Attached files
Exhibit 2.2
ASSET
PURCHASE AGREEMENT
ASSET PURCHASE AGREEMENT, dated as of
December 23, 2009 by and between CHARLESTON BASICS, INC., a Delaware corporation
(the “Seller”) having its principal offices at 2999 John Stevens Way, Hoquiam,
Washington 98550 and CAMBRIDGE TRADING PARTNERS, LLC, a New York limited
liability company (the “Purchaser”), having its principal offices at 1701 Avenue
I, Brooklyn, New York 11230.
RECITALS
WHEREAS, immediately prior to
the “reverse merger” transaction (the “Merger”) between the Seller’s
wholly-owned subsidiary, Paneltech Products, Inc. and Paneltech International,
L.L.C., the Seller’s only business was the manufacturing, marketing, buying,
selling and otherwise dealing in emergency and camping supplies and materials,
as more specifically provided in the Seller’s 2009 Annual Report on Form 10-K
filed with the Securities and Exchange Commission (the “Pre-Merger Business”)
and the Pre-Merger Business, includes, without limitation, any trademarks, trade
names, service marks, goodwill, customer and supplier lists, inventory, internet
website(s), accounts receivables, assets, properties and
rights of every nature, kind and description, whether tangible or intangible,
real personal or mixed, wherever located and whether or not carried or reflected
on the books and records of the Seller, which are used in, or which were
acquired in connection with the operation of the Pre-Merger Business, all
liabilities (including, but not limited to, payables, accrued expenses, taxes,
loans), leases and other payment obligations entered into in connection with the
Pre-Merger Business, Seller’s telephone number and URL rights immediately prior
to the Merger, and any other proprietary information used in the conduct and
operation of the Pre-Merger Business; and
WHEREAS, Michael Lieber
(“Lieber”), the principal of the Purchaser, immediately prior to the Merger, was
a consultant to the Seller and prior to that was a principal of the Seller and
is directly involved in maintaining the Pre-Merger Business; and
WHEREAS, the Seller desires to
sell, transfer and assign to Purchaser, and Purchaser desires to purchase from
the Seller, all of Seller’s assets existing immediately prior to the Merger
including, without limitation, all assets relating to the Pre-Merger Business;
and
WHEREAS, the Purchaser has
agreed to assume all liabilities and obligations of the Seller existing
immediately prior to the Merger including, without limitation, all liabilities
and obligations relating to the Pre-Merger Business; and
WHEREAS, in consideration for
the transfer and assignment of Seller’s assets described herein, in addition to
the Purchaser’s assumption of Seller’s liabilities and obligations, the
Purchaser also has agreed to deliver 50,000 shares of the common stock, par
value $.0001 of the Seller (the “Consideration Shares”), currently owned by
Lieber;
NOW, THEREFORE, in
consideration of the mutual covenants, promises and conditions hereinabove and
hereinafter contained, and for other good and valuable consideration the receipt
and sufficiency of which is hereby acknowledged, the parties agree as
follows:
1
1. AGREEMENT
TO PURCHASE AND SELL. On the
terms and subject to the conditions contained in this Agreement, Purchaser
hereby agrees to purchase from Seller, and Seller hereby agrees to sell, assign
and transfer to Purchaser, all of Seller’s right, title and interest in and to
all of Seller’s assets existing immediately prior to the closing of the Merger
(the “Purchased Assets”), subject to any and all liens, encumbrances, security
interests, mortgages, pledges, rights of way, options, rights of first refusal,
conditions, restrictions or encumbrances of any kind or character, title defects
and restrictions whatsoever (collectively, “Liens”), as may exist on the date of
transfer and assignment to Purchaser.
2. PURCHASED
ASSETS. ASSUMED LIABILITIES. ACCOUNTING AND
RECONCILIATIONS.
2.1 Purchased
Assets. The Purchased Assets shall consist of all of the
assets owned by Seller, immediately prior to the Merger, and used by Seller in
the Pre-Merger Business (except the Excluded Assets (defined hereafter)),
including, without limitation, the following (collectively, the "Purchased
Assets"):
(a) any
equipment or other tangible assets subject to a lease between the Seller and any
third party entered into in connection with the operation of the Pre-Merger
Business;
(b) all
accounts, notes, accounts receivable, contract rights, drafts and other forms of
claims, demands, instruments, receivables and rights to the payment of money or
other forms of consideration, whether for goods sold or leased, services
performed or to be performed, or otherwise, which are owned by Seller or in
which Seller has an interest, together with all guarantees, security agreements
and rights and interests securing the same (the “Receivables”);
(c) all of
the rights and benefits accruing under all contracts, including all government
contracts (the “Purchased Contracts”);
(d) all
operating data, files, general records, customer lists, employee records,
correspondence and other written records of Seller to the extent relating to the
Pre-Merger Business, wherever located (the “Purchased Records”)
;
(e) all of
the intellectual property rights, marketing rights, proprietary rights and other
intangible properties which are owned by Seller or in which Seller has an
interest or which are used in the operation of the Pre-Merger Business or relate
to the Pre-Merger Business, including, without limitation (i) the right to the
corporate name “Charleston Basics, Inc.” (ii) trademarks, service marks, trade
names, and each registration and application for any of the foregoing; (iii)
statutory, common law and registered copyrights, and each registration and
application therefore; and (iv) telephone numbers and URL rights immediately
prior to the Merger (the “Intangible Personal Property”);
(f)
all
prepaid and deferred items that relate to the Pre-Merger Business including all
prepaid rentals and unbilled charges, fees and deposits (the “Prepaid Items”);
2
(h) all real
property owned or leased by Seller or in which Seller has any interest or estate
(including the right to use), together with all buildings, fixtures, trade
fixtures, plant and other improvements located thereon and attached thereto; the
Seller’s rights arising out of ownership or use thereof (including air, water,
oil and mineral rights); and all subleases, franchises, licenses, permits,
easements and rights-of-way which are appurtenant thereto (the “Real
Property”);
(i) all of
the inventory relating to the Pre-Merger Business;
(j) all
rights and claims against third parties arising out of, relating to or in
respect of the Pre-Merger Business, including, without limitation, all causes of
action, rights of recovery and rights of set-off of any kind, all rights under
express or implied warranties from suppliers to Seller and all other interests
in or claims, rebates, refunds or payments from or against vendors;
and
(k) all other
properties, tangible or intangible, not otherwise referred to above, which are
owned by Seller or in which the Seller has an interest or which are used in the
operation of the Pre-Merger Business.
2.2 Excluded Assets. Anything contained in
Section 2.1 hereof to the contrary notwithstanding, there are expressly excluded
from the assets, properties and rights to be transferred, conveyed and assigned
to Purchaser hereunder the following:
(a) Seller’s
accounting and tax records; and
(b) Seller's
corporate charter, minutes and stock record books, corporate seal,
qualifications to conduct business as a foreign corporation, arrangements with
registered agents, taxpayer and other identification numbers.
For
convenience of reference, the assets, properties and rights which are not to be
transferred, conveyed and assigned to Purchaser hereunder are herein
collectively called "Excluded Assets."
3.3 Assignment of Contracts,
Rights. Anything in this
Agreement to the contrary notwithstanding, this Agreement shall not constitute
an agreement or attempted agreement to transfer, sublease or assign any
contract, license, lease, sales order, purchaser order, commitment or other
agreement or any claim or right or any benefit arising thereunder or resulting
therefrom if an attempted transfer, sublease or assignment thereof, without the
consent of any other party thereto, would constitute a breach thereof or in any
way adversely affect the rights of Purchaser or Seller
thereunder. Seller will use its commercially reasonable efforts to
obtain the consent of such other party to the assignment or transfer thereof to
Purchaser in all cases in which such consent is required for assignment or
transfer. If such consent is not obtained Seller will cooperate with
Purchaser in any arrangements necessary or desirable to provide for Purchaser
the benefits thereunder.
3.4 Assumed
Liabilities. Seller shall assign all
of its right, title and interest and Purchaser shall assume all liabilities and
obligations of Seller existing immediately prior to the Merger (the “Assumed
Liabilities”) and relating to the Pre-Merger Business including, without
limitation:
3
(a) all
unpaid or unperformed obligations or liabilities of Seller arising from the
ownership and operation of the Pre-Merger Business and under any contracts
(whether written or oral), including any obligations or liabilities arising out
of any breach or default thereof including, without limitation, all payables,
accrued expenses, taxes, loans and leases;
(b) all
liabilities with respect to any purchase orders;
(c) any
liability to any employee of Seller, or an consultant engaged by Seller, arising
prior to the closing of the Merger;
(d) any
liability arising from the ownership or lease of any Purchased Asset arising
prior to the closing of the Merger;
(e) the
obligations of the Seller for taxes imposed by any governmental authority on or
arising out of the sale or transfer of the Purchased Assets pursuant to this
Agreement;
and
(f) all
liabilities or obligations of Seller in respect of litigation of any kind or
nature arising as a result of any act, omission or circumstance taking place
prior to the closing of the Merger, including, without limitation, any adverse
claim, dispute, governmental investigation, suit, action (including, without
limitation, nonjudicial real or personal property foreclosure actions),
arbitration, legal, administrative or other proceeding of any nature, domestic
or foreign, criminal or civil, at law or in equity, by or against or otherwise
affecting Seller or the Pre-Merger Business.
4. TRANSFER
OF CONSIDERATION SHARES. In consideration
for Seller’s sale, assignment and transfer to Purchaser of all its right, title
and interest in and to the Purchased Assets, Lieber, on behalf of Purchaser,
shall deliver to Seller, upon the execution and delivery of this Agreement, a
stock certificate representing the Consideration Shares, in the name of Lieber,
duly endorsed by Lieber with such guarantees as required by the Seller’s
transfer agent to reflect the transfer of the Consideration Shares on the stock
records of the Seller.
5. TRANSFER
TAX LIABILITY. Any and all
transfer, documentary, gross receipts, taxes and similar liabilities, if any,
resulting from the consummation of the transactions contemplated by this
Agreement shall be paid by Purchaser.
6. REPRESENTATIONS AND
WARRANTIES.
6.1 Representations and
Warranties of Sellers. Seller hereby represents
and warrants to Purchaser as follows:
(a) Authority. Seller
is a corporation duly organized and in good standing under the laws of the State
of Delaware. Seller has the power to convey the Purchased
Assets and to perform its obligations hereunder. The execution and
delivery of this Agreement and the consummation of the transactions contemplated
hereby have been duly and validly authorized by all necessary action on the part
of Seller, and this Agreement has been duly and validly executed
4
and
delivered by Seller, and constitutes a valid and binding obligation of Seller
enforceable against it in accordance with its terms, except: (i) as limited by
general equitable principles and applicable bankruptcy, insolvency,
reorganization, moratorium and other laws of general application affecting
enforcement of creditors’ rights generally, (ii) as limited by laws relating to
the availability of specific performance, injunctive relief or other equitable
remedies and (iii) insofar as indemnification and contribution provisions may be
limited by applicable law..
(b) No
Conflicts. The entering into of this Agreement and the
consummation of the transactions contemplated herein by Seller will not result
in the violation of any of the terms and provisions of either the Certificate of
Incorporation or Bylaws of Seller.
6.2 Representations and
Warranties of Purchaser and Lieber. Purchaser and Lieber
hereby jointly and severally represent and warrant to Seller as
follows:
(a) Authority. This
Agreement has been duly and validly executed and delivered by Purchaser and
constitutes a valid and binding obligation of Purchaser enforceable against it
in connection with its terms, except: (i) as limited by general equitable
principles and applicable bankruptcy, insolvency, reorganization, moratorium and
other laws of general application affecting enforcement of creditors’ rights
generally, (ii) as limited by laws relating to the availability of specific
performance, injunctive relief or other equitable remedies and (iii) insofar as
indemnification and contribution provisions may be limited by applicable
law..
(b) No
Conflicts. The entering into this Agreement and the
consummation of the transactions contemplated hereby by Purchaser will not
result in the breach of any term or provision of, or constitute a default under
any agreement to which Purchaser is a party or by which it is
bound.
(c) Lieber
is the sole owner, beneficially and of record, of the Consideration
Shares. None of the Consideration Shares are subject to any Liens or
defect of title of any kind, except the restrictions, if any, set forth on the
front and back of the certificates evidencing the Consideration Shares imposed
by federal and state securities laws. Lieber has full power to transfer the
Shares without obtaining the consent or approval of any other party or
governmental authority.
7. CLOSING. The closing of
the transactions contemplated under this Agreement (the “Closing”) shall take
place at the offices of the Seller’s attorneys, or such other place as mutually
agreed by the parties, concurrently with the execution and delivery of this
Agreement by the parties, along with any and all other documents and items
required to be delivered by each applicable party hereunder. At the
Closing, (i) Seller shall transfer to Purchaser possession and control of the
Pre-Merger Business by taking such action that may be required or reasonably
requested by Purchaser to effect such transfer of possession and control; (ii)
Lieber shall deliver to the Seller the Consideration Shares in proper form for
assignment as provided in Section 4 hereof; and (iii) promptly after the Closing
and upon obtaining the approval of FINRA Seller shall change its name and
thereafter shall not use any name similar to Charleston Basics.
5
8. INDEMNIFICATION.
(a) Indemnification by
Purchaser. Purchaser shall indemnify and hold harmless Seller,
its officers, directors, employees, affiliates and each of their successors and
assigns, from and against any and all losses, costs, claims, damages, expenses,
obligations and liabilities of any nature whatsoever, including, without
limitation, court costs and reasonable attorneys’ fees (specifically including
court costs and reasonable attorneys’ fees incurred in enforcing this
paragraph (a) or in recovering damages or pursuing other remedies with
respect to any breach of this paragraph) (collectively referred to hereafter as
“Losses”), incurred by Seller as a result of or in connection with (i) any of
the Assumed Liabilities; (ii) the Pre-Merger Business; or (iii) any breach of
any representation, warranty, covenant or other obligation of Purchaser or
Lieber contained in this Agreement.
(b) Indemnification by
Seller. Seller shall indemnify and hold harmless Purchaser and
its officers, directors, employees, affiliates and each of their successors and
assigns, from and against any and all Losses incurred by Purchaser as a result
of or in connection with any breach of any representation, warranty, covenant or
other obligation of Seller contained in this Agreement.
(c) Survival of Representations
and Warranties. The parties acknowledge and agree that all
representations and warranties contained in this Agreement (and the related
indemnification obligations) shall survive the closing hereunder and continue in
force for a period of twenty-four (24) months after the date of this
Agreement.
(f) Indemnification
Procedures. In the event that any claim or demand for
indemnification shall be asserted by Purchaser or Seller ("Indemnified Party")
against the other party ("Indemnifying Party") in respect of which
indemnification may be sought under this Section 8, the Indemnified Party shall
cause written notice thereof ("Notice of Claim") to be given promptly to the
Indemnifying Party or its successor. Such written notice shall
describe such claim or the basis for such demand in reasonable
detail. In the event of a third-party claim, demand or legal
proceeding, the Indemnifying Party shall have the right to employ, at its own
expense, counsel as is reasonably acceptable to the Indemnified Party to defend
or dispute any such third-party claim, demand or legal proceeding asserted
against such Indemnified Party, provided that the Indemnifying Party gives
written notice of its intention to defend ("Notice to Defend") to the
Indemnified Party within two (2) weeks of receipt of the Notice of
Claim. The Indemnified Party shall have the right to participate in
the defense of or dispute at its own expense and in good faith, any such
third-party proceeding and, so long as the Indemnifying Party is defending such
claim, demand or legal proceeding diligently and in good faith, the Indemnified
Party shall not settle such claim, demand or legal proceeding without the prior
written consent of the Indemnifying Party, which consent shall not be
unreasonably withheld or delayed. The Indemnifying Party shall not,
without the prior written consent of the Indemnified Party, settle or compromise
any action in any manner that, in the reasonable judgment of the Indemnified
Party or its counsel, would materially and adversely affect the Indemnified
Party, other than as a result of money damages or other money
payments. If the Indemnifying Party fails to give such Notice to
Defend within such two (2) week period, then the Indemnified Party shall be
entitled to defend and settle any such third party claim for the account of and
at the Indemnifying Party's expense. The Indemnified Party shall
reasonably cooperate in any
6
investigation,
settlement or trial for which indemnity is sought hereunder and shall make
available to the Indemnifying Party or its representatives all relevant records
or other materials required by them for their use in contesting any claim,
demand or legal proceeding asserted by a third party against the Indemnified
Party. If the Indemnifying Party elects not to defend or dispute with
such third party any such claim, demand or legal proceeding diligently and in
good faith, the Indemnifying Party hereby waives any right that it may have to
contest any claim for indemnification, asserted by the Indemnified Party unless
a court of competent jurisdiction determines in a final order that such failure
to defend or dispute was justified.
9. MISCELLANEOUS.
9.1 Any
and all notices or other communications or deliveries required or permitted to
be provided hereunder shall be in writing and shall be deemed given and
effective on the earliest of: (a) the date of transmission, if such notice or
communication is delivered via facsimile at the facsimile number set forth on
the signature pages attached hereto prior to 5:30 p.m. (New York City time) on a
business day, (b) the next business day after the date of transmission, if such
notice or communication is delivered via facsimile at the facsimile number set
forth below on a day that is not a business day or later than 5:30 p.m. (New
York City time) on any business day, (c) the second business day following the
date of mailing, if sent by U.S. nationally recognized overnight courier service
or (d) upon actual receipt by the party to whom such notice is required to be
given. The address for such notices and communications shall be as
set forth on the signature pages attached hereto.
| If to Seller: | Charleston Basics, Inc. | ||
| 2999 John Stevens Way | |||
| Hoquiam, WA 98550 | |||
| Facsimile: (360) 532-0295 | |||
| Attn: Scott Olmstead |
|
With
a copy to:
|
Olshan
Grundman Frome Rosenzweig & Wolosky LLP
|
||
|
Park
Avenue Tower
|
|||
|
65
East 55th
Street
|
|||
|
New
York, NY 10022
|
|||
|
Facsimile
No.: (212) 451-2222
|
|||
|
Attn:
Robert Frome, Esq.
|
|||
|
Kenneth
A. Schlesinger, Esq.
|
| If to Purchaser: | Cambridge Trading Partners, LLC | ||
| 1701 Avenue I | |||
| Brooklyn, NY 11230 | |||
| Facsimile No.: | |||
| Attn: Michael Lieber | |||
7
| With copy to: | Krieger & Prager LLP | ||
| 39 Broadway, Suite 920 | |||
| New York, NY 10006 | |||
| Facsimile No.: (212) 363-2999 | |||
| Attn: Samuel M. Krieger, Esq. | |||
9.2 Brokers, Commission and
Finder's Fees. The parties each represent and warrant to each
other that there is no broker or agent involved in this transaction, nor is
there anyone to whom any commission or finder's fee might be due. If
a claim for commission or finder's fee is made by any other person, broker or
agent, the party against whom such claim is made agrees to indemnify, save
harmless and defend the other parties against such claim for fees and
commissions. This section shall survive the closing of this
transaction.
9.3 Entire
Agreement. This Agreement constitutes the entire agreement
between the parties and supersedes any prior or contemporaneous agreements,
negotiations, proposals or representations, whether written or oral relating to
the sale of the Pre-Merger Business and the Purchased Assets.
9.4 Assignability. This
Agreement shall not be assignable by either party without the prior written
consent of the other party.
9.5 Binding
Effect. This Agreement shall inure to the benefit of and the
binding upon the parties hereto, their respective heirs, successors, and
permitted assigns.
9.6 Non-Waiver. The
failure in any one or more instances of a party to insist upon performance of
any of the terms, covenants or conditions of this Agreement, to exercise any
right, privilege or remedy in this Agreement, or the waiver by said party of any
breach of any of the terms, covenants or conditions of this Agreement, shall not
be construed as a waiver of any other right or remedy or as a subsequent waiver
of any such terms, covenants, conditions, rights or privileges. No
waiver shall be effective unless it is in writing and signed by an authorized
representative of the waiving party.
9.8 Governing Law; Consent to
Jurisdiction. This Agreement shall be
governed in all respects, including its validity, construction and performance,
by the laws of the State of New York applicable to contracts to be performed in
the State of New York. The parties agree that any action or
proceeding, however characterized, arising out of or relating to this Agreement
shall be brought only in the Supreme Court of the State of New York sitting in
the county of New York or the United States District Court for the Southern
District of New York, and the parties irrevocably submit to the exclusive
jurisdiction of either such court for the purposes of any such action or
proceeding. The parties waive any objection they may now or hereafter
have to the venue of any such action or proceeding in either such court and any
claim that such action or proceeding has been brought in an inconvenient
forum. Any order or judgment of either of the foregoing courts may be
enforced in any court having jurisdiction of the parties and/or the subject
matter. Process in any action or proceeding in either of the
foregoing New York courts may be served by certified mail, which service shall
be sufficient to confer in-personam jurisdiction over the party so
served. The parties agree that in any action or proceeding arising
out of or relating to this Agreement, or the enforcement of any provisions
8
thereof,
the Court is empowered to grant any legal or equitable relief which may be
available, including without limitation, specific performance, injunctive relief
and any mandatory injunction it deems appropriate.
9.10 Further Assurances.
From time to time, as and when requested by any party hereto, the party so
requested will execute and deliver, or cause to be executed and delivered, all
such documents and instruments as may be reasonably necessary to consummate and
fully effectuate the transactions contemplated by this Agreement.
9.11 Execution. This
Agreement may be executed in two or more counterparts, all of which when taken
together shall be considered one and the same agreement and shall become
effective when counterparts have been signed by each party and delivered to the
other party, it being understood that both parties need not sign the same
counterpart. In the event that any signature is delivered by
facsimile transmission or by e-mail delivery of a “.pdf” format data file, such
signature shall create a valid and binding obligation of the party executing (or
on whose behalf such signature is executed) with the same force and effect as if
such facsimile or “.pdf” signature page were an original thereof.
Remainder
of Page Intentionally Left Blank
9
IN WITNESS WHEREOF, the
parties hereto have executed this Agreement as of the day and year first above
written.
| SELLER: | |||
| CHARLESTON BASICS, INC. | |||
|
|
By:
|
/s/ Leroy Nott | |
| Name: Leroy Nott | |||
| Title: President | |||
| PURCHASER: | |||
| CAMBRIDGE TRADING PARTNERS, LLC | |||
| By: | /s/ Michael Lieber | ||
| Name: Michael Lieber | |||
| Title: Managing Member | |||
AGREED
AND ACCEPTED WITH RESPECT TO
SECTIONS
4, 6.2 AND 8
/s/
Michael Lieber
MICHAEL LIEBER
10