ASSET PURCHASE AGREEMENT
EXHIBIT
10.7
THIS
ASSET PURCHASE AGREEMENT (this "Agreement") is made and entered into this
25th
day of January, 2005, by and between PHOENIX E & P TECHNOLOGY, L.L.C., a
Texas limited liability company (“Seller"), and TURBECO INC., a Texas
corporation ("Purchaser").
W I T N E
60;S S E T H
WHEREAS,
the Seller owns and operates a business relating to the manufacture, service,
and sale of screens and screening machines (the “Business”);
WHEREAS,
in connection with the Business, the Seller owns the patents listed on Exhibit
A
(the “Patents”);
WHEREAS,
the Purchaser desires to purchase the assets of the Business from the Seller,
and the Seller is willing to sell the assets of the Business to the Purchaser
pursuant to the terms set forth herein;
NOW,
THEREFORE, for and in consideration of the premises, the mutual representations,
warranties and covenants herein contained and other good and valuable
consideration, the receipt and sufficiency of which are hereby acknowledged,
the
parties hereby agree as follows:
1. PURCHASE
AND SALE OF THE ASSETS; CLOSING DATE.
1.1 Purchase
and Sale.
Seller
hereby agrees to sell, assign, transfer and deliver to Purchaser all right,
title and interest in and to (i) the Patents, (ii) the trade names and
trademarks “Vibra-screen” and “NNF Screening Machine”, (iii) the assets of the
Business listed on Exhibit B, and (iv) the other intangible assets of Seller
which relate to the Business, including but not limited to all of its know-how
and technology relating to the Business, the operating manuals, promotional
literature, marketing ideas or expressions (in any medium) which have been
copyrighted, or are subject to copyright, used in connection with the
Business(collectively the “Assets”), in each case free and clear of any liens or
encumbrances of any nature whatsoever. Purchaser hereby agrees to purchase
the
Assets from Seller in consideration for the Purchase Price (as hereinafter
defined).
1.2 Closing;
Closing Date.
The
closing of this transaction is taking place on the date (the “Closing Date”) of
the execution of this Agreement (the "Closing") at the offices of the Purchaser
in Houston, Texas.
1.3 Delivery
and Transfer Documents.
At and
after the Closing, Seller shall take all steps necessary to transfer the
Assets
to Purchaser, free and clear of any liens or encumbrances of any nature
whatsoever. Specifically, but not by way of limitation, Seller at the Closing
has delivered to Purchaser: (i) a duly executed assignment covering the Assets
(the “Assignment”) (ii) assignments relating to the Patents in the form provided
for by the US Patent and Trademark Office (the “USPTO”), and (iii) such other
duly executed transfer documents which Purchaser requested to evidence the
transfer of the Assets to Purchaser free and clear of any liens or encumbrances
of any nature whatsoever.
2. PURCHASE
PRICE.
2.1 Price
and Payment.
The
consideration paid by the Purchaser to the Seller for the Assets are $46,640
(the “Purchase Price”) and contingent consideration equal to twelve and one half
percent of the screen sales covered by the patents listed in Exhibit A of
the
Xxxx of Sale and Agreement, for a period of three years subsequent to the
date
of this Agreement. The Purchaser has prior to the date of this Agreement
paid on
behalf of the Seller $24,778.00 of the expenses of the Seller (the Prior
Payments”). The Purchaser and the Seller have agreed that the Prior Payments
will be considered payments of the Purchase Price and accordingly only
$20,212.00 of the Purchase Price remains unpaid prior to Closing, which amount
will be paid in full by Purchaser to Seller at the Closing. The Seller will
be
paid twelve and one half percent (12.5%) of net screen sales produced by
this
equipment for a three year period ending beginning February 1, 2005 payable
on a
monthly basis.
2.2 Excluded
Liabilities and Obligations.
The
Purchaser shall not assume and shall not be liable or responsible for any
debt,
obligation or liability of the Business or the Seller, including but not
limited
to any taxes of Seller or sales tax imposed on this transaction of any kind,
whether known or unknown, contingent, absolute or otherwise.
3. REPRESENTATIONS
AND WARRANTIES OF SELLER.
Seller
hereby represents and warrants to Purchaser as follows:
3.1 Organization
and Good Standing.
Seller
is duly organized, validly existing, and in good standing under the laws
of the
state of Texas and has all requisite power and authority to own, operate,
and
lease its properties and to carry on the Business.
3.2 Authorization.
All
requisite limited liability company action and proceedings with respect to
the
Seller have been obtained or have occurred to authorize the execution and
delivery of this Agreement and the consummation of the transactions contemplated
hereby.
3.3 Binding
Effect.
This
Agreement has been duly executed and delivered by Seller and constitutes
a valid
and binding agreement with respect to Seller, except as the enforceability
hereof may be subject to applicable bankruptcy, insolvency, reorganization,
or
other similar laws affecting creditor rights generally and to general principles
of equity.
3.4 The Patents.
The
Seller is the owner of the Patents and has not granted, and there are no
outstanding, any options, licenses, or agreements of any kind relating to
the
Patents. The Seller is not, and the Purchaser as a result of this transaction
will not become, subject to any obligation to pay any royalties or other
similar
obligation to third parties with respect to the marketing, sale or distribution,
manufacture, license, or use of any products in connection with the Business
or
the use of any of the Assets. To the best of Sellers knowledge, the Business
has
not infringed on the rights of any third party and Seller has not received
any
communication alleging that Seller or its predecessors have infringed or,
by
conducting the Business has infringed, any of the rights of any third party.
Seller has not filed any patent application or made any filings with the
USPTO
which is not disclosed in Exhibit A.
3.5 Tradename.
The
Seller owns the exclusive trade name and trademark rights to the names described
in Section1.1. The use by the Seller before Closing and by the Purchaser
after
Closing of these trade names and trademarks did not and will not infringe
on the
rights of any third party.
3.6 Effect of
Agreement.
The
execution and delivery of this Agreement and the consummation of the transaction
contemplated hereby will not (i) result in any breach of any of the terms
or
conditions of, or constitute a default under any commitment, mortgage, note,
bond, debenture, deed of trust, contract, agreement, license or other instrument
or obligation to which Seller is now a party or by which Seller or any of
its
properties or assets may be bound or affected; (ii) result in any violation
of
any governmental requirement; (iii) cause Purchaser to lose the benefit of
any
right or privilege included in the Assets; or (iv) relieve any person of
any
obligation (whether contractual or otherwise) or enable any person to terminate
any such obligation or any right or benefit enjoyed by Seller or to exercise
any
right under any agreement in respect of the Assets or the Business
3.7 Properties
and Assets.
Except
for the lien held by Redstone Bank which will be released at Closing, Seller
has
good title to all the Assets, free and clear of all mortgages, liens, pledges,
conditional sales agreements, charges, easements, covenants, assessments,
options, restrictions and encumbrances of any nature whatsoever.
3.8 Suits,
Actions and Claims.
There
are no suits, actions, claims, inquiries or investigations by any person,
or any
legal, administrative or arbitration proceedings in which Seller is engaged
or
which are pending or, to the best knowledge of Seller, threatened against
or
affecting Seller or any of its properties or assets or the Business, or to
which
Seller is or might become a party, or which challenge the validity or legality
of the transactions contemplated hereby.
3.9 Solvency.
After
the Closing, the Seller will be solvent.
3.10 Brokers
and Finders.
No
broker or finder has acted for Seller in connection with this Agreement or
the
transaction contemplated by this Agreement, and no broker or finder is entitled
to any brokerage or finder's fee or to any commission in respect thereof
based
in any way on agreements, arrangements or understandings made by or on behalf
of
Seller.
4. INDEMNIFICATION.
Seller
shall, and hereby does indemnify, hold harmless and defend Purchaser and
its
officers, directors, shareholders, employees, agents, representatives and
consultants at all times from and after the date of this Agreement, from
and
against any and all damages, losses, liabilities, suits, costs, costs of
any
settlement or judgment, claims of any and every kind whatsoever, remediation
costs and expenses (including, without limitation, reasonable attorneys'
fees),
of or to any of the indemnified parties ("Damages"), which may be paid, incurred
or suffered by or asserted against the indemnified parties by any Person
resulting or arising from or incurred in connection with any one or more
of the
following: (i) any liability or claim for liability related in any way to
the
Assets or the Business, to the extent such liability arises in connection
with
any action, omission or event occurring on or prior to the Closing Date;
and
(ii) any misrepresentation, breach of warranty or nonfulfillment of any covenant
or agreement on the part of Seller under this Agreement.
5. NONDISCLOSURE
OF CONFIDENTIAL INFORMATION.
Seller
recognizes and acknowledges that certain confidential information of Seller
is
included in the Assets (including, but not limited to, list of customers)
that
after the consummation of the transactions contemplated hereby will be valuable,
special and unique property of Purchaser. Seller agrees that it will not
disclose, and it will use its best efforts to prevent disclosure by any other
Person of, any such confidential information to any Person, except to authorized
representatives of Purchaser. Seller recognizes and agrees that violation
of any
of the agreements contained in this Section 5 will cause irreparable damage
or
injury to Purchaser, the exact amount of which may be impossible to ascertain,
and that, for such reason, among others, Purchaser shall be entitled to an
injunction, without the necessity of posting bond, therefor, restraining
any
further violation of such agreements. Such rights to any injunction shall
be in
addition to, and not in limitation of, any other rights and remedies Purchaser
may have against Seller.
6. COMPETITION.
Seller
agrees that it will not directly or indirectly participate, whether as an
owner,
consultant, employee, licensor, or otherwise, in any business similar to
the
Business during the two year period beginning on the Closing Date. The Purchaser
shall be entitled to specific performance and other injunctive relief to
enforce
this Section.
7. FURTHER
ACTIONS.
From
time to time, at the request of any party hereto, the other parties hereto
shall
execute and deliver such instruments and take such action as may be reasonably
requested to evidence the transactions contemplated hereby.
8. NOTICES.
All
notices, requests, demands and other communications required or permitted
to be
given hereunder shall be in writing and shall be deemed to have been duly
given
if delivered personally, given by facsimile or other similar instantaneous
electronic transmission device or mailing first class, postage prepaid,
certified United States mail, return receipt requested, as follows:
(a) If
to
Purchaser, at:
0000
Xxxxxx Xxxxxxx Xxxxx
Xxxxxxx,
Xxxxx 00000
(b) If
to
Seller, at:
0000
Xxxx
Xxxx Xxxxx, Xxxxx 000
Xxxxxxx,
Xxxxx 00000
Any
party
may change its address for notice by giving to the other party written notice
of
such change. Any notice given under this Section 8 shall be effective (i)
if
delivered personally, when delivered; (ii) if sent by facsimile or other
similar
instantaneous electronic transmission device, 24 hours after sending; and
(iii)
if mailed, 48 hours after mailing.
9. GENERAL
PROVISIONS.
9.1 Governing
Law; Interpretation; Section Headings.
This
Agreement shall be governed by and construed and enforced in accordance with
the
laws of the State of Texas, without regard to conflict-of-laws rules as applied
in Texas. The section headings contained herein are for purposes of convenience
only, and shall not be deemed to constitute a part of this Agreement or to
affect the meaning or interpretation of this Agreement in any way.
9.2 Severability.
Should
any provision of this Agreement be held unenforceable or invalid under the
laws
of the United States of America or the State of Texas, or under any other
applicable law of any other jurisdiction, then the parties hereto agree that
such provision shall be deemed modified for purposes of performance of this
Agreement in such jurisdiction to the extent necessary to render it lawful
and
enforceable, or if such a modification is not possible without materially
altering the intention of the parties hereto, then such provision shall be
severed herefrom for purposes of performance of this Agreement in such
jurisdiction. The validity of the remaining provisions of this Agreement
shall
not be affected by any such modification or severance.
9.3 Entire
Agreement. This
Agreement sets forth the entire agreement and understanding of the parties
hereto with respect to the transactions contemplated hereby, and supersedes
all
prior agreements, arrangements and understandings related to the subject
matter
hereof. No representation, promise, inducement or statement of intention
has
been made by any party hereto which is not embodied in this Agreement, and
no
party hereto shall be bound by or liable for any alleged representation,
promise, inducement or statement of intention not so set forth.
9.4 Binding
Effect.
All the
terms, provisions, covenants and conditions of this Agreement shall be binding
upon and inure to the benefit of and be enforceable by the parties hereto
and
their respective heirs, executors, administrators, representatives, successors
and assigns.
9.5 Assignment.
This
Agreement and the rights and obligations of the parties hereto shall not
be
assigned or delegated by any party hereto without the prior written consent
of
the other party hereto.
9.6 Amendment;
Waiver. This
Agreement may be amended, modified, superseded or cancelled, and any of the
terms, provisions, representations, warranties, covenants or conditions hereof
may be waived, only by a written instrument executed by all parties hereto,
or,
in the case of a waiver, by the party waiving compliance. The failure of
any
party at any time or times to require performance of any provision hereof
shall
in no manner affect the right to enforce the same. No waiver by any party
of any
condition contained in this Agreement, or of the breach of any term, provisions,
representation, warranty or covenant contained in this Agreement, in any
one or
more instances, shall be deemed to be or construed as a further or continuing
waiver of any such condition or breach, or as a waiver of any other condition
or
of the breach of any other term, provision, representation, warranty or
covenant.
9.7 Gender;
Numbers.
All
references in this Agreement to the masculine, feminine or neuter genders
shall,
where appropriate, be deemed to include all other genders. All plurals used
in
this Agreement shall, where appropriate, be deemed to be singular, and vice
versa.
9.8 Counterparts.
This
Agreement may be executed simultaneously in two or more counterparts, each
of
which shall be deemed an original, but all of which together shall constitute
one and the same instrument. This Agreement shall be binding when one or
more
counterparts hereof, individually or taken together, shall bear the signatures
of the parties reflected hereon as signatories.
9.9 Telecopy
Execution and Delivery.
A
facsimile, telecopy or other reproduction of this Agreement may be executed
by
one or more parties hereto, and an executed copy of this Agreement may be
delivered by one or more parties hereto by facsimile or similar instantaneous
electronic transmission device pursuant to which the signature of or on behalf
of such party can be seen, and such execution and delivery shall be considered
valid, binding and effective for all purposes. At the request of any party
hereto, all parties hereto agree to execute an original of this Agreement
as
well as any facsimile, telecopy or other reproduction hereof.
9.10 Cross
References.
References in this Agreement to Articles, Sections, Exhibits, or Schedules
shall
be deemed to be references to Articles, Sections, Exhibits, and Schedules
of
this Agreement unless the context specifically and expressly requires otherwise.
IN
WITNESS WHEREOF, the parties have executed this Agreement as of the date
first
above written.
| "PURCHASER" | ||
| TURBECO INC. | ||
| |
|
|
| By: | /s/ Xxxxx X. Xxxxx, Xx. | |
|
Name: Xxxxx X. Xxxxx, Xx. |
||
| Title: Chairman & CEO | ||
| "SELLER" | ||
| PHOENIX E & P TECHNOLOGY, L.L.C. | ||
| |
|
|
| By: | /s/ Xxxx X. Xxxxxxxx | |
|
Name: Xxxx X. Xxxxxxxx |
||
| Title: Managing Director | ||
