ASSET PURCHASE AGREEMENT
THIS
ASSET PURCHASE AGREEMENT (the “Agreement”) is
effective December 31, 2009 by and among, Brownie’s Marine Group, Inc., a Nevada
corporation (the “Buyer”) and Xxxxxx X.
Xxxxxxxxxx, an individual residing in the State of Florida (the “Seller”).
W I T N E S S E T
H:
WHEREAS,
the Seller owns certain intellectual property itemized on Exhibit
A;
WHEREAS,
the Buyer currently licenses such intellectual property from the Seller in
consideration of royalty fees;
WHEREAS,
the Buyer believes there are opportunities to develop markets for the
intellectual property; and
WHEREAS,
Buyer believes that it would be in the best interests of the Buyer to acquire
the intellectual property, thereby eliminating royalty fees, and providing the
Buyer with an opportunity to develop and market the intellectual property;
and
WHEREAS,
the Buyer wishes to purchase or acquire from the Seller and the Seller wishes to
sell, assign and transfer to the Buyer, the intellectual property upon the terms
and subject to the conditions hereinafter set forth.
NOW,
THEREFORE, in consideration of the mutual covenants, representations and
warranties made herein, and of the mutual benefits to be derived hereby, the
parties hereto agree as follows:
DEFINITIONS
The terms
defined below, whenever used in this Agreement (including the Exhibits and
Schedules attached hereto), shall have the respective meanings indicated below
for all purposes of this Agreement. All references herein to a
Section, Article, Exhibit or Schedule are to a Section, Article, Exhibit or
Schedule of or to this Agreement, unless otherwise indicated.
Affiliate: of
a Person shall mean a Person that directly or indirectly through one or more
intermediaries, controls, is controlled by, or is under common control with, the
first Person. “Control” (including the terms “controlled by” and
“under common control with”) means the possession, directly or indirectly, of
the power to direct or cause the direction of the management policies of a
person, whether through the ownership of voting securities, by contract or
credit arrangement, or otherwise.
Agreement: shall
have the meaning provided in the first paragraph, above.
Applicable
Law: shall mean all applicable provisions of all
constitutions, treaties, statutes, laws (including the common law), rules,
regulations, ordinances, codes or orders of any governmental
authority.
Assets: shall
have the meaning provided in Section 1.1.
Buyer: shall mean
Brownie’s Marine Group, Inc., a Nevada corporation, and any of its successors
and assigns.
Closing: shall
have the meaning provided in Section 2.1.
Closing
Date: shall have the meaning provided in Section
2.1.
Code: shall
mean the Internal Revenue Code of 1986, as amended.
Collateral
Documents: shall mean the Intellectual Property
Assignments.
Confidential
Information: shall mean any information (in any form
whatsoever) concerning the Assets that is not already generally available to the
public.
Consent: shall
mean any consent, approval, authorization, waiver, permit, grant, franchise,
concession, agreement, license, exemption or order of registration, certificate,
declaration or filing with, or report or notice to, any Person, including but
not limited to any Governmental Authority.
Contract: shall
mean all agreements and contracts related to the Assets, whether oral or
written.
Intellectual Property
Assets: shall have the meaning provided in Section
3.1.4(a)
Intellectual Property
Assignments: shall have the meaning provided in Section
4.
IRS: shall
mean the Internal Revenue Service.
Lien: shall
mean any mortgage, pledge, hypothecation, right of others, claim, security
interest, encumbrance, lease, sublease, license, occupancy agreement, adverse
claim or interest, easement, covenant, encroachment, burden, title defect, title
retention agreement, voting, trust agreement, interest, equity, option, lien,
right of first refusal, charge or other restrictions or limitations of any
nature whatsoever, including but not limited to such as may arise under any
Contracts.
Person: shall
mean any natural person, firm, partnership, association, corporation, company,
limited liability company, trust, business trust, Governmental Authority or
other entity.
Seller: shall
mean Xxxxxx X. Xxxxxxxxxx.
ARTICLE
I
SALE
AND PURCHASE OF THE ASSETS
1.1 Assets. Subject
to the terms, conditions and qualifications set forth herein and for the
consideration set forth in Article II hereof, Seller agrees to convey, transfer,
assign and deliver to the Buyer at the Closing all of Seller’s right, title and
interest in and to the Seller’s intellectual property described on Exhibit A
herein (including, without limitation, all goodwill associated with Seller’s
permits, claims, work in process), the Intellectual Property Assets, the
Confidential Information, any and all rights of the Sellers under Contracts
entered into by Seller relating to the Assets (the foregoing items are
collectively referred to herein as the “Assets”). The Assets
transferred pursuant to this Agreement shall be sold and conveyed to the Buyer
free and clear of all Liens of any nature or description. The Assets
are described as follows: (a) United States Patents (a)
United States Patents 7,083,484, 6,860,773, 6,652,339 and 6,200,026 --
Inflatable dive marker and collection bag; and (b) Current works in progress for
an entire new series of 3-dimensional dive flags and divers raft/float
system.
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ARTICLE
II
THE
CLOSING
2.1 Date. The
closing of the sale and purchase of the Assets (the “Closing”) shall take
place on December 31, 2009 (the “Closing
Date”).
2.2 Consideration. In
consideration of the sale, assignment, conveyance and delivery by the Seller of
the Assets to Buyer pursuant to the terms and conditions of this Agreement on
the Closing Date, the Buyer shall pay to the Seller an aggregate purchase price
of Four Hundred Thousand (400,000) shares of common stock of the Company (the
“Shares”).
2.3 Allocation of Purchase
Price. The consideration referenced in Section 2.2, above (and
any and all other capitalized costs), shall be allocated among the Assets in
accordance with an allocation schedule to be prepared by the Buyer in accordance
with the Code, which allocation shall be binding upon the Buyer and the
Seller.
ARTICLE
III
REPRESENTATIONS
AND WARRANTIES
3.1 Representations and
Warranties of the Seller. Seller represents, warrants and
covenants to the Buyer as follows:
3.1.1 Authorization,
etc. The Seller has the power and authority to execute and
deliver this Agreement and each of the Collateral Documents to which it is a
party, to perform fully its obligations hereunder and thereunder, and to
consummate the transactions contemplated hereby and thereby. The
execution and delivery by the Seller of this Agreement and the Collateral
Documents to which it is a party, and the consummation of the transactions
contemplated hereby and thereby, have been duly authorized by all requisite
legal actions. The Seller has duly executed and delivered this
Agreement and each of the Collateral Documents to which it is a
party. This Agreement is a legal, valid and binding obligation of the
Seller, enforceable against the Seller in accordance with its terms, except that
(a) such enforcement may be subject to bankruptcy, insolvency, reorganization,
fraudulent transfer, moratorium or other similar laws now or hereafter in effect
relating to creditors’ rights and (b) the remedy of specific performance and
injunctive and other forms of equitable relief may be subject to equitable
defenses and to the exercise of judicial discretion by the court before which
any proceeding therefore may be brought.
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3.1.2 No Conflicts,
etc. The execution, delivery and performance by the Seller of
this Agreement and each of the Collateral Documents to which it is a party, and
the consummation of the transactions contemplated hereby and thereby, do not and
will not conflict with or result in a violation of or a default under (with or
without the giving of notice or the lapse of time or both) (i) any Applicable
Law applicable to the Seller, or the Assets, (ii) the legal authority of the
Seller, or (iii) any Contract or other contract, agreement or other instrument
to which the Seller or any Affiliate thereof is a party or by which the Seller
may be bound or affected.
3.1.3 Assets. The
Seller has good title to all the Assets free and clear of any and all
Liens.
3.1.4 Intellectual
Property.
(a) Title. Exhibit
A contains a correct list of all Intellectual Property that is owned by the
Seller and used in, held for use in connection with, or necessary for the
conduct of, or otherwise material to the Seller’s conveyance of the intellectual
property contemplated by this Agreement (the “Intellectual Property
Assets”). The Seller is the sole owner all of the Intellectual
Property Assets, free from any Liens and free from any requirement of any past,
present or future royalty payments, license fees, charges or other payments, or
conditions or restrictions whatsoever.
(b) Transfer. Immediately
after the Closing, the Buyer will own or otherwise have the right to use all the
Intellectual Property Assets, free from any Liens.
3.1.5 Investment.
(a) Seller is
an Accredited Investor as that term is defined in Regulation D promulgated under
the Securities Act of 1933, as amended (the "Act").
(b) Seller
acknowledges that the Shares are being acquired solely for the account of Seller
and not with a view to, or for resale in connection with, any distribution in
any jurisdiction where such sale or distribution would be
precluded. The Seller does not intend to dispose of all or any part
of the Shares except in compliance with the provisions of the Act and applicable
state securities laws, and understands that the Shares are being offered
pursuant to a specific exemption under the provisions of the Act, which
exemption(s) depends, among other things, upon the compliance with the
provisions of the Act. Seller has relied solely on the reports of the
Company filed with the Securities and Exchange Commission in making its decision
to acquire the Shares.
3.2 Representations and
Warranties of the Buyer. The Buyer represents and warrants to
the Seller as follows:
3.2.1 Authorization,
etc. The Buyer has the power and authority to execute and
deliver this Agreement and each of the Collateral Documents to which it is a
party, to perform fully its obligations hereunder and thereunder, and to
consummate the transactions contemplated hereby and thereby. The
execution and delivery by the Buyer of this Agreement and the Collateral
Documents to which it is a party, and the consummation of the transactions
contemplated hereby and thereby, have been duly authorized by all requisite
action of the Buyer. The Buyer has duly executed and delivered this
Agreement and each of the Collateral Documents to which it is a
party. This Agreement is a legal, valid and binding obligation of the
Buyer, enforceable against it in accordance with its terms, except that (a) such
enforcement may be subject to bankruptcy, insolvency, reorganization, fraudulent
transfer, moratorium or other similar laws now or hereafter in effect relating
to creditors’ rights and (b) the remedy of specific performance and injunctive
and other forms of equitable relief may be subject to equitable defenses and to
the exercise of judicial discretion by the court before which any proceeding
therefore may be brought.
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3.2.2 Organization. The
Buyer is a corporation duly organized, validly existing and in good standing
under the laws of the jurisdiction of its formation with full power and
authority to carry on its business and to own or lease and to operate its
properties as and in the places where such business is conducted and such
properties are owned, leased or operated.
3.2.3 No Conflicts,
etc. The execution, delivery and performance by the Buyer of
this Agreement and each of the Collateral Documents to which it is a party, and
the consummation of the transactions contemplated hereby and thereby, do not and
will not conflict with or result in a violation of or a default under (with or
without the giving of notice or the lapse of time or both) (i) any Applicable
Law applicable to the Buyer, or (ii) the certificate of incorporation or bylaws
of the Buyer.
3.2.4 Issuance of the
Shares. The Shares are duly authorized and, when issued and
paid for in accordance with this Agreement, will be duly and validly issued,
fully paid and nonassessable, free and clear of all Liens and shall not be
subject to preemptive rights or similar rights of shareholders.
ARTICLE
IV
OBLIGATIONS
OF SELLER AT CLOSING
At the
Closing, Seller will deliver to the Buyer all documents, certificates and
agreements necessary to transfer to the Buyer good and marketable title to the
Assets, free and clear of any and all Liens thereon, including without
limitation, assignments with respect to the Intellectual Property Assets (the
“Intellectual Property
Assignments”).
ARTICLE
V
OBLIGATIONS
OF BUYER AT CLOSING
At the
Closing, the Buyer will deliver to the Seller the consideration provided under
Section 2.2 and copies of the corporate resolutions necessary to authorize the
execution, delivery and performance of this Agreement and the applicable
Collateral Documents by the Buyer.
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ARTICLE
VI
MISCELLANEOUS
6.1 Expenses. Subject
to the terms and provisions of this Agreement, the Seller, on the one hand, and
the Buyer, on the other hand, shall bear their respective expenses, costs and
fees (including attorneys’ and accountants’ fees) in connection with the
preparation, execution and delivery of this Agreement and compliance
herewith.
6.2 Severability. If
any provision of this Agreement, including any phrase, sentence, clause, Section
or subsection is inoperative or unenforceable for any reason, such circumstances
shall not have the effect of rendering the provision in question inoperative or
unenforceable in any other case or circumstance, or of rendering any other
provision or provisions herein contained invalid, inoperative, or unenforceable
to any extent whatsoever.
6.3 Notices. All
notices, requests, demands, waivers and other communication required or
permitted to be given under this Agreement shall be in writing and shall be
deemed to have been duly given if (a) delivered
personally, (b)
mailed by first-class, registered or certified mail, return receipt requested,
postage prepaid, or (c) sent by reputable,
nationally recognized next-day or overnight mail or delivery or (d) sent by telecopy
or telegram.
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(i) if
to the Seller to:
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Xxxxxx
X. Xxxxxxxxxx
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000
X.X. 0xx
Xxxxxx
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Xxxx
Xxxxxxxxxx, Xxxxxxx 00000
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(ii) if
to the Buyer to:
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Brownie’s
Marine Group, Inc.
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000
X.X. 0xx
Xxxxxx
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Xxxx
Xxxxxxxxxx,
Xxxxxxx 00000
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or, in
each case, at such other address as may be specified in writing to the other
parties hereto.
All such
notices, requests, demands, waivers and other communications shall be deemed to
have been received (w) if by personal
delivery on the date of such delivery, (x) if by certified or
registered mail, on the fifth (5th) day
after the mailing thereof, (y) if by next-day or
overnight mail or delivery, on the day delivered, (z) if by telecopy or
telegram, on the next day following the day on which such telecopy or telegram
was sent, provided that a copy is also sent by certified or registered
mail.
6.4 Entire
Agreement. This Agreement (including the Exhibits and
Schedules hereto) the Collateral Documents (when executed and delivered)
constitute the entire agreement and supersede all prior agreements and
understandings, both written and oral, between the parties with respect to the
subject matter hereof.
6.5 Counterparts. This
Agreement may be executed in several counterparts, each of which shall be deemed
an original and all of which shall together constitute one and the same
instrument.
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6.6 Governing Law,
etc. This Agreement shall be governed in all respects,
including as to validity, under the laws of the State of Florida without giving
effect to the conflict of laws rules thereof. The Buyer and the
Seller hereby irrevocably submit to the jurisdiction of the courts of the State
of Florida and the Federal courts of the United States of America located in the
State of Florida, solely in respect of the interpretation and enforcement of the
provisions of this Agreement and of the documents referred to in this Agreement,
and hereby waive, and agree not to assert, as a defense in any action, suit or
proceeding for the interpretation or enforcement hereof or of any such document,
that is not subject thereto or that such action, suit or proceeding may not be
brought or is not maintainable in said courts or that the venue thereof may not
be appropriate or that this Agreement or any of such document may not be
enforced in or by said courts, and the parties hereto irrevocably agree that all
claims with respect to such action or proceeding shall be heard and determined
in such court in Broward County, Florida.
6.7 Binding
Effect. This Agreement shall be binding upon and inure to the
benefit of the parties hereto and there respective successors and permitted
assigns.
6.8 Assignment. This
Agreement shall be freely assignable or transferable by the Buyer to, and shall
inure to the benefit of, and be binding upon any other corporate entity that
shall succeed to the business presently being operated by the
Buyer. This Agreement shall not be assignable by the Seller without
the prior written consent of the Buyer.
6.9 Amendment; Waivers,
etc. No amendment, modification or discharge of this
Agreement, and no waiver hereunder, shall be valid or binding unless set forth
in writing and duly executed by the party against whom enforcement of the
amendment, modification, discharge or waiver is sought.
IN
WITNESS WHEREOF, the parties hereto have duly executed this Agreement as of the
date first above written.
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BUYER:
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BROWNIE’S
MARINE GROUP, INC. a Nevada corporation
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By:
/s/Xxxxxx X. Xxxxxxxxxx
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Name: Xxxxxx
X. Xxxxxxxxxx
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Title: President
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SELLER:
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/s/Xxxxxx
X. Xxxxxxxxxx
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Xxxxxx
X. Xxxxxxxxxx
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7
EXHIBIT
A
SCHEDULE
3.1.14
INTELLECTUAL PROPERTY
ASSETS
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Patent
No.
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Title
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Filing
Date
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I.I.P
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Three-Dimensional
Dive Flag development in progress
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TBD
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I.I.P
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Novel
Dive Raft / Float system for Divers
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TBD
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7,083,484
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Inflatable
dive marker and collection bag
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February
28, 2005
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6,860,773
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Inflatable
dive marker and collection bag
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November
21, 2003
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6,652,339
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Inflatable
dive marker and collection bag
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March
12, 2001
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6,200,026
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Inflatable
dive marker and collection bag
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March
27, 1998
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