-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, Sosx6BsFLnX7cDI/u325G+2+VyYZO7ka7xAxO6tUFVTXTNhBujzmaZsrtzPNxgOe 6otefrkdD5np7c9MKPrMLw== 0000950147-03-000820.txt : 20030714 0000950147-03-000820.hdr.sgml : 20030714 20030714164731 ACCESSION NUMBER: 0000950147-03-000820 CONFORMED SUBMISSION TYPE: 8-K PUBLIC DOCUMENT COUNT: 4 CONFORMED PERIOD OF REPORT: 20030630 ITEM INFORMATION: Acquisition or disposition of assets ITEM INFORMATION: Financial statements and exhibits FILED AS OF DATE: 20030714 FILER: COMPANY DATA: COMPANY CONFORMED NAME: PACIFIC MAGTRON INTERNATIONAL CORP CENTRAL INDEX KEY: 0001077050 STANDARD INDUSTRIAL CLASSIFICATION: WHOLESALE-COMPUTER & PERIPHERAL EQUIPMENT & SOFTWARE [5045] IRS NUMBER: 880353141 STATE OF INCORPORATION: NV FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 8-K SEC ACT: 1934 Act SEC FILE NUMBER: 000-25277 FILM NUMBER: 03785669 BUSINESS ADDRESS: STREET 1: 1600 CALIFORNIA CIRCLE CITY: MILPITAS STATE: CA ZIP: 95035 BUSINESS PHONE: 4089568888 MAIL ADDRESS: STREET 1: 1600 CALIFORNIA CIRCLE CITY: MILPITAS STATE: CA ZIP: 95035 8-K 1 e-10186.txt CURRENT REPORT DATED 06/30/2003 SECURITIES AND EXCHANGE COMMISSION WASHINGTON, D.C. 20549 FORM 8-K CURRENT REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 Date of Report (Date of earliest event reported): June 30, 2003 PACIFIC MAGTRON INTERNATIONAL CORP. (Exact name of registrant as specified in its charter) Nevada (State or other jurisdiction of incorporation) 000-25277 88-0353141 (Commission File Number) (IRS Employer Identification Number) 1600 California Circle, Milpitas, California 95035 (Address of principal executive offices) (Zip Code) Registrant's telephone number, including area code: (408) 956-8888 Not Applicable (Former name or former address, if changed since last report) ITEM 2. ACQUISITION OR DISPOSITION OF ASSETS On July 9, 2003, the Company issued a press release (attached hereto as Exhibit 99.1) announcing that it has entered into an agreement to dispose of substantially all of the intangible assets and certain tangible assets of its Lea Publishing, Inc. subsidiary. On June 30, 2003, the Company entered into an asset purchase and sale agreement (the "Agreement," attached hereto as Exhibit 2.1), to sell substantially all of the intangible assets and certain tangible assets (listed in schedule 1.1 of the Agreement) of the Company's subsidiary Lea Publishing, Inc. to LiveCSP, Inc. The Company also entered into a Proprietary Software License and Support Agreement (attached hereto as Exhibit 2.2) with LiveCSP, Inc. for engaging LiveCSP, Inc. to provide certain electronic commerce support services to LiveWarehouse, Inc, a wholly owned subsidiary of the Company. The Company received $5,000 on the closing date and will receive the electronic commerce support services valued at an amount not exceeding $48,000. Prior to this sale certain stockholders and officers of LiveCSP, Inc. were employees of Lea Publishing, Inc. ITEM 7. FINANCIAL STATEMENTS AND EXHIBITS Exhibit No. Exhibit Description Filed Herewith - ----------- ------------------- -------------- 2.1 Asset Purchase and Sale Agreement dated as of June 30, 2003 X 2.2 Propriety Software License and Support Agreement X 99.1 Press Release X SIGNATURES Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized. Dated: July 14, 2003 PACIFIC MAGTRON INTERNATIONAL CORP. /s/ Theodore S. Li ---------------------------------------- Theodore S. Li Chairman of the Board and President -2- EX-2.1 3 ex2-1.txt ASSET PURCHASE AND SALE AGREEMENT EXHIBIT 2.1 ASSET PURCHASE AND SALE AGREEMENT THIS ASSET PURCHASE AND SALE AGREEMENT ("Agreement"), is entered into as of June 30, 2003 ("Closing Date"), by and between LiveCSP, Inc., a California corporation, whose address is 8001 Irvine Center Drive, Suite 960, Irvine, California 92618 ("Buyer") and Pacific Magtron International Corp., a Nevada corporation, whose address is 1600 California Circle, Milpitas, California 95035 ("Seller"). R E C I T A L S WHEREAS, Seller owns and operates a wholly-owned subsidiary named Lea Publishing, Inc., a California corporation. Lea Publishing, Inc., operates "LiveMarket," a business of developing and licensing web-based electronic software systems known as "LiveSell" and "LiveExchange." Pursuant to the terms and conditions of this Agreement, Seller desires to sell, assign and transfer all of its right, title and interest in all the tangible and intangible property and assets that are identified on Schedule 1.1 attached hereto. WHEREAS, pursuant to the terms and conditions of this Agreement, Buyer desires to purchase all Seller's rights, title and interest in and to the tangible and intangible property and assets that are identified on Schedule 1.1 attached hereto in exchange for cash and services to be provided by Buyer. NOW, THEREFORE, in consideration of the mutual covenants and agreements, and for other good and valuable consideration described herein, the receipt and sufficiency of which are hereby acknowledged, Buyer and Seller agree as follows: A G R E E M E N T 1. AGREEMENT TO PURCHASE AND SELL THE ASSETS. Subject to the terms and conditions of this Agreement, on the Closing Date, the Seller shall sell, grant, convey, transfer, assign and deliver all rights, title and interest in and to the Assets (as defined in Paragraph 2 herein below), free and clear of any encumbrances or security interests, and Buyer shall purchase and acquire the Assets from the Seller and to assume the Assumed Liabilities (as defined hereinbelow) upon the terms and conditions of this Agreement. 2. PURCHASED ASSETS. Subject to the limitation set forth in the following sentence below, the "Assets" means all rights, title and interest of every kind and description of the Seller as of the Closing (set forth herein below), in the property and assets identified on Schedule 1.1 attached hereto and incorporated herein by this reference, including without limitation the following: all publication rights, trade names, copyrights, trademarks, service marks, goodwill, and intangible assets used by the Seller in the "LiveMarket" business; and all rights, causes of action, claims and demands of whatever nature (liquidated or non-liquidated), of the Seller relating, directly or indirectly, to the Assets. "Assets" shall not include any trade accounts receivable, notes receivable, negotiable instruments or chattel paper arising from or related to the Contracts defined below in Paragraph 5 prior to the Closing Date. -1- 3. EXCLUDED ASSETS. The Assets shall not include any licensed third-party software contained on any computer equipment set forth on Schedule 1.1 that Seller does not have the legal right to transfer to Buyer. 4. NO ASSUMPTION OF LIABILITIES NOT SPECIFICALLY IDENTIFIED. Except for the Assumed Liabilities identified in Paragraph 5 below, the Buyer does not assume or undertake any liability for outstanding debts, obligations, contracts, liabilities, claims or other commitments of the Seller of any kind whatsoever. 5. ASSUMED LIABILITIES. The Buyer shall not assume nor discharge any debts, obligations, liabilities, or commitments of the Seller whether accrued now or hereafter, whether fixed or contingent, whether known or unknown, except as follows: (a) At the Closing, the Buyer shall assume and agree to discharge and perform only those liabilities and obligations that arise or are attributable to events occurring on or after the Closing Date pursuant to the following two contracts received hereunder by Buyer: (1) the OshKosh B'Gosh Electronic Commerce Managed Services Agreement dated July 1, 2002; and (2) and the VitalStream (formerly Epoch Internet) Hosting Maintenance Agreement dated July 1, 2002 (the "Contracts"). The Contracts are attached hereto collectively as Exhibit "A." The assumed obligations of the Contracts are limited to the following: a. Such obligations that are performable on or after the Closing Date; and b. Such obligations that are attributable to periods arising after or on the Closing Date. (b) Seller hereby agrees to assign and shall execute all documents necessary to effect an assignment of its contractual rights and obligations under the OshKosh B'Gosh Electronic Commerce Managed Services Agreement dated July 1, 2002 and VitalStream, (formerly Epoch Internet) Hosting Maintenance Agreement dated July 1, 2002. (c) The assumption by the Buyer of any Assumed Liabilities shall not be deemed to modify or amend the Seller's representations and warranties contained herein or in any way impair the Buyer's right to rely upon such representations and warranties to obtain indemnification for any breach of such warranties and representations. 6. PURCHASE PRICE. The purchase price ("Purchase Price") to be paid by the Buyer to the Seller for the Assets shall be equal to: (a) Five Thousand Dollars and Zero Cents ($5,000.00) in cash or other form of guaranteed payment paid directly to the Seller on the Closing Date; (b) services valued at an amount not exceeding Forty-Eight Thousand Dollars and Zero Cents ($48,000.00) pursuant to the Proprietary Software License and Support Agreement (the "Services Agreement") between the Seller and the Buyer; and (c) a license grant to use the LiveMarket software pursuant to the terms and conditions of the Proprietary Software License and Support Agreement dated July 30, 2003 ("Services Agreement"), which is attached hereto as Schedule 1.2 and incorporated herein by this reference. In addition, pursuant to the Services Agreement, Buyer hereby grants an exclusive, limited license of LiveMarket software that is transferable only upon Buyer's express, written consent and may be used only to operate Livewarehouse.com. Buyer's written consent shall not be unreasonably withheld. Any other use of the LiveMarket software license is prohibited. This exclusive, -2- limited license, transferable only upon Buyer's express, written consent, does not include any dependant third-party software licenses. 7. HOSTING STAGING ENVIRONMENT. Seller shall continue to host the staging environment for LiveMarket for 180 days after the Closing Date. Seller's support of the staging environment shall include providing physical location, power and internet connectivity for the equipment. 8. CONFIDENTIALITY. The Seller and Buyer agree that confidentiality and non-disclosure of the terms and conditions and the subject matter of this Agreement are material to this Agreement, and Seller and Buyer further agree that neither party shall disclose to non-parties or third-parties, without the prior written consent of the Buyer, any terms of or the subject matter of this Agreement, except as compelled by court order, or as required by law, including any disclosures required to be made pursuant to applicable state and federal securities laws. 9. EMPLOYEE MATTERS. Effective on the Closing, the employment by Seller of Marc Huynen, Austin, Bailey and Wes Porter (the "Named Employees") shall be terminated, and Seller shall release the Named Employees from any employment agreements, any non-competition agreements, and any non-solicitation agreements between Seller or Lea Publishing, Inc., on the one hand, and the Named Employees, on the other hand. The Seller shall pay the Named Employees for all benefits due them at the time of termination of their employment, which shall be the same as the Closing Date. 10. CLOSING DATE. The purchase and sale of the Assets (the "Closing") provided for in this Agreement will take place at the law offices of Quarles & Brady Streich Lang LLP, One Renaissance Center, Two North Central Avenue, Phoenix, Arizona, or at any other mutually acceptable location or by facsimile, on June 30, 2003. The Closing shall be completed upon the following: (a) Execution of this Agreement; (b) Satisfaction of all conditions to closing set forth in Paragraph 13, "Conditions Precedent to Obligations of the Buyer"; and (c) Satisfaction of all conditions to closing set forth in Paragraph 14, "Conditions Precedent to the Obligations of the Seller." 11. REPRESENTATIONS AND WARRANTIES OF THE SELLER. The Seller represents and warrants to the Buyer as follows: (a) ORGANIZATION AND GOOD STANDING. Seller is a corporation duly organized, validly existing and in good standing under the laws of the state of its organization, with full power and authority to conduct the "LiveMarket" business as it is presently being conducted, to own or use the Assets, and to perform all its obligations. The Seller is duly qualified to do business and in good standing in each jurisdiction in which it does business. (b) VALIDITY OF AGREEMENT. The Seller has full corporate power and authority to enter into this Agreement and to perform its obligations hereunder and to consummate the transaction contemplated hereby in accordance with the -3- terms of this Agreement. This Agreement constitutes the legal, valid, and binding obligation of the Seller, enforceable in accordance with its terms, and neither the execution nor delivery of this Agreement by the Seller nor the performance by the Seller of any of its covenants or obligations hereunder will constitute a default under any contract, agreement or obligation to which he is a party or by which any of the Assets are bound. Moreover, this Agreement is enforceable against the Seller in accordance with its terms, subject to bankruptcy, reorganization, insolvency, fraudulent conveyance, moratorium, receivership, or other similar laws relating to or affecting creditors' rights generally. (c) OWNERSHIP AND TITLE TO THE ASSETS. The Seller is the sole owner of the Assets and has good and marketable title to all the Assets free of any encumbrances or security interests. There are no existing agreements, options, commitments or rights with, of or to any person to acquire any of Assets or any interest therein. (d) INTELLECTUAL PROPERTY. The Seller is transferring its rights in and to all intellectual property listed on Schedule 1.1 owned by the Seller or licensed by the Seller (to the extent Seller can transfer such licensed rights) that is material to the operation of the "LiveMarket" business of the Seller as it is currently being conducted. (e) COMPLIANCE WITH LEGAL REQUIREMENTS.The Seller has complied with all legal requirements applicable to the Seller's ownership or use of the Assets, and the Seller has not received any notice (written or oral) of any violation or failure to comply with any legal requirements relating to the Assets or their use or operation which violation or failure has not been cured. (f) LEGAL PROCEEDINGS; ORDERS.There is no legal proceeding pending or threatened against the Seller affecting or concerning the Assets, and there is no court order or decree to which the Seller or the Assets are subject. Furthermore, there are no laws or regulations prohibiting the consummation of the transactions contemplated by this Agreement. (g) GOVERNMENTAL APPROVALS. No consent, approval or authorization of, or notification to or registration with, any governmental authority, either federal, state or local, is required in connection with the execution, delivery and performance of this Agreement by the Seller. (h) LICENSES, PERMITS AND REQUIRED CONSENTS. The "LiveMarket" business has all required franchises, tariffs, licenses, ordinances, certifications, approvals, authorizations and permits ("Authorizations") necessary to the conduct of the "LiveMarket" business. All Authorizations relating to the Assets are in full force and effect and no violations have been made in respect thereof, and no proceeding is pending or threatened which could have the effect of revoking or limiting any such Authorizations. (i) USE OF BUSINESS NAME. After the Closing, Seller shall not, directly or indirectly, use or do business under, or allow any subsidiary or affiliate to use or do business under, or assist any third party in using or doing business under, the names and marks "LiveMarket," "LiveSell," or "LiveExchange." -4- (j) TAXES. The Seller has timely and duly filed (giving effect to extensions duly taken) all federal, state, local or foreign tax returns, tax reports or forms, with respect to "LiveMarket" since the date of its purchase of the Assets. The Seller has paid, or made provision for the payment of, all taxes that have or may have become due pursuant to its tax returns or otherwise, or pursuant to any assessment received by the Seller. Furthermore, Seller represents and warrants that no unpaid taxes create and encumbrance on the Assets. Seller represents and warrants that the "LiveMarket" business is not currently being audited by any taxing authority and there are no claims or assessments pending against the Assets. (k) FULL DISCLOSURE. No representation or warranty of Seller in this Agreement contains an untrue statement of material fact or omits to state a material fact necessary to make the statements herein, in light of the circumstances in which they are made, not misleading. 12. REPRESENTATIONS AND WARRANTIES OF THE BUYER. The Buyer represents and warrants to the Seller that: (a) CAPACITY. The Buyer has read and understands this Agreement, has consulted legal and accounting representatives to the extent deemed necessary, and has the requisite power, authority and capacity to enter into this Agreement and to carry out the transactions contemplated hereby without the consent of any third party. (b) AUTHORITY AND CONSENT. This Agreement is valid and binding upon the Buyer and neither the execution nor delivery of this Agreement by the Buyer nor the performance by the Buyer of any of its covenants or obligations hereunder will constitute a default under any contract, agreement or obligation to which it is a party. This Agreement is enforceable against the Buyer in accordance with its terms, subject to bankruptcy, reorganization, insolvency, fraudulent conveyance, moratorium, receivership, or other similar laws relating to or affecting creditors' rights generally. (c) REPRESENTATIONS BY BUYER. No representation or warranty of Buyer in this Agreement contains an untrue statement of material fact or omits to state a material fact necessary to make the statements herein, in light of the circumstances in which they are made, not misleading. (d) INTELLECTUAL PROPERTY. Buyer acknowledges that the Seller is transferring its rights in and to all intellectual property listed on Schedule 1.1 owned by the Seller or licensed by the Seller (to the extent Seller can transfer such licensed rights) that is material to the operation of the "LiveMarket" business of the Seller as it is currently being conducted. 13. CONDITIONS PRECEDENT TO THE OBLIGATIONS OF THE BUYER. The obligations of the Buyer pursuant to this Agreement are subject to fulfillment on or before the Closing Date of each of the following conditions: (a) Performance of the Seller. The Seller shall have performed and complied with all agreements, terms and conditions required by this Agreement to be performed or complied with by Seller. -5- (b) Title. The Seller shall have delivered to the Buyer all appropriate bills of sales, assignments and other instruments giving and conveying to the Buyer all right, title and interest in and to the Assets. (c) Possession. The Seller shall deliver to the Buyer possession of the Assets. (d) OshKosh B'Gosh Release and Consent to Transfer. The Seller shall have obtained a full and complete assignment to the Buyer of the OshKosh B'Gosh Electronic Commerce Managed Services Agreement referenced above. (e) VitalStream Hosting Maintenance Release and Consent to Transfer. The Seller shall have obtained a full and complete assignment to the Buyer of the VitalStream Hosting Maintenance Agreement referenced above. (f) Legal Prohibition. On the Closing Date, there shall exist no injunction or final judgment, law or regulation prohibiting the consummation of the transactions contemplated by this Agreement. 14. CONDITIONS PRECEDENT TO THE OBLIGATIONS OF THE SELLER. The obligations of the Seller under this Agreement are subject to fulfillment on or before the Closing Date of each of the following conditions: (a) Performance by the Buyer. The Buyer shall have performed and complied with all agreements, terms and conditions required by this Agreement to be performed or complied with by it. (b) Payment. Subject to the terms and conditions hereof, the Buyer shall have paid the Purchase Price and assumed the Assumed Liabilities in exchange for the Assets. (c) Legal Prohibition. On the Closing Date, there shall exist no injunction or final judgment, law or regulation prohibiting the consummation of the transactions contemplated by this Agreement. 15. NECESSARY ACTS AND FURTHER ASSURANCES. Each of the parties hereto shall execute and deliver such further documents and instruments and shall take such other actions as may be reasonably required or appropriate to evidence or carry out the intent and purposes of this Agreement. 16. EXPENSES INCURRED IN PREPARING THIS AGREEMENT. (a) The Buyer shall be solely responsible for paying its own expenses and costs incidental to the preparation of this Agreement and to the consummation of the transactions contemplated by this Agreement. (b) The Seller shall be solely responsible for paying its own expenses and costs incidental to the preparation of this Agreement and to the consummation of the transactions contemplated by this Agreement. -6- 17. RISK OF LOSS. The risk of loss or destruction of all or any part of the Assets prior to or on the Closing Date from any cause (including, without limitation, fire, theft, acts of God or public enemy) shall be upon the Seller. Such risk shall be upon the Buyer if such loss occurs after the Closing Date. 18. INDEMNIFICATION BY SELLER. Seller shall indemnify and hold harmless Buyer and will pay to Buyer the amount of any loss, liability, claim, damage, expense (including reasonable attorney fees, whether or not involving a third party claim (collectively, "Damages") arising, directly or indirectly, from or in connection with: (a) any material breach or inaccuracy of any representation or warranty made by Seller in this Agreement, the Schedules hereto, or any other certificate or document delivered by Seller pursuant to this Agreement; (b) the material breach by Seller of any covenant or obligation of Seller in this Agreement or any certificate, or document delivered by Seller pursuant to this Agreement; (c) the failure of Seller to satisfy and discharge any liabilities not assumed by Buyer; (d) any facts, events or conditions known by Seller and that occurred or came into existence prior to the Closing, whether or not such Damages are asserted or claimed prior to the closing or thereafter; and (e) all litigation pending against the Seller as of the Closing or filed subsequent to the Closing but arising from the Seller's use of the Assets prior to the Closing or other liability, claim or expense relating to the operation of the LiveMarket website prior to the Closing. 19. INDEMNIFICATION BY BUYER. Buyer shall indemnify and hold harmless Seller for, and will pay to the Seller the amount of any Damages arising, directly or indirectly, form or in connection with: (a) any breach of any representation or warranty made by Buyer in this Agreement or in any certificate or document delivered by Buyer pursuant to this Agreement; and (b) the failure to timely pay, satisfy and discharge the Assumed Liabilities after the Closing. 20. THIRD PARTY BENEFICIARIES. This Agreement is made solely for the benefit of the parties to this Agreement, and no other person or entity shall have or acquire any right by virtue of this Agreement. 21. NOTIFICATION OF CLAIMS. Each party will promptly notify the other of any third-party claims against any party relating to the Assets of which they receive knowledge or notice so as to permit such party an opportunity to prepare a timely defense to such claim or to attempt settlement. -7- 22. NOTICES. All notices, requests, demands and other communications under this Agreement shall be in writing. When mailed certified mail, return receipt requested, notice is effective on receipt as confirmed by the return receipt. When mailed first-class to the last address of the recipient known to the party giving notice, notice is effective three (3) mail delivery days after postmark of deposit in a United States Postal Service office or mailbox. Addresses for purpose of giving notice are as follows: If to the Seller: Theodore S. Li Pacific Magtron International Corp. 1600 California Circle Milpitas, California 95035 Tel: (408) 956-8888 Fax: (408) 956-5777 With a copy to: Christian J. Hoffmann, III, Esq. Quarles & Brady Streich Lang LLP Renaissance One Two N. Central Avenue Phoenix, Arizona 85004-2391 Tel: (602) 229-5336 Fax: (602) 420-5008 If to the Buyer: Marc Huynen LiveCSP, Inc. 8001 Irvine Center Drive, Suite 960 Irvine, California 92618 Tel: (949) 788-0708 Fax: (949) 788-0098 With a copy to: Andrew A. Smits Law Offices of Andrew A. Smits 19900 MacArthur Boulevard, Suite 1150 Irvine, California 92612 Tel: (949) 833-1025 Fax: (949) 223-9611 Any party may change its address or facsimile number by giving the other party notice of the change in any manner permitted by this Agreement. -8- 23. TIME IS OF THE ESSENCE. Time is of the essence in respect to all provisions of this Agreement that specify a time for performance; provided, however, that the foregoing shall not be construed to limit or deprive a party of the benefits of any grace or use period allowed in this Agreement. 24. NO WAIVER AND REMEDIES. No waiver or a breach, failure of any condition, or any right or remedy contained in or granted by the provisions of this Agreement shall be effective unless it is in writing and signed by the party waiving the breach, failure, right, or remedy. No waiver of any breach, failure, right, or remedy shall be deemed a waiver of any other breach, failure, right, or remedy, whether or not similar, nor shall any waiver constitute a continuing waiver unless the writing so specifies. No remedy or election hereunder shall be deemed exclusive but it shall, wherever possible, be cumulative with all other remedies in law or equity. 25. BINDING AGREEMENT. The parties covenant and agree that this Agreement, when executed and delivered by the parties, will constitute a legal, valid and binding agreement between the parties and will be enforceable in accordance with its terms. 26. ASSIGNMENT. This Agreement and all of the provisions hereof shall be binding upon and inure to the benefit of the parties hereto, their legal representatives, successors and assigns. 27. CHOICE OF LAW. This Agreement, and any dispute arising from the relationship between the parties to this Agreement, shall be governed by, construed, interpreted and enforced according to the laws of the State of California. 28. ATTORNEY FEES AND COSTS INCURRED IN DISPUTE. In any litigation, arbitration, or other proceeding by which one party either seeks to enforce its rights under this Agreement (whether in contact, tort, or both) or seeks a declaration of any rights or obligations under this Agreement, the prevailing party shall be awarded reasonable attorney fees, together with any costs and expenses, to resolve the dispute and to enforce the final judgment. 29. HEADINGS AND THE USE OF PRONOUNS. The paragraph headings hereof are intended solely for convenience of reference and shall not be construed to explain any of the provisions of this Agreement. All pronouns and any variations thereof and other words, as applicable, shall be deemed to refer to the masculine, feminine, neuter, singular or plural as the identity of the person or matter may require. 30. SEVERABILITY. If a court or arbitrator of competent jurisdiction holds any provision of this Agreement to be illegal, unenforceable, or invalid in whole or in part for any reason, the validity and enforceability of the remaining provisions, or portions of them, will not be affected unless an essential purpose of this Agreement would be defeated by the loss of the illegal, unenforceable, or invalid provision. 31. RULES OF CONSTRUCTION. Each party and its counsel have participated fully in the review and revision of this Agreement. Any rule of construction to the effect that ambiguities are to be resolved against the drafting party shall not apply in interpreting this Agreement. -9- 32. ENTIRE AGREEMENT. This Agreement and Schedules 1.1 and 1.2 referred to herein constitute the final, complete, and exclusive statement of the terms of the agreement between the parties pertaining to the subject matter of this Agreement and supersedes all prior and contemporaneous understandings or agreements of the parties. No party has been induced to enter into this Agreement by, nor is any party relying on, any representation or warranty outside those expressly set forth in this Agreement. 33. MODIFICATION. This Agreement may be supplemented, amended, or modified only by the mutual agreement of the parties hereto. No supplement, amendment, or modification of this Agreement shall be binding unless it is in writing and signed by both parties. 34. COUNTERPARTS. This Agreement may be executed in two or more counterparts, and by the different parties hereto on separate counterparts, each of which shall be deemed an original, but all of which together shall constitute one and the same instrument. IN WITNESS WHEREOF, the parties have executed this Agreement as of the date of first above written. BUYER SELLER LiveCSP, Inc. Pacific Magtron International Corp. By /s/ Marc Huynen By /s/ Theodore S. Li ------------------------------- ------------------------------------- Marc Huynen Theodore S. Li President By /s/ Austin Bailey ------------------------------- Austin Bailey Secretary By /s/ Wes Porter ------------------------------- Wes Porter Treasurer -10- SCHEDULE 1.1 NAME DESCRIPTION URL LIVEMARKET.COM (DOMAIN NAME) MARKETING ASSETS, The right to use the LiveMarket marketing and PUBLICATION RIGHTS, promotional materials. TRADEMARKS, Logos and any designs related to LiveMarket COPYRIGHTS, TRADE LiveMarket Internet site NAMES, SERVICE Any Trademarks or Copyrights for LiveMarket, LiveSell MARKS and LiveExchange SOFTWARE PRODUCTS: LiveSell LiveExchange Interface adaptors or EXE, JDE and Commerce One SOURCE CODE: Title and use of the following subset of the intellectual property currently used by the Seller: *Proprietary source code related to the LiveSell and LiveExchange software products, including HTML code, Active Server Pages, Java Script, XML, COM components, Dynamic Link Libraries and structure of database; *LiveMarket interface source code to third party software; *LiveMarket Internet site source code; *LiveMarket Intranet source code; and *LiveMarket Star Team and Doors database source code. DOCUMENTATION User guides and training materials RELATED TO Project plans LIVEMARKET, Technical release notes LIVESELL AND Technical process documentation LIVEEXCHANGE Network architecture diagrams Database designs Product road maps and vision documents Website content CONTRACTS (1) OshKosh B'Gosh Electronic Commerce Managed Services Agreement dated July 1, 2002; and (2) VitalStream (formerly Epoch Internet) Hosting Maintenance Agreement dated July 1, 2002. -11- MICROSOFT GOLD MS Gold Partnership, Partner Number 523018 PARTNERSHIP SOFTWARE NAME SUPPLIER DESCRIPTION VeriSign Certificates LiveSell Developed LiveSell is the ecommerce product that is currently running OshKosh B'Gosh web site. All knowledge gained from the production and maintenance of the OshKosh B'Gosh LiveExchange Developed LiveExchange is the data exchange product that was developed for Boyhill. All knowledge gained from the production and maintenance of the Boyhill project BlackIce Network Ice Software This product is used for Security SA FileUp Artisans This product is used in Site Manager to load file up to production safety and security Crystal Reports Seagate Use to generate reports with Site Manager Site Scope Fresh Water Use to monitor the web sites Star Team Star Base This is used for bug tracking Web Time Sheets Replicon This software in a time tracking system -12- HARDWARE
PHYSICAL TYPE MFR. MODEL SERIAL NO. RARE ASSET TAG LOCATION Server IBM Netfinity 4500R 026000239 Staging Server IBM Netfinity 4500R 026000243 Staging Server IBM Netfinity 4500R 026000242 Staging Server IBM Netfinity 4500R 026000240 Staging Server IBM Netfinity 4500R 026000241 Staging Server IBM Netfinity 4500R 026000238 Staging Server Dell PowerEdge 4300 LMSQL02 026000224 Staging Server Dell PowerEdge 4300 LMVSS01 026000262 Staging Server Dell PowerEdge 4300 017000274 Staging Server Dell PowerEdge 4300 026000266 Dev Server Dell PowerEdge 4300 017000272 Dev Server Dell PowerEdge 4300 LMEXC01 017000275 Dev Laptops Sager 8887 NC888E3B00246 Dev Laptops Sager 8887 NC888E3B00206 Dev Laptops Sager 8887 NC888E3B00252 Dev Firewall Cisco PIX 520 017000216 Staging Firewall Cisco PIX 520 017000308 Staging Firewall Cisco PIX 520 18034404 Production Firewall Cisco PIX 520 18025259 Production Firewall Cisco PIX 520 18036950 Production Server Dell 2450 017000286 Staging 2450 Server Dell 2924-XL-EN 017000277 Staging Switch Switch Cisco 2924-XL-EN 017000282 Staging Switch Switch Cisco 2924-XL-EN 017000279 Staging Switch Switch Cisco 2924-XL-EN FAB0406Y0E9 026000261 Staging Switch Cisco Switch 22280030188 Staging Switch Cisco Switch 5509 Utah KVM Cybex 8 Port 017000287 Monitor IBM 17" LCD 017000264 Staging Monitor Compaq 17" LCD 026000261 Staging UPS Matrix 5000 017000294 Staging Rack Damac 4 Post 009869 Staging Rack Damac 4 Post 009868 Staging Rack IBM 4 Post 92H 9557 Staging Printer hp laserjet 8100dn 026000050 Dev Router Cisco 3640 router JAB040185EZ 017000947 Staging Router Cisco 2621 router JAB042582HA 017000290 Staging Workstation IBM PC 300GL 026000195 Dev
-13- Workstation IBM PC 300GL 026000194 Dev Workstation IBM PC 300GL 026000196 Dev Workstation IBM PC 300GL 026000197 Dev Workstation IBM PC 300GL 026000198 Dev Workstation IBM PC300GL 026000200 Dev UPS APC SmartUPS 3000 026000244 Staging UPS APC SmartUPS 1400 QB9935220237 Staging UPS APC SmartUPS 2200 WS0002012224 Dev UPS APC SmartUPS 2200 WS0002012227 Dev UPS APC SmartUPS3000 021000041 Staging UPS APC SmartUPS3000 017000266 Staging UPS APC SmartUPS3000 017000268 Staging UPS APC SmartUPS 1400 017000016 Staging Tape Backup Adic Fast Store 017000249 Staging Overhead InFocus LT755 3WW01800141 Irvine Desk Ikea L-Shape Irvine-Wes Desk Ikea L-Shape Irvine-Austin Desk Ikea L-Shape Irvine-Marc Book Shelve Ikea 4-Shelve Irvine Book Shelve Ikea 2-Drawer Rolling Irvine-Austin Book Shelve Ikea 2-Drawer Rolling Irvine-Wes Chair Herman Miller Irvine-Wes Chair Herman Miller Irvine-Austin Chair Herman Miller Irvine-Marc
-14- EX-2.2 4 ex2-2.txt PROPRIETY SOFTWARE LICENSE & SUPPORT AGMT. EXHIBIT 2.2 PROPRIETARY SOFTWARE LICENSE AND SUPPORT AGREEMENT THIS AGREEMENT (the "Agreement") is made and entered into as of June 30, 2003 (the "Effective Date") by and between LiveCSP, Inc., a California corporation, with its principal office at 8001 Irvine Center Drive, Suite 960, Irvine, California 92618 ("LiveCSP"), on the one hand, and Pacific Magtron International, Corp., a Nevada corporation, and LiveWarehouse, Inc., a California corporation and a wholly-owned subsidiary of Pacific Magtron International, Corp., on the other hand, both with their principal offices at 1600 California Circle, Milpitas, California 95035. Pacific Magtron International Corp., and LiveWarehouse, Inc., are referred to herein collectively as "PMIC/LiveWarehouse." WHERAS, LiveCSP currently provides certain electronic commerce support services to LiveWarehouse, Inc., under the URL "livewarehouse.com," and LiveCSP desires to continue providing such electronic commerce support services subject to and in accordance with the terms and conditions of this Agreement; and WHEREAS, PMIC/LiveWarehouse desires that LiveCSP continue providing such electronic commerce support services; NOW, THEREFORE, for the mutual consideration set forth herein, the adequacy of which is hereby acknowledged, LiveCSP and PMIC/LiveWarehouse hereby agree as follows: 1. LICENSE GRANT. A. LiveCSP hereby grants to PMIC/LiveWarehouse an exclusive right and license to use the LiveMarket software used to operate the website identified as http://www.livewarehouse.com ("Designated Site") for the term of this Agreement. The LiveMarket software used to operate the Designated Site shall be referred to hereinafter as the "Licensed Materials." The license granted herein is non-transferable; however, PMIC/LiveWarehouse may transfer the license upon the express, prior written consent of LiveCSP, which consent shall not be unreasonably withheld. B. LiveCSP shall be responsible for delivery of the Licensed Materials, the developer's guide and source code excluding COM (Component Object Model) component source code. C. PMIC/LiveWarehouse shall be solely responsible for the supervision, management and control of its use of the Licensed Materials, including without limitation: (i) the sourcing, licensing, payment and compliance for all third-party software required to operate the Licensed Materials; (ii) assuring proper machine configurations, audit controls and operating methods; (iii) establishing adequate backup plans, based on alternative procedures and access to qualified programming personnel; and (iv) implementing sufficient recovery procedures and checkpoints to satisfy its requirements for security and accuracy of input, as well as, system restart and recovery in the event of a malfunction. PMIC/LiveWarehouse acknowledges that certain third-party software is necessary to operate the Licensed Materials. -1- D. PMIC/LiveWarehouse may use the Licensed Materials only in connection with LiveWarehouse's internal operations. PMIC/LiveWarehouse is expressly prohibited from using the Licensed Materials for the benefit of any third parties. PMIC/LiveWarehouse may, from time to time, change the Designated Site and/or the location of the Designated Site to any computer site of PMIC/LiveWarehouse, subject to PMIC/LiveWarehouse giving LiveCSP written notice of such change 10 business days prior to any such change. During the term of this Agreement, and at any given time, PMIC/LiveWarehouse is authorized to use the Licensed Materials on only one of LiveWarehouse's computers or on a cluster of LiveWarehouse's computers; PMIC/LiveWarehouse may not copy or otherwise reproduce the Licensed Materials, or any part thereof (except such copying, strictly limited in number, as is essential for system backup, testing, maintenance or recovery purposes). 2. TERM OF THIS LICENSE AGREEMENT. This Agreement shall be effective as of the Effective Date and shall expire on June 25, 2008. 3. SUPPORT PLAN. A. Terms of Support. LiveCSP shall continue to provide certain electronic commerce support services to PMIC/LiveWarehouse under the URL "livewarehouse.com." The support plan provided hereunder shall be for a period of two years or 480 hours of support services, whichever occurs first. 480 hours is the maximum amount of hours of commitment under this Agreement. Commencing on the Effective Date, LiveCSP shall provide to PMIC/LiveWarehouse electronic commerce support services in the amount of 20 hours per month. The number of hours of support services provided by LiveCSP shall be deducted each month from the total number of unused hours; however, in no event shall the number of hours deducted each month be less than 20 hours, even if PMIC/Warehouse does not use 20 hours of support services in a given month. Upon the delivery of 480 hours or 24 consecutive months of support services, whichever occurs first, LiveCSP's support service shall terminate. B. New Releases. From time to time LiveCSP may issue modified or enhanced versions of the Licensed Materials, which shall be referred to herein as a "New Release." To the extent LiveCSP issues New Releases, LiveCSP will provide PMIC/LiveWarehouse with all New Releases during the term of this Agreement. 4. ACCOUNTING OF HOURS PROVIDED UNDER SUPPORT PLAN. For each month LiveCSP provides support services under this Agreement, LiveCSP shall deliver to PMIC/LiveWarehouse an accounting of support hours provided. LiveCSP will use its best effort to provide the accounting within fifteen (15) calendar days of the end of the month to which the accounting relates. LiveCSP's invoice shall disclose the hours of support services provided for the month reported and the balance of hours remaining under the terms of this Agreement. PMIC/LiveMarket shall advise LiveCSP in writing within 10 business days of the date of the invoice, of any discrepancy or dispute concerning the hours recorded in LiveCSP's invoice. Failure to timely raise such issues shall be deemed an acceptance of LiveCSP's invoice and accounting set forth therein. -2- 5. CONFIDENTIALITY. A. Confidential Information. "Confidential Information" means any confidential technical data, trade secret, know-how, or other confidential information disclosed by LiveCSP in writing, orally, or other form, which relates to or reflects the ideas and expressions contained in the Licensed Materials. B. Nondisclosure. PMIC/LiveWarehouse agrees that it will not disclose any Confidential Information to any third party and will not use any Confidential Information for any purpose other than performance of the rights and obligations hereunder during the term of this Agreement and for a period of 10 years thereafter, without the prior, written consent of LiveCSP. 6. INDEMNITY. LiveCSP hereby agrees to defend, indemnify and hold harmless PMIC/LiveMarket against all costs, expenses, and losses, including attorney fees and costs, incurred through claims of infringement by the Licensed Materials of any patent, copyright, trade secret, or other proprietary right. LiveCSP's agreement to indemnify set forth above is subject to the following: (i) PMIC/LiveWarehouse shall promptly notify LiveCSP in writing of any notice of such claim; (ii) LiveCSP shall have sole control of the defense of any action on such claim and all negotiations for its settlement or compromise; and (iii) PMIC/LiveWarehouse shall permit LiveCSP at LiveCSP's option and expense, either to procure for PMIC/LiveWarehouse the right to continue using the Licensed Materials or modify the Licensed Materials so that they become non-infringing. 7. LIABILITY. Except as provided for in Section 6 (Indemnity) above, LiveCSP shall have no liability for damages to PMIC/LiveWarehouse for any cause whatsoever, regardless of the form of action, arising from the use of the Licensed Materials. Moreover, in no event shall LiveCSP be liable for any lost profits, goodwill, or other consequential, special or indirect damages incurred by PMIC/LiveWarehouse in connection with or arising from the use of the Licensed Materials. 8. NOTICES. All notices, requests, demands and other communications under this Agreement shall be in writing. When mailed certified mail, return receipt requested, notice is effective on receipt as confirmed by the return receipt. When mailed first-class to the last address of the recipient known to the party giving notice, notice is effective three (3) mail delivery days after postmark of deposit in a United States Postal Service office or mailbox. Addresses for purpose of giving notice are as follows: -3- If to PMIC/LiveWarehouse: Theodore S. Li Pacific Magtron International Corp., and LiveWarehouse, Inc. 1600 California Circle Milpitas, California 95035 Tel: (408) 956-8888 Fax: (408) 956-5777 With a copy to: Christian J. Hoffmann, III, Esq. Quarles & Brady Streich Lang LLP Renaissance One Two N. Central Avenue Phoenix, Arizona 85004-2391 Tel: (602) 229-5336 Fax: (602) 420-5008 If to LiveCSP: Marc Huynen LiveCSP, Inc. 8001 Irvine Center Drive, Suite 960 Irvine, California 92618 Tel: (949) 788-0708 Fax: (949) 788-0098 With a copy to: Andrew A. Smits Law Offices of Andrew A. Smits 19900 MacArthur Boulevard, Suite 1150 Irvine, California 92612 Tel: (949) 833-1025 Fax: (949) 223-9611 Any party may change its address or facsimile number by giving the other party notice of the change in any manner permitted by this Agreement. 9. NO WAIVER AND REMEDIES. No waiver or a breach, failure of any condition, or any right or remedy contained in or granted by the provisions of this Agreement shall be effective unless it is in writing and signed by the party waiving the breach, failure, right, or remedy. No waiver of any breach, failure, right, or remedy shall be deemed a waiver of any other breach, failure, right, or remedy, whether or not -4- similar, nor shall any waiver constitute a continuing waiver unless the writing so specifies. No remedy or election hereunder shall be deemed exclusive but it shall, wherever possible, be cumulative with all other remedies in law or equity. 10. BINDING AGREEMENT. The parties covenant and agree that this Agreement, when executed and delivered by the parties, will constitute a legal, valid and binding agreement between the parties and will be enforceable in accordance with its terms. 11. CHOICE OF LAW. This Agreement, and any dispute arising from the relationship between the parties to this Agreement, shall be governed by, construed, interpreted and enforced according to the laws of the State of California. 12. ATTORNEY FEES AND COSTS. Except as provided is Section 6 (Indemnity) above, in any litigation, arbitration, or other proceeding by which one party either seeks to enforce its rights under this Agreement (whether in contact, tort, or both) or seeks a declaration of any rights or obligations under this Agreement, the prevailing party shall be awarded reasonable attorney fees, together with any costs and expenses, to resolve the dispute and to enforce the final judgment. 13. HEADINGS AND THE USE OF PRONOUNS. The paragraph headings hereof are intended solely for convenience of reference and shall not be construed to explain any of the provisions of this Agreement. All pronouns and any variations thereof and other words, as applicable, shall be deemed to refer to the masculine, feminine, neuter, singular or plural as the identity of the person or matter may require. 14. SEVERABILITY. If a court or arbitrator of competent jurisdiction holds any provision of this Agreement to be illegal, unenforceable, or invalid in whole or in part for any reason, the validity and enforceability of the remaining provisions, or portions of them, will not be affected unless an essential purpose of this Agreement would be defeated by the loss of the illegal, unenforceable, or invalid provision. 15. RULES OF CONSTRUCTION. Each party and its counsel have participated fully in the review and revision of this Agreement. Any rule of construction to the effect that ambiguities are to be resolved against the drafting party shall not apply in interpreting this Agreement. 16. ENTIRE AGREEMENT. This Agreement, together with the Asset Purchase and Sale Agreement to which this Agreement is Schedule 1.2, constitutes the final, complete, and exclusive statement of the terms of the agreement between the parties pertaining to the subject matter of this Agreement and supersedes all prior and contemporaneous understandings or agreements of the parties. No party has been induced to enter -5- into this Agreement by, nor is any party relying on, any representation or warranty outside those expressly set forth in this Agreement. 17. MODIFICATION. This Agreement may be supplemented, amended, or modified only by the mutual agreement of the parties hereto. No supplement, amendment, or modification of this Agreement shall be binding unless it is in writing and signed by both parties. 18. ASSIGNABILITY. Neither party may assign this Agreement or the rights and obligations thereunder to any third party without the prior express written approval of the other party. 19. COUNTERPARTS. This Agreement may be executed in two or more counterparts, and by the different parties hereto on separate counterparts, each of which shall be deemed an original, but all of which together shall constitute one and the same instrument. IN WITNESS WHEREOF, the parties have executed this Agreement as of the date of first above written. "PMIC/LiveMarket" "LiveCSP" Pacific Magtron International Corp. LiveCSP, Inc. By: By: /s/ Ted Li /s/ Marc Huynen ------------------------------ ------------------------------------ Ted Li, President Marc Huynen, President LiveWarehouse, Inc. By: /s/ Ted Li ------------------------------ Ted Li, President -6- EX-99.1 5 ex99-1.txt PRESS RELEASE EXHIBIT 99.1 PACIFIC MAGTRON INTERNATIONAL CORP. SELLS THE ASSETS OF ITS LIVEMARKET SUBSIDIARY MILPITAS, Calif. - (BUSINESS WIRE) - July 9, 2003 - Pacific Magtron International Corp. announced today that it has sold the assets of its Lea Publishing,Inc./LiveMarket subsidiary to LiveCSP, Inc., a newly formed corporation owned by the former employees of LiveMarket. As part of its previously announced plan to refocus on its core business, Pacific Magtron has sold the intangible assets and associated hardware of its subsidiary, Lea Publishing, Inc./dba LiveMarket to the LiveSCP, Inc. for $5,000 in cash and for 24 months of continuing software service and support from LiveSCP for the Company's LiveWarehouse.com subsidiary. Ted Li, President and CEO of Pacific Magtron International Corp., said, "While it is difficult to part with products we strongly believed in, it is in the best interest of the Company to continue to re-focus on its core competencies. We believe that the team at LiveSCP is the best one to continue the development and support of the LiveMarket products because this group was involved in the original development of LiveMarket's flagship products (LiveSell and LiveExchange)" "We are excited about the acquisition of LiveMarket and feel its customers will benefit from our knowledge and dedication to the LiveSell and LiveExchange product offerings," stated Marc Huynen, President of LiveCSP. "We expect that our purchase of LiveMarket will enable LiveMarket to grow and prosper." Pacific Magtron International Corp. is an enterprise dedicated to providing total hardware solutions in the computer peripheral marketplace. For more information visit our website at www.pacificmagtron.com. This press release contains forward-looking statements that are made pursuant to the Safe Harbor provisions of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended. These forward-looking statements regarding the success of future operations, capabilities and execution of the Company's business plan involve risks, uncertainties and other factors that could cause actual results to be materially different than the statements. Such factors include, but are not limited to, technological changes, marketability of inventory, customer loyalty, competition, gaining market acceptance, dependence on continued manufacturer, hiring and retention of key personnel, its ability to complete projects in a timely and cost effective manner, risks associated with its expansion into new businesses, particularly as it relates to the Company's subsidiaries and divisions eventually becoming profitable, and its ability to sell unprofitable subsidiaries and return to a profitable level of operations as an enterprise. A more complete listing of cautionary statements and risk factors is contained in the Company's report on Form 10-K for the year ended December 31, 2002 filed with the Securities and Exchange Commission. The forward-looking statements should be considered in light of these risks and uncertainties. The Company disavows any obligation to update or correct any of its forward-looking statements. Contact Information: Maven Strategic Partners Ed Bailey, 801/502-6000 (Investor Relations) E-mail: ir@pacmag.com -----END PRIVACY-ENHANCED MESSAGE-----