SALE OF CORPORATIONS ASSETS IN EXCHANGE FOR STOCK OF PURCHASING CORPORATION
AGREEMENT dated April 29, 1998, by and between A. M. W. Metal Fabricators,
Corporation, a Florida corporation (hereinafter "Seller") and Xxxxx Technology
Licensing, Inc., a Florida corporation, (hereinafter "Buyer").
WHEREAS the Seller is engaged in metal fabrication and advanced micro
welding and;
WHEREAS, the Buyer desires to acquire all of the Seller's assets, business
and good will in exchange for shares of the Buyer's common stock and for the
assumption by the Buyer of all of the Seller's liabilities and obligations,
subject to the further provisions of this Agreement; and
WHEREAS, the Seller desires that all of the Seller's properties be sold and
exchanged solely for shares of the Buyer's common stock and for the assumption
by the Buyer of such liabilities and obligations of the Seller (subject as
aforesaid) in connection with the dissolution and complete liquidation of the
Seller, whereupon the Seller will distribute to the holders of its common stock,
pro rata, all its right, title and interest in and to the shares of the Buyer's
stock to be received by the Seller as aforesaid, in exchange for the surrender
by such stockholders for cancellation of all of the Seller's outstanding common
stock, all as hereinafter more fully provided, and for the purpose of carrying
out a tax-free reorganization within the meaning of the Internal Revenue Code of
1954.
NOW THEREFORE, in consideration of the premises and the respective
agreements hereinafter set forth, the Seller and the Buyer hereby agree as
follows:
1a. Sale and Transfer of Assets. The Seller hereby agrees that, subject to the
terms and conditions this Agreement, the Seller will sell, convey, transfer
and deliver to the Buyer, at the Closing hereunder all of the Seller's then
existing assets and business including, without limitation, all of the
Seller's good will and its right to the use of its name. The assets so to
be sold, conveyed, transferred and delivered shall include those owned by
the Seller as of the effective date of this Agreement (including, without
limitation, those reflected in the Seller's audited financial statements.
Without limitation of the foregoing provisions, the aforesaid sale,
conveyance and transfer shall include all of the Seller's rights and
interests in, to and under all patents, patent applications, trademarks,
trademark registrations and applications therefor, copyrights, copyright
registrations and applications therefor, wherever issued or pending, all
trade names, labels and other trade rights, whether or not registered, all
inventions, discoveries, improvements, processes, formulae, trade secrets,
ideas, and other know-how, whether patentable or not, and all shop rights,
licenses and other agreements (including agreements with employees of the
Seller) relating in whole or in part to any of the foregoing.
b. Consideration for Sale and Transfer. The Buyer hereby agrees that, at the
Closing, subject to the terms and conditions of the Agreement, and in full
consideration for the aforesaid sale, conveyance, transfer and delivery,
(i) the Buyer will deliver to the Seller a certificate or
certificates for 500,000 (five-hundred thousand) shares of the
Buyer's common stock of the par value of $0.001 per share, so
that the aggregate number of shares of common stock so to be
delivered shall be at the rate of 50 shares of a share of the
Buyer's common stock for each share of common stock of the
Seller outstanding in the hands of the public at the Closing
Date, such delivery to be made by the Buyer in such authorized
full share denominations and registered in the name of the
SelIer or its nominees or such other names as the Seller shall
request in writing; and
(ii) the Buyer assumes and agrees to pay, perform and discharge all
debts, obligations, contracts and liabilities of the Seller of
any kind, character or description, whether accrued, absolute,
contingent or otherwise (and whether or not reflected or
reserved against in the Seller's balance sheets, books of
accounts and records), provided, however, that the Buyer shall
have no liability with respect to any items as to which
provision is made for payment in subsection (e) of this
Section 1 or with respect to any other obligations or
liabilities incurred by the Seller after the Closing.
c. Instruments of Conveyance and Transfer. The Seller hereby agrees that, at
the Closing, it will deliver to the Buyer (i) such deeds, bills of sale,
endorsements, assignments, and other good and sufficient instruments of
conveyance and transfer, in form satisfactory to the Buyer's counsel, as
shall be effective to vest in the Buyer good and marketable title to the
assets and business to be sold, conveyed, transferred and delivered
hereunder, all as provided in this Agreement, and (ii) all of the Seller's
contracts and commitments, books (except minute and stock books), records
and other data relating to its assets, business and operations, including,
without limitation, all its notebooks and other records relating to
inventions, discoveries and improvements, whether patentable or not; and
that, simultaneously with such delivery, all such steps will be taken as
may be requisite to put the Buyer in actual possession and operating
control of such assets and business.
d. Further Assurances. The Seller hereby agrees that, from time to time, at
the Buyer's request and without further consideration, the Seller will
execute and deliver such other instruments of conveyance and transfer and
take such other action as the Buyer reasonably may require more effectively
to convey, transfer to and vest in the Buyer, and to put the Buyer in
possession of, any property to be sold, conveyed, transferred and delivered
hereunder, and, in the case of contracts and rights, if any, which cannot
be transferred effectively without the consent of third parties which is
unobtainable, to use the Seller's best efforts to assure to the Buyer the
benefits thereof.
e. Seller's Liquidation and Dissolution Expenses. The Buyer shall provide for
the payment of the liquidation and dissolution expenses of the Seller,
including relocation and other costs in the amount of up to $5,000
(five-thousand dollars).
2. Closing. The closing of the transactions provided for in subsections (a),
(b) and (c) of Section 1 above (herein called the Closing) shall take place
at the Seller's office at 0000 000xx Xxxxxx Xxxxx, Xxxxx, Xxxxxxx, at
10:00AM on April 29, 1998; provided , however, that either the Buyer or the
Seller, by written notice or notices to the other from time to time, shall
be entitled to postpone the Closing to a date not later than thirty days
after the above specified date. If, due to causes beyond the control of
either the Buyer or the Seller, the Closing is not consummated on or before
the above specified date or within thirty days thereafter, this Agreement,
unless mutually extended in writing by the Buyer and the Seller, shall
terminate without liability of any kind on the part of either the Buyer or
the Seller. The date of the Closing is referred to in this Agreement as the
Closing Date.
3. Approval by Seller's Stockholders. The Seller hereby agrees that it will
duly call and give notice of a meeting of the holders of its common stock,
to be held on or prior to May 30, 1998, for the purpose of voting upon the
dissolution and liquidation of the Seller and in connection therewith the
change of name and the sale and transfer contemplated thereby. The Seller
hereby further agrees that, promptly after the Closing, the Seller will
take all such action as may be required to change its name and to dissolve
and terminate its corporate existence and to completely liquidate and to
distribute directly to the holders of the Seller's common stock, pro rata,
all its right, title and interest in and to the shares of Buyer's stock
received by the Seller under this Agreement, in exchange for the surrender
by such stockholders for cancellation of such common stock; the
arrangements for such distribution and exchange to include provision for
the purchase or sale, for account of the Seller's stockholders, of their
fractional interests in the Buyer's stock to the end that no fractional
shares of such stock will be required to be issued in connection therewith.
4. Approval by Buyer's Stockholders. The Buyer hereby agrees that it will duly
call and give notice of meeting of the holders of its preferred and common
stocks, to be held on or prior to May 30, 1998, for the purpose of voting
upon the acquisition by the Buyer contemplated hereby, a proposal to
increase the number of authorized shares of the Buyer's common stock, par
value $.001 per share, from 9,474,535 shares to 9,974,535 shares.
5. Representations and Warranties by the Seller. The Seller hereby represents
and warrants as follows:
(a) Organization and Capitalization. The Seller is a corporation duly
organized, validly existing and in good standing under the laws of the
State of Florida, has corporate power to carry on its business as it is now
being conducted, and is duly qualified to do business and is in good
standing in each jurisdiction in which the character and location of the
properties owned by it or the nature of the business transacted by it makes
such qualifications necessary. The Seller's authorized capital stock
consists of 10,000 shares of common stock, par value $.001 per share, of
which 10,000 shares were validly issued and outstanding, fully paid and
non-assessable, at the close of business on April 29, 1998. There are no
existing, options, calls or commitments of any character relating to the
Seller's authorized or issued stock. The copies of the Seller's Articles of
Incorporation and of the Seller's By-Laws which have been delivered to the
Buyer are complete and correct as at the date of this Agreement.
(b) Authority to Execute Agreement. The execution, delivery and performance of
this Agreement by the Seller including, without limitation, the sale,
conveyance, transfer, and delivery contemplated hereby have been duly and
effectively authorized by the Seller's Board of Directors, subject to
approval by the Seller's stockholders as required by law.
(c) Financial Statements. The Seller has delivered to the Buyer copies of its
audited financial statements, all of which are true and complete and have
been prepared in accordance with generally accepted accounting principles
consistently followed throughout the periods indicated. The Buyer shall
incur the expense associated with and shall make use of the Buyers
independent auditor for the purposes of this Agreement.
(d) Absence of Undisclosed: Liabilities. Except as and to the extent reflected
or reserved against in the Seller's Balance Sheet, the Seller has no
liabilities or obligations (whether accrued, absolute, contingent or
otherwise) of a nature customarily reflected in a corporate balance sheet
prepared in accordance with generally accepted; accounting principals,
including, without limitation, any tax liabilities due or to become clue
and whether (i) incurred in respect of or measured by the Seller's income
for any period prior to the closing of business on April 29, 1998,
(e) Absence of Certain Changes or Events. Since March 1, 1998, there has not
been:
(1) any change in the Seller's financial condition, assets, liabilities or
business, other than changes in the ordinary course of business and changes
of which the Buyer has been advised in writing, none of which has been
materially adverse;
(2) any declaration, setting aside or payment of any dividend or other
distribution in respect of the Seller's capital stock;
(3) any increase in the compensation payable or to become payable by the Seller
to any of its officers, employees or agents, other than increases made in
the ordinary course of business pursuant to the Seller's salary plan and
increases of which the Seller has advised the Buyer in writing, or any
bonus, percentage compensation, service award or other like benefit,
granted, made or accrued to or to the credit of any of the officers,
employees or agents of the Seller, or any employee welfare, pension,
retirement or similar payment or arrangement made or agreed to by the
Seller except payments made pursuant to the existing welfare, pension and
retirement plans and arrangements and except changes of which the Seller
has advised the Buyer in writing; or
(4) any significant labor trouble or any other event or condition of any
character which has materially and adversely affected the Seller's
business.
(f) Taxes. The provision made for taxes on the Seller's Balance Sheet is
sufficient, in the opinion of the Seller, for the payment of all accrued
and unpaid United States, Canadian, state, county and local taxes of the
Seller, whether or not disputed, for the four months period ended on April
29, 1998, and for all years prior thereto. There are no agreements by the
Seller for the extension of the time for the assessment of any tax, and all
United States, Canadian, state and local taxes due and payable by the
Seller on or before the date of this Agreement have been paid.
(g) Accounts Receivable. The accounts receivable of the Seller shown on the
Seller's Balance Sheet or thereafter acquired by it prior to the date of
this Agreement, have been collected or are collectible at the aggregate
recorded amounts thereof less applicable reserves.
(h) Inventories. The Seller's inventory shown on the Seller's Balance Sheet, or
thereafter acquired by it prior to the date of this Agreement, consist of
items of a quality and quantity usable or saleable in the normal course of
the Seller's business; the value of obsolete materials and of materials of
below standard quality has been written down to realizable market value or
adequate reserves provided therefor, and the values at which such
inventories are carried reflect the Seller's normal inventory valuation
policy of stating the inventory at cost, not in excess of market, all in
accordance with generally accepted accounting practices.
(i) Title to Properties; Absence of Liens and Encumbrances. The Seller has good
and marketable title to all its properties and assets, real and personal,
including those reflected in the Seller's Balance Sheet, except as since
sold or otherwise disposed of in the ordinary course of business or as
advised to the Buyer in writing, free and clear of all liens and
encumbrances.
(j) Lists of Properties, Contracts, etc. The Seller has delivered to the Buyer
accurate lists and summary descriptions, certified by authorized officers
of the Seller to be correct to the best of their knowledge and belief of
the following:
List of existing contracts
List of properties and equipment
(k) Litigation. Except as set forth in letter attached by the Seller to the
Buyer and except for suits, if any of a character incident to the normal
conduct of the Seller's business and involving not more than $1,000 in the
aggregate, there is no litigation, proceeding or governmental investigation
pending, or so far as known to the Seller, threatened against or relating
to the Seller or its properties or business, or the transactions
contemplated by this Agreement, nor is there any basis known to the Seller
for any such action.
(l) No Brokers. All negotiations relative to this Agreement and the
transactions contemplated hereby have been carried on by the Seller
directly with the Buyer, without the intervention of any person as the
result of any act of the Seller (and so far as known to the Seller, without
the intervention of any other person) in such manner as to give rise to any
valid claim against either of the parties hereto for a brokerage commission
or other like payment.
6. Representations and warranties by the Buyer. The Buyer hereby represents
and warrants
(a) that the Buyer is a corporation duly organized, existing and in good
standing under the laws of the State of Florida
(b) that the authorized capital stock of the Buyer consists of 20,000,000
shares of common stock of the par value of $.001 per share of which, at the
close of business on April 29, 1998, 9,474,535 shares were validly issued
and outstanding and no shares were reserved for issuance,
(c) that there has been no material change in the condition, financial or
otherwise, of the Buyer as shown in the audited balance sheet thereof as of
January 31, 1998, as submitted to stockholders, other than changes
occurring in the ordinary course of business, which changes have not
materially adversely affected its business, properties or financial
condition.
(d) that the execution, delivery and performance of this Agreement by the Buyer
have been duly and effectively authorized by the Buyer's Board of
Directors, subject to approval by the Buyer's stockholders,
(e) that the shares of the Buyer's common stock to be issued to the Seller,
pursuant to this Agreement, for distribution to its stockholders as
provided in Section 3 above, will, when so issued, be validly issued and
outstanding, fully paid and non-assessable. Said Common Shares shall be
issued as "restricted shares" as that term is defined in Rule 144, as
amended, and shall bear a legend in the following manner:
THESE SECURITIES CANNOT BE SOLD, TRANSFERRED OR OTHERWISE DISPOSED OF
BY ANY HOLDER TO ANY OTHER PERSON OR ENTITY UNLESS SUBSEQUENTLY
REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED, AND UNDER
APPLICABLE LAW OF THE STATE OR STATES WHERE SOLD, TRANSFERRED OR
DISPOSED OF, UNLESS SUCH SALE, TRANSFER OR Disposition SHALL QUALIFY
UNDER AN ALLOWED EXEMPTION TO SUCH REGISTRATION. ANY REQUEST FOR THE
SALE, TRANSFER OR OTHER DISPOSITION OF THESE SHARES SHALL BE
ACCOMPANIED BY AN OPINION OF COUNSEL ACCEPTABLE TO THIS CORPORATION.
(f) that the negotiations relative to this Agreement and the transactions
contemplated hereby have been carried on by the Buyer directly with the
Seller, without the intervention of any persons or as the result of any act
of the Buyer (and, so far as known to the Buyer, without the intervention
of any other person) in such manner as to give rise to any valid claim
against either of the parties hereto for a brokerage commission or other
like payment.
7. Conditions Precedent to Buyer's Obligations Hereunder. All obligations
of the Buyer under this Agreement are subject to the fulfillment, prior
to or at the Closing of each of the following conditions:
(a) The Buyer shall not have discovered any material error, misstatement or
omission in the representations and warranties made by the Seller
throughout this Agreement;
(b) The Seller's representations and warranties contained in this Agreement
shall be deemed to have been made again at and as of the time of Closing
and shall then be true in all material respects, except that litigation
commenced or threatened after the date of this Agreement against or
relating to the Seller shall not constitute a non-fulfillment of this
condition unless such litigation, if decided against the Seller, would
materially adversely affect the business of the Seller; the Seller shall
have performed and complied with all agreements and conditions required by
this Agreement to be performed or complied with by it prior to or at the
Closing; and the Buyer shall have been furnished with a certificate of
appropriate officers of the Seller, dated the Closing Date, certifying in
such detail as the Buyer may request to the fulfillment of the foregoing
condition.
(c) The sale and transfer by the Seller of its assets, business and goodwill
and its change of name and liquidation and dissolution as provided herein,
shall have been approved by the holders of at least two-thirds of the
outstanding stock of the Seller entitled to vote.
(d) The acquisition by the Buyer of the Seller's assets, business and goodwill
as provided in this Agreement have been approved at a meeting of the
Buyer's stockholders by affirmative votes constituting a majority of the
votes entitled to be cast by the holders of the Buyer's stock, preferred
and common, present or represented at such meeting and entitled to vote
thereat, relating to the increase in the Buyer's authorized common stock
and shall have been approved at said meeting by the holders of at least
two-thirds of each class of such shares, preferred and common, present and
voting at such meeting.
(e) Funds in Seller's reserves are adequate to provide for payment of all then
accrued and unpaid United States, Florida, Pinellas County and any other
local taxes of the Seller, whether or not disputed, for the fiscal year
then ended and for all fiscal years prior thereto.
8. Conditions Precedent to the Obligations of the Seller. All obligations of
the Seller under this Agreement are subject to the fulfillment, prior to or
at the Closing of each of the following conditions:
(a) The Seller shall not have discovered an;y material error, misstatement or
omission in the representations and warranties made by the Buyer
hereinabove.
(b) The Buyer's representations and warranties contained in this Agreement
shall be deemed to have been made again at and as of the time of the
Closing and shall then be true in all material respects; the Buyer shall
have performed and complied with all agreements and conditions required by
this Agreement to be performed or complied with by it prior to or at the
Closing; and the Seller shall have been furnished with a certificate of one
of the Buyer's Vice Presidents or its Comptroller, dated the Closing Date,
certifying in such detail as the Seller may request to the fulfillment of
the foregoing conditions.
(c) The acquisition by the Buyer of the Seller's assets, business and good will
as provided in this Agreement shall have been approved at a meeting of the
Buyer's stockholders by affirmative votes constituting a majority of the
votes entitled to be cast by the holders of the Buyer's stock, preferred
and common, present or represented at such meeting and entitled to vote
thereat, and the increase in the Buyer's authorized common stock
contemplated herein shall have been approved at said meeting by the holders
of at least two-thirds in interest of each class of such shares, preferred
and common, present and voting at such meeting.
9. Bulk Sales Law. The Buyer hereby waives compliance by the Seller with the
provisions of the Bulk Sales Law of any State.
10. Termination of Representations and Warranties. The Seller and the Buyer
agree that their respective representations and warranties contained herein
shall expire with, and be terminated and extinguished by, the Closing under
this Agreement on the Closing Date, and that, the Closing having been
consummated, neither the Seller nor the Buyer shall be under any liability
whatsoever with respect to any such representation or warranty,
11. Notices, Etc. All notices, requests, demands, and other communications
hereunder shall be in writing and shall be deemed to have been duly given
if delivered or mailed, first class postage prepaid,
(a) if to the Seller, at
A.M.W. Metal Fabricators
0000 000xx Xxxxxx Xxxxx
Xxxxx, Xxxxxxx 00000
(000) 000-0000
(b) if to the Buyer at:
Xxxxx Technology Licensing, Inc.
0000 Xxxxx Xxxxx Xxxx, Xxxxx 000
Xxxxx, Xxxxxxx 00000
(000)-000-0000
12. Amendments. This Agreement may be amended or modified by a written
instrument executed by the Buyer and the Seller acting by their respective
officers thereunto duly authorized by their respective Boards of Directors
or Executive Committees; provided, however, that no such amendment or
modification shall change the number of share of the Buyer to be issued
pursuant to this Agreement and provided further that no such amendment or
modification shall change the provisions with respect to the transfer of
the Seller's assets to, and assumption of its liabilities by, the Buyer,
and the distribution to the Seller's stockholders of shares of the Buyer's
common stock in exchange for the surrender by the stockholders of the
Seller, for cancellation, of the Seller's outstanding common stock in any
manner which would materially adversely affect the rights of the
stockholders of the Seller.
13. Sections and Other Headings. The section and other headings contained in
this Agreement are for reference purposes only and shall not affect in any
way the meaning or interpretation of this Agreement.
14. Counterparts. This Agreement may be executed simultaneously in two or more
counterparts, each of which shall be deemed an original, but all of which
together shall constitute one and the same instrument.
15. Parties In Interest. This Agreement shall inure to the benefit of and be
binding upon the parties named herein as the Seller and the Buyer and their
respective successors and assigns;nothing in this Agreement express or
implied, is intended to confer upon any other person any rights or remedies
under or by reason of this Agreement.
16. Florida Law to Govern. This Agreement shall be construed and enforced in
accordance with the laws of the State of Florida.
IN WITNESS WHEREOF, the undersigned parties hereto have duly executed this
Agreement on the date first above written.
For Seller For Buyer
Xxx Xxxx Xxxx X. Xxxxx, President
Xxx Xxxx
Witness:
For Seller For Buyer
Xxxxxxx Xxxxx Xxxx Xxxxxx, Corporate Secretary
Amendment A to that
AGREEMENT dated April 29, 1998, by and between A. M. W. Metal Fabricators,
Corporation, a Florida corporation (hereinafter "Seller") and Xxxxx Technology
Licensing, Inc., a Florida corporation, (hereinafter "Buyer").
1. Relocation. The Buyer has agreed to provide facilities for the relocation
of Seller to the Science Technology and Research Center and such facilities
have been inspected and approved by the Seller. The Buyer agrees to have
concluded all facility requirement so as to allow for Seller to complete
relocation no later than June 30, 1998.
2. Continuing Obligations
a. As a part of this agreement, Seller has agreed to mediate between the
individual and Buyer relating to the loan in the amount of $54,450 so that
said Note is either:
(i) Settled for Xxxxx Common Stock, or;
(ii) Assumption of Note by Xxxxx under existing terms and the removal of Xxx and
Xxx as guarantors to include release of their personal collateral.
b. The canceled lease in the amount of $83,000 which is currently in dispute
shall remain the responsibility of Seller. Buyer will assist with
settlement issues but does not intend to assume this lawsuit or its
expenses.
3. Compensation. Xxx Xxxx shall be compensated at the rate of $60,000 annually
and shall be entitled to participate in any and all bonus and incentive
plans promulgated by Buyer for its Officers and Directors. Key personnel of
AMW would also be eligible to participate in any and all bonus and
incentive plans promulgated by Buyer for its Officers and Directors.
4. Incentive Program. Xxx Xxxx shall be entitled to an increase in salary at
the rate of $5,000 annually commensurate with an increase of $50,000 annual
revenue which exceed expectations. Base salary for Xxx Xxxx however shall
not exceed $150,000 under this incentive program.
5. Expectations. The audited data indicates 1997 revenues of $344,000
(break-even). The audited data indicates first quarter 1997 revenues of
$110,000 (break-even). With the combined resources of Buyer, it is
anticipated that AMW shall achieve minimum 1998 revenues of $650,000 and
1999 revenues of $1,000,000.
6. Employment. Within sixty days of this Agreement, Buyer shall enter an
employment agreement for the services of Xxx Xxxx which shall contain,
among other things, a minimum employment period of five years.
7. Prior taxes. All taxes and related forms required for filing by Seller
prior to April 29, 1998, including those subsequently extended for prior
periods, shall remain the responsibility of Seller. These taxes may include
amendments to prior years and other responsibilities related to the
Subchapter "S" status of the Seller.
IN WITNESS WHEREOF, the undersigned parties hereto have duly executed this
Amendment on April 29, 1998.
For Seller For Buyer
Xxx Xxxx Xxxx X. Xxxxx, President
Xxx Xxxx
Witness:
For Seller For Buyer
Xxxxxxx Xxxxx Xxxx Xxxxxx
