EXHIBIT 10.1
ASSIGNMENT AND ASSUMPTION AGREEMENT
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KNOW ALL MEN BY THESE PRESENTS:
THAT VALENTEC SYSTEMS, INC., a Delaware corporation (the "SELLER"), as
of June 6, 2005, for and in consideration for the assumption by ACORN HOLDING
CORP. (the "BUYER") of all rights and obligations of the Seller pursuant to that
certain Promissory Note (the "NOTE") and related documents, instruments and
agreements therewith all dated April 28, 2005 by and between the Seller and
MONTGOMERY EQUITY PARTNERS, LTD. ("MONTGOMERY"), and the Standby Equity
Distribution Agreement (the "SEDA") and related documents, instruments and
agreements therewith all dated as of April 28, 2005, by and between Seller and
CORNELL CAPITAL PARTNERS, LP ("CORNELL"), a Delaware limited partnership (both
Montgomery and Cornell shall be referred to individually as an "INVESTOR" and
collectively as the "INVESTORS"), and all agreements executed or delivered in
connection therewith and dated April 28, 2005 (collectively, the "ASSIGNED
AGREEMENTS"), and other good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged and confessed, has:
GRANTED, SOLD, ASSIGNED, TRANSFERRED, CONVEYED AND DELIVERED and does by
these presents GRANT, SELL, ASSIGN, TRANSFER, CONVEY AND DELIVER unto the Buyer,
all right, title, interest, and obligations of Seller in and to the Assigned
Agreements.
TO HAVE AND TO HOLD, the Assigned Agreements and all such other property
as is hereinabove described unto Buyer and Buyer's successors, legal
representatives and assigns, forever.
AND Seller does represent, warrant and covenant to and with Buyer that
it is the lawful owner of the Assigned Agreements; that, with the exception of
such security interests and pledges of Seller's property under the terms of the
Assigned Agreements, they are free from all liens and encumbrances; that it has
good right to sell the same; that it will defend the same from the claims of all
others; that it has not previously assigned, conveyed or transferred any of the
Assigned Agreements; and, for purposes of clarification, any agreement by the
Seller in the Assigned Agreements to issue shares of its, or a surviving
entity's, capital stock (or warrants or other securities exercisable or
convertible into shares of he Seller's, or a surviving entity's, capital stock,
to an Investor shall, in fact, constitute an agreement for the issuance of
shares of the Buyer's common stock).
Within five (5) business days after Buyer's request, Seller shall
execute and deliver to Buyer or any designee of Buyer any and all such further
documents as Buyer may reasonably require to effectuate the transfer, assignment
and conveyance contemplated hereby, including without limitation, any and all
documents required by any governmental entity or any third party.
By its execution hereof, Buyer hereby accepts the transfer, assignment
and conveyance of the Assigned Agreements and expressly assumes all of the
Seller's obligations as if the Buyer had been the original signatory to the Note
and the SEDA and all agreements executed or delivered in connection therewith.
Seller shall remain liable to the Investor under the terms of the Assigned
Agreements.
All of the covenants, terms and conditions set forth herein shall be
binding upon, and inure to the benefit of, the parties hereto, and their
respective successors, personal and legal representatives, heirs, devisees and
assigns.
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IN WITNESS WHEREOF, the parties hereto have duly executed this Assignment and
Assumption Agreement as of the date first above written.
SELLER:
VALENTEC SYSTEMS, INC.
By: /s/ Robert Zummo
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Name: Robert Zummo
Title: CEO
BUYER:
ACORN HOLDING CORP.
By: /s/ Edward N. Epstein
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Name: Edward N. Epstein
Title: Chief Executive Officer
ACKNOWLEDGED AND AGREED:
CORNELL CAPITAL PARTNERS, LP PLACEMENT AGENT:
NEWBRIDGE SECURITIES
CORPORATION
By: Yorkville Advisors, LLC
Its: General Partner By: /s/ Guy S. Amico
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Name: Guy S. Amico
By: /s/ Mark Angelo Title: President
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Name: Mark Angelo
Title: Portfolio Manager
MONTGOMERY EQUITY PARTNERS, LTD. ESCROW AGENT
By: /s/ David Gonzalez
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Name: David Gonzalez, Esq.
By: /s/ Mark Angelo
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Name: Mark Angelo
Title: Portfolio Manager
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