INVENTORY
PURCHASE AND SALE AGREEMENT
between
Office Supply Line, Inc.,
Michael L. Lowe
and
Imtek Corporation
Dated as of November 1, 1997
INVENTORY PURCHASE AND SALE AGREEMENT
THIS INVENTORY PURCHASE AND SALE AGREEMENT ("Agreement") is made and
entered into as of November 1, 1997, by and between Office Supply Line, Inc., a
Virginia Corporation ("Seller"), Imtek Corporation, a Maryland corporation
("Buyer") and Michael L. Lowe.
WITNESSETH:
WHEREAS, Seller is the owner of and wishes to sell the inventory more
particularly described in Exhibit A, attached hereto and made a part hereof
("Inventory"); and
WHEREAS, Buyer wishes to buy from Seller the Inventory; and
WHEREAS, Seller and Buyer wish to enter into an agreement setting forth the
terms and conditions of the purchase and sale of the Inventory.
NOW THEREFORE, in consideration of the mutual covenants and conditions
hereinafter set forth and other good and valuable consideration, the receipt and
sufficiency of which are hereby expressly acknowledged, the parties hereto agree
as follows:
ARTICLE I
PURCHASE AND SALE OF INVENTORY
1.1 Purchase Price. Seller hereby agrees to sell to Buyer, and Buyer
hereby agrees to buy from Seller all of Seller's right, title and interest in
the Inventory Note for the purchase price of Two Hundred Thirty Seven Thousand
Dollars ($237,000).
1.2 Closing, The Closing of the purchase and sale of the Inventory shall
take place no latter than November 30, 1997.
1.3 Payment of Purchase Price. Buyer agrees to pay Seller an amount
equal to the Purchase Price. Buyer shall remit payment of the Purchase price
to Seller as follows: (a) $75,000 by certified check, cashier's check or bank
wire at Closing; (b) assumption of $70,000 in liabilities described in
Exhibit B attached hereto and made a part hereof ("Assumed Liabilities"); and
(c) a Promissory Note for $92,000, attached hereto and made a part hereof.
1.4 Transfer of Title to Inventory. Upon payment in full of the
Purchase Price, Seller shall execute and deliver to Buyer a Bill of Sale. In
addition, Seller shall execute and deliver such assignments of security
agreements, financing statements and similar document as Seller, in its
reasonable discretion, deems to be necessary or appropriate for the legal
transfer of Seller's right, title and interest in the Inventory immediately
upon the receipt of the full amount of Payment Price as described in section
1.3, above. Should any assignment in addition to those delivered by Seller be
required by applicable law, Buyer shall prepare and submit such additional
assignments to Seller for execution, and Buyer agrees to execute such additional
assignments.
1.5 Use of Proceeds from Resale of Inventory. The parties agree hereto
to permit the resale of Inventory only as follows: (a) Buyer may negotiate
the sale of all or part of the Inventory with the approval of Michael L.
Lowe; (b) any proceeds from sale on any of the Inventory must be used to
reduce pay any unpaid Assumed Liabilities and the Promissory Note until the
Purchase Price described in section 11.3 above has been paid in full.
ARTICLE II
REPRESENTATIONS, WARRANTIES AND COVENANTS OF SELLER
2.1 Seller's Warranties and Representations. Seller hereby represents
and warrants to Buyer the statements in Section 2.2, Section 2.3 and Section
2.4 are true and correct, as of the date of this Agreement, and shall be true
and correct as of the Closing.
2.2 Authority to Sell. Seller is duly and legally authorized to enter
into this Agreement, and to sell, transfer, convey and assign the Inventory.
2.3 Liens and Encumbrances. The Inventory is free and clear of any liens,
judgements or encumbrances.
2.4 Seller Indemnification. Seller warrants it will hold harmless and
indemnify Buyer from any adverse claims.
ARTICLE III
MISCELLANEOUS PROVISIONS
3.1 Severability. Each part of this Agreement is intended to
severable. If any term, covenant, condition or provision of this Agreement is
unlawful, invalid or unenforceable, such legality, invalidity or
unenforceability shall not effect the remaining provisions of this Agreement,
which shall remain in full force and effect and shall be binding upon the
parties.
3.2 Headings. The headings and the Articles and Sections of this
Agreement are inserted for convenience only and shall not affect the meaning or
interpretation of this Agreement or any provision thereof.
3.3 Governing Law. The parties agree that this Agreement shall be
construed, and the rights and obligations of the parties under the Agreement
shall be determined in accordance with the laws of the State of Virginia.
3.4 Entire Agreement. This Agreement, including any Exhibits,
constitutes the entire agreement between the parties pertaining to the
subject matter hereof and supersedes any and all
prior agreements, representations and understandings of the parties, written or
oral.
3.5 Waiver. No waiver by either party of the other party's breach of
any terms, covenant or condition contained in this Agreement shall be deemed
to be a waiver of any subsequent breach of the same or any other term,
covenant or condition of this Agreement.
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
duly executed and sealed as of the day and year first written above.
IMTEK CORPORATION
/s/ [Illegible]
------------------------
OFFICE SUPPLY LINE, INC.
/s/ Michael L. Lowe
------------------------
MICHAEL L. LOWE
/s/ Michael L. Lowe
-----------------------
PROMISSORY NOTE
PROMISE TO PAY. Imtek Corporation ("Borrower") promises to pay to Office
Supply Line ("Lender"), or order, in lawful money of the Untied States of
America, the principal amount of Ninety Two Thousand and 00/100 Dollars
($92,000.00), together with interest of 10% per anum on the unpaid balance
until paid in full.
INTEREST PAYMENTS. Borrower will pay Lender monthly payments of $9,626.92
Borrower's first payment is due December 15, 1997, and all subsequent payments
are due on the same day of each month after that.
PRINCIPAL PAYMENT. The entire unpaid principal and any accrued interest shall be
payable UPON DEMAND of the Lender.
PREPAYMENT. Borrower may pay without penalty all of the amount owed at any time.
DEFAULT. Borrower will be in default if any of the following happens: (a)
Borrower fails to make any payment when due, (b) Borrower breaks any promise
Borrower has made to Lender, or Borrower fails to perform promptly at the
time and strictly in the manner provided in this Promissory Note, (c)
Borrower becomes insolvent, a receiver is appointed for any part of
Borrower's property. Borrower makes an assignment for the benefit of
creditors, or any proceeding is commenced either by Borrower or against
Borrower under any bankruptcy or insolvency laws.
ASSIGNABILITY. This Promissory Note may be legally assigned by Lender or any
holder at any time.
GENERAL PROVISIONS. Lender may delay or forego enforcing any of its rights or
remedies under this Promissory Note without losing them. Borrower, to the
extent allowed by law, waive presentment, demand for payment, protest and
notice of dishonor. This Promissory Note shall be governed, construed and
interpreted in accordance with the laws of the State of Maryland.
IN WITNESS WHEREOF, the Borrower has executed this Promissory Note intending
this Promissory Note to constitute an instrument under seal.
WITNESS/ATTEST: BORROWER:
/s/ [Illegible] /s/ [Illegible]
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ATTACHMENT B
Assumed Liabilities