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EXHIBIT 10.6
ASSET PURCHASE AND SALE AGREEMENT
THIS AGREEMENT (the "AGREEMENT"), dated effective as of January 16, 1998,
is made between RJS, INC., a California corporation ("RJS"), a subsidiary of
Eltron International, Inc., a California corporation ("ELTRON"), and (RJS and
Eltron are collectively and individually referred to as "Seller") and
VERIFICATION SYSTEMS INTERNATIONAL, INC. a California Corporation ("Buyer"),
with reference to the following objectives:
P R E A M B L E
WHEREAS, RJS is engaged in the business of manufacturing high speed
thermal bar code printers, bar code verifiers and internal on-line verifiers for
printing systems;
WHEREAS, Buyer is engaged in the business of selling verifier and
related bar code products and systems; and
WHEREAS, Buyer desires to purchase from Seller, and Seller desires to sell
to Buyer, certain of RJS' assets relating to RJS' bar code verifier business
(the "BUSINESS"), excluding bar code printers, bar code printer supplies and
spare parts, and all service and maintenance business for verified and
non-verified printers, all subject to the terms and conditions set forth in this
Agreement.
ACCORDINGLY, THE PARTIES AGREE AS FOLLOWS:
ARTICLE 1
SALE AND PURCHASE OF ASSETS
SECTION 1.1 AGREEMENT TO SELL ASSETS. Subject to the terms and conditions of
this Agreement, on the Closing Date (as hereinafter defined), Seller shall sell,
transfer and deliver to Buyer, and Buyer agrees to purchase and acquire from
Seller, the following listed assets of Seller (collectively, the "PURCHASED
ASSETS"):
(a) PERSONAL PROPERTY. The manufacturing equipment, computers,
tools, furniture, office equipment, spare parts, and other personal property
listed on Schedule 1.1(a) (the "PERSONAL PROPERTY");
(b) INVENTORY. The inventories of raw materials,
work-in-process, finished goods and materials and supplies listed on Schedule
1.1(b) (the "INVENTORY");
(c) CONTRACTS AND LEASES. All of Seller's right, title and
interest, if any, in and to the contracts, agreements, leases, licenses and
commitments specifically identified on Schedule 1.1(c) (the "ASSUMED
CONTRACTS");
(d) INTELLECTUAL PROPERTY. The patents, trade names and
trademarks listed on Schedule 1.1(d) and the goodwill associated therewith,
and all software and technology related to the Business (the "INTELLECTUAL
PROPERTY");
(e) RECORDS. The customer lists, warranty information,
engineering documentation, and other information specifically listed on Schedule
1.1(e) (the "RECORDS";
(f) CORPORATE NAME. The name "RJS, Inc.," and all rights to
use or allow others to use such name; provided, however, for a period of three
(3) months, Seller may use such name on its printer products; and
(g) ACCOUNTS RECEIVABLE. The accounts receivable of Seller
concerning the verifier business outstanding as of the Closing Date, as listed
by customer on Schedule 1.1(g) ("ACCOUNTS RECEIVABLE").
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The Purchased Assets shall be transferred to Buyer at the Closing (as defined in
Section 4.1 hereof) free and clear of any and all claims, liens, mortgages,
security interests, encumbrances, charges or other restrictions, except the
"ASSUMED LIABILITIES" as defined in Section 1.3(b) hereof.
Except as specifically listed above, no other assets of Seller
are being sold to Buyer.
SECTION 1.2 PURCHASE PRICE AND PAYMENT.
(a) PURCHASE PRICE. In consideration for the transfer of the
Purchased Assets to Buyer and the other agreements of Seller set forth in this
Agreement, Buyer agrees to pay to Seller Two Million Eight Hundred Ninety Nine
Thousand Dollars ($2,899,000), plus or minus the amount of the Adjustments
determined pursuant to Section 1.2 (c) below to reflect the changes in the Book
Value of each of the accounts for the Personal Property, Inventory, Accounts
Receivable and Assumed Liabilities (collectively, the "ADJUSTED ASSETS/
LIABILITIES") reflected on the attached balance sheet ("OPENING BALANCE SHEET")
to the Book Value of each such account reflected on the Balance Sheet prepared
as of the Closing Date ("CLOSING BALANCE SHEET") (the "PURCHASE PRICE"). The
Purchase Price shall be paid, at the option of Seller, by cash in the form of
either (i) a wire transfer or (ii) a cashier's check.
(b) PAYMENT OF PURCHASE PRICE. The Purchase Price shall be
paid as follows:
(i) ESCROW DEPOSIT. At Closing, $150,000 (the
"ESCROW DEPOSIT") shall be deposited with the Escrow Agent pursuant to the
Escrow Agreement for thirteen (13) months following the Closing to secure
Seller's indemnification obligations to Buyer under ARTICLE 8 hereof, and shall
be distributed pursuant to the terms of the Escrow Agreement.
(ii) PAYMENT TO SELLER. At Closing, Buyer shall
deliver to Seller cash in the amount of $2,749,000, which is the Purchase Price
less the sum of the Escrow Deposit above.
(iii) ADJUSTMENT AMOUNT. Within 30 days following
Closing either Buyer shall pay to Seller or Seller shall pay to Buyer the
Adjustment Amount determined pursuant to Section 1.2 (c).
(c) DETERMINATION OF ADJUSTMENT.
(i) DEFINITION OF "BOOK VALUE". The term "Book Value"
means the fair value as determined under purchase and accounting methods under
generally accepted accounting principles of the specified asset or liability
account, as the case may be, as recorded on Seller's Opening Balance Sheet and
Closing Balance Sheet consistently prepared.
(ii) CLOSING BALANCE SHEET. Within 10 days after the
Closing Date, Seller shall prepare and deliver to Buyer a Closing Balance Sheet
of the Adjusted Assets/Liabilities of Seller as of the Closing Date. The Closing
Balance shall be prepared in a manner consistent with the preparation of the
Opening Balance Sheet. For purposes of the Closing Balance Sheet, all account
determinations shall be made as of the close of business on the Closing Date.
For up to 10 days after the receipt of the Closing Balance Sheet, Buyer may
review and provide its comments or objections to the Closing Balance Sheet.
Within 5 days after the end of such 10 day period, Seller shall issue the final
Closing Balance Sheet. Attached to and made a part of the Closing Balance Sheet
shall be a report (1) containing sufficient detail for the determination of and
setting forth the amount of the Book Value of the Adjusted Assets/Liabilities
Assets as of the Closing Date (the "Closing Book Value") and (2) setting forth
the "ADJUSTMENTS", for the accounts of the Inventory, Accounts Receivable and
Assumed Liabilities which shall be equal to the difference of (i) the Closing
Book Value of the Inventory account, Accounts Receivable account and the Assumed
Liability account, minus
(ii) $749,000 for the Inventory account
$540,000 for the Accounts Receivable account; and
$288,000 for the Assumed Liabilities account,
which the parties agree are the Opening Book Values for each such account of
these Adjusted Assets/Liabilities. If the Adjustment Amount is positive, it
shall be paid by Buyer to Seller. If the Adjustment Amount is negative, it shall
be paid by Seller to Buyer.
(iii) RESOLVING DISPUTES. In the event of a disagreement
relating to the Closing Balance Sheet, either party may elect to have such
disagreement resolved by an accounting firm of nationally recognized
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standing (the "ACCOUNTING FIRM") to be mutually selected by Seller and Buyer.
The Accounting Firm shall make a resolution of the Closing Balance Sheet, which
shall be final and binding for purposes of this Agreement. The Accounting Firm
shall apply the same accounting principles used to prepare the Opening Balance
Sheet. The fees and expenses for the services of the Accounting Firm shall be
shared equally by Buyer and Seller.
(d) PRORATIONS. The following prorations relating to the
Purchased Assets will be made as of the Closing Date, with Seller liable to the
extent such items relate to any time period up to and including the Closing Date
and Buyer liable to the extent such items relate to periods subsequent to the
Closing Date. The net amount of all such prorations will be settled and paid on
the Closing Date to the extent feasible, but in no event later than ten (10)
days after the Closing Date:
(i) Personal property taxes, real estate taxes and
assessments, and other taxes, if any, on or with respect to the Purchased
Assets.
(ii) Rents, additional rents, taxes and other items
payable by Seller under any lease, license, permit, contract or other agreement
or arrangement to be assigned to or assumed by Buyer.
(iii) The amount of rents, taxes and charges for
sewer, water, fuel, telephone, electricity and other utilities; provided that if
practicable, meter readings shall be taken at the Closing Date and the
respective obligations of the parties determined in accordance with such
readings.
(iv) All other items normally adjusted in connection
with similar transactions.
If the actual expense of any of the above items for the billing
period within which the Closing Date falls is not known on the Closing Date, the
proration shall be made based on the expense incurred in the previous billing
period, for expenses billed less often than quarterly, and on the average
expense incurred in the preceding three billing periods, for expenses billed
quarterly or more often. Seller agrees to furnish Buyer with such documents and
other records as shall be reasonably requested in order to confirm all proration
calculations.
(e) OTHER PAYMENTS. The amount of wages and other remuneration
due in respect of periods to and including the Closing Date to employees of
Seller and the amount of bonuses, if any, due to such employees for all such
periods will be paid by Seller directly to such employees.
SECTION 1.3 ASSUMPTION OF CERTAIN LIABILITIES; OTHER LIABILITIES NOT ASSUMED.
(a) ASSUMED CONTRACTS. At the Closing Buyer shall assume and
agree to pay, perform and discharge, when due, Seller's obligations arising
following the Closing Date, under and pursuant to the Assumed Contracts listed
on Schedule 1.1(c).
(b) ASSUMED LIABILITIES. At the Closing, Buyer shall also
assume and agree to perform and pay when due all of the liabilities and
obligations of Seller specifically identified on Schedule 1.3(b) to this
Agreement, regardless of whether such liabilities are accrued, absolute,
contingent or otherwise, including but not limited to all obligations under the
Seller's standard written product service warranty on the listed products
serviced by Seller (the "ASSUMED LIABILITIES").
(c) OTHER LIABILITIES. Except for the Assumed Liabilities and
Assumed Contracts, Buyer shall not assume or be obligated to pay, perform or
discharge any liability, obligation, debt, charge or expense of Seller of any
kind, description or character, whether accrued, absolute, contingent or
otherwise.
SECTION 1.4 ALLOCATION OF PURCHASE PRICE. The Purchase Price shall be allocated
as set forth on a Certificate of Allocation to be mutually prepared and signed
by Buyer and Seller and attached as Exhibit A; which allocation shall be
conclusive and binding on Buyer and Seller for all purposes, including, but not
limited to, the reporting and disclosure requirements of the Internal Revenue
Service.
ARTICLE 2
REPRESENTATIONS AND WARRANTIES OF SELLER
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Seller represents and warrants to Buyer, each of which is true and correct
on the date hereof and shall remain true and correct to and including the
Closing Date, as follows:
SECTION 2.1 DISCLOSURE SCHEDULE. Attached to this Agreement as Schedule 2.1 is a
disclosure schedule (the "DISCLOSURE SCHEDULE") which includes exceptions to the
representations and warranties set forth below. The Disclosure Schedule shall be
updated through the Closing Date.
SECTION 2.2 ORGANIZATION AND STANDING OF SELLER. Seller is a corporation duly
organized, validly existing and in good standing under the laws of the State of
California.
SECTION 2.3 AUTHORIZATION. Seller has full corporate authority to execute and
deliver this Agreement and to consummate the transactions contemplated hereby.
This Agreement has been duly and validly authorized by the Seller's Board of
Directors and sole shareholder. This Agreement constitutes the valid and binding
agreement of Seller, enforceable in accordance with its terms, except as such
enforcement may be affected or limited by bankruptcy, insolvency, reorganization
and other laws of general applicability relating to or affecting creditors
rights and to general equitable principles.
SECTION 2.4 INSURANCE. Seller has property, fire and casualty insurance policies
(subject to reasonable deductibles), sufficient to allow it to replace any of
the Purchased Assets that may be damaged or destroyed prior to the Closing Date.
SECTION 2.5 LEASED REAL PROPERTY. Seller leases real property at 140 East
Chestnut, Monrovia, California 91016. Seller is not in default under the
material terms of such lease.
SECTION 2.6 TITLE TO PERSONAL PROPERTY. Seller has good, valid and marketable
title to all of the Purchased Assets set forth on Schedules 1.1(a) and 1.1(b),
free and clear of all claims, liens, mortgages, security interests,
encumbrances, charges or other restrictions. All Purchased Assets owned or
leased by Seller will be in the possession of Seller on the Closing Date, except
as otherwise disposed of in the ordinary and usual course of Seller's business
SECTION 2.7 LITIGATION OR CLAIMS. There is no suit, action, proceeding (legal,
administrative or otherwise), arbitration, claim, investigation or inquiry (by
an administrative agency, governmental body or otherwise) pending or threatened
against Seller concerning the Purchased Assets. Seller does not know, or have
grounds to know, of any basis for any such claim or litigation. There is no
outstanding judgment, order, writ, injunction or decree of any court,
administrative agency, governmental body or arbitration tribunal against Seller
which affect the Purchased Assets.
SECTION 2.8 NO CONFLICT. The execution, delivery and performance of this
Agreement and the consummation of the transactions contemplated hereby will not
(i) result in the breach of any of the terms or conditions of, or constitute a
default under, the Articles of Incorporation or the Bylaws of Seller or any
material contract, agreement, lease, commitment, indenture, mortgage, pledge,
note, bond, license or other instrument or obligation to which Seller is a party
or by which Seller or any of Seller's properties or assets may be bound or
affected; or (ii) violate any law or violate any rule or regulation of any
administrative agency or governmental body or any order, writ, injunction or
decree of any court, administrative agency or governmental body. All consents,
approvals or authorizations of or declarations, filings or registrations with
any third parties or governmental or regulatory declarations, filings or
registrations with any third parties or governmental or regulatory authorities
required in connection with the execution, delivery or performance of this
Agreement or the consummation of the transactions contemplated hereby will be
obtained or made, as applicable, by Seller prior to the Closing Date.
SECTION 2.9 ASSUMED CONTRACTS. Seller is not in default, and no event has
occurred which would with notice or the passage of time constitute a default by
Seller, under any of the Assumed Contracts described in Section 1.1(c) of this
Agreement. No other party to any such agreements, contracts or leases is in
default, and no event has occurred which would with notice or the passage of
time constitute a default, under any such agreement, contract or lease.
SECTION 2.10 PRODUCT WARRANTY. Schedule 2.10 contains a true, correct and
complete copy of Seller's standard warranty or warranties for sales or servicing
of Products (as defined below) and, except as stated therein, there are no other
oral or written (expressed or implied) warranties, commitments or obligations
with respect to the return, repair or replacement of Products. As used in this
Section, the term "PRODUCTS" means those products set forth on Schedule 2.10
which are sold or serviced by Seller. The Opening and Closing Balance Sheet sets
forth a reasonable reserve for
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anticipated future warranty and repair work by Buyer on Products sold by Seller
prior to the Closing Date based upon Seller's historical costs and expenses and
its prior historical practices.
SECTION 2.11 ACCOUNTS RECEIVABLE. All accounts receivable reflected on the
Opening Balance Sheet, and as incurred in the normal course of RJS' business
since the date thereof, represent arms length sales actually made in the
ordinary course of business; are collectible (net of the reserves shown on the
Opening Balance Sheet for doubtful accounts) in the ordinary course of business
without the necessity of commencing legal proceedings; are subject to no
counterclaim or setoff; and are not in dispute. Schedule 1.1(g) contains an aged
schedule of accounts receivable included in the Opening Balance Sheet; provided,
however, such Schedule 1.1(g) shall change through the closing date based upon
collection of Accounts Receivable and the creation of new Accounts Receivable.
SECTION 2.12 FINANCIAL STATEMENTS; OTHER INFORMATION. Seller has delivered to
Buyer the Opening Balance Sheet, as at October 31, 1997. The Opening Balance
Sheet is complete and correct in all material respects and has been prepared in
accordance with generally accepted accounting principles applied on a consistent
basis throughout the periods indicated (except as disclosed therein).
SECTION 2.13 PATENTS, TRADEMARKS, ETC. Seller owns or possesses all of the
patents, trademarks, service marks, trade names, copyrights and licenses listed
on Schedule 1.1(d) and rights with respect to the foregoing. Seller has no
actual knowledge (as defined below) of any persons using any inventions,
processes, models, designs or formulas so as to infringe on or violate any
patent or other rights of Seller. The term "Knowledge" for purpose of this
Agreement, shall mean the actual knowledge of Seller's executive officers.
SECTION 2.14 GOVERNMENTAL CONSENT, ETC. No consent, approval or authorization
of, or designation, declaration or filing with, any government authority on the
part of Seller is required in connection with the valid execution and delivery
of this Agreement or the sale or delivery of the Purchased Assets, or the
consummation of any other transaction contemplated hereby.
SECTION 2.15 LABOR MATTERS. No employees of RJS are represented by any labor
organization, and no labor organization, or group of employees of RJS has made a
demand for recognition, has filed a petition seeking a representation proceeding
or has given RJS a written notice of any intention to hold an election for
collective bargaining representative. No strike, picketing, organized work
stoppage or similar action is pending or threatened against RJS by its employees
or any labor union representing its employees, and there have been no strikes,
picketing or organized work stoppage as a result of labor disputes in the last
five years.
SECTION 2.16 STATUS OF MAJOR CUSTOMERS. To Seller's knowledge (as defined in
Section 2.13), none of the RJS' major customers who constituted five percent
(5%) or more of its total sales during the twelve (12) months prior to the
Closing have informed RJS' management of their intention to cease being a
customer of RJS during the twelve (12) months following the Closing, although
RJS has not sought any assurance from any such customers of their continued
patronage.
SECTION 2.17 INVENTORY. Except to the extent of a reserve in the Opening Balance
Sheet, all Inventory of Seller reflected on the Opening Balance Sheet consists
of a quality and quantity usable and saleable in the ordinary course of business
within twelve (12) months after the Closing Date, has a commercial value at
least equal to the value shown on such balance sheet and is valued in accordance
with generally accepted accounting principles at the lower of cost or market.
All Inventory purchased since the date of such balance sheet consists of a
quality and quantity usable and saleable in the ordinary course of business.
ARTICLE 3
REPRESENTATIONS AND WARRANTIES OF BUYER
Buyer represents and warrants to Seller as follows:
SECTION 3.1 CORPORATE STATUS. Buyer is a corporation duly organized and
validly existing under the laws of the State of California and in good
standing thereunder.
SECTION 3.2 AUTHORIZATION. Buyer has full corporate authority to execute and
deliver this Agreement and to consummate the transactions contemplated hereby.
This Agreement has been duly
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and validly authorized by the Buyer's Board of Directors and no other consent or
approval is required. This Agreement and each document, instrument and
certificate executed and delivered in connection with the transactions described
herein has been duly and validly executed and delivered Buyer. This Agreement
constitutes the valid and binding obligation of Buyer, enforceable against Buyer
in accordance with its terms, except as such enforcement may be affected or
limited by bankruptcy, insolvency, reorganization and other laws of general
applicability relating to or affecting creditors rights and to general equitable
principles.
SECTION 3.3 CONSENTS AND APPROVALS; NO VIOLATION. No filing with, and no permit,
authorization, consent or approval of, any public body or authority is necessary
for the consummation by Seller and Buyer of the transactions contemplated
hereby.
ARTICLE 4
CLOSING
SECTION 4.1 CLOSING. The transactions contemplated by this Agreement shall be
consummated at a closing (the "Closing") to be held in the offices of Seller at
41 Moreland Rd., Simi Valley California, or at such other place as the parties
may mutually agree in writing, upon the satisfaction or waiver of all of the
conditions set forth in Article 6 and Article 7 (the "Closing Date").
SECTION 4.2 OBLIGATIONS OF SELLER. At the Closing, unless otherwise
waived by Buyer, Seller shall deliver to Buyer:
(a) BILLS OF SALES. Bills of sale, endorsements, assignments
and such other instruments of transfer as are sufficient, in the reasonable
judgment of Buyer and its counsel, to vest in Buyer good and marketable title to
the Purchased Assets, free and clear of any and all claims, liens, mortgages,
security interests, encumbrances, charges or other restrictions, except for
Assumed Liabilities.
(b) COMPLIANCE CERTIFICATE. A certificate signed by the Chief
Executive Officer or Vice President of Seller that each of the representations
and warranties made by it in this Agreement is true and correct in all material
respects on and as of the Closing Date with the same effect as though such
representations and warranties had been made on the Closing Date (except for any
changes permitted by the terms of this Agreement or consented to in writing by
Buyer), and that Seller has performed and complied with all of Seller's
obligations under this Agreement which are to be performed or complied with on
or prior to the Closing Date.
(c) OPINION OF COUNSEL. A written opinion of Graven, Perry,
Block, Brody & Qualls, counsel to Seller, dated as of the Closing Date,
addressed to Buyer, substantially in the form of Exhibit B hereto.
(d) CERTIFIED RESOLUTIONS. A certified copy of the resolutions
of the Board of Directors and the shareholder of Seller authorizing and
approving this Agreement and the consummation of this transaction contemplated
by this Agreement.
(e) LICENSE AGREEMENT. The License Agreement duly executed by
Eltron and Buyer, in the form of Exhibit D.
(f) ESCROW AGREEMENT. The Escrow Agreement duly executed by
Seller in the form of Exhibit E.
(g) OTHER RECORDS. All records and other documents to be
acquired by Buyer pursuant to Section 1.1 of this Agreement.
SECTION 4.3 OBLIGATIONS OF BUYER. At the Closing, unless otherwise waived by
Seller, Buyer shall deliver to Seller:
(a) PURCHASE PRICE. The Purchase Payment provided for in
Section 1.2 of this Agreement.
(b) ASSUMPTION OF LIABILITIES. Such undertakings and
instruments of assumption as will be reasonably sufficient in the opinion of
Seller and its counsel to evidence the assumption of the Assumed Liabilities.
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(c) COMPLIANCE CERTIFICATE. A certificate signed by the Chief
Executive Officer or Vice President of Buyer that each of the representations
and warranties made by Buyer in this Agreement are true and are correct in all
material respects on and as of the Closing Date with the same effect as though
such representations and warranties had been made or given on and as of the
Closing Date (except for any changes permitted by the terms of this Agreement or
consented to in writing by Seller), and that Buyer has performed and complied
with all of Buyer's obligations under this Agreement which are to be performed
or complied with on or prior to the Closing Date.
(d) OPINION OF COUNSEL. A written opinion of Kirshman &
Harris, counsel to Buyer, dated as of the Closing Date, addressed to Seller, in
substantially the form of Exhibit C hereto.
(e) CERTIFIED RESOLUTIONS. A certified copy of the resolutions
of the Board of Directors of Buyer authorizing and approving this Agreement and
the consummation of the transactions contemplated by this Agreement.
(f) LICENSE AGREEMENT. The License Agreement duly executed by
Eltron and Buyer in the form of Exhibit D.
(h) ESCROW AGREEMENT. The Escrow Agreement duly executed
by Buyer in the form of Exhibit E.
SECTION 4.4 FURTHER DOCUMENTS OR NECESSARY ACTION. Buyer and Seller agree to
take all such further actions on or after the Closing Date as Buyer or Seller
may deem to be reasonably necessary, desirable or appropriate in order to
effectuate the transactions contemplated in this Agreement.
ARTICLE 5 COVENANTS
SECTION 5.1 EMPLOYEES.
(a) "Affected Employees" shall mean employees of RJS who may
be employed by Buyer immediately after the Closing.
(b) Buyer may offer employment to, and Seller shall cooperate
and assist Buyer in its efforts to hire, the employees listed on Schedule 2.4,
whether on a permanent or on an interim basis, on terms and conditions
comparable to the employment terms currently provided by Seller.
(c) Seller agrees to satisfy, or cause Seller's insurance
carriers to satisfy, all claims for benefits under Seller's employee benefit
programs brought by Affected Employees which claims arise out of events
occurring on or prior to the Closing Date, in accordance with the terms and
conditions of such programs or applicable workers' compensation statutes without
interruption as a result of the employment by Buyer of any such employees after
the Closing Date.
(d) Seller agrees to make a clean cut-off of payroll and
payroll tax reporting with respect to the Affected Employees hired by Buyer
paying over to the federal, state and city governments those amounts
respectively withheld or required to be withheld for periods ending on or prior
to the Closing Date. Seller also agrees to issue Forms W-2 for wages paid
through the Closing Date. Except as set forth in this Agreement, Buyer shall be
responsible for all payroll and payroll tax obligations arising after the
Closing Date for employees hired by Buyer.
(e) To the extent permitted by law, Seller shall use its best
efforts to assign to VSI all of their rights, if any, under all confidentiality
agreements and noncompetition agreements that either of them may have with any
person or entity including, but not limited to, any consultants, current RJS
employees, former RJS employees, and current or former Eltron employees, to the
extent that they performed services related to the Purchased Assets. Seller
shall execute any other documents reasonably required to perfect the foregoing
assignments.
SECTION 5.2 PERFORMANCE OF WARRANTY WORK. Following the Closing, Buyer shall
assume, as part of the Assumed Liabilities, all responsibility for and shall
perform, or cause to be performed, all of the warranty work listed on Schedule
1.3(b).
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SECTION 5.3 BROKER'S FEES. Buyer and Seller represent to each other that neither
has incurred any liability for any broker or finder's fees, agents, commissions,
financial adviser's fees or other similar fees (collectively, "BROKER'S FEES")
with respect to this Agreement or the consummation of the transactions
contemplated hereby
SECTION 5.4 CONDUCT OF BUSINESS PENDING THE CLOSING. During the period from the
date of this Agreement to the Closing Date, Seller shall conduct its operation
of the business, and the Purchased Assets in the ordinary and usual course.
Seller shall pay and discharge all obligations and indebtedness as they come due
in a manner consistent with past practice.
SECTION 5.5 NOTICE OF BREACH OR FAILURE OF CONDITION. Prior to the consummation
of the transactions contemplated by this Agreement, Seller, on the one hand, and
Buyer on the other hand, agree to give prompt notice to the other of the
occurrence of any event or the failure of any event to occur that might preclude
or interfere with the satisfaction of any condition precedent to the obligations
of Seller or Buyer under this Agreement.
SECTION 5.6 EXPENSES. Whether or not the transactions under the Agreement are
consummated, all costs and expenses in connection with this Agreement and the
related transactions shall be paid and be the sole responsibility of the party
which incurred the expense or cost.
SECTION 5.7 BEST EFFORTS. Subject to the terms and conditions herein provided,
each of the parties hereto agrees to use its best efforts to take, or cause to
be taken, all action, and to do, or cause to be done, all things necessary,
proper or advisable under applicable laws and regulations to consummate and make
effective the transactions contemplated hereby. In case at any time after the
Closing Date any further action is necessary or desirable to carry out the
purposes of this Agreement, the parties hereto, by action of their proper
officers and directors or otherwise, shall take all such necessary action.
SECTION 5.8 CONSENTS. Each of the parties hereto will use its best efforts to
obtain consents of all third parties and governmental authorities necessary to
the consummation of the transactions contemplated hereby.
SECTION 5.9 ACCESS TO INFORMATION. Buyer may upon reasonable notice be provided
reasonable access during normal business hours, to view RJS' facilities and the
Purchased Assets and to meet with RJS' employees, and Seller shall use its best
efforts to cause its representatives to furnish promptly to Buyer and its
representatives such additional financial and operating data and other
information as to the business as Buyer may from time to time reasonably
request. After Buyer has completed and is satisfied with its due diligence
review of the facilities, Purchased Assets and employees, then Buyer may request
to contact certain of RJS' customers and Seller will arrange with the Buyer for
contact with RJS' customers with the mutual participation of a Seller employee.
SECTION 5.10 CONFIDENTIAL INFORMATION
(a) PRESERVATION OF CONFIDENTIALITY. In connection with the
negotiation of this Agreement, the preparation for the consummation of the
transactions contemplated hereby, and the performance of obligations hereunder,
both parties acknowledge that they will have access to confidential information
of the other party. The party receiving such confidential information (the
"RECEIVING PARTY") shall treat such information as confidential, preserve the
confidentiality thereof and not disclose the information received from the other
party (the "DISCLOSING PARTY"), except to its respective representatives in
connection with the transactions contemplated hereby. The Receiving Party agrees
to maintain in confidence, and not to disclose to any third party, any ideas,
methods, developments, inventions, improvements and business plans and
information which are the confidential information of the Disclosing Party. If,
however, confidential information is disclosed, the party shall immediately
notify the other party in writing and take all steps required to prevent further
disclosure.
(b) PROPERTY RIGHT IN CONFIDENTIAL INFORMATION. Until the Closing,
all of Seller's information shall remain its sole property. In the event of the
termination of this Agreement for any reason whatsoever, each party shall return
to the other party, all documents, work papers and other material (including all
copies thereof) obtained from the Disclosing Party or its employees in
connection with the transactions contemplated hereby and will use all reasonable
efforts, including, without limitation, instructing in writing its employees and
others who have had access to such information, to keep confidential and not to
use any such information, unless such information is now, or is hereafter
disclosed, through no act or omission of such party, in any manner making it
available to the general public. If the Receiving Party is compelled by legal
process to disclose any confidential information of the Disclosing Party, the
Receiving Party shall provide the Disclosing Party with prompt written notice of
such request.
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SECTION 5.11 CHANGE OF CORPORATE NAME. Within ten (10) days of the closing,
Seller shall change its corporate name to a new name bearing no resemblance to
its present name so as to permit the use of its present name by Buyer. Seller
shall authorize and consent to Buyer's reservation with the Secretary of State's
office any corporate name using the "RJS" name.
SECTION 5.12 SOLICITATION OF EMPLOYEES. For a period of one (1) year after the
closing of this Agreement, neither party nor its directors, officers and
employees and affiliated companies (including its parent corporation) will,
directly or indirectly, either for itself or for any other person, firm, company
or corporation, attempt to solicit, divert or take away any of the employees of
the other party.
SECTION 5.13 CONSULTING SERVICES. After the Closing Date, the parties shall
allow each other to use the consulting services of the employees of the other
party on the terms and conditions set forth on Schedule 5.13.
SECTION 5.14 INDEMNIFICATION FOR FAILURE TO COMPLY WITH BULK SALE NOTICE. To the
extent Seller may be required to give a "bulk sale" notice to its creditors and
others of the sale of the Purchased Assets to Buyer, Seller shall indemnify and
hold Buyer harmless from any and all costs, liabilities, damages or obligations
which arise or result from Seller's failure to provide such notice.
SECTION 5.15 MUTUAL ACCESS TO RECORDS, POST CLOSING. Following the Closing,
Buyer and Seller shall allow each other reasonable access during normal business
hours to view and copy records or documents relating to or concerning the
Purchased Assets for a reasonable business purpose (e.g. tax filings, accounting
and financial reporting, responding to creditors or customer claims, etc.).
SECTION 5.16 MONROVIA FACILITY. As soon as practicable after the Closing Date,
Buyer intends to remove from Seller's facility, located at 140 East Chestnut,
Monrovia, California 91016, the physical assets being purchased pursuant to this
Agreement. Seller shall allow Buyer to use such facility for up to 90 days after
the Closing Date for a daily license fee of $335. Buyer shall give Seller 35
day's written notice prior to moving from such facility. Buyer shall indemnify
Seller under the terms of Section 8.3 for any claim, action, suit or proceeding
which arise from or relate to Buyer's use of the facility from and after the
Closing Date. Buyer shall remove the Purchased Assets from the facility without
causing any damage to the premises (other than such damage which is necessary
and reasonable).
SECTION 5.17 FURTHER ASSURANCES. Following the Closing, at either party's
request and without further consideration, the other party will execute and
deliver such documents and take such other action as the requesting party may
reasonably request in order to consummate the transactions contemplated hereby,
including the vesting in Buyer of good title to the Purchased Assets.
ARTICLE 6
CONDITIONS PRECEDENT TO OBLIGATIONS OF BUYER
All obligations of Buyer under this Agreement are, except to the extent
expressly waived in writing by Buyer, subject to the satisfaction by Seller
prior to or at the Closing of all of the following conditions:
SECTION 6.1 REPRESENTATIONS AND WARRANTIES TRUE AT CLOSING. The representations
and warranties of Seller in this Agreement shall in all material respects be
true and correct when made and shall be true and correct on the Closing Date as
though such representations and warranties were made again on the Closing Date.
SECTION 6.2 PERFORMANCE. Seller shall have performed and complied with all
conditions required by this Agreement to be performed or complied with by Seller
prior to or at the Closing.
SECTION 6.3 SELLER'S CERTIFICATE. Buyer shall have received a certificate signed
by Seller and dated as of the Closing Date to the effect that all
representations and warranties made in this Agreement by Seller were on the date
of this Agreement and on the Closing Date true and correct in all material
respects and that Seller has performed in all material respects the obligations,
agreements and covenants undertaken by Seller in this Agreement to be performed
on or prior to the Closing Date.
SECTION 6.4 NO ADVERSE CHANGES. Except as contemplated by this Agreement or in
the Disclosure Schedule, there shall have been no material adverse change in the
condition of the Purchased Assets from the Date of this Agreement to the Closing
Date.
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SECTION 6.5 LITIGATION. Without limiting the warranty in Section 2.8, on the
Closing Date none of the parties shall be subject to any order, decree or
injunction of a court or any governmental commission, board, agency or other
instrumentality restraining or prohibiting the consummation of the transactions
contemplated by this Agreement, and no investigation by any governmental or
other agency shall be pending or threatened which might result in any such
litigation or other proceeding.
SECTION 6.6 NO CASUALTY. Except as provided in the Disclosure Schedule, the
Purchased Assets, except for use or consumption by Seller during the ordinary
and usual course of business, shall not have been adversely affected in any
material way as a result of any accident or other casualty or act of God.
SECTION 6.7 CONSENTS AND APPROVALS. All approvals, consents and waivers that are
required to effect the transactions contemplated under this Agreement shall have
been received and shall be in full force and effect. Such consents include, but
are not limited to, consent to all required filings, declarations or notices
with or to third parties shall also have been made or given.
ARTICLE 7
CONDITIONS PRECEDENT TO OBLIGATIONS OF SELLER
All obligations of Seller under this Agreement are, except to the extent
expressly waived in writing by Seller, subject to the satisfaction by Buyer
prior to or at the Closing of all of the following conditions:
SECTION 7.1 REPRESENTATIONS AND WARRANTIES TRUE AT CLOSING. The representations
and warranties of Buyer in this Agreement shall be true and correct when made
and shall be true and correct on the Closing Date as though such representations
and warranties were made again on the Closing Date.
SECTION 7.2 PERFORMANCE. Buyer shall have performed and complied with all
agreements and conditions required by this Agreement to be performed or complied
with by Buyer prior to or at the Closing.
SECTION 7.3 BUYER'S CERTIFICATE. Seller shall have received a certificate signed
by Buyer and dated as of the Closing Date to the effect that all representations
and warranties made in this Agreement by Buyer were on the date of this
Agreement and on the Closing Date true and correct in all material respects and
that Buyer has performed in all material respects the obligations, agreements
and covenants undertaken by Buyer in this Agreement to be performed on or prior
to the Closing Date.
SECTION 7.4 LITIGATION. On the Closing Date none of the par-ties shall be
subject to any order, decree or injunction of a court or any governmental
commission, board, agency or other instrumentality restraining or prohibiting
the consummation of the transactions contemplated by this Agreement, and no
investigation by any governmental or other agency shall be pending or threatened
which might result in any such litigation or other proceeding.
SECTION 7.5 CONSENTS AND APPROVALS. All approvals, consents and waivers that are
required to effect the transactions contemplated under this Agreement shall have
been received and shall be in full force and effect. All required filings,
declarations or notices with or to third parties shall also have been made or
given.
ARTICLE 8
INDEMNIFICATION
SECTION 8.1 INDEMNITY BY SELLER OF BUYER. Seller shall defend, indemnify and
hold harmless Buyer and its affiliates, employees, representatives, officers,
directors and agents, against and in respect of any and all loss, cost, damage,
liability, obligation, expense or deficiency suffered as a result of:
(a) LIABILITIES. Any and all liabilities, obligations or debts
of Seller of any nature, whether accrued, absolute, contingent or otherwise,
other than the Assumed Liabilities (as such term is defined in Section 1.3(b) of
this Agreement);
(b) BREACH OF COVENANTS, REPRESENTATIONS OR WARRANTIES. Any
and all inaccuracies or breaches of any representations, warranties, covenants
or obligations given by Seller to Buyer in this Agreement; and
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(c) EXPENSES. Any and all loss, cost, damage or expense
incurred with respect to any claims, actions, suits, proceedings or assessments
arising out of matters described in subsections (a) or (b) above, or the
settlement thereof, including, without limitation, accounting and legal fees.
Seller shall reimburse Buyer from time to time after the Closing Date in respect
of any liability or claim to which the foregoing indemnification relates within
ten (10) days of receipt of a written itemized accounting of the same from
Buyer.
(d) SECURITY FOR INDEMNITY OBLIGATIONS. To secure Seller's
indemnity obligations under this Section 8.1, a portion of the Purchase Price
equal to $150,000 shall be deposited with the Escrow Agent pursuant to the terms
of the Escrow Agreement in accordance with Section 1.2.
SECTION 8.2 INDEMNITY BY BUYER OF SELLER. Buyer shall defend, indemnify and hold
harmless Seller and its affiliates, employees, representatives, shareholders,
officers, directors and agents, against and in respect of any and all loss,
cost, damage, liability, obligation, expense or deficiency suffered as a result
of:
(a) LIABILITIES. Any and all Assumed Liabilities of any
nature, whether accrued, absolute, contingent or otherwise, as such term is
defined in Section 1.3(b) of this Agreement;
(b) BREACH OF REPRESENTATIONS OR WARRANTIES. Any and all
inaccuracies or breaches of any representations, warranties, covenants or
obligations given by Buyer to Seller in this Agreement; and
(c) EXPENSES. Any and all loss, cost, damage or expense
incurred with respect to any claims, actions, suits, proceedings or assessments
arising out of matters described in subsections (a) or (b) above, or the
settlement thereof, including, without limitation, accounting and legal fees.
Buyer shall reimburse Seller from time to time after the Closing Date in respect
of any liability or claim to which the foregoing indemnification relates within
ten (10) days of receipt of a written itemized accounting of the same from
Seller.
SECTION 8.3 THIRD-PARTY CLAIMS. If any action, suit, investigation or proceeding
shall be threatened or commenced in respect of which the party to be indemnified
under either Section 8.1 or 8.2 ("Indemnitee") may demand indemnification under
Section 8.1 or 8.2 herein, Indemnitee shall notify the party who is obligated to
indemnify ("Indemnitor") to that effect with reasonable promptness after the
commencement of that action, suit, proceeding or investigation, and Indemnitor
shall have the opportunity to defend against such action, suit, proceeding or
investigation, subject to the limitations set forth below. If Indemnitor elects
to defend against any action, suit, proceeding or investigation, Indemnitor
shall notify Indemnitee to that effect with reasonable promptness. Indemnitee
shall have the right to employ its own counsel and participate in the defense of
any such case, but the fees and expenses of counsel shall be at the expense of
Indemnitee unless (i) the employment of such counsel at the expense of
Indemnitor shall have been authorized in writing by Indemnitor in connection
with the defense of the action, suit, proceeding or investigation or (ii)
Indemnitor shall have decided not to defend against the action, suit, proceeding
or investigation, in either of these cases Indemnitor shall not have the right
to direct the defense of the action, suit, proceeding or investigation on behalf
of Indemnitee and the fees and expenses relating to such action, suit,
proceeding or investigation shall be borne by Indemnitor. Any party granted the
right to direct the defense of a claim pursuant to this Article 8 shall (i) keep
the other fully informed of the action, suit, proceeding or investigation at all
stages thereof whether or not represented and (ii) promptly submit to the other
copies of all pleadings, responsive pleadings, motions and other similar legal
documents and papers received in connection with the action, suit, proceeding or
investigation.
SECTION 8.4 AMOUNT LIMITATION. Buyer shall not be entitled to indemnification
under this Article 8 for breach of a representation, warranty, covenant or
agreement unless the aggregate of the Seller's indemnification obligations
exceeds $50,000; but in such event, Buyer shall be entitled to indemnification
in full for all breaches of representations, warranties, covenants or agreements
up to an aggregate of the Purchase Price for such claims.
SECTION 8.5 SURVIVAL OF INDEMNITY RIGHTS. The right of Buyer or Seller to seek
indemnity for claims arising under this Article 8 shall survive the Closing for
a period of thirteen (13) months and thereafter no claims may be brought, except
for indemnification by Seller of Buyer for third party claims under Section 8.3
(which are subject to statutory statute of limitations).
ARTICLE 9
TERMINATION
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SECTION 9.1 TERMINATION. At any time on or prior to the Closing Date, this
Agreement may be terminated (a) by the mutual written consent of the Boards of
Directors of Seller and Buyer, (b) by Seller if Buyer fails to show, within 10
days of the execution of this Agreement, proof of its ability to fund and pay
the Purchase Price, (c) by Seller or Buyer upon the default by the other party
in the observance or in the due and timely performance of any of the covenants
contained in this Agreement if such breach shall not be cured within ten (10)
days of written notice, (d) by Seller or Buyer if there shall have been a
material breach by the other party of any of the representations or warranties
set forth in this Agreement if such breach shall not be cured within ten (10)
days of written notice, (e) if any of the conditions of this Agreement to be
complied with or performed by Seller or Buyer on or before the Closing Date
shall not have been complied with or performed by such date and such
noncompliance or nonperformance shall not have been waived in writing by the
other party, then the party to whom the benefit of such condition runs may
terminate this Agreement, (f) by Buyer upon written notice to Seller that based
upon its due diligence review of Seller and its employees that it has reasonably
determined in good faith that previously unknown products and technology of
Seller's competitors are reasonably anticipated to cause a reduction during the
twenty four (24) months following the Closing of twenty five percent (25%) or
more of future sales based upon Seller's historical sales during the twenty four
(24) months prior to the anticipated Closing Date, or (g) by Buyer if, after its
due diligence review of the business of RJS and the Purchased Assets, including
contact with RJS' customers, Buyer not has received satisfactory assurances from
major customers, as defined in Section 2.16, of their continued patronage.
SECTION 9.2 FINAL EXPIRATION. This Agreement shall auto-matically expire
if the Closing does not occur on or before February 15, 1998.
SECTION 9.3 EFFECT OF TERMINATION. Termination of this Agree-ment pursuant to
this Article 9 shall not in any way restrict the rights and remedies of any
party hereto against any other party which has violated, breached or failed to
satisfy any of the representations, warranties, covenants, agreements,
conditions or other provisions of this Agreement prior to termination hereof.
ARTICLE 10
GENERAL
SECTION 10.1 ARBITRATION. Any controversy or claim arising out of, or relating
to this Agreement, or the breach thereof, shall be exclusively settled by a
three-person panel of arbitrators in an arbitration conducted in Los Angeles
County, California, in accordance with the Commercial Arbitration Rules of the
American Arbitration Association ("AAA") as such rules shall be in effect on the
date of delivery of demand for arbitration.
Judgment upon the award rendered by the arbitrators may be entered
in any court having jurisdiction thereof. The arbitrators' decision shall be in
writing and shall be final and nonappealable. The arbitrators' authority shall
include ordering discovery proceedings and the ability to render equitable types
of relief and, in such event, any aforesaid court may enter an order enjoining
or compelling such actions as found by the arbitrators. The arbitrators shall
also make a determination regarding whether one party's legal position in any
such controversy or claim is the more substantially correct (the "PREVAILING
PARTY") and the arbitrators shall require the other party or parties to pay the
reasonable legal and other professional fees and costs incurred by the
Prevailing Party in connection with such arbitration proceeding and any
necessary court action. The parties recognize and agree that the remedy of
specific performance may be appropriate in order to enforce certain provisions
of this Agreement. The parties agree that a party would be entitled to pursue
such remedies for emergency or preliminary injunctive or other equitable relief
in any court of competent jurisdiction, provided that there would be a stay of
such judicial proceedings on the merits of the dispute arising out of or
relating to this Agreement pending arbitration of all underlying claims between
the parties immediately following the issuance of any such emergency or
preliminary injunctive or other equitable relief.
The arbitrators shall be chosen from a list provided by the AAA as
follows: one arbitrator shall be chosen directly by Buyer, one arbitrator shall
be chosen directly by the Seller, and the third arbitrator shall be selected by
the two arbitrators so chosen.
SECTION 10.2 BINDING EFFECT; BENEFITS; ASSIGNMENT. All of the terms of this
Agreement shall be binding upon, inure to the benefit of and be enforceable by
and against the successors and authorized assigns of Seller and Buyer. 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 except as
expressly indicated herein. Neither Seller nor Buyer shall assign any of their
respective rights or obligations under this Agreement to any other person, firm
or corporation without the prior written consent of the other party.
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SECTION 10.3 DEFINITION OF "ORDINARY AND USUAL COURSE". As used in this
Agreement, an activity will be deemed to be in the "ordinary and usual course of
business" or "ordinary and usual course" if such activity is performed in
accordance with Seller's historical and customary practices with respect to the
activity in question.
SECTION 10.4 GOVERNING LAW. This Agreement shall be governed by and
construed in accordance with the laws of the State of California.
SECTION 10.5 PUBLIC DISCLOSURE. Except as required by law, neither Seller nor
Buyer shall make any public disclosure of the existence or terms of this
Agreement or the transactions contemplated by this Agreement without the prior
written consent of the other party or parties, which consent shall not be
unreasonably withheld.
SECTION 10.6 NOTICES. All notices, requests, demands and other communications to
be given pursuant to the terms of this when and if delivered or mailed first
class, postage prepaid or reputable courier service, delivery charges prepaid:
(a) If to Buyer:
Verification System International, Inc.
c/o Printronix, Inc.
17500 Cartwright Road, P.O. Box 19559
Irvine, California 92623-9559
Attn: Lisle Pottorff, President
with a copy to:
Michael S. Harris, Esq.
Kirshman and Harris
11500 W. Olympic Boulevard, Suite 605
Los Angeles, California 90064
(b) If to Seller:
RJS, Inc.
41 Moreland Road
Simi Valley, California 93065
Attn: Donald Skinner, Chief Executive Officer
With a copy to:
Graven, Perry, Block, Brody & Qualls
523 West Sixth St., Ste. 1130
Los Angeles, California 90014
Any party may change its address by prior written notice to the other
parties.
SECTION 10.7 COUNTERPARTS. This Agreement may be executed in identical
counterparts, each of which when so executed shall be deemed to be an original,
and such counterparts shall together constitute one and the same instrument.
SECTION 10.8 EXPENSES. Buyer and Seller shall pay their own respective expenses,
costs and fees including, without limitation, attorneys' and accountants' fees
incurred in connection with the negotiation, preparation, execution and delivery
of this Agreement and the consummation of the transactions contemplated by this
Agreement.
SECTION 10.9 ENTIRE AGREEMENT. This Agreement, the Exhibits and Schedules to
this Agreement (including the Disclosure Schedule), and the agreements
specifically referred to in this Agreement set forth the entire agreement and
understanding of Seller and Buyer in respect of the transactions contemplated by
this Agreement and supersede all prior agreements, arrangements and
understandings relating to the subject matter hereof. Any documents or
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information delivered by Seller to Buyer prior to the execution of this
Agreement, including but not limited to any financial information, projected
income statements or balance sheets, which are not expressly incorporated into
this Agreement as exhibits or as schedules are expressly excluded from this
Agreement. No representation, promise, inducement or statement of intention has
been made by Seller or Buyer that is not embodied in this Agreement or in the
documents referred to in this Agreement, and neither Seller nor Buyer shall be
bound by or liable for any alleged representation, promise, inducement or
statement of intention not so set forth.
SECTION 10.10 AMENDMENT AND WAIVER. This Agreement may be amended only by a
written instrument executed by Seller and Buyer or, in the case of a waiver, by
and behalf of the party waiving compliance. The failure of any party at any time
to require performance of any provision of this Agreement shall in no manner
affect the right of such party at a later time to enforce the same. No waiver by
any party of any condition or of any breach of any term contained in this
Agreement shall be deemed to be or construed as a further or continuing waiver
of any such term set forth herein.
SECTION 10.11 SEVERABILITY. Any provision of this Agreement which shall be found
to be contrary to California law or otherwise unenforceable shall not affect the
remaining terms of this Agreement, which shall be construed in such event as if
the unenforceable provision, or clause thereof, were absent from this Agreement.
SECTION 10.12 HEADINGS. The headings of the sections and paragraphs of this
Agreement have been inserted for convenience of reference only and shall in no
way restrict or otherwise modify any of the terms or provisions of this
Agreement.
SECTION 10.13 JOINT OBLIGATIONS. The obligations of RJS and Eltron are joint and
several, notwithstanding that such parties are referred to collectively as
"Seller" in this Agreement.
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IN WITNESS WHEREOF, the parties have executed this Agreement as of the day
and year first above written.
"BUYER" "SELLER"
Verification Systems RJS, Inc.
International, Inc.
By: ________________________ By:_____________________________
Lisle Pottorff, President Donald Skinner,
Chief Executive Officer
By: ________________________ By:_____________________________
J. Edward Belt, Secretary Kriston D. Qualls, Secretary
Eltron International, Inc.
By:__________________________
Donald Skinner,
Chief Executive Officer
By:_____________________________
Kriston D. Qualls, Secretary