Asset Purchase Agreement - eMerge Vision Systems Inc. and Sperry Marine Inc.
ASSET PURCHASE AGREEMENT
PRIVATE
THIS ASSET PURCHASE AGREEMENT (THIS "AGREEMENT") IS DATED AS OF JANUARY 15,
1999 BY AND AMONG EMERGE VISION SYSTEMS, INC. (FORMERLY ENHANCED VISION
SYSTEMS, INC.), A DELAWARE CORPORATION ("SELLER"), AND SPERRY MARINE
INC., A DELAWARE CORPORATION ("BUYER").
BACKGROUND
Seller is engaged in the manufacture, sale and distribution of
the infrared systems that are more particularly described in specifications
attached hereto as Schedule 1 (the "IR Systems") for use on marine vessels (the
"Marine Business"). The parties hereto wish to provide for the sale by Seller,
and the purchase by Buyer, of certain of the assets of Seller and for certain
other matters, all as hereinafter set forth.
NOW, THEREFORE, in consideration of the premises and the
mutual covenants herein contained, and intending to be legally bound hereby, the
parties hereto agree as follows:
SECTION 1.
SALE OF PURCHASED ASSETS
1.1 Sale and Purchase. At the "Closing" (as defined in Section 2.1) of
this Agreement, Seller shall sell, assign, deliver and transfer to Buyer, and
Buyer shall purchase from Seller, all of the assets of Seller specifically set
forth below (the "Purchased Assets"). Notwithstanding any other provision
hereof, Seller shall not sell to Buyer, and the Purchased Assets shall not
include, any asset of the Seller not set forth below ("Excluded Assets"). The
Purchased Assets are:
(a) all of Seller's inventory of IR Systems, including all
constituent and unassembled parts owned by Seller at Closing, other than the
Purchased IR Systems (as defined below) (the "Inventory");
(b) all of Seller's rights, to the extent assignable, under
the Hardware/Software License Agreement, dated July 12, 1996 (the "License
Agreement"), between Digital Imaging Inc. ("Digital") and Seller;
(c) all tooling owned by Seller used in the manufacture of the
IR Systems that is listed or described on Schedule 2 (collectively, "Vendor
Tooling"), whether located at Seller's facilities or located at the vendor
facility listed on such Schedule;
(d) all equipment owned by Seller which is used to test the
performance and functionality of the IR Systems that is listed on Schedule 3
(collectively, "Test Equipment"); and
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(e) all goodwill associated with the Marine Business.
1.2 Excluded Assets. Seller shall not sell, and Buyer shall not
purchase, pursuant to this Agreement, any of the following assets:
(a) any of the IR Systems (the "Purchased IR Systems") that
Seller is selling to Buyer pursuant to the terms of one or more Purchase Orders
(including Purchase Order #302388 dated November 23, 1998), as the same may be
amended or supplemented from time to time after the date hereof (the "Purchase
Order"), between Seller and Buyer, and all Inventory required by Seller to
manufacture such Purchased IR Systems;
(b) any parts or assemblies that would otherwise be included
in the Inventory but which are not required for the manufacture of up to 100 IR
Systems and which are identified in writing by Buyer prior to Closing;
(c) any other Inventory reasonably determined prior to
Closing to be defective that is identified in writing by Buyer prior to Closing;
(d) any Test Equipment that Buyer may elect in writing prior
to Closing to exclude from the Purchased Assets; and
(e) any other asset of Seller not expressly specified in
Section 1.1 hereof.
1.3 Assumed and Excluded Liabilities. From and after the Closing, Buyer
shall assume and be liable for all of Seller's obligations to be performed after
the Closing under the License Agreement, including, without limitation the
payment when due of all fees and royalties due Digital thereunder. Except as
provided in the immediately preceding sentence, Buyer shall not assume and shall
not become liable or responsible in any way for any liabilities or obligations
whatsoever, direct or indirect, contingent or otherwise, of Seller or any
affiliate of Seller (including, without limitation, any partner, officer,
employee, director or agent of Seller) to any person, or for any reason, known
or unknown, actual or inchoate, and whether arising from facts or events
occurring prior to, on or after the Closing (collectively, the "Excluded
Liabilities").
1.4 Purchase Price. The aggregate purchase price for the Purchased
Assets (the "Purchase Price") shall be One Million Eight Hundred Ninety Thousand
Nine Hundred Seventy Six Dollars and Sixty Two Cents ($1,890,976.62). Such
amount does not include any amounts payable to Seller by Buyer in accordance
with the terms of the Purchase Order. Payment of the Purchase Price shall be
made by wire transfer of immediately available funds, to such account as shall
be specified in writing by Seller to Buyer, and shall be paid, and allocated by
the parties for tax purposes, in accordance with the following schedule:
Payment Amount Due Date Allocation
PRIVATE
1.
$200,000
Closing
Inventory
2.
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$1,000,000
August 1, 1999
Inventory
3.
$412,390
September 1, 1999
Inventory
4.(a)
$278,585.62
October 1, 1999
Vendor Tooling and Test Equipment
(b)
$1
October 1, 1999
Goodwill
The Purchase Price shall be adjusted, up or down, based on the difference, if
any, between (a) $1,612,390 and the book value of the Inventory on the date of
Closing, and (b) $285,999 and the book value of the Vendor Tooling and Test
Equipment, each as determined by Seller in accordance with generally accepted
accounting principles, consistently applied with the determination of the value
of such Inventory on Seller's financial statements. Any necessary adjustment to
the Purchase Price on account of subsection (a) above shall be made to the
payment due on September 1, 1999 and shall be allocated to the Inventory. Any
necessary adjustment to the Purchase Price on account of subsection (b) above
shall be made to the payment due on October 1, 1999 and shall be allocated to
the Vendor Tooling and Test Equipment. Buyer and Seller shall file all tax
returns consistently with the allocations set forth above.
SECTION 2.
THE CLOSING
Section 2.1. Closing. The closing of the purchase and sale of the
Purchased Assets hereunder, subject to the terms and conditions set forth herein
(the "Closing"), shall take place on February 22, 1999 or such earlier date when
the Inventory is shipped to Buyer, at the offices of Seller, commencing at 10:00
A.M. or at such other date, place and time as may be mutually agreed by Buyer
and Seller (the "Closing Date"), provided, however, that Seller shall retain
possession of, and have the right to use for the manufacture and testing of the
Purchased IR Systems, the Vendor Tooling and Test Equipment until ten business
days after the all of the Purchased IR Systems are delivered to Buyer pursuant
to the Purchase Order. At the Closing, in addition to the other actions
contemplated elsewhere herein:
(a) Seller shall deliver to Buyer the following:
(i) the Purchased Assets to the
Charlottesville, Virginia
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location of Buyer;
(ii) the Purchase and License
Agreement in the form attached hereto as Exhibit A
(the "Purchase and License Agreement"), executed by
Seller; and
(iii) such bills of sale,
endorsements, assignments, certificates of title and
other instruments of transfer and conveyance as
shall be effective to vest title to each of the
Purchased Assets in Buyer.
(iv) Buyer shall deliver or cause to
be delivered the Purchase and License Agreement,
executed by Buyer.
SECTION 3.
REPRESENTATIONS AND WARRANTIES OF SELLER
Seller represents and warrants to Buyer that as of the date of this
Agreement and as of the Closing Date:
3.1 Legal Status. Seller is a corporation duly incorporated, validly
existing and in good standing under the laws of the State of Delaware and has
all necessary corporate power and authority to own and lease the Purchased
Assets. Seller has not agreed, contingently or otherwise, to share any profits,
losses, costs or liabilities of the Marine Business with any other person or
entity. The Marine Business is and has been conducted solely by and through the
Seller and through or by no other person or entity.
3.2 No Conflict or Violation. Subject to obtaining the necessary
approval and consent pursuant to the License Agreement (the "Consent") and in
reliance upon Section 4.2 and 4.8 herein, the execution, delivery and
performance of this Agreement and the other agreements and instruments
contemplated hereby will not: (i) conflict with any of the terms, conditions or
provisions of the articles of incorporation or bylaws of Seller; (ii) violate
any provision of, or require any consent, authorization or approval under, any
law or administrative regulation or any judicial, administrative or arbitration
order, award, judgment, writ, injunction or decree, or any governmental permit,
license or authorization, applicable or issued to Seller; (iii) conflict with,
result in a breach of, constitute a default under (whether by notice or the
lapse of time or both), or accelerate or permit the acceleration of the
performance required by, or require any consent, authorization or approval
under, any contract, indenture, mortgage, lien, lease, agreement or instrument
to which Seller is a party or by which it or any of the Purchased Assets is
bound; or (iv) result in the creation of any lien, charge, restriction or
encumbrance upon, or any loss of benefit with respect to any of the Purchased
Assets.
3.3 Authority and Binding Agreement. Subject to obtaining the Consent,
Seller has the full capacity, legal power and authority to execute, deliver and
perform this Agreement and its obligations hereunder. Seller has taken all
necessary legal and other action to authorize the execution, delivery and
performance of this Agreement. This Agreement and all other agreements and
instruments to be executed by Seller in connection herewith have been duly
executed and delivered by, and constitute the legal, valid and binding
obligations of Seller, enforceable against it in accordance with their
respective terms.
3.4 Consents, Authorizations and Permits. Except for obtaining the
Consent, no consent, waiver or approval of or notice to any person is or will be
necessary to
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consummate the transactions contemplated by this Agreement and permit Buyer to
employ the Purchased Assets following Closing without restriction, lien or
encumbrance.
3.5 Assets. Seller is the sole beneficial and record owner of and has
good title to the Purchased Assets, free and clear of all liens, encumbrances,
claims, restrictions, liabilities and rights of others, absolute or contingent,
against or affecting any of the Purchased Assets. Upon consummation of the
Closing, Buyer shall acquire all of Seller's right and title to the Pur chased
Assets, free and clear of all liens, encumbrances, claims, restrictions and
liabilities of any nature.
3.6 Litigation. There are no, and during the last three years there
have not been any claims, actions, suits, proceedings (arbitration or otherwise)
or investigations involving or affecting the Marine Business or any of the
Purchased Assets before or by any court or governmental agency or
instrumentality, or before any arbitrator of any kind. To the best of Seller's
knowledge, no such claim, action, suit, proceeding or investigation is presently
threatened or contemplated and there are no facts which could reasonably serve
as a basis for any such claim, action, suit, proceeding or investigation.
3.7 Contracts. Except for the Purchase Order, Seller has no contracts,
leases or agreements of any nature whatsoever (including, without limitation,
barter or similar arrangements), or any commitments obligating Seller to
purchase any equipment or other assets or to procure services, which relate to
the Purchased Assets. Buyer shall have no obligation under or with respect to
any such contracts, agreements, orders or obligations.
3.8 Product Warranties and Claims.
BUYER ACKNOWLEDGES THAT THE PURCHASED ASSETS ARE BEING ACQUIRED BY IT
"AS IS" AND THAT SELLER DOES NOT WARRANT THAT THE INVENTORY IS MERCHANTABLE OR
FIT FOR ANY PARTICULAR PURPOSE. THE PARTIES FURTHER AGREE THAT NEITHER THIS
AGREEMENT NOR ANY SALE MADE PURSUANT TO THIS AGREEMENT INCLUDES ANY WARRANTIES
OF MERCHANTABILITY OR FITNESS FOR ANY PARTICULAR PURPOSE. SELLER MAKES NO
WARRANTIES AS TO THE CONDITION OR QUALITY OF THE PURCHASED ASSETS.
SECTION 4.
REPRESENTATIONS AND WARRANTIES OF BUYER
Buyer hereby represents and warrants to Seller that as of the date of
this Agreement and as of the Closing Date:
4.1 Legal Status. Buyer is a corporation duly organized, validly
existing and in good standing under the laws of the State of Delaware.
4.2 Registered U.S. Entity. Buyer's parent is registered with the U.S.
Department of State as a manufacturer and exporter of defense articles under
Category XII of the U.S. Munitions List. Buyer is not controlled by any foreign
organization, entity, interest or person. For the purpose of this Section, the
term "control" means the power, direct or indirect, whether or not exercised,
and whether or not exercised or exercisable through the ownership of a majority
or a dominate minority of the total
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outstanding voting securities of an issuer, or by proxy voting, contractual
arrangements or other means, to determine, direct or decide matters affecting an
entity.
4.3 Authority and Binding Agreement. Buyer has the corporate power and
authority to execute and deliver this Agreement and to perform its obligations
hereunder. Buyer has taken all necessary corporate action to authorize the
execution, delivery and performance of this Agreement. This Agreement has been
and all other agreements and instruments to be executed by Buyer in connection
herewith have been (or upon execution and delivery will have been) duly executed
and delivered by, and constitute (or upon execution and delivery will
constitute) legal, valid and binding obligations of Buyer, enforceable against
it in accordance with their respective terms.
4.4 No Conflict or Violation. Neither the execution nor delivery by
Buyer of this Agreement, the compliance by Buyer with the terms and conditions
hereof nor the consummation by Buyer of the transactions contemplated hereby
will: (i) conflict with any of the terms, conditions or provisions of the
certificate of incorporation or bylaws of Buyer; (ii) violate any provision of,
or require any consent, authorization or approval under, any law or
administrative regulation or any judicial, administrative or arbitration order,
award, judgment, writ, injunction or decree, or any governmental permit, license
or authorization applicable or issued to, Buyer; or (iii) conflict with, result
in a breach of, constitute a default under (whether by notice or the lapse of
time or both), or accelerate or permit the acceleration of the performance
required by, or require any consent, authorization or approval under any
indenture, mortgage, lien, lease, agreement or instrument to which Buyer is a
party.
4.5 Consents. No consent, approval or waiver of or notice to any person
is or will be necessary or required on the part of Buyer in connection with the
authorization, execution, delivery or performance of its obligations hereunder
or under the Purchase and License Agreement, or under any document or instrument
to be delivered by Buyer in connection herewith or therewith.
4.6 Litigation; Compliance with Laws. No action, suit, claim or
inquiry, proceeding or governmental investigation is pending or threatened
against or relating to Buyer that would adversely impact its ability to own the
Purchased Assets or operate the Marine Business as of the Closing. There is no
outstanding order, injunction or decree of any court or governmental agency or
authority or self-regulatory body that materially adversely affects Buyer or
Buyer's ability to own the Purchased Assets or operate the Marine Business or
that would prevent the consummation of the transactions contemplated hereby.
Buyer has not engaged in, or is now engaging in, any act of course of conduct in
violation of any material respect of any law, regulation, ordinance or other
requirement of any governmental body or court which could impair Buyer's ability
to consummate the transactions contemplated by this Agreement or the Purchase
and License Agreement, own the Purchase Assets or operate the Marine Business as
of the Closing, and no notice or claim alleging any such violation has been
received by Buyer.
4.7 Financial Capacity. Buyer has, and will maintain, sufficient assets
and cash flow to enable it to timely make all payments required under this
Agreement to Seller and to perform its obligations under the Purchase and
License Agreement.
4.8 Compliance with Export Laws. To the best of Buyer's knowledge,
Buyer is in compliance with all laws, rules, regulations, permits, licenses and
other requirements
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relating to the export from the United States of goods, technology and/or
information ("Export Laws"). To the extent that Buyer is or at any time during
the last five years was not in compliance with such Export Laws, Buyer
represents that any such noncompliance will have no adverse effect on Seller or
Seller's ability to consummate the transactions contemplated hereby and/or enter
into and perform its obligations under the Purchase and License Agreement.
SECTION 5.
CONDITIONS PRECEDENT TO BUYER'S PERFORMANCE
The obligation of Buyer to purchase the Purchased Assets under this
Agreement is subject to the satisfaction, at or before the Closing, of all of
the following conditions:
5.1 Accuracy of Representations and Warranties; Performance by Seller.
The representations and warranties of Seller contained in this Agreement shall
be true in all material respects, except for changes permitted or contemplated
by this Agreement, on and as of the time of Closing (except to the extent that
they expressly relate to an earlier date). Seller shall have performed and
complied with all material covenants, agreements and conditions required by this
Agreement to be performed or satisfied by it before or at the Closing. Seller
shall have delivered to Buyer a certificate signed by a duly authorized person,
dated the Closing Date, certifying to the foregoing effect.
5.2 Absence of Litigation. No action or proceeding before any court or
other governmental entity shall have been instituted or threatened by any person
or entity (other than Buyer) to restrain or prohibit the transactions
contemplated by this Agreement and shall not have been dismissed or resolved.
5.3 Consents. The Consent and to the extent required, any statutory and
regulatory consents, approvals, permits, orders and actions required by any
governmental entity shall have been obtained.
5.4 Purchase and License Agreement. Seller shall have entered
into the Purchase and License Agreement.
5.5 Waiver of Conditions. Notwithstanding the failure of any one or
more of the foregoing conditions, Buyer may proceed with the Closing without
satisfaction, in whole or in part, of any one or more of such conditions and
without written waiver. To the extent that Buyer proceeds with the Closing,
Buyer shall be deemed to have waived for all purposes any rights or remedies it
may have against Seller by reason of the failure of any such conditions.
SECTION 6.
CONDITIONS PRECEDENT TO SELLER'S PERFORMANCE
6.1 Accuracy of Representations and Warranties; Performance by Buyer.
The representations and warranties of Buyer contained in this Agreement shall be
true in all material respects, except for changes permitted or contemplated by
this Agreement, on and as of the time of Closing (except to the extent that they
expressly relate to an earlier date). Buyer shall have performed and complied
with all material covenants, agreements
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and conditions required by this Agreement to be performed or satisfied by it
before or at the Closing. Buyer shall have delivered to Seller a certificate
signed by a duly authorized officer of Buyer, dated the Closing Date, certifying
to the foregoing effect.
6.2 Absence of Litigation. No action or proceeding before any court or
other governmental entity shall have been instituted or threatened by any person
(other than Seller) to restrain or prohibit the transactions contemplated by
this Agreement and shall not have been dismissed or resolved.
6.3 Consents. The Consent and to the extent required, any statutory and
regulatory consents, approvals, permits, orders and actions required by any
governmental entity shall have been obtained.
6.4 Purchase and License Agreement. Buyer shall have entered into
the Purchase and License Agreement.
6.5 Financing Statement. Buyer shall have executed a financing
statement reflecting the security interest granted to Seller pursuant to Section
7.7.
6.6 Waiver of Conditions. Notwithstanding the failure of any one or
more of the foregoing conditions, Seller may proceed with the Closing without
satisfaction, in whole or in part, of any one or more of such conditions and
without written waiver. To the extent that Seller proceeds with the Closing,
Seller shall be deemed to have waived for all purposes any rights or remedies it
may have against Buyer by reason of the failure of any such conditions or the
breach of any such representations.
SECTION 7.
COVENANTS; CERTAIN AGREEMENTS
7.1 Use of Name. From and after the Closing, Seller shall not use for
any purpose the name "AMIRIS" or any similar sounding name or any variant
thereof.
7.2 Employee Access and Participation. Seller shall assist Buyer in the
training of its employees in the manufacture and testing of the Purchased IR
Systems by permitting designated employees of Buyer who have signed a
nondisclosure agreement in the form attached hereto as Exhibit B, to participate
in the manufacture and testing of the Purchased IR Systems at Seller's
Sebastian, Florida facility. Buyer shall be solely responsible for all expenses
(e.g., travel, lodging and compensation expenses) incurred by such employees in
traveling to and participating in such assembly.
7.3 Support Documentation. Seller shall, no later than seven days after
the date of execution hereof, provide Buyer with written copies of the latest
revision level of the following:
(a) the technical data packages applicable to the manufacture
of the IR Systems;
(b) the manufacturing assembly procedures related to the IR
Systems; and
(c) the test procedures used to determine the functionality
and performance of the IR Systems.
7.4 Engineering Support Personnel. For a 120 day period, commencing on
the Closing Date, Seller shall make available to Buyer the services of up to
three full-time engineers employed by Seller who shall, upon the written request
of Buyer, work at Buyer's Charlottesville, Virginia facility during normal
business hours to train and
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support the transfer of the manufacture and assembly processes of the IR Systems
to such facility. Seller shall be solely responsible for all compensation
expenses of such engineers and Buyer shall be responsible for all travel,
lodging and other similar expenses incurred by Seller and/or such engineers in
fulfilling their obligations under this Section 7.4.
7.5 Engineering and Drafting Services. For a one year period,
commencing on the date hereof, upon Buyer's reasonable written request,
accompanied by an appropriate statement of work specifying in reasonable detail
the work to be performed and the requested schedule for completion thereof,
Seller shall provide up to 4,160 hours of engineering and/or drafting services
at the following rates: (a) $100 per hour for services that are performed by an
engineer and (b) $50 per hour for services that are performed by a draftsman.
Within ten days after receipt of such statement of work and requested schedule,
Seller shall provide Buyer with an estimate of the number of hours required to
complete such work (which estimate Seller shall not exceed without Buyer's
consent) and a proposed schedule for completion of such work. Buyer shall also
pay any travel, lodging or other similar charges incurred by Seller during the
course of providing such services hereunder. After the end of such one-year
period, Seller may, in its sole discretion, agree to provide additional
engineering and drafting services to Buyer at such prices and on such other
terms and conditions as shall be determined solely by Seller.
7.6 Maintenance of Technical Information. Seller shall maintain and, as
requested by Buyer, upgrade, at Seller's cost, all schematics relating to the IR
Systems currently maintained by it, in electronic format, for a period not to
exceed one year from the date hereof. Seller shall have no obligation to perform
such maintenance and upgrades subsequent to the expiration of such one year
period.
7.7 Security Interest. Buyer hereby grants to Seller, to secure all of
Buyer's liabilities hereunder and under the Purchase and License Agreement, a
first and prior security interest under the Uniform Commercial Code, as adopted
in the State of Florida (the "UCC"), in (i) all of the Purchased Assets, (ii)
all proceeds of the Purchased Assets, and (iii) all products of the Purchased
Assets (collectively, the "Collateral"). So long as any liability to Seller is
outstanding hereunder or under the Purchase and License Agreement, Buyer will
not, without the prior written consent of Seller, which may be withheld in its
sole discretion, permit any lien or encumbrance to attach to the Collateral, or
any levy to be made thereon, or any financing statement (except Seller's
statement) to be on file with respect thereto. Buyer represents that the
location where the Collateral will be kept is 1070 Seminole Trail,
Charlottesville, Virginia 22901. Buyer will keep the Collateral, to the extent
applicable, in good condition and repair, reasonable wear and tear excepted, and
will keep the Collateral insured for the benefit of Seller (to which loss shall
be payable) in such amounts, with such companies and against such risks as may
be satisfactory to Seller, pay the cost of insurance and deliver certificates
evidencing such insurance to Seller. Buyer hereby assigns to Seller all right to
receive the proceeds of such insurance. Buyer will, upon Seller's request, join
with Seller in executing a financing statement, in form satisfactory to Seller,
and such continuation statements and other instruments as Seller may from time
to time request and pay the cost of filing the same in any public office deemed
advisable by Seller. Seller may, upon reasonable notice, inspect and check the
Inventory, Vendor Tooling and Test Equipment. If at any time, Buyer fails to pay
any amount due to Seller hereunder or under the Purchase and
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License Agreement, all liabilities of Buyer to Seller shall immediately become
due and payable, and Seller may (in addition to any other rights and remedies
which it may have) immediately and without demand exercise any and all of the
rights and remedies granted to a secured party upon default under the UCC.
7.8 Export Controls. Buyer acknowledges that certain of the Purchased
Assets that Buyer may receive from Seller under this Agreement are controlled
under laws and regulations of the U.S. Government that prohibit or restrict the
export of technology and certain other activities. Buyer further acknowledges
and agrees that such laws and regulations may require that Buyer obtain a
license from the U.S. Government before the Purchased Assets or products made
therefrom are sold, leased, sublicensed or otherwise transferred to a foreign
person. Seller shall be excused from performance under this Agreement or under
any other agreement, and shall not be liable or accountable to Buyer for any
loss or damage, including lost profits or other indirect or incidental damages,
to the extent that an act or omission of the U.S. Government (including acts or
omissions of Congress and the judiciary) or any law or regulation restricts,
prohibits or delays Seller's performance of an obligation under this Agreement
or restricts or limits Buyer's use or transfer of the Purchased Assets or any
product made therefrom. Notwithstanding anything to the contrary contained
herein, in the event Buyer is required to respond to inquiries from a U.S.
Government Agency relating to the export of the Purchased Assets, Seller shall
provide reasonable assistance to Buyer in responding thereto at Buyer's sole
expense.
SECTION 8.
INDEMNIFICATION
8.1 Indemnification by Seller. Seller shall indemnify and hold Buyer
and its officers, directors, shareholders and affiliates harmless from and
against and in respect of any and all losses, costs, expenses, claims, damages,
deficiencies, liabilities and obligations, including costs of investigation and
defense, and reasonable attorneys' fees and expenses but excluding incidental or
consequential damages ("Damages"), which Buyer or any such person may suffer,
incur, or become subject to, arising out of, based upon or otherwise in respect
of: (i) any liabilities or obligations of, or claims against, Seller, whether
accruing prior to or after Closing, known or unknown, of any nature whatsoever,
including, without limitation, Excluded Liabilities and liabilities of Seller to
its creditors; (ii) any breach of any representation or warranty of Seller under
this Agreement or the other documents and agreements contemplated hereby; or
(iii) non fulfillment of any covenant on the part of Seller under this Agreement
or the other documents and agreements contemplated hereby.
8.2 Indemnification by Buyer. Buyer shall indemnify and hold Seller,
and its officers, directors and partners harmless against and in respect of any
and all Damages which Seller or any such person may suffer, incur or become
subject to arising out of, based upon or otherwise in respect of (i) any breach
of any representation or warranty of Buyer, (ii) nonfulfillment of any covenant
on the part of Buyer under this Agreement, (iii) the Assumed Liabilities, and
(iv) any and all liabilities, obligations, or claims arising from facts or
events occurring after the Closing in connection with Buyer's ownership or
operation of the Marine Business.
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8.3 Indemnification Procedures.
(a) Any party seeking indemnification pursuant to this Section
8 (the "Indemnified Party") shall notify the other party or parties from whom
such indemnification is sought (the "Indemnifying Party") of the Indemnified
Party's assertion of such claim for indemnification, specifying the basis of
such claim. The Indemnified Party shall thereupon give the Indemnifying Party
reasonable access to the books, records and assets of the Indemnified Party
which evidence or support such claim or the act, omission or occurrence giving
rise to such claim.
(b) Each Indemnified Party shall promptly notify the
Indemnifying Party of the assertion by any third party of any claim with respect
to which the indemnification set forth in this Section 8 relates (which shall
also constitute the notice required by Section 8.3(a)). The Indemnifying Party
shall have the right, upon notice to the Indemnified Party within ten business
days after the receipt of any such notice, to undertake the defense of or, with
the consent of the Indemnified Party (which consent shall not unreasonably be
withheld or delayed), to settle or compromise such claim. The failure of the
Indemnifying Party to give such notice and to undertake the defense of or to
settle or compromise such a claim shall constitute a waiver of the Indemnifying
Party's rights under this Section 8.3(b) and shall preclude the Indemnifying
Party from disputing the manner in which the Indemnified Party may conduct the
defense of such claim or the reasonableness of any amount paid by the
Indemnified Party in satisfaction of such claim. The election by the
Indemnifying Party, pursuant to this Section 8.3(b) to undertake the defense of
a third-party claim shall not preclude the party against which such claim has
been made also from participating or continuing to participate in such defense,
so long as such party bears its own legal fees and expenses for so doing.
(c) All claims for breach of any representation or warranty
made by any party must be asserted not later than two years from the Closing
Date, and no party shall be entitled to indemnity hereunder or other relief at
law or in equity for any such claims asserted after that date.
(d) This Section 8 shall not impose any time limitation on the
assertion of claims for breach of covenant made by any party or for claims for
indemnification asserted by Buyer against Seller based upon the assertion
against Buyer of any claim with respect to an Excluded Liability or for claims
for indemnification asserted by Seller against Buyer based upon the assertion
against Seller of any claim with respect to an Assumed Liability or facts or
events occurring after the Closing in connection with Buyer's ownership or
operation of the Marine Business.
(e) The rights of indemnification hereunder are not exclusive
of any other rights a party hereto may have, whether at law or in equity.
SECTION 9.
MISCELLANEOUS
9.1 Further Assurances. Seller shall, from time to time at the request
of Buyer, and without further consideration, provide to Buyer such information
relating to
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<PAGE> 12
the Purchased Assets, and execute and deliver to Buyer such further
instruments of assignment, transfer, conveyance and confirmation, and take such
other action as Buyer may reasonably request in order more effectively to
transfer title to the Purchased Assets or to effectuate the purposes of this
Agreement or the other documents and agreements contemplated hereby. To the
extent Seller is unable to obtain the Consent through the use of all reasonable
efforts prior to Closing, Seller shall (i) if permitted pursuant to the terms of
the License Agreement, use all reasonable efforts to provide Buyer with the full
benefit such agreement, (ii) cooperate in any lawful arrangement designed to
provide such benefits to Buyer and (iii) enforce at the request and expense of
Buyer any rights of Seller arising from the License Agreement. Buyer shall use
reasonable best efforts to obtain, on or before the Closing, a guarantee from
Litton Industries, Inc. of the full performance when due of all of Buyer's
obligations hereunder and pursuant to the Purchase and License Agreement, the
Purchase Order and each of the other agreements and transactions contemplated
hereby.
9.2 Survival of Representations and Warranties. The representations and
warranties made by each party in this Agreement or in any document delivered
hereto, shall survive the Closing for a period of one year, and notwithstanding
any investigation conducted before or after the Closing or the decision of any
party to complete the Closing, each party hereto shall be entitled to rely upon
the representations and warranties of the other party and to obtain
indemnification for any breach thereof.
9.3 Notices. All notices or other communications permitted or required
hereunder shall be in writing and shall be sufficiently given if and when hand
delivered to the persons set forth below or if sent by documented overnight
delivery service or registered or certified mail, postage prepaid, return
receipt requested, or by telegram, telecopy or telex, receipt acknowledged,
addressed as set forth below or to such other person or persons and/or at such
other address or addresses as shall be furnished by any party hereto to the
others. Any such notice or communication shall be deemed to have been given as
of the date received, in the case of personal delivery, or on the date shown on
the receipt or confirmation therefor in all other cases.
If to Buyer:
Sperry Marine Inc.
1070 Seminole Trail
Charlottesville, Virginia 22901
Attention: Carlton Carrol
Telephone No.: 804-974-2539
Telecopier No.: 804-974-2480
With a copy to:
Gerald L. Lett, Esq.
Deputy Director, Intellectual Property Law
1500 PRC Drive
MS 6E2
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<PAGE> 13
McLean, VA 22102-5050
Telephone No.: 703-556-2790
Telecopier No.: 703-556-2527
If to Seller:
eMerge Vision Systems, Inc.
c/o XL Vision, Inc.
10315 102nd Terrace
Sebastian, Florida 32958
Attention: Mike Janney
Telephone No.: 561-589-5310
Telecopier No.: 561-589-3779
With a copy to:
Karen M. Keating, Esq.
Safeguard Scientifics, Inc.
800 The Safeguard Building
435 Devon Park Drive
Wayne, Pennsylvania 19087
Telephone No.: 610-254-4106
Telecopier No.: 610-254-4376
9.4 Assignment and Benefit. Neither Buyer nor Seller shall assign,
delegate or otherwise transfer any obligations under this Agreement without the
written consent of the other. Subject to the foregoing, this Agreement and the
rights and obligations set forth herein shall inure to the benefit of, and be
binding upon, the parties hereto and each of their respective permitted
successors and assigns. This Agreement shall not be construed as giving any
person other than the parties hereto and their permitted successors, heirs and
assigns, any legal or equitable right, remedy or claim under or in respect of
this Agreement or any of the provisions herein contained. This Agreement is
intended to be for the sole and exclusive benefit of the parties hereto and
their permitted successors, heirs and assigns and for the benefit of no other
person or entity.
9.5 Entire Agreement. This Agreement, together with the Purchase and
License Agreement and all other agreements, exhibits, schedules and certificates
referred to herein or delivered pursuant to hereto, constitutes the entire
agreement between the parties hereto with respect to the matters contemplated
herein and supersedes all prior agreements and under standings with respect
thereto. Any amendment, modification, or waiver of this Agreement shall be in
writing. Unless expressly provided, the waiver by a party of any breach of any
provision of this Agreement shall not constitute or operate as a waiver of any
other breach of such provision or of any other provision hereof, nor shall any
failure to enforce any provision hereof operate as a waiver of such provision or
of any other provision hereof.
9.6 Fees and Expenses. Seller and Buyer shall each be responsible for
and bear all of their own costs and expenses incurred in connection with the
sale
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<PAGE> 14
of the Purchased Assets.
9.7 Governing Law. This Agreement is made pursuant to, and shall be
construed and enforced in accordance with the internal laws of the State of
Florida, without giving effect to otherwise applicable principles of conflict of
law.
9.8 Counterparts. This Agreement may be executed in two or more
counterparts, each of which shall be deemed to be an original and all of which,
when taken together, shall be deemed to constitute but one and the same
agreement.
9.9 Effect of Headings. The subject headings of this Agreement are
included for purposes of convenience only, and shall not affect the construction
or interpretation of any of its provisions.
9.10 Incorporation by Reference. The schedules and exhibits attached
hereto and referred to herein are hereby incorporated herein and made a part
hereof for all purposes as if fully set forth herein.
[Intentionally left blank]
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<PAGE> 15
IN WITNESS WHEREOF, each of the parties hereto has duly executed this Agreement,
all as of the day and year first above written.
EMERGE VISION SYSTEMS, INC.
By: /s/: T. Michael Janney
---------------------------------
Name: T. Michael Janney
---------------------------
Title: Chief Financial Officer
---------------------------
SPERRY MARINE INC.
By: C. Graham
----------------------------
Name: C. Graham
----------------------
Title: Manager
---------------------
15
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SCHEDULE 1
IR SPECIFICATIONS
The IR System is comprised of the following:
AMIRIS System #105190000
NSK 1000 System #105190001
FROS System #105594000
Three Field of View Assembly #105235
CCD Overlay #105504
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SCHEDULE 2
VENDOR TOOLING
PRIVATE
ITEM #
PART NUMBER
DESCRIPTION
TOOL
VENDOR
VALUE
1
105097000
HEATSINK LID MACHINED
MILLING FIXTURE
RUOFF & SONS
$
376.00
2
105100000
ENDCAP, PAN & TILT
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<PAGE> 18
MILLING FIXTURES
S. ENGINEERING
$
2,493.00
3
105149000
HOUSING, AZ-EL
MILLING FIXTURES
S. ENGINEERING
$
2,494.12
4
105224000
GEAR SECTOR
GEAR CUTTING FIXTURE
PEERLESS
$
313.00
5
105224000
GEAR SECTOR
GEAR HOB
PEERLESS
$
313.00
6
105224000
GEAR SECTOR
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GEAR MILLING FIXTURE
PEERLESS
$
314.00
7
105241000
MIRROR HOUSING CASTING
WAX INFECTION MOLD
AIC
$
5,580.00
8
105266000
CELL, LENS, 3X, CASTING
STRAIGHTENING MANDREL
NU CAST
$
650.00
9
105266000
CELL, LENS, 3X, CASTING
WAX INJECTION MOLD
NU CAST
$
7,250.00
10
105434000
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<PAGE> 20
AZ-EL HOUSING CASTING
WAX INJECTION MOLD
AIC
$
12,870.00
11
105440000
CAMERA HOUSING CASTING
WAX INFECTION MOLD
NU CAST
$
16,950.00
12
105456000
LID, HEATSINK CASTING
STRAIGHTENING MANDREL
NU CAST
$
950.00
13
105456000
LID, HEATSINK CASTING
WAX INJECTION MOLD
NU CAST
$
12,050.00
20
<PAGE> 21
14
105457000
ENDCAP CASTING
WAX INJECTION MOLD
AIC
$
6,750.00
15
105458000
SHAFT, AZIMUTH-CASTING
1 CAVITY MANUAL DIE
SOUTHERN TOOL
$
3,100.00
16
105505000
CA, GIMBEL/CAMERA
CONNECTOR MOLD (10EA)
WPI
$
1,072.50
17
105560000
CA, GIMBEL/CAMERA, 25 PIN
CONNECTOR MOLD (10EA)
WPI
$
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1,170.00
Subtotal
$
74,695.62
Material Handling %
11.5%
Material Handling %
$
8,590.00
Total Cost for Tooling
$
83,285.62
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<PAGE> 23
SCHEDULE 3
TEST EQUIPMENT
PRIVATE
Relay Lens Alignment Fixture
Auto Collimator
$ 10,000
Sissors Jack
$ 700
Misc Optical Mounts & Cables
$ 4,000
IR Optical Imager (105462)
$ 24,000
Power Supply (+15VDC @ 2 Amps)
$ 600
PC & Monitor & Video Monitor
$ 13,000
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<PAGE> 24
6 inch collimator (included in above amount)
3 FOV IR and Visible Alignment Fixture
IR Target Wheel
$ 5,000
8" Collimator
$ 14,000
Sissors Jack
$ 700
Misc optical Mounts
$ 2,000
Power Supply (+24 VDC)
$ 600
Optical Bench (needed to mount both alignment fixtures)
$ 16,000
Quad Optical Bench Test Fixture
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<PAGE> 25
$ 19,100
Leak Detector
Leak Detector
$ 21,000
Sterling Charging Station
$ 3,000
Power Supply Load Bank
$ 2,000
Camera Box Charging Station
$ 800
PRIVATE
PRIVATE
Flow Bench
$ 4,500
Engineering System
$ 54,300
PRIVATE
TOTAL
$ 195,300
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<PAGE> 26
EXHIBIT A
PURCHASE AND LICENSE AGREEMENT
26
<PAGE> 27
EXHIBIT B
NONDISCLOSURE AGREEMENT
THIS NONDISCLOSURE AGREEMENT (this "Agreement") is made and entered
into as of the day of , 1999, by and between ___________________, a Delaware
corporation (the "Corporation"), and ("Disclosee").
BACKGROUND
Disclosee acknowledges that (i) Disclosee will acquire unique
knowledge of the business and operations of the Corporation, (ii) Disclosee will
develop or acquire during the term of his or her visit to the Corporation,
rights and information which are proprietary in nature to the Corporation, and
(iii) the provisions contained in this Agreement are required in order to
preserve for the Corporation the valuable and legitimate rights of the
Corporation.
NOW THEREFORE, in consideration of the premises, and other
good and valuable consideration, the receipt and sufficiency of which is hereby
acknowledged, and intending to be legally bound hereby, the parties hereto agree
as follows:
Section 1. Confidentiality. Disclosee acknowledges and agrees
that in the course of, or incident to, the performance of this Agreement, the
Corporation may provide to Disclosee or Disclosee may have access to, trade
secrets, proprietary and other confidential information of the Corporation. For
purposes of this Agreement, the term "confidential information" shall mean all
information concerning the business, technology or affairs of the Corporation
and/or its affiliates and all information received from third parties and held
in confidence by the Corporation and/or its affiliates, including, without
limitation, client lists and all other information relating to existing and
potential clients, suppliers, markets, contracts, prices, software,
requirements, strategies, products, technology, know-how, information, data,
processes, inventions, development, formulations, applications and methods of
design and development, except any information that is shown to have been
voluntarily disclosed to the public by the Corporation, to have been
independently developed and disclosed by third parties or to have otherwise
entered the public domain by lawful means. Disclosee recognizes and agrees that
the confidentiality of the confidential information is necessary to the ability
of the Corporation to compete effectively with its competitors. In light of the
foregoing, Disclosee agrees that:
(a) During the term of this Agreement and at all
times thereafter, Disclosee will hold confidential information in the strictest
confidence and will not, without the prior written consent of the Corporation,
disclose or publish, and shall take all reasonable precautions to prevent any of
Disclosee's employer's, partners, associates or agents from disclosing or
publishing, any portion thereof to any person or
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<PAGE> 28
entity (which terms, as used in this Agreement, shall include, without
limitation, any individual, firm, corporation, association or group) except as
required by applicable law or legal process as to which he or she will give the
Corporation prompt notice and consult with it on the possibility of seeking a
protective order or other means to preserve the confidentiality of the
information required to be disclosed; and
(b) Upon expiration or termination of this Agreement
for any reason whatsoever, Disclosee will immediately return to the Corporation
all documents or other tangible records, and any and all copies thereof, within
Disclosee's possession, custody, or control, containing or reflecting any
confidential information.
Section 2. Breach of Conditions. Disclosee acknowledges that
upon the breach of any of the provisions of this Agreement the Corporation would
sustain irreparable harm, and, therefore, Disclosee agrees that in addition to
any other remedies which the Corporation may have under this Agreement or
otherwise upon such breach, the Corporation shall be entitled to apply to any
court of competent jurisdiction for equitable relief, including specific
performance and injunctions restraining Disclosee from committing or continuing
any such violation of this Agreement.
Section 3. Interpretation. If any provision of this Agreement
is held to be invalid or unenforceable by a judicial order for any reason, such
action shall not affect the enforceability of the remaining provisions hereof
and, without limiting the foregoing, any such holding shall in no event preclude
the Corporation from enforcing the provisions hereof for such term, in such
territory and to such extent not inconsistent with or prohibited by said
judicial order. If any provision, or part thereof, however, is held to be
unenforceable because of the duration thereof or the area covered thereby, the
parties agree that the court making such determination shall have the power to
reduce the duration and/or area of such provision and/or to delete specific
words or phrases, and in its reduced form such provision shall then be
enforceable.
Section 4. Binding Effect. This Agreement shall be binding on
the respective successors, assigns, heirs, executors and administrators of the
parties hereto.
Section 5. Entire Agreement. This Agreement constitutes the
entire understanding and agreement between the parties with respect to the
matters contemplated herein and shall not be modified or amended except by the
written agreement of the parties.
Section 6. Governing Law. This Agreement shall be interpreted
and enforced in accordance with the laws of the State of Florida, without
reference to the principles of conflicts of laws otherwise applicable therein.
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IN WITNESS WHEREOF, the parties hereto have duly executed and delivered
this Agreement as of the date first above written.
By:
Name:
Title:
[Signature]
[Print Name]
29