ASSET PURCHASE AGREEMENT
THIS AGREEMENT made this ____ day of April 2006, by and among WHITCO
COMPANY, L.P., a Texas limited partnership ("Seller"), AMERICAN TECHNOLOGIES
GROUP, INC., a Nevada corporation, (or its assignee pursuant to Section 8.7
below) ("Purchaser"), and Laurus Master Fund, Ltd., a Cayman Islands corporation
("Laurus") (solely for purposes of Section 2.4 hereof).
WHEREAS, on March 15, 2006 (the "Filing Date") Seller filed a Petition
under Chapter 11 of Title 11 of the United States Code ("Bankruptcy Code") case
number: 06-40721-RFN-11 in the Bankruptcy Court (as defined below) and since
that xxxx Xxxxxx has remained in possession of certain of its property and is
attempting to preserve its assets pending the sale contemplated herein;
WHEREAS, pursuant to a series of debt instruments, the Seller as of March
15, 2006 was indebted to Laurus in an aggregate amount of $3,481,019.18,
exclusive of fees, costs and charges;
WHEREAS, on March 24, 2006 the Bankruptcy Court entered a Consent Order
(i) Authorizing Use of Cash Collateral, (ii) Providing Adequate Protection under
11 U.S.C. Sections 105, 361 and 363, and (iii) Providing for Stay Relief under
11 U.S.C. Section 362(d) (the "March 24 Order");
WHEREAS, pursuant to the March 24 Order, Laurus holds a valid perfected
first priority lien and security interest in all of the assets of Seller which
liens secure a claim in the amount of $3,481,019.34 as of the Filing Date (the
"Laurus Secured Claim"), exclusive of fees, costs and charges provided for in
the Loan Documents (as defined in the March 24 Order);
WHEREAS, the parties hereto desire that substantially all of the assets of
Seller be sold to Purchaser and that certain contracts to which Seller is a
party be assumed and assigned, pursuant to this Agreement;
WHEREAS, in consideration of the assignment to Laurus of the purchase
price for the Assets (as defined in Section 1.1 below), Laurus is willing to
agree to the sale of the Assets pursuant to this Agreement free and clear of the
Laurus Secured Claim so long as it is afforded the rights and protections set
forth herein; and
NOW THEREFORE, for valuable consideration, including the mutual
representations, warranties and covenants herein contained, the receipt of which
is hereby acknowledged, the parties hereby agree as follows:
DEFINITIONS
"Assets" has the meaning set forth in Section 1.1 hereto.
"Bankruptcy Court" shall mean the United States Bankruptcy Court for the
Northern District of Texas (Ft. Worth Division).
"Employee Benefit Plan" means any (a) nonqualified deferred compensation
or retirement plan or arrangement which is an Employee Pension Benefit Plan, (b)
qualified defined contribution retirement plan or arrangement which is an
Employee Pension Benefit Plan, (c) qualified defined benefit retirement plan or
arrangement which is an Employee Pension Benefit Plan (including any
Multiemployer Plan), or (d) Employee Welfare Benefit Plan or material fringe
benefit plan or program.
"GAAP" means United States generally accepted accounting principles as
used by the Financial Accounting Standards Board of the American Institute of
Certified Public Accountants, consistently applied and maintained.
"Intellectual Property" means all (a) patents, patent applications, patent
disclosures, and improvements thereto, (b) trademarks, service marks, trade
dress, logos, trade names, and registrations and applications for registration
thereof, (c) copyrights and registrations and applications for registration
thereof, (d) mask works and registrations and applications for registration
thereof, (e) computer software, data, documentation, (f) trade secrets and
confidential business information (including ideas, formulas, compositions,
inventions (whether patentable or unpatentable and whether or not reduced to
practice), know-how, manufacturing and production processes and techniques,
research and development information, drawings, specifications, designs, plans,
proposals, technical data, copyrightable works, marketing, and business data,
pricing and costs information, business and marketing plans, and customer and
supplier lists and information), (g) other proprietary rights, and (h) copies
and tangible embodiments thereof (in whatever form or medium).
"Security Interest" means any lien, mortgage, pledge, security interest,
encumbrance, charge, or other lien.
"Taxes" means any federal, state, local, or foreign income, gross
receipts, capital stock, franchise, profits, withholding, social security,
unemployment, disability, real property, personal property, stamp, excise,
occupation, sales, use, transfer, value added, alternative minimum, estimated,
or other tax, including any interest, penalty, or additional charge thereto,
whether disputed or not.
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ARTICLE I
PURCHASE AND SALE OF ASSETS; ASSIGNMENT AND ASSUMPTION OF CERTAIN CONTRACTS
1.1 Purchased Assets. Subject to and upon the terms and conditions set
forth herein, the Seller agrees to and will sell, transfer, assign and deliver
to the Purchaser at the Closing (as hereinafter defined), and the Purchaser
agrees to and will purchase, acquire and take assignment and delivery of, all
the assets of the Seller except for the "Excluded Assets" described in Section
1.3 below (the "Assets"). Without limiting the foregoing, the Assets shall
include, but not be limited to (a) all inventory, work in progress, equipment,
machinery and other tangible personal property utilized by the Seller's business
prior to its bankruptcy filing, (b) all of the Seller's licenses, permits,
certificates of authority, authorizations, approvals, registrations, franchises
and similar consents granted or issued by any governmental or regulatory
authority as shall exist as of the Closing Date; (c) all telephone numbers
utilized by the Seller, (c) all customer deposits and other prepaid expenses;
(d) all goodwill and going-concern value relating to the Seller as shall exist
as of the Closing Date, (e) all of the Seller's Intellectual Property, (f) all
cash and cash equivalents of Seller existing on or after March 25, 2006, except
any cash or cash equivalents derived from accounts receivable or other assets
that arose from the operation of the Seller's business on or prior to March 24,
2006, all accounts receivable of Seller arising from the operation of the
Seller's business from and after March 25, 2006 in excess the first $41,800 of
such accounts receivables, (h) all books and records of Seller and (g) all other
assets of the Seller as shall exist as of the Closing date other than "Excluded
Assets" as specifically defined in Section 1.3 below.
1.2 Assignments and Assumption of Certain Contracts.
1.2.1 Bankruptcy Filing. Seller shall forthwith take all actions
necessary to seek an order from the Bankruptcy Court authorizing Seller to
assume the executory contracts necessary to preserve the value of the Assets to
be identified by the parties hereto (the "Assumed Contracts") which Assumed
Contracts includes those Assumed Contracts identified in Exhibit 1.2.1 hereto.
Notwithstanding any provision in this Agreement or any other writing to the
contrary, Buyer is assuming only the liabilities actually undertaken by it by
order of the Bankruptcy court and is not assuming any other liability or
obligation of Seller (or any predecessor of Seller or any prior owner of all or
part of its businesses and assets) of whatever nature, whether presently in
existence or arising hereafter.
1.2.2 Taxes and Prorations. Seller shall be responsible for all ad
valorem taxes or assessments relating to the Assets for taxable periods up to
and including the Closing Date, regardless of when the same shall become due and
payable, and such taxes shall be pro-rated between Seller and Purchaser as of
the Closing Date or within a reasonable time thereafter. All expense items
including but not limited to insurance, rents, utility charges, and any prepaid
agreements shall be prorated between Seller and Purchaser as of the Closing
Date.
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1.2.3 Other Closing Costs. Seller and Purchaser shall each remain
liable for their own closing expenses including attorney's fees.
1.3 Excluded Assets. Anything to the Contrary in Sections 1.1
notwithstanding, the Purchased Assets shall exclude:
1.3.1 Claims for relief under any of the avoiding powers provided
for under Chapter 5 of the Bankruptcy Code.
1.3.2 Employee Benefit Plans of the Seller.
1.3.3 The originals of all of Seller's partnership books and records
provided, however, that copies of all such records shall be included in the
Assets sold to Purchaser.
1.3.4 All cash of the Seller as of close of business on March 24,
2006 and any cash derived from accounts receivable of Seller created on or
before March 24, 2006.
1.3.5 All accounts receivable of the Seller created on or before
March 24, 2006.
1.3.6 The proceeds of accounts receivable of Seller created after
March 24, 2006 in an aggregate amount of $41,800.00.
ARTICLE II
PURCHASE PRICE
2.1 Purchase Price. The purchase price due from Purchaser to Seller for
the sale of the Assets and the assumption and assignment of the Assumed
Contracts shall consist of (i) a warrant to purchase 3,750,000 shares of
Purchaser common stock in the form attached hereto as Exhibit 2 (the "Warrant")
which shall have a deemed value for purposes of this Agreement of $1,500,000;
(ii) a credit in the full amount due as of the Closing date on a DIP loan to be
made by Purchaser to Seller; and (iii) all amounts necessary to cure any
defaults under any of the Assumed Contracts (the "Purchase Price").
2.2 Allocation of the Purchase Price Among the Purchased Assets. The
Purchase Price shall be allocated, for tax purposes, among each item or class of
the Assets pursuant to Exhibit 2.2 hereof. The Seller and the Purchaser agree
that they will prepare and file any notice or other filings required pursuant to
Section 1060 of the Internal Revenue Code of 1986, as amended, and that any such
notices or filings will be prepared based on such tax allocation of the Purchase
Price.
2.3 Employment of Seller's Personnel. The Seller will use its good faith
best efforts to persuade its employees to make themselves available for
employment by the Purchaser. Any employment of Seller's personnel by Purchaser
shall be in the sole discretion of Purchaser in the exercise of its business
judgment. It is not the intent of this section to make Seller's employees third
party beneficiaries to this Agreement. Purchaser is not assuming any of Seller's
employment liabilities that have accrued, including but not limited to, unpaid
FICA, FUTA, unemployment tax, pension or profit sharing plan contributions,
employee fringe benefits, bonuses or incentive programs of any type or accrued
and/or unpaid vacation time or allowances, nor is Purchaser acquiring any
interest or obligation under any Employee Benefit Plans of Seller.
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2.4 Consent of Laurus. Laurus agrees that on the Closing Date, it will
consent to the sale of the Assets to the Purchaser free and clear of the Laurus
Secured Claim in consideration of the following:
(a) The assignment to Laurus by the Seller of the Warrant pursuant to an
assignment agreement in form and substance satisfactory to Laurus, which Seller
hereby agrees to execute and deliver at the Closing; and
(b) Purchaser's covenant pursuant to this Section 2.4(b) that it will use
reasonable best efforts to collect for the benefit of Laurus the Seller's
accounts receivable that arose from operation of the Seller's business on or
before March 24, 2006 (the "Laurus Receivables") and shall remit such
collections to Laurus on a weekly basis. Purchaser shall provide Laurus with a
statement on a weekly basis setting forth the amount collected, the remaining
uncollected portion of the Laurus Receivables and an aging for the Laurus
Receivables. Payments received for any of Seller's accounts receivable shall be
credited against the oldest customer invoices. In addition, Purchaser covenants
that the first $41,800.00 of accounts receivable that it creates from and after
March 25, 2006 shall be collected by the Purchaser for the benefit of Laurus and
shall promptly be remitted to Laurus in repayment of Laurus' advance of such
amount to the Seller after the Filing Date. At any time on notice to Purchaser,
Laurus may take over the collection of the Laurus Receivables.
ARTICLE III
BANKRUPTCY COURT APPROVAL; CLOSING
3.1 Filings with Bankruptcy Court. Promptly after the execution of this
Agreement, but in no event later than three days thereafter, Seller shall file
with the Bankruptcy Court a motion for approval of this Agreement in a form
reasonably acceptable to Purchaser and Laurus, which shall include approval of
the sale of the Assets, free and clear of all liens, claims, encumbrances and
interests, and of the assumption and assignment of the Assumed Contracts.
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3.1.1 Entry of Order. An order of the Bankruptcy Court approving the
sale and any applicable assumption and assignment of the Assumed Contracts shall
be entered not later than 30 calendar days after the Motion requesting such sale
order has been filed (the "Sale Order"). If the Sale Order is not entered within
that period of time, then there shall be a failure of a condition precedent to
Purchaser's obligations herein, and Purchaser may terminate this Agreement
without further obligation hereunder. The Sale Order shall contain a provision
pursuant to Bankruptcy Code Section 363(m) that the reversal or modification
thereof on appeal does not affect the validity of such sale to Purchaser and
shall further provide that the Bankruptcy Court will retain jurisdiction with
respect to disputes between the parties hereto relating to this Agreement.
3.2 Press Release. Seller and Purchaser shall issue a joint press release
upon the execution of this Agreement. The content of any such press release
shall be reasonably agreed upon by both Seller and Purchaser. No press release
will be issued by either Seller or Purchaser unless a reasonable effort is made
to agree upon the content thereof.
3.3 Closing. The parties shall close (the "Closing") the transaction
contemplated by this Agreement (the "Transaction") as soon as reasonably
practical after the entry of the Sale Order. The Closing shall take place at the
offices of Seller or by facsimile and overnight courier for the convenience of
the parties. All computations, adjustments, and transfers for the purposes
herein shall be effective as of 12:01 a.m. on the date of Closing (the "Closing
Date"). Time is of the essence of this Agreement.
3.4 Closing Documents to be Delivered by Seller. At the Closing and
thereafter, at no cost or expense to the Seller, if reasonably requested by
Purchaser, the Seller shall tender to Purchaser fully executed deeds,
affidavits, assignments, bills of sale and other documentation as Purchaser's
attorneys may reasonably require for all Assets, including, but not limited to,
the following items:
3.4.1 Xxxx of Sale covering the Assets being conveyed.
3.4.2 Assignments of exectory agreements and other contracts as
required by Section 1.2.1.
3.4.3 Actual possession of the Assets.
3.4.4 All of Seller's books and records and the executed originals
of all lease agreements, service contracts, warranties, maintenance agreements
and other documents affecting the Assets.
3.4.5 Such other documents as may be reasonably requested by
Purchaser in connection with the conveyance of the Assets and the continued
effective operation thereof.
3.5 Closing Documents To Be Delivered By Purchaser. At Closing, the
Purchaser shall tender to Seller such documentation as Seller's attorneys may
reasonably require in connection with the sale of the Assets, including, but not
limited to, the following items:
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3.5.1. The Warrant and a related Registration Rights Agreement
substantially in the attached hereto as Exhibit 3 and Purchaser's consent to the
assignment of the Warrant and related Registration Rights Agreement to Laurus.
3.5.2. An Assignment and Assumption Agreement in form and substance
satisfactory to the Seller pursuant to which the Purchaser agrees to assume all
liabilities and obligations of the Seller under the Assumed Contracts.
3.5.3. Such other documents as may be reasonably requested by Seller
in connection with the sale of the Assets pursuant to the terms hereof.
ARTICLE IV
LIEN-FREE SALE
4.1 Upon the Closing and subject to the assignment to Laurus of the
Warrant and the Registration Rights Agreement, all right, title and interest in
and to the Assets shall be immediately vested in Purchaser, free and clear of
any and all liens, claims, encumbrances and interests of any type whatsoever,
pursuant to Bankruptcy Code Sections 363(b) and (f) (other than liabilities
assumed by Purchaser pursuant to Section 1.2 of this Agreement).
ARTICLE V
REPRESENTATIONS AND WARRANTIES
5.1 Representations and Warranties of Seller. In addition to any
warranties and representations otherwise contained herein, Seller also
represents and warrants to Purchaser as of the date hereof and on the Closing
Date as follows:
5.1.1 Title. Seller owns, and has good and marketable title, to the
Assets to be transferred by Seller pursuant to this Agreement.
5.1.2 Intellectual Property.
5.1.3.1 To the best of Seller's knowledge, information and belief,
Seller has title to or has the right to use, pursuant to license, sublicense,
agreement or permission, all Intellectual Property necessary for the operation
of the businesses of the Seller as conducted prior to bankruptcy and as
presently proposed to be conducted and each item of Intellectual Property owned
or used by Seller immediately prior to the bankruptcy hereunder will be owned or
available for use by the Purchaser on identical terms and conditions immediately
subsequent to the Closing hereunder.
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5.1.3.2 Seller has no knowledge that Seller has interfered with,
infringed upon, misappropriated or otherwise come into conflict with any
Intellectual Property rights of third parties, and none of the employees with
responsibility for Intellectual Property matters of Seller has ever received any
charge, complaint, claim or notice alleging any such interference, infringement,
misappropriation, or violation. To the knowledge of the Seller and employees
with responsibility for Intellectual Property matters of Seller, no third party
has interfered with, infringed upon, misappropriated, or otherwise come into
conflict with any Intellectual Property rights of Seller.
5.1.4 Leases. Seller has delivered to the Purchaser correct and
complete copies of the real estate leases of Seller (as amended to date) (the
"Leases"). With respect to each of the Leases, if such lease is an Assumed
Contract and subject to Purchaser's payment of any cure amount, Seller warrants
that:
5.1.4.1 The lease is legal, valid, binding, enforceable and has not
been terminated.
5.1.4.2 The lease will continue to be legal, valid, binding,
enforceable and will not be terminated as of the Closing.
5.1.4.3 Seller has not assigned, transferred, conveyed, mortgaged,
deeded in trust or encumbered any interest in the leasehold.
5.1.4.4 To the best of Seller's knowledge, information and belief,
all facilities leased thereunder have received all approvals of governmental
authorities (including licenses and permits) required in connection with the
operation thereof and have been operated and maintained in accordance with
applicable laws, rules and regulations.
5.1.5 Violations, Suits, Etc. Seller has no knowledge that Seller is
in violation of any law or regulation, or under any order of any court or
federal, state, municipal or other governmental department, commission, board,
bureau, agency or instrumentality wherever located. Seller has no knowledge,
except to the extent set forth on Exhibit 5.1.5, of any (1) claims, actions,
suits or proceedings instituted or filed and, (2) any claims, actions, suits or
proceedings threatened presently or which in the future may be threatened by any
federal, state, municipal or other governmental department, commission, board,
court, bureau, agency or instrumentality wherever located. Seller has no
knowledge that the execution and the delivery of this Agreement, or the
consummation of the transactions contemplated hereby (including the assignments
and assumptions referred to hereinabove), will violate in any material respect
any statute, regulation, rule, judgment, order, decree, stipulation, injunction,
charge or other restriction of any government, governmental agency, or court to
which the Seller is subject or any provision of its charter or bylaws. To the
best of the Seller's knowledge, information and belief, except for the approval
of the Bankruptcy Court, the Seller does not need to give any notice to, make
any filing with, or obtain any authorization, consent, or approval of any
government or governmental agency in order for the parties to consummate the
transactions contemplated by this Agreement.
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5.1.6 Financial Statements. Seller has provided Purchaser with the
financial statements affixed hereto as Exhibit 5.1.6 (collectively, the
"Financial Statements"). The Financial Statements have been prepared in
accordance with GAAP, are materially correct, accurate and complete as of their
dates and as of the date hereof, and are consistent with the books and records
of the Seller (which books and records are correct and complete).
5.1.7 [Omitted]
5.1.8 Present Status. Since the most recent Financial Statements,
and except as provided for in Seller's bankruptcy filings and the March 24
Order, the Seller has not sold or transferred any of its assets except sales
from inventory in the ordinary course of business and except sales of warehouse
inventory; suffered any material damage, destruction, or loss (whether or not
covered by insurance) materially affecting its properties, business or
prospects; waived any rights of substantial value; nor entered into any
transaction other than in the ordinary course of business.
5.1.9 Operations Until Closing. Between the date of this Agreement
and the Closing Date, and subject to the availability of financing, the Seller
shall:
5.1.9.1 Operate in the ordinary and normal course of business,
including, but not limited to, maintaining normal levels of inventory.
5.1.9.2 Use Seller's reasonable best efforts to maintain the Assets
in as good working order and condition as at present, ordinary wear and tear
excepted.
5.1.9.3 Keep in full force and effect until Closing present
insurance policies or other comparable insurance coverage.
5.1.9.4 Not, without Purchaser's consent, enter into any contracts
or obligations, other than those in the normal and ordinary course of business.
5.1.9.5 Not sell, assign, lease or otherwise transfer or dispose of
the Assets except in the normal and ordinary course of business.
5.1.9.6 Not enter into any employment contracts which are not
terminable at will.
5.1.9.7 Notification. Between the date of this Agreement and the
Closing Date, Seller will promptly notify Purchaser in writing if Seller becomes
aware of any fact or condition that causes or constitutes a breach of any of
Seller's covenants as of the date of this Agreement, or if Seller becomes aware
of the occurrence after the date of this Agreement of any fact or condition that
would (except as expressly contemplated by this Agreement) cause or constitute a
breach of any such covenant had such covenant been made as of the time of
occurrence or discovery of such fact or condition.
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5.1.10 Organizational Representations and Warranties of Seller.
Seller represents and warrants as follows:
5.1.10.1 Seller is a limited partnership validly existing and in
good standing under the laws of the State of Texas.
5.1.10.2 The execution and delivery of this Agreement by Seller has
been duly authorized pursuant to the terms of Seller's partnership agreement
and, on the Closing Date, Seller, subject to the entry of the Sale Order, will
have all necessary power and authority to consummate the transactions provided
herein.
5.1.10.3 The individual(s) whose signatures are affixed hereto have
the necessary power and authority to bind the Seller.
5.1.11 Access to Records. The Seller will afford the Purchaser
access to all its business operations, properties, books, files, and records,
and will cooperate in the Purchaser's examination thereof. No such examination,
however, shall constitute a waiver or relinquishment by the Purchaser of its
right to rely upon the Seller covenants, representations, and warranties as made
herein or pursuant hereto. Until the Closing, the Purchaser will hold in
confidence all information so obtained, except as hereinafter provided, and any
document or instrument heretofore or hereafter obtained by the Purchaser in
connection herewith shall be held on an express trust for and on behalf of the
Seller, except as hereinafter provided.
5.1.12 Compliance. Through the Closing Date, the Seller will use its
best efforts to cause its employees to comply with all applicable provisions of
this Agreement.
5.1.13 Environment, Health and Safety
5.1.13.1 To the best of Seller's knowledge, information and belief,
Seller has complied in all material respects with all laws (including rules and
regulations thereunder) of federal, state and local governments (and all
agencies thereof) concerning the environment, public health and safety, and
employee health and safety and no charge, complaint, action, suit, proceeding,
hearing, investigation, claim, demand or notice has been filed or commenced
against any of them alleging any failure to comply with any such law or
regulation.
5.1.13.2 Except as disclosed on Schedule 5.1.13, Seller has no
knowledge of any liability under the Comprehensive Environmental Response,
Compensation and Liability Act of 1980, the Resource Conservation and Recovery
Act of 1976, the Federal Water Pollution Control Act of 1972, the Clean Air Act
of 1970, the Safe Drinking Water Act of 1974, the Toxic Substances Control Act
of 1976, the Refuse Act of 1899, or the Emergency Planning and Community
Right-To Know Act of 1986 (each as amended), or any other law (or rule or
regulation thereunder) of any federal, state or local government (or agency
thereof, concerning release or threatened release of hazardous substances,
public health and safety, or pollution or protection of the environment
(collectively, the "Environmental Laws").
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5.1.13.3 Except as disclosed on Schedule 5.1.13, Seller has no
knowledge of any liability (and Seller, to its knowledge, has not handled or
disposed of any substance, arranged for the disposal of any substance or owned
or operated any property or facility in any manner that could form the basis for
any present or future charge, complaint, action, suit, proceeding, hearing,
investigation, claim or demand (under the common law or pursuant to any statute)
against Seller giving rise to any material liability) for damage to any site,
location or body of water (surface or subsurface) or for illness or personal
injury.
5.1.13.4 Except as disclosed on Schedule 5.1.13, Seller has no
knowledge of any liability under the Occupational Safety and Health Act, as
amended, or any other law (or rule or regulation thereunder) of any federal,
state or local government (or agency thereof) concerning employee health and
safety.
Further, Seller agrees to provide Purchaser with any hazardous or toxic
waste evaluations which have been prepared by a private engineer, business, or a
governmental entity, in the Seller's possession or control.
5.2 Representations and Warranties of Purchaser.
5.2.1 Purchaser is a corporation duly organized, validly existing
and in good standing under the laws of the State of Nevada.
5.2.2 The execution and delivery of this Agreement by Purchaser has
been duly authorized by proper corporate action. This Agreement constitutes the
Purchaser's legal, valid and binding agreement, enforceable against it in
accordance with its terms, subject to applicable bankruptcy, insolvency,
reorganization, moratorium and similar laws affecting creditors' rights and
remedies generally. On the Closing Date, Purchaser will have all necessary
authority to consummate the transactions provided herein.
5.2.3 Except for the Bankruptcy Court's entry of the Sale Order, no
consent, authorization, order or approval of or filing or registration with, any
governmental authority or persons required for the execution and delivery by
Purchaser of this Agreement and the consummation by Purchaser of the
transactions contemplated hereby.
5.2.4 Neither the execution and delivery of this Agreement by
Purchaser, nor the consummation by Purchaser of the transactions contemplated
hereby, will conflict or result in a breach of any of the terms, conditions or
provisions of the certificate or articles of incorporation or by-laws of
Purchaser, or any agreement or instrument to which Purchaser is a party or any
of its properties is subject or bound or any statute or administrative
regulation, or of any order, writ, injunction, judgment or decree of any court
or governmental authority or any arbitration award that is binding upon
Purchaser.
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5.2.5. The Warrant and the Registration Rights Agreement constitute
the legal, valid and binding obligation of the Purchaser. All corporate action
on the part of the Purchaser, its directors and shareholders necessary for the
authorization, execution and delivery of the Warrant and the Registration Rights
Agreement has been or will have been taken prior to the Closing. The Purchaser
has reserved for issuance a sufficient number of shares of its Common Stock for
issuance upon the exercise of the Warrant and, upon the issuance of such shares
of Common Stock in accordance with the terms of the Warrant, such shares will be
duly authorized, validly issued, fully paid and non-assessable.
5.2.6. PURCHASER HEREBY ACKNOWLEDGES AND AGREES THAT, EXCEPT AS
OTHERWISE EXPRESSLY PROVIDED IN SECTION 5.1, SELLER MAKES NO REPRESENTATIONS OR
WARRANTIES WHATSOEVER, EXPRESS OR IMPLIED, WITH RESPECT TO ANY MATTER RELATING
TO THE ASSETS INCLUDING, WITHOUT LIMITATION, INCOME TO BE DERIVED OR EXPENSES TO
BE INCURRED IN CONNECTION WITH THE ASSETS, THE PHYSICAL CONDITION OF ANY
PERSONAL PROPERTY COMPRISING A PART OF THE ASSETS OR WHICH IS THE SUBJECT OF ANY
OTHER LEASE OR CONTRACT TO BE ASSUMED BY PURCHASER AT THE CLOSING, THE
ENVIRONMENTAL CONDITION OR OTHER MATTER RELATING TO THE PHYSICAL CONDITION OF
ANY REAL PROPERTY OR IMPROVEMENTS WHICH ARE THE SUBJECT OF ANY REAL PROPERTY
LEASE TO BE ASSUMED BY PURCHASER AT THE CLOSING, THE ZONING OF ANY SUCH REAL
PROPERTY OR IMPROVEMENTS, THE VALUE OF THE PROPERTY (OR ANY PORTION THEREOF),
THE TRANSFERABILITY OF PROPERTY, THE TERMS, AMOUNT, VALIDITY OR ENFORCEABILITY
OF ANY ASSUMED CONTRACT, THE TITLE OF THE ASSETS (OR ANY PORTION THEREOF), THE
MERCHANTABILITY OR FITNESS OF THE PERSONAL PROPERTY OR ANY OTHER PORTION OF THE
ASSETS FOR ANY PARTICULAR PURPOSE, OR ANY OTHER MATTER OR THING RELATING TO THE
ASSETS OR ANY PORTION THEREOF. WITHOUT IN ANY WAY LIMITING THE FOREGOING, SELLER
HEREBY DISCLAIMS ANY WARRANTY, EXPRESS OR IMPLIED, OF MERCHANTABILITY OR FITNESS
FOR ANY PARTICULAR PURPOSE AS TO ANY PORTION OF THE ASSETS. PURCHASER FURTHER
ACKNOWLEDGES THAT PURCHASER HAS CONDUCTED AN INDEPENDENT INSPECTION AND
INVESTIGATION OF THE PHYSICAL CONDITION OF THE ASSETS AND ALL SUCH OTHER MATTERS
RELATING TO OR AFFECTING THE ASSETS AS PURCHASER DEEMED NECESSARY OR APPROPRIATE
AND THAT IN PROCEEDING WITH ITS ACQUISITION OF THE ASSETS, EXCEPT FOR ANY
REPRESENTATIONS AND WARRANTIES EXPRESSLY SET FORTH IN THIS SECTION 5.1,
PURCHASER IS DOING SO BASED SOLELY UPON SUCH INDEPENDENT INSPECTIONS AND
INVESTIGATIONS. ACCORDINGLY, PURCHASER WILL ACCEPT THE ASSETS AT THE CLOSING "AS
IS," "WHERE IS," AND "WITH ALL FAULTS."
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ARTICLE VI
CONDITIONS TO OBLIGATION TO CLOSE
6.1 Conditions to Obligation To Close.
6.1.1 Conditions to Obligation of the Purchaser. The obligation of
the Purchaser to consummate the transactions to be performed by it in connection
with the Closing is subject to satisfaction of the following conditions:
6.1.1.1 Approval by Bankruptcy Court. Entry of the Sale Order by the
Bankruptcy Court.
6.1.1.2 The representations and warranties of Seller set forth
hereinabove shall be true and correct in all material respects at and as of the
Closing Date.
6.1.1.3 Seller shall have performed and complied with all of its
covenants hereunder in all material respects through the Closing.
6.1.2 Conditions to Obligation of the Seller. The obligation of the
Seller to consummate the transactions to be performed by it in connection with
the Closing is subject to satisfaction of the following conditions:
6.1.2.1 The representations and warranties of Purchaser set forth
hereinabove shall be true and correct in all material respects at and as of the
Closing Date;
6.1.2.2 The Purchaser shall have performed and complied with all of
its covenants hereunder in all material respects through the Closing.
6.1.2.3 The Bankruptcy Court shall have entered the Sale Order.
ARTICLE VII
ADDITIONAL PROVISIONS
7.1 Costs and Expenses. Each party to this Agreement agrees that it will
bear their respective costs and expenses (including legal fees and expenses)
incurred in connection with this Agreement and the transactions contemplated
hereby; provided, however, in the event that the Purchaser should breach its
obligations hereunder, it shall reimburse Laurus for all of its costs and
expenses (including legal fees and expenses) incurred by Laurus in connection
with this Agreement and the transactions contemplated hereby.
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ARTICLE VIII
MISCELLANEOUS PROVISIONS
8.1 Risk of Loss. The risk of loss prior to the Closing Date shall be with
Seller.
8.2 Severability and Operations of Law. If any provision of this Agreement
is prohibited by the laws of any jurisdiction as those laws apply to this
Agreement, that provision is ineffective to the extent of such prohibition
and/or is modified to conform with such laws, without invalidating the remaining
provisions hereto; and any such prohibition in any jurisdiction shall not
invalidate such provision in any other jurisdiction.
8.3 Choice of Law. This Agreement shall be governed by the internal laws
(and not the law of conflicts) of the State of Texas.
8.4 Entire Agreement; Modification. This Agreement embodies the entire
agreement and understanding of the parties hereto and supersedes any and all
prior agreements, arrangements and understandings relating to the matters
provided for herein. No modification, alteration, waiver, amendment, change or
supplement hereto shall be binding or effective unless the same is set forth in
writing signed by a duly authorized representative of each party to this
Agreement.
8.5 Survival and Binding Agreement. The terms and conditions hereof shall
survive the Closing and shall inure to the benefit of and be binding upon the
parties hereto and their respective heirs, personal representatives, successors
and assigns.
8.6 Counterparts. This Agreement may be executed in one or more
counterparts, each of which shall be deemed an original, but all of which
together shall constitute one and the same instrument.
8.7 Assignments. Neither party to this Agreement may assign any of its
rights or delegate any of its responsibilities under this Agreement, except that
Purchaser may assign this Agreement to any wholly owned subsidiary of Purchaser
or to any person or entity that succeeds to all or substantially all of the
business of Purchaser through a purchase of assets, merger or otherwise;
provided that such Assignment by Purchaser shall not relieve it of any of its
obligations hereunder; provided that such Assignment by Purchaser shall not
relieve it of any of its obligations hereunder.
8.8 Notices. All notices, requests, demands, claims and other
communications hereunder will be in writing. Any notice, request, demand, claim,
or other communication hereunder shall be deemed duly given if (and then two
business days after) it is sent by personal delivery, by overnight carrier, or
by facsimile transaction, as follows:
14
If to the Seller: Copy to:
Whitco Company, L.P. Xxxx X. Xxxxxxx
0000 Xxxxx Xxxxx 00000 Xxxx Xx. Xxxxx 0000
Xx. Xxxxx, XX 00000 Xxxxxx XX 00000
If to the Purchaser: Copy to:
American Technologies Group, Inc. Xxxxxxxx & Xxxxxxxxxx, P.C.
000 Xxx Xxxx Xxxx, Xxxxx 0000 00000 Xxxxxxx Xxxxxxx, Xx.
Xx. Xxxxxxxxxx, XX 00000 Xxxxx, XX 00000
Fax No: Fax No: 000.000.0000
Attn: Xxxxxxx X. Xxxxxxxxx III Attn: Xxxxxx X. Xxxxxxx, Esq.
if to Laurus; Laurus Master Fund , Ltd.
000 Xxxxx Xxxxxx, 00xx Xxxxx
Xxx Xxxx, XX 00000
Attn: Xxxx Xxxxxx, Esq.
with a copy to: Cole, Schotz, Meisel, Xxxxxx & Xxxxxxx P.A.
Court Plaza North
00 Xxxx Xxxxxx
Xxxxxxxxxx, XX 00000-0000
Facsimile No.: (000) 000-0000
Attn: Xxxxxx Xxxxxxxx, Esq.
Xxxx X. Press, Esq.
8.9 Termination. In addition to the rights of the parties to terminate
this Agreement as set forth elsewhere herein, this Agreement may be terminated:
8.10.1 At any time, by the mutual agreement of Seller and Purchaser.
8.10.2 At any time by Purchaser if Seller is in breach of any of its
representations, warranties or covenants set forth herein.
8.10.3 At any time by Seller, if Purchaser is in breach of any of
its representations, warranties or covenants set forth herein.
No termination pursuant to Sections 8.10.2 shall relieve any breaching
party of its obligations to the non-breaching party.
15
IN WITNESS WHEREOF, the parties have executed this Agreement as of the
________ day and year first above written.
WHITCO COMPANY, LP AMERICAN TECHNOLOGIES GROUP, INC.
----------------------------- -------------------------------
By: By:
Its: Its:
LAURUS MASTER FUND, LTD.
-----------------------------
By:
Its:
16
Exhibit 1.2.1
Assumed Contracts
1. BMF, LLC - Attached - Cure Amount: None
000 Xxxxxxxxx Xxxx, Xxxxx 000
Xxx Xxxxxxx, XX 00000
2. Pitney Xxxxx Credit Corporation - attached - Cure
Amount: $506.41
XX Xxx 000000
Xxxxxxxxxx, XX 00000-0000
3. NEC Financial Services - attached - Cure Amount:
$901.38 000 Xxxxx X. Xxxx Xxxx.
Xxxxxxx, XX 00000
4. Administaff - attached - Settled by motion at hearing contract to be
terminated April 30. Cure amount settled by motion
00000 Xxxxxxxx Xxxxxxx Xxxxx
Xxxxxxxx, Xxxxx 00000-0000
5. Labor Ready - attached - Cure Amount: None
XX Xxx 000000
Xxxxxx, Xxxxx 00000
6. Day Brite Joint venture - Cure Amount: None
DayBrite
Attn: Xxxxxx Xxxxxx
000 Xxxxx Xxxxx Xxxxxx
XX Xxx 0000
Xxxxxx, XX 00000
7. Contracts in place to maintain corporate web identity -See#8
8. All rights and copyrights for the Whitco name as well as for American
Sports Lighting on-line and web development for internet business:
xxx.xxxxxxxxx.xxx - Cure Amount $3,334.90
Digital Kansas Interactive Media
0000 Xxxxxx Xxxxx Xxxxx
Xxxxxxxxxx, Xxxxxx 00000
9. Gas - Atmos Energy Cure Amount: $165.74
XX Xxx 000000
Xxxxxx, Xxxxx 00000
10. Water - City of White Settlement - Cure Amount: $489.23
000 Xxxxxx Xxxx Xxxxx
Xxxx Xxxxx, Xxxxx 00000
11. Phone - SBC - Cure Amount: $418.47
XX Xxx 000000
Xxxxxx, Xxxxx 00000
17
12. Phone - SBC Long Distance Cure Amount: $240.25
XX Xxx 000000
Xxxxxx, Xxxxx 00000
13. Phone - SBC - Cure Amount: $1,567.53
XX Xxx 000000
Xxxxxx, Xxxxx 00000
14. Phone - SBC - Cure Amount: $1562.84
XX Xxx 000000
Xxxxxx, Xxxxx 00000
15. Cell - Cingular - Cure Amount: $393.25
XX Xxx 000000
Xxxxxx Xxxxx 00000
16. Electricity - TXU Energy - Cure Amount: $6,890.10 XX Xxx
000000
Xxxxxx, Xxxxx 00000
17. Xxxxxxxx Production, Inc. - Cure Amount: $13,908.11
0000 Xxxxxxxxxx Xxxxx
XxXxxxxxx, Xxxxxx 00000
Total: $30,378.21
18
Exhibit 2.2
ALLOCATION OF PURCHASE PRICE
Description Percentage of Purchase Price
----------- ----------------------------
Goodwill 5%
Tangible Assets - Equipment, Tools & Inventory 95%
19
Exhibit 5.1.5
CLAIMS
20
Exhibit 5.1.6
FINANCIAL STATEMENTS
21
