SALE AND ASSIGNMENT AGREEMENT
Exhibit
10.87
This
SALE AND ASSIGNMENT AGREEMENT (the “Agreement”) made this 9th
day of December, 2005, by and between Xxxxxx X. Xxxx a resident of the State
of
Florida (“Assignor”)
and Host
America Corporation, a Colorado corporation with a place of business at 0
Xxxxxxxx, Xxxxxx, Xxxxxxxxxxx or its nominee
(“Assignee”):
WHEREAS, pursuant
to a certain Loan Agreement dated May 9, 2003 between the
Assignor and K. W. M. Electronics Corporation, a Utah corporation
(“KWM”) (the “Loan Agreement”), the Assignor
made a loan (the “Loan”) to KWM which is evidenced by a
Promissory Note executed on May 9, 2003, in the original principal amount
of
Five Hundred Fifty Thousand and 00/100 Dollars ($550,000.00) (the
“Note”). The Loan is secured by a certain Security
Agreement dated May 9, 2003, between KWM and the Assignor (the “Security
Agreement”). The Loan Agreement, the Note and the Security Agreement,
together with the other documents listed on Exhibit A hereto are
collectively referred to herein as the “Loan
Documents”;
WHEREAS, Assignor
has commenced the following actions (collectively, the
“Actions”) in connection with the Loans:
|
|
1.
|
Action against
KWM
and each of Xxxxxxx Xxxxxxxxx and Xxxxx Xxxxxxxxxx, filed in the
Circuit
Court of the Twelfth Judicial Circuit in and for Sarasota County,
Civil
Division, Xxxx Xx. 0000 XX 0000XX; and
|
|
|
||
|
|
2.
|
Action against
KWM,
Assignor, R.S. Services, Inc. and GlobalNet Acquisitions Corporation,
filed in the District Court of Xxxxxxxx County, State of Oklahoma,
Case
No. CJ-05-204E;
|
WHEREAS, the Assignee
wishes to purchase from Assignor and the Assignor wishes
to sell to Assignee all of the Assignor’s right, title and interest in and to
the Loan Documents and all claims and other rights arising thereunder or
inuring
thereto, as provided herein, upon the terms and conditions set forth in this
Agreement.
(Reference is hereby
made to the Appendix of Definitions for the meaning
of certain capitalized terms).
NOW
THEREFORE, in consideration of the premises herein contained and other good
and
valuable consideration, the receipt and sufficiency of which is hereby
acknowledged, the parties hereby agree as follows:
1. Agreement to
Sell and
Purchase. Effective upon the Closing Date and subject to the
terms and conditions of this Agreement, the Assignor hereby agrees to sell,
transfer and assign to the Assignee, and the Assignee hereby agrees to purchase
and accept from the Assignor, all of the Assignor’s right, title and interest in
and to the Loan Documents and all claims and other rights and proceeds arising
thereunder or inuring
thereto (collectively,
the “Purchased Rights”). Said Purchased Rights shall
include, without limitation:
(a) the Loan Documents
and all rights
to payment and other rights, title and interests of the Assignor in, to and
under the Loan Documents and any and all other agreements, instruments and
documents by, between or among KWM and the Guarantors and the Assignor or
its
predecessors in interest, evidencing or pertaining thereto;
(b) all rights, title,
interests,
powers, liens or security interests of the Assignor in, to or under each
Loan
Document, including without limitation, all liens and security interests
in the
Collateral as defined and/or set forth on the Loan Documents and all claims
and
rights to and interests in proceeds of hazard or casualty insurance covering
any
“Collateral” (as defined in the Security Agreement) securing
the Note;
(c) all amounts due
or to become due
under any Loan Document including, without limitation, accrued and unpaid
principal, interest and applicable costs of collection then due and owing
thereon, all of the Assignor's right to receive distributions of cash,
securities, obligations or other property, if any, or otherwise in respect
of
the Loan Documents including;
(d) any judgment or
execution based
upon the Note or any other Loan Document, to the extent attributable thereto,
and any lien arising from any such judgment or execution; and
(e) any and all; rights
and/or
interests in the Actions.
The
Purchased Rights, including the Loan Documents, shall be sold and assigned
pursuant to the endorsement of the Note to the order of Assignee, a Xxxx
of Sale
and Assignment (“Xxxx of
Sale”)
attached hereto as Exhibit B, a form of UCC-3 Assignment in the form
attached hereto as Exhibit C with respect to each UCC-1 Financing
Statement filed or recorded in connection with the Loan (“UCC-3s”),
and such
other assignments and documents as Assignee may reasonably request to effect
the
sale and assignment.
2. Date and Place
of
Closing. The consummation of the
sale and assignment transaction provided for herein is being held
contemporaneously with the execution hereof on December 9, 2005 (the
“Closing Date”).
On the
Closing Date, the Assignor and the Assignee shall execute and deliver a
Contingent Assignment of Intellectual Property and Security Agreement (the
“Assignment”), which Assignment shall grant to the Assignor a security interest
in certain inventions and intellectual property of the Assignee as collateral
to
secure the repayment of the Promissory Note (defined herein).
On the
Closing Date, the Assignor shall execute in favor of and/or deliver to Assignee
the following, if the same shall be in the possession of the
Assignor:
-2-
(a) Originals of the
Loan Documents
with the Note endorsed as payable to the order of the Assignee without
recourse;
(b) The Xxxx of Sale;
(c) An Affidavit of
Debt, in form,
substance and content satisfactory to Assignee, dated as of the Closing Date
and
stating the then principal balance of and accrued interest of the Loan and
all
attorney’s fees and costs associated with the collection of the Loan (such fees
and costs to be set forth on a detailed schedule to said Affidavit so as
to
permit the Assignee to recover the same as a portion of the Loan);
(d) Stock powers with
signatures
guaranteed respecting all shares of capital stock pledged to the Assignor
as
collateral for the Loan and the original certificates of such pledged capital
stock;
(e) The parties shall
execute and
deliver any documents if, as to the Assignor, the same shall be in the
possession of the Assignor, as are reasonably necessary for the purpose of
carrying out the intent of this Agreement.
3. Purchase Price.
In consideration
for the Purchased Rights, the Assignee shall pay an amount
equal to $771,230.07 (the “Purchase Price”) to the Assignor at
the Closing. The Purchase Price shall be allocated as
follows:
(a) Cash Consideration.
An amount
equal to $400,000.00 in currently available funds by wire transfer
and/or bank or certified check in accordance with instructions to be provided
by
the Assignor.
(b) Promissory Note. A
Promissory Note in the amount of $371,230.07 made by the Assignee to the
order
of the Assignor, which Promissory Note shall be in the form as set forth
in
Exhibit D and which Promissory Note will be subordinated to any
indebtedness owing by Assignee any institutional lender providing working
capital financing to Assignee in an arm’s length transaction (the
“PromissoryNote”).
The
parties hereto accept, agree and acknowledge that evidence of termination
of
that certain Distributor Agreement dated May 9, 2003, between KWM and Strategic
Energy Technology Group, in the form attached hereto as Exhibit E, shall
be received by the Assignee contemporaneously with the closing of the
transactions contemplated under this Agreement.
4. Representations
-
Assignor. The Assignor hereby represents and
warrants to the Assignee as follows:
(a) The Assignor is
the sole owner of
and has not sold, pledged, assigned, transferred, disposed of or terminated,
in
whole or in part, any of his right, title
-3-
and interest in
and to
the Purchased Rights. The Assignor owns the Purchased Rights and all
claims and rights arising thereunder, free and clear of any lien or encumbrance
whatsoever.
(b) To the Assignor’s knowledge, the
execution, delivery and performance of this Agreement and the transactions
contemplated hereby do not and on the Closing Date will not conflict with
or
result in any breach or contravention of any provision of law, statute, rule
or
regulation to which the Assignor is subject. In addition, the execution,
delivery and performance of this Agreement and the transactions contemplated
hereby do not and on the Closing Date will not conflict with or result in
any
breach or contravention of any agreement, judgment, order, writ, injunction,
license or permit applicable to the Assignor.
(c) This Agreement and
all documents
executed by Assignor in connection herewith constitute the legal, valid and
binding obligation of the Assignor enforceable against him in accordance
with
its terms.
(d) To the Assignor’s knowledge, the
Loan is secured by a valid and binding first perfected security interest
in the
Collateral subject to no other liens, claims and/or encumbrances. The
UCC-1 Financing Statement attached hereto as Exhibit F has been properly
filed in the filing office described in Exhibit F, which, to Assignor’s
knowledge, is the only filing office necessary to perfect such security interest
in the Collateral. The Assignor has not assigned, hypothecated,
transferred, pledged, sold or granted a security interest in the Collateral
to
any party except to Assignee.
(e) Effective upon the
Closing and the
consummation of the sale and assignment transactions contemplated herein,
the
Assignor shall have no continuing ownership interest of any kind or nature
whatsoever in the Purchased Rights, or any monies payable on account of or
interest and principal due and payable in connection with the Collateral,
or any
claims or rights arising under or in connection with the Collateral, including
without limitation, the Actions, or any restructuring or modification of
the
Purchased Rights.
(f) The aggregate amount
of
KWM’s and/or the Guarantors’ indebtedness with respect to the Loan as of
December 9, 2005, (excluding any legal fees or other costs of collection
incurred by Assignor) is Seven Hundred Seventy One Thousand Two Hundred Thirty
and 07/100 Dollars ($771,230.07), which total is comprised of the respective
amounts owing in respect of the Loan Documents as determined as of December
9,
2005, which are set forth on Exhibit A attached hereto.
(g) Neither KWM nor
any other party
has any right to a disbursement of additional loan proceeds or future advances
with respect to the Loan.
(h) There are no escrow
deposits or
accounts relating to the Loan which are in the possession or under the control
of Assignor.
-4-
(i) Assignor has not:
(1)
modified the Note or other Loan Documents in any respect, (2) satisfied,
canceled or subordinated any of the same in whole or in part, or (3) released
all or any of the Collateral from the lien created under the Security Agreement,
or (4) executed any instrument of release, cancellation or satisfaction of
the
same in whole or in part.
(j) The copies of the
Loan
Documents furnished to the Assignee by Assignor on or before the date hereof
are
true and correct copies of such documents and have not, in writing, been
superseded, amended, modified, canceled or otherwise changed in any material
respect.
(k) Excepting the Actions,
Assignor is
not a party to any other litigation with respect to the Purchased Rights,
the
Loan or the Loan Documents and is not aware of any litigation or threatened
litigation with respect to the Purchased Rights. A docket sheet from
Courts for the respective counties where the Actions have been filed is attached
hereto as Exhibit G.
(l) The Assignor has
not nor has
the Assignor caused any other party to, license, distribute and/or grant
any
right whatsoever in any Collateral.
5. Representations
-
Assignee. The Assignee hereby represents and
warrants to the Assignor as follows:
(a) The Assignee has
all requisite
power and authority to execute and deliver, and to perform all of its
obligations under, this Agreement and all instruments and other documents
executed and delivered by the Assignee in connection herewith. The
transactions contemplated by this Agreement have been approved by the Board
of
Directors of the Assignee and by all appropriate internal committees of the
Assignee as reflected in the minute books of the Assignee, and the officer
of
the Assignee whose name appears below has been duly authorized by the Assignee
to act on its behalf in the execution of this Agreement and in the execution
of
all of the documents, agreements and instruments executed in connection
herewith. Assignee shall provide Assignor at the Closing with a
Secretary's Certificate evidencing such approval.
(b) The execution, delivery
and
performance of this Agreement and the transactions contemplated hereby do
not
and on the Closing Date will not conflict with or result in any breach or
contravention of any provision of law, statute, rule or regulation to which
the
Assignee is subject, or any judgment, order, writ, injunction, license or
permit
applicable to the Assignee.
(c) The Assignee is
acquiring the Loan
Documents without any view either to participate in, or to sell the Loan
Documents in connection with any public distribution thereof, and the Assignee
has no intention of making any distribution of the Loan Documents in a manner
which would violate applicable securities laws; provided, however, that nothing
in this Agreement shall restrict or limit in any way the Assignee's
-5-
ability and right
to
dispose of all or part of the Loan Documents in accordance with such laws
if at
some future time the Assignee deems it advisable to do so.
(d) This Agreement constitutes
a
legal, valid and binding obligation of the Assignee enforceable against it
in
accordance with its terms.
6. Delivery of
Documents;
Other Actions. Effective upon the Closing, each of the Assignor and
the Assignee hereby covenants and agrees to execute and deliver all such
documents and to take such further actions as the other may reasonably deem
necessary, from time to time, to carry out the intent and purpose of this
Agreement and to consummate the transactions contemplated hereby. In
furtherance of the foregoing, upon consummation of this Agreement and the
transactions contemplated hereby, the Assignor shall not take any action
with
respect to the Actions except as may be authorized by Assignee. In
addition, at Assignor’s option, Assignor may act to avoid a default in the
Actions. Except as otherwise provided herein, the Assignor accepts, agrees
and acknowledges that it shall take such actions and execute and deliver
such
documents, instruments or agreements as may be requested by Assignee in
connection with the Actions to (a) preserve the Assignor’s rights thereunder
and/or (b) transfer the Assignor’s rights thereunder to the Assignee. The
Assignor shall provide a copy of any pleading, notice and/or any and all
information it receives in connection with the Actions promptly to Assignee
in
accordance with Section 17 hereof.
7. Mutual Representations
and
Warranties. The Assignor and Assignee represent to the other that they
have had no dealings, negotiations, or consultations with any broker,
representative, employee, agent or other intermediary in connection with
this
Agreement or the sale of the Purchased Rights. Assignor and Assignee agree
that each will indemnify, defend and hold the other free and harmless from
the
claims of any broker(s), representative(s), employee(s), agent(s) or other
intermediary(ies) claiming to have represented Assignor or Assignee,
respectively, or otherwise to be entitled to compensation in connection with
this Agreement or in connection with the sale of the Purchased
Rights.
8. Survival of
Representations and Warranties. The representations and warranties of
the Assignor and Assignee contained herein shall survive the Closing and
the
consummation of the transactions contemplated hereby.
9.
Severabililty If any term,
covenant,
condition or provision hereof is unlawful, invalid or unenforceable for any
reason whatsoever, and such illegality, invalidity or unenforceability does
not
affect the remaining parts of this Agreement, then all such remaining parts
hereof shall be valid and enforceable and have full force and effect as if
the
invalid or unenforceable part had not been included.
10. Rights Cumulative;
Waivers The rights of each of the
parties under this Agreement are cumulative and may be exercised as often
as any
party considers appropriate under the terms and conditions specifically set
forth. The rights of each of the parties hereunder shall not be capable of
being waived or varied otherwise than by an
-6-
express waiver or
variation in writing. Any failure to exercise or any delay in exercising
any of such rights shall not operate as a waiver or variation of that or
any
other such right. Any defective or partial exercise of any of such rights
shall not preclude any other or further exercise of that or any other such
right. No act or course of conduct or negotiation on the part of any party
shall in any way preclude such party from exercising any such right or
constitute a suspension or any variation of any such right.
11.
Headings. The headings
of
the paragraphs contained in this Agreement are inserted for convenience only
and
shall not affect the meaning or interpretation of this Agreement or any
provision hereof.
12. No Third-Party
Beneficiaries. Each of the provisions of this
Agreement is for the sole and exclusive benefit of the parties hereto, and
none
of the provisions of this Agreement shall be deemed to be for the benefit
of any
other person or entity.
13. Governing
Law. This
Agreement shall be governed by and construed in accordance with the laws
of the
State of Connecticut without reference to conflicts of law. The parties
hereto specifically consent to the jurisdiction of the State of Connecticut
with
respect to all matters and disputes arising under this Agreement and/or the
transactions contemplated hereby and agreed to be bound by the judgments,
decisions and decrees of any state or federal court sitting in the State
of
Connecticut.
14. Entire
Agreement. This Agreement, together with the other
documents delivered in connection herewith, sets forth the entire agreement
and
understanding of the parties hereto and supersedes all prior agreements and
understandings between the parties hereto with respect to the transactions
contemplated hereby. This Agreement shall be binding on and inure to the
benefit of the parties hereto and their respective successors and
assigns.
15. Counterparts. This
Agreement may be signed in counterparts, each of which shall be an original
and
both of which taken together shall constitute one agreement.
16. Changes to Agreement. This
Agreement may not be changed, waived, discharged or terminated orally, but
only
by an instrument in writing signed by the party against which enforcement
of
such change, waiver, discharge or termination is sought.
17. Notices. Any notice,
demand, request or other communication made, given, required or permitted
pursuant to this Agreement shall be (a) in writing, (b) delivered personally,
transmitted by facsimile, delivered by a commercial overnight courier service
or
mailed by certified or registered United States first class mail, return
receipt
requested, postage prepaid, and (c) addressed to the party for whom intended,
as
follows:
-7-
(a) If to Assignee addressed
to:
Copy to:
Xxxxxx X. Xxxxxx,
Esq.
Rogin, Nassau, Xxxxxx, Xxxxxxx & Xxxxxx, LLC
CityPlace I, 22nd Floor
000 Xxxxxx Xxxxxx
Xxxxxxxx, XX 00000
Rogin, Nassau, Xxxxxx, Xxxxxxx & Xxxxxx, LLC
CityPlace I, 22nd Floor
000 Xxxxxx Xxxxxx
Xxxxxxxx, XX 00000
(b) If to Assignor addressed
to:
Xx. Xxxxxx X.
Xxxx
59 The Heights
Xxxxxxx, Xxxxxxxxxxxxx 00000
59 The Heights
Xxxxxxx, Xxxxxxxxxxxxx 00000
Xx. Xxxxxx X.
Xxxx
415 L’Ambiance Drive
Longboat Key, FL 34228
415 L’Ambiance Drive
Longboat Key, FL 34228
Copy to:
Xxxxx Xxxxxxxxxxx,
Esq.
Xxxx Xxxxxxxxx, P.A.
000 Xxxxx Xxxxxx Xxxxxx
Xxxxxxxx, XX 00000
Xxxx Xxxxxxxxx, P.A.
000 Xxxxx Xxxxxx Xxxxxx
Xxxxxxxx, XX 00000
18. Confidentiality. Each of
the Assignor and the Assignee agrees with the other that it shall hold in
confidence and shall not disclose to any third party the specific terms and
conditions of this Agreement or the transactions contemplated hereby, except
for
disclosures required hereunder or by applicable law, court order or by
governmental or regulatory authorities, and except for disclosures to the
Assignor, the Assignee and their respective representatives and consultants
for
use solely as necessary in connection with this Agreement and the transactions
contemplated hereby; provided that such representatives and consultants are
advised of the confidentiality requirements contained herein and shall agree
to
be bound thereby; and further provided that the parties hereto shall be
responsible for any breach of these confidentiality requirements by their
respective representatives and consultants. Should Assignee default under
the terms of the Promissory Note, Assignor shall send written notice to
Assignee, who will have twenty (20) days to cure the default. If the
default is not cured by Assignee within that
-8-
time, Assignor will
no
longer be required to hold this Agreement and related transactions in
confidence.
19. Costs and Expenses. At the
Closing, the Assignee shall pay all filing and recording fees required to
be
paid by either the Assignor or the Assignee in connection with the transactions
contemplated by this Agreement. Each of the Assignor and the Assignee
shall be solely responsible for all costs or expenses (including legal expenses)
incurred by it with respect to the sale of the Purchased Rights. Except as
otherwise described herein, the Assignee (and not the Assignor) shall be
solely
liable for and shall pay when due all costs and expenses relating to or in
connection with the Purchased Rights which are incurred after the Closing
Date;
provided, however, Assignee shall not be responsible for any such costs and
expenses incurred prior to and through the Closing Date.
20. Further Assurances. The
parties agree to execute such other and further instruments and documents
as
shall be necessary to implement and carry out the terms
of the within and
foregoing Sale and Assignment Agreement at no further cost or expense to
any
other party.
[signature
pages follow]
-9-
[SIGNATURE
PAGE TO SALE AND ASSIGNMENT
AGREEMENT]
IN
WITNESS WHEREOF, the parties hereto have executed this Agreement as of the
date
first above written.
HOST AMERICA CORPORATION
By:/s/ XXXXX
XXXXXX
Name:
Title:
Name:
Title:
/s/ XXXXXX X.
XXXX
XXXXXX X. XXXX
XXXXXX X. XXXX
On
this the 9th day of December, 2005, personally appeared ________________,
who
acknowledged himself to be the ________________________of Host America
Corporation, signer and sealer of the foregoing instrument and acknowledged
the
same to be his free act and deed as such officer and the free act and deed
of
said corporation, before me.
______________________________
Name:
Notary Public
My Commission Expires:
Name:
Notary Public
My Commission Expires:
STATE OF
______________)
)-ss.
COUNTY OF ____________)
)-ss.
COUNTY OF ____________)
On
this the 9th day of December, 2005, personally appeared Xxxxxx X. Xxxx, the
signer and sealer of the foregoing instrument and acknowledged the same to
be
his free act and deed, before me.
______________________________
Name:
Notary Public
My Commission Expires:
Name:
Notary Public
My Commission Expires:
-10-
APPENDIX
OF DEFINITIONS
Actions:
the
meaning set forth in paragraph 3 of page 1.
Agreement:
the
meaning set forth in paragraph 1 of page 1.
Assignee:
the
meaning set forth in paragraph 1 of page 1.
Assignor:
the
meaning set forth in paragraph 1 of page 1.
Xxxx of
Sale: the meaning set forth in the last paragraph of
Section 1.
Closing: the closing of the transactions contemplated by
this Agreement
Closing
Date: the meaning set forth in Section 2.
Collateral: the meaning set forth in Section 1(b).
Guarantors:
shall
mean each of Xxxxxxx Xxxxxxxxx and
Xxxxx Xxxxxxxxxx,
the
guarantors of the Loan.
guarantors of the Loan.
KWM:
the
meaning set forth in paragraph 2 of page 1.
Loan:
the
meaning set forth in paragraph 2 of page 1.
Loan
Agreement:
the meaning set forth in paragraph 2 of page 1.
Loan
Documents:
the meaning set forth in paragraph 2 of page 1.
Note:
the
meaning set forth in paragraph 2 of page 1.
Promissory
Note: the meaning set forth in Section
3(b).
Purchase
Price: the meaning set forth in Section
3.
Purchased
Rights: the meaning set forth in Section 1.
Security
Agreement: the meaning set forth in paragraph 2 of page
1.
UCC-3:
the
meaning set forth in the last paragraph of Section 1.
