Exhibit 2.1
ASSET PURCHASE AGREEMENT
AGREEMENT made the 8th day of December, 2003, between Equidyne Systems,
Inc., a California corporation with its principal place of business located at
11300 Sorrento Valley Road, Ste 255, San Diego, California ("Seller") and HNS
International Inc., a California corporation with its principal place of
business located at 17662 Irvine Boulevard, Suite #20, Tustin, California
("Buyer").
RECITALS:
Seller has developed and markets a needle-free injection device
("Device") known as Injex, a registered trademark.
Seller has previously sold to Rosch GmbH Medizintechnik ("Rosch")
certain patent and other rights to the Device in Europe pursuant to a sales
agreement dated July 8, 1999 (the "Rosch Agreement"). Seller has also previously
entered into distribution agreements with Buyer dated September 22, 1998 and
April 15, 1999 (the "HNS Agreements").
Seller wishes to sell to Buyer on an "as is, where is" basis and Buyer
wishes to purchase from Seller all of Seller's right, title and interest in and
to (1) the Device and (2) the patent protection thereon, and (3) the materials,
manufacturing and marketing rights relating thereto.
NOW THEREFORE. Seller and Buyer hereby agree as follows:
1. SALE OF THE DEVICE, ISSUED PATENTS AND THOSE PENDING, AND RELATED
TOOLING.
(a) Seller hereby sells, transfers and assigns to Buyer, and Buyer
hereby purchases from Seller, all of Seller's right, title and
interest in and to the Device, related patents, (except for
the Japanese Patent No. 32130088 Issued July 19, 2001 (the
"Japanese Patent")) both issued and applied for, inventory on
hand, all tools, molds and equipment for the production of the
Device and the materials and rights relating thereto, owned by
Seller as of the date hereof, including, without limitation:
(i) the inventory, the tooling and equipment for and the
components of the Device, and the operating manuals,
packaging, artwork, warranty cards, computer
equipment including the server, office furniture in
the Sorrento Valley office and the Poway storage
location, but excluding the office equipment in the
Sorrento Valley office;
In reference to the Sortimat Convertible Assembly
Equipment located in Stuttgart, Germany (the
"Sortimat Machine"), Seller agrees upon signing this
Agreement to provide an introduction to its contacts
at Sortimat Technology GmbH & Co. ("Sortimat") in
Germany and assist in arranging for immediate
inspection of the Sortimat Machine. Also, the Seller
will provide reasonable assistance to Buyer in
obtaining operating instructions and shipping
specifications from Seller or Sortimat, provided that
Seller does not have to incur any additional costs or
expenses relating thereto.
(ii) all technology, designs, plans and drawings
pertaining to the Device or any part thereof;
(iii) Seller's customer list of approximately 600 names;
(iv) any files of Seller pertaining to the Device
including, without limitation, those records
maintained in the Sorrento Valley and Poway office,
reviews and letters of comments;
(v) brochures, posters and promotional materials
pertaining to the Device;
(vi) Except for the Japanese Patent, all issued and
pending patents including applications for same
covering the Device (the "Patents") and the United
States trademark (the "Trademark") respecting the
Device owned by Seller as of the date hereof. In
addition, the United States trademark Injex, the
www.injex.com internet domain name and related web
pages, along with assignments of the Patents and
Trademark.
(b) Seller will then refer to Buyer all inquiries and orders for
the purchase of the Device for a three year period.
(c) If Seller receives any requests for replacement of a defective
Device under warranty, Seller will promptly notify Buyer
thereof and Buyer will promptly replace the defective Device
at no cost to Seller; but apart from this undertaking by
Buyer, Buyer assumes no responsibility--and Seller assumes all
responsibility-- for any claims whatsoever with respect to any
unit of the Device, and component of the Device sold,
marketed, delivered or otherwise exploited by Seller prior to
the date hereof.
(d) Seller agrees to be responsible for all storage charges with
respect to the Properties up until and including the date of
Closing and Buyer agrees to be responsible for all storage
charges following the date of Closing.
(e) Seller will use reasonable commercial efforts to effect the
transfer of the 510(K) FDA approvals for the Device to the
Buyer, provided that Seller does not have to incur any
additional costs or expenses relating thereto.
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2. PRICE AND PAYMENT.
(a) Buyer will pay Seller for the Device and the materials and
rights which Buyer is purchasing pursuant to Section 1 of this
Agreement (collectively called the "Properties") the sum of
$750,000.00 (the "Purchase Price"), payable as follows:
(i) $100,000.00, U.S. (the "Deposit") upon the signature
of the parties to this Agreement; and
(ii) $650,000.00 U.S. on December 31, 2003 (the "2nd
Payment").
(b) The Purchase Price is allocated as follows: $700,000 for the
intellectual property, including the Patents and Trademark,
$25,000 for the Sortimat Machine and $25,000 for the remaining
inventories and other tangible assets.
(c) All payments of the Purchase Price by Buyer to Seller will be
made by wire transfer to the following account:
Harris Bank, New York
Swift Code: HATRUSS 33
ABA No. 026007760
For Further Credit to Bank of Montreal Call Loan Dept
For Further Credit to First Associates Investments Inc.
Transit No. 0002
Account No. 4669-605
For Further Credit to Account: 5A8666F, Equidyne Corporation
Message: Notify CAROL SEREDA at First Associates at
(604) 640-0256
3. SELLER'S WARRANTIES.
(a) Except for the Rosch Agreement and the HNS Agreements, Seller
is the sole owner of all of the rights in and to all of the
Properties; to the knowledge of Seller, the Patents and
Trademark are, respectively, a valid patent (or patent
application) and trademark under the laws of the United States
and to the knowledge of Seller, they are duly and properly
registered in the name of Seller; the Properties are not
subject to any lien or other encumbrance or other right in
favor of a third party; except for the provisions of this
Agreement, there are no monies owing or obligations
outstanding with respect to any of the Properties; and no
consent or approval by or notice to any third party is
required in connection with the sale of the Properties to
Buyer pursuant to this Agreement.
(b) Except for the Japanese Patent indicated above and those
rights sold to Buyer under this Agreement, Seller does not own
or have any rights in or to any patent, copyright, trademark,
service mark or other right pertaining to any of the
Properties;
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(c) There is no litigation or claim pending or, to the knowledge
of Seller, threatened with respect to any of the Properties;
the execution, delivery and performance of this Agreement has
been duly authorized by the Seller's board of directors.
(d) The representations and warranties of Seller under this
section 3 will survive execution of this Agreement.
4. BUYER'S WARRANTY. Buyer represents and warrants to Seller that the
execution, delivery and performance of this Agreement have been duly
authorized by Buyer's board of directors.
5. CONDITION OF PROPERTIES. APART FROM THE REPRESENTATIONS AND WARRANTIES
SET FORTH ABOVE, SELLER MAKES NO REPRESENTATION OR WARRANTY, EXPRESS OR
IMPLIED, WITH RESPECT TO ANY OF THE PROPERTIES OR THE STATUS,
CONDITION, POTENTIAL OR PROSPECTS OF ANY OF THE PROPERTIES OR THE
BUSINESS TO WHICH THEY PERTAIN, OR WITH RESPECT TO THE MERCHANTABILITY
OF ANY OF THE PROPERTIES OR THEIR SUITABILITY OF FITNEESS FOR ANY
PURPOSE, OR WITH RESPECT TO ANY OTHER MATTER PERTAINING TO ANY OF THE
PROPERTIES OR TO SUCH BUSINESS OR TO THE TRANSACTION. BUYER CONFIRMS
THAT IT HAS MADE ITS OWN INDEPENDENT INVESTIGATION OF THE PROPERTIES
AND THE BUSINESS TO WHICH THEY PERTAIN AND OF THIS TRANSACTION, THAT IT
HAS RELIED ON THAT INVESTIGATION, AND THAT IT HAS NOT RELIED ON ANY
STATEMENT OF OR INFORMATION FURNISHED BY SELLER EXCEPT FOR THOSE
STATEMENTS AND THAT INFORMATION SET FORTH IN THIS AGREEMENT. BUYER WILL
HAVE NO CLAIM AGAINST SELLER BASED ON MISREPRESENTATION OR FAILURE TO
DISCLOSURE EXCEPT FOR THE BREACH OF AN EXPRESS REPRESENTATION OR
WARRANTY UNDER THIS AGREEMENT.
6. COMPETING PRODUCTS.
(a) Other than under the Rosch Agreement and the HNS Agreements,
Seller has not granted any continuing rights in respect to the
Device, its patents, trademarks or service marks.
(b) For a period of ten years from the date of this Agreement,
Seller will not develop, manufacture, promote, market, sell or
otherwise exploit, and will not participate, directly or
indirectly, in the development, manufacture, promotion,
marketing, sale or other exploitation of any device similar to
or competitive with the Device.
(c) Seller acknowledges that violation of any of the provisions of
this section 5 will cause irreparable loss and harm to Buyer
which cannot be reasonable or adequately compensated by
damages in an at law, and, accordingly, that Buyer will be
entitled to injunctive and other equitable relief to prevent
or cure any breach or threatened breach thereof, but no action
for any such relief shall be
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deemed to waive the right of Buyer to an action for damages.
For purposes of any such proceeding, Seller submits to the
non-exclusive jurisdiction of the courts of the State of
California, located in the County of Los Angeles; and Seller
agrees not to raise and waives any objection to or defense
based on the venue of any such court or forum non conveniens.
(d) A court of competent jurisdiction, if it determines any
provision of this Agreement to be unreasonable in scope, time
or geography, is hereby authorized by Seller and Buyer to
enforce same in such narrower scope, shorter time or lesser
geography as such court determines to be reasonable and proper
under all the circumstances.
(e) Buyer will also have such other legal remedies as may be
appropriate under the circumstance including inter alia,
recovery of damages occasioned by a breach. Buyer's rights and
remedies are cumulative and the exercise or enforcement of any
one or more of them will not preclude Buyer from exercising or
enforcing any other right or remedy.
7. CLOSING OF TRANSACTION.
(a) If it is determined that this sale of assets is subject to
California sales tax, Buyer agrees to assume responsibility
for such payment.
(b) The closing date shall be January 6, 2004 .
(c) In the event that Buyer does not make the 2nd Payment pursuant
to Section 2(a), Buyer will forfeit the Deposit to Seller and
Seller will have no further obligation to complete the
transaction under this Agreement; and this Agreement shall be
terminated without any further action by the parties.
(d) Seller, at its discretion, will in no less than 10 days prior
to the closing, cause to be published in a newspaper of
general circulation in San Diego County, notice of the pending
sale of assets. The parties agree that Seller will not engage
in discussions with other persons, firms, or corporations
concerning the sale of assets by Seller after the date of
execution of this Agreement until the closing date or the
termination of this Agreement.
8. FURTHER ASSURANCES BY SELLER.
(a) Seller will execute such additional documents as Buyer may
reasonably request to vest or confirm the vesting in Buyer of
all of the Properties and title thereto.
(b) For a period of six months after the date of this Agreement
Seller will, in response to inquiries by Buyer, without
charge, reasonably advise Buyer with respect to matters
pertaining to the Device, the technology involved in the
Device, and the manufacturing and assembly of the Device and
parts thereof,
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provided that Seller possesses the requisite knowledge and
information, and Seller does not have to incur any additional
costs or expenses relating thereto.
9. RELEASES.
As a mutual condition to the closing of the transactions herein provided, on the
closing date:
(a) Buyer will, and Buyer will cause Jim Fukishima to, sign and
deliver a release in favour of Seller, Equidyne Corporation
("Equidyne") and Equidyne's and Seller's affiliates, past and
present officers and directors and agents in the form attached
hereto as Appendix A; and
(b) Seller will, and Seller will cause Equidyne to, sign and
deliver a release in favour of Buyer and Jim Fukishima and
their affiliates in the form attached hereto as Appendix A.
10. CONFIDENTIALITY. The terms of this Agreement will be kept confidential
except where Equidyne has, under applicable securities laws, an
obligation to make public disclosures.
11. AMENDMENT. This Agreement may be amended only by an instrument in
writing signed by Seller and Buyer.
12. GOVERNING LAW. This Agreement will be governed by and construed in
accordance with the law of the State of California. Should a dispute
arise between the parties and litigation ensues, the prevailing party
will entitled to costs and reasonable attorney fees.
13. SECTION HEADINGS. Section headings are for convenient reference only
and shall not affect the meaning or have any bearing on the
interpretation of any provision of this Agreement.
14. COUNTERPARTS. This Agreement may be executed in one or more
counterparts and by facsimile, each part of which is to be construed an
original, and all of which taken together constitute one agreement.
IN WITNESS WHEREOF, the parties have executed this Agreement as of the date
first written above.
By: /s/ Michael Smith By: /s/ Jim Fukushima
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Seller Buyer
Name: Michael Smith Name: Jim Fukushima
Title: Title:
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