PURCHASE AND SALE OF ASSETS AGREEMENT
EXHIBIT 10.1
THIS PURCHASE AND SALE OF ASSETS AGREEMENT (the "Agreement") made and entered into this 9th day of February 2011 (the "Execution Date"),
BETWEEN:
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NANO CP, LLC
(the “Seller”)
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OF THE FIRST PART
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- AND -
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(the "Purchaser")
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OF THE SECOND PART
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BACKGROUND:
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A)
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Purchaser and Seller have expressed their mutual intention and desire of Purchaser’s purchasing all existing physical assets and liabilities and intellectual property relating to fuel cell technology held by Nano CP, LLC (the “Company”). Seller desires to sell all physical assets and liabilities and intellectual property related to fuel cell technology held by the Company.
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B)
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It is understood by the Seller, that Purchaser intends to cause subsidiaries to be created for each the equipment and the intellectual property.
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C)
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It is understood by the Parties, that it is the intention of Purchaser to immediately to action, pursuant to ongoing negotiations, to lease all physical assets and to license all intellectual property to WATT Fuel Cell Corp and Evolution Fuel Cell, Inc.
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D)
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The Parties understand that the Company has certain liabilities. It is understood by both Parties that Purchaser intends to buy all assets of the Company, including all liabilities, unless otherwise listed herein.
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E)
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All provisions, obligations, and rights expounded within this Agreement are conditioned upon and operate solely under the assumption that the Seller and Purchaser have entered into a business arrangement, and acting without duress, have executed this Agreement freely and willfully with the intention of committing to the transaction as set forth below and hereby express their desires to be held to the requirements, obligations, and rights set hereunder.
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IN CONSIDERATION of the provisions contained in this Agreement and for other good and valuable consideration, the receipt and sufficiency of which consideration is acknowledged, the Parties agree as follows:
| Initial | Initial | Solar Acquisition Purchase Agreement |
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I
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PURCHASE
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A
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The Sale
Subject to the terms and conditions of this Agreement, and in reliance on the representations, warranties, and conditions set out in this Agreement, the Seller agrees to sell all assets of the Company to the Purchaser, and the Purchaser agrees to purchase said assets from the Seller. All assets and liabilities, included under the terms of this Agreement shall be attached hereto as Schedule “A”. All patents, trademarks, and intellectual property included under the terms of this Agreement shall be attached hereto as Schedule “B”.
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B
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The Purchase Price and Payment
The Aggregate Purchase Price exactly sixteen million three hundred thousand dollars ($16,300,000.00USD), as follows:
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i.
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A promissory note for $3,300,000.00, attached hereto as Exhibit 1 as payment for of the equipment listed under Schedule A, the terms of which are as follows:
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(a)
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Interest rate: 15% per annum
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(b)
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Maturity Date: February 1, 2016
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(c)
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Terms of Repayment:
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(1)
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Interest shall be paid in monthly payments of interest in arrears. If the Buyer has insufficient cash on hand to pay interest due it may pay interest in common shares at a price per share equal to the 20 day moving average price of common shares of the Buyer, rounded up to the next whole share. If the Buyer does have sufficient cash on hand to pay interest due, Seller may, at its sole discretion, elect to take payment in common shares instead of cash. The method for calculation shall be the same as if the Buyer had insufficient cash on hand.
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(2)
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Principle shall be paid as cash flow allows, thereafter to be paid on Maturity Date or a funding event sufficient to pay the balance of the note, whichever occurs first.
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(d)
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Subordination:
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(e)
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Seller shall agree that note shall be subordinate to any debt instrument or other encumbrance against the physical assets, provided that prior to or simultaneously with any such encumbrance the Buyer has paid/pays at least $1,500,000 of the outstanding principle balance. In the event the Buyer wishes to encumber any of the assets but has not paid $1,500,000 of the outstanding principle, the Seller shall allow the encumbrance, provided that the Buyer ensures that only such part of the assets equal in value to the financing resulting in the encumbrance are in fact encumbered, and no less than 80% of the financing is utilized to reduce the outstanding balance due to Seller.
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| Initial | Initial | Solar Acquisition Purchase Agreement |
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ii.
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Exactly 1,000,000 shares of Preferred Stock in the Solar Acquisition Corp, convertible 1:100, preferred common at par value, $0.001 as payment for the intellectual property listed under Schedule B. Upon intent to exercise, Seller shall give notice to Buyer and Buyer shall take action required to duly authorize the issuance of common shares sufficient to fulfill Seller’s exercise.
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C
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Closing
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i.
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The closing of the purchase and sale of the Company (the "Closing") will take place on the 1st day of March 2011 (the "Closing Date") at the offices of the Seller or at such other time and place as the Parties mutually agree.
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ii.
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At Closing:
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(a)
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The Purchaser shall provide:
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(1)
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Any and all documentation and forms required to sufficiently and legally secure Seller's rights in the stocks or other securities, present and/or future;
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(2)
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An executed promissory note in accordance with Section I(B)(i); and
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(3)
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Certificates or other identification of the Preferred Shares in accordance with Section I(B)(ii);
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(b)
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the Seller shall provide:
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(1)
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Duly executed forms and documents evidencing transfer of signing authority and control of all assets listed under Schedule “A” and Schedule “B” attached hereto;
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II
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REPRESENTATIONS AND WARRANTIES
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A
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Seller's Representations and Warranties
The Seller represents and warrants to the Purchaser that:
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i.
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The Company is a corporation, or limited liability company, duly incorporated or continued, validly existing, and in good standing under the laws of the State of Florida and has all requisite authority to carry on business as currently conducted.
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| Initial | Initial | Solar Acquisition Purchase Agreement |
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ii.
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The Seller is the absolute beneficial owner of the assets, free and clear of any liens, charges, encumbrances or rights of others, except as expressed in the Agreement and the schedules and exhibits attached herein, and is exclusively entitled to dispose of said assets upon execution of this Agreement.
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iii.
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There has been no act or omission by the Seller that would give rise to any valid claim relating to a brokerage commission, finder's fee, or other similar payment.
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iv.
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The Seller is a resident of the United States for the purposes of the Internal Revenue Code.
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v.
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The Seller has read, understood, and had the opportunity to ask questions related to the company's filings with the SEC
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vi.
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The Seller has no knowledge that any representation or warranty given by the Purchaser in this Agreement is inaccurate or false.
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vii.
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The representations and warranties given in this Agreement are the only representations and warranties; no other representation or warranty, either express or implied, has been given by the Seller to the Purchaser.
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viii.
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The Seller warrants to the Purchaser that each of the representations and warranties made by it is accurate and not misleading at the Closing Date. The Seller acknowledges that the Purchaser is entering into this Agreement in reliance on each warranty and representation.
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ix.
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The Seller's representations and warranties will survive the Closing Date of this Agreement.
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B
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Purchaser's Representations and Warranties
The Purchaser represents and warrants to the Seller the following:
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i.
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The Purchaser has the authority to bind Solar Acquisition Corp to pay the full Aggregate Purchase Price in the form designated, i.e. the promissory note and issuance of preferred shares in accordance with Section I(B) and any expenses accumulated by the Purchaser in connection with this Agreement and the Purchaser has not incurred any obligation, commitment, restriction, or liability of any kind, absolute or contingent, present or future, which would adversely affect its ability to perform its obligations under this Agreement.
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ii.
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The Purchaser has entered into a master agreement with WATT Fuel Cell Corp, Evolution Fuel Cell, Inc. and the two (2) subsidiaries of the Purchaser, executed on this date, for the license and lease of the Assets described herein (the “WATT Master Agreement”).
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| Initial | Initial | Solar Acquisition Purchase Agreement |
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iii.
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The Purchaser has not committed any act or omission that would give rise to any valid claim relating to a brokerage commission, finder's fee, or other similar payment.
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iv.
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The Purchaser is a resident of the United States for the purposes of the Internal Revenue Code.
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v.
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This Agreement has been duly executed by the Purchaser and constitutes a legal and binding obligation of the Purchaser, enforceable in accordance with its terms, except as enforcement may be limited by bankruptcy and insolvency, by other laws affecting the rights of creditors generally, and by equitable remedies granted by a court of competent jurisdiction.
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vi.
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The Purchaser has no knowledge that any representation or warranty given by the Seller in this Agreement is inaccurate or false.
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vii.
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The representations and warranties given in this Agreement are the only representations and warranties; the Purchaser has given no other representation or warranty, either express or implied, to the Seller.
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viii.
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The Purchaser warrants to the Seller that each of the representations and warranties made by the Purchaser is accurate and not misleading at the date of Closing. The Purchaser acknowledges that the Seller is entering into this Agreement in reliance on each warranty and representation.
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ix.
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The Purchaser's representations and warranties will survive Closing.
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III
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CONDITIONS PRECEDENT
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A
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Conditions Precedent to Seller's Obligations
The obligation of the Seller to complete the sale of the Company under this Agreement is subject to the satisfaction of the following conditions precedent by the Purchaser, on or before the Closing Date, each of which is acknowledged to be for the exclusive benefit of the Seller and may be waived by the Seller entirely or in part:
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i.
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All of the representations and warranties made by the Purchaser in this Agreement will be true and accurate in all material respects on the Closing Date.
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ii.
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The Shareholders of Purchaser shall approve all terms, conditions and obligations set forth under this Agreement.
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iii.
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Purchaser shall have fulfilled all requirements and obligations pursuant to the WATT Master Agreement signed, on this date.
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| Initial | Initial | Solar Acquisition Purchase Agreement |
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iv.
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The Purchaser will obtain or complete all forms, documents, consents, approvals, registrations, declarations, orders, or authorizations of any person or any governmental or public body, required of the Purchaser in connection with the execution of this Agreement.
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v.
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The Purchaser will execute and deliver any and all Promissory Notes to the Seller for review and approval prior to the closing of this Agreement.
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B
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Conditions Precedent to Purchaser's Obligations
The obligation of the Purchaser to complete the purchase of the Company under this Agreement is subject to the satisfaction of the following conditions precedent by the Seller, on or before the Closing Date, each of which is acknowledged to be for the exclusive benefit of the Purchaser and may be waived by the Purchaser entirely or in part:
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i.
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All of the representations and warranties made by the Seller in this Agreement will be true and accurate in all material respects on the Closing Date.
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ii.
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The Seller will obtain and complete all forms, documents, consents, approvals, registrations, declarations, orders, or authorizations of any person or governmental or public body that are required of the Seller for the proper execution of this Agreement and the transfer of the shares and assets to the Purchaser.
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iii.
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The Shareholders of Purchaser shall approve all terms, conditions and obligations set forth under this Agreement.
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iv.
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The shareholders of Seller have approved the sale of assets as described herein in accordance with Fl. Statute 607 § 1202.
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v.
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The Seller will have executed all documentation necessary to transfer the assets described herein to the Purchaser.
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C
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Conditions Precedent Not Satisfied
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i.
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If the Seller fails to satisfy any condition precedent set out in this Agreement on or before the Closing Date, and the Purchaser does not waive the condition, this Agreement will be of no effect on the Closing Date and there will be no liability between the Parties.
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ii.
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If the Purchaser fails to satisfy any condition precedent set out in this Agreement on or before the Closing Date, and the Seller does not waive the condition, this Agreement will be of no effect on the Closing Date and there will be no liability between the Parties.
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| Initial | Initial | Solar Acquisition Purchase Agreement |
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IV
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DISCLOSURE
The Purchaser further agrees to use all reasonable efforts to ensure the confidentiality of any private or unpublished information received from the Seller or observed at the Seller's premises. If this Agreement is terminated for any reason, the Purchaser will promptly return all written information and documents relating to the Business to the Seller.
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V
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INDEMNITY
The Seller will indemnify and save the Purchaser harmless from and against all claims, loss, damage, liability or expense which the Purchaser may suffer in regards to any liability or obligation arising out of the ownership or operation of the Company prior to the Closing Date.
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VI
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NOTICES
Any notices or deliveries required in the performance of this Agreement will be deemed completed when hand-delivered, delivered by agent, or three (3) days after being placed in the post, postage prepaid, to the Parties at the addresses contained in this Agreement or as the Parties may later designate in writing.
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VII
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EXPENSES AND COSTS
The Parties agree to pay all their own costs and expenses in connection with this Agreement.
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VIII
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STOCK RESTRICTIONS
Seller agrees and understands that any and all shares received as part of the purchase amount maybe restricted in accordance with the Securities Act of 1933 as to eligibility to be sold.
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IX
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MEDIATION AND ARBITRATION
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A
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In the event a dispute arises out of or in connection with this Agreement, the Parties will attempt to resolve the dispute through friendly consultation.
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B
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C
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If mediation is not successful in resolving the entire dispute or is unavailable, any outstanding issues will be submitted to final and binding arbitration in accordance with the laws of the State of Florida. The Parties agree to submit to the rules of either the American Arbitration Association or the National Arbitration Forum at the election of the complaining Party. The Parties agree that the forum shall be Broward County, Florida and that this Agreement and all matters herein shall be controlled by the laws of the State of Florida and the Rules of the chosen body to govern the arbitration. The arbitrator's award will be final, and judgment may be entered upon it by any court having jurisdiction within the State of Florida.
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| Initial | Initial | Solar Acquisition Purchase Agreement |
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X
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SEVERABILITY
The Parties acknowledge that this Agreement is reasonable, valid, and enforceable; however, if any part of this Agreement is held by a court of competent jurisdiction to be invalid, it is the intent of the Parties that such provision be reduced in scope only to the extent deemed necessary to render the provision reasonable and enforceable and the remainder of the provisions of this Agreement will in no way be affected or invalidated as a result.
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XI
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GENERAL PROVISIONS
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A
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This Agreement will be governed by and construed in accordance with the laws of the State of Florida.
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B
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This Agreement contains the entire agreement between the Parties. Statements or representations which may have been made by any Party to this Agreement in the negotiation stages of this Agreement may in some way be inconsistent with this final written Agreement. All such statements are declared to be of no value to either Party. All other written agreements preceding this Agreement shall only be incorporated if attached as exhibits herein and expressly acknowledged under the attached Parties' Affidavit to Incorporate Documents. Only the written terms of this Agreement will bind the Parties.
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C
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This Agreement may only be amended or modified by a written instrument executed by all of the Parties.
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D
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A waiver by one Party of any right or benefit provided in this Agreement does not infer or permit a further waiver of that right or benefit, nor does it infer or permit a waiver of any other right or benefit provided in this Agreement.
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E
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This Agreement is the result of the negotiations of the Parties and in the event of any dispute shall not be construed in favor or against any Party on the basis of it having memorialized the Agreement in writing.
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F
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This Agreement will pass to the benefit of and be binding upon the Parties' respective heirs, executors, administrators, successors, and permitted assigns.
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G
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The clauses, paragraphs, and sub paragraphs contained in this Agreement are intended to be read and construed independently of each other. If any part of this Agreement is held to be invalid, this invalidity will not affect the operation of any other part of this Agreement.
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| Initial | Initial | Solar Acquisition Purchase Agreement |
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H
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All of the rights, remedies and benefits provided in this Agreement will be cumulative and will not be exclusive of any other such rights, remedies and benefits allowed by law or equity.
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I
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For purposes of interpretation and timing, except where otherwise specified, time is of the essence in this Agreement.
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J
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To facilitate execution, this Agreement may be executed in as many counterparts as may be required, and it shall not be necessary that the signatures of, or on behalf of, each party, or that the signatures of all persons required to bind any party, appear on each counterpart; but it shall be sufficient that the signature of, or on behalf of, each party, or that the signatures of the persons required to bind any party, appear on one or more of the counterparts. All counterparts must be consistent and contain equal and identical attachments and incorporated agreements. All counterparts shall collectively constitute a single agreement. It shall not be necessary in making proof of this Agreement to produce or account for more than a number of counterparts containing the respective signatures of, or on behalf of, all of the parties hereto. Further, this Agreement may be executed by facsimile signatures and such facsimile signatures shall be deemed to be the original signatures of the parties.
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K
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Headings are inserted for the convenience of the Parties only and are not to be considered when interpreting this Agreement. Words in the singular mean and include the plural and vice versa. Words in the masculine gender include the feminine gender and vice versa. Words in the neuter gender include the masculine gender and the feminine gender and vice versa.
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THIS SPACE LEFT INTENTIONALLY BLANK SIGNATURE PAGE TO FOLLOW
IN WITNESS WHEREOF the Parties have duly affixed their signatures under hand and seal on this 9th day of February 2011.
| ________________________________________ | _____________________________________________ |
| ________________________________________ | Date |
| Representative for Solar Acquisition Corp. |
| ________________________________________ | _____________________________________________ |
| ________________________________________ | Date |
| Representative for Nano CP, LLC |
| Initial | Initial | Solar Acquisition Purchase Agreement |
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