ASSET PURCHASE AND INDEMNITY AGREEMENT
Exhibit 10.1
This Asset Purchase and Indemnity Agreement (this “Agreement”) is made and entered into as of
this the 16th day of October, 2007 by and among Fireline Restoration, Inc., a Florida
corporation as the purchaser (the “Purchaser”), RG America, Inc., a Nevada corporation (“RGA”) and
the following RGA subsidiaries: Restoration Group America 2003, Inc., a Texas corporation,
Restoration Group America, Inc., a Texas corporation (“Restoration Group America”), RG Restoration,
Inc., a Texas corporation, RG Insurance Services, Inc., a Texas corporation, CTFD, Inc., a Texas
corporation (“CTFD”), CTFD Marine, Inc., a Texas corporation (“CTFD Marine”), RG Risk Management,
Inc., a Texas corporation (“RGRM”), Invvision Funding, Inc., a Texas corporation, Practical
Building Solutions 2000, Inc., a Texas corporation, and RG Florida GC, Inc., a Florida corporation,
as the seller (RGA and the foregoing subsidiaries are referred to herein collectively as the
"Seller” and individually as a “Seller Entity”).
R E C I T A L S:
A. The Seller desires to sell to the Purchaser, and the Purchaser desires to purchase from the
Seller, certain equipment and vehicles comprising the Assets (as defined below) used in the
restoration and construction business and Restoration Group America’s PropertySMARTTM
risk management program (the restoration and construction business and the
PropertySMARTTM risk management program are collectively referred to herein as the
"Business”).
B. Laurus Master Fund, Ltd. (“Laurus”) has provided financing to the Seller (the “Laurus
Debt”) and in connection therewith was granted Liens (as defined below) on all assets of the
Seller, including, without limitation, Liens on the Assets (as defined below), all pursuant to that
certain Security Agreement dated as of October 1, 2005.
C. The Purchaser is a party to that certain Consulting Agreement, dated as of March 2007 (the
"Consulting Agreement”), among Home Solutions of America, Inc., a Delaware corporation and parent
company of the Purchaser (“HSOA”), RGA and certain of RGA’s subsidiaries that are parties thereto,
whereby, among other things, RGA and certain of the RGA subsidiaries granted to the Purchaser
certain of their respective rights to collect certain accounts receivable (the “Consulting
Assets”).
D. Laurus and HSOA are parties to that certain Release Agreement of even date herewith (the
"Release Agreement”), whereby Laurus has agreed, among other things, to release its Liens on all of
the assets of RGA and its subsidiaries, including the Assets, and whereby HSOA has agreed to issue
to Laurus, 2,000,000 shares of its common stock, par value $.001 per share (the “Shares”).
E. At the closing of the transactions contemplated by this Agreement, HSOA has agreed to enter
into the Royalty Agreement with RGRM in the form attached hereto as Exhibit “A” (the
"Royalty Agreement”), pursuant to which HSOA agrees to pay RGRM the Royalty (as defined in the
Royalty Agreement).
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F. HSOA enters into this Agreement for the limited purpose of agreeing to enter into the
Royalty Agreement with RGRM.
A G R E E M E N T:
NOW, THEREFORE, for and in consideration of the premises, the mutual covenants and agreements
contained in this Agreement, and for other good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, the Seller and the Purchaser agree as follows:
ARTICLE I
PURCHASE AND SALE
1.01 Purchase and Sale of Assets. Subject to the terms and conditions in this
Agreement, the Seller agrees to sell and convey, and the Purchaser agrees to purchase and accept,
all of the Seller’s right, title and interest in and to (i) the equipment and vehicles listed on
Schedule 1.01 together with all ownership and maintenance records, title certificates, and
warranties related thereto and (ii) the PropertySMARTTM risk management program as
described on Schedule 1.01 (collectively, the “Assets”), free and clear of any and all
liens, prior assignments, security interests, charges, pledges, claims or encumbrances of any kind
or character whatsoever (collectively, “Liens”), except for the Lien set forth on Schedule
3.05.
1.02 Purchase Price. The purchase price for the Assets (the “Purchase Price”) is (i)
HSOA obtaining Laurus’ release of the Laurus Debt and its Liens on the Assets pursuant to the
Release Agreement, in exchange for HSOA’s issuance of the Shares to Laurus pursuant to and in
accordance with the Release Agreement; and (ii) the amounts due to RGRM pursuant to the Royalty
Agreement. The Seller acknowledges and agrees that Laurus’ release of the Laurus Debt and its
Liens on the Assets in exchange for HSOA’s issuance of the Shares to Laurus, and the amounts due to
RGRM pursuant to the Royalty Agreement are material benefits to the Seller and as such, represent
sufficient consideration for the sale of the Assets to the Purchaser.
1.03 Date, Time and Place of Closing. The closing of the transactions contemplated by
this Agreement (the “Closing”) shall take place at the offices of the Seller at 10:00 a.m., local
time, on November 5, 2007, or as promptly as practicable thereafter as soon as the conditions set
forth in Article VI are satisfied, or at such other date, time or place fixed by mutual
written consent of the Purchaser and the Seller, but in no event later than November 30, 2007,
unless the Purchaser agrees to extend such date (such date, as it may be extended, the “Termination
Date”). All proceedings to take place at the Closing shall take place simultaneously, and no
delivery shall be considered to have been made until all such proceedings have been completed (the
date of such Closing is referred to herein as the “Closing Date”).
1.04 Effective Time. The transactions contemplated by this Agreement shall be deemed
effective for tax and all other purposes as of 8:00 a.m., Dallas, Texas time, on the Closing Date
(the “Effective Time”), unless otherwise mutually agreed in writing by the parties.
Notwithstanding the foregoing, for accounting purposes, the effective time of the transactions
contemplated by this Agreement shall be the effective time determined by Purchaser as reflected in
its books and records.
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1.05 Assumed Liabilities. Purchaser is not assuming any liability or obligation of
the Seller or with respect to the Assets, including, without limitation, accounts payable, or any
obligations with respect to the Seller’s lenders and creditors.
1.06 Instruments Delivered at Closing.
(a) At the Closing, the Seller shall execute and/or deliver to the Purchaser:
(i) a xxxx of sale, in form and substance satisfactory to the Purchaser, for the
Assets;
(ii) such other instruments of transfer as the Purchaser shall deem necessary or
appropriate to convey the Assets to the Purchaser, including, without limitation,
assignments of patents, trademarks and other intellectual property rights sufficient to
transfer the rights to the PropertySMARTTM risk management program to the
Purchaser, and individual assignments and bills of sale for each vehicle and piece of
equipment comprising a portion of the Assets in forms reasonably acceptable to Purchaser,
title certificates, and such other documents, bills of sale, certificates of title,
endorsements, assignments and instruments necessary, advisable or desirable to vest in
Purchaser good and marketable title to all of the Assets;
(iii) such keys and other similar items as the Purchaser shall require to obtain full
occupation, possession and control of the Assets;
(iv) written consents from all third parties required for the transfer and assignment
of the Assets;
(v) corporate resolutions of each Seller Entity pursuant to Section 3.02.
(b) At the Closing, the Purchaser shall cause to be delivered to the Seller:
(i) a counterpart to the Royalty Agreement, duly executed by HSOA; and
(ii) corporate resolutions pursuant to Section 4.01.
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ARTICLE 2
COSTS AND ALLOCATIONS
2.01 Closing Costs. The Purchaser shall pay any sales and other transfer tax
attributable to the transfer of the Assets to the Purchaser. All legal, accounting, or other costs
incurred by the Seller or the Purchaser in connection with the transactions contemplated herein
shall be borne by the party who incurred such costs; provided, however, that the Purchaser agrees
to reimburse the Seller for bona fide legal fees incurred by the Seller solely in connection with
the negotiation of the transactions contemplated by this Agreement and the preparation and filing
of the Information Statement (as defined in Section 4.04 herein), subject to the offset
rights of HSOA set forth in the Royalty Agreement, in an amount not to exceed Fifty Thousand and
NO/100 Dollars ($50,000.00), upon the Purchaser’s receipt of invoice from the Seller’s legal
counsel.
2.02 Allocation of Purchase Price. The Seller and the Purchaser agree to allocate the
Purchase Price among the Assets on the basis set forth on Exhibit “B”. The Seller and the
Purchaser agree to furnish such reports and returns to the Internal Revenue Service and the
Secretary of the Treasury as may be required by Section 1060 of the Internal Revenue Code of 1986,
as amended and Treasury Regulations thereunder, and such returns or reports shall be consistent
with the allocation of Purchase Price set forth on Exhibit “B”.
2.03 Liabilities. Except for the liabilities set forth on Section 2.03 of the
Seller’s Disclosure Schedule (herein so called), Purchaser shall not assume and shall not be liable
for or obligated to pay or assume, and none of the Assets or the assets of Purchaser shall be or
become liable for or subject to, any liability, indebtedness, commitment or obligation of any
Seller Entity or any of their Affiliates (as hereinafter defined), whether known or unknown, fixed
or contingent, recorded or unrecorded, currently existing or hereafter arising or otherwise. As
used herein, the term “Affiliate” shall mean, with respect to any party to this Agreement, any
entity or person that directly or indirectly controls, is controlled by or is under common control
with such party. The Seller agrees that the Seller will pay all of its liabilities.
2.04 Prorations. All insurance, licenses, etc. shall be prorated between the
Purchaser and the Seller as of the day of Closing.
2.05 Covenants and Further Assurance. The Seller shall, at any time and from time to
time after the Closing Date, upon request of the Purchaser and without further cost or expense to
Purchaser, execute and deliver such instruments of conveyance and assignment and shall take such
actions as the Purchaser may reasonably request to more effectively carry out the transactions
contemplated by this Agreement.
ARTICLE III
REPRESENTATIONS OF SELLER
Each Seller Entity, jointly and severally, represents to the Purchaser the following:
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3.01 Good Standing. RGA is a corporation duly organized, validly existing and in good
standing under the laws of the State of Nevada. Each Seller Entity is a corporation duly
organized, validly existing and in good standing under the laws of the state in which it is
incorporated.
3.02 Corporate and Stockholder Approval. This Agreement, and the execution, delivery
and performance of same, have been duly approved by the Seller (and each Seller Entity) and
constitutes a valid and binding obligation against the Seller (and each Seller Entity), enforceable
in accordance with its terms, subject as to enforceability, to bankruptcy, insolvency
reorganization, moratorium and other laws of general applicability relating to or affecting
creditors’ rights and to general principles of equity (regardless of whether such enforceability is
considered in a proceeding in equity or at law). A copy of all corporate resolutions of each
Seller Entity approving this Agreement and the transactions contemplated hereby shall be delivered
by the Seller to the Purchaser upon the execution hereof. Other than the RGA Stockholder Consent
(as hereinafter defined), no consent, approval, or order of any person, entity, organization, third
party, lender, creditor or the shareholders of any entity is required in connection with the
execution, delivery or performance of the transactions contemplated by this Agreement.
3.03 Conflicts; Defaults. The execution and delivery of this Agreement and the
performance by the Seller of the transactions contemplated hereby, do not and will not (a) violate,
conflict with, or constitute a breach or default under any of the terms of the certificate of
incorporation, articles of incorporation, bylaws, or other organizational documents of the Seller
(or any entity comprising the Seller), (b) result in the creation or imposition of any Liens in
favor of any third party upon any of the Assets or the Business, (c) violate or require any
authorization, approval, consent or other action by, or registration, declaration or filing with or
notice to any governmental authority pursuant to any law, statute, judgment, decree, injunction,
order, writ, rule or regulation of any governmental authority affecting the Business or the Assets,
or (d) conflict with or result in a breach of, create an event of default (or event that, with the
giving of notice or lapse of time or both, would constitute an event of default) under, any
contract, lease, agreement, note, deed of trust, indenture, order, judgment or decree to which any
Seller is a party or by which any Seller or any of the Assets is bound or affected.
3.04 Enforceability. This Agreement has been, and the other agreements and
instruments to be executed and delivered by the Seller in connection herewith will be, on or prior
to the Closing Date, duly executed and delivered by each Seller Entity and (assuming due
authorization, execution and delivery hereof by the Purchaser) constitute or, upon execution and
delivery, will constitute the valid, legal and binding obligations of each Seller Entity,
enforceable against each Seller Entity in accordance with their respective terms; subject as to
enforceability, to bankruptcy, insolvency, reorganization, moratorium and other laws of general
applicability relating to or effecting creditors’ rights and the exercise of judicial discretion in
accordance with principles of equity.
3.05 Clear Title. The Seller is the owner of, and has good and marketable title to,
all of the Assets. Except as set forth on Schedule 3.05 of the Seller’s Disclosure
Schedule, the
Assets are owned by the Seller, and shall be delivered to the Purchaser, free and clear of all
Liens.
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3.06 Adverse Agreements and Changes. The Seller is not (a) a party to any agreement
or instrument, or to the best of Seller’s knowledge, subject to any judgment, order, writ,
injunction, decree, rule or regulation which materially adversely affects the Assets or the
Business, or (b) aware of any pending event or condition which will have a material adverse impact
on the Assets or Business, except as set forth on Schedule 3.08 of the Seller’s Disclosure
Schedule.
3.07 Brokers or Finders Fees. No person is entitled to compensation by reason of any
agreement or understanding with the Seller, as a broker or finder in connection with the sale and
purchase of the Assets.
3.08 Litigation. Except as set forth on Schedule 3.08 of the Seller’s
Disclosure Schedule, there is not pending or, to the best knowledge of the Seller, threatened, any
litigation, action, suit, arbitration, investigation, inquiry, audit, complaint, charge, or other
proceeding to which the Seller is a party involving the Assets or Business, or to which the Assets
or the Business is or could be subject, before or by any court or governmental or regulatory agency
or body.
3.09 Assets. Schedule 1.01 contains a true, complete and accurate list of all
of the Assets, including (i) for vehicles and equipment comprising a portion of the Assets, a
description of each vehicle or piece of equipment, the year of manufacture, the complete address of
its location, the state of registration, and title registration number(s), the name of the Seller
Entity owning each such Asset, and the name of the Seller Entity in which title for each such Asset
is registered, respectively, and (ii) with respect to PropertySMARTTM risk management
program, a complete description of such program.
3.10 Stockholder Consent. RGA has obtained the written affirmative consent of no less
than 66 2/3% of the stockholders of RGA in connection with the execution, delivery or performance
of this Agreement and the consummation of the transactions contemplated hereby (“RGA Stockholder
Consent”). A true and correct copy of the RGA Stockholder Consent has been delivered to the
Purchaser. No stockholder of RGA has rescinded its consent or informed Seller that such
stockholder intends to rescind its consent.
3.11 Absence of Undisclosed Information. Except as set forth on Schedule 3.11
of the Seller’s Disclosure Schedule, the Assets are not subject to (i) any liabilities or
obligations of any nature, fixed or contingent, or any facts that might give rise to any such
liabilities or obligations, which would materially adversely affect the Assets, or (ii) any
liabilities or adverse claims against or relating to the Assets.
3.12 Personal Property Leases. None of the Assets are subject to a personal property,
vehicle, equipment or other lease or contingent sale arrangement.
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3.13 Taxes.
(a) Each Seller Entity has, on the Closing Date will have, (i) timely filed all
returns, schedules and declarations (including any withholding and information returns)
required to be filed by any jurisdiction to which any Seller Entity is or has been subject
with respect to any Taxes (as defined below), all of which returns, schedules and
declarations are, or will, when filed by the applicable filing date (including any
extensions thereof), be true, complete, accurate and correct in all material respects, (ii)
paid in full all Taxes due and payable (or claimed to be due and payable by any federal,
state, local or foreign Taxing authority), including all taxes on the Assets, (iii) paid or
finally settled all Tax deficiencies asserted or assessed against any Seller Entity, and
(iv) made timely payments to the proper governmental authorities of the Taxes required to be
deducted and withheld from the wages paid to its employees.
(b) No Seller Entity (i) is delinquent in the payment of any Tax, (ii) has been granted
an extension of time to file any Tax return which has expired, or will expire, on or before
the Closing Date without such return having been filed, and (iii) has granted to any other
person or entity a power of attorney or similar authorization with respect to the settlement
of its liability for Taxes.
(c) No deficiencies for any Tax has been claimed, proposed or assessed (whether or not
finally or tentatively, orally or in writing), no requests for waivers of the time to assess
any deficiency for any Taxes are pending, and there are no pending or threatened Tax audits,
investigations or claims for or relating to (i) the assessment or collection of Taxes, or
(ii) a claim for refund made with respect to Taxes previously paid. There are no matters
under discussion or dispute with any governmental authorities with respect to Taxes that may
have been raised, nor are there any issues Seller believes will be raised in the future, by
any Taxing authority with respect to Taxes accruing on or prior to the Closing Date.
(d) There are, and as of the Closing Date there will be, no Liens for Taxes upon the
Assets except for statutory Liens for Taxes not yet due and not delinquent. On the Closing
Date, Purchaser will take title to the Assets free and clear of all Liens for Taxes except
for statutory Liens for Taxes not yet due and not delinquent.
As used in this Agreement, “Taxes” (and all derivations thereof) means all federal, state,
local and foreign income, sales, use, property, payroll and other taxes imposed by any
governmental authority with respect to the ownership, operation, transfer or use of the
Business or the Assets, or in any other way relating to the Business or the Assets.
3.14 Environmental Laws. To the best knowledge of each Seller Entity, neither any
Seller Entity nor the Business is or has been (a) subject to any environmental hazards, risks, or
liabilities, or (b) in violation of any federal, state or local statutes, regulations, laws or
orders pertaining to environmental matters, including, without limitation, the Comprehensive
Environmental Response, Compensation and Liability Act of 1980 (“CERCLA”), as supplemented
and amended, 42 U.S.C. Section 9601 et seq.; the Resource Conservation and
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Recovery Act, as amended (“RCRA”), 42 U.S.C. Section 6901, et seq.; the Federal Clean Air
Act, 42 U.S.C. Section 7401, et seq.; the Federal Water Pollution Control Act, Federal Clean Water
Act of 1977, 33 U.S.C. Section 1251, et seq.; Federal Hazardous Materials Transportation Act, 48
U.S.C. Section 1801, et seq.; Federal Toxic Substances Control Act, 15 U.S.C. Section 2601, et
seq.; and the Federal Safe Drinking Water Act, 42 U.S.C. Section 300f, et seq. To the best
knowledge of each Seller Entity, no Hazardous Substances (which for purposes of this Section
3.14 shall mean and include any hazardous or toxic substances, pollutants, contaminants,
materials or wastes, including but not limited to those substances, pollutants, contaminants,
materials and wastes listed in the United States Department of Transportation Table (49 CFR
172.101) or by the Environmental Protection Agency as hazardous substances pursuant to 40 CFR Part
302, or such substances, materials and wastes which are regulated under any federal environmental
law or any applicable local or state environmental law, including without limitation CERCLA, ECRA,
RCRA; toxic substances as defined under the Toxic Substance Control Act, 15 U.S.C. 2601, et seq.;
or any of the following: hydrocarbons, petroleum and petroleum products, asbestos, polychlorinated
biphenyls, formaldehyde, radioactive substances, flammables and explosives) have been and through
the Closing Date will be, disposed of or released or discharged from or onto (including groundwater
contamination) any Asset or any place where the Business has been operated or services have been
provided by any Seller Entity in violation of any applicable environmental statute, regulation, or
ordinance. To the best knowledge of each Seller Entity, neither any Seller Entity, nor any
Affiliate of any Seller Entity has allowed any Hazardous Substances to be discharged, possessed,
managed, processed, or otherwise handled in a manner which is in violation of applicable law, and
each Seller Entity has complied and is compliant with all environmental laws applicable to the
Assets. Neither any Seller Entity nor its Affiliates or agents have received any communication
(written or oral) that alleges that any Seller Entity or the Business is not in compliance with all
applicable environmental laws.
3.15 Full Disclosure. The information provided and to be provided by the Seller to
Purchaser in this Agreement, in the Schedules attached hereto or in any other writing pursuant
hereto does not and will not contain any untrue statement of a material fact and does not and will
not omit to state a material fact required to be stated herein or therein or necessary to make the
statements contained herein or therein, in light of the circumstances in which they are made, not
false or misleading. Copies of all statements, reports, documents and other materials heretofore
or hereafter delivered or made available to the Purchaser pursuant hereto and thereto were or will
be at the time of their delivery to the Purchaser true, complete and accurate copies of such
statements, reports, documents and other materials.
3.16 Intellectual Property.
(a) The Seller (i) owns and has independently developed or acquired or (ii) has the
valid right or license to all Seller IP Rights (as hereinafter defined) relating to the
Assets. The Seller IP Rights are sufficient for the conduct of PropertySMARTTM
risk management program as it has been historically conducted in all material
respects.
(b) Seller has not transferred ownership of any Intellectual Property that is or was
Seller-Owned IP Rights and that relates or was related to the Assets to any third party or
knowingly permitted Seller’s rights in any Intellectual Property that is or was
Seller-Owned IP Rights to enter the public domain or, with respect to any Intellectual
Property for which Seller has submitted an application or obtained a registration, lapse
(other than through the expiration of registered Intellectual Property at the end of its
maximum statutory term).
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(c) Seller owns and has good and exclusive title to each item of Seller-Owned IP Rights
and each item of Seller Registered Intellectual Property that comprises a portion of the
Assets, free and clear of any Liens (other than non-exclusive licenses granted by Seller in
the ordinary course of its business consistent with past practice on its standard form of
customer agreement and on terms materially similar to such standard form). “Seller
Registered Intellectual Property” means all United States, international and foreign: (i)
patents and patent applications (including provisional applications); (ii) registered
trademarks, applications to register trademarks, intent-to-use applications or other
registrations or applications related to trademarks; (iii) registered Internet domain names;
(iv) registered copyrights and applications for copyright registration; and (v) any other
Intellectual Property that is the subject of an application, certificate, filing,
registration or other document issued, filed with or recorded by any governmental authority
owned by, registered or filed in the name of Seller. “Third-Party Intellectual Property
Rights” means any Intellectual Property owned by a third party.
(d) Schedule 3.16 of the Seller Disclosure Schedule lists all Seller Registered
Intellectual Property that comprises a portion of the Assets, including the jurisdictions in
which each such item of Intellectual Property has been issued or registered or in which any
application for such issuance and registration has been filed or in which any other filing
or recordation has been made.
(e) All registration, maintenance and renewal fees currently due in connection with
each item of Seller Registered Intellectual Property have been paid and all documents,
recordations and certificates in connection with such Seller Registered Intellectual
Property currently required to be filed have been filed with the relevant patent, copyright,
trademark or other authorities in the United States or foreign jurisdictions, as the case
may be, for the purposes of prosecuting, maintaining and perfecting such Seller Registered
Intellectual Property and recording the Seller’s ownership interests therein.
(f) There are no royalties, honoraria, fees or other payments payable by the Seller to
any person or entity (other than salaries payable to employees, consultants and independent
contractors not contingent on or related to use of their work product), as a result of the
ownership, use, possession, license-in, license-out, sale, marketing, advertising or
disposition of any Seller-Owned IP Rights by Seller.
(g) To the best knowledge of the Seller, there is no unauthorized use, unauthorized
disclosure, infringement or misappropriation of any Seller-Owned IP Rights by any third
party, including any employee or former employee of Seller. Seller has not brought any
action, suit or proceeding for infringement or misappropriation of any Intellectual Property
or breach of any Seller IP Rights Agreement.
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(h) To the best knowledge of the Seller, no current or former employee, consultant or
independent contractor of Seller has any right, license, claim or interest whatsoever in or
with respect to any Seller-Owned IP Rights.
For purposes of this Agreement, (i) “Intellectual Property” means any and all worldwide
industrial and intellectual property rights and all rights associated therewith, including all
patents and applications therefor and all reissues, divisions, renewals, extensions, provisionals,
continuations and continuations-in-part thereof, all inventions (whether patentable or not),
invention disclosures, improvements, trade secrets, proprietary information, know how, technology,
technical data, proprietary processes and formulae, algorithms, specifications, customer lists and
supplier lists, all industrial designs and any registrations and applications therefor, all trade
names, logos, common law trademarks and service marks, trademark and service xxxx registrations and
applications therefor, Internet domain names, Internet and World Wide Web URLs or addresses, all
copyrights, copyright registrations and applications therefor, and all other rights corresponding
thereto, all mask works, mask work registrations and applications therefor, and any equivalent or
similar rights in semiconductor masks, layouts, architectures or topology, all computer software,
including all source code, object code, firmware, network and network equipment monitoring,
management and security related tools and utilities, development tools, files, records and data,
all schematics, netlists, test methodologies, test vectors, emulation and simulation tools and
reports, hardware development tools, and all rights in prototypes, breadboards and other devices,
all databases and data collections and all rights therein, all moral and economic rights of authors
and inventors, however denominated, and any similar or equivalent rights to any of the foregoing,
and all tangible embodiments of the foregoing, (ii) “Seller IP Rights” means any and all
Intellectual Property related to the Assets, and (iii) “Seller-Owned IP Rights” means Seller IP
Rights that are owned or are purportedly owned by Seller.
3.17 No Violation. The execution, delivery and performance of this Agreement and all
other agreements and instruments executed and delivered by the Seller in connection with this
Agreement and the consummation of the transactions contemplated hereby and thereby will not
conflict with or result in the breach of any term or provision of, or violate or constitute a
judgment, decree, writ, law or regulation to which the Seller is a party or by which the Seller is
in any way bound or obligated.
3.18 Representations as of the Effective Date and Closing. The Seller Entities’
representations set forth in this Agreement shall be true on and as of the date of this Agreement
and the Closing as though such representations were made on and as of such times.
3.19 Disclaimer of Other Representations and Warranties. Except as expressly set
forth in this Article III, the Seller makes no representations or warranties, express or
implied, at law or in equity, in respect of any of its assets (including, without limitation, the
Assets), liabilities or operations, including without limitation, with respect to merchantability
or fitness for any particular purpose, and any such other representations or warranties are hereby
expressly disclaimed. The Purchaser hereby acknowledges and agrees that, except to the extent
specifically set forth in this Article III, the Purchaser is purchasing the Assets on an
“as-is, where-is basis.” Without limiting the generality of the foregoing, the Seller makes no
representation or warranty regarding any assets other than the Assets and none shall be
implied, at law or in equity.
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ARTICLE IV
AGREEMENTS OF THE PARTIES
4.01 Access and Information. Each Seller Entity shall afford to the Purchaser and
Purchaser’s accountants, counsel and other representatives full and reasonable access from time to
time throughout the period from the date hereof until the Closing Date to Seller’s properties,
books, contracts, commitments, personnel and records relating to the Business and the Assets, and,
during such period, each Seller Entity will (or will cause its representatives to) furnish to the
Purchaser and the Purchaser’s accountants, counsel and other representatives copies of such
documents and all such other information as the Purchaser may reasonably request as well as any
other information that the Purchaser or its accountants, counsel and other representatives deem
necessary to complete any filings necessary under the Securities Act of 1933, as amended (the
"Securities Act”) or the Securities Exchange Act of 1934, as amended (the “Exchange Act”).
4.02 Conduct of the Business Pending Closing. From the date hereof through the
Closing Date:
(a) Ordinary Course of Business. Each Seller Entity shall use all reasonable
efforts to preserve the business organization of the Business intact, and to preserve for
Purchaser the goodwill of those suppliers, customers, employees and others having business
relations involving the Assets;
(b) Operation of Business. Each Seller Entity shall maintain the Assets in
good order and condition, subject to ordinary wear and tear;
(c) Contracts. No Seller Entity shall enter into any contract, purchase order
or other commitment directly or indirectly affecting the Assets, except contracts and
commitments entered into in the ordinary course of business consistent with past practices,
which are freely transferable to Purchaser without the consent of any party, and with
respect to which Seller has obtained Purchaser’s prior written consent;
(d) Material Adverse Effect. Seller shall give prompt written notice (but not
later than two (2) business days after the occurrence thereof) to Purchaser of any (i)
Material Adverse Effect; and (ii) change that would render any representation or warranty
made by any Seller Entity hereunder untrue or incomplete in any material respect as of the
date of such change;
(e) Compliance with Representations and Warranties. Without limiting the
foregoing, each Seller Entity agrees that it shall not take any action or permit to occur
any event, directly or indirectly within the control of Seller, that would cause any
representation or warranty contained herein to be inaccurate or untrue on or prior to the
Closing Date; and
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(f) Consents. Each Seller Entity shall use its best efforts to obtain all
consents and approvals of third parties necessary for the consummation of the transactions
contemplated by this Agreement.
4.03 Exclusivity. From and after the date hereof through the Closing Date, no Seller
Entity nor any of their respective Affiliates, partners, shareholders, officers, directors,
employees, or agents, shall, directly or indirectly, solicit, initiate or engage in or continue
(including without limitation, furnishing any information concerning the Assets) discussions,
inquiries or proposals, or enter into any negotiations for the purpose or with the intention of
leading to any proposal, concerning the acquisition or purchase by any other party of the Business
or any part thereof or any Asset.
4.04 Stockholders’ Consent; Information Statement.
(a) RGA shall, as soon as practicable after the execution of this Agreement, distribute
to its stockholders, the RGA Stockholder Consent; together with the written recommendation
of the Board of Directors of RGA that the terms of this Agreement are fair to and in the
best interest of the stockholders of RGA and declaring this Agreement to be advisable.
(b) As promptly as practicable but in no event later than ten (10) days after the
execution of this Agreement, RGA, after consultation with Purchaser, shall file an
information statement (the “Information Statement”) under and pursuant to the provisions of
the Exchange Act. RGA, after consultation with Purchaser, shall respond promptly to all
comments made by the Securities and Exchange Commission (the “SEC”) with respect to the
preliminary Information Statement and cause a definitive Information Statement to be filed
with the SEC and mailed to its stockholders, as required by the Exchange Act. RGA will
notify Purchaser promptly of the receipt of any comments from the SEC or its staff and of
any request by the SEC or its staff for amendments or supplements to the Information
Statement, or for additional information, and will supply Purchaser with copies of all
correspondence between RGA and the SEC or its staff with respect to the Information
Statement. RGA shall provide draft Information Statements to Purchaser and use commercially
reasonable efforts to accept Purchaser’s comments related thereto.
(c) Each of Purchaser and RGA agrees to provide as promptly as practicable to the other
such information concerning its business and financial statements and affairs as, in the
reasonable judgment of the other party, may be required or appropriate for inclusion in the
Information Statement or in any amendments or supplements thereto, and to cause its counsel
and auditors to cooperate with the other’s counsel and auditors in the preparation of the
Information Statement.
(d) At the time the Information Statement is mailed to RGA’s stockholders, RGA will
ensure that the Information Statement will (i) not contain any untrue statement of a
material fact, or omit to state any material fact required to be stated therein as
necessary, in order to make the statements therein, in light of the circumstances under
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which they were made, not misleading or necessary and (ii) comply in all material respects
with the provisions of the Securities Act and Exchange Act, as applicable, and the rules and
regulations thereunder; provided, however, no representation is made by Purchaser or RGA
with respect to statements made in the Information Statement based on information supplied
by the other party expressly for inclusion or incorporation by reference in the Information
Statement or information omitted with respect to the other party.
4.05 Casualty. If, prior to the Closing, the Business or any Asset sustains material
damage or destruction by fire or other casualty that Seller does not completely repair prior to
Closing, Purchaser may elect to either (a) terminate this Agreement by providing written notice
thereof to Seller, or (b) consummate the transactions contemplated by this Agreement subject to a
mutually agreeable adjustment in the Purchase Price to reflect such unrepaired casualty loss
insurance.
4.06 Employment Matters.
(a) Employment. Each Seller Entity agrees that Purchaser is under no
obligation to: (i) hire any employees of the Business; (ii) maintain any of RGA’s or any of
its Affiliates’ employees that it does hire at the same position, title or level of
responsibility that they had with RGA or any of its Affiliates; (iii) grant seniority or
service credit or recognize accrued vacation or sick leave time to any such employee; or
(iv) pay any specified level of compensation or benefits to any such employee.
(b) Employment Liabilities. Purchaser does not assume, and Seller or its
Affiliates, as applicable, hereby retains, any and all employment related costs, obligations
and liabilities of the Business, including, without limitation, costs, obligations and
liabilities relating to severance rights of employees of the Business (including those
rights to health care continuation coverage under the Consolidated Omnibus Budget
Reconciliation Act of 1985, as amended (“COBRA”)), employment discrimination, unfair labor
practices, wage and hour laws, health and safety, workers compensation, wrongful discharge,
compensation, fringe benefits, insurance, employee benefit plans, pensions, retiree medical,
severance pay, vacations, torts, accidents, disabilities, injuries, sickness, exposure to
harmful conditions, breach of oral or written employment contracts or collective bargaining
agreements, or breach of law, statute, judgment, decree, injunction, order, writ, rule or
regulation of any governmental authority. The entire liability for continuing acts or
conditions (such as exposure to harmful conditions or continuing discrimination) shall be
retained and assumed by Seller.
(c) Employment Agreement. HSOA and Xxxxx Xxx agree to use commercially
reasonable efforts to negotiate and execute an agreement for the employment of Xxxxx Xxx by
HSOA or one of its subsidiaries upon terms mutually acceptable to HSOA and Xxxxx Xxx.
Notwithstanding the foregoing sentence, (i) Xxxxx Xxx acknowledges and agrees that neither
HSOA nor any of its subsidiaries has any obligation to hire Xxxxx Xxx, and (ii) HSOA
acknowledges and agrees that Xxxxx Xxx
has no obligation to agree to any employment arrangement with HSOA or any of its
subsidiaries.
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4.07 Pre-closing Deliveries.
(a) The Seller’s Deliveries. Concurrently with the execution of this
Agreement, the Seller shall deliver to the Purchaser, each of the following:
(i) the Seller’s Disclosure Schedule to this Agreement, satisfactory to the
Purchaser in all respects;
(ii) all corporate resolutions of each Seller Entity approving this Agreement
and the transactions contemplated hereby;
(iii) the duly executed RGA Stockholder Consent; and
(iv) a duly executed counterpart to the Equipment Lease between CTFD, CTFD
Marine and the Purchaser (the “Lease”), pursuant to which CTFD and CTFD Marine agree
to lease certain equipment to the Purchaser upon the terms set forth therein.
(b) The Purchaser’s Deliveries. Concurrently with the execution of this
Agreement, the Purchaser shall deliver to the Seller, each of the following:
(i) the corporate resolutions of the Purchaser approving this Agreement and the
transactions contemplated hereby; and
(ii) a duly executed counterpart to the Lease.
ARTICLE V
REPRESENTATIONS OF PURCHASER
The Purchaser represents the following:
5.01 Good Standing. The Purchaser is a corporation duly organized, validly existing
and in good standing under the laws of the State of Florida.
5.02 Corporate Approval. This Agreement, and the execution, delivery and performance
of same, have been duly approved by the Purchaser and HSOA and constitutes a valid and binding
obligation against the Purchaser and HSOA, enforceable in accordance with its terms. No consent,
approval or order of any person, entity, organization or third party is required in connection with
the execution, delivery or performance of the transactions contemplated by the Agreement other than
such consents that have been obtained or that will be obtained prior to the Closing Date. A copy
of all corporate resolutions of the Purchaser and HSOA relating to this
Agreement and the transactions contemplated hereby shall be delivered by the Purchaser to the
Seller upon the execution hereof.
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5.03 Brokers or Finders Fees. No person is entitled to compensation by reason of any
agreement or understanding with the Purchaser, as a broker or finder in connection with the sale
and purchase of the Assets.
5.04 Litigation. Other than in relation to any claims or causes of action of Laurus,
including based on the lawsuits filed August 31, 2007 in the New York County Clerk’s Office
entitled Laurus Master Fund, Ltd. v. Home Solutions of America, Inc. and Fireline Restoration, Inc.
and Laurus Master Fund, Ltd. v. Xxxxx Xxxxxxxx, there is not pending or, to the knowledge of the
Purchaser, threatened, any litigation, action, suit, arbitration, investigation, inquiry, audit,
complaint, charge or other proceeding to which the Purchaser is a party involving the Purchaser’s
business, or to which the Purchaser’s business is or could be subject, before or by any court or
governmental or regulatory agency or body.
5.05 No Violation. The execution, delivery and performance of this Agreement and all
other agreements and instruments executed and delivered by the Purchaser in connection with this
Agreement and the consummation of the transactions contemplated hereby and thereby will not
conflict with or result in the breach of any term or provision of, or violate or constitute a
judgment, decree, writ, law or regulation to which the Purchaser is a party or by which the
Purchaser is in any way bound or obligated.
5.06 Financial Capability. The Purchaser has the financial capability to purchase the
Assets on the terms and subject to the conditions set forth in this Agreement.
5.07 Representations as of the Effective Date and Closing. The Purchaser’s
representations set forth in this Agreement shall be true on and as of the date of this Agreement
and the Closing as though such representations were made on and as of such times.
ARTICLE VI
CONDITIONS PRECEDENT TO PERFORMANCE
6.01 Conditions Precedent to Seller’s Performance. The obligations of the Seller to
consummate the sale of the Assets to Purchaser contemplated by this Agreement under this Agreement
are subject to the satisfaction of all the conditions set out in this Section 6.01. The
Seller may waive any or all of these conditions in whole or in part without prior notice, provided,
however, that no such waiver of a condition shall constitute a waiver by the Seller of any of its
other rights or remedies, at law or in equity, if the Purchaser shall be in default of any of its
representations, warranties or covenants under this Agreement:
(a) all representations by the Purchaser contained in this Agreement, shall be true on
and as of the date of this Agreement and the Closing;
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(b) the Purchaser shall have performed all covenants and agreements and satisfied all
conditions required by this Agreement to be performed, complied with or satisfied, shall have
released the Laurus Debt and its Liens on the Assets pursuant to the terms and conditions of
the Release Agreement, and HSOA shall have issued the Shares to Laurus under the Release
Agreement; and
(c) the Purchaser shall have furnished a certificate, executed on behalf of the
Purchaser, confirming the matters expressed in Sections 6.01(a) and (b); and
(d) all applicable waiting periods including those promulgated under the rules and
regulations of the Securities and Exchange Commission shall have expired.
6.02 Conditions Precedent to Purchaser’s Performance. The obligations of the
Purchaser to consummate the purchase of the Assets from Seller contemplated by this Agreement under
this Agreement are subject to the satisfaction of all the conditions set out in this Section
6.02. The Purchaser may waive any or all of these conditions in whole or in part without prior
notice, provided, however, that no such waiver of a condition shall constitute a waiver by the
Purchaser of any of its other rights or remedies, at law or in equity, if the Seller shall be in
default of any of its representations, warranties or covenants under this Agreement:
(a) all representations by the Seller contained in this Agreement, or in any written
statement delivered to Purchaser pursuant to the Agreement, shall be true on and as of the
date of this Agreement and the Closing;
(b) the Seller shall have performed all covenants and agreements and satisfied all
conditions required by this Agreement to be performed, complied with or satisfied;
(c) the Seller shall have timely delivered to the Purchaser all schedules, documents,
instruments, licenses and agreements required under this Agreement;
(d) Seller shall have executed and delivered to Purchaser, all transfer documents,
instruments and other closing deliveries contemplated by Section 1.06 hereof;
(e) Seller shall have furnished a certificate, executed on behalf of Seller, confirming
the matters expressed in Sections 6.02(a), (b), (c) and (d) hereof;
(f) Each Seller Entity shall have furnished to Purchaser (i) certificates of the
secretary of state of the state in which each is incorporated, dated as of a date nor more
than five (5) business days prior to the Closing Date, attesting to the due incorporation,
existence and good standing of each such Seller Entity, (ii) copies, certified by the
Secretary of State of the state in which each is incorporated, dated as of a date not more
than five (5) business days prior to the Closing Date, of each Seller Entity’s Articles or
Certificate of Incorporation together with all amendments, (iii) copies, certified by the
Secretaries of each Seller Entity, of the Bylaws of each Seller Entity, each as amended and
in effect as of the Closing Date, (iv) copies, certified by the Secretaries of each Seller
Entity, of resolutions duly adopted by the Board of Directors of each Seller Entity duly
authorizing the transactions contemplated by this Agreement, and (v) a copy, certified by
the Secretary of RGA, of the RGA Stockholder Consent;
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(g) HSOA shall have obtained the written consent of its lender(s) to the transactions
contemplated by this Agreement, and shall have entered into such agreements with its lender
as are necessary or required to consummate the transactions contemplated hereby;
(h) Laurus shall have released the Laurus Debt and its Liens on the Assets, and Laurus
and HSOA shall have entered into the Release Agreement on terms and conditions satisfactory
to HSOA and its Board of Directors;
(i) There shall not have occurred any material adverse effect on the Assets, and there
shall be no pending or threatened litigation affecting any Seller Entity or the Assets other
than as disclosed on Schedule 3.08 of the Seller’s Disclosure Schedule and existing
on the date this Agreement is executed, or with respect to the transactions contemplated by
this Agreement;
(j) the RGA Stockholder Consent shall be subsisting and valid and not revoked;
(k) all applicable waiting periods including those promulgated under the rules and
regulations of the Securities and Exchange Commission shall have expired;
(l) the Purchaser shall have received the Non-Compete, Non-Hire and Non-Solicitation
Agreements duly executed by the Designated Employees; and
(m) the Closing occurs no later than the Termination Date.
ARTICLE VII
INDEMNIFICATION; RELEASE
7.01 SELLER INDEMNITY. EACH SELLER ENTITY, ON A JOINT AND SEVERAL BASIS, SHALL
INDEMNIFY, DEFEND AND HOLD HARMLESS FROM AND AGAINST, PURCHASER AND HSOA AND THEIR RESPECTIVE
OFFICERS, DIRECTORS, AGENTS AND AFFILIATES (EACH, A “PURCHASER INDEMNIFIED PARTY” AND COLLECTIVELY,
THE “PURCHASER INDEMNIFIED PARTIES”), AND REIMBURSE THE PURCHASER INDEMNIFIED PARTIES FOR, ANY AND
ALL CLAIMS, LOSSES, LIABILITIES, DAMAGES, COSTS AND EXPENSES (INCLUDING, WITHOUT LIMITATION,
REASONABLE ATTORNEYS’ FEES) (COLLECTIVELY, “LIABILITIES”) THAT MAY BE INCURRED BY, IMPOSED UPON OR
ASSERTED AGAINST ANY PURCHASER INDEMNIFIED PARTY ARISING FROM OR RELATING TO: (I) ANY FAILURE OF
ANY SELLER ENTITY TO ASSUME, PAY, PERFORM AND DISCHARGE ANY LIABILITY OR OBLIGATION OF ANY SELLER
ENTITY; (II) ANY ACTION, CLAIM OR JUDICIAL OR OTHER PROCEEDING ASSERTED AGAINST ANY PURCHASER
INDEMNIFIED PARTY BY ANY PERSON
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OR ENTITY, INCLUDING, WITHOUT LIMITATION, THE ACTIONS, CLAIMS AND JUDICIAL PROCEEDINGS DESCRIBED ON
SCHEDULE 3.08 OF THE SELLER’S DISCLOSURE SCHEDULE, OR ANY STOCKHOLDER ACTION OR CLAIM WITH
RESPECT TO THIS AGREEMENT OR THE TRANSACTIONS CONTEMPLATED HEREBY, OR ANY LIEN OR OTHER CLAIM ON OR
WITH RESPECT TO THE ASSETS, OR THE FAILURE OF THE SELLER TO OBTAIN THE CONSENT OF ANY PERSON OR
ENTITY OR ANY STOCKHOLDER OF RGA TO THIS AGREEMENT OR THE TRANSACTIONS CONTEMPLATED HEREBY, OR THE
RELEASE AGREEMENT AND THE TRANSACTIONS CONTEMPLATED THEREBY, OR THE CONSULTING AGREEMENT AND THE
TRANSACTIONS CONTEMPLATED THEREBY, OR ANY RELATIONSHIP AMONG HSOA, LAURUS, AND RGA AND ITS
SUBSIDIARIES, RESPECTIVELY, (III) ANY INACCURACY IN OR BREACH OF ANY REPRESENTATION, WARRANTY,
COVENANT, OBLIGATION OR AGREEMENT OF ANY SELLER ENTITY CONTAINED HEREIN, OR IN ANY DOCUMENT OR
INSTRUMENT DELIVERED PURSUANT HERETO; (IV) THE OPERATION OF THE BUSINESS OR THE OWNERSHIP, USE OR
SALE OF THE ASSETS BY THE SELLER PRIOR TO THE CLOSING (INCLUDING, WITHOUT LIMITATION, ANY
CONTRACTUAL, TAX, PRODUCT, WARRANTY, TORT OR OTHER LIABILITY WHATSOEVER); (V) ALL LIABILITIES AND
OBLIGATIONS, INCLUDING, WITHOUT LIMITATION, TAX OBLIGATIONS, OF ANY SELLER ENTITY, AND (VI) ACT OR
OMISSION OF ANY SELLER ENTITY CONSTITUTING OR ALLEGEDLY CONSTITUTING FRAUD, EMBEZZLEMENT OR ANY
CRIME FOR WHICH IMPRISONMENT IS A PUNISHMENT, OR ANY ACT INVOLVING MORAL TURPITUDE.
7.02 PURCHASER INDEMNITY. PURCHASER AND HSOA, ON A JOINT AND SEVERAL BASIS, SHALL
INDEMNIFY, DEFEND AND HOLD HARMLESS FROM AND AGAINST, EACH SELLER ENTITY AND THEIR RESPECTIVE
OFFICERS, DIRECTORS, AGENTS AND AFFILIATES (EACH, A “SELLER INDEMNIFIED PARTY” AND COLLECTIVELY,
THE “SELLER INDEMNIFIED PARTIES”), AND REIMBURSE THE SELLER INDEMNIFIED PARTIES FOR, ANY AND ALL
LIABILITIES THAT MAY BE INCURRED BY, IMPOSED UPON OR ASSERTED AGAINST ANY SELLER INDEMNIFIED PARTY
ARISING FROM OR RELATING TO (I) ANY INACCURACY IN OR BREACH OF ANY REPRESENTATION, WARRANTY,
COVENANT, OBLIGATION OR AGREEMENT OF THE PURCHASER OR HSOA CONTAINED HEREIN, OR IN ANY DOCUMENT OR
INSTRUMENT DELIVERED PURSUANT HERETO, AND (II) ANY ACTION, CLAIM OR JUDICIAL OR OTHER PROCEEDING
ASSERTED AGAINST ANY SELLER INDEMNIFIED PARTY ARISING FROM OR RELATING TO THE PURCHASER’S
PERFORMANCE AND/OR MANAGEMENT OF SELLER CONSTRUCTION PROJECTS UNDER OR PURSUANT TO THE CONSULTING
AGREEMENT.
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7.03 RELEASE BY SELLER. FOR GOOD AND VALUABLE CONSIDERATION INCLUDING THE PROMISES,
AGREEMENTS, COVENANTS, REPRESENTATIONS AND OBLIGATIONS OF PURCHASER SET FORTH HEREIN,
EFFECTIVE AS OF THE CLOSING DATE AND SUBJECT TO THE CONSUMMATION OF THE TRANSACTIONS CONTEMPLATED
BY THIS AGREEMENT, EACH SELLER ENTITY HEREBY JOINTLY AND SEVERALLY IRREVOCABLY AND UNCONDITIONALLY
RELEASES, ACQUITS AND FOREVER DISCHARGES EACH PURCHASER INDEMNIFIED PARTY FROM AND AGAINST ANY AND
ALL CLAIMS, COMPLAINTS, GRIEVANCES, LIABILITIES, OBLIGATIONS, PROMISES AGREEMENTS, DAMAGES, CAUSES
OF ACTION, RIGHTS, DEBTS, DEMANDS, CONTROVERSIES, COSTS, LOSSES, DAMAGES, AND EXPENSES (INCLUDING,
WITHOUT LIMITATION, ATTORNEYS FEES AND EXPENSES) WHATSOEVER (INCLUDING, WITHOUT LIMITATION, UNDER
ANY MUNICIPAL, LOCAL, STATE OR FEDERAL LAW, COMMON OR STATUTORY), WHICH THEY OR ANY OF THEIR
SUCCESSORS, ASSIGNS OR OTHER LEGAL REPRESENTATIVES OWNED, HELD, HAD OR CLAIMED TO HAVE HAD OR MAY
OWN, HOLD, HAVE OR CLAIM TO HAVE ARISING ON OR PRIOR TO THE DATE OF THIS AGREEMENT. EACH SELLER
ENTITY UNDERSTANDS, ACKNOWLEDGES AND AGREES THAT THE RELEASE SET FORTH ABOVE MAY BE PLEADED AS A
FULL AND COMPLETE DEFENSE AND MAYBE USED AS A BASIS FOR INJUNCTION AGAINST ANY ACTION, SUIT OR
OTHER PROCEEDING WHICH MAY BE INSTITUTED, PROSECUTED OR ATTEMPTED IN BREACH OF THE PROVISIONS OF
SUCH RELEASE. SIMILARLY, EACH SELLER ENTITY AGREES THAT NO FACT, EVENT, CIRCUMSTANCE, EVIDENCE OR
TRANSACTION WHICH COULD NOW BE ASSERTED OR WHICH MAY HEREAFTER BE DISCLOSED SHALL AFFECT IN ANY
MANNER THE FINAL, ABSOLUTE AND UNCONDITIONAL NATURE OF THE RELEASE SET FORTH ABOVE. THE PURCHASER
INDEMNIFIED PARTIES UNDERSTAND, ACKNOWLEDGE AND AGREE THAT THE RELEASE SET FORTH ABOVE SHALL NOT
EXTEND TO OR LIMIT IN ANY MANNER WHATSOEVER ANY RIGHTS OF SELLER UNDER THIS AGREEMENT OR ANY
CLAIMS OR CAUSES OF ACTION OF SELLER THAT MAY ARISE OUT OF OR RELATE TO THIS AGREEMENT.
7.04 PURCHASER RELEASE. FOR GOOD AND VALUABLE CONSIDERATION INCLUDING THE PROMISES,
AGREEMENTS, COVENANTS, REPRESENTATIONS AND OBLIGATIONS OF SELLER SET FORTH HEREIN, EFFECTIVE AS OF
THE CLOSING DATE AND SUBJECT TO THE CONSUMMATION OF THE TRANSACTIONS CONTEMPLATED BY THIS
AGREEMENT, EACH OF PURCHASER AND HSOA HEREBY JOINTLY AND SEVERALLY IRREVOCABLY AND UNCONDITIONALLY
RELEASES, ACQUITS AND FOREVER DISCHARGES EACH SELLER INDEMNIFIED PARTY FROM AND AGAINST ANY AND ALL
CLAIMS, COMPLAINTS, GRIEVANCES, LIABILITIES, OBLIGATIONS, PROMISES AGREEMENTS, DAMAGES, CAUSES OF
ACTION, RIGHTS, DEBTS, DEMANDS, CONTROVERSIES, COSTS, LOSSES, DAMAGES, AND EXPENSES (INCLUDING,
WITHOUT LIMITATION, ATTORNEYS FEES AND EXPENSES) WHATSOEVER (INCLUDING, WITHOUT LIMITATION, UNDER
ANY MUNICIPAL, LOCAL, STATE OR FEDERAL LAW, COMMON OR STATUTORY), WHICH THEY OR ANY OF THEIR
SUCCESSORS, ASSIGNS OR OTHER LEGAL REPRESENTATIVES OWNED, HELD, HAD OR CLAIMED TO HAVE HAD OR MAY
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OWN, HOLD, HAVE OR CLAIM TO HAVE ARISING ON OR PRIOR TO THE DATE OF THIS AGREEMENT. EACH OF
PURCHASER AND HSOA UNDERSTANDS, ACKNOWLEDGES AND AGREES THAT THE RELEASE SET FORTH ABOVE MAY BE
PLEADED AS A FULL AND COMPLETE DEFENSE AND MAYBE USED AS A BASIS FOR INJUNCTION AGAINST ANY ACTION,
SUIT OR OTHER PROCEEDING WHICH MAY BE INSTITUTED, PROSECUTED OR ATTEMPTED IN BREACH OF THE
PROVISIONS OF SUCH RELEASE. SIMILARLY, EACH OF PURCHASER AND HSOA AGREES THAT NO FACT, EVENT,
CIRCUMSTANCE, EVIDENCE OR TRANSACTION WHICH COULD NOW BE ASSERTED OR WHICH MAY HEREAFTER BE
DISCLOSED SHALL AFFECT IN ANY MANNER THE FINAL, ABSOLUTE AND UNCONDITIONAL NATURE OF THE RELEASE
SET FORTH ABOVE. THE SELLER INDEMNIFIED PARTIES UNDERSTAND, ACKNOWLEDGE AND AGREE THAT THE RELEASE
SET FORTH ABOVE SHALL NOT EXTEND TO OR LIMIT IN ANY MANNER WHATSOEVER ANY RIGHTS OF PURCHASER AND
HSOA UNDER THIS AGREEMENT OR ANY CLAIMS OR CAUSES OF ACTION OF PURCHASER AND HSOA THAT MAY ARISE
OUT OF OR RELATE TO THIS AGREEMENT.
ARTICLE VIII
TERMINATION OF AGREEMENT
TERMINATION OF AGREEMENT
8.01 Termination of Agreement. This Agreement and the transactions contemplated hereby
may be terminated and abandoned at any time on or prior to the Closing as follows:
(a) by the written consent of Purchaser and Seller;
(b) by Purchaser, (i) if there is or occurs an inaccuracy in any material respect in
the representations and warranties of any Seller Entity set forth in this Agreement, which
inaccuracy is not capable of being cured by the Termination Date, (ii) if there has been a
breach in any material respect of a covenant of any Seller Entity, or a failure in any
material respect on the part of any Seller Entity to comply with their respective
obligations hereunder, and such breach or failure is not capable of being cured by the
Termination Date; (iii) if there occurs any casualty with respect to the any Asset as
described herein, or (iv) if any proposed supplement, change or amendment to any Schedule
submitted by Seller to Purchaser is unacceptable to Purchaser;
(c) by Purchaser if any of the conditions of the Seller set forth in Section
6.02 hereof are not satisfied on or before the Termination Date;
(d) by Seller, (i) if there is or occurs an inaccuracy in any material respect in the
representations and warranties of Purchaser set forth in this Agreement, which inaccuracy is
not capable of being cured by the Termination Date, or (ii) if there has been a breach in
any material respect on the part of Purchaser to comply with its obligations hereunder, and
such breach or failure is not capable of being cured by the Termination Date;
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(e) by Seller if any of the conditions set forth in Section 6.01 hereof are not
satisfied on or before the Termination Date; or
(f) by Purchaser if the Closing Date shall not have occurred before the Termination
Date for any reason other than the failure of the Purchaser to perform in any material
respect its obligations hereunder or the breach or inaccuracy in any material respect of a
representation or warranty made by such party.
8.02 Obligations Upon Termination.
(a) In the event that this Agreement is terminated pursuant to the provisions of Section
8.01(a) or (f), neither party shall have any further obligation to the other.
(b) If either party shall terminate this Agreement pursuant to Sections 8.01(b),
(c), (d) or (e) because a condition to the terminating party’s obligations
under this Agreement is not satisfied as a result of the other party’s failure to comply with its
obligations under this Agreement, the terminating party’s right to pursue any and all rights it may
have at law or equity or hereunder shall survive unimpaired.
ARTICLE IX
MISCELLANEOUS
9.01 Survival of Representations. All statements contained in any exhibit, schedule,
certificate or other instrument delivered by or on behalf of the Seller or the Purchaser pursuant
to this Agreement, or in connection with the transaction contemplated hereby, shall be deemed
representations by the Seller or by the Purchaser, respectively, hereunder. All representations
and agreements made by the Seller and the Purchaser shall survive until the third anniversary date
following the Closing.
9.02 Legal Expenses. If any legal action or any arbitration or other proceeding is
brought for the enforcement of this Agreement, or because of an alleged or actual dispute, breach,
default or misrepresentation in connection with any of the provisions of this Agreement, the
successful or prevailing party shall be entitled to recover reasonable attorneys’ fees and other
costs incurred in that action or proceeding, in addition to any other relief to which it may be
entitled.
9.03 Invalid Provisions. If any one or more of the provisions of this Agreement shall
be held invalid or unenforceable, such provision shall be modified to the minimum extent necessary
to make it valid and enforceable, and the validity and enforceability of all other provisions of
this Agreement shall not be affected thereby.
9.04 Binding Effect. This Agreement shall be binding upon and inure to the benefit of
the Seller and the Purchaser, and their respective heirs, successors and assigns. This Agreement
may not be assigned or transferred without the written consent of all parties thereto.
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9.05 Casualty. The Seller shall bear all risk of casualty loss or damage to the
Assets until and through the Closing. The Purchaser shall bear all risk of casualty loss or damage
to the Assets after the Closing.
9.06 Public Announcements. Any public announcement concerning this Agreement before
the Closing or any of the terms hereof shall be made only with the prior approval of the Seller and
Purchaser, other than required filings under applicable securities laws.
9.07 Delivery of Exhibits. All exhibits, schedules, and documents referred to in or
attached to this Agreement are integral parts of this Agreement and are incorporated herein for all
purposes as if fully set forth herein.
9.08 Further Assurances. The parties shall give further assurances, take such actions
and execute such further documents as are necessary or desirable to effectuate the purpose of this
Agreement.
9.09 Notices. All notices, requests, demands and other communications hereunder shall
be in writing and shall be deemed to have been duly given (a) on the date of delivery if personally
delivered, delivered by nationally recognized overnight delivery service guaranteeing at least
second business day delivery, or (b) on the date of delivery as evidenced by the return receipt or
similar evidence or on the fifth calendar day after mailing, whichever is earlier in time, if
mailed, by registered or certified mail or delivered by any express delivery service, postage
prepaid, and properly addressed as set forth below or at such other address as the addressee may
have previously specified by notice delivered in accordance with this paragraph.
(a) If to Seller:
RG America, Inc.
Restoration Group America 2003, Inc.
Restoration Group America, Inc.
RG Restoration, Inc.
RG Insurance Services, Inc.
CTFD, Inc.
CTFD Marine, Inc.
RG Risk Management, Inc.
Invvision Funding, Inc.
Practical Building Solutions 2000, Inc.
RG Florida GC, Inc.
Attn: Xxxxx Xxx
0000 Xxxxxxx Xxxxxx, Xxxxx 000
Xxxxx, Xxxxx 00000
Facsimile: (000) 000-0000
Restoration Group America 2003, Inc.
Restoration Group America, Inc.
RG Restoration, Inc.
RG Insurance Services, Inc.
CTFD, Inc.
CTFD Marine, Inc.
RG Risk Management, Inc.
Invvision Funding, Inc.
Practical Building Solutions 2000, Inc.
RG Florida GC, Inc.
Attn: Xxxxx Xxx
0000 Xxxxxxx Xxxxxx, Xxxxx 000
Xxxxx, Xxxxx 00000
Facsimile: (000) 000-0000
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With a copy (which shall not constitute notice) to:
Xxxxxx & Xxxx LLP
0000 Xxxx Xxxxxx
Xxxxx 0000
Xxxxxx, Xxxxx 00000
Attention: I. Xxxxx Xxxxxxxx, Esq.
Facsimile: (000) 000-0000
0000 Xxxx Xxxxxx
Xxxxx 0000
Xxxxxx, Xxxxx 00000
Attention: I. Xxxxx Xxxxxxxx, Esq.
Facsimile: (000) 000-0000
(b) If to Purchaser:
Fireline Restoration, Inc.
Attn: Xxxxx Xxxxxxxx, President
0000 Xxxxxxx Xxxxxx
Xxxxx, Xxxxxxx 00000
Facsimile: (813) 353-972
Attn: Xxxxx Xxxxxxxx, President
0000 Xxxxxxx Xxxxxx
Xxxxx, Xxxxxxx 00000
Facsimile: (813) 353-972
9.10 GOVERNING LAW. THIS AGREEMENT SHALL BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE
WITH, THE LAWS OF THE UNITED STATES AND THE STATE OF TEXAS AND WILL, TO THE MAXIMUM EXTENT
PRACTICABLE, BE DEEMED TO CALL FOR PERFORMANCE IN DALLAS COUNTY, TEXAS.
9.11 Effect of Captions. The captions of sections of this Agreement shall have been
inserted solely for convenience and reference, and shall not control or affect the meaning or
construction of any of the provisions of this Agreement.
9.12 Entire Agreement; Modification; Waiver. This Agreement constitutes the entire
Agreement between the Seller and the Purchaser pertaining to the subject matter contained herein,
and supersedes all prior agreements, representations and all understandings of the parties. The
parties acknowledge and agree that no supplement or amendment of this Agreement shall be binding
unless expressed as such and executed in writing by the Seller and the Purchaser. No waiver of any
of the provisions of this Agreement shall be deemed or constitute a waiver of any other provision,
whether or not similar, nor shall any waiver constitute a continuing waiver.
[The remainder of this page is left blank intentionally.]
-23-
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be executed as of the day
and year first above written.
| SELLER: | RG AMERICA, INC. | |||
| By: | /s/ Xxxxx X. Xxx | |||
| Name: | Xxxxx X. Xxx | |||
| Title: | Chief Executive Officer | |||
| PURCHASER: | FIRELINE RESTORATION, INC. | |||
| By: | /s/ Xxxxx Xxxxxxxx | |||
| Name: | Xxxxx Xxxxxxxx | |||
| Title: | President | |||
| OTHER SELLER ENTITIES: | RESTORATION GROUP AMERICA, 2003, INC. | |||
| By: | /s/ Xxxxx X. Xxx | |||
| Name: | Xxxxx X. Xxx | |||
| Title: | Chief Executive Officer | |||
| RESTORATION GROUP AMERICA, INC. | ||||
| By: | /s/ Xxxxx X. Xxx | |||
| Name: | Xxxxx X. Xxx | |||
| Title: | Chief Executive Officer | |||
| RG RESTORATION, INC. | ||||
| By: | /s/ Xxxxx X. Xxx | |||
| Name: | Xxxxx X. Xxx | |||
| Title: | Chief Executive Officer | |||
-24-
| RG INSURANCE SERVICES, INC. | ||||
| By: | /s/ Xxxxx X. Xxx | |||
| Name: | Xxxxx X. Xxx | |||
| Title: | Chief Executive Officer | |||
| CTFD, INC. | ||||
| By: | /s/ Xxxxx X. Xxx | |||
| Name: | Xxxxx X. Xxx | |||
| Title: | Chief Executive Officer | |||
| CTFD MARINE, INC. | ||||
| By: | /s/ Xxxxx X. Xxx | |||
| Name: | Xxxxx X. Xxx | |||
| Title: | Chief Executive Officer | |||
| RG RISK MANAGEMENT, INC. | ||||
| By: | /s/ Xxxxx X. Xxx | |||
| Name: | Xxxxx X. Xxx | |||
| Title: | Chief Executive Officer | |||
| INVVISION FUNDING, INC. | ||||
| By: | /s/ Xxxxx X. Xxx | |||
| Name: | Xxxxx X. Xxx | |||
| Title: | Chief Executive Officer | |||
-25-
| PRACTICAL BUILDING SOLUTIONS 2000, INC. | ||||
| By: | /s/ Xxxxx X. Xxx | |||
| Name: | Xxxxx X. Xxx | |||
| Title: | Chief Executive Officer | |||
| RG FLORIDA GC, INC. | ||||
| By: | /s/ Xxxxx X. Xxx | |||
| Name: | Xxxxx X. Xxx | |||
| Title: | Chief Executive Officer | |||
AGREED AND ACCEPTED AS TO SECTION 4.06(c):
/s/ Xxxxx Xxx
|
-26-
THE PROVISIONS OF SECTION 1.02 ARE HEREBY AGREED TO AND ACCEPTED:
| HOME SOLUTIONS OF AMERICA, INC. | ||||
| By: | /s/ Xxxx Xxxxxxx | |||
| Name: Title: |
Xxxx Xxxxxxx Chief Financial Officer |
|||
-27-
List of Exhibits
Exhibit A
|
Royalty Agreement | |
Exhibit B
|
Allocation of Purchase Price |
List of Schedules
Schedule 1.01
|
Assets | |
Schedule 2.03
|
Liabilities | |
Schedule 3.05
|
Liens | |
Schedule 3.08
|
Litigation | |
Schedule 3.11
|
Absence of Undisclosed Information | |
Schedule 3.16
|
Intellectual Property |
-28-
EXHIBIT A
Royalty Agreement
EXHIBIT B
Allocation of Purchase Price
