agreement or
other instrument, permit, concession, franchise, material license, judgment,
order, decree, statute, law, ordinance, rule or regulation applicable to Buyer
or its properties or assets. No consent, waiver, approval, order or
authorization of, or registration, declaration or filing with any court,
administrative agency or commission or other federal, state, county, local or
foreign governmental authority, instrumentality, agency or Commission having
jurisdiction over Buyer is required by or with respect to Buyer in connection
with the execution and delivery of this Agreement or the consummation of the
transactions contemplated hereby (including the exhibits to the Agreement).
ARTICLE IV
CONDITIONS TO THE ACQUISITION
4.1 Conditions to Obligations of Seller. The obligations of Seller to
consummate and effect this Agreement and the transactions contemplated hereby
shall be subject to the satisfaction at or prior to the Closing Date of
each of the following conditions, any of which may be waived, in writing,
exclusively by Seller:
(a) Representations, Warranties and Covenants. The representations and
warranties of Buyer in this Agreement shall be true and correct in all
material respects on and as of the Closing Date as though such
representations and warranties were made on and as of such time and Buyer
shall have performed and complied with all covenants, obligations and
conditions of this Agreement in all material respects required to be
performed and complied with by it as of the Closing Date.
(b) Delivery. The Buyer shall have executed and delivered to Seller all
documents and instruments specified in Section 1.3.
(c) Legal Matters. All material matters of a legal nature which pertain to
this Agreement and the transactions contemplated hereby shall have been
approved by counsel to the Seller.
4.2 Conditions to the Obligations of Buyer. The obligations of Buyer to
consummate and effect this Agreement and the transactions contemplated hereby
shall be subject to the satisfaction at or prior to the Closing Date of each of
the following conditions, any of which may be waived, in writing, exclusively by
Buyer:
(a) Representations, Warranties and Covenants. The representations and
warranties of Seller in this Agreement shall be true and correct in all
material respects on and as of the Closing Date as though such
representations and warranties were made on and as of such time and Seller
shall have performed and complied with all covenants, obligations and
conditions of this Agreement in all material respects required to be
performed and complied with by it as of the Closing Date.
(b) Delivery. The Seller shall have executed and delivered to Buyer all
documents and instruments specified in Section 1.3.
(c) Legal Matters. All material matters of a legal nature which pertain to this
Agreement and the transactions contemplated hereby shall have been approved
by counsel to the Buyer.
ARTICLE V
GENERAL PROVISIONS
5.1 Notices. All notices and other communications hereunder shall be in writing
and shall be deemed given if delivered personally or by commercial delivery
service, or mailed by registered or certified mail (return receipt requested) or
sent via telecopy (with acknowledgment of complete transmission) to the parties
at the following addresses (or at such other address for a party as shall be
specified by like notice): (a) if to Buyer, to:
I.Q. Biometrix California
000 Xxxxxx Xxx., Xxxxx X
Xxxxxx, Xxxxxxxxxx 00000
Attention: Xxxxxx Xxxx
Telephone No.: (000) 000-0000
with a copy to:
Case X. Xxxxxxxx
0000 X. Xxxx Xxx., #000
Xxxxxx, Xxxxxxxxxx 00000
Telephone No.: (000) 000-0000
(b) if to Seller, to:
CISystems, Inc.
00000 Xx Xxxx Xxxx, #000
Xxxxxxxxx, Xxxxxxxxxx 00000
Attn: Xxxx X. XxXxxx
Telephone No.: (000) 000-0000
5.2 Counterparts. This Agreement may be executed in one or more counterparts,
all of which shall be considered one and the same agreement and shall become
effective when one or more counterparts have been signed by each of the parties
and delivered to the other party, it being understood that all parties need not
sign the same counterpart.
5.3 Entire Agreement. This Agreement and the exhibits hereto: (a) constitute the
entire agreement among the parties with respect to the subject matter hereof and
supersede all prior agreements and understandings, both written and oral, among
the parties with respect to the subject matter hereof; (b) are not intended to
confer upon any other person any rights or remedies hereunder, unless expressly
provided otherwise; and (c) shall not be assigned by operation of law or
otherwise except as otherwise specifically provided. 5.4 Amendment. This
Agreement may be amended by the parties hereto at any time by execution of an
instrument in writing signed on behalf of each of the parties hereto.
5.5 Expenses. Whether or not the Acquisition is consummated, all fees and
expenses incurred in connection with the Acquisition shall be the obligation of
the respective party incurring such fees and expenses. 5.6 Severability. In the
event that any provision of this Agreement or the application thereof, becomes
or is declared by a court of competent jurisdiction to be illegal, void or
unenforceable, the remainder of this Agreement will continue in full force and
effect and the application of such provision to other persons or circumstances
will be interpreted so as reasonably to effect the intent of the parties hereto.
The parties further agree to replace such void or unenforceable provision of
this Agreement with a valid and enforceable provision that will achieve, to the
extent possible, the economic, business and other purposes of such void or
unenforceable provision.
5.7 Other Remedies. Except as otherwise provided herein, any and all remedies
herein expressly conferred upon a party will be deemed cumulative with and not
exclusive of any other remedy conferred hereby, or by law or equity upon such
party, and the exercise by a party of any one remedy will not preclude the
exercise of any other remedy.
5.8 Governing Law. This Agreement shall be governed by and construed in
accordance with the laws of the State of Delaware, regardless of the laws that
might otherwise govern under applicable principles of conflicts of laws thereof.
5.9 Rules of Construction. The parties hereto agree that they have been
represented by counsel during the negotiation and execution of this Agreement
and, therefore, waive the application of any law, regulation, holding or rule of
construction providing that ambiguities in an agreement or other document will
be construed against the party drafting such agreement or document.
5.10 Facsimile. This Agreement may be executed via facsimile.
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IN WITNESS WHEREOF, Buyer and Seller have caused this Agreement to be
signed by their duly authorized respective officers, all as of the date first
written above.
BUYER: I.Q. BIOMETRIX CALIFORNIA, INC.
By:
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Name: Xxxxxx Xxxxxxxxx
Title: Executive Vice President
SELLER: CISYSTEMS, INC.
By:
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Name: Xxxx X. XxXxxx
Title: Chairman
EXHIBIT A
COMMON STOCK PURCHASE AGREEMENT
EXHIBIT B
Xxxxx X. Xxxxxxxx Advisory Agreement
