EXHIBIT 10.1
CUSTOMER LIST PURCHASE AGREEMENT
BY AND BETWEEN
Brody Enterprises
as
"SELLER"
and
American TonerServ Corp.
as
"BUYER"
CUSTOMER LIST PURCHASE AGREEMENT
This Customer List Purchase Agreement ("Agreement") is entered into as
of this 20th day of December, 2006 ("Effective Date") by and between Brody
Enterprises, a Nevada corporation ("Seller"), with its principal place of
business located at ▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇., ▇▇▇▇▇▇▇▇ ▇, ▇▇▇▇▇ ▇▇▇, ▇▇▇
▇▇▇▇▇, ▇▇ ▇▇▇▇▇, and American TonerServ Corp., a Delaware corporation
("Buyer").
RECITALS
A. Seller is in the business of selling inkjet cartridges, toner
printer cartridges, Ribbons, copier toner/drums, fax cartridges and office
supplies using the name "Sun Products".
B. Seller is desirous of selling and conveying its customer list to
Buyer.
C. Buyer is desirous of acquiring said customer list.
D. The parties have reached an understanding with respect to the terms
and considerations of the foregoing and are desirous of memorializing the
same herein;
AGREEMENT
NOW, THEREFORE, in consideration of the terms, covenants and conditions
hereinafter set forth, the parties hereto agree as follows:
1. Purchase and Sale of Customer List. Seller agrees to sell, convey,
assign, deliver and transfer to Buyer, and Buyer agrees to purchase and
acquire from Seller the Customer List ("the Asset"). The Customer List is
attached hereto on Schedule 1.
2. Buyer's Due Diligence. Seller has made available to Buyer (its
counsel, accountants and other representatives) for Buyer's review and
copying all information available to Seller regarding the Customer List and,
without limitation, all disclosures requested by Buyer. Commencing on the
Effective Date and continuing for a period satisfactory to the Buyer but no
longer than the day Buyer pays the purchase price or accepts possession of
the Customer List (the "Due Diligence Period"), which closing shall occur on
or before December 20, 2006. Buyer has the right to inspect and approve all
other documents regarding or relating to the Customer List that Buyer
reasonably desires to review.
3. Assumption of Liabilities. Buyer will assume no liabilities,
obligations, expenses or other commitments of the Seller. Seller shall be
entitled to all accounts receivables from sales by Seller through the day
before closing.
4. Purchase Price and Payment of Purchase Price. As full payment and
consideration for the purchase of the Asset, Buyer agrees to pay Seller
$800,000 (referred to herein as the "Purchase Price") as consideration as
described hereinafter.
a. The Buyer shall issue a promissory note for $800,000 in the
form attached hereto as Exhibit A. The principal of the note shall be due and
payable in cash, in equal annual installments of $200,000 on January 2, 2007,
2008, 2009 and 2010.
b. Payment of the note is secured by the Customer List and the
license of the URL granted in Section 5 hereof. In the event of default by
Buyer, Seller shall retain any payments made as liquidated damages, and the
Customer List shall revert back to the Seller and the Non-compete and
nonsolicitation provisions this Agreement and the ▇▇▇▇▇▇ ▇▇▇▇▇ Independent
Sales Partner Agreement shall be null and void. The above security shall be
evidenced by a security agreement and UCC1 filing.
5. Licensing Agreement. Buyer is hereby granted a royalty-free,
worldwide license to use the Sun Products name and URL for a period of six
months from the closing date of this agreement. This arrangement may be
extended, at the buyer's option, if needed, to complete the transition. In
addition, ▇▇▇▇▇▇ ▇▇▇▇▇ will agree to assist Buyer to make full use of the
Customer List during the transition period.
6. Closing. The Closing shall occur on a date mutually agreed upon by
the parties, but no later than December 20, 2006, at which time the
promissory note, security agreement and UCC1 shall be delivered by Buyer to
Seller, and Seller shall deliver the Customer List to Buyer. Buyer shall
cause the security agreement and UCC1 to be recorded in the appropriate
public records in the state of Nevada within ten days of the Closing date.
7. Confidentiality. The parties agree that the financial terms and
conditions of this Agreement including, but not limited to, any and all
information provided by Buyer to Seller are strictly confidential. Neither
party will knowingly publicize or disclose or cause or knowingly permit or
authorize the publicizing or disclosure of the financial terms and conditions
of this Agreement for any reason, at any time, without the prior written
consent of the other party. In addition, Buyer shall not disclose any
information obtained from Seller involving the Business or any of the Assets
including any and all financial statements. Notwithstanding the above, the
parties may disclose information to their counsel, personal tax advisor,
their family or as may be required by law. The parties agree, to the extent
not prohibited under law, to instruct those to whom disclosure is allowed
under this Agreement that its terms are confidential and must not be further
disclosed.
8. Uniform Commercial Code Compliance. If necessary, Buyer agrees
that it will publish notice to creditors as required by and in the form and
manner and within the time provided in under Nevada law and otherwise comply
with Division 6 of the Uniform Commercial Code, of any bulk transfer
contemplated by this Agreement if required under Nevada law.
9. Obligation Not to Solicit and Not to Compete.
a. Non-Solicitation - Sales Agents and Employees of the Buyer.
Seller agrees not to solicit or otherwise seek to hire, cause, encourage, or
attempt to encourage (i) any former or current sales agent or employee of the
Buyer or any successor thereto, or (ii) any current or former sales agent or
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employee of Seller to become a sales agent or employee of any other person or
entity (other than the Buyer or an affiliate or successor thereof) engaged in
the toner cartridge business within the United States of America.
b. Non-Solicitation - Customers. The Seller agrees that, the
Seller will not knowingly contact, solicit the business of, or accept orders
from, any Customer including, without limitation, Customers who receive or
have received Services or Products under the Buyer, for the purpose of moving
such Customer from the Buyer or switching such Customer to another provider
of services or products which competes with the Buyer.
c. Term of Non-Solicitation Obligations. The obligations of
Seller not to solicit as set forth in this Section shall continue for a
period of five (5) years from the Closing Date.
d. Non-Competition. For two (2) years following payment of the
final installment of the Purchase Price, Seller will not, directly or
indirectly, whether alone or with any other person, (a) provide products and
services comparable to the products and services Buyer provides to any of its
Customers, or that Seller reasonably should know is undertaking to become
engaged in competition with Buyer or (b) own an interest in, operate, join,
control, or participate as a partner, director, principal, officer, or agent
of, enter into the employment of, or act as a consultant to, any entity whose
business consists of (1) providing products or services similar to those
products and services sold by the Seller and repair services for office
equipment provided by the Buyer.
e. Remedies. Seller acknowledges that if Seller breaches or
threatens to breach Seller's covenants and agreements in this Section 9, then
Seller's actions may cause irreparable harm and damage to Buyer that could
not be adequately compensated in damages. Accordingly, if Seller breaches or
threatens to breach this Agreement, then Buyer will be entitled to injunctive
relief in addition to any other rights or remedies of Buyer under this
Agreement or otherwise.
f. Severability. If any restrictive covenant of this Section 9
is held by any court to be invalid, illegal or unenforceable, either in whole
or in part, then such invalidity, illegality or unenforceability will not
affect the validity, legality or enforceability of the remaining provisions
or covenants of this Agreement, all of which will remain in full force and
effect to the maximum extent allowed by law. Without limiting the foregoing,
although the parties have, in good faith, used their best efforts to make the
provisions of Section 9 reasonable in terms of geographic area, duration and
scope of restricted activities in light of Buyer's business activities, and
it is not anticipated, nor is it intended, by any party hereto that a court
of competent jurisdiction would find it necessary to reform the provisions
hereof to make them reasonable in terms of geographic area, duration or
otherwise, the parties understand and agree that if a court of competent
jurisdiction determines it necessary to reform the scope of Section 9 or any
part thereof in order to make it binding and enforceable, such provision
shall be considered divisible in all respects and such lesser scope as any
such court shall determine to be reasonable shall be effective, binding and
enforceable.
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10. Representation and Warranties of Buyer. Buyer warrants and
represents to Seller:
a. That the within Agreement is a valid and binding obligation of
Buyer, and that Buyer has the ability to enter into and consummate this
Agreement;
b. that Buyer shall, at closing, have the funds necessary to
consummate the transaction contemplated by this Agreement; and
c. Buyer acknowledges that if Buyer breaches or threatens to
breach Buyer's covenants and agreements in this Section 10, then Buyer's
actions may cause irreparable harm and damage to Seller that could not be
adequately compensated in damages. Accordingly, if Buyer breaches or
threatens to breach this Agreement, then Seller will be entitled to
injunctive relief in addition to any other rights or remedies of Seller under
this Agreement or otherwise.
11. Representation and Warranties of Seller. Seller warrants and
represents to Buyer:
a. Authority. Seller has full power and authority to execute and
deliver this Agreement and to perform the obligations hereunder. This
Agreement as delivered at the Closing, to which the Seller is a signatory,
will be duly authorized, executed and delivered by, and a valid and binding
agreement of, the Seller who is a signatory thereto, enforceable in
accordance with their respective terms, and no further action, approvals or
consents are necessary on the part of the Seller, nor is it necessary for the
Seller to obtain any actions, approvals or consents from any third persons,
governmental or other to make this Agreement valid and binding upon and
enforceable against the Seller in accordance with their respective terms, or
to enable the Seller to perform this Agreement and the transactions
contemplated thereby.
b. Undisclosed Liabilities. To the best of Seller's knowledge,
there are no liabilities or obligations, secured or unsecured (whether
absolute, accrued, contingent, or otherwise, and whether due or to become
due), of Seller of a nature required by generally accepted accounting
principles to be reflected in a balance sheet, except such liabilities and
obligations that either: (a) are disclosed by, or accrued or reserved
against in, the most recent balance sheet; or (b) have arisen or been
incurred in the ordinary course of business since the most recent balance
sheet date and which did not and will not have a material adverse effect on
the financial condition, operations, sales, gross margins, operating results,
assets, customer relations, employee relations or prospects of Seller .
c. Customer List. The Customer List attached hereto is a full and
complete list of the customers of Seller
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d. Title and Quiet Enjoyment. Seller has, and at the Closing will
convey to Buyer, good and marketable title to the Customer List, free and
clear of all liens, pledges, leases, charges, encumbrances, equities, claims,
conditional sale contracts, security interests, or any other interests or
imperfections of title of any nature whatsoever.
e. Compliance with Law. To the best of Seller's knowledge, Seller
has not been and is not now in violation of any federal, state or local laws,
regulations or orders.
f. Litigation and Proceedings. There are no claims, actions,
suits, proceedings or investigations, judicial or administrative, pending,
involving or, to the best knowledge of either Seller, threatened against or
affecting either Seller or the Customer List or which seek to restrain,
prohibit or invalidate the transactions contemplated by this Agreement or
which might materially affect the right of Buyer to own the Customer List.
Seller does not know of any basis for any such action, suit, proceeding or
investigation.
g. Seller acknowledges that if Seller breaches or threatens to
breach Seller's covenants and agreements in this Section 11, then Seller's
actions may cause irreparable harm and damage to Buyer that could not be
adequately compensated in damages. Accordingly, if Seller breaches or
threatens to breach this Agreement, then Buyer will be entitled to injunctive
relief in addition to any other rights or remedies of Buyer under this
Agreement or otherwise.
12. Covenants of Seller Pending Closing. Seller covenants and agrees
that, from and after the execution and delivery of this Agreement and through
the Closing Date:
a. Representations, Warranties and Covenants True as of Closing
Date. All of the representations, warranties and covenants of Seller
contained in the foregoing paragraphs hereof shall be true and correct, and
shall not have been breached, on and as of the Closing. All of the
representations, warranties and covenants contained in the foregoing
paragraphs shall survive the Closing.
b. Conduct of Business in Ordinary Course. Seller will continue
to carry on its business in the ordinary course diligently and substantially
in the same manner as heretofore conducted. Seller will not take any action
that would cause any of the representations and warranties made by Seller in
this Agreement not to be true and correct in all material respects on and as
of the Closing Date, with the same force and effect as if made on and as of
the Closing Date. Seller will use commercially reasonable efforts to
preserve the Seller's business intact and to preserve the Seller's
relationships with employees, customers, clients, vendors, representatives,
agents, creditors, subcontractors and suppliers and others having business
relationships with Seller and/or Seller's business. The other, more specific
provisions of this Section shall in no way limit the generality of this
subsection.
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c. Sale of Customer List. Seller will not sell or otherwise
transfer, or grant any security or other interest in, the Customer List to
any other person or entity.
13. Representations, Warranties and Covenants True as of Closing Date.
All of the representations, warranties and covenants contained in paragraph
10 and 11 hereof shall be true and correct, and shall not have been breached,
on and as of the closing date. All of the representations, warranties and
covenants contained in paragraph 10 and 11 shall survive the closing.
14. Attorneys, Brokers, Consultants. The parties hereto warrant that no
person or entity can properly claim a right to a commission, finder's fee, or
other compensation based upon the acts of that party with respect to the
purchase and sale contemplated herein and each party hereby agrees to
mutually indemnify and hold the other harmless from any and all claims,
liabilities, costs, including attorney fees, expense and commissions,
resulting from any claim for a commission, fee or other compensation by any
party or entity based upon those acts.
15. Seller Indemnification.
a. In the event Seller breaches (or in the event any third party
alleges facts that, if true, would mean Seller has breached) any of its
representations, warranties or covenants contained in this Agreement, then
Seller will indemnify Buyer from and against the entirety of any and all
Adverse Consequences Buyer may suffer to the extent resulting from, arising
out of, relating to, or caused by the breach (or the alleged breach).
b. Seller will indemnify Buyer from and against the entirety of
any Adverse Consequences Buyer may suffer to the extent resulting from,
arising out of, relating to, in the nature of, or caused by any liability not
assumed by Buyer (including but not limited to any liability of Seller that
becomes a liability of Buyer under any bulk transfer law of any jurisdiction,
under any common law doctrine of de facto merger or successor liability, or
otherwise by operation of law).
c. Seller will indemnify Buyer from and against the entirety of
any Adverse Consequences Buyer may suffer to the extent resulting from,
arising out of, relating to, or caused by, any lawsuit or other legal
proceeding to which the Seller is now, or may hereafter become, a party
provided such lawsuit or legal proceeding relates to the business prior to
closing and is not related to an obligation assumed by Buyer under this
Agreement.
d. If the consent of any person or entity to the assignment of
any of the contract by Seller to Buyer as contemplated by this Agreement is
required by the terms of such contract, and such consent has not been
obtained by Seller and delivered to Buyer at or prior to the Closing, Seller
will indemnify Buyer from and against the entirety of any Adverse
Consequences Buyer may suffer to the extent resulting from, arising out of,
relating to, or caused by the failure of Seller to obtain such consent prior
to the Closing.
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16. Headings. The "headings" contained in this agreement are for the
purposes of expediency and are not intended to otherwise bind the parties or
interpret the content of the paragraph language they precede.
17. Notices. Any notice or other communication between the parties
hereto shall be in writing and shall be delivered personally or by United
States mail and shall be deemed delivered upon receipt if sent by personal
delivery, and three (3) business days after deposit if sent by United States
mail certified return receipt requested. Such notices or communications shall
be sent to the following addresses: (a) if to the Buyer, at ▇▇▇ ▇▇▇▇▇▇▇▇
▇▇▇▇, ▇▇▇▇▇ ▇▇▇, ▇▇▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇, or at such other address or addresses
as may have been furnished in writing by the Buyer to the Seller, with a copy
to ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇ & ▇▇▇▇▇▇▇, LLP, ▇▇▇ ▇▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇, ▇▇▇ ▇▇▇
▇▇▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇; and (b) if to the Seller, at the address set forth on
his or her signature page to the Customer List Purchase Agreement, or at such
other address or addresses as may have been furnished to the Buyer in writing
with copy to ▇▇▇▇ ▇. ▇▇▇▇▇▇, Esq., ▇▇▇▇ ▇. ▇▇▇▇▇▇ PA ▇▇▇▇ - ▇ ▇▇▇▇▇▇▇▇ ▇▇.,
▇▇▇▇▇▇▇▇▇ ▇▇, ▇▇▇▇▇.
18. Survivorship. The representatives, covenants and obligations of the
parties as set forth in this Agreement shall survive the closing of the title
hereunder.
19. Binding Effect. All of the terms, covenants and conditions herein
contained shall be for and shall inure to the benefit of and shall bind the
respective parties hereto and their successors and assigns, respectively.
20. Assignment to Corporation. This Agreement may be assigned by Buyer
to a corporation or partnership controlled by Buyer in place and instead of
Buyer; however, Buyer shall not, upon such assignment, be relieved of
performance hereunder and pursuant to the provisions hereof.
21. Governing Law. The parties hereto expressly agree that this
Agreement will be governed by, interpreted under, and construed and enforced
exclusively in accordance with the laws of the State of Nevada.
22. Arbitration. Except for the provisions provided in Section 9(e)
above, any controversy involving the construction or application of any of
the terms, provisions or conditions of this Agreement shall, on the written
request of either party served on the other, be submitted to binding
arbitration with the American Arbitration Association without the right to a
trial de novo, subject to the governing law of this Agreement. The cost of
arbitration and reasonable attorney fees shall be borne by the losing party
or in such proportions as the arbitrator shall decide. Said costs and fees
shall be applicable to any trial or appellate court proceedings.
Signatures on next page
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IN WITNESS WHEREOF, the parties hereto have executed this Customer List
Purchase Agreement dated and effective as of the date first set forth above.
SELLER: Brody Enterprises, BUYER: America TonerServ Corp.,
a Nevada corporation
By:/s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇ By:/s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
▇▇▇▇▇▇ ▇. ▇▇▇▇▇, President ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇, President & CEO
Address: Address:
▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇. 475 Aviation Blvd., ▇▇▇▇▇ ▇▇▇
▇▇▇▇▇▇▇▇ ▇, ▇▇▇▇▇ ▇▇▇ Santa Rosa, CA 95403
▇▇▇ ▇▇▇▇▇, ▇▇ ▇▇▇▇▇
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