EXHIBIT 2.2
ASSET PURCHASE AGREEMENT
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THIS ASSET PURCHASE AGREEMENT is made and entered at Hinsdale,
Illinois, on February 1, 2003, by and between QUEST MANUFACTURING, INC. an
Illinois corporation ("Seller"), and SILICON FILM TECHNOLOGIES, INCORPORATED, an
Illinois corporation ("Purchaser").
W I T N E S S E T H:
WHEREAS, Seller owns certain proprietary electronic film systems and
other digital imaging products and services (the "Business"); and
WHEREAS, Seller desires to sell, assign and transfer to Purchaser, and
Purchaser desires to purchase, acquire and accept from Seller, a substantial
portion of the assets utilized in the Business, including, without limitation,
all patents, trademarks, and other intellectual property rights associated with
the Business, upon the terms and subject to the conditions set forth in this
Agreement; and
NOW, THEREFORE, in consideration of the mutual covenants and agreements
hereinafter set forth and other good and valuable consideration, the receipt and
sufficiency of which is hereby acknowledged, Purchaser and Seller hereby agree
as set forth in this Agreement:
1. SALE AND PURCHASE OF ASSETS. Except as provided in Section 2, Seller
hereby sells, assigns and transfers to Purchaser, and Purchaser hereby
purchases, acquires and accepts from Seller, substantially all the assets,
personal property, powers and privileges of Seller, tangible and intangible,
whether written-off, expensed, fully depreciated or otherwise, utilized in the
Business (collectively, the "Assets"), free and clear of any and all liens,
claims, charges, liabilities, pledges, mortgages, security interests,
encumbrances or rights or claims of any other person or entity of any kind,
nature or description whatsoever (collectively, the "Liens"). The Assets shall
include in it's entirety the assets of Silicon Film Technology, Inc. (a
California corporation), which were purchased by Quest Manufacturing on February
2nd, 2002 by a court order free and clear, without limitation, plastic tooling,
molds, metal tooling, software, patents, trademarks, intellectual property and
licenses agreements. The only exception to the above is payable to Knobbe,
Martens, Xxxxx & Bear, LLP the technologies patent attorney that is owed
$76,000.
2. EXCLUDED ASSETS. Purchaser is not purchasing the following assets of
Seller, which assets shall remain the property of Seller and shall be excluded
from the definition of "Assets":
(a) Seller's accounts receivable, if any; provided, however,
Purchaser agrees to collect Seller's accounts receivable in the ordinary course
of business for ninety (90) days following closing, after which time Purchaser
shall assign to Seller any outstanding receivables. Purchaser shall account to
Seller at least weekly for all accounts receivable collected. All payments
received shall be allocated to the receivable designated with such payment.
(b) Cash and cash equivalents, including all account balances
and deposits in bank accounts;
(c) Tangible assets and inventory that Purchaser deems to be
unusable for its continuation of the Business;
(d) Pre-paid expenses, if any;
(e) All refunds and deposits of all federal, state, local and
municipal taxes paid, or which may be paid, by Seller with respect to the
Business for any period; and
(f) All closes of action and litigation.
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3. NON-ASSUMPTION OF LIABILITIES. Purchaser is not assuming and will
not be liable for any trade and accounts payables, debts, liabilities or
obligations of Seller, except payments to Knobbe, Martens, Xxxxx & Bear, LLP as
noted in section 1.
4. CLOSING. The closing of the sale and purchase of the Assets shall
take place on February 1st, 2003, at Purchaser's principal place of business or
at a place as shall be mutually agreed to by the parties ("Closing").
5. PURCHASE PRICE, PAYMENT TERMS AND ALLOCATION OF PURCHASE PRICE.
(a) The purchase price for the Assets is One Million One
Hundred Fifty Eight Thousand Two Hundred Fifty Dollars (US$1,158,250.00) [the
"Purchase Price"].
(b) Purchaser shall pay the Purchase Price to Seller, as
follows:
(1) At closing Quest will be allocated 15,365,000
shares Common A Stock of Silicon Film Technologies, Inc., valued at $768,250 or
$0.05 per share. The shares must be issued to Quest by December 31st, 2004.
(2) By June 30th, 2003, the sum of Seventy Thousand
Dollars ($70,000) ["Initial Payment"]. The balance of the Purchase Price,
$320,000, shall be payable as monies are available, but must be completed by
December 31, 2004.
(3) Unpaid balance shall accrue interest at 6% per
annum.
(c) The Purchase Price shall be allocated among the Assets in
the manner determined by the Purchaser, the cash payment allocation shall also
be utilized by the Seller in any required filings with the Internal Revenue
Service.
6. SELLER'S REPRESENTATIONS AND WARRANTIES. Seller represents and
warrants to Purchaser as follows:
(a) Seller is a corporation duly organized, validly existing
and in good standing under the laws of the State of Illinois, and is duly
qualified to transact business in the State of Illinois and other states where
qualification is necessary for the conduct of the Business.
(b) Seller has the requisite power and authority to execute,
deliver and perform its covenants, duties and obligations set forth in this
Agreement.
(c) The execution of this Agreement and Seller's full and
timely performance of its covenants, duties and obligations described herein has
been authorized by Seller.
(d) This Agreement is the valid, legal and binding obligation
of Seller, enforceable in accordance with its terms. No other action by Seller
is necessary to authorize the execution and delivery of this Agreement, the
performance of Seller's covenants, duties and obligations and the consummation
of the transactions described in and contemplated by this Agreement.
(e) Neither the execution and delivery of this Agreement, the
performance of Seller's covenants, duties and obligations nor the consummation
of the transactions described in or contemplated by this Agreement, constitute a
default under or conflict with any judgment, decree or order of any court or
other governmental body to which Seller is subject and will not conflict or be
inconsistent with or result in the termination, modification, breach or default
under the terms of any contract, commitment, covenant, agreement, instrument,
document or understanding to which Seller is a party.
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(f) The execution and delivery of this Agreement and the
performance by Seller of its covenants, duties and obligations set forth in this
Agreement do not require the consent, approval or other action of, or any filing
with or notice to, any governmental agency or authority or any other person or
entity whatsoever.
(g) Seller is not obligated for, nor are any of the Assets
subject to, any liabilities, adverse claims or obligations, absolute or
contingent, which could have a material impact or effect on the Business, the
sale, assignment and transfer of the Assets to Purchaser in accordance with the
terms of this Agreement or Purchaser's operation of the Business on and after
the date of this Agreement.
(h) Seller has no knowledge of any condition or circumstance
which would prevent Purchaser from obtaining all federal, state and local
permits, authorizations and licenses necessary for Purchaser to conduct the
Business utilizing the Assets on and after the date hereof, nor does Seller know
of any basis or reason for any litigation, arbitration or other proceeding
against Purchaser arising from or in connection with the Purchaser's operation
of the Business or Purchaser's utilization of the Assets on and after the date
hereof.
(i) Seller has fully reported and fully and timely paid, and
will continue to fully and timely report and pay, all federal, state, local and
foreign taxes of every kind, nature and description whatsoever that are due and
payable or accrued with respect to Seller's business and the Assets, including,
without limitation, all income, excise, payroll, social security, sales, use,
license, franchise, property, head, employment and unemployment taxes.
(j) There is no litigation, arbitration, proceeding or
controversy which is pending, threatened or anticipated before any court,
governmental agency or authority, arbitrator or board of arbitrators to which
Seller is a party or which may affect or is threatened against the Business, the
Assets or Seller's right to carry on the Business as conducted on and before the
date of this Agreement. There is no action, suite or proceeding pending or
threatened before any court or governmental agency or authority which would give
any party the right to rescind or enjoin any transaction described in or
contemplated by this Agreement.
(k) All documents containing Seller's financial information
that Seller has furnished to Purchaser are true and correct copies and present
fairly the financial condition of Seller.
(l) Since January 1, 2003, Seller has actively conducted the
Business in the ordinary and regular course and there has not been any material
adverse change in the Business, the Assets, Seller's liabilities or the
Business' prospects or operations.
(m) Seller is not represented by a broker in connection with
the sale and purchase of the Assets and the other transactions described in or
contemplated by this Agreement, and Seller warrants that it owes no broker's or
finder's fee or commission in connection with the sale of the Assets and the
other transactions described in or contemplated by this Agreement.
(n) No representation or warranty made by Seller in this
Agreement or in any document, written statement, certificate or Exhibit
furnished or to be furnished to Purchaser or its counsel pursuant hereto, or in
connection with the transactions described in and contemplated by this
Agreement, contains or will contain any untrue statement of any material fact,
or omits or will omit any material fact necessary to prevent the statements of
facts contained therein from being materially false or misleading. All
statements made and data presented by Seller in any document, written statement,
certificate or Exhibit provided to Purchaser pursuant to or in connection with
this Agreement, or contemplated by this Agreement, are deemed to be
representations and warranties made by Seller to Purchaser in this Agreement.
7. PURCHASER'S REPRESENTATIONS AND WARRANTIES. Purchaser represents and
warrants unto Seller as follows:
(a) Purchaser is a corporation duly organized, validly
existing and in good standing under the laws of the State of Illinois.
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(b) Purchaser has the requisite corporate power and authority
to execute, deliver and perform its covenants, duties and obligations set forth
in this Agreement.
(c) The execution of this Agreement and Purchaser's full and
timely performance of its covenants, duties and obligations described herein
have been duly authorized by Purchaser's Board of Directors in accordance with
all applicable laws and the Articles of Incorporation and By-Laws of Purchaser.
(d) This Agreement is the valid, legal and binding obligation
of Purchaser, enforceable in accordance with its terms. No other action by
Purchaser is necessary to authorize the execution and delivery of this
Agreement, the performance of purchaser's covenants, duties and obligations and
the consummation of the transactions described in and contemplated by this
Agreement.
(e) Neither the execution and delivery of this Agreement, the
performance of purchaser's covenants, duties and obligations nor the
consummation of the transactions described in or contemplated by this Agreement,
constitute a default under or conflict with any judgment, decree or order of any
court or other governmental body to which Purchaser is subject and will not
conflict or be inconsistent with or result in the terminating, modification,
breach or default under the terms of any contract, commitment, covenant,
agreement, instrument, document or understanding to which Purchaser is a party.
8. INDEMNIFICATION.
(a) Seller shall defend, indemnify and hold Purchaser and its
officers, directors, shareholders, employees, agents, accountants, attorneys,
legal representatives, successors and assigns (collectively the "Purchaser
Group"), harmless of, from and against any and all suits, actions, proceedings,
losses, claims, damages, liabilities, penalties and other costs or expenses,
including, without limitation, reasonable attorneys' fees and costs, at law or
in equity, now existing or hereafter arising, liquidated or unliquidated,
foreseeable or unforeseeable, insured or uninsured (collectively "Claims"),
incurred or sustained by the Purchaser, arising from or relating to:
(i) A default or breach by Seller of any term,
provision, representation, warranty, covenant, duty, agreement or obligation
of Seller set forth in this Agreement or in any document, written statement,
certificate or Exhibit delivered pursuant to or in connection with this
Agreement;
(ii) Seller's operation of the Business;
(iii) Seller's ownership and use of the Assets on and
prior to the closing of the transaction contemplated by this Agreement;
and
(iv) Any federal, state, county, local or municipal
tax or assessment against Seller or arising from or in connection with the
operation of Seller's business, Seller's income or otherwise.
(b) Purchaser shall defend, indemnify and hold Seller, its
officers, directors, shareholders, employees, agents, accountants, attorneys,
legal representatives, successors and assigns, as the case may be (collectively
the "Seller Group") harmless of, from and against any and all Claims incurred or
sustained by the Seller Group, or any of them, arising from or relating to:
(i) A default or breach by Purchaser of any term,
provision, representation, warranty, covenant, duty, agreement or
obligation of Purchaser set forth in this Agreement or in any document, written
statement, certificate or Exhibit delivered pursuant to or in connection with
this Agreement; and
(ii) Purchaser's operation of the Business.
9. SURVIVAL. Notwithstanding any investigation made by or on behalf of
Seller or Purchaser, the representations and warranties of Seller and Purchaser
contained in this Agreement and or in any document, written statement,
certificate or Exhibit delivered pursuant to or in connection with this
Agreement and the respective covenants, agreements and obligations of Seller and
Purchaser to indemnify each other pursuant to Paragraph 8 will survive the
execution of this Agreement.
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10. NOTICES. All notices, requests, demands and other communications
required or desired to be given pursuant to this Agreement will be given in
writing and will be deemed duly given upon personal delivery, or on the third
day after mailing if sent by registered or certified mail, postage prepaid,
return receipt requested, or on the day after mailing if sent by a nationally
recognized overnight delivery service which maintains records of the time, place
and recipient of delivery, and in each case if directed as follows:
If to Seller, then to: Quest Manufacturing, Inc.
XX Xxx 000
0000 Xxxxxx Xxxxx Drive Unit F
Spring Grove, IL 60081
With a copy to: Xxxx Xxxxxxx
0 Xxxxxx Xxxx
Xxxxxx Xxxxx, XX 00000
If to Purchaser, then to: Silicon Film Technologies, Inc.
Address TBD
With a copy to: Xxxxxxxxx XxXxxx
000 X. Xxxxxxxxxx Xxxxxx
Xxxxxxxx, XX 00000
or to such other person, entity or address as a party may respectively designate
in like manner, from time to time.
11. MISCELLANEOUS.
(a) This Agreement is delivered and intended to be performed
in the State of Illinois and will be construed, interpreted and enforced in
accordance with the laws of the State of Illinois.
(b) This Agreement may be assigned by Seller or Purchaser
without the prior written consent of the other party hereto, except that Seller
or Purchaser must notify the other party of the assignment in writing as long as
there is a balance due as described in Section 5.
(c) This Agreement will be binding upon, inure to the benefit
of and will be enforceable by Seller and Purchaser, and their respective legal
representatives, successors and permitted assigns, if any, and no other person
or entity will be deemed a third-party beneficiary of this Agreement.
(d) This Agreement will not be amended, changed, modified or
discharged, except by a writing signed by Seller and Purchaser.
(e) This Agreement may be executed in two or more
counterparts, each of which will be deemed an original, but all of which
together will constitute one and the same instrument.
(f) This Agreement, together with the Exhibits attached
hereto, constitutes the entire agreement and understanding between the parties
hereto with regard to the subject matter hereof, and supersedes all prior and
contemporaneous verbal and written communications, agreements, assurances and
understandings between the parties hereto. No statement, representation,
warranty, covenant, agreement, obligation, indemnity or undertaking of any kind,
nature or description whatsoever not expressly set forth in this Agreement will
be deemed a part of or will affect or be used to interpret, change or restrict
the express terms and provisions of this Agreement.
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(g) A waiver of any party's default or breach of any of their
respective representations, warranties, covenants, duties, agreements or
obligations or any term or provision of this Agreement, will be effective only
if in writing and signed by all of the parties hereto and will be limited to the
default or breach described therein; no such waiver will be or be deemed a
waiver of any other, similar, prior, continuing or subsequent default or breach.
(h) The numbers, headings or titles of the various paragraphs
of this Agreement are not a part of this Agreement, but are for convenience of
reference only and do not, and will not be used to, define, limit, continue,
modify or affect the meaning or content of the paragraphs.
(i) Seller and Purchaser will pay their own fees and expenses
in connection with this Agreement and the transactions described in and
contemplated by this Agreement, whether or not such transactions are
consummated, including, without limitation, the fees of any attorneys,
accountants or other persons or entities engaged by such party.
(j) The recitals set forth at the beginning of this Agreement
are hereby incorporated into and made a part of this Agreement as if fully set
forth herein.
(k) Whenever required by context, the masculine pronouns will
include the feminine and neuter genders, and the singular will include the
plural and vice versa.
(l) The Exhibits referred to in this Agreement are attached
hereto, made a part hereof and incorporated herein by this reference.
(m) If any provision contained herein is held to be invalid or
unenforceable by a court of competent jurisdiction, such provision will be
severed herefrom and such invalidity or unenforceability will not affect any
other provision of this Agreement, the balance of which will remain in and have
its intended full force and effect; provided, however, if such invalid or
unenforceable provision may be modified so as to be valid and enforceable as a
matter of law, such provision will be deemed to have been modified so as to be
valid and enforceable to the maximum extent permitted by law.
(n) Seller and Purchaser shall execute and deliver such
additional documents and instruments, and take such other actions, as may be
necessary or advisable to document or consummate the transactions described in
or contemplated by this Agreement.
(o) Each party to this Agreement acknowledges and agrees that
any information or data involving the sale and purchase of the Assets and the
consummation of the other transactions described in or contemplated by this
Agreement, including, without limitation, the purchase price and other terms and
provisions set forth herein, is of a confidential nature and not generally known
to the public. In order to preserve the confidentiality of all such information
and data and the goodwill associated with the sale and purchase of the Assets,
each party hereto agrees that it shall not divulge, communicate or disclose any
such information or data, except as may be required by law, in connection with
the performance of their respective covenants, duties and obligations set forth
in this Agreement or Purchaser's operation of the Business on and after the date
of this Agreement, or use to the detriment of any other party hereto or for the
benefit of any other person or entity, or misuse in any way, any such
information or data.
IN WITNESS WHEREOF, Seller and Purchaser have each duly executed this
Agreement as of the date first set forth above.
QUEST MANUFACTURING, INC. SILICON FILM TECHNOLOGIES, INC.
By: /S/ XXXX XXXXXXX By: /S/ XXXXXXXXX XXXXXX
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Xxxx Xxxxxxx Xxxxxxxxx XxXxxx
Its: President CEO Its: President
Date: February 1, 2003 Date: February 1, 2003
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