Exhibit 10.2
EXECUTION COPY
ASSET PURCHASE AGREEMENT
BETWEEN
QUALITY METAL SYSTEMS, LLC
A FLORIDA CORPORATION,
AND
ALTERNATIVE CONSTRUCTION COMPANY, INC.
A FLORIDA CORPORATION,
DATED:
DECEMBER 15, 2004
TABLE OF CONTENTS
1. Definitions.............................................................1
2. Purchase and Sale of Assets.............................................4
2.1 Purchase and Sale................................................4
2.2 Purchased Assets.................................................4
2.3 Excluded Assets..................................................4
2.4 Assumption of Certain Liabilities................................4
2.5 Excluded Liabilities.............................................4
3. Purchase Price and Payment..............................................5
3.1 Purchase Price...................................................5
3.2 Tax and Accounting Consequences..................................6
3.3 Price Reduction Upon Certain Events..............................6
4. Pre-Closing Matters.....................................................6
4.1 Operation of Purchased Assets....................................6
4.2 Consents.........................................................7
4.3 Notification of Certain Events...................................7
4.4 Access to Information............................................8
4.5 Public Announcements.............................................8
5. Conditions to Closing...................................................8
5.1 Transferor's Conditions..........................................8
5.2 Acquiror's Conditions............................................9
6. Closing................................................................10
6.1 Time and Place of Closing....................................10
6.2 Closing Deliveries..............................................10
6.3 Closing Cost....................................................11
6.4 Possession......................................................11
6.5 Bridge Loan.....................................................11
7. Representations and Warranties.........................................11
7.1 Transferor's Representations and Warranties.....................11
7.2 Acquiror's Representations and Warranties.......................18
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8. Additional Covenants...................................................19
8.1 Covenants by Each Party.........................................19
8.2 Indemnification.................................................20
8.3 Retention of and Access to Books and Records....................20
9. Termination............................................................20
9.1 Termination Events..............................................20
9.2 Effect of Termination...........................................20
10. Default; Remedies......................................................21
10.1 Time of Essence.................................................21
10.2 Remedies........................................................21
11. Survival of Representations and Warranties; Escrow.....................21
11.1 Survival of Representations and Warranties......................21
11.2 Stockholder Escrow Arrangements.................................21
12. Escrow Agent's Duties..................................................25
13. Limitation on Liability................................................26
14. Construction and Interpretation........................................27
15. Miscellaneous Provisions...............................................27
15.1 Survival of Covenants...........................................27
15.2 Expenses........................................................27
15.3 Binding Effect..................................................27
15.4 Assignment......................................................28
15.5 Notices.........................................................28
15.6 Waiver..........................................................28
15.7 Amendment.......................................................29
15.8 Severability....................................................29
15.9 Integration.....................................................29
15.10 Governing Law...................................................29
15.11 Arbitration.....................................................29
15.12 Execution.......................................................29
15.13 Waiver of Conflicts.............................................30
15.14 Incorporation of Recitals, Exhibits, and Schedules..............30
15.15 Further Assurances..............................................30
15.16 No Third Party Beneficiaries....................................30
15.17 Bulk Sales......................................................30
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ASSET PURCHASE AGREEMENT
THIS ASSET PURCHASE AGREEMENT (this "Agreement") is made and entered
into this 14th day of December with effect as of January 15, 2005 (the
"Effective Date") by and between Quality Metal Systems, LLC, a Florida
corporation ("QMS")("Transferor") and Alternative Construction Company, Inc., a
Florida corporation ("ACC" or "Acquiror").
RECITALS
A. QMC is in the title holder of certain business assets related to
the business of Alternative Construction Technologies, Inc. ("ACT") whom is in
the business of producing, marketing and distributing proprietary wall panels
for the construction industry (the "Business").
B. Transferor wishes to sell to Acquiror certain assets as
described in Section 2.2 associated with Transferor's Business and Acquiror
wishes to purchase such assets from Transferor, in each case on the terms and
conditions set forth in this Agreement (this term and all other capitalized
terms used herein having the respective meanings set forth in this Agreement).
AGREEMENTS
In consideration of the foregoing, the mutual covenants of the parties
set forth in this Agreement, and other good and valuable consideration, the
receipt and sufficiency of which are hereby acknowledged, the parties, intending
to be legally bound, agree as follows:
1. Definitions. As used in this Agreement, the following terms have
the respective meanings set forth below:
"Agreement" shall mean this Asset Purchase Agreement.
"Acquiror" shall have the meaning set forth in the preamble to
this Agreement.
"Acquiror's Knowledge" shall mean that any of the officers or
directors of Acquiror are actually aware of a particular fact or other matter.
"Assumed Liabilities" shall have the meaning set forth in
Section 2.4.
"Best Efforts" shall mean the efforts that a prudent Person who
wishes to achieve a result would use in similar circumstances to achieve such
result as expeditiously as reasonably possible.
"Xxxx of Sale" shall mean the document described in
Section 6.2.1(a).
"Books and Records" shall mean all books and records of
Transferor that are necessary to conduct the Business, the ownership, use, and
operation of the Purchased Assets, or the payment or performance of the Assumed
Liabilities, including any such records maintained on computer and all related
computer software.
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"Breach" shall mean any material inaccuracy in or material
breach of, or any material failure to perform or comply with, any
representation, warranty, covenant, obligation, or other provision of this
Agreement or any document delivered pursuant to this Agreement.
"Business" shall have the meaning set forth in the Recitals.
"Business Day" shall mean any day other than a Saturday, Sunday,
or other day on which commercial banks in Seattle, Washington are authorized or
required by applicable Legal Requirements to be closed.
"Closing" shall mean the closing of this transaction, at which
the events set forth in Section 6.2 shall occur.
"Closing Date" shall mean the date on which the Closing occurs.
"Preferred Stock" shall have the meaning set forth in
Section 3.1.
"Consent" shall mean any approval, consent, ratification,
waiver, or other authorization, including any Governmental Authorization.
"Contract" shall mean any agreement, contract, lease,
obligation, promise, or understanding, whether written or oral and whether
express or implied, that is legally binding.
"Damages" shall have the meaning set forth in Section 8.2.
"Effective Date" shall have the meaning set forth in the
preamble to this Agreement.
"Excluded Assets" shall have the meaning set forth in
Section 2.3.
"Governmental Authority" shall mean any national, federal,
state, provincial, county, municipal, or local government, foreign or domestic,
or the government of any political subdivision of the any of the foregoing, or
any entity, authority, agency, ministry, or other similar body exercising
executive, legislative, judicial, regulatory, or administrative authority or
functions of or pertaining to the government, including any quasi-governmental
entity established to perform any such functions.
"Governmental Authorization" shall mean any Consent, license,
permit, waiver, or other authorization issued, granted, given, or otherwise made
available by or under the authority of any Governmental Authority or pursuant to
any Legal Requirement.
"Intellectual Property" shall mean (a) all inventions (whether
patentable or unpatentable and whether or not reduced to practice), all
improvements thereto, and all patents, patent applications, and patent
disclosures, together with all reissuances, continuations,
continuations-in-part, revisions, extensions, and reexaminations thereof, (b)
all trademarks, service marks, trade dress, logos, trade names, and corporate
names, together with all translations, adaptation, derivations, and combinations
thereof and including all goodwill associated therewith, and all applications,
registrations, and renewals in connection therewith,
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(c) all copyrightable works, all copyrights, and all applications,
registrations, and renewals in connection therewith, (d) all mask works and all
applications, registrations, and renewals in connection therewith, (e) all trade
secrets and confidential business information (including ideas, research and
development, know-how, formulas, compositions, manufacturing and production
processes and techniques, technical data, designs, drawings, specifications,
customer and supplier lists, pricing and cost information, and business and
marketing plans and proposals), (f) all computer software (including data and
related documentation) and (g) all other proprietary rights.
"Legal Requirement" shall mean any federal, state, local,
municipal, foreign, international, multinational, or other administrative Order,
constitution, law, ordinance, principle of common law, regulation, rule,
statute, or treaty.
"Lien" shall mean a monetary encumbrance against a Purchased
Asset.
"Ordinary Course of Business" shall mean any action taken by a
Person if, and only if, such action is consistent with the past practices of
such Person and is taken in the ordinary course of the normal day-to-day
operations of such Person.
"Organizational Documents" shall mean (i) the articles or
certificate of incorporation and the bylaws of a corporation, (ii) the
partnership agreement and any statement of partnership of a general partnership,
(iii) the limited partnership agreement and certificate of limited partnership
of a limited partnership, (iv) any charter, operating agreement, or similar
document adopted or filed in connection with the creation, formation, or
organization of a Person, and (v) any amendment to any of the foregoing.
"Permitted Encumbrances" shall mean those encumbrances incurred
in the ordinary course of business or otherwise in existence as of the Closing
Date.
"Person" shall mean an individual, partnership, corporation,
limited liability company, joint stock company, trust, unincorporated
organization or association, joint venture, or other organization, whether or
not a legal entity, or a Governmental Authority.
"Possession Date" shall mean 12:01 a.m., on the day following
the Closing Date.
"Proceeding" shall mean any action, arbitration, audit, hearing,
litigation, or suit (whether civil, criminal, administrative, investigative, or
informal) commenced, brought, conducted, or heard by or before, or otherwise
involving, any Governmental Authority, arbitrator, or mediator.
"Purchase Price" shall have the meaning set forth in
Section 3.1.
"Purchased Assets" shall have the meaning set forth in
Section 2.2.
"Release Agreement" shall mean the Agreement described in
Section 8.1.1.
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"Representative" shall mean, with respect to a particular
Person, any director, officer, employee, agent, consultant, advisor, or other
representative of or to such Person, including such Person's attorneys,
accountants, and financial advisors.
"Amon" means Xxxxxx Xxxx, Esq.
"Transferor" shall have the meaning set forth in the preamble to
this Agreement.
"Transferor Shareholders" shall have the meaning set forth in
Section 3.2.
"Transferor's Knowledge" shall mean that any of the officers or
directors of Transferor are actually aware of a particular fact or other matter.
"Tax" shall mean any tax (including any income tax, capital
gains tax, value-added tax, sales tax, excise tax, property tax, gift tax, or
estate tax), levy, assessment, tariff, duty (including any customs duty),
deficiency, or other fee, and any related charge or amount (including any fine,
penalty, interest, or addition to tax), imposed, assessed, or collected by or
under the authority of any Governmental Authority or payable pursuant to any
tax-sharing agreement or other Contract relating to the sharing or payment of
any such tax, levy, assessment, tariff, duty, deficiency, or fee
2. Purchase and Sale of Assets.
2.1 Purchase and Sale. Transferor agrees to transfer and
sell the Purchased Assets to Acquiror, and Acquiror agrees to acquire the
Purchased Assets from Transferor, in each case for the price and on the terms
and conditions set forth in this Agreement. Upon payment of the Purchase Price
as described in Section 3 hereof and the satisfaction of the other terms of this
Agreement, Transferor shall sell, transfer, assign and deliver the Purchased
Assets to Acquiror on the Closing Date free and clear of any and all liens,
encumbrances, security interests or obligations, except for Permitted
Encumbrances.
2.2 Purchased Assets. The assets to be sold by Transferor
to Acquiror pursuant to this Agreement (the "Purchased Assets") shall be all of
the Transferor's assets described on Exhibit A attached hereto, with the
exception of the Excluded Assets described in Section 2.3.
2.3 Excluded Assets. All assets of Transferor not
specifically included in the Purchased Assets (the "Excluded Assets") shall not
be acquired by Acquiror pursuant to this Agreement.
2.4 Assumption of Certain Liabilities. Acquiror shall at
Closing assume the liabilities of Transferor described on Exhibit B (the
"Assumed Liabilities"), but excluding any other liabilities of Transferor
whatsoever.
2.5 Excluded Liabilities. Acquiror shall not assume any
of the liabilities of Transferor not identified in Section 2.4 above. Without
limiting the generality of the foregoing, Acquiror shall not assume any
liabilities:
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(a) attributable to any of the Excluded Assets;
(b) liabilities for any income, gain, profit or
similar Tax arising out of or resulting from the sale,
conveyance, transfer, assignment and delivery of the Purchased
Assets provided for in this Agreement;
(c) all Taxes imposed on or with respect to the
Business for all Pre-Closing Periods;
(d) liabilities for any sales, exercise, transfer or
other tax on or arising out of the sale, conveyance, transfer,
assignment or delivery of the Purchased Assets;
(e) liabilities and obligations pursuant to any
agreements relating to the employment of any individual in
connection with Transferor's business, including, but not
limited to liabilities for any option, warrant, bonus,
performance, golden parachute, consulting, or similar liability;
(f) liabilities and obligations (whether fixed or
contingent) with respect to the Employee Benefit Plans; and
(g) all liabilities and obligations arising out of
the Excluded Assets.
(h) liability for any contract not assigned to
Acquiror;
(i) liability for any employee or stockholder loan;
(j) liability for any pending lawsuits, including
those listed on Schedule 7.1.15; and
(k) liability for Transferor's costs, fees, and
expenses of this transaction.
3. Purchase Price and Payment.
3.1 Purchase Price. In consideration of (i) the sale,
transfer and conveyance to Acquiror of the Purchased Assets, Acquiror shall, at
the Closing, transfer to Transferor $Five Hundred Thousand Dollars ($500,000.00)
and Seven Hundred Fifty Thousand (750,000) shares of ACC Series B Preferred
Stock (the "Preferred Stock") to be issued by Acquiror (the "Shares"). The
number of Shares to be transferred to Transferor shall be appropriately adjusted
to reflect the effect of any stock split, reverse split, stock dividend,
reorganization, recapitalization or other like change with respect to
Transferor's Preferred Stock occurring after the Effective Date and prior to
Closing, so as to provide Transferor the same economic effect as contemplated by
this Agreement prior to such stock split, reverse split, stock dividend,
reorganization, recapitalization, or like change. The consideration described in
this Section 3.1 is herein referred to as the "Purchase Price."
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3.2 Tax and Accounting Consequences. As a result of the
transfer of the Shares to Transferor, in accordance with the terms and
conditions set forth in this Agreement, there may be certain Tax and accounting
consequences to the shareholders of the Transferor (the "Transferor
Shareholders"), who will be the ultimate recipients of the Shares.
ACQUIROR MAKES NO REPRESENTATIONS OR WARRANTIES OF ANY KIND, NOR ARE ANY
INTENDED OR SHOULD ANY BE INFERRED, REGARDING THE ECONOMIC RETURN OR THE TAX
CONSEQUENCES TO THE TRANSFEROR SHAREHOLDERS WHO WILL ACQUIRE THE SHARES.
ACQUIROR, THEREFORE, RECOMMENDS THAT THE TRANSFEROR SHAREHOLDERS CONSULT THEIR
OWN ATTORNEYS, ACCOUNTANTS AND FINANCIAL ADVISORS ABOUT THE LEGAL AND TAX
CONSEQUENCES AND THE FINANCIAL RISKS AND MERITS OF RECEIVING THE SHARES.
3.3 Price Reduction Upon Certain Events. In the event of any
damage, loss, destruction or condemnation of any of the Purchased Assets
(excluding damage or destruction caused by Acquiror or any of its affiliates),
or any taking of any of the Purchased Assets by eminent domain, between the
Effective Date and the Closing Date, Acquiror shall have the right, by notice
given to Transferor within five (5) days of such event (but in any case prior to
the Closing Date), to terminate this Agreement. If Acquiror does not elect to
terminate this Agreement, the Purchase Price shall be reduced by an amount equal
to the resulting reduction in the value of the Purchased Assets, which shall be
attributed to the Transferor whose respective Purchased Assets were so damaged,
lost, destroyed or condemned. Transferor shall be entitled to retain any
insurance proceeds or condemnation awards paid or payable on account of such
damage or destruction or such taking. Transferor and Acquiror agree to negotiate
in good faith regarding the reduction in value resulting from any damage to or
destruction or condemnation of the Purchased Assets.
4. Pre-Closing Matters.
4.1 Operation of Purchased Assets. Between the Effective
Date and the Closing Date, Transferor, with respect to the Business, shall:
4.1.1 Conduct the Business and operate and maintain
the Purchased Assets in the Ordinary Course of Business;
4.1.2 Not sell, lease, or otherwise transfer or
dispose of any Purchased Assets, or any interest therein, other than transfers
and dispositions made in the Ordinary Course of Business or transfers and
dispositions otherwise authorized by its President;
4.1.3 Not permit or allow any Purchased Assets to
become subject to any additional Lien (other than Permitted Encumbrances);
4.1.4 Maintain the levels of Inventories and supplies
in the Business at customary levels; and
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4.1.5 Use its Best Efforts to maintain the relations
and goodwill with suppliers, customers, and others having business relationships
with Transferor in connection with the Business.
4.2 Consents.
4.2.1 Schedule 4.2.1 to this Agreement sets forth a
complete and accurate list of all Consents to transfer required under (i) all
material Contracts (a) to which Transferor is a party and which relate to
Transferor's Business or the ownership, use, or operation of the Purchased
Assets, or (b) by which any of the Purchased Assets is bound; and (ii) all
material Governmental Authorizations that are held by Transferor and relate to
Transferor's Business or the ownership, use or operation of the Purchased
Assets. Acquiror and Transferor shall use their respective Best Efforts, each at
its own expense, to obtain all such Consents as soon as practicable after the
Effective Date. In the event any such Consent is not obtained by the Closing
Date, Transferor agrees to continue to use its Best Efforts thereafter, in
cooperation with Acquiror, to obtain such Consent as soon as practicable.
4.2.2 Acquiror shall provide all cooperation
reasonably requested by Transferor in connection with obtaining the Consents
described on Schedule 4.2.1, including the provision of any information relating
to Acquiror that may be requested by the Person from whom any such Consent is
required.
4.3 Notification of Certain Events.
4.3.1 By Transferor. Between the Effective Date and
the Closing Date, Transferor shall give prompt notice to Acquiror in the event
Transferor becomes aware of (i) any fact or condition that causes or constitutes
a Breach of any representation or warranty of Transferor set forth herein as of
the Effective Date, (ii) any fact or condition that would cause or constitute a
Breach of any such representation or warranty had such representation or
warranty been made as of the time of occurrence or discovery of such fact or
condition, (iii) the occurrence of any Breach of any covenant of Transferor in
this Agreement, or (iv) the occurrence of any event that Transferor believes
will make the satisfaction of any of the conditions set forth in Section 5
impossible or unlikely. In the event that any fact or condition of the type
described in the foregoing clause (i) or (ii) would have required any change in
any of the Schedules or Exhibits to this Agreement if such fact or condition had
occurred or been known as of the Effective Date, Transferor shall promptly
deliver to Acquiror a supplement to such Schedule or Exhibit specifying the
necessary change.
4.3.2 By Acquiror. Between the Effective Date and the
Closing Date, Acquiror shall give prompt notice to Transferor in the event
Acquiror becomes aware of (i) any fact or condition that causes or constitutes a
Breach of any representation or warranty of Acquiror set forth herein as of the
Effective Date, (ii) any fact or condition that would cause or constitute a
Breach of any such representation or warranty had such representation or
warranty been made as of the time of occurrence or discovery of such fact or
condition, (iii) the occurrence of any Breach of any covenant of Acquiror in
this Agreement, or (iv) the occurrence of any event that Acquiror believes will
make the satisfaction of any of the conditions set forth in Section 5 impossible
or unlikely. In the event that any fact or condition of the type described in
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the foregoing clause (i) or (ii) would have required any change in any of the
Schedules or Exhibits to this Agreement if such fact or condition had occurred
or been known as of the Effective Date, Acquiror shall promptly deliver to
Transferor a supplement to such Schedule or Exhibit specifying the necessary
change.
4.3.3 No Effect on Remedies. The delivery of a notice
or supplement pursuant to Sections 4.3.1 and 4.3.2 shall have no effect on the
remedies of any party hereunder.
4.4 Access to Information. Between the Effective Date and
the Closing Date, Transferor shall, upon reasonable notice from Acquiror, (i)
give Acquiror and its representatives access (during normal business hours), in
a manner so as not to interfere with Transferor's normal operations and subject
to reasonable restrictions imposed by any such representative, to all key
employees and to the Purchased Assets, including the Books and Records relating
thereto, and (ii) cause its representatives to make available to Acquiror for
the purpose of making copies thereof such financial and operating data and other
information with respect to the Business and the Purchased Assets as Acquiror
may reasonably request.
4.5 Public Announcements. Except as otherwise required by
applicable Legal Requirements, any public announcement or similar publicity with
respect to this Agreement or this transaction shall be issued, if at all, only
with such contents, at such time and in such manner as the parties may agree. If
a party believes that it is required by applicable Legal Requirements to make
any such public announcement, it shall first provide to the other party the
content of the proposed announcement, the reasons such announcement is required
to be made, and the time and place that the announcement will be made.
5. Conditions to Closing.
5.1 Transferor's Conditions. Transferor's obligation to
close this transaction shall be subject to and contingent upon the satisfaction
(or waiver by Transferor in writing in its sole discretion) of each of the
following conditions:
5.1.1 All representations and warranties of Acquiror
set forth in this Agreement and each such representation and warranty shall have
been accurate in all respects as of the Effective Date and shall be accurate in
all respects as of the Closing Date, as if made on the Closing Date.
5.1.2 (i) All of the covenants and obligations that
Acquiror is obligated to perform or comply with pursuant to this Agreement prior
to or at the Closing and each such covenant and obligation (considered
individually) shall have been performed and complied with in all respects; and
(ii) Acquiror shall have made the deliveries of documents required to be made
pursuant to Section 6.2.2; provided, however, that with respect to the covenants
and obligations described in this Section 5.1.2, a failure of the foregoing
condition shall not be deemed to have occurred unless (a) Transferor has given
Acquiror notice specifying the nature of any Breach of such covenants or
obligations in reasonable detail, and (b) either (y) Acquiror has failed to cure
such Breach within ten (10) Business Days after such notice is given, or (z) if
such Breach cannot be cured solely by the payment of money and cannot reasonably
be cured within ten (10) Business Days despite the exercise of Best Efforts,
Acquiror has failed to commence curative
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action within ten (10) Business Days after such notice is given or thereafter
fails to complete the cure of such Breach as soon as practicable.
5.2 Acquiror's Conditions. Acquiror's obligation to close
this transaction shall be subject to and contingent upon the satisfaction (or
waiver by Acquiror in its sole discretion) of each of the following conditions:
5.2.1 All representations and warranties of Transferor
set forth in this Agreement shall have been accurate as of the Effective Date
and shall be accurate as of the Closing Date, as if made on the Closing Date.
5.2.2 All of the covenants and obligations that
Transferor are obligated to perform or comply with pursuant to this Agreement
prior to or at the Closing shall have been performed and complied with; and (ii)
Transferor shall have made the deliveries of documents required to be made
pursuant to Section 6.2.1.
5.2.3 To the extent, if any, that Acquiror is required
to obtain any Governmental Authorizations that relate to the Businesses or the
ownership, use, and operation of the Purchased Assets, Acquiror shall have
obtained such Governmental Authorizations and such Governmental Authorizations
shall be in full force and effect as of the Closing Date or subject to issuance
to Acquiror upon consummation of this transaction.
5.2.4 As of the Closing Date, there shall not be in
effect any legal requirement or any injunction or other order that prohibits the
transfer of any portion of the Purchased Assets by Transferor to Acquiror.
5.2.5 Between the Effective Date and the Closing Date,
there shall have been no damage to or destruction of any of the Purchased Assets
(excluding damage or destruction (i) caused by Acquiror or any of its
affiliates; or (ii) that does not have a material adverse effect on the
Businesses), nor any taking of any material portion of the Purchased Assets by
eminent domain.
5.2.6 Since the Effective Date, there shall not have
been commenced or threatened against Acquiror or Transferor or any related
person of Acquiror or Transferor any proceeding (i) seeking damages or other
relief in connection with, any aspect of this transaction, or (ii) that could
reasonably be expected to have the effect of preventing this transaction or
making this transaction illegal.
5.2.7 Transferor shall have executed a Release
Agreement, on terms and conditions acceptable to Acquiror.
5.2.8 Transferor shall have executed all documents
necessary to transfer and assign any of the Transferor's Intellectual Property
which is being transferred pursuant to this Agreement.
5.2.9 The Shareholders of Transferor shall have
approved the transaction.
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6. Closing.
6.1 Time and Place of Closing. The Closing shall take place
at the offices of QMC or at such other location as the parties may mutually
agree. Subject to the provisions of Section 7, the Closing shall take place
commencing at 2:00 p.m. (Eastern Standard Time) on January 15, 2005, unless
Transferor, in its sole discretion, determines that shareholder approval of the
transactions contemplated by this Agreement is necessary or desirable, in which
case Closing shall take place on January 15, 2005 or, in either case, on such
other date as is mutually acceptable to the parties.
6.2 Closing Deliveries.
6.2.1 At the Closing, Transferor shall deliver, or
cause to be delivered, to Acquiror:
(a) A fully executed Xxxx of Sale and Assignment and
Assumption in the form of Exhibit C to this Agreement (the
"Xxxx of Sale") conveying to Acquiror all personal property to
be acquired by Acquiror pursuant to this Agreement and providing
for (i) the assignment to Acquiror of the contract rights, and
all other intangible personal property included in the Purchased
Assets and (ii) Acquiror's assumption of the Assumed
Liabilities;
(b) A Certificate of an officer of Transferor (i)
certifying to the attached resolutions of the board of directors
and shareholders, if the board of directors deems it necessary,
of Transferor authorizing this transaction, and (ii) attesting
to the incumbency of the authorized officers of Transferor
executing this Agreement and the Transferor's closing documents;
(c) A duly authorized and executed Release Agreement
required by Section 8.1.1;
(d) A Certificate of an authorized officer of the
Transferor certifying as to the accuracy of the Transferor's
representations and warranties under Section 7.1;
(e) All Consents necessary to permit Transferor to
transfer the Purchased Assets to Acquiror; and
(f) All necessary documents to transfer and assign
any Intellectual Property which is being transferred pursuant
to this Agreement; and
(g) all of the books and records of Transferor.
6.2.2 At the Closing, Acquiror shall deliver, or cause
to be delivered, to Transferor:
(a) A counterpart copy of the Xxxx of Sale, executed
by Acquiror;
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(b) A Certificate of an authorized officer of
Acquiror (i) certifying attached resolutions of the boards of
directors and shareholders of Acquiror authorizing this
transaction, and (ii) attesting to the incumbency of the
authorized officer of Acquiror executing this Agreement and the
Acquiror's closing documents;
(c) A duly authorized and executed Release Agreement
as required by Section 8.1.1;
(d) A Certificate of an authorized officer of the
Acquiror certifying as to the accuracy of the Acquiror's
representations and warranties under Section 7.2;
(e) A Certificate of an authorized officer of the
Acquiror certifying the number of shares that Transferor shall
be entitled to in accordance with the terms and conditions of
this Agreement; and
(f) A counterpart copy of necessary documents to
transfer and assign any Intellectual Property which is being
transferred pursuant to this Agreement.
6.3 Closing Costs. Transferor and Acquiror shall each pay
one-half (1/2) of the following costs associated with the Closing: (i) recording
fees with respect to the assignment of any Intellectual Property and (ii) all
sales and excise taxes due in connection with this transaction.
6.4 Possession. Acquiror shall be entitled to possession of
the Purchased Assets on the Possession Date as that term is defined in
Section 1.
7. Representations and Warranties.
7.1 Transferor's Representations and Warranties. Transferor
represents and warrants to Acquiror as follows:
7.1.1 Organization and Good Standing. Transferor is a
corporation, duly formed, validly existing and in good standing under the laws
of the State of Florida. Transferor has the corporate power to own its
properties and to carry on its business as now being conducted. Transferor is
duly qualified to do business and is in good standing as a foreign corporation
in each jurisdiction in which the failure to be so qualified would have a
material adverse effect on the business, assets (including intangible assets),
prospects, financial condition or results of operations of Transferor
(hereinafter referred to as a "MATERIAL ADVERSE EFFECT"). Transferor has
delivered a true and correct copy of its Articles of Incorporation and By-laws,
each as amended to date, to Acquiror.
7.1.2 Title to Purchased Assets. Transferor has good
and marketable title to the Purchased Assets, free and clear of all mortgages,
pledges, liens, encumbrances, security interests, equities, charges and
restrictions of any nature whatsoever, except such Permitted Encumbrances, as
that term is defined in Section 1. By virtue of the deliveries made at the
Closing, Acquiror will obtain good and marketable title to the Purchased Assets,
free and
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clear of all liens, mortgages, pledges, encumbrances, security interests,
equities, charges and restrictions of any nature whatsoever, except any
Permitted Encumbrances.
7.1.3 Authority; No Conflict.
(a) This Agreement constitutes the legal, valid, and
binding obligation of Transferor, enforceable against Transferor
in accordance with its terms. Upon its execution and delivery by
Transferor at the Closing, the Transferor's closing documents
will constitute the legal, valid, and binding obligations of
Transferor, enforceable against Transferor in accordance with
its respective terms. Transferor has full corporate power,
authority, and capacity to execute and deliver this Agreement
and Transferor's closing documents and to perform its
obligations hereunder and thereunder. Without limiting the
generality of the foregoing, the Boards of Directors, and
shareholders, if the Boards of Directors deems it necessary, of
Transferor has approved this Agreement and the transactions
contemplated hereby.
(b) Neither the execution and delivery of this
Agreement, nor the performance of any of Transferor's
obligations hereunder, nor the consummation of the transactions
contemplated by this Agreement will, directly or indirectly
(with or without notice, lapse of time, or both), (i)
contravene, conflict with or result in a violation of any
provision of Transferor's Organizational Documents or any
resolution adopted by the Boards of Directors or shareholders of
Transferor; (ii) contravene, conflict with, or result in a
violation of, or give any Governmental Authority or other person
the right to challenge this transaction or to exercise any
remedy or obtain any relief under, any legal requirement or any
order to which Transferor or any of the Purchased Assets is
subject; (iii) contravene, conflict with, or result in a
violation of any of the terms or requirements of any
governmental authorization; (iv) contravene, conflict with, or
result in a violation or breach of any provision of, or give any
person the right to declare a default or exercise any remedy
under, or to accelerate the maturity or performance of, or to
cancel, terminate, or modify, any Contract; or (v) result in the
imposition or creation of any lien upon or with respect to any
of the Purchased Assets; except, in the case of clauses (i),
(ii) and (iii) above, for contraventions, conflicts or
violations which do not have a material adverse effect on the
ability of Transferor
(c) to consummate the transactions contemplated
hereby.
(d) Transferor represents and warrants that it is
not and will not be required to give any notice to, make any
filing with, or obtain any material Consent from any person in
connection with the execution and delivery of this Agreement,
the performance of its obligations hereunder, or the
consummation of this transaction, other than the Consents
described on Schedule 4.2.1. except, for Consents, the failure
of which to obtain would not have a material adverse effect on
the ability of the Transferor to consummate the transactions
contemplated hereby.
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7.1.4 Books and Records. The Books and Records are
complete and correct in all material respects and have been maintained in
accordance with sound business practices.
7.1.5 Possession of Purchased Assets. The Purchased
Assets are assets of the Transferor as of the Effective Date and are in
Transferor's possession as of the Effective Date, and that Transferor has all
requisite title or license to convey the Purchased Assets to Acquiror as
contemplated by the Agreement.
7.1.6 No Material Adverse Changes. There have been no
material adverse changes to Transferor's business, operations or financial
condition other than as disclosed to Acquiror.
7.1.7 Certain Proceedings. No proceeding is pending
or, to Transferor's Knowledge, has been threatened against Transferor that
challenges, or could reasonably be expected to have the effect of preventing,
making illegal, or otherwise materially interfering with, this transaction.
7.1.8 Transferor Financial Statements. (a) Transferor
has heretofore furnished Acquiror with no audited or unaudited balance sheets in
respect of the Business and no audited or unaudited income statements for any
period. Transferor has heretofore furnished Acquiror with a depreciation
schedule of the assets dated November 2004 (heretoafter referred as the
"Depreciation Schedule").
7.1.9 To the Knowledge of Transferor, since the
Depreciation Schedule Date, (i) there has been no material adverse change in the
Condition of the Business, (ii) the Business has, in all material respects, been
conducted in the ordinary course of business consistent with past practice,
(iii) there has not been any material obligation or liability (contingent or
otherwise) incurred by Transferor with respect to the Business other than
obligations and liabilities incurred in the ordinary course of business, (iv)
there has not been any purchase, sale or other disposition, or any agreement or
other arrangement, oral or written, for the purchase, sale or other disposition,
of any properties or assets having a value in excess of $5,000 in any case other
than in the ordinary course of business, and (v) none of the assets of
Transferor have been used to reduce liabilities which are not being assumed by
Acquiror.
7.1.10 No Undisclosed Liabilities. Except as set forth
in Schedule 7.1.10 or set forth on the Balance Sheet, Transferor does not have
any liability, indebtedness, obligation, expense, claim, deficiency, guaranty or
endorsement of any type, in excess of $5,000 individually or $10,000 in the
aggregate, whether accrued, absolute, contingent, matured, unmatured or other
(whether or not required to be reflected in financial statements in accordance
with generally accepted accounting principles).
7.1.11 Tax and Other Returns and Reports.
(a) Definition of Taxes. For the purposes of this
Agreement, "TAX" or, collectively, "TAXES," shall have the
meaning set forth in Article 1 hereof.
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(b) Tax Returns And Audits. Except as set forth in
Schedule 7.1.11:
(i) Transferor as of the Closing Date will have
prepared and filed all required federal, state, local and
foreign returns, estimates, information statements and reports
("RETURNS") relating to any and all Taxes concerning or
attributable to Transferor or its operations and such Returns
will be true and correct in all material respects and will have
been completed in accordance with applicable law in all material
respects.
(ii) Transferor as of the Closing Date: (A) will have
paid or accrued all material Taxes it is required to pay or
accrue and (B) will have withheld with respect to its employees
all federal and state income taxes, FICA, FUTA and other Taxes
required to be withheld.
(iii) Transferor has not been adjudicated delinquent
by any Tax Authority in the payment of any Tax nor is there any
Tax deficiency outstanding, proposed or assessed against
Transferor, nor has Transferor executed any waiver of any
statute of limitations on or extending the period for the
assessment or collection of any Tax.
(iv) No audit or other examination of any Return of
Transferor is presently in progress, nor has Transferor been
notified of any request for such an audit or other examination.
(v) Transferor does not have any material
liabilities for unpaid federal, state, local and foreign Taxes
which have not been accrued or reserved against on the current
Balance Sheet, whether asserted or unasserted, contingent or
otherwise, and Transferor has no knowledge of any basis for the
assertion of any such liability attributable to Transferor, its
assets or operations.
(vi) Transferor has provided to Acquiror copies of
all federal and state income and all state sales and use Tax
Returns filed for fiscal years 2000 and 2001.
(vii) There are (and as of immediately following the
Closing there will be) no material liens, pledges, charges,
claims, security interests or other encumbrances of any sort
("LIENS") on the assets of Transferor relating to or
attributable to Taxes.
(viii) Transferor has no knowledge of any basis for the
assertion of any claim relating or attributable to Taxes, which
if adversely determined, would result in any Lien on the assets
of Transferor.
(ix) None of Transferor's assets are treated as "tax-
exempt use property" within the meaning of Section 168(h) of the
Code.
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(x) As of the Closing Date, Transferor will not be a
party to any contract, agreement, plan or arrangement, including
but not limited to the provisions of this Agreement, covering
any employee or former employee of Transferor that could
obligate Transferor to pay any amount that would not be
deductible pursuant to Section 280G of the Code.
(xi) Transferor has not filed any consent agreement
under Section 341(f) of the Code nor agreed to have Section 341
(f)(2) of the Code apply to any disposition of a subsection (f)
asset (as defined in Section 341(f)(4) of the Code) owned by
Transferor.
(xii) Transferor is not a party to a tax sharing or
allocation agreement nor does Transferor owe any amount under
any such agreement.
(xiii) Transferor is not, and has not been at any time,
a "United States real property holding corporation" within the
meaning of Section 897(c)(2) of the Code.
(xiv) Transferor's tax basis in its assets for
purposes of determining its future amortization, depreciation
and other federal income tax deductions is accurately reflected
on Transferor's tax books and records in all material respects.
7.1.12 Agreements, Contracts And Commitments. Except
as set forth on Schedule 7.1.12, Transferor does not have, is not a party to nor
is it bound by:
(i) any collective bargaining agreements,
(ii) any agreements or arrangements that contain any
severance pay or post-employment liabilities or obligations,
(iii) any bonus, deferred compensation, pension,
profit sharing or retirement plans, or any other employee
benefit plans or arrangements,
(iv) any employment or consulting agreement, contract
or commitment with an employee or individual consultant or
salesperson or consulting or sales agreement, contract or
commitment with a firm or other organization,
(v) any agreement or plan, including, without
limitation, any stock option plan, stock appreciation rights
plan or stock purchase plan, any of the benefits of which will
be increased, or the vesting of benefits of which will be
accelerated, by the occurrence of any of the transactions
contemplated by this Agreement or the value of any of the
benefits of which will be calculated on the basis of any of the
transactions contemplated by this Agreement,
(vi) any fidelity or surety bond or completion bond,
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(vii) any lease of personal property having a value
individually in excess of $5,000,
(viii) any agreement of indemnification or guaranty,
(ix) any agreement, contract or commitment containing
any covenant limiting the freedom of Transferor to engage in any
line of business or to compete with any person,
(x) any agreement, contract or commitment relating
to capital expenditures and involving future payments in excess
of $5,000,
(xi) any agreement, contract or commitment relating
to the disposition or acquisition of material assets or any
interest in any business enterprise outside the ordinary course
of Transferor's business,
(xii) any mortgages, indentures, loans or credit
agreements, security agreements or other agreements or
instruments relating to the borrowing of money or extension of
credit, including guaranties referred to in clause (viii)
hereof,
(xiii) any purchase order or contract for the purchase
of raw materials involving $10,000 or more other than purchases
in the ordinary course of business,
(xiv) any construction contracts,
(xv) any distribution, joint marketing or development
agreement, or
(xvi) any other agreement, contract or commitment that
involves $5,000 or more and is not cancelable without penalty
within thirty (30) days.
(xvii) Except for such alleged breaches, violations and
defaults, and events that would constitute a breach, violation
or default with the lapse of time, giving of notice, or both,
all as noted in Schedule 7.1.12, Transferor has not breached,
violated or defaulted under, or received notice that it has
breached, violated or defaulted under, any of the terms or
conditions of any agreement, contract or commitment to which it
is a party or by which it is bound and which are required to be
set forth in Schedule 7.1.12 (any such agreement, contract or
commitment, a "CONTRACT") except for breaches, violations or
defaults that will not have a Material Adverse Effect. Each
agreement, contract or commitment set forth in any of Transferor
Schedules is in full force and effect and, except as otherwise
disclosed in Schedule 3.12(b), is not subject to any default
thereunder of which Transferor has knowledge by any party
obligated to Transferor pursuant thereto.
7.1.13 Interested Party Transactions. Except as set
forth on Schedule 7.1.13, to the knowledge of Transferor, no director, officer
or stockholder of Transferor (nor to the knowledge of Transferor any ancestor,
sibling, descendant or spouse of any of such persons,
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or any trust, partnership or corporation in which any of such persons has an
interest), has, directly or indirectly, (i) a direct interest in any entity
which finished or sold, or finishes or sells, services or products that
Transferor finishes or sells, or proposes to finish or sell, or (ii) a direct
interest in any entity that purchases from or sells or finishes to, Transferor,
any goods or services or (iii) a beneficial interest in any contract or
agreement set forth in Schedule 7.1.15; PROVIDED, that ownership of no more than
one percent (1%) of the outstanding voting stock of a publicly traded
corporation shall not be deemed an "interest in any entity" for purposes of this
Section 3.13.
7.1.14 Governmental Authorization. Schedule 3.14
accurately lists each material consent, license, permit, grant or other
authorization issued to Transferor by a governmental entity (i) pursuant to
which Transferor currently operates or holds any interest in any of its
properties or (ii) which is required for the operation of its business or the
holding of any such interest (herein collectively called "TRANSFEROR
AUTHORIZATIONS"), which Transferor Authorizations are in full force and effect
and constitute all Transferor Authorizations required to permit Transferor to
operate or conduct its business substantially as it is currently and has been
conducted or hold any interest in its properties or assets.
7.1.15 Litigation. Except as set forth in Schedule
7.1.15, there is no action, suit, claim or proceeding of any nature pending or,
to the knowledge of Transferor, threatened against Transferor, its properties or
any of its officers or directors in their capacity as such, nor, to the
knowledge of Transferor, is there any basis therefore. Except as set forth in
Schedule 7.1.15, there is no investigation pending or to the knowledge of
Transferor, threatened against Transferor, its properties or any of its officers
or directors (nor, to the Knowledge of Transferor, is there any basis therefore)
by or before any governmental entity. Schedule 7.1.15 sets forth, with respect
to any pending or threatened action, suit, proceeding or investigation, the
forum, the parties thereto, the subject matter thereof and the amount of damages
claimed or other remedy requested. Except as set forth in Schedule 7.1.15, no
governmental entity has at any time challenged or questioned the legal right of
Transferor to manufacture, offer or sell any of its products in the present
manner or style thereof. Neither Transferor nor any of the Purchased Assets is
subject to any material order, writ, injunction, judgment or decree of any court
or other governmental agency or authority.
7.1.16 Accounts Receivable. There are no Accounts
Receivable.
7.1.17 Minute Books. The minutes of corporate
proceedings and consents of Transferor and Subsidiary made available to counsel
for Acquiror are the only minute books of Transferor and Subsidiaries and
contain a reasonably accurate summary of the meetings of directors (or
committees thereof) referred to therein.
7.1.18 Environmental Matters.
(a) Hazardous Material. No underground storage tanks
and no amount of any substance that has been designated by any
Governmental Entity or by applicable federal, state or local law
to be radioactive, toxic, hazardous or otherwise a danger to
health or the environment, including, without limitation, PCBs,
asbestos, petroleum, urea-formaldehyde and all substances listed
as
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hazardous substances pursuant to the Comprehensive Environmental
Response, Compensation, and Liability Act of 1980, as amended,
or defined as a hazardous waste pursuant to the United States
Resource Conservation and Recovery Act of 1976, as amended, and
the regulations promulgated pursuant to said laws, (a "HAZARDOUS
MATERIAL"), but excluding office and janitorial supplies or
similar items, are present in any material quantities, as a
result of the deliberate actions of Transferor, or, to
Transferor's knowledge, as a result of any actions of any third
party or otherwise, in, on or under any property, including the
land and the improvements, ground water and surface water
thereof, that Transferor has at any time owned, operated,
occupied or leased, except for such presence as will not have a
Material Adverse Effect.
(b) Hazardous Materials Activities. Transferor has
not transported, stored, used, manufactured, disposed of,
released or exposed its employees or others to Hazardous
Materials in violation of any law in effect on or before the
Closing Date, nor has Transferor disposed of, transported, sold,
or manufactured any product containing a Hazardous Material
(collectively "HAZARDOUS MATERIALS ACTIVITIES") in violation of
any rule, regulation, treaty or statute promulgated by any
Governmental Entity in effect prior to or as of the date hereof
to prohibit, regulate or control Hazardous Materials or any
Hazardous Material Activity, except for such Hazardous Material
Activity as would not have a Material Adverse Effect.
(c) Permits. Transferor currently holds all
environmental approvals, permits, licenses, clearances and
consents (the "ENVIRONMENTAL PERMITS") necessary for the conduct
of Transferor's Hazardous Material Activities and other
businesses of Transferor as such activities and businesses are
currently being conducted.
(d) Environmental Liabilities. No material action,
proceeding, revocation proceeding, amendment procedure, writ,
injunction or claim is pending, or to Transferor's knowledge,
threatened concerning any Environmental Permit, Hazardous
Material or any Hazardous Materials Activity of Transferor.
Transferor is not aware of any fact or circumstance which could
involve Transferor in any material environmental litigation or
impose upon Transferor any material environmental liability.
(e) Capital Expenditures. Transferor is not aware of
any material capital expenditures which are required in order
for it to comply with Environmental Laws.
7.2 Acquiror's Representations and Warranties. Acquiror
represents and warrants to Transferor as follows:
7.2.1 Organization and Good Standing. Acquiror is a
corporation duly incorporated, validly existing and in good standing under the
laws of the State of Delaware.
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7.2.2 Authority; No Conflict.
() This Agreement constitutes the legal, valid,
and binding obligation of Acquiror, enforceable against Acquiror
in accordance with its terms. Upon their execution and delivery
by Acquiror at the Closing, the Acquiror's closing documents
will constitute the legal, valid, and binding obligations of
Acquiror, enforceable against Acquiror in accordance with their
respective terms. Acquiror has full corporate power, authority,
and capacity to execute and deliver this Agreement and the
Acquiror's closing documents and to perform its obligations
hereunder and thereunder. Without limiting the generality of the
foregoing, the Board of Directors of the Acquiror has approved
this Agreement and the transactions contemplated hereby.
(a) Neither the execution and delivery of this
Agreement, nor the performance of any of Acquiror's obligations
hereunder, nor the consummation of this transaction will,
directly or indirectly (with or without notice, lapse of time,
or both), (i) contravene, conflict with, or result in a
violation of any provision of Acquiror's Organizational
Documents or any resolution adopted by the Board of Directors or
the shareholders of Acquiror; or (ii) give any Person the right
to prevent or otherwise interfere with this transaction pursuant
to any legal requirement or order to which Acquiror is subject
or any Contract to which Acquiror is a party or by which it or
any of its assets is bound.
7.2.3 Certain Proceedings. No proceeding is pending
or, to Acquiror's Knowledge, has been threatened against Acquiror that
challenges, or could reasonably be expected to have the effect of preventing,
making illegal, or otherwise materially interfering with, this transaction.
7.2.4 Title to Shares. The Shares are duly authorized
and, when issued, upon the consummation of the transactions set forth herein,
Transferor will own the Shares free and clear of all liens and encumbrances
whatsoever.
8. Additional Covenants.
8.1 Covenants by Each Party.
8.1.1 Release of Acquiror and Transferor. At Closing,
Acquiror and Transferor shall enter into a release agreement (the "Release
Agreement") in the form of Exhibit D attached hereto.
8.1.2 Cooperation. Each of the parties hereto shall
cooperate with the other parties in every reasonable way in carrying out the
transactions contemplated herein, and in delivering all documents and
instruments deemed reasonably necessary or useful by counsel for each party
hereto.
8.1.3 Expenses. Except as otherwise provided in this
Agreement, all costs and expenses incurred in connection with this Agreement and
the transactions contemplated hereby shall be paid by the party incurring such
costs or expenses.
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8.1.4 Further Assurances. From time to time after the
Closing, Transferor will, at its own expense, execute and deliver, or cause to
be executed and delivered, such documents to Acquiror as Acquiror may reasonably
request in order more effectively to vest in Acquiror good title to the
Purchased Assets and otherwise to consummate the transactions contemplated by
this Agreement, and from time to time after the Closing, Acquiror will, at its
own expense, execute and deliver such documents to Transferor as Transferor may
reasonably request in order more effectively to consummate the assumption of the
Assumed Liabilities by Acquiror and otherwise to consummate the transactions
contemplated by this Agreement.
8.2 Indemnification.
8.2.1 By Acquiror. In the event the Acquiror (i)
breaches or is deemed to have breached any of the representations and warranties
contained in this Agreement or (ii) fails to perform or comply with any of the
covenants and agreements set forth in this Agreement, then the Acquiror shall
hold harmless, indemnify and defend Transferor, and each of its directors,
officers, shareholders, attorneys, representatives and agents, from and against
any Damages incurred or paid by Transferor to the extent such Damages arise or
result from a breach by the Acquiror of any such representations and warranties
or a violation of any covenant in this Agreement.
8.2.2 By Transferor. In the event Transferor (i)
breaches or is deemed to have breached any of the representations and warranties
contained in this Agreement or (ii) fails to perform or comply with any of the
covenants and agreements set forth in this Agreement, Transferor shall hold
harmless, indemnify and defend Acquiror, and each of its directors, officers,
shareholders, attorneys, representatives and agents, from and against any
Damages incurred or paid by the acquirer to the extent such Damages arise or
result from a breach by Transferor of any such representations or warranties or
a violation of any covenant in this Agreement. For purposes of this Section 8.2,
"Damages" shall mean any and all costs, losses, damages, liabilities, demands,
claims, suits, actions, judgments, causes of action, assessments or expenses,
including interest, penalties, fines and attorneys' fees and expenses incident
thereto, incurred in connection with any claim for indemnification arising out
of this Agreement, and any and all amounts paid in settlement of any such claim.
8.3 Retention of and Access to Books and Records. Transferor
agree to retain the Books and Records for a period of five (5) years after the
Closing Date and to make them available to Acquiror for the purpose of making
copies thereof at Acquiror's expense of.
9. Termination.
9.1 Termination Events. Except as otherwise provided for,
this Agreement may, by notice given prior to or at the Closing (which notice
shall specify the grounds for termination), be terminated by mutual written
agreement of both Transferor and Acquiror.
9.2 Effect of Termination. Each party's right of termination
under Section 9.1 is in addition to any other rights it may have under this
Agreement or otherwise, and the exercise of a right of termination shall not
constitute an election of remedies. If this Agreement is terminated pursuant to
Section 9.1, all further obligations of the parties under this Agreement
20
shall thereupon terminate, except that Sections 10 and 12 shall survive;
provided, however, that if this Agreement is terminated by a party because of a
material Breach of this Agreement by any of the parties or because one or more
of the conditions to the terminating party's obligations under this Agreement is
not satisfied as a result of any party's failure to comply with its obligations
under this Agreement, the terminating party's right to pursue all legal remedies
shall survive such termination unimpaired.
10. Default; Remedies.
10.1 Time of Essence. Time is of the essence of the parties'
obligations under this Agreement.
10.2 Remedies. If any party fails to perform its obligations
under this Agreement, the other party shall be entitled to pursue all remedies
available at law or in equity, including, in the case of a failure to consummate
this transaction following satisfaction (or waiver) of the conditions set forth
in Section 6.1 or 6.2, as applicable, the remedy of specific performance;
provided, however, that except with respect to a failure to close this
transaction as provided herein, a party shall not be in default hereunder unless
(i) the non-Breaching party has given the Breaching party notice specifying the
nature of the Breach in reasonable detail, and (ii) the Breaching party either
(a) has failed to cure such Breach within ten (10) Business Days after such
notice is given, or (b) if such Breach cannot be cured solely by the payment of
money and cannot reasonably be cured within ten (10) Business Days despite the
exercise of Best Efforts, has failed to commence curative action within ten (10)
Business Days after such notice is given or thereafter fails to complete the
cure of such Breach as soon as practicable.
11. Survival of Representations and Warranties; Escrow
11.1 Survival Of Representations And Warranties. The
representations and warranties in this Agreement or in any instrument
delivered pursuant to this Agreement shall survive the Closing and
continue until December 31, 2007.
11.2 Stockholder Escrow Arrangements.
(a) Escrow Funds. At the Closing, 25% of the
Acquiror's Preferred Stock to be issued to Transferor ("Escrow
Amount") will be deposited into an escrow account with Xxxxxx
Xxxx, Esq. (the "ESCROW AGENT"), such deposit to constitute an
escrow fund (the "ESCROW FUND"). The terms upon which the Escrow
Agent will serve in such capacity shall be as provided in an
Escrow Agreement to be mutually agreed upon by Acquiror and
Transferor, and which will be consistent with the provisions of
Section 8.2 and Article 11 (the "ESCROW AGREEMENT"). The Escrow
Fund is to be governed by the terms set forth in the Escrow
Agreement and maintained at Acquiror's sole cost and expense
(the "STOCKHOLDER ESCROW").
(b) Purpose. The Escrow Fund shall be available to
compensate Transferor and its affiliates for any claim, loss,
expense, liability or other damage, including reasonable
attorneys' fees, to the extent of the amount of such claim,
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loss, expense, liability or other damage (collectively "LOSSES")
that Acquiror or any of its affiliates has incurred or
reasonably anticipates incurring (in the case of an extension of
the Stockholder Escrow period pursuant to Section 11.2(c)) by
reason of the breach by Transferor of any representation,
warranty, covenant or agreement of Transferor contained herein,
including the indemnities provided for in Section 8.2 hereof and
the covenants contained in Section 8.1 hereof. Losses shall not
include amounts recovered from insurance. Acquiror shall
undertake commercially reasonable efforts to claim and collect
insurance to which it is entitled with respect to any Losses.
(c) Termination And Distribution Of Escrow Fund. The
Escrow shall terminate on December 31, 2005; PROVIDED HOWEVER,
that such portion of the Stockholder Escrow, which, in the
reasonable judgment of Acquiror, subject to the objection of the
Transferor and the subsequent arbitration of the matter in the
manner provided in Section 11.2(i) hereof, is necessary to
satisfy any identified but unsatisfied Losses specified in any
Officer's Certificate theretofore delivered to the Escrow Agent
prior to termination of the Stockholder Escrow, shall remain in
the Stockholder Escrow (and the Stockholder Escrow shall remain
in existence) until the earlier of (i) the expiration of the
statute of limitations applicable to such claims or (ii) the
resolution of such claims. As soon as all such claims have been
resolved or the statute of limitations has expired, the Escrow
Agent shall deliver to the appropriate security holders of
Transferor the remaining portion of the Stockholder Escrow not
required to satisfy such claims. Deliveries of Escrow Amounts to
the Transferor's stockholders pursuant to this Section 11.2(c)
shall be made according to each stockholder's Proportionate
Escrow Interest as certified to the Escrow Agent by the
Transferor Stockholder Agent.
(d) Protection Of Escrow Fund. The Escrow Agent
shall hold and safeguard the Escrow Funds during their
existence, shall treat such fund as a trust fund in accordance
with the terms of this Agreement and not as the property of
Acquiror and shall hold and dispose of the Escrow Funds only in
accordance with the terms hereof.
(e) Claims Upon Escrow Fund. In the event Acquiror
incurs or becomes aware of any Losses or potential Losses for
which it is entitled to indemnity under Article 8.2 and this
Article 11, it shall deliver to the Escrow Agent and the
Transferor Stockholder Agent a certificate signed by any officer
of Acquiror (an "OFFICER'S CERTIFICATE"): (A) stating that
Acquiror has (i) incurred or (ii) for purposes of extending the
Escrow pursuant to Section 11.2(c) above, reasonably anticipates
that it will have to incur Losses, (B) specifying in reasonable
detail the individual items of Losses included in the amount so
stated, the date each such item was paid or properly incurred,
or the basis for such anticipated liability, and either the
nature of the misrepresentation, breach of warranty or claim or
the litigation matter to which such item is related. Upon the
receipt of a certificate pursuant to clause (A)(i) above and
after compliance with the provisions of Sections 11.2(f), (g)
and (h) hereof, and if there is no written
22
objection by Transferor as further provided in subsection (g)
hereof, the Escrow Agent shall deliver to Acquiror out of the
Escrow Fund, as promptly as practicable, such amounts held in
the Escrow Fund equal to such Losses incurred. In determining
the number of shares of Acquiror Common Stock to be paid out by
the Escrow Agent pursuant to this Article V, such shares shall
be valued by the Escrow Agent at the value of $1.00 per share.
(f) Acquiror shall not be entitled to receive any
disbursement or cause any amount to be retained in Escrow with
respect to any Losses arising in respect of any individual
occurrence or circumstance unless the aggregate amount of all
Losses shall exceed $10,000; provided that in the event the
aggregate amount of such Losses of Acquiror shall exceed
$10,000, then Acquiror shall be entitled to recover from the
Escrow Fund only Losses in excess of $10,000.
(g) Objections To Claims. At the time of delivery of
any Officer's Certificate to the Escrow Agent, a duplicate copy
of such certificate shall be delivered to the Transferor
Stockholder Agent (as defined in Section 11.2(i)). The Escrow
Agent shall make no delivery to Acquiror of any amounts out of
the Escrow Fund, pursuant to Section 11.2(e)(A)(i) hereof,
unless and until the Escrow Agent shall have received written
authorization from the Transferor Stockholder Agent to make such
delivery or unless the claim shall have been resolved pursuant
to Section 11.2(h). If the Transferor Stockholder Agent shall
object to the claim made in the Officer's Certificate, the
Transferor Stockholder Agent shall do so in a written statement
to such effect delivered to the Escrow Agent. The Transferor
Stockholder Agent shall approve or object to any such claim
within a reasonable time after actual receipt of the Officer's
Certificate.
(h) Resolution Of Conflicts; Arbitration.
(i) In case the Transferor shall so object
in writing to any claim or claims made in any Officer's
Certificate, the Transferor and Acquiror shall attempt
in good faith to agree upon the rights of the respective
parties with respect to each of such claims. If the
Transferor and Acquiror should so agree, a memorandum
setting forth such agreement shall be prepared and
signed by both parties and shall be furnished to the
Escrow Agent. The Escrow Agent shall be entitled to rely
on any such memorandum and distribute amounts from the
Escrow Funds in accordance with the terms thereof.
(ii) If no such agreement can be reached
after good faith negotiation, the matter shall be
arbitrated before the American Arbitration Association.
Either Acquiror or the Transferor may demand arbitration
of the matter unless the amount of the damage or loss is
at issue in pending litigation with a third party, in
which event arbitration shall not be commenced until
such amount is ascertained upon the conclusion of such
litigation or both parties agree to arbitration, and in
either such event the
23
matter shall be settled by binding arbitration conducted
by three arbitrators. Acquiror and the Transferor shall
each select one arbitrator, and the two arbitrators so
selected shall select a third arbitrator. The
arbitrators shall set a limited time period and
establish procedures designed to reduce the cost and
time for discovery while allowing the parties an
opportunity, adequate in the sole judgment of the
arbitrators, to discover relevant information from the
opposing parties about the subject matter of the
dispute. The arbitrators shall rule upon motions to
compel or limit discovery and shall have the authority
to impose sanctions, including attorneys' fees and
costs, to the same extent as a court of competent law or
equity, should the arbitrators determine that discovery
was sought without substantial justification or that
discovery was refused or objected to without substantial
justification. The decision of the arbitrators as to the
validity and amount of any claim in such Officer's
Certificate shall be binding and conclusive upon the
parties to this Agreement, and notwithstanding anything
in this Section 11.2(h); the Escrow Agent shall be
entitled to act in accordance with such decision and
make or withhold payments out of the Escrow Fund in
accordance therewith. Such decision shall be written and
shall be supported by written findings of fact and
conclusions of law, which shall set forth the award,
decree or order of the arbitrators.
(iii) Judgment upon any award rendered by the
arbitrators may be entered in any court having
jurisdiction. Any such arbitration shall be held at the
discretion of Acquiror in Naples or Tampa Florida, under
the rules then in effect of the American Arbitration
Association.
(i) Agent Of Transferor's Stockholders; Power Of
Attorney.
(i) Upon execution and delivery of this
Agreement, without further act of any stockholder of
Transferor, Xxxx Xxxxxxxx shall be appointed as agent
and attorney-in-fact (the "TRANSFEROR STOCKHOLDER
AGENT") for each stockholder of Transferor on whose
behalf any Acquiror Common Stock was deposited into the
Escrow Fund for and on behalf of stockholders of
Transferor, to give and receive notices and
communications, to authorize delivery to Acquiror of
Acquiror Common Stock from the Escrow Fund in
satisfaction of claims by Acquiror, to object to such
deliveries, to agree to, negotiate, enter into
settlements and compromises of, and demand arbitration
and comply with orders of courts and awards of
arbitrators with respect to such claims, and to take all
actions necessary or appropriate in the judgment of the
Transferor Stockholder Agent for the accomplishment of
the foregoing. Such agency may be changed by the
stockholders of Transferor from time to time upon not
less than thirty (30) days prior written notice to
Acquiror; provided that the Transferor Stockholder Agent
may not be removed unless holders of a two-thirds
interest of the Escrow Funds agree to such removal and
to
24
the identity of the substituted agent. No bond shall be
required of the Transferor Stockholder Agent, and the
Transferor Stockholder Agent shall not receive
compensation for his services. Notices or communications
to or from the Transferor Stockholder Agent shall
constitute notice to or from each of the stockholders of
Transferor.
(ii) The Transferor Stockholder Agent shall
not be liable for any act done or omitted hereunder as
Agent while acting in good faith and in the exercise of
reasonable judgment. The stockholders of Transferor on
whose behalf the amounts were contributed to the Escrow
Funds shall severally indemnify the Transferor
Stockholder Agent and hold the Transferor Stockholder
Agent harmless against any loss, liability or expense
incurred without negligence or bad faith on the part of
the Transferor Stockholder Agent and arising out of or
in connection with the acceptance or administration of
the Transferor Stockholder Agent's duties hereunder,
including the reasonable fees and expenses of any legal
counsel retained by the Transferor Stockholder Agent.
(j) Actions Of The Transferor's Stockholder Agent. A
decision, act, consent or instruction of the Transferor
Stockholder Agent shall constitute a decision of all the
stockholders for whom a portion of the amounts otherwise
issuable to them are deposited in the Escrow Funds and shall be
final, binding and conclusive upon each of such stockholders,
and the Escrow Agent and Acquiror may rely upon any such
decision, act, consent or instruction of the Transferor's
Stockholder Agent as being the decision, act, consent or
instruction of each and every such stockholder of Transferor.
The Escrow Agent and Acquiror are hereby relieved from any
liability to any person for any acts done by them in accordance
with such decision, act, consent or instruction of the
Transferor Stockholder Agent.
(k) Third-Party Claims. If during The Escrow
Period, a third-party asserts a claim which gives rise to a
claim to The Escrow supported by an Officer's Certificate,
Acquiror shall have the right in its sole discretion to defend
and to settle such third-party claim, provided, however, that
any counsel retained to defend a third-party claim to be
satisfied from the Escrow Fund shall be reasonably acceptable to
the Transferor Stockholder Agent and Acquiror shall not settle
any such third party claim without the prior consent of the
Transferor Stockholder Agent, which consent shall not be
unreasonably withheld.
12. Escrow Agent's Duties.
(a) The Escrow Agent shall be obligated only for the
performance of such duties as are specifically set forth herein,
and as set forth in any additional written escrow instructions
which the Escrow Agent may receive after the date of this
Agreement which are signed by an officer of Acquiror and the
Transferor Stockholder Agent, and may rely and shall be
protected in relying or refraining from acting on any instrument
reasonably believed to be genuine and to have been
25
signed or presented by the proper party or parties. The Escrow
Agent shall not be liable for any act done or omitted hereunder
as Escrow Agent while acting in good faith and in the exercise
of reasonable judgment, and any act done or omitted pursuant to
the advice of counsel shall be conclusive evidence of such good
faith
(b) The Escrow Agent is hereby expressly authorized
to disregard any and all warnings given by any of the parties
hereto or by any other person, excepting only orders or process
of courts of law, and is hereby expressly authorized to comply
with and obey orders, judgments or decrees of any court. In case
the Escrow Agent obeys or complies with any such order, judgment
or decree of any court, the Escrow Agent shall not be liable to
any of the parties hereto or to any other person by reason of
such compliance, notwithstanding any such order, judgment or
decree being subsequently reversed, modified, annulled, set
aside, vacated or found to have been entered without
jurisdiction.
(c) The Escrow Agent shall not be liable in any
respect on account of the rights of the parties executing or
delivering or purporting to execute or deliver this Agreement or
any documents or papers deposited or called for hereunder.
(d) The Escrow Agent shall not be liable for the
expiration of any rights under any statute of limitations with
respect to this Agreement or any documents deposited with the
Escrow Agent.
(e) The Escrow Agent may resign at any time upon
giving at least thirty (30) days written notice to Acquiror and
the Transferor Stockholder Agent to this Agreement; PROVIDED,
HOWEVER, that no such resignation shall become effective until
the appointment of a successor escrow agent which shall be
accomplished as follows: Acquiror and the Transferor Stockholder
Agent shall use their best efforts to mutually agree upon a
successor agent within thirty (30) days after receiving such
notice. If the parties fail to agree upon a successor escrow
agent within such time, Acquiror shall have the right to appoint
a successor escrow agent. The successor escrow agent selected in
the preceding manner shall execute and deliver an instrument
accepting such appointment and it shall thereupon be deemed the
Escrow Agent hereunder and it shall without further acts be
vested with all the estates, properties, rights, powers, and
duties of the predecessor Escrow Agent as if originally named as
Escrow Agent. Thereafter, the predecessor Escrow Agent shall be
discharged from any further duties and liabilities under this
Agreement.
13. Limitation On Liability. Notwithstanding any other provision of
this Agreement to the contrary, absent fraud or bad faith, the liability of
Transferor with respect to any claim for a breach of any representation,
warranty, covenant or agreement contained in this Agreement shall be limited to
the assets of the Escrow Fund, and no Principal Stockholder shall have any
liability to Acquiror or arising from any breach after the termination of the
Escrow other than with
26
respect to claims made prior to such termination under Section 11.2(c) (and
liability with such claims shall be limited to the amount held in the Escrow as
a result thereof).
14. Construction and Interpretation.
14.1 The headings or titles of the sections of this Agreement
are intended for ease of reference only and shall have no effect whatsoever on
the construction or interpretation of any provision of this Agreement.
References herein to sections are to sections of this Agreement unless otherwise
specified.
14.2 Meanings of defined terms used in this Agreement are
equally applicable to singular and plural forms of the defined terms. The
masculine gender shall also include the feminine and neutral genders and vice
versa.
14.3 As used herein, (i) the term "party" refers to a party
to this Agreement, unless otherwise specified, (ii) the terms "hereof,"
"herein," "hereunder," and similar terms refer to this Agreement as a whole and
not to any particular provision of this Agreement, (iii) the term "this
transaction" refers to the transaction contemplated by this Agreement, (iv) the
term "including" is not limiting and means "including without limitation," (v)
the term "documents" includes all instruments, documents, agreements,
certificates, indentures, notices, and other writings, however evidenced, and
(vi) the term "property" includes any kind of property or asset, real, personal,
or mixed, tangible or intangible.
14.4 In the event any period of time specified in this
Agreement ends on a day other than a Business Day, such period shall be extended
to the next following Business Day. In the computation of periods of time from a
specified date to a later specified date, the word "from" means "from and
including," the words "to" and "until" each mean "to but excluding," and the
word "through" means "to and including."
14.5 This Agreement is the product of arm's length
negotiations among, and has been reviewed by counsel to the parties and is the
product of all the parties. Accordingly, this Agreement shall not be construed
for or against any party by reason of the authorship or alleged authorship of
any provision hereof.
15. Miscellaneous Provisions.
15.1 Survival of Covenants. Each covenant or agreement of the
parties set forth in this Agreement which by its terms expressly provides for
performance after the Closing Date shall survive the Closing and be fully
enforceable thereafter.
15.2 Expenses. Except as otherwise provided, each party shall
bear its own expenses incurred in connection with the preparation, execution,
and performance of this Agreement and this transaction, including all fees and
expenses of its own Representatives or any other similar payment in connection
with this transaction.
15.3 Binding Effect. The provisions of this Agreement shall
be binding upon and inure to the benefit of the parties and, subject to the
restrictions on assignment set forth herein, their respective successors and
assigns.
27
15.4 Assignment. Neither party shall assign any of its rights
or obligations under this Agreement without the prior written consent of the
other party. No assignment of this Agreement shall release the assigning party
from its obligations under this Agreement.
15.5 Notices. All notices under this Agreement shall be in
writing. Notices may be (i) delivered personally, (ii) transmitted by facsimile,
(iii) delivered by a recognized national overnight delivery service, or (iv)
mailed by certified United States mail, postage prepaid and return receipt
requested. Notices to any party shall be directed to its address set forth
below, or to such other or additional address as any party may specify by notice
to the other party. Any notice delivered in accordance with this Section 13.5
shall be deemed given when actually received or, if earlier, (a) in the case of
any notice transmitted by facsimile, on the date on which the transmitting party
receives confirmation of receipt by facsimile transmission, telephone, or
otherwise, if sent during the recipient's normal business hours or, if not, on
the next Business Day, (b) in the case of any notice delivered by a recognized
national overnight delivery service, on the next Business Day after delivery to
the service or, if different, on the day designated for delivery, or (c) in the
case of any notice mailed by certified U.S. mail, two (2) Business Days after
deposit therein.
If to QMC Quality Metal Systems, LLC
000 Xxxxxxxxxxx Xxxxx
Xxxxx Xxxxxx, XX 00000
Attn: Xxxx Xxxxxxxx
With a copy to: __________, Esq.
__________________
__________________
__________________
If to ACC: Alternative Construction Company, Inc.
0000 X. Xxxxxx Xxxx Xxxx.
Xxxxx 000
Xxxxxxxxx, XX 00000
With a copy to: Xxxxxx Xxxx, Esq.
000 Xxxxxxxxx Xxxxxx
0xx Xxxxx
Xxx Xxxx, XX 00000
15.6 Waiver. Any party's failure to exercise any right or
remedy under this Agreement, delay in exercising any such right or remedy, or
partial exercise of any such right or remedy shall not constitute a waiver of
that or any other right or remedy hereunder. A waiver of any Breach of any
provision of this Agreement shall not constitute a waiver of any succeeding
Breach of such provision or a waiver of such provision itself. No waiver of any
provision of this Agreement shall be binding on a party unless it is set forth
in writing and signed by such party.
28
15.7 Amendment. This Agreement may not be modified or amended
except by the written agreement of the parties.
15.8 Severability. If any provision of this Agreement is held
invalid, illegal, or unenforceable, then (i) such provision shall be enforceable
to the fullest extent permitted by applicable law, and (ii) the validity and
enforceability of the other provisions of this Agreement shall not be affected
and all such provisions shall remain in full force and effect.
15.9 Integration. This Agreement, including the Exhibits and
Schedules hereto, contains the entire agreement and understanding of the parties
with respect to the subject matter hereof and supersedes all prior and
contemporaneous agreements with respect thereto. The parties acknowledge and
agree that there are no agreements or representations relating to the subject
matter of this Agreement, either written or oral, express or implied, that are
not set forth in this Agreement, in the Exhibits and Schedules to this
Agreement.
15.10 Governing Law. This Agreement shall be governed by and
construed in accordance with the laws of the State of Florida (without regard to
the principles thereof relating to conflicts of laws).
15.11 Arbitration. All disputes or claims arising out of or
relating to this Agreement, or the breach hereof, including disputes as to the
validity and/or enforceability of this Agreement or any portion thereof, and any
claims for indemnification under the provisions of this Agreement, shall be
resolved by binding arbitration conducted in Sarasota, Florida. Any arbitration
pursuant to this Section 12.11 shall be conducted, upon the request of any
party, before a single arbitrator selected by the parties or, failing agreement
on the choice of an arbitrator within thirty (30) days of service of written
demand for arbitration, by an arbitrator designated by the Presiding Judge of
the Superior Court for Xxxxxxx County, Florida. The arbitrator shall be a
practicing attorney licensed to practice in one or more of the fifty (50)
states, with substantial experience in commercial and/or commercial litigation
matters, who has been in active practice for at least ten (10) years. Such
arbitration shall be conducted in accordance with the laws of the State of
Florida and pursuant to the commercial arbitration rules of the American
Arbitration Association (although not under the auspices of the American
Arbitration Association) and such of the federal rules of civil procedure as the
arbitrator may determine. The arbitration shall be conducted within forty-five
(45) days of the selection of the arbitrator and the arbitrator shall render his
or her decision within twenty (20) days after conclusion of the arbitration. The
prevailing party in the arbitration shall be entitled as a part of the
arbitration award to the costs and expenses (including reasonable attorneys'
fees and the fees of the arbitrator) of investigating, preparing, and pursuing
or defending the arbitration claim as such costs and expenses are awarded by the
arbitrator. The duty to arbitrate shall survive a termination or cancellation of
this Agreement and shall be specifically enforceable under applicable federal
law and the prevailing arbitration law of the State of Florida. The decision of
the arbitrator shall be final and binding upon the parties and enforceable in
any court of competent jurisdiction.
15.12 Execution. This Agreement may be executed in any number
of counterparts, all of which together shall constitute one and the same
agreement. Each party may rely upon the signature of each other party on this
Agreement that is transmitted by facsimile as
29
constituting a duly authorized, irrevocable, actual, current delivery of this
Agreement with the original ink signature of the transmitting party.
15.13 Waiver of Conflicts The parties acknowledge that certain
of the principals of QMC may have independent agreements with ACC providing for
their employment after the Closing. The terms and conditions of these agreements
have been negotiated in good faith and at arms-length. Any conflict of interest,
whether real or implied resulting from these prior agreements are deemed by the
parties hereto to be waived.
15.14 Incorporation of Recitals, Exhibits, and Schedules. The
Recitals to this Agreement and all Exhibits and Schedules to this Agreement are
incorporated herein by this reference.
15.15 Further Assurances. Each party agrees to execute and
deliver such additional documents and instruments as may reasonably be required
to effect this transaction fully, so long as the terms thereof are consistent
with the terms of this Agreement.
15.16 No Third Party Beneficiaries. This Agreement is made and
entered into for the sole protection and legal benefit of Transferor and
Acquiror, and, subject to the restrictions on assignment set forth herein, their
respective successors and assigns, and no other Person shall be a direct or
indirect legal beneficiary of, or have any direct or indirect cause of action or
claim in connection with, this Agreement.
15.17 Bulk Sales Acquiror hereby waives compliance by
transferor with the provisions of any applicable bulk sales law (including the
applicable sections of the Uniform Commercial Code of any state, and transferor
hereby agrees to indemnify and hold Acquiror harmless for any liability, cost
and expenses resulting from any such non-compliance.
30
IN WITNESS WHEREOF, the parties have executed this Agreement as of the
Effective Date.
QMC: QUALITY METAL SYSTEMS, LLC
A Florida corporation
By: _______________________
Name: _______________________
Its: _______________________
ACC: ALTERNATIVE CONSTRUCTION
COMPANY, INC.
a Florida corporation
By: _______________________
Name: _______________________
Its: _______________________
31
EXHIBIT A
PURCHASED ASSETS
The following are the assets owned by QMC, which under the terms and conditions
of this Agreement are being acquired by ACC.
PANEL LINE:
Overhead crane 33,000
Master console 45,000
Decoilers (2) 60,000
Roll formers (2) 250,000
Pallet decoilers (2) 15,000
High pressure foam mixing system 150,000
50 foot Armorbelt 347,500
Heating unit 10,000
Detail system 4,500
Saw 125,000
Roof panel equipment 58,000
Conveyors 18,000
Air compressor 11,000
------------
SUBTOTAL 1,127,000
------------
FABRICATOR SHOP:
Break and shear 83,700
Saw 5,400
Welders 10,500
Hydraulic system 8,000
Misc. tools 4,500
Panel press table 5,800
------------
SUBTOTAL 117,900
------------
1
MISCELLANEOUS:
Trailers (2) 15,000
Toyota T100 truck 3,000
------------
SUBTOTAL 18,000
------------
TOTAL 1,262,900
============
Property located at 0000 Xxxx Xxxxxx, Xxxxxxx, Xxxxxxxxx, 00000 valued at
$800,000 legally described by a metes and bounds description as found in Deed
Book S15, Page 717, in the Xxxxxxxx County Register of Deed's Office.
2
EXHIBIT B
ASSUMED LIABILITIES
NONE
1
EXHIBIT C
XXXX OF SALE
AND
ASSIGNMENT AND ASSUMPTION
This Xxxx of Sale and Assignment and Assumption Agreement (this "Xxxx of
Sale"), dated as of January 15, 2005 (the "Effective Date") by and between
Quality Metal Systems, LLC, a Florida corporation ("QMC")("Transferor"), and
Alternative Construction Company, Inc., a Florida corporation ("ACC" or
"Acquiror").
RECITALS:
A. QMC and ACC entered into that certain Asset Purchase Agreement,
December 14, 2004 (the "Agreement"), which provides, on the terms and conditions
set forth therein, for the transfer by Transferor and purchase by Acquiror of
certain assets of Transferor as set forth in the Agreement. Capitalized terms
used herein without definition shall have the meanings ascribed to them in the
Agreement.
B. The assets being sold by Transferor and purchased by Acquiror
include, but are not limited to, certain of Transferor's tangible and intangible
property (the "Purchased Assets") as set forth in the Agreement.
C. Acquiror desires to obtain all right, title and interest in and
to any and all of the Purchased Assets.
D. This Xxxx of Sale is being executed and delivered in order to
effect the transfer of the Purchased Assets to Acquiror, as provided in the
Agreement.
NOW THEREFORE, for valuable consideration, the receipt and sufficiency
of which are hereby acknowledged, Transferor agree as follows:
1. Assignment. Transferor hereby sells, grants, conveys, bargains,
transfers, assigns and delivers to Acquiror, and to Acquiror's successors and
assigns, all of Transferor's rights, titles and interests, legal and equitable,
throughout the world, in and to the Purchased Assets, to have and to hold the
same forever. This is a transfer and conveyance by Transferor to Acquiror of
good and marketable title to the Purchased Assets, free and clear of all
encumbrances except as provided in the Agreement or on the Schedules thereto.
Subject to the conditions and limitations contained in the Agreement, Transferor
hereby covenants and agrees to warrant and defend title to the Purchased Assets
against any and all claims whatsoever to the extent represented and warranted to
in the Agreement.
2
2. Assumption. Acquiror, in consideration of the assignment, hereby
assumes and undertakes to discharge, as appropriate in accordance with their
terms, all of the Assumed Liabilities except as otherwise set forth in the
Agreement. Except as provided for in this Xxxxxxxxx 0, Xxxxxxxx is not hereby
assuming, and the Acquiror shall not assume or otherwise be obligated to pay,
perform, satisfy or discharge, any liabilities or obligations of Transferor or
the Business.
3. Further Assurances. Transferor agrees that it will, at
Acquiror's request at any time and from time to time after the date hereof and
without further consideration, do, execute, acknowledge and deliver or will
cause to be done, executed, acknowledged and delivered all such further acts,
deeds, assignments, transfers, conveyances, powers of attorney and other
instruments and assurances as may be considered by Acquiror, its successors and
assigns, to be necessary or proper to better effect the sale, conveyance,
transfer, assignment, assurance, confirmation and delivery of ownership of the
Purchased Assets to Acquiror, or to aid and assist in collecting and reducing to
the possession of Acquiror, any and all Purchased Assets.
4. Amendment or Termination; Successors and Assigns. This Xxxx of
Sale may not be amended or terminated except by a written instrument duly signed
by each of the parties hereto. This Xxxx of Sale shall inure to the benefit of,
and be binding upon, each of the parties hereto and their respective successors
and assigns.
5. No Third Parties. Nothing in this Xxxx of Sale, expressed or
implied, is intended or shall be construed to confer upon or give to any person,
firm or corporation other than Acquiror and Transferor, their successors and
assigns, any remedy or claim under or by reason of this instrument or any term,
covenant or condition hereof, and all of the terms, covenants, conditions,
promises and agreements contained in this instrument shall be for the sole and
exclusive benefit of the Acquiror and Transferor, their successors and assigns.
6. Construction. This Xxxx of Sale, being further documentation of
a portion of the conveyances, transfers and assignments provided for in and by
the Agreement, neither supersedes, amends, or modifies any of the terms or
provisions of the Agreement nor does it expand upon or limit the rights,
obligations or warranties of the parties under the Agreement. In the event of a
conflict or ambiguity between the provisions of this Xxxx of Sale and the
Agreement, the provisions of the Agreement will be controlling.
7. Governing Law. The rights and obligations of the parties under
this Xxxx of Sale will be construed under and governed by the internal laws of
the State of Florida (regardless of its or any other jurisdiction's
conflict-of-law provisions).
8. Counterparts. This Xxxx of Sale may be executed by facsimile in
one or more counterparts and by facsimile, each of which shall be deemed an
original and all of which taken together shall constitute one and the same
instrument.
3
IN WITNESS WHEREOF, the parties have executed this Xxxx of Sale as of
the Effective Date.
TRANSFEROR: QUALITY METAL SYSTEMS, LLC
A Florida corporation
By: _______________________
Name: _______________________
Its: _______________________
ACQUIROR: ALTERNATIVE CONSTRUCTION
COMPANY, INC.
a Florida corporation
By: _______________________
Name: _______________________
Its: _______________________
4
EXHIBIT D
MUTUAL RELEASE AGREEMENT
This Mutual Release Agreement (this "Release Agreement"), dated as of
January 15, 2004 (the "Effective Date"), by and between Quality Metal Systems,
LLC, a Florida corporation ("QMC") and Alternative Construction Company, Inc., a
Delaware corporation ("ACC").
RECITALS
WHEREAS, QMC and ACC are parties to that certain Asset Purchase
Agreement, dated December 14, 2004 (the "Asset Purchase Agreement"), and this
Release Agreement is that certain Release Agreement as that term is defined in
the Asset Purchase Agreement; and
WHEREAS, QMC and ACC now wish to enter into this Release Agreement with
respect to the consummation of the Asset Purchase Agreement.
AGREEMENT
NOW, THEREFORE, in consideration of the mutual covenants and agreements
contained in this Agreement, the receipt and sufficiency of which are hereby
acknowledged, the parties do hereby agree as follows:
1. Definitions. Any capitalized term used in this Release Agreement
without definition shall have the meaning given to such term in the Asset
Purchase Agreement.
2. Release by QMC. QMC hereby fully, forever, irrevocably, and
unconditionally releases and discharges ACC, including, as applicable, all past
and present officers, directors, stockholders, affiliates (including, but not
limited to, parent, subsidiary and affiliated corporations), agents, employees,
representatives, lawyers, administrators, spouses, and all persons acting by,
through, under, or in concert with them, from any and all claims, damages or
other sums, including attorneys' fees and costs, which QMC may have against
them, or any of them, which could have arisen out of any act or omission
occurring from the beginning of time to the effective date of this Agreement,
whether now known or unknown, and whether asserted or unasserted.
3. Release by ACC. ACC hereby fully, forever, irrevocably, and
unconditionally releases and discharges QMC, including, as applicable, all past
and present officers, directors, stockholders, affiliates (including, but not
limited to, parent, subsidiary and affiliated corporations), agents, employees,
representatives, lawyers, administrators, spouses, and all persons acting by,
through, under, or in concert with them, from any and all claims, damages or
other sums, including attorneys' fees and costs, which ACC may have against
them, or any of them, which could have arisen out of any act or omission
occurring from the beginning of time to
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the effective date of this Agreement, whether now known or unknown, and whether
asserted or unasserted.
4. Miscellaneous.
4.1 Severability. The invalidity of all or any part of this
Release Agreement shall not render invalid the remainder of this Release
Agreement. In the event a court of competent jurisdiction should decline to
enforce any provision of this Release Agreement, such provision shall be
reformed to the extent necessary in the judgment of such court to make such
provision enforceable to the maximum extent that the court shall find
enforceable.
4.2 Notices. Any notice hereunder shall be sufficient if in
writing and telefaxed to the party or sent by certified mail, return receipt
requested and addressed as follows:
If to QMC Quality Metal Systems, LLC
000 Xxxxxxxxxxx Xxxxx
Xxxxx Xxxxxx, XX 00000
Attn: Xxxx Xxxxxxxx
With a copy to: __________, Esq.
__________________
__________________
__________________
If to ACC: Alternative Construction Company, Inc.
0000 X. Xxxxxx Xxxx Xxxx.
Xxxxx 000
Xxxxxxxxx, XX 00000
With a copy to: Xxxxxx Xxxx, Esq.
000 Xxxxxxxxx Xxxxxx
0xx Xxxxx
Xxx Xxxx, XX 00000
4.3 Governing Law. This Agreement is made and shall be
construed and performed in accordance with the laws of the State of Florida.
4.4 Waiver of Agreement. Any term or condition of this
Release Agreement may be waived at any time by the party that is entitled to the
benefit thereof, but no such waiver shall be effective unless set forth in a
written instrument duly executed by or on behalf of the party waiving such term
or condition. No waiver by any party of any term or condition of this Release
Agreement, in any one or more instance, shall be deemed to be or construed as a
waiver of the same or any other term or condition of this Release Agreement on
any future occasion.
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All remedies, either under this Release Agreement, by law or otherwise, will be
cumulative and not alternative.
4.5 Headings. The headings of the sections of this Release
Agreement are for convenience and reference only and are not to be used to
interpret or define the provisions hereof.
4.6 Counterparts. This Release Agreement may be executed by
facsimile and in two (2) or more counterparts, each of which shall be deemed an
original and all of which shall constitute one (1) instrument.
[SIGNATURE PAGE FOLLOWS]
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IN WITNESS WHEREOF, each of the parties has caused this Release Agreement to be
executed as of the Effective Date.
QMC: QUALITY METAL SYSTEMS, LLC
A Florida corporation
By: _______________________
Name: _______________________
Its: _______________________
ACC: ALTERNATIVE CONSTRUCTION
COMPANY, INC.
a Florida corporation
By: _______________________
Name: _______________________
Its: _______________________
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SCHEDULE 4.2.1
CONSENTS
[INSERT AGREEMENTS WHICH ARE BEING ASSIGNED]
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