ASSET PURCHASE AND INDEMNITY AGREEMENT
This
Asset Purchase and Indemnity Agreement (this “Agreement”)
is
made and entered into as of this 16 day of October, 2007 by and among Fireline
Restoration, Inc., a Florida corporation as the purchaser (the “Purchaser”),
RG
America, Inc., a Nevada corporation (“RGA”)
and
the following RGA subsidiaries: Restoration Group America 2003, Inc., a Texas
corporation, Restoration Group America, Inc., a Texas corporation (“Restoration
Group America”),
RG
Restoration, Inc., a Texas corporation, RG Insurance Services, Inc., a Texas
corporation, CTFD, Inc., a Texas corporation (“CTFD”),
CTFD
Marine, Inc., a Texas corporation (“CTFD
Marine”),
RG
Risk Management, Inc., a Texas corporation (“RGRM”),
Invvision Funding, Inc., a Texas corporation, Practical Building Solutions
2000,
Inc., a Texas corporation, and RG Florida GC, Inc., a Florida corporation,
as
the seller (RGA and the foregoing subsidiaries are referred to herein
collectively as the “Seller”
and
individually as a “Seller
Entity”).
R E C I T A L S:
A. The
Seller desires to sell to the Purchaser, and the Purchaser desires to purchase
from the Seller, certain equipment and vehicles comprising the Assets (as
defined below) used in the restoration and construction business and Restoration
Group America’s PropertySMARTTM
risk
management program (the restoration and construction business and the
PropertySMARTTM
risk
management program are collectively referred to herein as the “Business”).
B. Laurus
Master Fund, Ltd. (“Laurus”)
has
provided financing to the Seller (the “Laurus
Debt”)
and in
connection therewith was granted Liens (as defined below) on all assets of
the
Seller, including, without limitation, Liens on the Assets (as defined below),
all pursuant to that certain Security Agreement dated as of October 1,
2005.
C. The
Purchaser is a party to that certain Consulting Agreement, dated as of March
2007 (the “Consulting
Agreement”),
among
Home Solutions of America, Inc., a Delaware corporation and parent company
of
the Purchaser (“HSOA”),
RGA
and certain of RGA’s subsidiaries that are parties thereto, whereby, among other
things, RGA and certain of the RGA subsidiaries granted to the Purchaser certain
of their respective rights to collect certain accounts receivable (the
“Consulting
Assets”).
D. Laurus
and HSOA are parties to that certain Release Agreement of even date herewith
(the “Release
Agreement”),
whereby Laurus has agreed, among other things, to release its Liens on all
of
the assets of RGA and its subsidiaries, including the Assets, and whereby HSOA
has agreed to issue to Laurus, 2,000,000 shares of its common stock, par value
$.001 per share (the “Shares”).
E. At
the
closing of the transactions contemplated by this Agreement, HSOA has agreed
to
enter into the Royalty Agreement with RGRM in the form attached hereto as
Exhibit
“A”
(the
“Royalty
Agreement”),
pursuant to which HSOA agrees to pay RGRM the Royalty (as defined in the Royalty
Agreement).
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F. HSOA
enters into this Agreement for the limited purpose of agreeing to enter into
the
Royalty Agreement with RGRM.
A G R E E M E N T:
NOW,
THEREFORE, for and in consideration of the premises, the mutual covenants and
agreements contained in this Agreement, and for other good and valuable
consideration, the receipt and sufficiency of which are hereby acknowledged,
the
Seller and the Purchaser agree as follows:
ARTICLE
I
PURCHASE
AND SALE
1.01 Purchase
and Sale of Assets.
Subject
to the terms and conditions in this Agreement, the Seller agrees to sell and
convey, and the Purchaser agrees to purchase and accept, all of the Seller’s
right, title and interest in and to (i) the equipment and vehicles listed on
Schedule
1.01
together
with all ownership and maintenance records, title certificates, and warranties
related thereto and (ii) the PropertySMARTTM
risk
management program as described on Schedule
1.01
(collectively, the “Assets”),
free
and clear of any and all liens, prior assignments, security interests, charges,
pledges, claims or encumbrances of any kind or character whatsoever
(collectively, “Liens”),
except for the Lien set forth on Schedule
3.05.
1.02 Purchase
Price.
The
purchase price for the Assets (the “Purchase
Price”)
is (i)
HSOA obtaining Laurus’ release of the Laurus Debt and its Liens on the Assets
pursuant to the Release Agreement, in exchange for HSOA’s issuance of the Shares
to Laurus pursuant to and in accordance with the Release Agreement; and (ii)
the
amounts due to RGRM pursuant to the Royalty Agreement. The Seller acknowledges
and agrees that Laurus’ release of the Laurus Debt and its Liens on the Assets
in exchange for HSOA’s issuance of the Shares to Laurus, and the amounts due to
RGRM pursuant to the Royalty Agreement are material benefits to the Seller
and
as such, represent sufficient consideration for the sale of the Assets to the
Purchaser.
1.03 Date,
Time and Place of Closing.
The
closing of the transactions contemplated by this Agreement (the “Closing”)
shall
take place at the offices of the Seller at 10:00 a.m., local time, on November
5, 2007, or as promptly as practicable thereafter as soon as the conditions
set
forth in Article
VI
are
satisfied, or at such other date, time or place fixed by mutual written consent
of the Purchaser and the Seller, but in no event later than November 30, 2007,
unless the Purchaser agrees to extend such date (such date, as it may be
extended, the “Termination
Date”).
All
proceedings to take place at the Closing shall take place simultaneously, and
no
delivery shall be considered to have been made until all such proceedings have
been completed (the date of such Closing is referred to herein as the
“Closing
Date”).
1.04 Effective
Time.
The
transactions contemplated by this Agreement shall be deemed effective for tax
and all other purposes as of 8:00 a.m., Dallas, Texas time, on the Closing
Date
(the “Effective
Time”),
unless otherwise mutually agreed in writing by the parties. Notwithstanding
the
foregoing, for accounting purposes, the effective time of the transactions
contemplated by this Agreement shall be the effective time determined by
Purchaser as reflected in its books and records.
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1.05 Assumed
Liabilities.
Purchaser is not assuming any liability or obligation of the Seller or with
respect to the Assets, including, without limitation, accounts payable, or
any
obligations with respect to the Seller’s lenders and creditors.
1.06 Instruments
Delivered at Closing.
(a) At
the
Closing, the Seller shall execute and/or deliver to the Purchaser:
(i) a
▇▇▇▇ of
sale, in form and substance satisfactory to the Purchaser, for the
Assets;
(ii) such
other instruments of transfer as the Purchaser shall deem necessary or
appropriate to convey the Assets to the Purchaser, including, without
limitation, assignments of patents, trademarks and other intellectual property
rights sufficient to transfer the rights to the PropertySMARTTM
risk
management program to the Purchaser, and individual assignments and bills of
sale for each vehicle and piece of equipment comprising a portion of the Assets
in forms reasonably acceptable to Purchaser, title certificates, and such other
documents, bills of sale, certificates of title, endorsements, assignments
and
instruments necessary, advisable or desirable to vest in Purchaser good and
marketable title to all of the Assets;
(iii) such
keys
and other similar items as the Purchaser shall require to obtain full
occupation, possession and control of the Assets;
(iv) written
consents from all third parties required for the transfer and assignment of
the
Assets;
(v) corporate
resolutions of each Seller Entity pursuant to Section 3.02.
(b) At
the
Closing, the Purchaser shall cause to be delivered to the Seller:
(i) a
counterpart to the Royalty Agreement, duly executed by HSOA; and
(ii) corporate
resolutions pursuant to Section
4.01.
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ARTICLE
2
COSTS
AND ALLOCATIONS
2.01 Closing
Costs.
The
Purchaser shall pay any sales and other transfer tax attributable to the
transfer of the Assets to the Purchaser. All legal, accounting, or other costs
incurred by the Seller or the Purchaser in connection with the transactions
contemplated herein shall be borne by the party who incurred such costs;
provided, however, that the Purchaser agrees to reimburse the Seller for bona
fide legal fees incurred by the Seller solely in connection with the negotiation
of the transactions contemplated by this Agreement and the preparation and
filing of the Information Statement (as defined in Section
4.04
herein),
subject to the offset rights of HSOA set forth in the Royalty Agreement, in
an
amount not to exceed Fifty Thousand and NO/100 Dollars ($50,000.00), upon the
Purchaser’s receipt of invoice from the Seller’s legal counsel.
2.02 Allocation
of Purchase Price.
The
Seller and the Purchaser agree to allocate the Purchase Price among the Assets
on the basis set forth on Exhibit
“B”.
The
Seller and the Purchaser agree to furnish such reports and returns to the
Internal Revenue Service and the Secretary of the Treasury as may be required
by
Section 1060 of the Internal Revenue Code of 1986, as amended and Treasury
Regulations thereunder, and such returns or reports shall be consistent with
the
allocation of Purchase Price set forth on Exhibit
“B”.
2.03 Liabilities.
Except
for the liabilities set forth on Section
2.03
of the
Seller’s Disclosure Schedule (herein so called), Purchaser shall not assume and
shall not be liable for or obligated to pay or assume, and none of the Assets
or
the assets of Purchaser shall be or become liable for or subject to, any
liability, indebtedness, commitment or obligation of any Seller Entity or any
of
their Affiliates (as hereinafter defined), whether known or unknown, fixed
or
contingent, recorded or unrecorded, currently existing or hereafter arising
or
otherwise. As used herein, the term “Affiliate”
shall
mean, with respect to any party to this Agreement, any entity or person that
directly or indirectly controls, is controlled by or is under common control
with such party. The Seller agrees that the Seller will pay all of its
liabilities.
2.04 Prorations.
All
insurance, licenses, etc. shall be prorated between the Purchaser and the Seller
as of the day of Closing.
2.05 Covenants
and Further Assurance.
The
Seller shall, at any time and from time to time after the Closing Date, upon
request of the Purchaser and without further cost or expense to Purchaser,
execute and deliver such instruments of conveyance and assignment and shall
take
such actions as the Purchaser may reasonably request to more effectively carry
out the transactions contemplated by this Agreement.
ARTICLE
III
REPRESENTATIONS
OF SELLER
Each
Seller Entity, jointly and severally, represents to the Purchaser the
following:
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3.01 Good
Standing.
RGA is
a corporation duly organized, validly existing and in good standing under the
laws of the State of Nevada. Each Seller Entity is a corporation duly organized,
validly existing and in good standing under the laws of the state in which
it is
incorporated.
3.02 Corporate
and Stockholder Approval.
This
Agreement, and the execution, delivery and performance of same, have been duly
approved by the Seller (and each Seller Entity) and constitutes a valid and
binding obligation against the Seller (and each Seller Entity), enforceable
in
accordance with its terms, subject as to enforceability, to bankruptcy,
insolvency reorganization, moratorium and other laws of general applicability
relating to or affecting creditors’ rights and to general principles of equity
(regardless of whether such enforceability is considered in a proceeding in
equity or at law). A copy of all corporate resolutions of each Seller Entity
approving this Agreement and the transactions contemplated hereby shall be
delivered by the Seller to the Purchaser upon the execution hereof. Other than
the RGA Stockholder Consent (as hereinafter defined), no consent, approval,
or
order of any person, entity, organization, third party, lender, creditor or
the
shareholders of any entity is required in connection with the execution,
delivery or performance of the transactions contemplated by this
Agreement.
3.03 Conflicts;
Defaults.
The
execution and delivery of this Agreement and the performance by the Seller
of
the transactions contemplated hereby, do not and will not (a) violate, conflict
with, or constitute a breach or default under any of the terms of the
certificate of incorporation, articles of incorporation, bylaws, or other
organizational documents of the Seller (or any entity comprising the Seller),
(b) result in the creation or imposition of any Liens in favor of any third
party upon any of the Assets or the Business, (c) violate or require any
authorization, approval, consent or other action by, or registration,
declaration or filing with or notice to any governmental authority pursuant
to
any law, statute, judgment, decree, injunction, order, writ, rule or regulation
of any governmental authority affecting the Business or the Assets, or (d)
conflict with or result in a breach of, create an event of default (or event
that, with the giving of notice or lapse of time or both, would constitute
an
event of default) under, any contract, lease, agreement, note, deed of trust,
indenture, order, judgment or decree to which any Seller is a party or by which
any Seller or any of the Assets is bound or affected.
3.04 Enforceability.
This
Agreement has been, and the other agreements and instruments to be executed
and
delivered by the Seller in connection herewith will be, on or prior to the
Closing Date, duly executed and delivered by each Seller Entity and (assuming
due authorization, execution and delivery hereof by the Purchaser) constitute
or, upon execution and delivery, will constitute the valid, legal and binding
obligations of each Seller Entity, enforceable against each Seller Entity in
accordance with their respective terms; subject as to enforceability, to
bankruptcy, insolvency, reorganization, moratorium and other laws of general
applicability relating to or effecting creditors’ rights and the exercise of
judicial discretion in accordance with principles of equity.
3.05 Clear
Title.
The
Seller is the owner of, and has good and marketable title to, all of the Assets.
Except as set forth on Schedule
3.05
of the
Seller’s Disclosure Schedule, the Assets are owned by the Seller, and shall be
delivered to the Purchaser, free and clear of all Liens.
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3.06 Adverse
Agreements and Changes.
The
Seller is not (a) a party to any agreement or instrument, or to the best of
Seller’s knowledge, subject to any judgment, order, writ, injunction, decree,
rule or regulation which materially adversely affects the Assets or the
Business, or (b) aware of any pending event or condition which will have a
material adverse impact on the Assets or Business, except
as
set forth on Schedule
3.08
of the
Seller’s Disclosure Schedule.
3.07 Brokers
or Finders Fees.
No
person is entitled to compensation by reason of any agreement or understanding
with the Seller, as a broker or finder in connection with the sale and purchase
of the Assets.
3.08 Litigation.
Except
as set forth on Schedule
3.08
of the
Seller’s Disclosure Schedule, there is not pending or, to the best knowledge of
the Seller, threatened, any litigation, action, suit, arbitration,
investigation, inquiry, audit, complaint, charge, or other proceeding to which
the Seller is a party involving the Assets or Business, or to which the Assets
or the Business is or could be subject, before or by any court or governmental
or regulatory agency or body.
3.09 Assets.
Schedule
1.01
contains
a true, complete and accurate list of all of the Assets, including (i) for
vehicles and equipment comprising a portion of the Assets, a description of
each
vehicle or piece of equipment, the year of manufacture, the complete address
of
its location, the state of registration, and title registration number(s),
the
name of the Seller Entity owning each such Asset, and the name of the Seller
Entity in which title for each such Asset is registered, respectively, and
(ii)
with respect to PropertySMARTTM
risk
management program, a complete description of such program.
3.10 Stockholder
Consent.
RGA has
obtained the written affirmative consent of no less than 66 2/3% of the
stockholders of RGA in connection with the execution, delivery or performance
of
this Agreement and the consummation of the transactions contemplated hereby
(“RGA
Stockholder Consent”).
A
true and correct copy of the RGA Stockholder Consent has been delivered to
the
Purchaser. No stockholder of RGA has rescinded its consent or informed Seller
that such stockholder intends to rescind its consent.
3.11Absence
of Undisclosed Information.
Except
as set forth on Schedule
3.11
of the
Seller’s Disclosure Schedule, the Assets are not subject to (i) any liabilities
or obligations of any nature, fixed or contingent, or any facts that might
give
rise to any such liabilities or obligations, which would materially adversely
affect the Assets, or (ii) any liabilities or adverse claims against or relating
to the Assets.
3.12 Personal
Property Leases.
None of
the Assets are subject to a personal property, vehicle, equipment or other
lease
or contingent sale arrangement.
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3.13 Taxes.
(a) Each
Seller Entity has, on the Closing Date will have, (i) timely filed all returns,
schedules and declarations (including any withholding and information returns)
required to be filed by any jurisdiction to which any Seller Entity is or has
been subject with respect to any Taxes (as defined below), all of which returns,
schedules and declarations are, or will, when filed by the applicable filing
date (including any extensions thereof), be true, complete, accurate and correct
in all material respects, (ii) paid in full all Taxes due and payable (or
claimed to be due and payable by any federal, state, local or foreign Taxing
authority), including all taxes on the Assets, (iii) paid or finally settled
all
Tax deficiencies asserted or assessed against any Seller Entity, and (iv) made
timely payments to the proper governmental authorities of the Taxes required
to
be deducted and withheld from the wages paid to its employees.
(b) No
Seller
Entity (i) is delinquent in the payment of any Tax, (ii) has been granted an
extension of time to file any Tax return which has expired, or will expire,
on
or before the Closing Date without such return having been filed, and (iii)
has
granted to any other person or entity a power of attorney or similar
authorization with respect to the settlement of its liability for
Taxes.
(c) No
deficiencies for any Tax has been claimed, proposed or assessed (whether or
not
finally or tentatively, orally or in writing), no requests for waivers of the
time to assess any deficiency for any Taxes are pending, and there are no
pending or threatened Tax audits, investigations or claims for or relating
to
(i) the assessment or collection of Taxes, or (ii) a claim for refund made
with
respect to Taxes previously paid. There are no matters under discussion or
dispute with any governmental authorities with respect to Taxes that may have
been raised, nor are there any issues Seller believes will be raised in the
future, by any Taxing authority with respect to Taxes accruing on or prior
to
the Closing Date.
(d) There
are, and as of the Closing Date there will be, no Liens for Taxes upon the
Assets except for statutory Liens for Taxes not yet due and not delinquent.
On
the Closing Date, Purchaser will take title to the Assets free and clear of
all
Liens for Taxes except for statutory Liens for Taxes not yet due and not
delinquent.
As
used
in this Agreement, “Taxes”
(and
all derivations thereof) means all federal, state, local and foreign income,
sales, use, property, payroll and other taxes imposed by any governmental
authority with respect to the ownership, operation, transfer or use of the
Business or the Assets, or in any other way relating to the Business or the
Assets.
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3.14 Environmental Laws. To the best knowledge of each Seller Entity, neither any Seller Entity nor the Business is or has been (a) subject to any environmental hazards, risks, or liabilities, or (b) in violation of any federal, state or local statutes, regulations, laws or orders pertaining to environmental matters, including, without limitation, the Comprehensive Environmental Response, Compensation and Liability Act of 1980 (“CERCLA”), as supplemented and amended, 42 U.S.C. Section 9601 et seq.; the Resource Conservation and Recovery Act, as amended (“RCRA”), 42 U.S.C. Section 6901, et seq.; the Federal Clean Air Act, 42 U.S.C. Section 7401, et seq.; the Federal Water Pollution Control Act, Federal Clean Water Act of 1977, 33 U.S.C. Section 1251, et seq.; Federal Hazardous Materials Transportation Act, 48 U.S.C. Section 1801, et seq.; Federal Toxic Substances Control Act, 15 U.S.C. Section 2601, et seq.; and the Federal Safe Drinking Water Act, 42 U.S.C. Section 300f, et seq. To the best knowledge of each Seller Entity, no Hazardous Substances (which for purposes of this Section 3.14 shall mean and include any hazardous or toxic substances, pollutants, contaminants, materials or wastes, including but not limited to those substances, pollutants, contaminants, materials and wastes listed in the United States Department of Transportation Table (49 CFR 172.101) or by the Environmental Protection Agency as hazardous substances pursuant to 40 CFR Part 302, or such substances, materials and wastes which are regulated under any federal environmental law or any applicable local or state environmental law, including without limitation CERCLA, ECRA, RCRA; toxic substances as defined under the Toxic Substance Control Act, 15 U.S.C. 2601, et seq.; or any of the following: hydrocarbons, petroleum and petroleum products, asbestos, polychlorinated biphenyls, formaldehyde, radioactive substances, flammables and explosives) have been and through the Closing Date will be, disposed of or released or discharged from or onto (including groundwater contamination) any Asset or any place where the Business has been operated or services have been provided by any Seller Entity in violation of any applicable environmental statute, regulation, or ordinance. To the best knowledge of each Seller Entity, neither any Seller Entity, nor any Affiliate of any Seller Entity has allowed any Hazardous Substances to be discharged, possessed, managed, processed, or otherwise handled in a manner which is in violation of applicable law, and each Seller Entity has complied and is compliant with all environmental laws applicable to the Assets. Neither any Seller Entity nor its Affiliates or agents have received any communication (written or oral) that alleges that any Seller Entity or the Business is not in compliance with all applicable environmental laws.
3.15 Full
Disclosure.
The
information provided and to be provided by the Seller to Purchaser in this
Agreement, in the Schedules attached hereto or in any other writing pursuant
hereto does not and will not contain any untrue statement of a material fact
and
does not and will not omit to state a material fact required to be stated herein
or therein or necessary to make the statements contained herein or therein,
in
light of the circumstances in which they are made, not false or misleading.
Copies of all statements, reports, documents and other materials heretofore
or
hereafter delivered or made available to the Purchaser pursuant hereto and
thereto were or will be at the time of their delivery to the Purchaser true,
complete and accurate copies of such statements, reports, documents and other
materials.
3.16 Intellectual
Property.
(a) The
Seller (i) owns and has independently developed or acquired or (ii) has the
valid right or license to all Seller IP Rights (as hereinafter defined) relating
to the Assets. The Seller IP Rights are sufficient for the conduct of
PropertySMARTTM
risk
management program as it has been historically conducted in all material
respects.
(b) Seller
has not transferred ownership of any Intellectual Property that is or was
Seller-Owned IP Rights and that relates or was related to the Assets to any
third party or knowingly permitted Seller’s rights in any Intellectual Property
that is or was Seller-Owned IP Rights to enter the public domain or, with
respect to any Intellectual Property for which Seller has submitted an
application or obtained a registration, lapse (other than through the expiration
of registered Intellectual Property at the end of its maximum statutory
term).
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(c) Seller
owns and has good and exclusive title to each item of Seller-Owned IP Rights
and
each item of Seller Registered Intellectual Property that comprises a portion
of
the Assets, free and clear of any Liens (other than non-exclusive licenses
granted by Seller in the ordinary course of its business consistent with past
practice on its standard form of customer agreement and on terms materially
similar to such standard form). “Seller
Registered Intellectual Property”
means
all United States, international and foreign: (i) patents and patent
applications (including provisional applications); (ii) registered trademarks,
applications to register trademarks, intent-to-use applications or other
registrations or applications related to trademarks; (iii) registered Internet
domain names; (iv) registered copyrights and applications for copyright
registration; and (v) any other Intellectual Property that is the subject of
an
application, certificate, filing, registration or other document issued, filed
with or recorded by any governmental authority owned by, registered or filed
in
the name of Seller. “Third-Party
Intellectual Property Rights”
means
any Intellectual Property owned by a third party.
(d) Schedule
3.16
of the
Seller Disclosure Schedule lists all Seller Registered Intellectual Property
that comprises a portion of the Assets, including the jurisdictions in which
each such item of Intellectual Property has been issued or registered or in
which any application for such issuance and registration has been filed or
in
which any other filing or recordation has been made.
(e) All
registration, maintenance and renewal fees currently due in connection with
each
item of Seller Registered Intellectual Property have been paid and all
documents, recordations and certificates in connection with such Seller
Registered Intellectual Property currently required to be filed have been filed
with the relevant patent, copyright, trademark or other authorities in the
United States or foreign jurisdictions, as the case may be, for the purposes
of
prosecuting, maintaining and perfecting such Seller Registered Intellectual
Property and recording the Seller’s ownership interests therein.
(f) There
are
no royalties, honoraria, fees or other payments payable by the Seller to any
person or entity (other than salaries payable to employees, consultants and
independent contractors not contingent on or related to use of their work
product), as a result of the ownership, use, possession, license-in,
license-out, sale, marketing, advertising or disposition of any Seller-Owned
IP
Rights by Seller.
(g) To
the
best knowledge of the Seller, there is no unauthorized use, unauthorized
disclosure, infringement or misappropriation of any Seller-Owned IP Rights
by
any third party, including any employee or former employee of Seller. Seller
has
not brought any action, suit or proceeding for infringement or misappropriation
of any Intellectual Property or breach of any Seller IP Rights
Agreement.
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(h) To
the
best knowledge of the Seller, no current or former employee, consultant or
independent contractor of Seller has any right, license, claim or interest
whatsoever in or with respect to any Seller-Owned IP Rights.
For
purposes of this Agreement, (i) “Intellectual
Property”
means
any and all worldwide industrial and intellectual property rights and all rights
associated therewith, including all patents and applications therefor and all
reissues, divisions, renewals, extensions, provisionals, continuations and
continuations-in-part thereof, all inventions (whether patentable or not),
invention disclosures, improvements, trade secrets, proprietary information,
know how, technology, technical data, proprietary processes and formulae,
algorithms, specifications, customer lists and supplier lists, all industrial
designs and any registrations and applications therefor, all trade names, logos,
common law trademarks and service marks, trademark and service ▇▇▇▇
registrations and applications therefor, Internet domain names, Internet and
World Wide Web URLs or addresses, all copyrights, copyright registrations and
applications therefor, and all other rights corresponding thereto, all mask
works, mask work registrations and applications therefor, and any equivalent
or
similar rights in semiconductor masks, layouts, architectures or topology,
all
computer software, including all source code, object code, firmware, network
and
network equipment monitoring, management and security related tools and
utilities, development tools, files, records and data, all schematics, netlists,
test methodologies, test vectors, emulation and simulation tools and reports,
hardware development tools, and all rights in prototypes, breadboards and other
devices, all databases and data collections and all rights therein, all moral
and economic rights of authors and inventors, however denominated, and any
similar or equivalent rights to any of the foregoing, and all tangible
embodiments of the foregoing, (ii) “Seller
IP Rights”
means
any and all Intellectual Property related to the Assets, and (iii) “Seller-Owned
IP Rights”
means
Seller IP Rights that are owned or are purportedly owned by Seller.
3.17 No
Violation.
The
execution, delivery and performance of this Agreement and all other agreements
and instruments executed and delivered by the Seller in connection with this
Agreement and the consummation of the transactions contemplated hereby and
thereby will not conflict with or result in the breach of any term or provision
of, or violate or constitute a judgment, decree, writ, law or regulation to
which the Seller is a party or by which the Seller is in any way bound or
obligated.
3.18 Representations
as of the Effective Date and Closing.
The
Seller Entities’ representations set forth in this Agreement shall be true on
and as of the date of this Agreement and the Closing as though such
representations were made on and as of such times.
3.19 Disclaimer
of Other Representations and Warranties.
Except
as expressly set forth in this Article
III,
the
Seller makes no representations or warranties, express or implied, at law or
in
equity, in respect of any of its assets (including, without limitation, the
Assets), liabilities or operations, including without limitation, with respect
to merchantability or fitness for any particular purpose, and any such other
representations or warranties are hereby expressly disclaimed. The Purchaser
hereby acknowledges and agrees that, except to the extent specifically set
forth
in this Article
III,
the
Purchaser is purchasing the Assets on an “as-is, where-is basis.” Without
limiting the generality of the foregoing, the Seller makes no representation
or
warranty regarding any assets other than the Assets and none shall be implied,
at law or in equity.
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ARTICLE
IV
AGREEMENTS
OF THE PARTIES
4.01 Access
and Information.
Each
Seller Entity shall afford to the Purchaser and Purchaser’s accountants, counsel
and other representatives full and reasonable access from time to time
throughout the period from the date hereof until the Closing Date to Seller’s
properties, books, contracts, commitments, personnel and records relating to
the
Business and the Assets, and, during such period, each Seller Entity will (or
will cause its representatives to) furnish to the Purchaser and the Purchaser’s
accountants, counsel and other representatives copies of such documents and
all
such other information as the Purchaser may reasonably request as well as any
other information that the Purchaser or its accountants, counsel and other
representatives deem necessary to complete any filings necessary under the
Securities Act of 1933, as amended (the “Securities
Act”)
or the
Securities Exchange Act of 1934, as amended (the “Exchange
Act”).
4.02 Conduct
of the Business Pending Closing.
From
the date hereof through the Closing Date:
(a) Ordinary
Course of Business.
Each
Seller Entity shall use all reasonable efforts to preserve the business
organization of the Business intact, and to preserve for Purchaser the goodwill
of those suppliers, customers, employees and others having business relations
involving the Assets;
(b) Operation
of Business.
Each
Seller Entity shall maintain the Assets in good order and condition, subject
to
ordinary wear and tear;
(c) Contracts.
No
Seller Entity shall enter into any contract, purchase order or other commitment
directly or indirectly affecting the Assets, except contracts and commitments
entered into in the ordinary course of business consistent with past practices,
which are freely transferable to Purchaser without the consent of any party,
and
with respect to which Seller has obtained Purchaser’s prior written
consent;
(d) Material
Adverse Effect.
Seller
shall give prompt written notice (but not later than two (2) business days
after
the occurrence thereof) to Purchaser of any (i) Material Adverse Effect; and
(ii) change that would render any representation or warranty made by any Seller
Entity hereunder untrue or incomplete in any material respect as of the date
of
such change;
(e) Compliance
with Representations and Warranties.
Without
limiting the foregoing, each Seller Entity agrees that it shall not take any
action or permit to occur any event, directly or indirectly within the control
of Seller, that would cause any representation or warranty contained herein
to
be inaccurate or untrue on or prior to the Closing Date; and
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(f) Consents.
Each
Seller Entity shall use its best efforts to obtain all consents and approvals
of
third parties necessary for the consummation of the transactions contemplated
by
this Agreement.
4.03 Exclusivity.
From and
after the date hereof through the Closing Date, no Seller Entity nor any of
their respective Affiliates, partners, shareholders, officers, directors,
employees, or agents, shall, directly or indirectly, solicit, initiate or engage
in or continue (including without limitation, furnishing any information
concerning the Assets) discussions, inquiries or proposals, or enter into any
negotiations for the purpose or with the intention of leading to any proposal,
concerning the acquisition or purchase by any other party of the Business or
any
part thereof or any Asset.
4.04 Stockholders’
Consent; Information Statement.
(a) RGA
shall, as soon as practicable after the execution of this Agreement, distribute
to its stockholders, the RGA Stockholder Consent; together with the written
recommendation of the Board of Directors of RGA that the terms of this Agreement
are fair to and in the best interest of the stockholders of RGA and declaring
this Agreement to be advisable.
(b) As
promptly as practicable but in no event later than ten (10) days after the
execution of this Agreement, RGA, after consultation with Purchaser, shall
file
an information statement (the “Information
Statement”)
under
and pursuant to the provisions of the Exchange Act. RGA, after consultation
with
Purchaser, shall respond promptly to all comments made by the Securities and
Exchange Commission (the “SEC”)
with
respect to the preliminary Information Statement and cause a definitive
Information Statement to be filed with the SEC and mailed to its stockholders,
as required by the Exchange Act. RGA will notify Purchaser promptly of the
receipt of any comments from the SEC or its staff and of any request by the
SEC
or its staff for amendments or supplements to the Information Statement, or
for
additional information, and will supply Purchaser with copies of all
correspondence between RGA and the SEC or its staff with respect to the
Information Statement. RGA shall provide draft Information Statements to
Purchaser and use commercially reasonable efforts to accept Purchaser’s comments
related thereto.
(c) Each
of
Purchaser and RGA agrees to provide as promptly as practicable to the other
such
information concerning its business and financial statements and affairs as,
in
the reasonable judgment of the other party, may be required or appropriate
for
inclusion in the Information Statement or in any amendments or supplements
thereto, and to cause its counsel and auditors to cooperate with the other’s
counsel and auditors in the preparation of the Information
Statement.
(d) At
the
time the Information Statement is mailed to RGA’s stockholders, RGA will ensure
that the Information Statement will (i) not contain any untrue statement of
a
material fact, or omit to state any material fact required to be stated therein
as necessary, in order to make the statements therein, in light of the
circumstances under which they were made, not misleading or necessary and (ii)
comply in all material respects with the provisions of the Securities Act and
Exchange Act, as applicable, and the rules and regulations thereunder; provided,
however, no representation is made by Purchaser or RGA with respect to
statements made in the Information Statement based on information supplied
by
the other party expressly for inclusion or incorporation by reference in the
Information Statement or information omitted with respect to the other
party.
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4.05 Casualty.
If,
prior to the Closing, the Business or any Asset sustains material damage or
destruction by fire or other casualty that Seller does not completely repair
prior to Closing, Purchaser may elect to either (a) terminate this Agreement
by
providing written notice thereof to Seller, or (b) consummate the transactions
contemplated by this Agreement subject to a mutually agreeable adjustment in
the
Purchase Price to reflect such unrepaired casualty loss insurance.
4.06 Employment
Matters.
(a) Employment.
Each
Seller Entity agrees that Purchaser is under no obligation to: (i) hire any
employees of the Business; (ii) maintain any of RGA’s or any of its Affiliates’
employees that it does hire at the same position, title or level of
responsibility that they had with RGA or any of its Affiliates; (iii) grant
seniority or service credit or recognize accrued vacation or sick leave time
to
any such employee; or (iv) pay any specified level of compensation or benefits
to any such employee.
(b) Employment
Liabilities.
Purchaser does not assume, and Seller or its Affiliates, as applicable, hereby
retains, any and all employment related costs, obligations and liabilities
of
the Business, including, without limitation, costs, obligations and liabilities
relating to severance rights of employees of the Business (including those
rights to health care continuation coverage under the Consolidated Omnibus
Budget Reconciliation Act of 1985, as amended (“COBRA”)),
employment discrimination, unfair labor practices, wage and hour laws, health
and safety, workers compensation, wrongful discharge, compensation, fringe
benefits, insurance, employee benefit plans, pensions, retiree medical,
severance pay, vacations, torts, accidents, disabilities, injuries, sickness,
exposure to harmful conditions, breach of oral or written employment contracts
or collective bargaining agreements, or breach of law, statute, judgment,
decree, injunction, order, writ, rule or regulation of any governmental
authority. The entire liability for continuing acts or conditions (such as
exposure to harmful conditions or continuing discrimination) shall be retained
and assumed by Seller.
(c) Employment
Agreement.
HSOA
and ▇▇▇▇▇ ▇▇▇ agree to use commercially reasonable efforts to negotiate and
execute an agreement for the employment of ▇▇▇▇▇ ▇▇▇ by HSOA or one of its
subsidiaries upon terms mutually acceptable to HSOA and ▇▇▇▇▇ ▇▇▇.
Notwithstanding the foregoing sentence, (i) ▇▇▇▇▇ ▇▇▇ acknowledges and agrees
that neither HSOA nor any of its subsidiaries has any obligation to hire ▇▇▇▇▇
▇▇▇, and (ii) HSOA acknowledges and agrees that ▇▇▇▇▇ ▇▇▇ has no obligation
to
agree to any employment arrangement with HSOA or any of its
subsidiaries.
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4.07 Pre-closing
Deliveries.
(a) The
Seller’s Deliveries.
Concurrently with the execution of this Agreement, the Seller shall deliver
to
the Purchaser, each of the following:
(i) the
Seller’s Disclosure Schedule to this Agreement, satisfactory to the Purchaser in
all respects;
(ii) all
corporate resolutions of each Seller Entity approving this Agreement and the
transactions contemplated hereby;
(iii) the
duly
executed RGA Stockholder Consent; and
(iv) a
duly
executed counterpart to the Equipment Lease between CTFD, CTFD Marine and the
Purchaser (the “Lease”),
pursuant to which CTFD and CTFD Marine agree
to
lease certain equipment to the Purchaser upon the terms set forth
therein.
(b) The
Purchaser’s Deliveries.
Concurrently with the execution of this Agreement, the Purchaser shall deliver
to the Seller, each of the following:
(i) the
corporate resolutions of the Purchaser approving this Agreement and the
transactions contemplated hereby; and
(ii) a
duly
executed counterpart to the Lease.
ARTICLE
V
REPRESENTATIONS
OF PURCHASER
The
Purchaser represents the following:
5.01 Good
Standing.
The
Purchaser is a corporation duly organized, validly existing and in good standing
under the laws of the State of Florida.
5.02 Corporate
Approval.
This
Agreement, and the execution, delivery and performance of same, have been duly
approved by the Purchaser and HSOA and constitutes a valid and binding
obligation against the Purchaser and HSOA, enforceable in accordance with its
terms. No consent, approval or order of any person, entity, organization or
third party is required in connection with the execution, delivery or
performance of the transactions contemplated by the Agreement other than such
consents that have been obtained or that will be obtained prior to the Closing
Date. A copy of all corporate resolutions of the Purchaser and HSOA relating
to
this Agreement and the transactions contemplated hereby shall be delivered
by
the Purchaser to the Seller upon the execution hereof.
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5.03 Brokers
or Finders Fees.
No
person is entitled to compensation by reason of any agreement or understanding
with the Purchaser, as a broker or finder in connection with the sale and
purchase of the Assets.
5.04 Litigation.
Other
than in relation to any claims or causes of action of Laurus, including based
on
the lawsuits filed August 31, 2007 in the New York County Clerk’s Office
entitled Laurus Master Fund, Ltd. v. Home Solutions of America, Inc. and
Fireline Restoration, Inc. and Laurus Master Fund, Ltd. v. ▇▇▇▇▇ ▇▇▇▇▇▇▇▇,
there
is not pending or, to the knowledge of the Purchaser, threatened, any
litigation, action, suit, arbitration, investigation, inquiry, audit, complaint,
charge or other proceeding to which the Purchaser is a party involving the
Purchaser’s business, or to which the Purchaser’s business is or could be
subject, before or by any court or governmental or regulatory agency or
body.
5.05 No
Violation.
The
execution, delivery and performance of this Agreement and all other agreements
and instruments executed and delivered by the Purchaser in connection with
this
Agreement and the consummation of the transactions contemplated hereby and
thereby will not conflict with or result in the breach of any term or provision
of, or violate or constitute a judgment, decree, writ, law or regulation to
which the Purchaser is a party or by which the Purchaser is in any way bound
or
obligated.
5.06 Financial
Capability.
The
Purchaser has the financial capability to purchase the Assets on the terms
and
subject to the conditions set forth in this Agreement.
5.07 Representations
as of the Effective Date and Closing.
The
Purchaser’s representations set forth in this Agreement shall be true on and as
of the date of this Agreement and the Closing as though such representations
were made on and as of such times.
ARTICLE
VI
CONDITIONS
PRECEDENT TO PERFORMANCE
6.01 Conditions
Precedent to Seller’s Performance.
The
obligations of the Seller to consummate the sale of the Assets to Purchaser
contemplated by this Agreement under this Agreement are subject to the
satisfaction of all the conditions set out in this Section 6.01.
The
Seller may waive any or all of these conditions in whole or in part without
prior notice, provided, however, that no such waiver of a condition shall
constitute a waiver by the Seller of any of its other rights or remedies, at
law
or in equity, if the Purchaser shall be in default of any of its
representations, warranties or covenants under this Agreement:
(a) all
representations by the Purchaser contained in this Agreement, shall be true
on
and as of the date of this Agreement and the Closing;
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(b) the
Purchaser shall have performed all covenants and agreements and satisfied all
conditions required by this Agreement to be performed, complied with or
satisfied, shall have released the Laurus Debt and its Liens on the Assets
pursuant to the terms and conditions of the Release Agreement, and HSOA shall
have issued the Shares to Laurus under the Release Agreement; and
(c) the
Purchaser shall have furnished a certificate, executed on behalf of the
Purchaser, confirming the matters expressed in Sections
6.01(a) and (b);
and
(d) all
applicable waiting periods including those promulgated under the rules and
regulations of the Securities and Exchange Commission shall have
expired.
6.02 Conditions
Precedent to Purchaser’s Performance.
The
obligations of the Purchaser to consummate the purchase of the Assets from
Seller contemplated by this Agreement under this Agreement are subject to the
satisfaction of all the conditions set out in this Section
6.02.
The
Purchaser may waive any or all of these conditions in whole or in part without
prior notice, provided, however, that no such waiver of a condition shall
constitute a waiver by the Purchaser of any of its other rights or remedies,
at
law or in equity, if the Seller shall be in default of any of its
representations, warranties or covenants under this Agreement:
(a) all
representations by the Seller contained in this Agreement, or in any written
statement delivered to Purchaser pursuant to the Agreement, shall be true on
and
as of the date of this Agreement and the Closing;
(b) the
Seller shall have performed all covenants and agreements and satisfied all
conditions required by this Agreement to be performed, complied with or
satisfied;
(c) the
Seller shall have timely delivered to the Purchaser all schedules, documents,
instruments, licenses and agreements required under this Agreement;
(d) Seller
shall have executed and delivered to Purchaser, all transfer documents,
instruments and other closing deliveries contemplated by Section
1.06
hereof;
(e) Seller
shall have furnished a certificate, executed on behalf of Seller, confirming
the
matters expressed in Sections
6.02(a), (b), (c) and (d)
hereof;
(f) Each
Seller Entity shall have furnished to Purchaser (i) certificates of the
secretary of state of the state in which each is incorporated, dated as of
a
date nor more than five (5) business days prior to the Closing Date, attesting
to the due incorporation, existence and good standing of each such Seller
Entity, (ii) copies, certified by the Secretary of State of the state in which
each is incorporated, dated as of a date not more than five (5) business days
prior to the Closing Date, of each Seller Entity’s Articles or Certificate of
Incorporation together with all amendments, (iii) copies, certified by the
Secretaries of each Seller Entity, of the Bylaws of each Seller Entity, each
as
amended and in effect as of the Closing Date, (iv) copies, certified by the
Secretaries of each Seller Entity, of resolutions duly adopted by the Board
of
Directors of each Seller Entity duly authorizing the transactions contemplated
by this Agreement, and (v) a copy, certified by the Secretary of RGA, of the
RGA
Stockholder Consent;
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(g) HSOA
shall have obtained the written consent of its lender(s) to the transactions
contemplated by this Agreement, and shall have entered into such agreements
with
its lender as are necessary or required to consummate the transactions
contemplated hereby;
(h) Laurus
shall have released the Laurus Debt and its Liens on the Assets, and Laurus
and
HSOA shall have entered into the Release Agreement on terms and conditions
satisfactory to HSOA and its Board of Directors;
(i) There
shall not have occurred any material adverse effect on the Assets, and there
shall be no pending or threatened litigation affecting any Seller Entity or
the
Assets other than as disclosed on Schedule
3.08
of the
Seller’s Disclosure Schedule and existing on the date this Agreement is
executed, or with respect to the transactions contemplated by this
Agreement;
(j) the
RGA
Stockholder Consent shall be subsisting and valid and not revoked;
(k) all
applicable waiting periods including those promulgated under the rules and
regulations of the Securities and Exchange Commission shall have expired;
(l) the
Purchaser shall have received the Non-Compete, Non-Hire and Non-Solicitation
Agreements duly executed by the Designated Employees; and
(m) the
Closing occurs no later than the Termination Date.
ARTICLE
VII
INDEMNIFICATION;
RELEASE
7.01 SELLER
INDEMNITY. EACH
SELLER ENTITY, ON A JOINT AND SEVERAL BASIS, SHALL INDEMNIFY, DEFEND AND HOLD
HARMLESS FROM AND AGAINST, PURCHASER AND HSOA AND THEIR RESPECTIVE OFFICERS,
DIRECTORS, AGENTS AND AFFILIATES (EACH, A “PURCHASER
INDEMNIFIED PARTY”
AND COLLECTIVELY, THE “PURCHASER
INDEMNIFIED PARTIES”),
AND REIMBURSE THE PURCHASER INDEMNIFIED PARTIES FOR, ANY AND ALL CLAIMS, LOSSES,
LIABILITIES, DAMAGES, COSTS AND EXPENSES (INCLUDING, WITHOUT LIMITATION,
REASONABLE ATTORNEYS’ FEES) (COLLECTIVELY, “LIABILITIES”)
THAT MAY BE INCURRED BY, IMPOSED UPON OR ASSERTED AGAINST ANY PURCHASER
INDEMNIFIED PARTY ARISING FROM OR RELATING TO: (I) ANY FAILURE OF ANY SELLER
ENTITY TO ASSUME, PAY, PERFORM AND DISCHARGE ANY LIABILITY OR OBLIGATION OF
ANY
SELLER ENTITY; (II) ANY ACTION, CLAIM OR JUDICIAL OR OTHER PROCEEDING ASSERTED
AGAINST ANY PURCHASER INDEMNIFIED PARTY BY ANY PERSON OR ENTITY, INCLUDING,
WITHOUT LIMITATION, THE ACTIONS, CLAIMS AND JUDICIAL PROCEEDINGS DESCRIBED
ON
SCHEDULE
3.08
OF THE SELLER’S DISCLOSURE SCHEDULE, OR ANY STOCKHOLDER ACTION OR CLAIM WITH
RESPECT TO THIS AGREEMENT OR THE TRANSACTIONS CONTEMPLATED HEREBY, OR ANY LIEN
OR OTHER CLAIM ON OR WITH RESPECT TO THE ASSETS, OR THE FAILURE OF THE SELLER
TO
OBTAIN THE CONSENT OF ANY PERSON OR ENTITY OR ANY STOCKHOLDER OF RGA TO THIS
AGREEMENT OR THE TRANSACTIONS CONTEMPLATED HEREBY, OR THE RELEASE AGREEMENT
AND
THE TRANSACTIONS CONTEMPLATED THEREBY, OR THE CONSULTING AGREEMENT AND THE
TRANSACTIONS CONTEMPLATED THEREBY, OR ANY RELATIONSHIP AMONG HSOA, LAURUS,
AND
RGA AND ITS SUBSIDIARIES, RESPECTIVELY, (III) ANY INACCURACY IN OR BREACH OF
ANY
REPRESENTATION, WARRANTY, COVENANT, OBLIGATION OR AGREEMENT OF ANY SELLER ENTITY
CONTAINED HEREIN, OR IN ANY DOCUMENT OR INSTRUMENT DELIVERED PURSUANT HERETO;
(IV) THE OPERATION OF THE BUSINESS OR THE OWNERSHIP, USE OR SALE OF THE ASSETS
BY THE SELLER PRIOR TO THE CLOSING (INCLUDING, WITHOUT LIMITATION, ANY
CONTRACTUAL, TAX, PRODUCT, WARRANTY, TORT OR OTHER LIABILITY WHATSOEVER); (V)
ALL LIABILITIES AND OBLIGATIONS, INCLUDING, WITHOUT LIMITATION, TAX OBLIGATIONS,
OF ANY SELLER ENTITY, AND (VI) ACT OR OMISSION OF ANY SELLER ENTITY CONSTITUTING
OR ALLEGEDLY CONSTITUTING FRAUD, EMBEZZLEMENT OR ANY CRIME FOR WHICH
IMPRISONMENT IS A PUNISHMENT, OR ANY ACT INVOLVING MORAL
TURPITUDE.
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7.02 PURCHASER
INDEMNITY. PURCHASER
AND HSOA,
ON A JOINT AND SEVERAL BASIS, SHALL INDEMNIFY, DEFEND AND HOLD HARMLESS FROM
AND
AGAINST, EACH SELLER ENTITY AND THEIR RESPECTIVE OFFICERS, DIRECTORS, AGENTS
AND
AFFILIATES (EACH, A “SELLER
INDEMNIFIED PARTY”
AND COLLECTIVELY, THE “SELLER
INDEMNIFIED PARTIES”),
AND REIMBURSE THE SELLER INDEMNIFIED PARTIES FOR, ANY AND ALL LIABILITIES THAT
MAY BE INCURRED BY, IMPOSED UPON OR ASSERTED AGAINST ANY SELLER INDEMNIFIED
PARTY ARISING FROM OR RELATING TO (I) ANY INACCURACY IN OR BREACH OF ANY
REPRESENTATION, WARRANTY, COVENANT, OBLIGATION OR AGREEMENT OF THE PURCHASER
OR
HSOA CONTAINED HEREIN, OR IN ANY DOCUMENT OR INSTRUMENT DELIVERED PURSUANT
HERETO, AND (II) ANY ACTION, CLAIM OR JUDICIAL OR OTHER PROCEEDING ASSERTED
AGAINST ANY SELLER INDEMNIFIED PARTY ARISING FROM OR RELATING TO THE PURCHASER’S
PERFORMANCE AND/OR MANAGEMENT OF SELLER CONSTRUCTION PROJECTS UNDER OR PURSUANT
TO THE CONSULTING AGREEMENT.
7.03 RELEASE
BY SELLER. FOR
GOOD AND VALUABLE CONSIDERATION INCLUDING THE PROMISES, AGREEMENTS, COVENANTS,
REPRESENTATIONS AND OBLIGATIONS OF PURCHASER SET FORTH HEREIN, EFFECTIVE
AS OF
THE CLOSING DATE AND SUBJECT TO THE CONSUMMATION OF THE TRANSACTIONS
CONTEMPLATED BY THIS AGREEMENT, EACH SELLER ENTITY HEREBY
JOINTLY AND SEVERALLY IRREVOCABLY AND UNCONDITIONALLY RELEASES, ACQUITS AND
FOREVER DISCHARGES EACH PURCHASER INDEMNIFIED PARTY FROM AND AGAINST ANY
AND ALL
CLAIMS, COMPLAINTS, GRIEVANCES, LIABILITIES, OBLIGATIONS, PROMISES AGREEMENTS,
DAMAGES, CAUSES OF ACTION, RIGHTS, DEBTS, DEMANDS, CONTROVERSIES, COSTS,
LOSSES,
DAMAGES, AND EXPENSES (INCLUDING, WITHOUT LIMITATION, ATTORNEYS FEES AND
EXPENSES) WHATSOEVER (INCLUDING, WITHOUT LIMITATION, UNDER ANY MUNICIPAL,
LOCAL,
STATE OR FEDERAL LAW, COMMON OR STATUTORY), WHICH THEY OR ANY OF THEIR
SUCCESSORS, ASSIGNS OR OTHER LEGAL REPRESENTATIVES OWNED, HELD, HAD OR CLAIMED
TO HAVE HAD OR MAY OWN, HOLD, HAVE OR CLAIM TO HAVE ARISING ON OR PRIOR TO
THE
DATE OF THIS AGREEMENT. EACH SELLER ENTITY UNDERSTANDS, ACKNOWLEDGES AND
AGREES
THAT THE RELEASE SET FORTH ABOVE MAY BE PLEADED AS A FULL AND COMPLETE DEFENSE
AND MAYBE USED AS A BASIS FOR INJUNCTION AGAINST ANY ACTION, SUIT OR OTHER
PROCEEDING WHICH MAY BE INSTITUTED, PROSECUTED OR ATTEMPTED IN BREACH OF
THE
PROVISIONS OF SUCH RELEASE. SIMILARLY, EACH SELLER ENTITY AGREES THAT NO
FACT,
EVENT, CIRCUMSTANCE, EVIDENCE OR TRANSACTION WHICH COULD NOW BE ASSERTED
OR
WHICH MAY HEREAFTER BE DISCLOSED SHALL AFFECT IN ANY MANNER THE FINAL, ABSOLUTE
AND UNCONDITIONAL NATURE OF THE RELEASE SET FORTH ABOVE. THE PURCHASER
INDEMNIFIED PARTIES UNDERSTAND, ACKNOWLEDGE AND AGREE THAT THE RELEASE SET
FORTH
ABOVE SHALL NOT EXTEND TO OR LIMIT IN ANY MANNER WHATSOEVER ANY RIGHTS OF
SELLER
UNDER THIS AGREEMENT OR ANY CLAIMS OR CAUSES OF ACTION OF SELLER THAT MAY
ARISE
OUT OF OR RELATE TO THIS AGREEMENT.
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7.04 PURCHASER
RELEASE. FOR
GOOD AND VALUABLE CONSIDERATION INCLUDING THE PROMISES, AGREEMENTS, COVENANTS,
REPRESENTATIONS AND OBLIGATIONS OF SELLER SET FORTH HEREIN, EFFECTIVE AS OF
THE
CLOSING DATE AND SUBJECT TO THE CONSUMMATION OF THE TRANSACTIONS CONTEMPLATED
BY
THIS AGREEMENT, EACH OF PURCHASER AND HSOA HEREBY
JOINTLY AND SEVERALLY IRREVOCABLY AND UNCONDITIONALLY RELEASES, ACQUITS AND
FOREVER DISCHARGES EACH SELLER INDEMNIFIED PARTY FROM AND AGAINST ANY AND ALL
CLAIMS, COMPLAINTS, GRIEVANCES, LIABILITIES, OBLIGATIONS, PROMISES AGREEMENTS,
DAMAGES, CAUSES OF ACTION, RIGHTS, DEBTS, DEMANDS, CONTROVERSIES, COSTS, LOSSES,
DAMAGES, AND EXPENSES (INCLUDING, WITHOUT LIMITATION, ATTORNEYS FEES AND
EXPENSES) WHATSOEVER (INCLUDING, WITHOUT LIMITATION, UNDER ANY MUNICIPAL, LOCAL,
STATE OR FEDERAL LAW, COMMON OR STATUTORY), WHICH THEY OR ANY OF THEIR
SUCCESSORS, ASSIGNS OR OTHER LEGAL REPRESENTATIVES OWNED, HELD, HAD OR CLAIMED
TO HAVE HAD OR MAY OWN, HOLD, HAVE OR CLAIM TO HAVE ARISING ON OR PRIOR TO
THE
DATE OF THIS AGREEMENT. EACH OF PURCHASER AND HSOA UNDERSTANDS, ACKNOWLEDGES
AND
AGREES THAT THE RELEASE SET FORTH ABOVE MAY BE PLEADED AS A FULL AND COMPLETE
DEFENSE AND MAYBE USED AS A BASIS FOR INJUNCTION AGAINST ANY ACTION, SUIT OR
OTHER PROCEEDING WHICH MAY BE INSTITUTED, PROSECUTED OR ATTEMPTED IN BREACH
OF
THE PROVISIONS OF SUCH RELEASE. SIMILARLY, EACH OF PURCHASER AND HSOA AGREES
THAT NO FACT, EVENT, CIRCUMSTANCE, EVIDENCE OR TRANSACTION WHICH COULD NOW
BE
ASSERTED OR WHICH MAY HEREAFTER BE DISCLOSED SHALL AFFECT IN ANY MANNER THE
FINAL, ABSOLUTE AND UNCONDITIONAL NATURE OF THE RELEASE SET FORTH ABOVE. THE
SELLER INDEMNIFIED PARTIES UNDERSTAND, ACKNOWLEDGE AND AGREE THAT THE RELEASE
SET FORTH ABOVE SHALL NOT EXTEND TO OR LIMIT IN ANY MANNER WHATSOEVER ANY RIGHTS
OF PURCHASER AND HSOA UNDER THIS AGREEMENT OR ANY CLAIMS OR CAUSES OF ACTION
OF
PURCHASER AND HSOA THAT MAY ARISE OUT OF OR RELATE TO THIS
AGREEMENT.
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ARTICLE
VIII
TERMINATION
OF AGREEMENT
8.01 Termination
of Agreement. This
Agreement and the transactions contemplated hereby may be terminated and
abandoned at any time on or prior to the Closing as follows:
(a) by
the
written consent of Purchaser and Seller;
(b) by
Purchaser, (i) if there is or occurs an inaccuracy in any material respect
in
the representations and warranties of any Seller Entity set forth in this
Agreement, which inaccuracy is not capable of being cured by the Termination
Date, (ii) if there has been a breach in any material respect of a covenant
of
any Seller Entity, or a failure in any material respect on the part of any
Seller Entity to comply with their respective obligations hereunder, and such
breach or failure is not capable of being cured by the Termination Date; (iii)
if there occurs any casualty with respect to the any Asset as described herein,
or (iv) if any proposed supplement, change or amendment to any Schedule
submitted by Seller to Purchaser is unacceptable to Purchaser;
(c) by
Purchaser if any of the conditions of the Seller set forth in Section
6.02
hereof
are not satisfied on or before the Termination Date;
(d) by
Seller, (i) if there is or occurs an inaccuracy in any material respect in
the
representations and warranties of Purchaser set forth in this Agreement, which
inaccuracy is not capable of being cured by the Termination Date, or (ii) if
there has been a breach in any material respect on the part of Purchaser to
comply with its obligations hereunder, and such breach or failure is not capable
of being cured by the Termination Date;
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(e) by
Seller
if any of the conditions set forth in Section
6.01
hereof
are not satisfied on or before the Termination Date; or
(f) by
Purchaser if the Closing Date shall not have occurred before the Termination
Date for any reason other than the failure of the Purchaser to perform in any
material respect its obligations hereunder or the breach or inaccuracy in any
material respect of a representation or warranty made by such
party.
8.02 Obligations
Upon Termination.
(a) In
the
event that this Agreement is terminated pursuant to the provisions of
Section
8.01(a)
or
(f),
neither
party shall have any further obligation to the other.
(b) If
either
party shall terminate this Agreement pursuant to Sections 8.01(b),
(c),
(d)
or
(e)
because
a condition to the terminating party’s obligations under this Agreement is not
satisfied as a result of the other party’s failure to comply with its
obligations under this Agreement, the terminating party’s right to pursue any
and all rights it may have at law or equity or hereunder shall survive
unimpaired.
ARTICLE
IX
MISCELLANEOUS
9.01 Survival
of Representations.
All
statements contained in any exhibit, schedule, certificate or other instrument
delivered by or on behalf of the Seller or the Purchaser pursuant to this
Agreement, or in connection with the transaction contemplated hereby, shall
be
deemed representations by the Seller or by the Purchaser, respectively,
hereunder. All representations and agreements made by the Seller and the
Purchaser shall survive until the third anniversary date following the
Closing.
9.02 Legal
Expenses.
If any
legal action or any arbitration or other proceeding is brought for the
enforcement of this Agreement, or because of an alleged or actual dispute,
breach, default or misrepresentation in connection with any of the provisions
of
this Agreement, the successful or prevailing party shall be entitled to recover
reasonable attorneys’ fees and other costs incurred in that action or
proceeding, in addition to any other relief to which it may be
entitled.
9.03 Invalid
Provisions.
If any
one or more of the provisions of this Agreement shall be held invalid or
unenforceable, such provision shall be modified to the minimum extent necessary
to make it valid and enforceable, and the validity and enforceability of all
other provisions of this Agreement shall not be affected thereby.
9.04 Binding
Effect.
This
Agreement shall be binding upon and inure to the benefit of the Seller and
the
Purchaser, and their respective heirs, successors and assigns. This Agreement
may not be assigned or transferred without the written consent of all parties
thereto.
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21
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9.05 Casualty.
The
Seller shall bear all risk of casualty loss or damage to the Assets until and
through the Closing. The Purchaser shall bear all risk of casualty loss or
damage to the Assets after the Closing.
9.06 Public
Announcements.
Any
public announcement concerning this Agreement before the Closing or any of
the
terms hereof shall be made only with the prior approval of the Seller and
Purchaser, other than required filings under applicable securities
laws.
9.07 Delivery
of Exhibits.
All
exhibits, schedules, and documents referred to in or attached to this Agreement
are integral parts of this Agreement and are incorporated herein for all
purposes as if fully set forth herein.
9.08 Further
Assurances.
The
parties shall give further assurances, take such actions and execute such
further documents as are necessary or desirable to effectuate the purpose of
this Agreement.
9.09 Notices.
All
notices, requests, demands and other communications hereunder shall be in
writing and shall be deemed to have been duly given (a) on the date of delivery
if personally delivered, delivered by nationally recognized overnight delivery
service guaranteeing at least second business day delivery, or (b) on the date
of delivery as evidenced by the return receipt or similar evidence or on the
fifth calendar day after mailing, whichever is earlier in time, if mailed,
by
registered or certified mail or delivered by any express delivery service,
postage prepaid, and properly addressed as set forth below or at such other
address as the addressee may have previously specified by notice delivered
in
accordance with this paragraph.
If
to
Seller:
RG
America, Inc.
Restoration Group America 2003, Inc.
Restoration Group America 2003, Inc.
Restoration
Group America, Inc.
RG
Restoration, Inc.
RG
Insurance Services, Inc.
CTFD,
Inc.
CTFD
Marine, Inc.
RG
Risk
Management, Inc.
Invvision
Funding, Inc.
Practical
Building Solutions 2000, Inc.
RG
Florida GC, Inc.
Attn:
▇▇▇▇▇ ▇▇▇
▇▇▇▇
▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇
▇▇▇▇▇,
▇▇▇▇▇ ▇▇▇▇▇
Facsimile:
(▇▇▇) ▇▇▇-▇▇▇▇
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22
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With
a
copy (which shall not constitute notice) to:
▇▇▇▇▇▇
& ▇▇▇▇ LLP
▇▇▇▇
▇▇▇▇
▇▇▇▇▇▇
▇▇▇▇▇
▇▇▇▇
▇▇▇▇▇▇,
▇▇▇▇▇ ▇▇▇▇▇
Attention:
I. ▇▇▇▇▇ ▇▇▇▇▇▇▇▇, Esq.
Facsimile:
(▇▇▇) ▇▇▇-▇▇▇▇
If
to
Purchaser:
Fireline
Restoration, Inc.
Attn:
▇▇▇▇▇ ▇▇▇▇▇▇▇▇, President
▇▇▇▇
▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇,
▇▇▇▇▇▇▇ ▇▇▇▇▇
Facsimile:
(813) 353-972
9.10 GOVERNING
LAW.
THIS AGREEMENT SHALL BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH, THE
LAWS
OF THE UNITED STATES AND THE STATE OF TEXAS AND WILL, TO THE MAXIMUM EXTENT
PRACTICABLE, BE DEEMED TO CALL FOR PERFORMANCE IN DALLAS COUNTY, TEXAS.
9.11 Effect
of Captions.
The
captions of sections of this Agreement shall have been inserted solely for
convenience and reference, and shall not control or affect the meaning or
construction of any of the provisions of this Agreement.
9.12 Entire
Agreement; Modification; Waiver.
This
Agreement constitutes the entire Agreement between the Seller and the Purchaser
pertaining to the subject matter contained herein, and supersedes all prior
agreements, representations and all understandings of the parties. The parties
acknowledge and agree that no supplement or amendment of this Agreement shall
be
binding unless expressed as such and executed in writing by the Seller and
the
Purchaser. No waiver of any of the provisions of this Agreement shall be deemed
or constitute a waiver of any other provision, whether or not similar, nor
shall
any waiver constitute a continuing waiver.
[The
remainder of this page is left blank intentionally.]
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IN
WITNESS WHEREOF, the parties hereto have caused this Agreement to be executed
as
of the day and year first above written.
|
SELLER:
|
|||
|
By:
|
/s/
▇▇▇▇▇ ▇. ▇▇▇
|
||
|
Name:
|
▇▇▇▇▇
▇. ▇▇▇
|
||
|
Title:
|
Chief
Executive Officer
|
||
|
PURCHASER:
|
FIRELINE
RESTORATION, INC.
|
||
|
By:
|
/s/
▇▇▇▇▇ ▇▇▇▇▇▇▇▇
|
||
|
Name:
|
▇▇▇▇▇
▇▇▇▇▇▇▇▇
|
||
|
Title:
|
President
|
||
|
OTHER
SELLER ENTITIES:
|
RESTORATION
GROUP AMERICA, 2003, INC.
|
||
|
By:
|
/s/
▇▇▇▇▇ ▇. ▇▇▇
|
||
|
Name:
|
▇▇▇▇▇
▇. ▇▇▇
|
||
|
Title:
|
President
|
||
|
RESTORATION
GROUP AMERICA, INC.
|
|||
|
By:
|
/s/
▇▇▇▇▇ ▇. ▇▇▇
|
||
|
Name:
|
▇▇▇▇▇
▇. ▇▇▇
|
||
|
Title:
|
President
|
||
|
RG
RESTORATION, INC.
|
|||
|
By:
|
/s/
▇▇▇▇▇ ▇. ▇▇▇
|
||
|
Name:
|
▇▇▇▇▇
▇. ▇▇▇
|
||
|
Title:
|
President
|
||
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24
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|
RG
INSURANCE SERVICES, INC.
|
||
|
By:
|
/s/
▇▇▇▇▇ ▇. ▇▇▇
|
|
|
Name:
|
▇▇▇▇▇
▇. ▇▇▇
|
|
|
Title:
|
President
|
|
|
CTFD,
INC.
|
||
|
By:
|
/s/
▇▇▇▇▇ ▇. ▇▇▇
|
|
|
Name:
|
▇▇▇▇▇
▇. ▇▇▇
|
|
|
Title:
|
President
|
|
|
CTFD
MARINE, INC.
|
||
|
By:
|
/s/
▇▇▇▇▇ ▇. ▇▇▇
|
|
|
Name:
|
▇▇▇▇▇
▇. ▇▇▇
|
|
|
Title:
|
President
|
|
|
RG
RISK MANAGEMENT, INC.
|
||
|
By:
|
/s/
▇▇▇▇▇ ▇. ▇▇▇
|
|
|
Name:
|
▇▇▇▇▇
▇. ▇▇▇
|
|
|
Title:
|
President
|
|
|
INVVISION
FUNDING, INC.
|
||
|
By:
|
/s/
▇▇▇▇▇ ▇. ▇▇▇
|
|
|
Name:
|
▇▇▇▇▇
▇. ▇▇▇
|
|
|
Title:
|
President
|
|
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25
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|
PRACTICAL
BUILDING SOLUTIONS 2000, INC.
|
||
|
By:
|
/s/
▇▇▇▇▇ ▇. ▇▇▇
|
|
|
Name:
|
▇▇▇▇▇
▇. ▇▇▇
|
|
|
Title:
|
President
|
|
|
RG
FLORIDA GC, INC.
|
||
|
By:
|
/s/
▇▇▇▇▇ ▇. ▇▇▇
|
|
|
Name:
|
▇▇▇▇▇
▇. ▇▇▇
|
|
|
Title:
|
President
|
|
AGREED
AND ACCEPTED AS TO SECTION 4.06(c):
|
/s/
▇▇▇▇▇ ▇. ▇▇▇
|
|
▇▇▇▇▇
▇. ▇▇▇
|
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26
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THE
PROVISIONS OF SECTION 1.02 ARE HEREBY AGREED TO AND
ACCEPTED:
|
By:
|
/s/
▇▇▇▇ ▇▇▇▇▇▇▇
|
|
Name:
|
|
|
Title:
|
Chief
Financial Officer
|
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27
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List
of Exhibits
|
Exhibit
A
|
Royalty
Agreement
|
|
Exhibit
B
|
Allocation
of Purchase Price
|
List
of Schedules
|
Schedule
1.01
|
Assets
|
|
Schedule
2.03
|
Liabilities
|
|
Schedule
3.05
|
Liens
|
|
Schedule
3.08
|
Litigation
|
|
Schedule
3.11
|
Absence
of Undisclosed Information
|
|
Schedule
3.16
|
Intellectual
Property
|
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