ASSET PURCHASE AGREEMENT BETWEEN US BIODEFENSE, INC. AND FTS GROUP, INC. Dated as of March 19, 2008 and Closed April 4, 2008

2.7 Compliance With Law. Seller has complied and is in compliance with all applicable federal, state and local laws, statutes, licensing requirements, rules and regulations, and judicial or administrative decisions applicable to the Acquired Assets or the Assumed Liabilities. There is no order issued, investigation or proceeding pending or, to Seller's knowledge, threatened, or notice served with respect to any violation of any law, ordinance, order, writ, decree, rule or regulation issued by any governmental entity applicable to the Acquired Assets or the Assumed Liabilities.

2.8 Employee Matters.

(a) Seller is not a party to, and there does not otherwise exist, any agreements with any labor organization or collective bargaining or similar agreement with respect to its employees. Seller is not a party to any outstanding contract, commission agreement, settlement agreement, or compensation agreement with any employee. To the knowledge of Seller, there are no complaints, grievances, arbitrations, employment-related proceedings or administrative proceedings, either pending or threatened orally or in writing, involving any employee; during the past five years, the business has not suffered or sustained any labor dispute resulting in any work stoppage and no such work stoppage is, to the knowledge of Seller, threatened.

 

(b) There is no litigation brought by any of Seller’s employees currently pending against Seller in any municipal, state or federal court or agency.

 

ARTICLE 3

REPRESENTATIONS AND WARRANTIES OF BUYER

 

As an inducement to Seller to enter into this Agreement, Buyer hereby represents and warrants to Seller:

 

3.1 Organization of Buyer. Buyer is a corporation duly organized, validly existing, and in good standing under the laws of Utah. Buyer has all requisite corporate power and authority to own and use the properties owned, if any, and used by it and to carry on its business as currently conducted and as currently contemplated to be conducted. Buyer is duly qualified or licensed to do business and in good standing in each jurisdiction in which the failure to be so qualified or licensed would have a Material Adverse Effect.

3.3 No Conflict. The execution and delivery of this Agreement and the ▇▇▇▇ of Sale to which Buyer is a party, and the consummation of the transactions contemplated hereby and thereby, do not and will not conflict with, or result in any violation of, or default under, or give rise to a Conflict under (i) any provision of Buyer's Articles of Incorporation or Buyer's Bylaws, each as currently in effect, (ii) any Material Contract to which Buyer or any of its properties or assets are subject, or (iii) any judgment, order, decree, statute, law, ordinance, rule or regulation applicable to Buyer or its properties or assets.

3.4 Consents. No consent, waiver, approval, order or authorization of, or registration, declaration or filing with, any governmental entity, or any third party, including a party to any Material Contract with Buyer (so as not to trigger any Conflict), is required by or with respect to Buyer in connection with the execution and delivery of this Agreement or the ▇▇▇▇ of Sale or the consummation of the transactions contemplated hereby or thereby.

3.5 Compliance with Laws. To Buyer's knowledge, Buyer has complied with, is not in violation of, and has not received any notices of violation with respect to, any foreign, federal, state or local statute, law or regulation with respect to the conduct or operation of its business.

ARTICLE 4

COVENANTS AND AGREEMENTS

4.1 Additional Documents and Further Assurances.

 

(a) Each party hereto, at the request of another party hereto, shall execute and deliver such other instruments and do and perform such other acts and things as may be reasonably necessary or desirable for effecting completely the consummation of this Agreement and the transactions contemplated hereby.

 

(b) Following the Closing, Seller will afford Buyer, its counsel and its accountants, during normal business hours, reasonable access to the books, records and other data, if any, relating to the Acquired Assets in Seller's possession with respect to periods prior to the Closing and the right to make copies and extracts there from, to the extent that such access may be reasonably required by Buyer in connection with: (i) the preparation of tax returns; (ii) compliance with the requirements of any governmental entity; and (iii) in connection with any actual or threatened action or proceeding by a third party.

 

4.2 Taxes.

 

 

4.3 Bulk Sales. Seller covenants to pay all of its vendors in accordance with the terms of its obligations. Seller represents that such transfer of the Acquired Assets is not a fraudulent conveyance.

 

ARTICLE 5

SURVIVAL OF REPRESENTATIONS, WARRANTIES AND COVENANTS; INDEMNIFICATION

5.1 Survival of Representations, Warranties and Covenants. The representations, warranties and covenants of Seller contained in this Agreement, or in any certificate or other instrument delivered pursuant to this Agreement, shall terminate on the one year anniversary of the Closing Date. The representations, warranties and covenants of Buyer contained in this Agreement, or in any certificate or other instrument delivered pursuant to this Agreement, shall terminate on the one year anniversary of the Closing Date.

5.2 Indemnification.

 

(a) Seller hereby agrees to indemnify and hold harmless Buyer, its affiliates, officers, directors, counsel, employees and agents from and against any and all losses, liabilities, damages, demands, claims, suits, actions, judgments or causes of action, assessments, costs and expenses, including, without limitation, interest, penalties, reasonable attorneys' fees, any and all expenses incurred in investigating, preparing or defending against any litigation, commenced or threatened, or any claim whatsoever, and any and all amounts paid in settlement of any claim or litigation (collectively, "Damages"), asserted against, resulting to, imposed upon, or incurred or suffered by Seller, its affiliates, officers, directors, employees or agents, directly or indirectly, as a result of or arising from any of the following claims (collectively,  the "Buyer Indemnifiable Claims"):

 

(i)   any inaccuracy in or breach or nonfulfillment of any of the representations, warranties, covenants or agreements made by Buyer in this Agreement and the ▇▇▇▇ of Sale;

(iii) any Claim by any person or entity for brokerage or finders' fees or commissions or similar payments based upon any agreement or understanding alleged to have been made by such person or entity directly or indirectly with Buyer or any of its officers, directors or employees in connection with any of the transactions contemplated by the Agreement or the ▇▇▇▇ of Sale.

 

5.3 Limitation on Liability.

 

 

ARTICLE 6

GENERAL

6.1 Notices. All notices and other communications hereunder shall be in writing and shall be deemed given if delivered personally or by commercial messenger or courier service, or mailed by certified mail (return receipt requested) or sent via nationally recognized overnight delivery service to the parties at the following addresses (or at such other address for a party as shall be specified by like notice:

(a)      if  to  Buyer,  to:           US Biodefense, Inc.           Attention:  ▇▇▇▇▇  ▇▇▇▇▇▇▇▇▇           ▇▇▇ ▇▇▇▇▇ ▇▇., ▇▇▇▇▇ ▇▇▇           ▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇   (b)     if  to  Seller,  to:           FTS Group, Inc.           Attention: ▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇           ▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇  ▇▇▇           ▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇

 

Notices sent via certified mail shall be deemed effective three postal days after deposit in the U.S. mail and those sent via overnight delivery shall be deemed effective upon receipt or refusal.

 

6.2 Entire Agreement. This Agreement, the ▇▇▇▇ of Sale and Exhibits hereto, (i) constitute the entire agreement among the parties with respect to the subject matter hereof and supersede all prior agreements and understandings both written and oral, among the parties with respect to the subject matter hereof; (ii) are not intended to confer upon any other person any rights or remedies hereunder; and (iii) shall not be assigned by operation of law or otherwise.

6.3 Severability. In the event that any provision of this Agreement or the application thereof, becomes or is declared by a court of competent jurisdiction to be illegal, void or unenforceable, the remainder of this Agreement will continue in full force and effect and the application of such provision to other persons or circumstances will be interpreted so as reasonably to effect the intent of the parties hereto. The parties further agree to replace such void or unenforceable provision of this Agreement with a valid and enforceable provision that will achieve, to the extent possible, the economic, business and other purposes of such void or unenforceable provision.

6.4 Amendment. This Agreement may be amended by the parties hereto at any time by execution of an instrument in writing signed on behalf of each of the parties hereto.

6.5 Extension; Waiver. At any time prior to the Closing, Buyer, on the one hand, and Seller, on the other hand, may, to the extent legally allowed, (i) extend the time for the performance of any of the obligations of the other party hereto, (ii) waive any inaccuracies in the representations and warranties made to such party contained herein or in any document delivered pursuant hereto, and (iii) waive compliance with any of the agreements or conditions for the benefit of such party contained herein. Any agreement on the part of a party hereto to any such extension or waiver shall be valid only if set forth in an instrument in writing signed on behalf of such party. A waiver by a party of the performance of any covenant, agreement, obligation, condition, representation or warranty will not be construed as a waiver of any other covenant, agreement, obligation, condition, representation or warranty. A waiver by any party of the performance of any act will not constitute a waiver of the performance of any other act or an identical act required to be performed at a later time.

6.6 Dispute Resolution and Applicable Law.

 

(a) The parties shall attempt in good faith to resolve any dispute arising out of or relating to this Agreement. In particular, those executives of the respective parties who have authority to settle the controversy and have direct responsibility for administration of the relationships established pursuant to this Agreement shall attempt in good faith to negotiate a settlement pursuant to the following process:

 

(b) Any party having a dispute or claim shall give the other party written notice stating the nature of the dispute in reasonable detail. Within ten business days after delivery of the notice, the receiving party shall submit to the other a written response also in reasonable detail. Within ten business days after delivery of the written response, decision-makers from both parties shall meet (in person or by telephone) at a mutually acceptable time and place (including telephonic conference), and thereafter as often as they reasonably deem necessary, to attempt to resolve the dispute. All reasonable requests for information made by one party to the other shall be honored.

 

(c) If the matter has not been resolved by the persons referred to above within ten days of the first meeting of such persons, the dispute shall be referred to more senior executives of each party who have authority to settle the dispute and who shall likewise meet (in person or by telephone) to attempt to resolve the dispute. If after such 10 day period the dispute remains unresolved, the parties shall participate in a mediation conducted by a mutually agreed upon mediator. If the parties resolve such dispute either alone or with the aid of the mediator, such resolution shall be binding on the parties and a settlement agreement shall be signed by each party.

 

(d) In the event the parties are unable to resolve such dispute following the mediation procedures provided in Section 6.6(c), either party may avail itself of any remedies available to it, whether at law or in equity, including recourse to any court of competent jurisdiction. Each party shall have the right to apply to a court of competent jurisdiction at any time for a temporary restraining order, preliminary injunction, or other interim or conservatory relief, as necessary, notwithstanding any informal dispute resolution procedures herein.

 

(e) In connection with any court proceeding relating to this Agreement or any Ancillary Agreement, Buyer and Seller hereto irrevocably waive any jury trial.

 

(f) The parties hereto each agree to the jurisdiction of any state or federal court sitting in the State of Florida and waive personal service of any and all process upon it, and consent that all services of process be made as provided herein and directed to it at its address as set forth in Section 6.1, and service so made shall be deemed to be completed when received. The parties hereto each waive any objection based on forum non convenience and waive any objection to venue of any action instituted hereunder. Nothing in this paragraph shall affect the right of the parties hereto to serve legal process in any other manner permitted by law.

 

6.7 Construction.

 

(a) For purposes of this Agreement, whenever the context requires: the singular number will include the plural, and vice versa; the masculine gender will include the feminine and neuter genders; the feminine gender will include the masculine and neuter genders; and the neuter gender will include the masculine and feminine genders.

 

(b) Any rule of construction to the effect that ambiguities are to be resolved against the drafting party will not be applied in the construction or interpretation of this Agreement.

 

(c) As used in this Agreement, the words "include" and "including" and variations thereof will not be deemed to be terms of limitation, but rather will be deemed to be followed by the words "without limitation.

 

 

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