ASSET PURCHASE AGREEMENT BY AND AMONG AURA SYSTEMS, INC. AND EMERALD COMMERCIAL LEASING, INC. MAY 15, 2008
EXECUTION
COPY
_______________________________
BY
AND AMONG
AURA
SYSTEMS, INC. AND
EMERALD
COMMERCIAL LEASING, INC.
MAY
15, 2008
_______________________________
Schedule
1.1 and General Assignment and ▇▇▇▇ of Sale
|
Schedule
1.1
|
Inventory
(Assets)
|
General
Assignment and ▇▇▇▇ of Sale
ii
This
Asset Purchase Agreement (this “Agreement”), dated May 15, 2008, effective as of
May 15, 2008, is made by and between Aura Systems, Inc., a Delaware corporation
(the “Buyer”), having its principal place of business at ▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇, ▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇ and Emerald Commercial Leasing, Inc. a Georgia
corporation (the “Seller”), having its principal place of business at ▇▇▇▇
▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇.
RECITALS
WHEREAS,
Seller
is
engaged in the business of leasing complete refrigeration transport systems,
which include, among other things, the design and installation of generators,
and refrigeration systems onto commercial diesel vehicles for use in interstate
commerce in the United States (the “Business”); and
WHEREAS,
Buyer
desires to purchase and Seller desires to sell certain inventory assets relating
to refrigeration transport systems as described below; and
WHEREAS,
this
Agreement sets forth the terms and conditions upon which the Buyer will purchase
from Seller, and Seller will sell to Buyer, the aforementioned inventory assets
for the consideration provided herein.
NOW
THEREFORE,
In
consideration of the foregoing, the mutual representations, warranties and
covenants set forth herein, and for other good and valuable consideration,
the
receipt and sufficiency of which are hereby acknowledged, the parties to this
Agreement hereby agree as follows:
ARTICLE
I
PURCHASE
AND SALE OF ASSETS
1.1 Agreement
of Sale and Purchase.
Seller
hereby sells, bargains, assigns, transfers and conveys to Buyer and Buyer hereby
purchases and acquires the following assets (the “Assets”) of Seller on the
terms and conditions set forth in this Agreement:
(a) all
right, title and interest of the Seller in and to the inventory attached hereto
in Schedule 1.1 (the “Assets”).
Seller
is
retaining any and all other assets and liabilities of the Business.
1.2 Purchase
Price.
The
purchase price for the Assets is $384,894.89.
1.3 Time
and Place of Closing.
The
closing of described herein (the “Closing”) shall take place simultaneously with
the execution of this Agreement. The date and time at which the Closing actually
occurs is hereinafter referred to as the “Closing Date.”
1.4 Execution
and Delivery of Documents of Title by the Seller.
At the
Closing, the Seller shall execute and deliver to the Buyer a general assignment
and ▇▇▇▇ of sale in form and substance acceptable to Buyer, (the “▇▇▇▇ of Sale”)
and such deeds, conveyances, certificates of title, assignments, assurances
and
other instruments and documents as the Buyer may reasonably request in order
to
effect the sale, conveyance, and transfer of the Assets from the Seller to
the
Buyer. Such instruments and documents shall be sufficient to convey to the
Buyer
good and marketable title in all of the Assets. The Seller will, from time
to
time after the Closing Date, take such additional actions and execute and
deliver such further documents as the Buyer may reasonably request in order
to
more effectively sell, transfer and convey the purchased Assets to the Buyer
and
to place the Buyer in position to operate and control all of the purchased
Assets.
1.5 Allocation
of the Purchase Price.
The
purchase price for the assets shall be allocated to the Assets as set forth
in
the attached Schedule 1.1, which represent the fair market value allocable
to
each of the Assets to be purchased by Buyer under this Agreement, were arrived
at by arm’s length negotiations, and shall be used by each party in reporting
the transaction contemplated by this Agreement for federal income tax purposes.
As to assets purchased at Buyer’s cost, such shall be noted in Schedule 1.1.
1.6 Waiver
of Compliance with the Bulk Sales Act.
In
connection with the transactions contemplated hereby, only if applicable, the
parties shall waive compliance with the provisions of Article 6 of the Uniform
Commercial Code - Bulk Transfers and the Bulk Sales Act, to the extent
applicable, and any other applicable United States, state or provincial bulk
sales act or statute (“Bulk Sales Acts”).
1.7 Payment
Terms. Subsequent
to the Closing, Buyer shall pay for each asset item in accordance with the
pricing set forth in Schedule 1.1, upon Buyer’s sale to third parties of its all
electric refrigeration transport mobile power systems, incorporating items
comprising the Assets contained in Schedule 1.1, net fifteen calendar days
of
Buyer’s receipt of payment for each such asset item sold. Payment to Seller of
the purchase price in total for the Assets shall be without interest to Buyer
and within a period not to exceed two years from the date Buyer takes physical
possession of the Assets.
ARTICLE
II
REPRESENTATIONS
AND WARRANTIES
OF
THE SELLER
2.1 The
Seller hereby represents and warrants to the Buyer that the following statements
are true and correct.
(a) Organization
and Qualification.
The
Seller is a corporation duly organized, validly existing and in good standing
under the laws of the state of its incorporation. The Seller has full corporate
power and authority to own, use and lease its properties and to conduct its
business as such properties are currently owned, used or leased and as such
business is currently conducted. The Seller is qualified to do business as
a
foreign corporation and is in good standing in each jurisdiction in which the
conduct of its business would require such qualification.
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(b) Authority;
No Violation.
The
Seller has all requisite corporate power and authority to enter into this
Agreement and to carry out the transactions contemplated hereby or thereby.
The
execution, delivery and performance by the Seller of this Agreement have been
duly and validly authorized and approved by all necessary corporate action.
This
Agreement constitutes the legal and binding obligation of the Seller,
enforceable in accordance with its terms. Assuming the accuracy of the
representations and warranties of the Buyer hereunder, the entering into of
this
Agreement by the Seller does not, and the consummation by the Seller of the
transactions contemplated hereby, including specifically the transfer of the
Assets to the Buyer by the Seller, will not violate the provisions of
(i) any applicable laws of the United States or any other state or
jurisdiction in which the Seller does business, or (ii) the Seller’s
Articles of Incorporation or Bylaws.
2.2 The
Seller hereby represents and warrants that it has no any actual knowledge that
any of the following statements are not true or correct in all material
respects.
(a) No
Violation.
The
consummation, execution, delivery and performance of this Agreement will not
conflict with any provision of, or result in a default or acceleration of any
obligation under, result in any change in the rights or obligations of the
Seller under or require any consent under, any Lien, contract agreement,
license, lease, instrument, indenture, order, arbitration award, judgment,
or
decree to which the Seller is a party or by which it is bound, or to which
any
property of the Seller is subject and which now has a material adverse effect
on
the Seller.
(b) Consents.
No
consent, waiver, approval, order or authorization of, or registration,
declaration or filing with, any court, administrative agency or commission
or
other federal, state, county, local or other foreign governmental authority,
instrumentality, agency or commission (“Governmental Entity”) or any third
party, including a party to any agreement with the Seller, is required by or
with respect to the Seller in connection with the execution and delivery of
this
Agreement and any related agreement, if any, to which the Seller is a party.
(c) Title
to the Purchased Assets.
Seller
has good and marketable title to all of the Assets, free and clear of all
charges, liens, commitments, claims, restrictions, leases or encumbrances of
every kind and nature.
(d) Condition
of Assets.
At the
time of delivery to Buyer, the Assets shall be in good repair and operating
condition, suitable for its intended uses, and Buyer shall have the right to
inspect the Assets prior to the closing.
(e) Liabilities.
Seller
does not have and will not have after the date of this Agreement any debts,
liabilities or obligations of any nature, whether accrued, absolute, contingent
or otherwise for which Buyer may become liable as a result of the transactions
contemplated by this Agreement.
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(f) Litigation.
There
are no claims pending or threatened (or any facts which could lead to such
a
claim) by, or against the Seller before any federal, state, local or foreign
court or any other governmental or administrative agency or tribunal or any
arbitrator or arbitration panel, and there are no judgments, orders, rulings,
charges, decrees, injunctions, notices of violation or other mandates against
the Seller to which the Seller is a party with respect to the business, property
or assets of the Seller.
(g) Brokers.
Neither
the Seller nor anyone acting on their behalf has engaged, retained, nor incurred
any liability to any broker, finder or agent or has agreed to pay any brokerage
fees, commissions, finder’s fees or other fees with respect to this Agreement or
the transactions contemplated hereby.
(h) Disclosure
of Material Information.
There is
no fact or circumstance known to the Seller which now or hereafter has a
material adverse effect on the Seller and which has not been set forth in this
Agreement or in any other document delivered or to be delivered in connection
herewith. Without limiting the generality of the foregoing, the Seller has
not
heretofore taken any actions, nor is there any existing fact or circumstance
relating to Seller, which now or hereafter has a material adverse effect on
Buyer after the consummation of the purchase and sale of the Assets contemplated
hereby.
(i) No
Misleading Statements.
No
representation, warranty or statement of Seller set forth in this Agreement
or
any Schedule to this Agreement contains or will contain any untrue statements
of
a material fact.
ARTICLE
III
REPRESENTATIONS
AND WARRANTIES OF THE BUYER
The
Buyer
hereby represents and warrants to the Seller as follows:
3.1 Organization
and Qualification.
The
Buyer is a corporation duly organized, validly existing and in good standing
under the laws of the state of Delaware, with full corporate power and authority
to own, use or lease its properties and to conduct its business as such
properties are owned, used or leased and as such business is conducted.
3.2 Authority.
The
Buyer has the requisite corporate power and authority to enter into this
Agreement and to carry out the transactions contemplated hereby or thereby.
The
execution, delivery and performance of this Agreement and any related document
by the Buyer has been duly and validly authorized and approved by all necessary
corporate action.
3.3 Brokers.
The
Buyer has not engaged, retained, or incurred any liability to any broker, finder
or agent or has agreed to pay any brokerage fees, commissions, finder’s fees or
other fees with respect to this Agreement or the transactions contemplated
hereby.
3.3 No
Misleading Statements.
No
representation, warranty or statement of Buyer set forth in this Agreement
or
any Schedule to this Agreement contains or will contain any untrue statements
of
a material fact.
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ARTICLE
IV
NO
ASSUMPTION OF LIABILITIES AND INDEMNIFICATION
4.1 Assumption
of Liabilities.
Buyer
is not assuming and shall not be obligated or liable for any of the liabilities,
obligations, contracts or commitments of Seller, whether now existing or arising
in the future. If Buyer pays or performs any expense, liability, obligation,
contract or commitment of Seller, Buyer shall be entitled to indemnification
from Seller pursuant to Section 4.2 below; provided that Buyer will promptly
notify Seller upon receipt of any such claim and will not pay or perform on
such
claim if Seller provides Buyer with assurances which are, in Buyer’s
determination, adequate to the effect that Seller will pay or perform what
is
properly due to the claimant.
4.2 Indemnification
of Buyer.
Seller
agrees to indemnify and hold harmless Buyer and its officers, directors,
stockholders, employees, and agents, from, against and in respect of:
(a) Any
and
all losses, damages or deficiencies resulting from any and all
misrepresentations or breaches of any warranty, provision or term by Seller
made
or contained in this Agreement or any Schedule hereto;
(b) The
assertion against Buyer of any claim by any creditor of or claimant against
Seller relating to an obligation or liability of Seller or to the operation,
ownership, use or maintenance prior to Closing of the Assets or Business of
Seller; and
(c) The
reasonable costs and expenses incident to any and all actions, suits,
proceedings, claims, demands, assessments or judgments in respect of any matter
for which Buyer is indemnified under Section 4.2(a) or (b) above, including
legal and accounting fees and expenses.
4.3 Indemnification
of Seller.
Buyer
agrees to indemnify and hold harmless Seller and its officers, directors,
stockholders, employees, and agents, from, against and in respect of:
(d) Any
and
all losses, damages or deficiencies resulting from any and all
misrepresentations or breaches of any warranty, provision or term by Buyer
made
or contained in this Agreement or any Schedule hereto;
(e) The
assertion against Seller of any claim by any creditor of or claimant against
Buyer relating to the operation, ownership, use or maintenance after the Closing
of the Assets of Seller; and
(f) The
reasonable costs and expenses incident to any and all actions, suits,
proceedings, claims, demands, assessments or judgments in respect of any matter
for which Seller is indemnified under Section 4.3(a) or (b) above, including
legal and accounting fees and expenses.
4.4 Cooperation.
If a
party to this Agreement (the “Indemnifying Party”) is indemnifying the other
party to this Agreement (the “Indemnified Party”), the Indemnified party agrees
to provide the Indemnifying Party such cooperation, information or assistance
as
the Indemnifying Party may reasonably request.
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ARTICLE
V
MISCELLANEOUS
5.1 Fees
and Expenses.
Each of
the parties hereto will pay and discharge its own expenses and fees in
connection with the negotiation of and entry into this Agreement and the
consummation of the transactions contemplated hereby.
5.2 Notices.
All
notices, requests, demands, consents and communications necessary or required
under this Agreement shall be made in the manner specified, or, if not
specified, shall be delivered by hand or sent by registered or certified mail,
return receipt requested, or by telecopy (receipt confirmed) or e-mail
to:
if
to the
Buyer:
Aura
Systems, Inc.
▇▇▇▇▇▇
▇▇▇▇▇▇▇▇, CEO and Chairman
▇▇▇
▇▇▇▇
▇▇▇▇▇▇
▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Facsimile
Transmission Number: (▇▇▇) ▇▇▇-▇▇▇▇
if
to the
Seller:
Emerald
Commercial Leasing, Inc.
▇▇▇▇▇▇
▇▇▇▇▇▇▇, President and Sole Stockholder
▇▇▇▇
▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇,
▇▇ ▇▇▇▇▇
Facsimile
Transmission Number: (▇▇▇) ▇▇▇-▇▇▇▇
All
such
notices, requests, demands, consents and other communications shall be deemed
to
have been duly given or sent two (2) days following the date on which mailed,
or
on the date on which delivered by hand or by facsimile transmission (receipt
confirmed), as the case may be, and addressed as aforesaid.
5.3 Successors
and Assigns.
All
covenants and agreements set forth in this Agreement and made by or on behalf
of
any of the parties hereto shall bind and inure to the benefit of the successors
and assigns of such party, whether or not so expressed, except that neither
party may assign or transfer any of their respective rights or obligations
under
this Agreement without the consent in writing of the other, except in connection
with a merger of such party with a third party or a sale of all or substantially
all the assets or stock of such party to a third party.
5.4 Counterparts;
Descriptive Headings; Variations in Pronouns.
This
Agreement may be executed in any number of counterparts and by the different
parties hereto on separate counterparts, each of which when so executed and
delivered shall be an original, but all of which together shall constitute
one
and the same instrument, and it shall not be necessary in making proof of this
Agreement to produce or account for more than one such counterpart. The headings
of the sections and paragraphs of this Agreement have been inserted for
convenience of reference only and shall not be deemed to be part of this
Agreement. All pronouns and any variations thereof refer to the masculine,
feminine or neuter, singular or plural, as the identity of the person or persons
may require.
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5.5 Severability;
Entire Agreement.
If any
provision contained herein is held unenforceable, the enforceability of any
such
provision in every other respect and of the remaining provisions hereof shall
not be in any way impaired or affected. This Agreement, including the Schedule
and ▇▇▇▇ of Sale referred to herein, is complete, and all promises,
representations, understandings, warranties and agreements with reference to
the
subject matter hereof, and all inducements to the making of this Agreement
relied upon by any of the parties hereto, have been expressed herein or in
said
Schedule and ▇▇▇▇ of Sale. This Agreement may not be amended except by an
instrument in writing signed on behalf of the Seller and the Buyer.
5.6 Attorneys’
Fees.
In any
action or proceeding brought to enforce any provision of this Agreement the
successful party shall be entitled to recover reasonable attorneys’ fees in
addition to any other available remedy.
5.7 Course
of Dealing.
No
course of dealing and no delay on the part of any party hereto in exercising
any
right, power, or remedy conferred by this Agreement shall operate as a waiver
thereof or otherwise prejudice such party’s rights, powers and remedies. The
failure of any of the parties to this Agreement to require the performance
of a
term or obligation under this Agreement or the waiver by any of the parties
to
this Agreement of any breach hereunder shall not prevent subsequent enforcement
of such term or obligation or be deemed a waiver of any subsequent breach
hereunder. No single or partial exercise of any rights, powers or remedies
conferred by this Agreement shall preclude any other or further exercise thereof
or the exercise of any other right, power or remedy.
5.8 GOVERNING
LAW.
THIS
AGREEMENT, INCLUDING THE VALIDITY HEREOF AND THE RIGHTS AND OBLIGATIONS OF
THE
PARTIES HEREUNDER, SHALL BE CONSTRUED IN ACCORDANCE WITH AND GOVERNED BY THE
LAWS OF THE STATE OF CALIFORNIA WITHOUT
REGARD TO PRINCIPLES OF CONFLICTS OF LAWS.
JURISDICTION
AND VENUE FOR ANY ACTION COMMENCED SHALL BE IN LOS ANGELES SUPERIOR COURT OR
THE
UNITED STATES DISTRICT COURT, CENTRAL DISTRICT OF CALIFORNIA. THIS AGREEMENT
IS
MADE SUBJECT TO AND IN ACCORDANCE WITH THE SECURITIES LAWS OF THE UNITED
STATES.
[Remander
of page intentionally left blank. Signature page to follow.]
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IN
WITNESS WHEREOF
the
parties hereto have executed this Agreement under seal as of the date first
set
forth above.
| EMERALD COMMERCIAL LEASING, INC. | |||
|
By:
|
|||
| Name: ▇▇▇▇▇▇ ▇▇▇▇▇▇▇ | |||
| Title: President and Sole Stockholder | |||
|
ATTEST:
|
AURA SYSTEMS, INC. | ||
|
By:
|
|||
| Name: ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ | |||
| Title: Chairman and Chief Executive Officer | |||
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