Exhibit 10.5
ASSET PURCHASE AGREEMENT
THIS ASSET PURCHASE AGREEMENT (this "Agreement"), made and entered into
to be effective this 30th day of May, 2003, by and between Noxso Corporation, a
Virginia corporation, ("Buyer") and SANTA XXXX CORPORATION, a Nevada
corporation, ("Seller").
WITNESSETH:
WHEREAS, Seller is the owner of a mobile surface bonding plant and
related know-how as more fully in Annex II hereto (the "Equipment").
WHEREAS, Seller desires to convey to Buyer and Buyer desires to acquire
from Seller the all rights, title and interest to the Equipment and other rights
associated and/or connected thereto, all upon the terms and conditions and
subject to the limited exceptions set forth herein.
NOW, THEREFORE, in consideration of the mutual representations,
warranties, covenants, and agreements of the parties hereinafter set forth, the
parties hereto, intending to be legally bound, do hereby agree as follows.
SECTION 1
PURCHASE AND SALE OF EQUIPMENT
1.1 Purchase and Sale of Assets. Upon the terms and subject to the
conditions of this Agreement, Buyer hereby purchases, accepts, and acquires from
Seller, and Seller hereby sells, transfers, assigns, conveys, and delivers to
Buyer, all right, title, and interest of Seller in and to all of the rights and
assets, real, personal, and mixed, tangible or intangible, in the Equipment or
otherwise relating primarily to the Equipment, as owned or held by Seller.
Subject to such express exclusion and qualification, the foregoing rights and
assets shall hereinafter collectively be referred to as the "Assets." Without in
any way limiting the generality of the foregoing, the Assets shall include all
right and interest owned or held by the Seller in the following:
a. Technical Documentation All technical and descriptive
materials relating to the acquisition, design, development, use, or
maintenance of the Equipment (the "Technical Documentation").
b. Contracts. All contracts, warranties, agreements, licenses,
and other commitments and arrangements, oral or written, with any
person or entity respecting the ownership, license, warranty,
acquisition, design, development, distribution, marketing, use, or
maintenance of the Equipment.
c. Equipment. The Equipment.
d. Authorizations. All governmental approvals, authorizations,
certifications, consents, variances, permissions, licenses, and permits
to or from, or filings, notices, or recordings to or with, federal,
state, and local governmental authorities that relate to the Equipment.
e. Insurance Policies. All insurance and reinsurance, surety,
bonding, or indemnity policies, binders, or contracts, and the benefits
of any prior insurance coverage to the extent still available, as
established or obtained with respect to the Equipment.
f. Claims. All claims Seller may have against any person
relating to or arising from the Equipment, including rights to
recoveries for damages or defective goods, to refunds, insurance
claims, and chooses in action.
1.2 No Liabilities Assumed. Except as expressly set forth in Section 2
below, Buyer shall not assume or be responsible for any liability or obligation
of Seller of any kind, known or unknown, contingent or otherwise.
SECTION 2
PRICE AND PAYMENT
2.1 Consideration for Asset Assignment. The aggregate consideration for
the Assets (the "Purchase Price") shall be TWO HUNDRED FORTY-FIVE THOUSAND
DOLLARS ($245,000 US) and shall be paid as follows:
a. Stock. The Buyer shall issue 335,000 shares of its
restricted common stock (the "Shares") to Seller.
b. Promissory Notes. The Buyer shall issued promissory notes
in the aggregate principal amount of ONE HUNDRED TWENTY THOUSAND
DOLLARS ($120,000 US) which notes shall bear interest at the rate of
ten percent (10%) per annum, shall be due and payable on the earlier of
the one year anniversary of the note or on demand and shall otherwise
be in the form attached hereto as Annex III (the "Notes"). The Notes
shall be issued to the Seller's designees set forth in Annex I.
c. Assumption of Liability. Buyer hereby assumes the remaining
invoice purchase price of the Invoice, dated September 9, 2000 (the
"Assumed Invoice"), in the approximate original amount of TWO HUNDRED
FORTY-FIVE THOUSAND DOLLARS ($245,000), due and payable and bearing
interest as therein provided which Assumed Invoice has an outstanding
amount owing of no more than TWENTY-FIVE THOUSAND DOLLARS ($25,000 US).
SECTION 3
REPRESENTATIONS AND WARRANTIES OF SELLER
3.1 Representations and Warranties. Seller hereby represents and
warrants the following to Buyer. Buyer and Seller have entered into this
Agreement on the condition that Seller make the following representations and
warranties, which representations and warranties were and are a material
inducement to Buyer entering into this Agreement, and Buyer would not have
entered into this Agreement except in reliance upon the representations and
warranties of Seller made herein.
3.1.1 Consents. All required approvals or consents have been
obtained in connection with the execution of this Agreement by Seller and with
the performance by Seller of Seller's obligations hereunder.
3.1.2 Contracts. Neither this Agreement nor the transactions
contemplated hereby violates or shall violate any contract, document,
understanding, agreement or instrument to which Seller is a party or by which
Seller may be bound, or any contract, document, understanding, agreement or
instrument affecting the Assets.
3.1.3 Lawsuits. Seller has received no written notice of any
pending or threatened lawsuits or asserted or unasserted claims, condemnation or
eminent domain proceedings, or proceedings in lieu thereof, relating to the
Assets.
3.1.4 Notice of Violation. Seller has not received
notification of any violation of any laws, rules or regulations with respect to,
or which would affect the use of the Assets.
3.1.5 Contracts. There are no contracts relating to the Assets
to which Seller is a party, or which Seller has assumed, has agreed to be bound
by or has agreed to pay on, that will obligate Buyer (except for the Assumed
Invoice).
3.1.6 Authority. Seller has been duly authorized to enter into
this Agreement and to sell the Assets pursuant to the terms and conditions
hereof, and the parties and persons executing this Agreement on behalf of Seller
have been duly authorized to execute this Agreement and to take such other
actions as may be necessary or appropriate to consummate the transactions
contemplated hereby.
3.1.7 Good and Marketable Title. Upon the mutual execution of
this Agreement, Buyer shall obtain good and marketable title to all of the
Assets, free and clear of all title defects, liens, restrictions, claims,
charges, security interests, or other encumbrances of any nature whatsoever
(except for the Assumed Invoice) leases, chattel mortgages, conditional sales
contracts, collateral security arrangements, or other title or interest
retention arrangements.
3.1.8 Accredited Investor Status. Seller is an "accredited
investor" for purposes of Regulation D under the Securities Act of 1933, as
amended (the "Securities Act") and Seller has sufficient knowledge and
experience in evaluating and investing in companies similar to Buyer in terms of
Buyer's stage of development so as to be able to evaluate the risks and merits
of its investment in Buyer and is able financially to bear the risks thereof.
Seller was not organized for the purpose of acquiring the Shares.
3.1.9 Investment Purposes. Seller is acquiring the Shares,
subject to the terms hereof, for investment for its own account and not with a
view to, or for resale in connection with, any distribution thereof, and Seller
has no present intention of selling or granting any participation in, or
otherwise distributing the same. By executing this Agreement, Seller further
represents and warrants that it has no contract, undertaking, agreement or
arrangement with any person to sell, transfer or grant participations to such
person or to any third person, with respect to any of the Shares.
3.1.10 Access to Information. Seller has had access to any and
all information concerning Buyer that it and its financial, tax and legal
advisors required or considered necessary to make a proper evaluation of this
investment. Specifically, Seller has had the opportunity to review Buyer's last
annual report on Form 10-KSB, dated March 31, 2002, and all subsequent filings
by Buyer with the Securities and Exchange Commission. Further, Buyer has advised
Seller that (i) there have been material developments that are not fully
described in such filings, (ii) Buyer's financial statements and other
information contained in such filings do not reflect material changes that have
occurred since the date of the last Buyer financial statement and (iii) Buyer
believes that updated financial and business information would be material to an
investment decision. Notwithstanding the foregoing, Seller has declined to
review, accept or consider additional information in making an investment
decision. In making the decision to acquire the Shares, Seller and its advisers
have relied solely upon their own independent investigations, and fully
understand that there are no guarantees, assurances or promises in connection
with any investment hereunder and understand that the particular tax
consequences arising from this investment in Buyer will depend upon its
individual circumstances. Seller further understands that no opinion is being
given as to any securities or tax matters involving the offering.
3.1.11 Exempt Transaction. Seller understands that the Shares
have not been registered under the Securities Act and must be held indefinitely
unless a subsequent disposition thereof is registered under the Securities Act
or is exempt from such registration.
3.1.12 Legend. Seller also understands and agrees that stop
transfer instructions relating to the Shares will be placed in Buyer's stock
transfer ledger, and that the certificates evidencing the Shares will bear
legends in substantially the following form:
The securities represented by this certificate have not been
registered under the Securities Act of 1933 (the "Act") and
are "restricted securities" as that term is defined in Rule
144 under the Act. The securities may not be offered for sale,
sold or otherwise transferred except pursuant to an effective
registration statement under the Act or pursuant to an
exemption from registration under the Act, the availability of
which is to be established to the satisfaction of the Company.
3.2 Survival of Representations and Warranties. All of the
representations and warranties of the Seller set forth in Section 3.1 hereof
shall survive the execution, deliver and closing of the transactions described
herein.
SECTION 4
REPRESENTATIONS AND WARRANTIES OF BUYER
4.1 Representations and Warranties. Buyer hereby makes the following
representations and warranties to Seller. Buyer and Seller have entered into
this Agreement on the condition that Buyer make the following representations
and warranties, which representations and warranties were and are a material
inducement to Seller entering into this Agreement, and Seller would not have
entered into this Agreement except in reliance upon the representations and
warranties of Buyer made herein.
4.1.1 Consents. All required approvals or consents have been
obtained in connection with the execution of this Agreement by Buyer and with
the performance by Buyer of Buyer's obligations hereunder.
4.1.2 Contracts. Neither this Agreement nor the transactions
contemplated hereby violates or shall violate any contract, document,
understanding, agreement or instrument to which any Buyer is a party or by which
Buyer may be bound.
4.1.3 Authority. Buyer has been duly authorized to enter into
this Agreement and to purchase the Assets pursuant to the terms and conditions
hereof, and the person executing this Agreement on behalf of Buyer has been duly
authorized to execute this Agreement and to take such other actions as may be
necessary or appropriate to consummate the transactions contemplated hereby.
4.2 Survival of Representations and Warranties. All of the
representations and warranties of Buyer set forth in Section 4.1 hereof shall
survive the execution, deliver and closing of the transactions described herein.
SECTION 5
DELIVERIES
5.1 Deliveries. On the date hereof or as soon thereafter as is
reasonably practicable, Buyer and Seller shall take the following actions, in
addition to such other actions as may otherwise be required under this
Agreement:
a. Conveyance Instruments. Seller and Buyer shall mutually
execute and deliver to each other a xxxx of sale in substantially the same form
as attached hereto as Annex IV, and such other assignments and other instruments
of conveyance and transfer as such party may reasonably request to effect the
transactions described herein.
5.2 Further Assurances. After the date hereof, without further
consideration, the parties shall take all such other action and shall procure or
execute, acknowledge, and deliver all such further certificates, conveyance
instruments, consents, and other documents as the other party or its counsel may
reasonably request (1) to vest in Buyer, and perfect and protect Buyer's right,
title, and interest in, and enjoyment of, the Assets, or (2) as otherwise
required to achieve the purposes hereof.
SECTION 6
MISCELLANEOUS
6.1 Entire Agreement. This Agreement (including the Annexes), and the
other certificates, agreements, and other instruments to be executed and
delivered by the parties in connection with the transactions contemplated
hereby; constitute the sole understanding of the parties with respect to the
subject matter hereof. No amendment, modification, or alteration of the terms or
provisions of this Agreement shall be binding unless the same shall be in
writing and duly executed by the parties hereto.
6.2 Parties Bound by Agreement; Successors and Assigns. The terms,
conditions, and obligations of this Agreement shall inure to the benefit of and
be binding upon the parties hereto and the respective successors and assigns
thereof. Without the prior written consent of the other party, Buyer may assign
its rights, duties, or obligations hereunder or any part thereof to any other
person or entity, which shall thereupon become Buyer, provided that at the time
of such assignment Buyer unconditionally and irrevocably guarantees the payment
and performance of any duties or obligations so assigned.
6.3 Counterparts. This Agreement may be executed in one or more
counterparts, each of which shall for all purposes be deemed to be an original
and all of which shall constitute the same instrument. Facsimile signatures
shall be deemed to be original signatures for purposes of this Agreement.
6.4 Headings. The headings of the Sections and paragraphs of this
Agreement are inserted for convenience only and shall not be deemed to
constitute part of this Agreement or to affect the construction hereof.
6.5 Modification and Waiver. Any of the terms or conditions of this
Agreement may be waived in writing at any time by the party that is entitled to
the benefits thereof. No waiver of any of the provisions of this Agreement shall
be deemed to or shall constitute a waiver of any other provision hereof (whether
or not similar).
6.6 Expenses. The parties shall each pay all costs and expenses
incurred by it or on its behalf in connection with this Agreement and the
transactions contemplated hereby, including fees and expenses of its own
financial consultants, accounts, and counsel.
6.7 Notices. Any notice or other communication in connection with this
Agreement shall be deemed to be delivered if in writing addressed as provided
below and if either (a) actually delivered at said address, (b) in the case of a
letter, seven business days shall have elapsed after the same shall have been
deposited in the United States mails, postage prepaid and registered or
certified, return receipt requested or (c) transmitted to any address outside of
the United States, by telecopy and confirmed by overnight or two-day courier. If
to the Seller, to the Seller's address as set forth in Annex I or at such other
address as the Seller shall have specified by notice to Buyer. If to Buyer, to
Buyer's address set forth herein, or at such other address as Buyer shall have
specified by notice to the Seller.
6.8 Governing Law. This Agreement shall be construed in accordance with
and governed by the laws of the State of Utah without giving effect to the
principles of conflicts of law thereof. Any judicial proceeding brought to
enforce this Agreement, or any matter related thereto, shall be brought in the
appropriate courts for Xxxxx County, State of Utah or the appropriate United
States District Court located in the State of Utah. By execution of this
Agreement, each party accepts and agrees to the exclusive jurisdiction of the
aforesaid courts and irrevocably agrees to be bound by any judgment rendered
thereby in connection with this Agreement.
6.9 Survival of Agreements. All Covenants, agreements, representations,
and warranties made herein shall survive the execution and delivery of this
Agreement.
6.10 Severability. The invalidity or unenforceability of any provision
of this Agreement shall not affect the validity or enforceability of any other
provision, the remaining provisions being deemed to continue in full force and
effect.
6.11 Construction. This Agreement shall not be construed against the
party preparing it, and shall be construed without regard to the identity of the
person who drafted it or the party who caused it to be drafted and shall be
construed as if all parties had jointly prepared this Agreement and it shall be
deemed their joint work product, and each and every provision of this Agreement
shall be construed as though all the parties hereto participated equally in the
drafting hereof; and any uncertainty or ambiguity shall not be interpreted
against any one party. As a result of the foregoing, any rule of construction
that a document is to be construed against the drafting party shall not be
applicable.
IN WITNESS WHEREOF, each of the parties hereto has caused this
Agreement to be executed on its behalf on the date indicated.
BUYER SELLER
NOXSO CORPORATION SANTA XXXX CORPORATION
By /s/ Xxxxxxx X. Xxxxxxxx By /s/ Xxxx X. Xxxxxxxxxxxx
--------------------------------- ------------------------------
Xxxxxxx X. Xxxxxxxx, President Xxxx X. Xxxxxxxxxxxx, CEO
ANNEX I
SELLER
Name and Address Principal Amount of Note Number of Shares
---------------- ------------------------ ----------------
SANTA XXXX CORPORATION $0 335,000
000 Xxxx Xxxxxx Xxxxxx
Xxxx, XX 00000
T Xxxxxx $56,250 0
B Xxxxx $4,000 0
R Xxxxx $4,000 0
D Warner $16,000 0
R Knell $39,750 0
-------- -------
TOTAL $120,000 335,000
======== =======
ANNEX II
DESCRIPTION OF EQUIPMENT
[To be completed]
ANNEX III
FORM OF NOTE
THIS NOTE HAS NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED.
IT MAY NOT BE SOLD, OFFERED FOR SALE, PLEDGED OR HYPOTHECATED IN THE ABSENCE OF
A REGISTRATION STATEMENT IN EFFECT WITH RESPECT TO THIS NOTE UNDER SUCH ACT OR
AN OPINION OF COUNSEL SATISFACTORY TO THE COMPANY THAT SUCH REGISTRATION IS NOT
REQUIRED OR UNLESS SOLD PURSUANT TO RULE 144 OR RULE 144A OF SUCH ACT.
PROMISSORY NOTE
$__________ ____[DATE]
FOR VALUE RECEIVED, the undersigned, NOXSO CORPORATION, a Virginia
corporation (the "Borrower"), promises to pay to ______________ (the "Lender"),
or order, the principal amount of __________________ DOLLARS ($_______) (the
"Loan"), together with daily interest from the date hereof, computed on the
basis of a 365-day year, on the aggregate principal amount of the Loan from time
to time unpaid at a per annum rate of 10%, all payable as follows:
On the earlier of the one year anniversary of this Note or upon demand,
the Borrower will pay to the Lender for credit to the Loan an amount equal to
the Loan then due, together with all accrued and unpaid interest on the Loan.
The Borrower may from time to time prepay all or any portion of the
Loan, without premium or penalty. Upon all prepayments of the Loan, the Borrower
shall pay to the Lender the principal amount to be prepaid together with unpaid
interest in respect thereof accrued to the date of prepayment.
Any payment under this Note shall be made to the Lender in lawful money
of the United States of America on the date such payment is due at the office of
the Lender at ___________________ or such address as the Lender may specify in
writing to the Borrower.
The parties hereto, including the Borrower and all guarantors and
endorsers, hereby waive presentment, demand, notice, protest and all other
demands and notices in connection with the delivery, acceptance, performance and
enforcement of this Note, except as specifically otherwise provided herein, and
assent to extensions of time of payment, or forbearance or other indulgence,
without notice.
Any reference in this Note to the Borrower shall be deemed to include
the successors and assigns of the Borrower; provided, however, that the Borrower
may not assign its obligations hereunder without the prior written consent of
the Lender. Any reference in this Note to the Lender shall be deemed to include
the successors and assigns of the Lender.
Notwithstanding the place where this Note may be executed, the Borrower
expressly agrees that all the terms and provisions hereof shall be governed by
and construed in accordance with the laws (other than the conflict of laws
rules) of the State of Utah
IN WITNESS WHEREOF, the undersigned has executed this Note as of the
day and year first above written.
NOXSO CORPORATION
--------------------------------
By: Xxxxxxx X Xxxxxxxx
Title: President
ANNEX IV
XXXX OF SALE, ASSIGNMENT AND ASSUMPTION
Xxxx of Sale and Assignment
For good and valuable consideration, the receipt of which is hereby
acknowledged, effective as of May 30, 2003 (the "Closing"), and pursuant to the
terms of the Asset Purchase Agreement dated May 30, 2003 (the "Asset Purchase
Agreement"), between Noxso Corporation, a Virginia corporation ("Buyer"), as
transferee of certain rights and obligations of SANTA XXXX CORPORATION, a Nevada
corporation ("Seller") (with all capitalized terms not otherwise defined herein
having the meanings ascribed to them in the Asset Purchase Agreement), Seller
hereby sells, assigns, grants, conveys, transfers and delivers to Buyer all of
the Assets (as defined in the Asset Purchase Agreement), free and clear of all
Liens except as contemplated by Section 2.1.c. of the Asset Purchase Agreement.
Seller hereby constitutes and appoints Buyer, its successors and
assigns, as its true and lawful attorney-in-fact, with full power of
substitution, to, in its name and stead, but on behalf of and for the benefit of
Buyer, its successors and assigns, (i) demand and receive any and all of the
Assets, (ii) from time to time institute and prosecute in its name or otherwise,
for the collection and enforcement of any claim or any right conveyed, assigned
or transferred as a part of the Assets, and (iii) do all acts and things in
relation to any of the foregoing powers which Buyer shall deem desirable. Seller
hereby declares that the foregoing powers are coupled with an interest and are
and shall be irrevocable by Seller in any manner or for any reason whatsoever.
After the date hereof, the Seller will execute and deliver from time to
time at the request of Buyer all such further instruments as, in the reasonable
opinion of Buyer's counsel, may be required in order to vest in Buyer full and
complete title to and the right to use the Assets.
The delivery by Seller of this Xxxx of Sale and Assignment and the
acceptance by Buyer of this Xxxx of Sale and Assignment shall not alter, in any
manner, any of the rights or obligations of the parties to the Asset Purchase
Agreement as set forth therein.
SANTA XXXX CORPORATION,
a Nevada corporation
By:
-----------------------------
Xxxx X. Xxxxxxxxxxxx
Its: CEO
Assumption
Noxso Corporation, a Virginia corporation ("Buyer") hereby accepts the
foregoing assignment of the Assets, hereby assumes the Assumed Invoice (as
defined in the Asset Purchase Agreement) and hereby agrees to pay, perform and
discharge the Assumed Invoice when due in accordance with its terms.
Except as expressly set forth in the preceding paragraph, Buyer is not
assuming or agreeing to pay or perform any Liens or obligations of Seller.
Dated as of May 30, 2003 NOXSO CORPORATION,
a Virginia corporation
By:
------------------------
Xxxxxxx X. Xxxxxxxx
Its: President
