ASSET PURCHASE AGREEMENT
BY
AND BETWEEN
JINKHOLD,
LTD.
A
United Kingdom Corporation
▇▇
▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇
#06286236
(Purchaser)
And
ANDRONICS,
LTD.
A
Northern Ireland Corporation
▇▇
▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇▇▇▇,
▇▇▇▇ ▇▇▇
#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 ▇▇▇▇▇▇ ▇▇▇▇▇▇▇, an individual residing in Northern Ireland
and a founder of Andronics (“▇▇▇▇▇▇▇”). Jinkhold,
Andronics and ▇▇▇▇▇▇▇ 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
▇▇▇▇ 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 ▇▇▇▇▇▇ ▇▇▇▇▇▇▇. 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
▇▇▇▇▇▇▇
Monthly Options, defined in Section 4.6; second, by one (1) share of unvested
▇▇▇▇▇▇▇ Quarterly Options, defined in Section 4.6; and third, by one (1)
Convertible Debenture, defined in ▇▇▇▇▇▇▇ ▇.▇, ▇▇▇▇▇▇ ▇▇▇▇▇▇ 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 ▇▇▇▇▇▇-▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇
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 ▇▇▇ ▇▇▇▇ 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.
|
8.6
|
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:
|
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 ▇▇▇▇ 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:
|
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.
|
|
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.
|
|
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.
|
|
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.
|
|
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.
|
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 ▇▇▇ ▇▇▇▇ is brought into force) Companies ▇▇▇
▇▇▇▇. 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 ▇▇▇ ▇▇▇▇ (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 ▇▇▇▇▇▇ and ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇ for
the lease of the property consisting of the current Andronics offices, located
at ▇▇▇▇ ▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇, Springtown Industrial Estate, ▇▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇
▇▇▇▇▇▇▇ ▇▇▇▇ ▇▇▇. 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
▇▇▇▇▇▇ ▇▇▇▇▇▇▇ in connection with the Six Hundred Fifty Thousand Pound (£650,000
GBP) personal guarantee made for the benefit of Andronics. At the
Closing, ▇▇▇▇▇▇ ▇▇▇▇▇▇▇ shall be appointed to the advisory board of Secure
Asset
Reporting Services, Inc. ▇▇. ▇▇▇▇▇▇▇ 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, ▇▇▇▇▇▇ ▇▇▇▇▇▇▇ 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 “▇▇▇▇▇▇▇
Options”). The ▇▇▇▇▇▇▇ 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 ▇▇▇▇▇▇▇ 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 (
“▇▇▇▇▇▇▇ 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 “▇▇▇▇▇▇▇ Quarterly Options.”
▇▇▇▇▇▇
▇▇▇▇▇▇▇ 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 ▇▇▇▇▇▇▇ Options or as the result of
the
acquisition, holding or disposal of SARS Common Stock by ▇▇.
▇▇▇▇▇▇▇. In connection therewith, ▇▇. ▇▇▇▇▇▇▇ and the Purchaser agree
that:
(i) if
so requested by the Purchaser at any time after the Closing Date, ▇▇. ▇▇▇▇▇▇▇
shall enter into an election under Section 431 of the Income Tax (Earnings
and
▇▇▇▇▇▇▇▇) ▇▇▇ ▇▇▇▇ in respect of any SARS Common Stock acquired by ▇▇. ▇▇▇▇▇▇▇
pursuant to the option; and
(ii) it
shall be a condition of the exercise of the ▇▇▇▇▇▇▇ Options that ▇▇. ▇▇▇▇▇▇▇
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
▇▇▇▇ Law Group, PLLC
Attn:
▇▇▇▇▇ ▇▇▇▇
▇▇▇
▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇,
▇▇ ▇▇▇▇▇
▇▇▇▇▇▇
▇▇▇▇▇▇
|
|
If
to Seller:
|
Andronics,
Ltd.
▇▇▇▇
▇▇ ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇
Springtown
Industrial Estate
Londonderry
Northern
Ireland
BT48
ONA
|
|
With
a Copy to:
|
▇▇▇▇▇▇
▇▇▇▇▇▇▇
▇ ▇▇▇▇▇▇
▇▇▇▇▇▇
▇▇▇▇▇▇▇▇▇▇▇
▇▇▇▇▇▇
▇▇▇▇▇▇▇▇▇▇▇
▇▇▇▇
▇▇▇
|
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: /s/
▇▇▇▇▇▇
▇▇▇▇▇▇▇
Name: ▇▇▇▇▇▇
▇▇▇▇▇▇▇
Title:
▇▇▇▇▇▇▇:
▇▇▇▇▇▇
▇▇▇▇▇▇▇
By: /s/
▇▇▇▇▇▇
▇▇▇▇▇▇▇
Name:
▇▇▇▇▇▇ ▇▇▇▇▇▇▇
|
|
Title:
|
PURCHASER:
JINKHOLD,
LTD.
By: /s/
▇▇▇▇▇▇▇
▇▇▇▇▇▇▇
Name:
▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇
|
|
Title:
Director
|
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 ▇▇▇▇▇▇▇ 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:
▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
Its: Chief
Executive
Officer
|
Holder:
[name]
Holder’s
address: [address]
[city,
state, ZIP]
|
|
|
Maker’s
address: SARS,
Corporation
Attn:
▇▇▇▇▇▇▇ ▇.
▇▇▇▇▇▇▇
▇▇▇
▇▇▇▇▇
▇▇▇▇▇▇ ▇▇, ▇▇▇▇
▇▇▇▇▇
▇▇▇▇▇▇▇▇,
▇▇ ▇▇▇▇▇ ▇▇▇
|
With
a copy
to: The
▇▇▇▇ Law Group, PLLC
Attn:
▇▇▇▇▇ ▇. ▇▇▇▇
▇▇▇
▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇
▇▇▇▇
▇▇▇▇▇▇▇,
▇▇ ▇▇▇▇▇
▇▇▇
|
_________,
2007
SARS
Corporation
▇▇▇
▇▇▇▇▇ ▇▇▇▇▇▇
▇▇, ▇▇▇▇
▇▇▇▇▇
▇▇▇▇▇▇▇▇,
▇▇ ▇▇▇▇▇ ▇▇▇
Attention:
▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
RE: SARS,
Corporation (the “Company”) Convertible Debenture
Dear
▇▇.
▇▇▇▇▇▇▇:
I,
________________________, am the
holder of convertible debenture #___ of the Company, issued on ______________,
200__ for $____________ (the “Debenture”). The original Debenture is
enclosed and attached hereto. Subject to Section 8 of the Debenture,
I wish to convert the entire principal and any accrued interest into such
number
of shares of the Company’s common stock as determined pursuant to Section 7 of
the Debenture. I understand that by converting the Debenture into common
stock,
no further payments shall thereafter accrue or owe under the
Debenture.
Once
the Debenture is converted into
common stock of the Company, please direct the Company’s transfer agent to
submit the stock certificates to the following street address:
_____________________
_____________________
_____________________
_____________________
Phone:
_______________
Please
do not hesitate to contact me at
the above referenced phone number if you need further
assistance. Thank you for your time.
Sincerely,
_____________________
Enclosure
Exhibit
B
Operating
Agreement
[the
Operating Agreement appears on the following pages]
OPERATING
AGREEMENT
THIS
OPERATING AGREEMENT (this “Agreement”) is entered into as of
this ___ day
of January, 2007 (the “Execution Date”), between Andronics,
Ltd. (“Andronics”), Veritas Solutions, Inc.
(“VSI”) and Secure Asset Reporting Services, Inc., a wholly
owned subsidiary of VSI (“SARS”). Collectively
referred to herein as the “Parties.”
W
I T N E
S S E T H:
WHEREAS,
Andronics is engaged in the business of offering global two-way data solutions
for monitoring and control of remote assets (the
“Services”);
WHEREAS,
VSI and SARS are contemplating the purchase of certain assets of Andronics
(the
“Asset Purchase”), a list of substantially all of these assets
is attached hereto as Exhibit A (the “Assets”), the
Assets are currently valued at ____________ Dollars ($________);
WHEREAS,
pursuant to and until that certain contemplated Asset Purchase occurs,
VSI,
through its subsidiary, SARS, would like to exclusively control, operate,
market, sell and manage the Assets of Andronics in accordance with the
terms and
conditions of this Agreement;
WHEREAS,
Andronics desires to engage VSI and SARS to allow VSI and SARS to exclusively
control, operate, market, sell and manage the Assets of Andronics in accordance
with the terms and conditions of this Agreement;
WHEREAS,
SARS would like to obtain the consulting services of the individuals listed
on
Exhibit B (collectively referred to as the “Andronics
Consultants”);
WHEREAS,
the Andronics Consultants would like to provide consulting services to
SARS to
assist with the management and operation of the Services and Assets;
and
WHEREAS,
the Parties would like to acknowledge the operating expenses already paid
by VSI
and secure such expenses (listed below) with a promissory note (the
“Note”) in accordance with the terms and conditions of this
Agreement and the Note, a form of which is attached hereto as Exhibit
C.
NOW,
THEREFORE, in consideration of the foregoing and the mutual agreements
hereinafter set forth, the parties hereby agree as follows:
ARTICLE
I
PURPOSE;
EFFECTIVENESS
1.1 Purpose. The
primary purpose of the activities contemplated by this Agreement is to
provide
for the (i) exclusive control, operation, marketing, selling and management
of
the Assets by VSI and SARS, and (ii) to obtain the services of the Andronics
Consultants to manage the Assets and to provide the Services.
1.2 Effectiveness. This
Agreement shall become effective as of the December _____, 2006 (the
“Effective Date”).
1.3 Promissory
Note. As of Execution Date, VSI has provided Andronics
approximately Sixteen Thousand United States Dollars ($16,000) for operating
expenses and working capital needs. Andronics agrees to secure such
expenses with a promissory note, a form of which is attached hereto as
Exhibit C.
1.4 License
Agreement. As
of the Execution Date, the Parties shall have executed the License Agreement,
a
form of which is attached hereto as Exhibit D.
1.5 Asset
Purchase. VSI and SARS are contemplating effectuating an Asset
Purchase with Andronics, of the Assets owned by Andronics. The Assets are
currently valued at ____________ Dollars ($________) (the “Purchase
Price”).
(a) If
the Asset Purchase closes and becomes effective within six (6) of the Execution
Date of this Agreement, the Note amount (and any additional amended amounts
thereto) shall be applied against the Purchase Price and the Note shall
be
cancelled in its entirety.
ARTICLE
II
DESIGNATION
AS OPERATOR; NATURE OF AGREEMENT
2.1 Engagement. Andronics
hereby engages and grants to SARS the exclusive right to operate and control
the
Services for the term specified in Section 5, and SARS hereby agrees to
perform
the Operator Duties for such term, on the terms and conditions specified
in this
Agreement. The Operator Duties shall be carried out under the name of
VSI and SARS on behalf of Andronics and all revenue shall be attributed
to
VSI.
2.2 Relationship. This
Agreement is not intended to create, and shall not be deemed or treated
as
creating, a partnership, joint venture, employment contract or any other
relationship between the Parties other than the service relationship expressly
provided for in this Agreement. All commitments, obligations,
undertakings and liabilities associated with the Operator Duties shall
be
entered in the name of, and shall be the sole responsibility of SARS and
neither
party shall be authorized to enter into any commitment, obligation, undertaking
or liability in the name of, or on behalf of, the other party.
ARTICLE
III
PERSONNEL;
OPERATIONS; PERFORMANCE
3.1 Personnel.
(a) SARS
shall execute consulting services agreements with the Andronics Consultants
to
perform its obligations under this Agreement because they possess such
qualifications, knowledge and experience in the provision of the tasks
to which
they are assigned as would be required for comparable positions and tasks
in
competitive businesses. SARS shall provide appropriate training to
such personnel as and when required in order to facilitate the efficient
and
knowledgeable performance of services under this Agreement. SARS
shall monitor the performance of such personnel and shall take such action
as is
necessary to remedy promptly any deficiencies in such performance.
(b) The
Andronics Consultants shall render all services hereunder as an independent
contractor and shall not hold itself out as an agent of VSI or SARS. Nothing
herein shall be construed to create or confer upon the Andronics Consultants
the
right to make contracts or commitments for or on behalf of VSI or
SARS.
3.2 Operations
and Duties.
(a) Andronics
shall maintain (whether by acquisition or lease) suitable facilities and
equipment for the efficient and effective performance of operating the
Services
and Assets (the “Duties”). Such facilities and
equipment shall be kept in good working order, normal wear and tear
excepted.
(b) SARS
shall be responsible for all costs associated with the Duties.
3.3 Licenses,
Etc. The Andronics Consultants shall be responsible for obtaining
and maintaining (i) all licenses and permits required from any governmental
body
or agency for the performance of its services hereunder, and (ii) all licenses
or rights required from any third parties for the performance of its services
hereunder.
3.4 Insurance. The
Andronics Consultants shall obtain, and maintain during the term of this
Agreement, insurance for the Assets against such risks and in such amounts
as
are carried by similar businesses in similar circumstances.
3.5 Expenses. The
Parties shall be solely responsible for all expenses, obligations or commitments
incurred in connection with the performance of their respective obligations
under this Agreement.
3.6 Performance
Standards.
(a) Except
to the extent otherwise expressly provided, VSI and SARS shall, in the
performance of its obligations and duties under this Agreement, exercise
and use
a degree of care and skill that a similarly situated service provider would
exercise and use in providing services in similar circumstances.
(b) VSI
and SARS shall use reasonable commercial efforts to broaden the geographic
penetration of the Services.
3.7 Inspection
of Records. VSI and SARS may (i) at any time it reasonably
believes Andronics is in breach of any provision of this Agreement (in
which
case, it shall notify Operator in writing of such belief and the reasons
therefor) and (ii) once during any calendar year, request Andronics to,
and
Andronics shall, upon reasonable advance notice, permit employees, agents
or
representatives of VSI and SARS, during normal business hours, to review,
inspect and/or audit Andronics’ financial records and its operating procedures
relating to the performance of services under this
Agreement. Andronics shall cooperate and make available appropriate
personnel to assist representatives of VSI and SARS in inspecting or auditing
the books, records and facilities of Andronics, and Andronics will reasonably
cooperate with respect to any such audit or inspection.
ARTICLE
IV
FEES;
COMPENSATION
4.1 Fees. SARS
shall have the authority to, on behalf of Andronics, establish, revise
and
collect fees with respect to the Services.
4.2 Compensation. As
compensation for its services hereunder, VSI and SARS shall be entitled
to one
hundred percent (100%) of all gross revenue derived from providing and
operating
the Services and Assets.
4.3 Late
Payments. Any payment not made by a party when due under the
terms of the Note shall bear interest as the Default Rate (as defined in
the
Note) from the due date under this Agreement until paid.
ARTICLE
V
TERM;
TERMINATION AND EXTENSION
5.1 Term. This
Agreement shall continue in effect until (i) terminated by one (1) of the
parties pursuant to Section 5.2; (ii) the mutual written agreement of the
Parties; or (iii) the contemplated Asset Purchase closes and becomes
effective.
5.2 Termination.
(a) A
party may terminate this Agreement by notice to the other party in the
event
that: (i) the other party (the “Defaulting Party”) shall fail
to perform, or shall breach, any of its obligations set forth in this Agreement,
and such failure shall continue for thirty (30) days after written notice
thereof has been given to the Defaulting Party, or if the breach is not
capable
of cure within such thirty (30) days, reasonable efforts to cure have not
been
undertaken; or (ii) the other party (1) makes any general assignment for
the
benefit of creditors, (2) initiates or is the subject of a request to initiate
a
bankruptcy or insolvency proceeding under any provision of law, including
the
United States Bankruptcy Code, that is intended to liquidate or rehabilitate
such other party, and is not dismissed within sixty (60) days, (3) files,
or is
the subject of a filing (that is not dismissed within sixty (60) days)
with a
court of competent jurisdiction for the appointment of a receiver, guardian,
conservator or similar officer, or (4) is rendered or declared insolvent;
and a
termination hereunder shall be effective, if no cure has occurred thirty
days
after notice has been given to such other party.
(b) Upon
written notice to Andronics, VSI and SARS may terminate this Agreement
in the
event that the Asset Purchase fails to close within six (6) months of the
Execution Date.
5.3 Transition. In
the event that this Agreement is terminated by either party pursuant to
Section
5.2(a), either party may request an extension of this Agreement, and, if
mutually agreed upon, the Parties shall continue to perform hereunder at
the
requesting party’s sole cost and expense, for a period of up to six (6) months
from the otherwise effective date of termination in order to allow the
orderly
migration and transition of responsibilities.
5.4 Effect
of Termination. With the exception of Articles V, VII, VII and IX
of this Agreement, in the event that this Agreement is terminated, all
further
obligations of the Parties under this Agreement shall be terminated without
further liability of either party to the other.
ARTICLE
VI
CONFIDENTIALITY
6.1 Confidential
Information. Neither party will make any intellectual property,
documentation software, enhancements or know-how, trade secrets, procedures
and
methods, financial and operational information and other matters relating
to the
Assets and/or Services available, in any form, to any other person without
the
prior written consent of the other. The foregoing shall not restrict
a party with respect to information which (i) such party rightfully possessed
before it received such information from the other party as evidenced by
written
documentation; (ii) subsequently becomes publicly available through no
fault of
such party; (iii) is subsequently provided to such party by a third party
without restrictions on use or disclosure; (iv) is required to be disclosed
by
law; or (v) has become the sole property of the party making the
disclosure.
ARTICLE
VII
LIABILITY
AND INDEMNIFICATION
7.1 LIMITATION
OF
LIABILITY. IN
NO EVENT OR UNDER ANY CIRCUMSTANCES SHALL EITHER PARTY BE LIABLE TO THE
OTHER
PARTY FOR EXEMPLARY, PUNITIVE OR CONSEQUENTAL DAMAGES OF ANY KIND WHATSOEVER;
PROVIDED, HOWEVER, THAT THE FOREGOING LIMITATION SHALL NOT APPLY TO AN
INTENTIONAL OR WILLFUL BREACH OF THIS AGREEMENT.
7.2 Indemnification.
(a) Each
party shall indemnify and hold the other party and its officers, directors,
agents and employees harmless from and against any and all claims, demands,
actions, losses, liabilities, costs, expenses (including reasonable legal
fees
and expenses), suits and proceedings of any nature whatsoever arising from
the
gross negligence or willful misconduct of the indemnifying party that arise
out
of or are in any manner connected with its performance under this Agreement,
except to the extent such claim, demand, action, loss, liability, expense,
suit
or proceeding is attributable to the gross negligence, willful misconduct,
or
breach of this Agreement by, the party seeking indemnification
hereunder.
(b) VSI
and SARS shall indemnify and hold Andronics and its officers, directors,
agents
and employees harmless from and against any and all claims, demands, actions,
losses, liabilities, expenses (including reasonable legal fees and expenses),
suits and proceedings arising from VSI’s or SARS’
performance involving the Duties and/or the Services.
ARTICLE
VIII
DISPUTE
RESOLUTION
8.1 Dispute
Resolution. 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. If, after ten (10) days, the Parties are unsuccessful,
the Parties agree to mediate their dispute, with each Party appointing
one (1)
mediator to represent itself. If, after fifteen (15) days of the
mediation’s commencement, no resolution is reached, the Parties shall submit to
mandatory binding arbitration in any controversy or claim arising out of,
or
relating to, the Agreement or any breach hereof. Such arbitration
shall be conducted in accordance with the commercial arbitration rules
of the
American Arbitration Association in effect at that time, and the Parties
agree
to be bound by any judgment, determination or award rendered by the
arbitrator. The arbitrator is hereby authorized to award to the
prevailing party the costs (including reasonable attorneys’ fees and expenses)
of any such arbitration. The Parties further agree that any mediation
and arbitration meetings may be held via teleconference.
8.2 Recourse
to Courts and Other
Remedies. Notwithstanding
the Dispute resolution procedures contained in Sections 8.1, any party
may apply
to any court having jurisdiction (a) to enforce this agreement to arbitrate,
(b)
to seek provisional injunctive relief so as to maintain the status quo
until the
arbitration award is rendered or the Dispute is otherwise resolved, (c)
to avoid
the expiration of any applicable limitation period, (d) to preserve a superior
position with respect to other creditors or (e) to challenge or vacate
any final
judgment, award or decision of the Panel that does not comport with the
express
provisions of Section 8.2.
8.3 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.
ARTICLE
IX
MISCELLANEOUS
9.1 Notices. All
notices, requests, demands and other communications hereunder shall be
in
writing and shall be deemed to have been duly given and effective (a) upon
receipt, if delivered in person, by cable or by telegram, or (b) one (1)
business day after deposit prepaid with a global overnight express delivery
service:
If
to Andronics and/or the Andronics Consultants:
If
to VSI
or
SARS: Veritas
Solutions, Inc.
▇▇▇
▇▇▇▇▇ ▇▇▇▇▇▇
▇▇, ▇▇▇▇▇
▇▇▇▇
▇▇▇▇▇▇▇▇,
▇▇ ▇▇▇▇▇
Attn: ▇▇▇▇▇▇▇
▇▇▇▇▇▇▇
Fax: (▇▇▇)
▇▇▇-▇▇▇▇
with
a
copy
to: The
▇▇▇▇ Law Group, PLLC
▇▇▇
▇▇▇▇▇
▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇
▇▇▇▇▇▇▇,
▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attn: ▇▇▇▇▇
▇. ▇▇▇▇
Fax: (▇▇▇)
▇▇▇-▇▇▇▇
9.2 Amendments. This
Agreement may be amended or modified only by a dated written instrument
so
stating and executed by the Parties.
9.3 Counterparts. This
Agreement may be executed in any number of counterparts, each of which
shall be
deemed an original, but all of which together shall constitute one and
the same
instrument.
9.4 Parties
in Interest; No
Assignment. This
Agreement shall inure to the benefit of and be binding upon the Parties
hereto
and their respective successors and assigns. Nothing in this
Agreement, express or implied, is intended to confer upon any other person
any
rights or remedies under or by reason of this
Agreement. Notwithstanding the foregoing, this Agreement may not be
assigned without the prior written consent of the other party
hereto.
9.5 Applicable
Law. The rights and obligations of the Parties shall be construed
under and governed by the internal laws (without application of the conflicts
of
laws provisions thereof) of the State of Washington. Venue shall be
in the County of King, Washington.
9.6 Waiver.
No provision in this Agreement shall be deemed waived by course of conduct,
unless such waiver is in writing signed by both Parties and stating specifically
that it was intended to modify this Agreement.
9.7 Partial
Invalidity. Wherever possible, each provision hereof shall be
interpreted in such manner as to be effective and valid under applicable
law,
but in case any one or more of the provisions contained herein shall, for
any
reason, be held to be invalid, illegal or unenforceable in any respect,
such
provision shall be ineffective to the extent, but only to the extent, of
such
invalidity, illegality or unenforceability without invalidating the remainder
of
such invalid, illegal or unenforceable provision or provisions or any other
provisions hereof, unless such a construction would be
unreasonable.
9.8 Entire
Agreement. This Agreement and the agreement referred to herein
and the schedules attached hereto constitute the entire agreement between
the
Parties governing the matters addressed herein. No prior agreement or
representation, whether oral or written, shall have any force or effect
thereon.
IN
WITNESS WHEREOF, the Parties have duly executed this Agreement as of the
day and
year first above written.
VERITAS
SOLUTIONS, INC.
By:
▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇
Title:
Director and CEO
SECURE
ASSET REPORTING SERVICES, INC.
By:
▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇
Title:
Director and CEO
ANDRONICS
LTD.
By:
Its:
Exhibit
A
Assets
and Licensed Property
Exhibit
B
Andronics
Consultants
Exhibit
C
Note
Exhibit
C
Licensing
Agreement
[the
Licensing Agreement appears on the following pages]
LICENSING
AGREEMENT
THIS
EXCLUSIVE PATENT AND INTELLECTUAL PROPERTY LICENSING AGREEMENT (the
“Licensing Agreement”), made and entered into this ___ day
of January,
2007 (the “Execution Date”), between Andronics, Ltd.
(“Andronics” or the “Licensor”), Veritas
Solutions, Inc. (“VSI”) and Secure Asset Reporting Services,
Inc., a wholly owned subsidiary of VSI (“SARS”). VSI
and SARS are collectively referred to as the
“Licensee.”
WITNESSETH:
WHEREAS,
Andronics desires to engage VSI and SARS to allow VSI and SARS to exclusively
control, operate, market, sell and manage the Assets (as defined in the
Operating Agreement) and Licensed Property (defined below) of Andronics
in
accordance with the terms and conditions of this Agreement;
WHEREAS,
Licensor wishes to grant an exclusive license of the Licensed Patents (as
defined below) and Licensed Intellectual Property (as defined below) to
Licensee, and Licensee wishes to obtain an exclusive license of the Licensed
Patents and Licensed Intellectual Property (collectively, the “Licensed
Property”) from the Licensor, a list is located under the heading,
“Licensed Property” and is attached to the Operating Agreement as Exhibit
A, all in accordance with and pursuant to the terms, covenants and
conditions of this Licensing Agreement;
WHEREAS,
Licensor is the owner of certain patents that Licensor desires to license
to
Licensee (the “Licensed Patents”); and
WHEREAS,
Licensor is the owner of certain Licensed Intellectual Property rights
pertaining to the Licensed Patents, including trade secrets, trademarks,
service
marks, trade names (including, in the case of trademarks, service marks
and
trade names, all goodwill pertaining thereto), inventions, copyrights,
technology licenses, know-how, confidential information, shop rights, technical
data, drawings, diagrams, designs, prototypes, engineering files, documentation,
processes, procedures, marketing techniques and/or materials, marketing
plans,
timetables, strategies and development plans, charts, research, design
specifications either developed or acquired by Licensor in connection with
the
development of the Licensed Patents and documents (written or electronic),
physical properties of components of manufactured goods, techniques used
or
sequences in manufacture, sources (suppliers) and costs of components,
costs of
any aspect or phase of manufacture, profit margins, sub-licensing agreements
and
other information pertaining to customers, pricing policies and financial
information (the “Licensed Intellectual
Property”).
AGREEMENT:
NOW,
THEREFORE, for and in consideration of the foregoing, the warranties
and representations herein contained and other good and valuable consideration,
the receipt of which is hereby acknowledged, the parties hereto have agreed
and
do hereby agree as follows:
ARTICLE
I
DEFINITIONS
1.1 Definitions
.
|
a.
|
Unless
otherwise defined below, capitalized terms shall have the meaning
as set
forth in the Operating Agreement. The following terms, as used
herein, have the following
meanings:
|
“Bankruptcy
Event” means any of the following events: (a) Licensee commences a case
or other proceeding under any bankruptcy, reorganization, arrangement,
adjustment of debt, relief of debtors, dissolution, insolvency or liquidation
or
similar Law of any jurisdiction relating to Licensee; (b) there is commenced
against Licensee any such case or proceeding that is not dismissed within
sixty
(60) days after commencement; (c) Licensee is adjudicated insolvent or
bankrupt,
or any order of relief or other order approving any such case or proceeding
is
entered; (d) Licensee suffers any appointment of any custodian or the like
for
it or any substantial part of its property that is not discharged or stayed
within sixty (60) days; (e) Licensee makes a general assignment for the
benefit
of creditors; (f) Licensee fails to pay, or states that it is unable to
pay or
is unable to pay, its debts generally as they become due; (g) Licensee
calls a meeting of its creditors with a view to arranging a composition,
adjustment or restructuring of its debts; or (h) Licensee, by any act or
failure
to act, indicates its consent to, approval of or acquiescence in any of
the
foregoing or takes any corporate or other action for the purpose of effecting
any of the foregoing.
“Contracts”
means all contracts, agreements, arrangements, understandings, leases,
licenses,
commitments, sales and purchase orders and other instruments.
“Governmental
Entity” means any Federal, state or local or any foreign governmental,
regulatory or administrative authority, agency, official, body or commission
or
any court, tribunal or arbitral body.
“Knowledge
of Licensor” shall mean that Licensor is actually aware of a fact or a
matter.
“Law”
means any Federal, state, foreign or local statute, law, ordinance, regulation,
rule, code, order, judgment, decree, other requirement or rule of law of
the
United States or any other jurisdiction and any other similar act or
law.
“Lien”
means any mortgage, liability, lien (including any tax lien), obligation,
pledge, charge, security interest or encumbrance of any kind.
“Licensed
Property” means the assets listed on Exhibit A under the heading
“Licensed Property” attached to the Operating Agreement.
“Material
Adverse Effect” means any change in or effect on the Purchased Assets
that, individually or in the aggregate (taking into account all other such
changes or effects), is, or is reasonably likely to be, materially adverse
to
the value of the Purchased Assets individually or taken as a whole.
“Person”
means an individual, corporation, partnership, association, trust or other
entity or organization, including a government or political subdivision
or an
agency or instrumentality thereof.
ARTICLE
II
GRANT
OF
LICENSES
2.1 Exclusive
License. Licensor hereby grants, bargains, assigns, licenses,
conveys and setsover to the Licensee an exclusive world-wide license to
utilize
the Licensed Patents and the claims set forth therein and the Licensed
Intellectual Property for the purpose of developing, manufacturing (directly
or
through subcontractors), marketing and selling products incorporating the
inventions contained in the Licensed Patents and Licensed Intellectual
Property
and for the purposes of sub-licensing the Licensed Patents and Licensed
Intellectual Property. Notwithstanding any provision to the contrary
set forth in this Agreement, (i) any sub-licenses to be granted under this
Agreement by Licensee first shall be approved in writing by the Licensor
and
shall be granted in an enforceable written agreement, of which Licensor
is a
third-party beneficiary, that contain terms and conditions at least as
restrictive as all of the terms and conditions set forth in this Agreement,
and
(ii) promptly following the execution of any such sub-license, Licensee
shall
provide Licensor with a copy of the same.
a. Notwithstanding
anything to the contrary in this Section or elsewhere in this Agreement,
all
rights granted to Licensee in this Agreement shall be subject to the terms
and
conditions of any and all existing licenses and other obligations related
to the
Licensed Property existing at the time the Agreement is entered
into.
b. Licensee
acknowledges and agrees that, (i) the Licensed Property and all goodwill
associated therewith are and shall remain the sole property of Licensor,
(ii)
nothing in this Agreement shall convey to Licensee any right of ownership
in the
Licensed Property, (iii) Licensee shall not in any manner take any action
and
shall ensure that none of its permitted sub-licensees take any action,
that
disparages or would impair the value of, or goodwill associated with, the
Licensed Property and (iv) all rights not expressly granted to Licensee
are
reserved to Licensor. Licensee acknowledges and agrees that all use
of the Licensed Property by Licensee shall inure to the benefit of
Licensor.
2.2 Ownership
and Use of Licenses.
a. Licensor
and Licensee agree that throughout the term of this License Agreement (and
any
extensions thereof) that Licensee may engage in research and development
activities that produce new formulas, methods, inventions, techniques,
properties or products that enhance the Licensed Property (“Licensee
Enhancements”). In the event Licensee develops such Licensee
Enhancements, then Licensor shall retain ownership of such Licensee Enhancements
and the Licensee Enhancements shall not be deemed to be a part of the Licensed
Property and Licensor shall have all right, title and interest in and to
any of
the Licensee Enhancements.
b. Licensor
and Licensee agree that throughout the term of this License Agreement (and
any
extensions thereof) that Licensor may engage in research and development
activities that produce new formulas, methods, inventions, techniques,
properties or products that enhance the Licensed Property (“Licensor
Enhancements”). When Licensor develops such Licensor
Enhancements, the Licensor Enhancements shall not be deemed to be a part
of the
Licensed Property and shall not be deemed to have been licensed to Licensee
in
accordance with the terms of this License Agreement.
2.3 General
Duties of Licensor. Throughout the term of this Licensing
Agreement (including any extensions thereto), Licensor shall, (i) provide
Licensee with copies of the Licensed Patents and Licensed Intellectual
Property,
(ii) provide Licensee with complete specifications of the raw material
and
design and use specifications pertaining to the same and (iii) provide
Licensee
with a complete list of all persons known to Licensor that were contacted
during
the development of the Licensed Patents and Licensed Intellectual Property
(including, but not by way of limitation, lists of possible suppliers,
sub-contractors, sub-licensees and customers).
2.4 General
Duties of Licensee. Throughout the term of this Licensing
Agreement (including any extensions thereof), Licensee shall use its best
efforts to effectively develop and promote widespread use and manufacturing
of
products based on the claims included in the Licensed Patents and Licensed
Intellectual Property. Such efforts shall include (but not by way of
limitation), (i) engaging in the final stages of product development and
testing, (ii) following successful completion of product development and
testing, developing a “demonstration” manufacturing facility, (iii) engaging in
market research to identify discrete market opportunities for products
based on
the Licensed Patents and Licensed Intellectual Property, (iv) developing
and
implementing marketing, pricing and distribution strategies for the products
developed, and (v) attending industry forums and expositions to support
marketing, promotion and distribution of products produced that utilize
the
Licensed Patents and Licensed Intellectual Property.
2.5 Reservations
and Limitations; Foreign Licensed Patents. Except as provided in this
Section and in Sections 2.1(a), 2.8(a), 2.8(b), 3.8(b) and 3.8(c) of this
Licensing Agreement, the parties agree that Licensor retains all of its
rights,
title and interest in and to the Licensed Patents and Licensed Intellectual
Property. Licensor and Licensee agree that, during the term of this Licensing
Agreement (including any extensions thereof), Licensee shall have the sole
right
and discretion to determine whether, when and if to apply for foreign Licensed
Patents covering the inventions contained in the Licensed Patents. In the
event
that Licensee determines to apply for foreign Licensed Patents covering
the
inventions contained in the Licensed Patents, Licensee shall prosecute
such
foreign patent applications at Licensee’s sole expense. Any such foreign
Licensed Patents shall be prosecuted in the name of Licensor. Licensor
hereby
agrees that during the term of this Licensing Agreement (including any
extensions thereof), Licensee shall have and is hereby granted the same
license
rights with respect to any such foreign Licensed Patents as Licensee is
granted
with respect to the Licensed Patents by Section 2.1(a) of this Licensing
Agreement. Licensor agrees to cooperate with Licensee in prosecuting any
such
patent applications and, subsequent to the granting of any such Licensed
Patents, to confirm Licensee’s exclusive worldwide license rights thereunder and
hereby appoints Licensee its attorney-in-fact for such purposes.
2.6 Future
Improvements and Discoveries. Licensee acknowledges that, except
as expressly proscribed by this Licensing Agreement, Licensor shall have
the
right to continue Licensor’s research and development activities in building
materials and designs. Should those activities produce formulas, methods
and
inventions (“New Inventions”) which arise from Licensor’s
independent activities which Licensor decides to license, Licensor hereby
grants
to Licensee a right of first refusal with respect to the licensing of the
New
Inventions. In the event Licensor decides to license some or all of the
New
Inventions, Licensor shall provide Licensee with a written notification
of
Licensor’s intent to license and of the terms (including fees and royalties) on
which the license will be offered. The parties will then have thirty (30)
days
to negotiate a mutually agreeable licensing agreement. If the parties
fail to reach agreement within thirty (30) days, Licensor shall be free
to offer
a license of the New Inventions to third-parties on the terms initially
offered
to Licensee. If Licensor subsequently modifies the terms on which the license
will be made available, Licensee shall be provided additional rights of
first
refusal to consider the modification(s) in Licensor’s proposal. Notwithstanding
the foregoing, nothing contained in this Section 2.6 shall be interpreted
to
permit Licensor to incorporate elements of the Licensed Patents in any
New
Invention in contravention of the warranties and representations contained
in
Section 3.8(a) of this Licensing Agreement.
2.7 Non-disclosure
and Confidentiality. Licensor and Licensee agree that many
documents constituting the Licensed Patents and Licensed Intellectual Property,
together with other documents and information of a similar nature that
will be
developed by Licensor or Licensee during the term of this Licensing Agreement
(and any extensions thereof) are and will be of a confidential and proprietary
nature (such documents and information hereafter referred to as
“Confidential Information”). Licensor and Licensee agree that
such Confidential Information shall include any information concerning
the
Licensed Patents which is furnished now or during the term of this Licensing
Agreement (including any extensions thereof) by or in behalf of the Licensor
pursuant to or in accordance with the terms of this Licensing Agreement
(whether
or not reduced to writing or still in development and whether or not
specifically marked confidential or proprietary by Licensor or Licensee).
Licensor and Licensee agree that they shall use their best efforts to safeguard
Confidential Information. To that end, Licensor and Licensee shall, (i)
designate all such information by marking each such document or piece of
information “Confidential/Proprietary,” (ii) restrict access to Confidential
Information to those with a need to access that information, (iii) train
employees and agents in the importance of non-disclosure of Confidential
Information and (iv) include in all sub-contracts and sub-licenses provisions
that require sub-contractors and sub-licensees to accord similar protections
to
Confidential Information. For purposes of Section 2.7 of this Licensing
Agreement, the term “Confidential Information” does not include
information that is generally available to the public other than as a result
of
a disclosure by a party to this Licensing Agreement, became available to
the
Licensee on a non-confidential basis from a source other than the Licensor
(provided that such source is not bound by a confidentiality agreement
with or
other contractual relationship, legal or fiduciary obligation of confidentiality
with respect to such information) or is part of the public record as a
result of
the registration of the Licensed Patents. Notwithstanding the foregoing,
it
shall not be a breach of Section 2.8 of this Licensing Agreement for either
the
Licensor or the Licensee to provide Confidential Information to a court
of
competent jurisdiction or an agency, department or subdivision of the United
States or a state, territory or possession thereof having a lawful right
to
obtain the information requested, provided the Licensor or Licensee notifies
the
other party of the request and provides the other party with the opportunity
to
seek a stay or otherwise contest the request for information if that contest
does not expose the other party to liabilities which are not or cannot
be
indemnified by the party wishing to contest the request.
2.8 Assignment
and Sub-Licensing.
a. Assignment.
Except as provided in this Section 2.8, neither Licensor nor Licensee may
assign
their rights and obligations under this Licensing Agreement to any other
person.
For purposes of this Section 2.8, the granting of a security interest in
the
rights created under this Licensing Agreement constitutes an assignment.
Licensor may assign Licensor’s rights under this Licensing Agreement to any
person or entity, but may assign its obligations under this Licensing Agreement
to another person, in whole or in part, only with the prior written consent
of
Licensee, which consent shall not be unreasonably withheld. Any refusal
to
consent to an assignment of the obligations of the Licensor that would
interfere
with the Licensor’s personal performance of the duties set forth in Section 2.4
of this Licensing Agreement or that would defeat or jeopardize protection
of the
Licensed Patents shall not be deemed unreasonably withheld. Licensee may
assign
Licensee’s rights and obligations under this Agreement to any third person
(including a business entity which Licensee controls on the date of the
assignment) without the prior consent of the Licensor. For the purposes
of this
Section 2.8, the term “assignment” shall include the granting of a security
interest in the rights created under this Licensing Agreement and any change
in
voting control of a business entity. An assignee receiving an assignment
of
rights and obligations under this Licensing Agreement shall have the same
rights
to further assign interests and obligations under this Licensing Agreement
as
did the assignee’s assignor.
b. Sub-licensing
and Distribution. Licensor and Licensee agree that Licensee shall
have the right to sub-license the Licensed Patents and Licensed Intellectual
Property and to enter into distribution agreements with respect to products
manufactured utilizing inventions contained in the Licensed Patents and
Licensed
Intellectual Property to such persons and on such terms as Licensee deems
appropriate. Licensor and Licensee agree that during the term of this Licensing
Agreement (including any extensions thereof), Licensee shall have the sole
right
and responsibility to contact, discuss, negotiate and execute sub-licensing
and
distribution agreements with sub-licensees and potential
sub-licensees. No such agreement shall be permitted to cover a term
longer than the remaining term of this Licensing Agreement in effect on
the date
the sub-licensing or distribution agreement is executed and in effect absent
the
prior written consent of Licensor. Licensee shall provide Licensor with
a copy
of each such agreement within thirty (30) days of the agreement’s execution.
Each agreement shall provide that notifications by one party to the sub-license
agreement to the other shall also require the party giving the notice to
the
other party to also send a copy of the notice to the Licensor. In the event
that
this License Agreement terminates prior to the termination of any sub-license
agreement (either because Licensor has consented to a term for the sub-license
agreement that exceeds the term of this License Agreement in effect on
the date
of execution of the sub-license agreement or because of the termination
of this
License Agreement other than upon the normal expiration of its term), the
rights
of the sub-licensee under the sub-license agreement shall remain in full
force
and effect. From the date of termination of this Licensing Agreement
through the date of termination of the sub-licensing agreement, remittances
required to be made by the sub-licensee to the Licensee shall continue
to be
made to the Licensee and remittances due from Licensee to Licensor with
respect
to any such sub-license shall continue to be made as though this Licensing
Agreement was still in full force and effect.
2.9 Rights
and Duties Upon Termination; Return of Materials. Within thirty (30) days of
the termination of this Licensing Agreement, each party to this Licensing
Agreement that has possession of or control over any confidential or proprietary
information of the other party shall return to the other party all written
and
otherwise recorded or stored matter containing confidential or proprietary
information, including both original matter and all copies thereof; provided,
that each party’s legal counsel may retain one copy of any such information in
its files solely for the purpose of identifying information to be protected
under applicable confidentiality provisions. For purposes of the foregoing,
Licensee shall not be deemed to be in possession or control of confidential
or
proprietary information in possession of sub-licensees with a right to
retain
such information during the term of their sub-license agreement following
termination of this Licensing Agreement.
ARTICLE
III
REPRESENTATIONS
AND WARRANTIES OF LICENSOR
Licensor
hereby represents and warrants to Licensee that all such exceptions to
be
referenced to a specific representation set forth in this Article III,
or shall
be deemed to be referenced to a specific representation in which such exception
would be appropriate and reasonably apparent from the context, as of the
date
hereof, that:
3.1 Organization
and Qualification
. Licensor
is a corporation organized under the law of Northern Ireland and has the
requisite power and authority to own, lease and operate these properties,
except
for such failures to be so qualified that could not reasonably be expected
to,
individually result in a Material Adverse Effect.
3.2 Absence
of Certain Changes
. Licensor
has utilized the Purchased Assets in the ordinary course consistent with
past
practices, and there has not been:
a. any
Material Adverse Effect or any event, occurrence, development or state
of
circumstances or facts known to Licensor which could reasonably be expected
to
result in a Material Adverse Effect;
b. any
event
that could reasonably be expected to prevent or materially delay the performance
of the obligations of Licensor pursuant to this Agreement;
c. any
incurrence, assumption or guarantee by Licensor of any indebtedness for
borrowed
money with respect to the Licensed Property other than in the ordinary
course of
business and in amounts and on terms consistent with past
practices;
d. any
creation or other incurrence of any Lien on any Licensed Property or any
failure
to discharge or satisfy any such Lien or pay or satisfy any material obligation
or liability (whether absolute, accrued, contingent or otherwise) relating
to or
affecting the Purchased Assets;
e. any
transaction or Contract entered into by Licensor relating to any Licensed
Property (including the acquisition or disposition of any assets) or any
relinquishment by Licensor of any such Contract or other right relating
to any
Licensed Property, in either case, other than transactions and commitments
in
the ordinary course of business consistent with past practices and those
contemplated by this Agreement;
f. any
settlement, waiver, release, assignment or compromise relating to or affecting
any material action, suit, proceeding, claim arbitration or litigation
affecting
the Licensed Property;
g. any
sale
or transfer of any of the Licensed Property (including, without limitation,
any
disposition or license of any Proprietary Rights) except for inventory
sold in
the ordinary course of business consistent with past practices or cancellation
of any material debts or claims relating to the Licensed Property or waiver
of
any rights relating thereto;
h. any
authorization of, or agreement entered into or commitment made to do any
of the
foregoing.
3.3 Title
to Licensed Assets
. No
Licensed Property is subject to any Lien. Upon consummation of the
transactions contemplated hereby, Licensee will have acquired good and
marketable title in and to, or a valid leasehold interest in, each of the
Licensed Property, free and clear of all Liens.
3.4 No
Undisclosed Liabilities
. There
are no liabilities relating to or affecting the Licensed Property of any
kind
whatsoever, whether accrued, contingent, absolute, determined, determinable
or
otherwise, and there is no existing condition, situation or set of circumstances
which could reasonably be expected to result in such a liability other
than
liabilities that, individually or in the aggregate, would result in a Material
Adverse Effect with respect to the Licensed Property.
3.5 Litigation
. There
is no action, suit, claim, investigation or proceeding (or any basis therefore)
pending against, or to the Knowledge of Licensor, threatened against, or
relating to or affecting, any Licensed Property before any court or arbitrator
or any Governmental Entity, and to the Knowledge of Licensor, there are
no
existing acts or circumstances that could reasonably be expected to result
in
such an action, suit, claim, investigation or proceeding. Licensor is
not subject to any outstanding order, writ, injunction or decree which
could
reasonably be expected to have, individually or in the aggregate, a Material
Adverse Effect or materially interfere with Licensor’s ability to consummate the
transactions contemplated hereby.
3.6 Material
Contracts
.
|
a.
|
Licensor
is not a party to or subject to:
|
1. Any
Contract that substantially limits the freedom of Licensor to compete in
any
line of business or with any Person or in any area or to own, operate,
sell,
transfer, pledge or otherwise dispose of or encumber any Licensed Property
or
that would so limit the freedom of Licensee after the Closing Date;
or
2. Any
material Contract not made in the ordinary course of business that relates
to or
affects the Licensed Property.
3.7 Compliance
with Laws
. Licensor
is not in violation of, Licensor has not violated, and to the Knowledge
of
Licensor, Licensor is not under investigation with respect to or been threatened
to be charged with or given notice of any violation of, any Law or judgment,
order or decree entered by any court, arbitrator or Governmental Entity,
applicable to the Licensed Property or the conduct of the
Business. No violation of any Law relating to or affecting any
Licensed Property currently exists or has existed at any time. There
are no developments relating to or affecting any of the Licensed Property
pending or threatened, which might reasonably be expected to materially
detract
from the value of such Licensed Property, materially interfere with any
present
or intended use of any such Licensed Property or result in a Material Adverse
Effect with respect to the marketability of such Licensed Property.
3.8 Proprietary
Rights
.
a. All
patents (including, without limitation, all U.S. and foreign patents, patent
applications (including provisional applications), invention disclosures
and any
and all divisions, continuations, continuations-in-part, re-issues,
re-examinations and extensions thereof), design rights, trademarks, trademark
applications (including intent to use filings), trade names and service
marks
(whether or not registered), trade dress, logos, copyrights (whether or
not
registered) and any renewal rights therefore, sui generis database rights,
statistical models, technology, inventions, supplier lists, trade secrets,
know-how, databases, technical documentation, mask works, registrations
and
applications for any of the foregoing and all other tangible and intangible
proprietary information, materials and associated goodwill (collectively,
“Proprietary Rights”) that are held by or have been or are
planned to be used in (including in the development of) the Business and/or
in
any product, technology or process (i) currently being or formerly manufactured,
published or offered by the Licensor or (ii) currently under development
for
possible future manufacturing, publication, marketing or other use by the
Licensor, are hereinafter referred to as the “Licensor Proprietary
Rights.”
b. The
Licensor Proprietary Rights contain only those items and rights that
are: (i) owned by the Licensor; (ii) in the public domain; or (iii)
rightfully used by the Licensor pursuant to a valid and enforceable license
or
other similar agreement (the Licensor Proprietary Rights which are used
pursuant
to sub-section; (iii) are referred to as “Licensor Licensed
Proprietary Rights”). The
Licensor has all rights in Licensor Proprietary Rights owned by the Licensor
and
in Licensor Licensed Proprietary Rights necessary (and had all rights necessary
to carry out its former activities at the time such activities were being
conducted), including, to the extent required to carry out such activities,
rights to make, use, reproduce, modify, adopt, create derivative works
based on,
translate, distribute (directly and indirectly), transmit, display and
perform
publicly, license, rent and lease and, other than with respect to Licensor
Licensed Proprietary Rights, assign and sell Licensor Proprietary
Rights.
c. To
the
Knowledge of Licensor, the use, reproduction, manufacturing, distribution,
licensing, sub-licensing, sale or any other exercise of rights in any Licensor
Proprietary Rights, product, activity, technology or process as now used
or
offered for use, licensing or sale by the Licensor does not, directly or
indirectly, infringe on any rights in any Proprietary Rights or other
proprietary right of any person, anywhere in the world. No claims or
investigations, (i) challenging or threatening the validity, enforceability,
effectiveness or ownership by the Licensor of any Licensor Proprietary
Rights or
(ii) to the effect that the use, manufacturing, distribution, licensing,
sublicensing, sale or any other exercise of rights in any Licensor Proprietary
Rights, product, activity, technology or process as now used by the Licensor
directly or indirectly infringes any Proprietary Rights or other proprietary
right of any person, have been asserted or threatened by any
person. All of the rights within Licensor Proprietary Rights are
enforceable and subsisting. To the Knowledge of Licensor, there is no
unauthorized use, infringement or misappropriation of any Licensor Proprietary
Rights by any third-party, employee, former employee or contract
worker.
d. The
Licensor has taken all appropriate measures to protect the proprietary
nature of
the Licensor Proprietary Rights and to maintain in confidence all trade
secrets
and confidential information owned or used by the Licensor.
e. Except
as
would not otherwise materially impair the Licensor’s ability to account for,
enforce its rights under, make use of, understand or memorialize the Licensor
Proprietary Rights, the Licensor has taken all steps, in accordance with
normal
industry practice, to preserve and maintain notes and records relating
to
Licensor Proprietary Rights and to cause the same to be readily understood,
identified and available.
f. The
Licensor Proprietary Rights are free and clear of any and all
Liens.
g. All
data
which has been collected, stored, maintained or otherwise used by the Licensor
has been collected, stored, maintained and used in accordance with all
applicable U.S. and foreign Laws, rules, regulations, guidelines and industry
standards. The Licensor has not received a notice of noncompliance with
applicable data protection laws, rules, regulations, guidelines or industry
standards.
3.9 Licensed
Patents: Representations and Warranties; Third-Party Infringement Claims
Defense; Prosecution of Infringement Claims Against Third-parties; Right
of Set
Off; When Failure to Establish Validity Becomes Grounds for Terminating
Payments.
a. Licensor
Representations and Warranties Respecting Licensed
Patents. Licensor represents and warrants to Licensee that, (i)
the Licensed Patents do not infringe on the patent rights of any third-party,
(ii) Licensor is the sole owner of the Licensed Patents and Licensed
Intellectual Property, (iii) Licensor has granted no other license(s) that
permit any other person or entity to develop, manufacture, exploit, sub-license
or otherwise use the inventions used in the Licensed Patents and Licensed
Intellectual Property and will grant no other such license(s) or use rights
to
any third-party during the term of this Licensing Agreement (or any extensions
thereof), (iv) Licensor has neither applied for nor obtained foreign Licensed
Patents with respect to the inventions contained in the Licensed Patents
and
Licensed Intellectual Property and during the term of this Licensing Agreement
(or any extensions thereof) will not apply for or obtain any such foreign
Licensed Patents (except with the prior written consent of Licensee on
such
terms and conditions as Licensee in its sole discretion finds acceptable),
(v)
Licensee will not undertake modifications of the Licensed Patents through
which
essentially similar processes, products or techniques may be implemented
that
would be competitive with processes or techniques employed or products
produced
by Licensee utilizing the Licensed Patents and/or Licensed Intellectual
Property
and (vi) Licensor has not and during the term of this Licensing Agreement
(or
any extensions thereof) will not engage in or encourage the development
of
competing products, processes or techniques under the Licensed Patents
or other
similar Licensed Patents either in the United States or any foreign
patent jurisdiction.
b. Third-party
Infringement Claims Defense. In the event that any third-party
asserts that the Licensed Patents infringe on the third-party’s patent rights,
it shall be the Licensor’s obligation to defend such infringement claim and to
conform Licensee’s continued right to develop, manufacture and sell products
based on the claims set forth in the Licensed Patents and to sub-license
the
Licensed Patents. Licensor and Licensee agree to make each other aware
of any
third-party infringement claim within thirty (30) days of being made aware
of
the claim by the third-party. Licensor shall defend against any such
infringement claim at Licensor’s own cost and expense. In the event that
Licensor fails to defend such infringement claim, Licensee shall have the
right
(but not the obligation) to defend against such claim and Licensor hereby
appoints Licensee its attorney-in-fact to defend against any such infringement
claim and in Licensee’s sole discretion, to take all acts with respect to the
claim (and its settlement) which Licensee deems appropriate. Licensor agrees
to
cooperate fully with Licensee in connection with any such defense (including,
but not by way of limitation, by joining in any such defense).
c. Prosecution
of Third-parties for Infringement of Licensed Patents. In the
event that Licensor or Licensee become aware of any potential infringement
of
the Licensed Patents by any third-party, Licensor and Licensee agree to
make
each other aware of any such potential infringement within fifteen (15)
days of
becoming aware of the potential infringement. Licensor and Licensee agree
that
it shall be Licensee’s right (but not its obligation) to warn third-parties of
potential infringements of the Licensed Patents during the term of this
Licensing Agreement (including and extensions thereof) and Licensor agrees
to
assist Licensee in the prosecution of any patent infringement claim (including,
but not by way of limitation, by joining in the prosecution of any such
claim).
Licensor hereby appoints Licensee its attorney-in-fact for purposes of
prosecuting any such patent infringement claims. Any such patent infringement
claims shall be conducted at the expense of the Licensee.
d. Set
Off. In the event Licensee undertakes the defense of a patent
infringement claim or the prosecution of a patent infringement claim, Licensee
shall be entitled to recover Licensee’s expenses (including court costs,
reasonable attorneys’ fees and reasonable expert witness’ fees, settlement
payments and fees or royalties paid to third-parties in settlement of
infringement claims) as a set off against other amounts owning to Licensor
by
Licensee under this License Agreement (including fees payable this Licensing
Agreement). Licensor and Licensee agree that this right of set off exists
in
addition to, any other rights Licensee may have at law or in equity to
recover
such expenses from Licensor or any third-party.
e. Patent
Prosecution and Maintenance. Except as otherwise provided in this
Licensing Agreement, Licensor may proceed with the prosecution of patent
applications with respect to inventions independently developed by Licensor
at
Licensor’s own discretion and at Licensor’s own cost. Licensee may
proceed with prosecution of patent applications with respect to patentable
products and techniques developed during product development under this
License
Agreement at Licensee’s own discretion and expense and without receiving the
consent or approval of Licensor; provided, however, that if the new inventions
that are the subjects of such patent applications utilize elements of the
Licensed Patents, such patent applications may be prosecuted by Licensee
only
with the approval and participation of Licensor on such terms
(including expense, royalty and fee sharing) as may be mutually
agreed to by Licensor and Licensee.
f. Grounds
for Terminating Payments Pertaining to Licensed
Patents. Licensee’s right to terminate payments required under
Sections 2.2 of this Licensing Agreement in the event that that the Licensed
Patents licensed hereunder are found invalid or unenforceable shall arise
only
upon a “final adjudication” of such invalidity or unenforceability. For purposes
of this Section 3.8(f), “final adjudication” shall mean an
adjudication or determination by a trial court or a court of appeal, which
adjudication or determination shall be final and binding. Notwithstanding
the
foregoing, Licensor and Licensee agree that from the time that either Licensor
or Licensee is on notice of any assertion of a third-party patent infringement
claim until any such final adjudication, all payments required to be made
to
Licensor under Sections 2.2 shall be made instead into an escrow account
to be
held there pending final adjudication of the third-party claim. Upon such
final
adjudication, the sums held in escrow will be distributed as follows: first,
if
defense of any such action is undertaken by Licensee under this Licensing
Agreement, to reimburse Licensee of expenses incurred (including court
costs and
reasonable attorneys and expert witness fees) in the defense; second, to
pay the
third-party any amount to which the third-party becomes entitled as a
consequence of the settlement or final adjudication of the third-party’s claim;
and finally, if any amounts remain after the payments referred to above,
to
Licensor. Interest earned on the amounts held in escrow shall be and remain
the
property of Licensee. Nothing herein contained shall be construed as a
limitation upon any rights Licensee may otherwise have under this Licensing
Agreement, at law or in equity, arising from Licensor’s breach of any
representation or warranty contained in this Licensing Agreement.
ARTICLE
IV
REPRESENTATIONS
AND WARRANTIES OF LICENSEE
Licensee
hereby represents and warrants to Licensor, all such exceptions to be referenced
to a specific representation set forth in this Article IV, or shall be
deemed to
be referenced to a specific representation in which such exception would
be
appropriate and reasonably apparent from the context, as of the date hereof,
that:
4.1 Organization
and Qualification
. Licensee
is a corporation duly organized, validly existing and in good standing
under the
laws of the State of Washington and has the requisite corporate power and
authority to own, lease and operate its properties and to carry on its
business
as it is now being conducted. Licensee is duly qualified or licensed
to do business, and is in good standing (to the extent applicable), in
each
jurisdiction where the character of the properties owned, leased or operated
by
it or the nature of its business makes such qualification or licensing
necessary, except for such failures to be so qualified and in good standing
that
could not reasonably be expected to, individually or in the aggregate,
result in
a material adverse effect on the Licensee.
4.2 Corporate
Authorization
. Licensee
has the necessary corporate power and authority to execute and deliver
this
Agreement, to perform its obligations hereunder and thereunder, and to
consummate the transactions contemplated hereby and thereby. The
execution, delivery and performance by Licensee of this Agreement, and
the
consummation by Licensee of the transactions contemplated hereby and thereby
have been duly authorized by all necessary corporate action on the part
of
Licensee and no further corporate action on the part of Licensee is necessary
to
authorize this Agreement or to consummate the transactions contemplated
hereby
or thereby. This Agreement has been duly executed and delivered by
Licensee and constitutes valid and binding agreements of Licensee, enforceable
against Licensee in accordance with their respective terms.
4.3 Governmental
Authorization
. The
execution, delivery and performance by Licensee of this Agreement, and
the
consummation by the Licensee of the transactions contemplated hereby and
thereby, do not and will not require any action by or in respect of, or
filing
with, any Governmental Entity, except where the failure to take such action
or
obtain authorizations, consents or approvals or to make such filings would
not
reasonably be expected to, individually or in the aggregate, result in
a
material adverse effect on the Licensee.
4.4 Non-Contravention
. The
execution, delivery and performance by Licensee of this Agreement, and
the
consummation by the Licensee of the transactions contemplated hereby and
thereby, do not and will not, (i) contravene or conflict with the certificate
of
incorporation or bylaws of Licensee, (ii) contravene or conflict with or
constitute a violation of any provision of any Law, judgment, injunction,
order
or decree binding upon or applicable to Licensee; or (iii) constitute a
default
under or give rise to any right of termination, cancellation or acceleration
of
any right or obligation of Licensee or to a loss of any material benefit
relating to Licensee’s business to which Licensee is entitled under any
provision of any material Contract binding upon Licensee or by which any
of
Licensee’s assets is or may be bound; except, in each case, for violations and
defaults that, individually and in the aggregate, could not reasonably
be
expected to have or result in a material adverse effect on the Licensee,
or
materially impair the ability of Licensee to perform its obligations
hereunder.
ARTICLE
V
MISCELLANEOUS
5.1 Indemnities
and Arbitration.
a. Licensee
Indemnity. Licensee shall defend, indemnify, save and hold
harmless Licensor from all losses, claims, suits, damages, costs, fees
and
expenses (including attorneys fees) resulting from or arising out of any
act or
omission of Licensee related to this Licensing Agreement. Licensor shall
promptly notify Licensee of any loss, claim or suit for which indemnification
is
sought hereunder. A failure to give such prompt notification shall act
as a
waiver of Licensor’s rights under this Section 5.1(a).
b. Licensor
Indemnity. Licensor shall defend, indemnify, save and hold
harmless Licensee from all losses, claims, suits, damages, costs, fees
and
expenses (including attorneys fees) resulting from or arising out of any
act or
omission of Licensor relating to this Licensing Agreement or from a breach
by
Licensor of any representation, warranty or covenant contained in this
Licensing
Agreement. Licensee shall promptly notify Licensee of any loss, claim or
suit
for which indemnification is sought hereunder. A failure to give such prompt
notification shall act as a waiver of Licensee’s rights under this Section
5.1(b).
c. Dispute
Resolution. 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. If, after ten (10) days, the parties are unsuccessful,
the Parties agree to mediate their dispute, with each party appointing
one (1)
mediator to represent itself. If, after fifteen (15) days of the
mediation’s commencement, no resolution is reached, the parties shall submit to
mandatory binding arbitration in any controversy or claim arising out of,
or
relating to, the Agreement or any breach hereof. Such arbitration
shall be conducted in accordance with the commercial arbitration rules
of the
American Arbitration Association in effect at that time, and the parties
agree
to be bound by any judgment, determination or award rendered by the
arbitrator. The arbitrator is hereby authorized to award to the
prevailing party the costs (including reasonable attorneys’ fees and expenses)
of any such arbitration. The parties further agree that any mediation
and arbitration meetings may be held via teleconference.
5.2 Accounting
and Audit. Licensee shall be responsible for maintaining current and
accurate financial records of all sales of the Licensed Property, which
records
shall be maintained in accordance with generally accepted accounting principles
(“GAAP”). Licensor shall have the right to inspect
and/or audit such records, from time to time, upon providing ten (10) days
written notice to Licensee.
5.3 Attorneys’
Fees. In the event of any dispute between the parties that arises out of
this Licensing Agreement, the substantially prevailing party with respect
to the
dispute shall be entitled to recover from the other party, in addition
to
whatever other amounts the prevailing party is entitled to recovery in
law or
equity, attorneys’ fees and expenses, expert witness fees and expenses and court
costs whether incurred in pretrial, trial or on appeal.
5.4. Governing
Law. Except as specifically preempted by the federal laws of the United
States of America, this Licensing Agreement shall be governed by and construed
in accordance with the laws of the State of Washington.
5.5 Notices. All
notices required or permitted to be given pursuant to this Licensing Agreement
shall be given in writing and shall be sent by registered mail or certified
mail, return receipt requested, postage prepaid, to the following
addresses:
If
to
Andronics:
If
to VSI
or
SARS: Veritas
Solutions, Inc.
▇▇▇
▇▇▇▇▇ ▇▇▇▇▇▇
▇▇, ▇▇▇▇▇
▇▇▇▇
▇▇▇▇▇▇▇▇,
▇▇ ▇▇▇▇▇
Attn: ▇▇▇▇▇▇▇
▇▇▇▇▇▇▇
Fax: (▇▇▇)
▇▇▇-▇▇▇▇
with
a
copy
to: The
▇▇▇▇ Law Group, PLLC
▇▇▇
▇▇▇▇▇
▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇
▇▇▇▇▇▇▇,
▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attn: ▇▇▇▇▇
▇. ▇▇▇▇
Fax: (▇▇▇)
▇▇▇-▇▇▇▇
Any
notice given pursuant to this Section 5.5 shall be effective upon the date
of
actual receipt by the addressee, as evidenced by a return receipt or other
similar written confirmation. Either party hereto may, from time to time,
by
advance written notice given in accordance with and pursuant to this Section
5.5, designate a substitute address for the receipt of notices under this
Licensing Agreement.
5.6 Severability.
If any term or other provision of this License Agreement is invalid, illegal
or
incapable of being enforced by any rule of law, or public policy, all other
conditions and provisions of this License Agreement shall nevertheless
remain in
full force and effect so long as the economic or legal substance of the
transactions contemplated by this License Agreement is not affected in
any
manner adverse to any party. Upon such determination that any term or
other provision is invalid, illegal or incapable of being enforced, the
parties
shall negotiate in good faith to modify this Agreement so as to effect
the
original intent of the parties as closely as possible in a mutually acceptable
manner in order that the transactions contemplated by this License Agreement
be
consummated as originally contemplated to the fullest extent
possible.
5.8 Parties,
Successors and Assigns. This Licensing Agreement shall inure to
the benefit of and be binding upon the parties hereto, their successors
and
permitted assigns.
[Signature
Page to Follow]
This
License Agreement may be executed by the parties individually or in any
combination, by facsimile and in two (2) or more counterparts, each of
which
shall be deemed an original and all of which shall together constitute
one and
the same agreement.
IN
WITNESS WHEREOF, the parties hereto have caused this Agreement to be duly
executed by their respective authorized officers as of the day and year
first
above written.
VERITAS
SOLUTIONS, INC.
By:
▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇
Title:
Director and CEO
SECURE
ASSET REPORTING SERVICES, INC.
By:
▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇
Title:
Director and CEO
ANDRONICS
LTD.
By:
Its:
Exhibit
D
Lease
Agreement
[the
Lease 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
▇▇▇▇▇-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
|
|
▇▇▇▇▇▇
|
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 (▇'▇▇▇▇▇ Bros)
|
31/05/99
|
|
Renovations
(▇'▇▇▇▇▇ Bros)
|
01/10/02
|
Schedule
1.1 Continued
Assumed
Accounts Receivable
|
Forex
Rate
|
0.492
|
0.682
|
72,064.37
|
10,566.12
|
52,338.93
|
9,159.33
|
144,128.75
|
||||||
|
Invoice
GBP
|
VAT
GBP
|
Euros
Invoice
|
Euros
VAT
|
Invoice
GBP to Total$
|
VAT
GBP to Total$
|
Euros
Invoice to Total$
|
Euros
VAT to Total$ VAT
|
*Total
Orbcomm Invoices
|
|||||
|
October
|
9,520.44
|
1,666.06
|
11,499.40
|
2,012.40
|
19,350.49
|
3,386.30
|
16,861.29
|
2,950.73
|
|||||
|
November
|
9,956.56
|
1,742.39
|
12,262.95
|
2,146.02
|
20,236.91
|
3,541.44
|
17,980.87
|
3,146.66
|
|||||
|
December
|
10,229.08
|
1,790.08
|
11,932.80
|
2,088.24
|
20,790.81
|
3,638.37
|
17,496.77
|
3,061.94
|
|||||
Schedule
1.2
List
of Employees
|
|
Forename
|
Dept
|
|
Surname
|
||
|
▇▇▇▇▇▇▇
|
▇▇▇▇▇▇▇▇
|
Admin
|
|
▇▇▇▇▇▇▇
|
▇▇▇▇▇▇
|
Directors
- 7001
|
|
▇▇▇▇▇▇▇
|
▇▇▇▇
▇▇▇▇▇▇
|
Sales/Marketing
- 6001
|
|
▇▇▇▇▇▇▇▇
|
▇▇▇▇▇▇▇
|
Sales/Marketing
- 6001
|
|
▇▇▇▇▇
|
▇▇▇▇▇
|
Development
Engineers - 7003
|
|
▇▇▇▇▇
|
▇▇▇▇▇▇
|
Productive
- 6000
|
|
▇▇▇▇▇▇▇▇▇
|
▇▇▇▇▇▇
|
Development
Engineers - 7003
|
|
▇▇▇▇▇▇
|
▇▇▇▇▇▇▇▇▇▇▇
|
Development
Engineers - 7003
|
|
▇▇▇▇▇
|
▇▇▇▇▇▇
|
Web
Design - 7003
|
|
▇▇▇▇▇▇▇▇▇
|
▇▇▇▇▇
|
Directors
- 7001
|
|
*▇▇▇▇▇▇▇▇▇
|
▇▇▇▇
▇▇▇▇▇
|
Web
Design - 7003
|
|
▇▇▇▇▇
|
▇▇▇▇
▇▇▇▇▇▇
|
Productive
- 6000
|
|
▇▇▇▇▇▇▇▇
|
▇▇▇▇▇
|
Web
Design - 7003
|
|
Strawhorne
|
▇▇▇▇
▇▇▇▇▇▇
|
Development
Engineers - 7003
|
|
Thomson
|
▇▇▇▇▇▇
▇▇▇▇▇
|
Productive
- 6000
|
|
**▇▇▇▇▇▇
|
▇▇▇▇
|
Development
Engineers - 7003
|
*▇▇.
▇▇▇▇▇▇▇▇▇ was hired as a summer intern after February 7, 2007 but is no
longer
on the payroll.
**▇▇.
▇▇▇▇▇▇ 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
|
Schedule
1.4
List
of Intellectual Property
|
Intellectual
Property
|
Book
Value
|
|
Software
Development for internal proprietary asset-tracking
system
|
$1,550,300
|
|
LEOCATE,
Trade ▇▇▇▇ No. 2232925
|
|
|
UTILITY-EYE,
Trade ▇▇▇▇ 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)
|
Accepted
AP Workpaper
|
||||||||||||
|
Andronics
Total AP
|
$334,058.10
|
|||||||||||
|
(-)
Offsetting Items
|
$ -
|
|||||||||||
|
(-)
Unaccepted AP
|
$26,866.85
|
|||||||||||
|
(=)
Total Accepted AP
|
$ 307,191.25
|
|||||||||||
|
Andronics
|
Limited
|
$
|
1
|
rates
as of 12/11/2007
|
||||||||
|
Date:
|
12/7/2007
|
£
|
0.492
|
######
|
Aged
|
Analysis
|
||||||
|
Report
|
Date:
|
€
|
0.682
|
From:
|
Include
|
transactions:
|
||||||
|
A/C
|
Name
|
Turnover
|
Balance
|
Future
|
Current
|
Period
1
|
Period
2
|
Period
3
|
Older
|
US$
|
||
|
1890CARK
|
1890
CarKits
|
1,107.63
|
459.77
|
0
|
0
|
459.77
|
0
|
0
|
0
|
$944.86
|
||
|
AIRMAR$
|
Airmar
Technology Corporation
|
992.91
|
1,401.86
|
0
|
0
|
29.38
|
0
|
0
|
1,372.48
|
$2,880.93
|
||
|
AIRTRICI
|
Airtricity
Energy Supply (NI) Limited
|
1,146.05
|
175.79
|
0
|
0
|
175.79
|
0
|
0
|
0
|
$361.26
|
||
|
APBMACHI
|
APB
Machinery Moving
|
315
|
158.63
|
0
|
0
|
0
|
52.88
|
105.75
|
0
|
$326.00
|
||
|
AUTOSECU
|
Auto
Security Installations
|
1,863.14
|
137.92
|
0
|
0
|
0
|
0
|
0
|
137.92
|
$283.44
|
||
|
BALLYGOW
|
Aquaporte
Limited
|
507.8
|
43.84
|
0
|
-43.84
|
43.84
|
43.84
|
0
|
0
|
$90.09
|
||
|
BAUGHWEE
|
▇▇▇▇▇
& ▇▇▇▇▇▇ NDT
|
1,283.00
|
1,507.53
|
0
|
0
|
0
|
1,507.53
|
0
|
0
|
$3,098.09
|
||
|
▇▇▇▇▇▇▇
|
▇▇▇▇▇▇▇
bv
|
1,894.29
|
1,894.29
|
0
|
0
|
1,894.29
|
0
|
0
|
0
|
$3,892.91
|
||
|
BT
|
British
Telecommunications Plc
|
3,161.82
|
384.26
|
0
|
384.26
|
0
|
0
|
0
|
0
|
$789.68
|
||
|
CHAMBCOM
|
Londonderry
Chamber of Commerce
|
50
|
82.25
|
0
|
0
|
0
|
58.75
|
0
|
23.5
|
$169.03
|
||
|
CHUBB
|
Chubb
(NI) Ltd
|
121.83
|
143.15
|
0
|
0
|
0
|
0
|
143.15
|
0
|
$294.18
|
||
|
COILTECH
|
Coil
Tech UK Ltd
|
60.5
|
71.09
|
0
|
0
|
71.09
|
0
|
0
|
0
|
$146.10
|
||
|
CPC
|
CPC
Office Supplies Limited
|
299.12
|
48.7
|
0
|
10.86
|
37.84
|
0
|
0
|
0
|
$100.08
|
||
|
CSI
|
CSI
(Ireland) Ltd
|
9,663.00
|
767.28
|
0
|
0
|
0
|
0
|
0
|
767.28
|
$1,576.82
|
||
|
DAVINCI
|
Da
Vinci's Hotel
|
348.94
|
368
|
0
|
0
|
0
|
0
|
368
|
0
|
$756.27
|
||
|
DHL96
|
DHL
Express
|
5,137.72
|
3,811.53
|
0
|
0
|
2,076.28
|
0
|
1,552.84
|
182.41
|
$7,832.98
|
||
|
DIGIKEY
|
▇▇.▇▇▇▇▇▇▇.▇▇▇
|
0
|
-281.88
|
0
|
-108.42
|
-173.46
|
0
|
0
|
0
|
$0.00
|
||
|
ESENDEX
|
Esendex
UK
|
1,108.47
|
-141
|
0
|
-141
|
0
|
0
|
0
|
0
|
$0.00
|
||
|
ESS
|
Electronic
& Security Services Ltd
|
957.84
|
1,125.46
|
0
|
0
|
0
|
0
|
0
|
1,125.46
|
$2,312.91
|
||
|
EXPEDIT
|
Expeditors
International
|
7,079.42
|
1,357.13
|
0
|
0
|
0
|
781.38
|
0
|
575.75
|
$2,789.01
|
||
|
FARNELLE
|
Farnell
Electronic Components Ltd
|
2,587.78
|
826.75
|
0
|
0
|
473.25
|
353.5
|
0
|
0
|
$1,699.03
|
||
|
GENEVAPA
|
Geneva
Palexpo
|
0
|
0
|
0
|
0
|
0
|
0
|
0
|
0
|
$0.00
|
||
|
GLOBINC
|
Globalstar,
Inc.
|
6,558.83
|
6,057.05
|
0
|
0
|
1,248.81
|
4,808.24
|
0
|
0
|
$12,447.70
|
||
|
GMCNICHL
|
▇▇▇▇
▇▇▇▇▇▇▇▇▇
|
26,250.00
|
1,510.00
|
0
|
180
|
510
|
820
|
0
|
0
|
$3,103.16
|
||
|
GSG
|
Resource
|
204.53
|
216.79
|
0
|
0
|
0
|
0
|
81.8
|
134.99
|
$445.52
|
||
|
HDLELECT
|
HDL
Electronics Ltd
|
2,668.95
|
3,136.06
|
0
|
0
|
1,870.21
|
1,265.85
|
0
|
0
|
$6,444.84
|
||
|
IDEXPO
|
IDEXPO
|
0
|
0
|
0
|
0
|
0
|
0
|
0
|
0
|
$0.00
|
||
|
IFSCOURI
|
IFS
Courier Express Ltd
|
7,811.96
|
693.22
|
0
|
0
|
147.68
|
378.46
|
167.08
|
0
|
$1,424.62
|
||
|
IFSGLOBA
|
IFS
Global Logistics Ltd
|
6,987.36
|
1,714.48
|
0
|
121.63
|
401.9
|
623.39
|
370.75
|
196.81
|
$3,523.39
|
||
|
IMPERIAL
|
Imperial
Connector Systems Ltd
|
1,027.50
|
-247.81
|
0
|
0
|
0
|
0
|
0
|
-247.81
|
$0.00
|
||
|
ITS
|
Intertek
Testing Services
|
1,240.00
|
1,457.00
|
0
|
0
|
0
|
0
|
0
|
1,457.00
|
$2,994.25
|
||
|
JMTC
|
JMTC
Ltd
|
0
|
318.62
|
0
|
0
|
0
|
0
|
0
|
318.62
|
$654.79
|
||
|
▇▇▇▇▇▇▇▇
|
▇▇▇▇▇▇▇▇
Printing Limited
|
339
|
398.33
|
0
|
0
|
398.33
|
0
|
0
|
0
|
$818.60
|
||
|
KEEPSOLU
|
Keep
Solutions Simple
|
5,280.00
|
1,116.25
|
0
|
0
|
916.5
|
199.75
|
0
|
0
|
$2,293.98
|
||
|
KMCCAULE
|
▇▇▇▇▇▇▇▇
▇▇▇▇▇▇▇ Chartered Accountants
|
12,125.00
|
14,246.88
|
0
|
8,225.00
|
4,700.00
|
0
|
0
|
1,321.88
|
$29,278.42
|
||
|
LIMAVADY
|
Limavady
Gear Company Limited
|
15,628.00
|
7,207.45
|
0
|
0
|
0
|
0
|
690.9
|
6,516.55
|
$14,811.86
|
||
|
LJNDESIG
|
LJN
Designs
|
750
|
470
|
0
|
0
|
0
|
0
|
470
|
0
|
$965.89
|
||
|
MATRIX
|
Matrix
Telematics Ltd
|
841.44
|
988.69
|
0
|
0
|
0
|
0
|
0
|
988.69
|
$2,031.83
|
||
|
MULTIBUK
|
Multiband
Antennas Limited
|
105
|
-0.21
|
0
|
-0.21
|
0
|
0
|
0
|
0
|
$0.00
|
||
|
NITRONIC
|
Nitronica
|
1,941.69
|
1,371.28
|
0
|
705.76
|
665.52
|
0
|
0
|
0
|
$2,818.08
|
||
|
NTL
|
NTL
Business Credit Control
|
7,881.00
|
7,402.50
|
0
|
0
|
0
|
7,402.50
|
0
|
0
|
$15,212.70
|
||
|
NUSTARTE
|
Nu-Start
Electronics
|
13,409.58
|
8,031.69
|
0
|
0
|
0
|
8,031.69
|
0
|
0
|
$16,505.73
|
||
|
▇▇
|
▇▇
(▇▇) Limited
|
7,197.14
|
347.31
|
0
|
214.99
|
368.54
|
-209.37
|
-320.81
|
293.96
|
$713.75
|
||
|
ORANGE
|
Orange
|
19,543.82
|
5,079.65
|
0
|
0
|
3,082.14
|
-0.55
|
0
|
1,998.06
|
$10,439.07
|
||
|
ORBCOMM
|
Orbcomm
Global L.P.
|
0
|
-292.18
|
0
|
0
|
0
|
0
|
0
|
-292.18
|
$0.00
|
||
|
ORBCOMML
|
Orbcomm
LLC
|
2,533.63
|
13,073.41
|
0
|
0
|
371.51
|
0
|
0
|
12,701.90
|
$26,866.85
|
||
|
PESTCTRL
|
North
West Pest & Rodent Control Service
|
162
|
190.35
|
0
|
190.35
|
0
|
0
|
0
|
0
|
$391.18
|
||
|
POWERACT
|
Power
Action
|
12,551.54
|
-1,627.61
|
0
|
0
|
-3,093.41
|
0
|
0
|
1,465.80
|
$3,012.33
|
||
|
QUAKE$
|
Quake
Global INC
|
9,641.21
|
204.63
|
0
|
0
|
0
|
0
|
204.63
|
0
|
$420.53
|
||
|
RAPIDELE
|
Rapid
Electroncs
|
1,091.41
|
0.29
|
0
|
0
|
0.29
|
0
|
0
|
0
|
$0.60
|
||
|
RCA
|
Rates
Collection Agency
|
4,504.71
|
900.94
|
0
|
0
|
0
|
0
|
0
|
900.94
|
$1,851.50
|
||
|
ROCHESTE
|
Rochester
Gauges International S.A
|
0
|
38.03
|
0
|
0
|
0
|
0
|
0
|
38.03
|
$0.00
|
||
|
RORYMCIN
|
▇▇▇▇
▇▇▇▇▇▇▇▇
|
609.6
|
178
|
0
|
0
|
0
|
0
|
0
|
178
|
$0.00
|
||
|
RS
|
RS
Components Limited
|
75.7
|
16.61
|
0
|
0
|
0
|
16.61
|
0
|
0
|
$34.13
|
||
|
▇▇▇▇▇▇▇▇
|
▇▇▇▇▇▇▇▇
Joblink
|
45
|
105.76
|
0
|
0
|
0
|
0
|
0
|
105.76
|
$0.00
|
||
|
SAFT
|
SAFT
Ltd
|
31,900.00
|
13,771.00
|
0
|
0
|
0
|
0
|
0
|
13,771.00
|
$28,300.45
|
||
|
SAGE
|
Sage
(UK) Ltd
|
2,112.50
|
1,240.80
|
0
|
-124.7
|
60
|
0
|
0
|
1,305.50
|
$2,549.94
|
||
|
SARSINC
|
SARS
Inc
|
57,090.00
|
25,318.67
|
0
|
0
|
0
|
20,327.50
|
5,287.50
|
-296.33
|
$0.00
|
||
|
SARSINC$
|
SARS
Inc $
|
139,150.18
|
138,300.42
|
0
|
0
|
0
|
0
|
7,362.25
|
130,938.17
|
$0.00
|
||
|
SCAPACK
|
SCA
Packaging Ireland
|
0
|
-2,570.38
|
0
|
0
|
0
|
0
|
0
|
-2,570.38
|
$0.00
|
||
|
SECTRAC€
|
Sectrack
NV
|
0
|
3.59
|
0
|
0
|
0
|
0
|
0
|
3.59
|
$0.00
|
||
|
SELECTTR
|
Selective
Travel Management
|
14,576.92
|
3,875.76
|
0
|
0
|
1,585.00
|
2,290.76
|
0
|
0
|
$7,964.98
|
||
|
STELLAR$
|
Stellar
Satellite Communciations Ltd
|
0
|
610.33
|
0
|
0
|
0
|
0
|
0
|
610.33
|
$1,254.27
|
||
|
STEPTOEJ
|
Steptoe
& ▇▇▇▇▇▇▇
|
0
|
-96.68
|
0
|
0
|
0
|
0
|
0
|
-96.68
|
$0.00
|
||
|
SYSTEM
|
System
Design Technology Ltd
|
292.5
|
29,141.89
|
0
|
0
|
0
|
0
|
-424.76
|
29,566.65
|
$59,888.80
|
||
|
TMOBILE
|
T-Mobile
(UK) Ltd
|
54,662.93
|
7,611.25
|
0
|
7,611.25
|
0
|
0
|
0
|
0
|
$15,641.70
|
||
|
TNT
|
TNT
UK Limited
|
0
|
42.41
|
0
|
0
|
0
|
0
|
0
|
42.41
|
$87.16
|
||
|
TRAKM8
|
Trakm8
Limited
|
-825
|
8,272.67
|
0
|
0
|
0
|
0
|
0
|
8,272.67
|
$17,000.97
|
||
|
TRFASTEN
|
TR
Fastenings
|
532.61
|
-2,048.48
|
0
|
0
|
0
|
0
|
-2,079.75
|
31.27
|
$0.00
|
||
|
TWTLOG
|
TWT
Logistics Limited
|
480
|
564
|
0
|
0
|
141
|
0
|
423
|
0
|
$1,159.06
|
||
|
UNITEDWA
|
SITA
(Northern Ireland) Limited
|
665.68
|
82.53
|
0
|
0
|
82.53
|
0
|
0
|
0
|
$169.61
|
||
|
UPS
|
U.P.S.
Limited
|
1,334.34
|
122.54
|
0
|
0
|
122.54
|
0
|
0
|
0
|
$251.83
|
||
|
VODAFONE
|
Vodafone
Ireland Limited
|
5,015.64
|
2,325.80
|
0
|
0
|
0
|
0
|
704.63
|
1,621.17
|
$4,779.70
|
||
|
▇▇▇▇▇▇
|
▇▇▇▇▇▇
Limited
|
4,504.50
|
2,099.93
|
0
|
0
|
0
|
0
|
0
|
2,099.93
|
$4,315.52
|
||
|
XELLEXBA
|
Xellex
Battery Co Ltd - $
|
3,329.76
|
-6,110.98
|
0
|
0
|
0
|
0
|
0
|
-6,110.98
|
$0.00
|
||
|
ZENITH
|
Zenith
|
350
|
411.25
|
0
|
0
|
411.25
|
0
|
0
|
0
|
$845.15
|
||
|
Totals:
|
523,864.42
|
311,614.13
|
0
|
17,225.93
|
19,078.41
|
48,752.71
|
15,106.96
|
211,450.12
|
$334,058.10
|
|||
Schedule
4.2
Convertible
Debenture Holders
|
Principal
Amount:
|
Holder:
|
|
Four
Hundred Eighty-Nine Thousand United States Dollars ($489,000
USD)
|
▇▇▇▇▇▇▇
▇▇▇▇▇▇▇
|
|
▇▇▇
▇▇▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇ Dollars ($150,000
USD)
|
▇▇▇▇▇▇
▇▇▇▇▇
|
|
Thirteen
Thousand United States Dollars ($13,000 USD)
|
Vehicle
Services (▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇)
|
|
Seventy
Thousand United States Dollars ($70,000 USD)
|
Independent
Northern Ireland
|
Schedule
4.6.2
Revenue
Projection Schedule for ▇▇▇▇▇▇▇ 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
|
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
|