EXHIBIT 10(A)
AGREEMENT FOR SALE AND PURCHASE OF CERTAIN ASSETS
OF UNIVERSAL SEALANT, LTD.
THIS AGREEMENT is made as of the 30th day of March 2001, by and
between Universal Sealant, Ltd., a Bahamian corporation
(hereinafter referred to as "USL" or the "Seller"), and The
Winner's Xxxx.xxx, Inc. (hereinafter referred to as "WNNR" or the
"Buyer").
I. Introductory Statement
----------------------
1.1 Seller is a Bahamian corporation located at Xxxxxxxx
Xxxxx, X.X. Xxx X-00000, Xxxxxxxx, Xxxxxxx. USL owns all
proprietary and other rights to manufacture, produce, distribute,
and sell a roofing sealant known as UniSeal Roof Shield[TM](the
"Product").
1.2 Buyer is a Delaware corporation with its principal
offices located at X.X. Xxx 000, Xxxx Xxxxxxx, XX 00000, that
desires to acquire all of the rights to manufacture, produce,
distribute, and sell the Product.
II. Sale of Assets
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Seller agrees to sell and Buyer agrees to purchase certain
assets of USL, as follows:
2.1 Assignment of all right, title and interest in and to the
existing Contract Manufacturing Agreement dated September 30, 1999
(the "Contract"), by and between USL and Industrotech Sales, Ltd.;
and
2.2 The worldwide rights to exclusively market and sell all
USL sealant products; and
2.3 The copyrights and trademarks of all sealant products
currently or previously produced by Industrotech Sales, Ltd. for
USL; and
2.4 All research and development data compiled by both USL
and Industrotech Sales, Ltd.; and
2.5 All printed literature, labels, artwork, etc. that may be
related to the sealant products being transferred; and
2.6 Assignment and transfer of any licenses and any other
related permits concerning the sales, distribution, or use of the
Product; and
2.7 Any customer lists or customer accounts which exist at
the time of closing.
Exhibit 10(A) - Pg. 1
III. Purchase Price
--------------
The purchase price for the certain assets described in the
preceding Section II shall be paid over twenty-four (24) months
(the "Term") as follows:
3.1 Payments shall be derived from certain Net Revenues from
the sale of the Product. Net Revenues shall be defined as the
gross revenues from the sale of the Product less certain expenses
as set forth in Schedule 3.1 attached hereto and incorporated
herein by reference.
3.2 The Buyer shall be entitled to retain the first fifty
thousand dollars ($50,000.00) in net revenues generated during the
initial twelve (12) month Term and, thereafter, all net revenues
shall be paid to Lender.
3.3 During the final twelve (12) months of the Term, the
Buyer shall be entitled to retain the first fifty-thousand dollars
($50,00.00) in net revenues and, thereafter, all net revenues shall
be paid to Seller.
3.4 At the expiration of the Term, March 31, 2003, and
provided that all net revenues as set forth above have been paid to
Seller through the end of the Term, then irrespective of the total
amount of net revenues paid, the Buyer will have no further
financial obligations of any kind and nature whatsoever to Seller
concerning the sale of and transfer of the certain assets set forth
in Section II. Notwithstanding any provision to the contrary
contained herein, total net revenues paid to Seller during the term
shall not exceed One Million Dollars ($1,000,000).
3.5 Notwithstanding any provision to the contrary contained
in this Agreement, title to the assets set forth in Section II of
this Agreement will be deemed to have been transferred by Seller to
Buyer as of the Closing Date.
IV. Conditions Precedent to Closing
-------------------------------
The following items shall be completed prior to closing:
4.1 The receipt of $100,000 by WNNR from the private sale of
2,500,000 shares of WNNR Common Stock; and
4.2 A letter from Industrotech Sales, Ltd. to WNNR stating
that (i) the Contract is current, (ii) there have been no breaches
or claims concerning the Contract, (iii) the obligations are
binding on the parties to the Contract, and (iv) Industrotech
Sales, Ltd. consents to the assignment and transfer of the USL
rights and obligations under the Contract; and
V. Closing
-------
This transaction shall be closed on or before the 30th day of
Exhibit 10(A) - Pg. 2
April, 2001 (the "Closing Date") at the offices of Xxxxx X. Xxxxxx,
P.A., 0000 Xxxxxx Xxxx, Xxxxx 000, Xxxx Xxxxx, Xxxx Xxxxx, Xxxxxxx
00000.
5.1 At the closing, Buyer shall deliver to the Seller:
5.1.1 A Board of Directors Resolution authorizing and
approving the Agreement.
5.2 At the closing, Seller shall deliver to the Buyer:
5.2.1 A Xxxx of Sale for the certain assets set forth in
Section II above.
5.2.2 An Assignment of the Contract to Buyer for the Product
and any other instruments appropriate to transfer the assets to
be sold hereunder; and
5.2.3 A legal opinion acceptable to Buyer's counsel that the
certain assets to be conveyed are free and clear of all liens
and encumbrances, that the Seller is a corporation duly
incorporated and validly existing in all jurisdictions in which
Seller conducts business, and that the Seller's signatories to
the Agreement are authorized and empowered to close the
transaction; and
5.3 Any other document reasonably requested by either party
to effectuate this transaction shall be delivered at the closing.
VI. Representations and Warranties of Buyer
---------------------------------------
Buyer represents and warrants the following to Seller:
6.1 Buyer is a corporation, duly organized and validly
existing under the laws of the State of Delaware, and has the
authority to carry on its business as a corporation following the
conclusion of the transaction described hereunder.
6.2 The execution, delivery and performance of this Agreement
by Buyer is not in violation of any other agreement or instrument
to which the Buyer is a party or by which the Buyer is bound.
6.3 The foregoing representations and warranties shall be
true on the closing date.
VII. Representations and Warranties of Seller
----------------------------------------
Seller represents and warrants the following to Buyer:
7.1 Seller is a corporation, duly organized and validly
existing under the laws of the Commonwealth of the Bahamas, and is
duly empowered to enter into this transaction.
Exhibit 10(A) - Pg. 3
7.2 The execution, delivery and performance of this Agreement
by Seller is not in violation of any other agreement or instrument
to which the Seller is a party or by which the Seller is bound.
7.3 Seller is the owner of all assets free and clear of all
liens and encumbrances to be transferred to Buyer pursuant to this
Agreement.
7.4 The Contract Manufacturing Agreement is in full force and
effect and Seller is in full compliance therewith. (Buyer
acknowledges receipt of a copy of the Agreement). The transfer and
assignment of the Contract is conditioned upon the prior consent of
Industrotech, Ltd.
7.4 No litigation or claims of any nature whatsoever are
pending or threatened against or involving the certain assets.
Seller does not know of any basis for any such action or claim.
7.5 All sales taxes, tangible and intangible taxes, real
estate taxes, and other taxes which would affect the sale and
transfer of assets, due and payable for the certain assets have
been paid through December 31, 2000, and any sales tax accrued
subsequent to such date shall be promptly paid by Seller.
7.6 The representations and warranties of Seller shall be true
as of the date of closing.
7.7 Seller agrees to indemnify Buyer and hold it harmless
from and against all debt and employee claims against the assets.
In the event that such a claim arises, Buyer shall promptly notify
Seller and the Seller shall defend, indemnify and hold Buyer
harmless. If Seller fails to do so and Buyer is forced to retain
counsel, then Seller shall also reimburse and indemnify Buyer for
all reasonable attorney fees and costs.
7.8 Buyer shall not assume nor be responsible for any liability
of Seller except as set forth in this Agreement.
VIII. Conduct of Business Prior to Closing
------------------------------------
Between the date of this Agreement and the Closing Date, Seller
shall continue to sell the Product in the usual course, and will
use his best efforts to preserve intact the business relationship
with suppliers, customers, distributors and employees. Further,
Seller shall take no action with respect to the Product out of the
ordinary.
IX. Covenant Not To Compete
-----------------------
Seller agrees that for a period of three (3) years following the
closing, Seller will not, directly or indirectly, own, manage,
operate, join in, control, or participate in the ownership,
management, operation, or control of, or be connected with in any
manner, any entity engaged in the manufacture, sale, or
Exhibit 10(A) - Pg. 4
distribution of the Product or any reasonably related product.
Such covenant shall be effective so long as Buyer is not in
material default under this Agreement.
X. Default
------
No party may be held in default under this Agreement unless he
or it has received five (5) business days written notice from the
other party. Upon default, interest shall accrue at the highest
rate permissible under Florida law.
XI. Miscellaneous
-------------
11.1 Captions. The captions of this Agreement are for
convenience and reference only and in no way define, describe,
extend or limit the scope or intent of this Agreement or the intent
of any provision in it.
11.2 Invalidity of Provisions. The unenforceability, for any
reason, of any term, condition, covenant or provision of this
Agreement shall neither limit nor impair the operation,
enforceability or validity of any other terms, conditions,
provisions or covenants of the Agreement.
11.3 Construction. This Agreement shall not be construed
against either party regardless of who is responsible for its
drafting.
11.4 Arbitration. In the event that any dispute arises under
this Agreement which cannot be resolved between the parties, the
parties hereto stipulate and agree to submit such dispute to non-
binding pre-suit mediation. The parties shall select a mediator
from the list of certified Circuit Court mediators maintained by
the office of the Palm Beach County Circuit Court and no suit shall
be filed until ten (10) days after the mediator has declared an
impasse.
11.5 Governing Law. This Agreement shall be governed by and
construed in accordance with the laws of the State of Florida,
without giving effect to the conflict of laws rules of the State of
Florida. The parties agree that any action brought by and party
against another party in connection with any rights or obligations
arising out of this Agreement shall be instituted properly in a
federal or state court of competent jurisdiction with venue only in
the Seventeenth Judicial Circuit Court in and for Palm Beach
County, Florida or the United States District Court for the
Southern District of Florida, West Palm Beach Division. A party to
this Agreement named as a Defendant in any action brought in
connection with this Agreement in any court outside of the above
named designated county or district shall have the right to have
the venue of said action changed to the above designated county or
district or, if necessary, have the case dismissed, requiring the
other party to refile such action in an appropriate court in the
above designated county or federal district. If a party is not a
Exhibit 10(A) - Pg. 5
resident of or does not maintain a presence in the above designated
state in which the designated county of venue is situated, then
such party hereby consents to personal jurisdiction of a court of
competent subject matter jurisdiction located in the above-
designated state and county of federal district. The parties
acknowledge that this Agreement is executed in, and that a material
portion of each party's obligations under this Agreement are to be
performed in, the above designated State and county and federal
district.
11.6 Good Faith Efforts and Further Steps. The parties to this
Agreement covenant to use their best efforts in good faith to
comply with the provisions of this Agreement, both before and after
execution of this Agreement or any documents required by this
Agreement. In this regard the parties agree to take such further
steps and execute such documents as are reasonably required by
another party.
11.7 Assignment. Seller shall have the right to assign this
Agreement without the prior consent of the Buyer.
11.8 Entire Agreement. This Agreement constitutes the entire
Agreement of the parties and may not be amended or modified except
in writing signed by all parties. All prior understandings and
Agreements among the parties are merged in this Agreement, which
alone fully and completely expresses their understanding. Any
prior agreements among any of the parties to this Agreement
concerning the subject hereof are hereby declared null and void.
11.9 Notices. All notices, requests, demands and other
communications hereunder shall be deemed to have been duly given if
the same shall be in writing and shall be delivered personally or
sent by registered or certified mail, postage prepaid and addressed
as follows:
If to Buyer: Xxxxxxx X. Xxxxx, Chairman & CEO
The Winner's Xxxx.xxx, Inc.
X.X. Xxx 000
Xxxx Xxxxxxx, XX 00000
With a copy to: Xxxxx X. Xxxxxx, Esq.
Xxxxx X. Xxxxxx, P.A.
0000 Xxxxxx Xxxx, Xxxxx 000X
Xxxx Xxxxx, XX 00000
If to Seller: Xxxx Xxxxx, Chairman and CEO
Universal Sealant, Ltd.
Xxxxxxxx Xxxxx
X.X. Xxx X-00000
Freeport, Bahamas
11.10 Attorney Fees and Costs. In connection with any
litigation arising out of this Agreement, the prevailing Party
shall be entitled to recover all costs incurred including
Exhibit 10(A) - Pg. 6
attorney's fees for services rendered in connection with any
enforcement or breach of contract, including bankruptcy, appellate
proceedings and post judgment proceedings. In connection with any
legal fees for the transactions herein contemplated, Buyer and
Seller will each pay their own legal fees and costs.
11.11 Successors. This Agreement shall be binding on and inure
to the benefit of the parties and their respective successors,
assigns and personal representatives.
11.12 The parties acknowledge and agree that the transactions
contemplated herein involves significant legal and tax
consequences, and that they have been advised to seek independent
professional legal and tax advice to carefully analyze the
consequences, risks and merits of this transaction.
11.13 The parties acknowledge that each has been represented
and advised by separate counsel and have signed this document of
his, her or its owns volition.
11.14 This Agreement may be signed in counterparts, but all
such counterparts shall be considered as a single document.
IN WITNESS WHEREOF, the parties hereunto executed this agreement
as of the date set forth below.
SELLER: UNIVERSAL SEALANT, LTD.
By:/s/ Xxxx Xxxxx
------------------------------------
Xxxx Xxxxx
Its: Chairman and CEO
BUYER: THE WINNER'S XXXX.XXX, INC.
By:/s/ Xxxxxxx X. Xxxxx
------------------------------------
Xxxxxxx X. Xxxxx
Its: Chairman and Chief Executive Officer
STATE OF Florida )
)SS
COUNTY OF Broward )
I HEREBY CERTIFY that on this day, before me, personally
appeared Xxxx Xxxxx, who is Chairman and CEO of Universal Sealant,
Ltd., and that he/she, as such officer, being authorized so to do,
executed the foregoing instrument for the purposes therein
contained and did (did not) take an oath.
IN WITNESS WHEREOF, I have hereunto set my hand and affixed my
seal this 30th day of March, 2001.
Exhibit 10(A) - Pg. 7
/s/ Xxx Xxxxxx Xxxxxx
----------------------------
Notary Public
My Commission Expires:
01/04/2002
-----------------------------------------------------------------
STATE OF Massachusetts )
)SS
COUNTY OF Bristol )
I HEREBY CERTIFY that on this day, before me, personally
appeared Xxxxxxx X. Xxxxx , who is Chairman and CEO of The
Winner's Xxxx.xxx, Inc. and that he, as such officer, being
authorized so to do, executed the foregoing instrument for the
purposes therein contained and did (did not) take an oath.
IN WITNESS WHEREOF, I have hereunto set my hand and affixed my
seal this 30th day of March, 2001.
/s/ Xxxx-Xxx Xxxxxx
---------------------------
Notary Public
My Commission Expires: 4/5/2002
Exhibit 10(A) - Pg. 8
