Exhibit 10.27
ASSET PURCHASE AGREEMENT
This Agreement is entered into this 30th day of August, 2001 by and
between Contra-Pak, Inc., a Texas corporation ("Seller"), Xxxxx Xxxxxxxx,
the sole shareholder of Seller ("Xxxxxxxx"), and Host America Corporation,
a Colorado corporation ("Purchaser").
WHEREAS, Seller owns and operates the business known as Contra-Pak,
Inc., and
WHEREAS, Seller desires to sell and Purchaser desires to purchase
certain assets of the Business.
NOW, THEREFORE, in consideration of the mutual promises contained
herein, and other good and valuable consideration, the receipt of which is
hereby acknowledged, it is agreed as follows:
1. SALE OF ASSETS.
(a) Seller shall convey to Purchaser at closing, certain assets
of the Seller, free and clear of any and all liens or encumbrances
whatsoever, including all packaging film, the vehicle, its customer lists,
and all of Seller's rights in and to the name "Contra-Pak", and any other
trade names or trademarks used in connection with the Seller's business.
EXHIBIT A, attached hereto, identifies all of said assets (the "Transferred
Assets").
(b) All uses of the names set forth in EXHIBIT A to this
Agreement, or any derivations thereof, are being transferred to the
Purchaser hereunder as part of the Transferred Assets. The Seller and
Xxxxxxxx agree that neither will take any action that reasonably could be
expected to affect adversely the Purchaser's right to such names or cause
confusion with respect to the Purchaser's, or its assignee's use of the
such names. All goodwill with respect to the use of the names will inure
to the benefit of the Purchaser, and the Seller will not have any rights to
xxx or recover against any person with respect to the use of such names.
(c) Purchaser acknowledges that the following assets are
excluded from sale: Cash, cash equivalents, accounts receivable, personal
effects (desk in office), and personal vehicles.
2. PURCHASE PRICE AND TERMS.
(a) $285,870 Purchase Price, payable as follows:
(b) $145,870 Due at closing in the form of a cashier's check
made payable to Seller.
(c) $140,000 The balance of the purchase price shall be payable
in shares of Purchaser's restricted common stock valued at the average
closing market price of such stock over the five trading days immediately
prior to the Closing Date. Seller acknowledges and agrees that the stock
issued pursuant to this Section 2(c) shall be restricted stock and shall
bear the legend set forth in Section 4(j)(iv) hereof.
3. LIABILITIES NOT ASSUMED BY THE PURCHASER. The Seller shall pay
and discharge in due course all of its liabilities, debts and obligations
relating to the Transferred Assets or the business of Seller, whether known
or unknown, now existing or hereafter arising, contingent or liquidated,
including, without limitation, any tax liabilities of Seller pertaining to
the Transferred Assets or the business of Seller, any debt obligations and
the liabilities and obligations set forth in clauses (a) through (d) below
(collectively, the "Retained Liabilities"), and the Purchaser shall not
assume, or in any way be liable or responsible for, any of such Retained
Liabilities. Without limiting the generality of the foregoing, the
Retained Liabilities shall include the following:
(a) any liability or obligation of the Seller arising out of or
in connection with the negotiation and preparation of this agreement and
the consummation and performance of the transactions contemplated hereby,
whether or not such transactions are consummated, including but not limited
to any tax liability so arising;
(b) any liability or obligation for any and all taxes of the
Seller or the business of Seller or the Transferred Assets (including, but
not limited to, any and all taxes described in this Section 3(b) for which
liability is or may be sought to be imposed on the Purchaser under any
successor liability, transferee liability or similar provision of any
applicable federal, foreign, state or local law (including, without
limitation, Section 111.020 of the Texas Tax Code));
(c) any liability to which any of the parties may become subject
as a result of the fact that the transactions contemplated by this
agreement are being effected without compliance with the bulk sales
provisions of the Uniform Commercial Code as in effect in any state or any
similar statute as enacted in any jurisdiction; and
(d) all other liabilities and obligations arising prior to the
Closing and related to the conduct or operation of the Transferred Assets
or the business of the Seller on or prior to the Closing Date.
4. Representation and Warranties of the Seller and Xxxxxxxx. Except
as otherwise set forth in the Disclosure Schedule attached hereto as
EXHIBIT B, the Seller and Xxxxxxxx jointly and severally represent and
warrant to the Purchaser as follows:
(a) CORPORATE MATTERS.
(i) The Seller is a corporation duly organized, validly
existing and in good standing under the laws of Texas. The Seller has all
requisite power and authority under all applicable laws, ordinances and
order of public authorities to own, operate and lease its properties and
assets and to carry on its business in the manner currently conducted,
except where the failure to have such would not have a material adverse
effect on such business. The Seller is qualified to transact business as
a foreign corporation and is in good standing in the jurisdictions, if any,
specified in Section 4(a)(i) of the Disclosure Schedule, and there is no
other jurisdiction in which the nature and extent of the Seller's business
or their character of its assets make such qualification necessary, except
where the failure to have such would not have
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a material adverse effect on the Seller's business. The Seller has all
requisite corporate power and authority to enter into this Agreement and to
perform its obligations under this Agreement.
(ii) The Seller has no subsidiaries.
(iii) True, correct and complete copies of the
organizational documents of the Seller have been provided by the Seller to
the Purchaser, and such organizational documents are in full force and
effect.
(iv) Set forth in Section 4(a)(iv) of the Disclosure
Schedule is a list of assumed names under which the Seller operates its
business.
(b) VALIDITY OF AGREEMENT AND CONFLICT WITH OTHER INSTRUMENTS.
(i) This Agreement, and the transactions contemplated
hereby, have been duly authorized and approved by all necessary corporate
action on the part of the Seller, including the approval of the directors
and shareholders of the Seller. This Agreement has been duly executed and
delivered by the Seller and is a legal, valid and binding obligation of the
Seller enforceable against the Seller in accordance with its terms, except
as enforceability may be limited by applicable bankruptcy, insolvency,
reorganization, moratorium or similar laws from time to time in effect that
affect creditors' rights generally and by legal and equitable limitations
on the availability of specific remedies.
(ii) The execution, delivery and performance of this
Agreement and the other agreements and documents to be delivered by the
Seller to the Purchaser, the consummation of the transactions contemplated
hereby or thereby, and the compliance with the provisions hereof or
thereof, by the Seller will not, with or without the passage of time or the
giving of notice or both:
(1) conflict with, constitute a breach, violation or
termination of any provision of , or give rise to
any right of termination, cancellation or
acceleration, or loss of any right or benefit or
both, under any of the contracts and other
agreements relating to the Seller's business;
(2) conflict with or violate the organizational
documents of the Seller;
(3) result in the creation or imposition of any lien
or other encumbrance or third party right on any
of the Transferred Assets; or
(4) violate any law, statute, ordinance, regulation,
judgment, writ, injunction, rule, decree, order
or any other restriction of any kind or character
applicable to the Transferred Assets or the
Seller.
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(iii) Attached as Section 4(b)(iii) of the Disclosure
Schedule are true, correct and complete copies of the resolutions adopted
by the Seller and the shareholders of the Seller approving this Agreement
and the transactions contemplated hereby. Such resolutions were adopted at
meetings duly called and convened at which quorums were present and acting
throughout or by unanimous written consents. Such resolutions are in full
force and effect without amendment or modification.
(c) APPROVALS, LICENSES AND AUTHORIZATIONS. Except as set forth
in Section 4(c) of the Disclosure Schedule, no order, license, consent,
waiver, authorization or approval of, or exemption by, or the giving of
notice to, or the registration with, or the taking of any other action in
respect of, any Person not a party to this Agreement, including any
governmental entity, and no filing, recording, publication or registration
in any public office or any other place is now, or under existing law in
the future will be, necessary on behalf of the Seller to authorize its
execution, delivery and performance of this Agreement and the consummation
of the transactions contemplated hereby (including, but not limited to,
assignment of the Transferred Assets), or to effect the legality, validity,
binding effect or enforceability hereof.
(d) TITLE TO AND CONDITION OF PROPERTIES. The Seller owns, and
has good and marketable title to the Transferred Assets, free and clear of
any liens. The Seller owns or possesses all rights to the name "Contra-
Pak". The Seller has not received any notice of infringement,
misappropriation or conflict from any other Person with respect to such
name and, to the Seller's knowledge, the conduct of the business under the
name Contra-Pak has not infringed, misappropriated or otherwise conflicted
with any proprietary rights of any person.
(e) CONTRACTS AND COMMITMENTS.
(i) None of the Transferred Assets is subject to:
(1) any agreement, contract or commitment requiring
the expenditure or series of related expenditures
of funds;
(2) any agreement, contract or commitment requiring
the payment for goods or services whether or not
such goods or services are actually provided or
the provision of goods or services at a price
less than the Seller's cost of producing such
goods or providing such services;
(3) any loan or advance to, or investment in, any
Person or any agreement, contract, commitment or
understanding relating to the making of any such
loan, advance or investment;
(4) any debt obligations;
(5) any management service, employment, consulting or
other similar type contract or agreement;
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(6) any agreement, contract or commitment that would
limit the freedom of the Purchaser or any
affiliate of the Purchaser following the Closing
Date to engage in any line of business, own,
operate, sell, transfer, pledge or otherwise
dispose of or encumber any of the Transferred
Assets or to compete with any Person or to engage
in any business or activity in any geographic
area;
(7) any agreement, lease, contract or commitment or
series of related agreements, leases or
commitments not entered into in the ordinary
course of business of the Seller, not cancelable
by the Seller without penalty to the Seller
within 30 calendar days;
(8) any agreement or contract obligating the Seller
or that would obligate or require any subsequent
owner of the business or any of the Transferred
Assets to provide for indemnification or
contribution with respect to any matter;
(9) any sales, distributorship or similar agreement
relating to the products sold or services
provided by the Seller;
(10) any license, royalty or similar agreement; or
(11) any other agreement, contract or commitment that
might reasonably be expected to have a material
adverse effect on the value of any Transferred
Asset.
(ii) Except as set forth in the Disclosure Schedule, the
transfer of the Transferred Assets do not require the receipt of a consent
or waiver of any Person or governmental entity prior to the sale,
assignment, transfer, conveyance or delivery thereof pursuant to this
Agreement.
(f) NO VIOLATIONS OR LITIGATION.
(i) The Seller has not violated and currently is not in
violation of, and the consummation of the transactions contemplated hereby
will not cause any violation of, any order of any governmental entity or
any law, ordinance, regulation, order, requirement, statute, rule, permit,
concession, grant, franchise, license or other governmental authorization
relating or applicable to the Seller, or to the Transferred Assets.
(ii) There is no action, suit, claim, investigation or
legal, administrative, arbitration or other proceeding, or governmental
investigation or examination pending or, to the Seller's knowledge,
threatened against or affecting the Transferred Assets, at law or in
equity, before or by any governmental entity.
(g) CONDITION OF ASSETS. The Transferred Assets are in good
operating condition, repair and working order and free of any known
defects.
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(h) FINDER'S FEES. The Seller has not employed or retained any
investment banker, broker, agent, finder or other party, or incurred any
obligation for brokerage fees, finder's fees or commissions, with respect
to the sale by the Seller of any of the Transferred Assets or with respect
to the transactions contemplated by this agreement, or otherwise dealt with
anyone purporting to act in the capacity of a finder or broker with respect
thereto whereby any party hereto may be obligated to pay such a fee or
commission.
(i) Neither this Agreement nor any other document or written
statement furnished to Purchaser by or on behalf of Seller in connection
with the transaction contemplated by this Agreement contains or will
contain any untrue statement of a material fact, or omits or will omit to
state any material fact necessary in order to make the statements contained
herein and therein not misleading. There is no fact known to Seller which
adversely affects or in the future may materially adversely affect
Transferred Assets. In the event that Seller becomes aware of any material
adverse effect that occurs, Seller shall promptly notify Purchaser in
writing prior to the closing date.
(j) INVESTMENT INTENT; RESTRICTED SECURITIES.
(i) Seller is acquiring the restricted shares of the
common stock of Purchaser which constitute a portion of the Purchase Price
for his own account for investment and not with a view to, or for sale in
connection with, any distribution of any thereof and with no present
intention of disposing of any thereof . Seller acknowledges that such
securities have not been registered under the Securities Act or qualified
under applicable state securities laws and confirms to the Purchaser that
it understands the restrictions on resale of such securities imposed by
such laws including Rule 144 promulgated under the Securities Act and that
such securities may only be sold in limited circumstances.
(ii) Notwithstanding the provisions of Section 4(j)(i), the
Seller may transfer such securities in compliance with the provisions of
the Securities Act (including Rule 144 promulgated thereunder) and any
applicable provision of state law. Prior to any transfer of such
securities otherwise than in an offering registered under the Securities
Act, the Seller will notify the Purchaser of its intention to effect such
transfer, indicating the circumstances of the proposed transfer and if
reasonably requested by the Purchaser, furnish the Purchaser with an
opinion of its counsel, in form and substance reasonably satisfactory to
counsel for the Purchaser, to the effect that the proposed transfer may be
made without registration under the Securities Act or qualification under
any applicable state securities laws; provided that the Purchaser agrees
that no opinion will be required for transfers under Rule 144 except in
unusual circumstances. The Purchaser will promptly notify the Seller if
the opinion of counsel furnished to the Purchaser is reasonably
satisfactory to counsel for the Purchaser. Unless the Purchaser notifies
the Seller within fourteen (14) days after the Seller furnishes it with
such opinion that such opinion is not reasonably satisfactory to counsel
for the Purchaser, the Seller may proceed to effect the transfer.
(iii) Notwithstanding the foregoing provisions and the
legend contained in Section 4(j)(iii), no such registration statement or
opinion of counsel will be necessary for a transfer by a corporation or
other person controlling, controlled by, or under common control with such
Seller (for purposes of this subsection, control will mean ownership of
securities
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having at least a majority of the votes attributable to all outstanding
equity securities of the controlled corporation), or a distribution to a
shareholder of the Seller, or the transfer by gift, will or intestate
succession of any shareholder to his spouse or to the siblings, lineal
descendants or ancestors of such shareholder or his spouse, if the
transferee agrees in writing to be subject to the terms hereof to the same
extent as if he or she were the Seller hereunder and, in particular, agrees
to be bound by this Section 4(j).
(iv) The Seller understands that the Purchaser will place
the following legend and any other legend required by law on the
certificates representing the shares of restricted common stock issued in
connection with this Agreement:
UNTIL JULY 18, 2003, THE SHARES REPRESENTED BY THIS
CERTIFICATE AND THIS CERTIFICATE SHALL NOT BE SOLD,
ASSIGNED, PLEDGED, HYPOTHECATED, OR OTHERWISE
TRANSFERRED WITHOUT THE PRIOR WRITTEN CONSENT OF HOST
AMERICA CORPORATION. FURTHER, AND IN ADDITION TO THE
FOREGOING, THE SECURITIES EVIDENCED BY THIS CERTIFICATE
HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF
1933 OR ANY APPLICABLE STATE LAW, AND NO INTEREST
THEREIN MAY BE SOLD OR OTHERWISE TRANSFERRED, PLEDGED
OR HYPOTHECATED IN THE ABSENCE OF SUCH REGISTRATION AND
QUALIFICATION WITHOUT AN OPINION OF LEGAL COUNSEL
ACCEPTABLE TO THE ISSUER THAT SUCH REGISTRATION AND
QUALIFICATION ARE NOT REQUIRED.
Subsequent to July 18, 2003, or upon the written consent of the Purchaser,
the Purchaser shall, upon the request of the Seller or any subsequent
holder of a stock certificate bearing the foregoing legend and the
surrender of such certificate, issue a new stock certificate without the
foregoing legend if (1) the stock evidenced by such certificate has been
effectively registered under the Securities Act and sold by the holder
thereof in accordance with such registration, or (2) such holder shall have
delivered to the Purchaser a written legal opinion reasonably acceptable to
the Purchaser to the effect that the restrictions set forth herein are no
longer required or necessary under any federal or state law or regulation.
(v) The Seller and the shareholders of the Seller have such
knowledge and experience in financial and business matters that the Seller
is capable of evaluating the risks of its investment in securities of the
Purchaser and is able to bear the economic risks of such investment.
(k) CUSTOMER LIST. In Seller's core business of food service
sales, income from the customers listed on EXHIBIT A, SCHEDULE 1, was in
excess of $800,000 for the period from September 1, 2000 to the effective
date of this Agreement.
(l) TAX RETURN. The tax return of Seller for the year 2000
reported on Form 1120
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(the "Tax Return"), which form was provided to Purchaser as part of
Purchaser's due diligence in connection with this transaction, accurately
reflects income generated by Seller's core business of food service sales.
5. REPRESENTATIONS AND WARRANTIES OF PURCHASER. The Purchaser
represents and warrants to the Seller as follows:
(a) CORPORATE MATTERS. The Purchaser is a corporation duly
incorporated, validly existing and in good standing under the laws of the
State of Colorado. The Purchaser has all requisite corporate power and
authority to enter into this Agreement and to perform its obligations under
this Agreement. This Agreement, and all transactions contemplated hereby,
have been duly authorized and approved by all necessary corporate action on
the part of the Purchaser. No further corporate action is necessary on the
part of the Purchaser to execute and deliver this Agreement or to
consummate the transactions contemplated hereby. This Agreement has been
duly executed and delivered by the Purchaser and is a legal, valid and
binding obligation of the Purchaser, enforceable against it in accordance
with its terms, except as enforceability may be limited by applicable
bankruptcy, insolvency, reorganization, moratorium or similar laws from
time to time in effect that affect creditors' rights generally and by legal
and equitable limitations on the availability of specific remedies.
(b) APPROVALS AND AUTHORIZATIONS. No order, license, consent,
waiver, authorization or approval of, or exemption by, or the giving of
notice to, or the registration with, or the taking of any other action in
respect of, any person not a party to this Agreement, including any
governmental entity, and no filing, recording, publication or registration
in any public office or any other place is now, or under existing law in
the future will be, necessary on behalf of the Purchaser to authorize its
execution, delivery and performance of this Agreement or any other
agreement contemplated hereby to be executed and delivered by the Purchaser
and the consummation of the transactions contemplated hereby or thereby, or
to effect the legality, validity, binding effect or enforceability thereof.
(c) FINDER'S FEES. The Purchaser has not employed or retained
any investment banker, broker, agent, finder or other party, or incurred
any obligation for brokerage fees, finder's fees or commissions, with
respect to the sale of the Transferred Assets or with respect to he
transactions contemplated by this Agreement, or otherwise dealt with anyone
purporting to act in the capacity of a finder or broker with respect
thereto whereby any part hereto may be obligated to pay such a fee or a
commission.
6. TRANSFER TAXES; RECORDING FEES.
(a) The Purchaser and the Seller acknowledge and agree that the
Purchase Price includes and is inclusive of any and all sales, use,
transfer or other similar taxes imposed as a result of the consummation of
the transactions contemplated by this Agreement and the Seller hereby
agrees to indemnify the Purchaser against, and agrees to protect, save and
hold the Purchaser harmless from, any loss, liability, obligation or claim
(whether or not ultimately successful) for sales, use, transfer or other
similar taxes (and any interest, penalties, additions
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to tax and fines thereon or related thereto) imposed as a result of the
consummation of the transactions contemplated by this Agreement.
(b) The Purchaser shall pay any and all recording, filing or
other fees relating to the conveyance or transfer of the Transferred Assets
from the Seller to the Purchaser.
7. PROFESSIONAL FEES. Purchaser and Seller shall each be
responsible for paying their respective professional advisors, including
attorneys and accountants.
8. PURCHASER'S CONDITIONS. The obligation of the Purchaser to
purchase the Transferred Assets as contemplated hereby is, at the option of
the Purchaser, subject to the satisfaction on or before the Closing Date of
the conditions set forth below, any of which may be waived by the Purchaser
in writing.
(a) REPRESENTATIONS, WARRANTIES AND COVENANTS. The
representations and warranties of the Seller and Xxxxxxxx contained in this
Agreement shall be true, correct and complete in all material respects on
and as of the Closing Date with the same force and effect as though such
representations and warranties had been made or given on and as of the
Closing Date, except for such matters due to changes in facts from the date
hereof required or permitted by this Agreement. Each and all of the
agreements and covenants of the Seller to be performed or complied with by
the Seller on or before the Closing Date pursuant to this Agreement shall
have been performed or complied with in all material respects. The Seller
shall have delivered to the Purchaser a certificate signed by duly
authorized officers dated the Closing Date regarding the matters set forth
in this Section 8(a).
(b) GOOD STANDING. The Seller shall have delivered to the
Purchaser a certificate issued by the Secretary of State of Texas and other
appropriate governmental entities evidencing the good standing of the
Seller, as of a date not more than five calendar days prior to the Closing
Date in the states or commonwealths in which it was organized or qualified
to do business as a corporation. To the extent provided for under
applicable law, the Seller shall also have delivered to the Purchaser
certificates or other writings issued by appropriate governmental entities
evidencing that all applicable state franchise Taxes have been paid.
(c) INSTRUMENTS OF TRANSFER. The Seller shall have executed,
acknowledged and delivered to the Purchaser such bills of sale, assignments
and other instruments of transfer, assignment and conveyance, in form and
substance mutually agreeable, as shall be necessary to vest in the
Purchaser all the right, title and interest in and to the Transferred
Assets.
(d) DISSOLUTION OF SELLER. The Seller shall have prepared,
obtained all necessary corporate authorization for, executed and delivered
to the Purchaser documents in form and substance satisfactory to counsel
for the Purchaser sufficient to (i) dissolve the Seller in accordance with
the laws of the Seller's state of incorporation; and (ii) withdraw or
cancel its authority to transact business as a foreign corporation in any
jurisdiction wherein it has obtained such authority.
(e) NO LITIGATION. No preliminary or permanent injunction or
other order of any governmental entity shall be in effect nor shall there
be in effect any statute, rule, regulation or
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executive order promulgated or enacted by any governmental entity that, in
any such case prevents the consummation of the transactions contemplated
by this Agreement. No suit, action, claim, proceeding or investigation
before any governmental entity shall have been commenced or threatened by
any Person seeking to prevent the sale of the Transferred Assets or
asserting that the sale of all or a portion of the Transferred Assets would
be unlawful.
(f) RESOLUTIONS. The Purchaser shall have received copies of
resolutions of the directors and shareholders of the Seller approving this
Agreement and the transactions contemplated hereby, certified by the
Secretary or an Assistant Secretary of the Seller.
(g) OTHER LEGAL MATTERS. All Exhibits, Schedules, certificates,
documents and legal matters in connection with this Agreement and the
transactions contemplated hereby shall be in the form required by this
Agreement.
(h) LEGAL OPINION. The Purchaser shall have received an opinion
of W. Xxxxx Xxxxxxxx, Attorney, counsel to the Seller, in substantially the
form attached to this Agreement as EXHIBIT C.
(i) NON-COMPETITION, NON-SOLICITATION AND EMPLOYMENT AGREEMENT.
Xxxxxxxx shall have agreed to enter into an employment agreement with
Xxxxxxx Food Service Corporation, the wholly owned subsidiary of Purchaser
("Xxxxxxx") in substantially the form attached to this Agreement as EXHIBIT
D (the "Employment Agreement").
9. SELLER'S CONDITIONS. The obligation of the Seller to transfer
the Transferred Assets as contemplated hereby is, at the option of the
Seller, subject to the satisfaction on or before the Closing Date of the
conditions set forth below, any of which may be waived by the Seller in
writing.
(a) REPRESENTATIONS, WARRANTIES AND COVENANTS. The
representations and warranties of the Purchaser contained in this Agreement
shall be true, correct and complete on and as of the Closing Date with the
same force and effect as though such representations and warranties had
been made or given on and as of the Closing Date. Each and all of the
agreements and covenants of the Purchaser to be performed or complied with
by it on or before the Closing Date pursuant to this Agreement shall have
been performed or complied with in all material respects. The Purchaser
shall have delivered to the Seller a certificate signed by one of its duly
authorized officers, dated the Closing Date, regarding the matters set
forth in this Section 9(a).
(b) NO LITIGATION. No preliminary or permanent injunction or
other order of any governmental entity shall be in effect nor shall there
be in effect any statute, rule, regulation or executive order promulgated
or enacted by any governmental entity that, in any such case, prevents the
consummation of the transactions contemplated by this agreement. No suit,
action, claim, proceeding or investigation before any governmental entity
shall have been commenced or threatened by any Person seeking to prevent
the sale of the Transferred Assets or asserting that the sale of all or a
portion of the Transferred Assets would be unlawful.
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(c) RESOLUTIONS. The Seller shall have received copies of
resolutions or minutes of meetings of the directors of the Purchaser
approving this Agreement and the transactions contemplated hereby,
certified by the appropriate officer of the Purchaser.
10. CLOSING.
(a) Closing Date. Closing shall take place on or before August
27, 2001, via teleconference, facsimile transmission of signature pages and
overnight delivery of originals. Time is of the essence with this
agreement and the Closing and any change in the closing date shall require
the prior written agreement of Seller and Purchaser.
(b) At the closing, Seller shall deliver to Purchaser the
following:
(i) Xxxx of sale transferring all right, title and
interest in and to the Transferred Assets;
(ii) The Employment Agreement executed by Xxxxxxxx and
Xxxxxxx;
(iii) Corporate resolutions of Seller's Board of Directors
and Shareholders, in form satisfactory to counsel for Purchaser,
authorizing the execution and performance of this Agreement and all actions
to be taken by Seller under this Agreement as described in Section 8(f);
(iv) Certificate(s) of Good Standing as described in
Section 8(b);
(v) Instruments of Corporate Dissolution and Compliance as
described in Section 8(d);
(vi) Opinion of Counsel to Seller as described in Section
8(i); and
(vii) Such other executed documents as may be reasonably
requested by Purchaser to effectuate the transaction contemplated hereby.
(c) At the closing, Purchaser shall deliver to Seller the
following:
(i) Same day funds in the amount of $145,870.
(ii) A stock certificate representing the requisite number
of shares of the restricted common stock of Purchaser in accordance with
Section 2(c).
11. ACCESS TO INFORMATION. Until the Closing, the Seller will
furnish the Purchaser and its employees, officers, accountants, attorneys,
agents, investment bankers and other authorized representatives with all
information concerning the Transferred Assets as the Purchaser reasonably
shall request from time to time and will afford the Purchaser the
opportunity to ask questions of, and receive answers from, representatives
of the Seller with respect to the Transferred Assets. No investigations by
the Purchaser or its employees, representatives or agents shall reduce or
otherwise affect the obligation or liability of the Seller or the
Shareholders with respect to any representations, warranties, covenants or
agreements
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made in this Agreement or in any Exhibit, Schedule or other certificate,
instrument, agreement or document, including the Disclosure Schedule,
executed and delivered in connection with this Agreement. The Seller will
cooperate with the Purchaser and its employees, officers, accountants,
attorneys, agents and other authorized representatives in the preparation
of any documents or other materials that may be required by any
governmental entity.
12. FURTHER ASSURANCES. The Seller shall execute, acknowledge and
deliver or cause to be executed, acknowledged and delivered to the
Purchaser such bills of sale, assignments (including, but not limited to,
assignments of leases) and other instruments of transfer, assignment and
conveyance, in form and substance satisfactory to counsel for the
Purchaser, as shall be necessary to vest in the Purchaser all the right,
title and interest in and to the Transferred Assets free and clear of all
Liens and shall use its best efforts to cause to be taken such other action
as the Purchaser reasonably may require to more effectively implement and
carry into effect the transactions contemplated by this Agreement.
13. COMPLIANCE.
(a) The Seller shall use its best efforts to
(i) cause all of the obligations imposed upon it in this
Agreement to be duly complied with, and all conditions precedent to such
obligations to be satisfied; and
(ii) obtain any and all consents, waivers, amendments,
modifications, approvals, authorizations, notations and licenses necessary
to the consummation of the transactions contemplated by this Agreement.
(b) The Seller shall cause all Liens on the Transferred Assets
to be released as of the Closing Date.
14. INDEMNIFICATION; RESCISSION. Purchaser and Seller agree to
protect, indemnify, and hold the other harmless against, and with respect
to, any loss, damage, or expense occasioned by any breach or alleged
breach, falsity, or failure of any of the representations, covenants,
warranties, or agreements of any such party contained herein or contained
in any document transferred between Purchaser and Seller in connection with
this transaction. In the event of Seller's material misrepresentation of
the matters set forth in Sections 4(k) and 4(l), Purchaser shall have, in
addition to all other remedies provided hereby or any other remedies at law
or in equity, the right to rescind this transaction and immediately (a)
recover from Seller the cash portion of the Purchase Price paid in
accordance with Section 2(b) hereof, and (b) cancel the stock issued in
accordance with Section 2(c) hereof. In the event of rescission and upon
repayment of the cash Purchase Price and return of the stock certificates
by Seller, Purchaser shall convey the Transferred Assets to Seller by Xxxx
of Sale and Xxxxxxxx shall be immediately released from any obligation or
responsibility under his employment/non-compete agreement of even date
herewith.
15. RISK OF LOSS. Pending closing, Seller shall keep all presently
existing insurance covering the Transferred Assets in effect. All risk of
loss, until Closing, shall remain with the Seller. In the event any of the
Transferred Assets shall be damaged by fire or other casualty
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prior to the Closing Date, in an amount of not more than ten (10%) percent
of the total purchase price, Seller shall be obligated to repair the same
before closing or as soon thereafter as possible. In the event such damage
cannot be repaired within said time, or if such damage shall exceed such
sum, this Agreement may be canceled at the option of the Purchaser.
16. TERMINATION.
(a) EVENTS OF TERMINATION. The obligation to close the
transactions contemplated by this Agreement may be terminated by:
(i) mutual agreement of the Purchaser and the Seller;
(ii) the Purchaser, if a material default shall be made by
the Seller in the observance or in the due and timely performance by the
Seller of any agreements and covenants of the Seller herein contained, or
if there shall have been a breach by the Seller or Xxxxxxxx of any of the
warranties and representations of the Seller herein contained, and such
default or breach has not been cured or has not been waived within 30 days
of written notice thereof;
(iii) the Seller, if a material default shall be made by the
Purchaser in the observance or in the due and timely performance by the
Purchaser of any agreements and covenants of the Purchaser herein
contained, or if there shall have been a breach by the Purchaser of any of
the warranties and representations of the Purchaser herein contained, and
such default or breach has not been cured or has not been waived within 30
days of written notice thereof; or
(iv) the Purchaser or the Seller, provided the terminating
party has not materially breached any of its agreements, covenants,
representations or warranties, if the Closing shall not have occurred on or
before September 30, 2001.
(b) LIABILITY UPON TERMINATION. If the obligation to close the
transactions contemplated by this Agreement is terminated pursuant to any
provision of this Section 16 then this Agreement shall forthwith become
void and there shall not be any liability or obligation with respect to the
terminated provisions of this Agreement on the part of the Seller or the
Purchaser except and to the extent such termination results from the
willful breach by a party of any of its representations, warranties or
agreements.
(c) NOTICE OF TERMINATION. The parties hereto may exercise
their respective rights of termination under this Section 16 only by
delivering written notice to that effect to the other party; PROVIDED,
HOWEVER, that such notice must be received on or before the Closing Date.
17. MERGER. This Agreement shall not be merged or extinguished, but
shall survive Closing.
18. GOVERNING LAW. This Agreement shall be governed by, and its
terms construed under, the laws of the State of Colorado without regard to
its conflict of laws principles.
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19. ENTIRE AGREEMENT. This document contains the entire
understanding of Purchaser and Seller, and there are no warranties,
representations, or agreements between the parties which are not set forth
herein. Any amendment hereto must be in writing and executed by both
parties.
20. ASSIGNMENT. This Agreement may not be assigned by either party
without the prior written consent of the other party, which consent shall
not be unreasonably withheld. Notwithstanding the foregoing, this
Agreement shall inure to, and be binding upon, the parties hereto, their
respective heirs, personal representatives, successors, and permitted
assigns.
[The remainder of this page is left intentionally blank]
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IN WITNESS WHEREOF, the parties have executed this Agreement effective
as of the ___ day of August, 2001.
SELLER:
CONTRA-PAK, INC., a Texas corporation
By: /s/ Xxxxx Xxxxxxxx
----------------------------------
Xxxxx Xxxxxxxx, President
XXXXXXXX:
/s/ Xxxxx Xxxxxxxx
-------------------------------------
Xxxxx Xxxxxxxx
PURCHASER:
HOST AMERICA CORPORATION, a Colorado
corporation
By: /s/ Xxxxxxxx Xxxxxx
----------------------------------
Xxxxxxxx Xxxxxx, President
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