Exhibit 10.2
ASSET PURCHASE AGREEMENT
THIS ASSET PURCHASE AGREEMENT (this "Agreement") made and entered into
as of the 22nd day of December, 2003, and to be effective as of the date of
closing by and between NOXSO Corporation, a Virginia corporation, with offices
at 1065 South 500 West, Bountiful, UT 84010 ("Buyer") and The FOUNDATION FOR
ADVANCED RESEARCH, a California non-profit corporation, with offices at 661 -
36th Street, Manhattan Beach, CA 90266 ("Seller").
WITNESSETH:
WHEREAS, Seller is the owner of significant deposits of Perlite in
Mojave County, Arizona, and has related know-how as to the uses, benefits and
harvesting of such Perlite.
WHEREAS, Seller desires to convey to Buyer and Buyer desires to acquire
from Seller an undivided interest in all the rights, title and interest to a
certain initial quantity of Perlite of the total amount owned by Seller together
with any rights of Seller associated and/or connected thereto for the
development, excavation and harvesting of the Perlite, all upon the terms and
conditions and subject to the limited exceptions set forth herein.
WHEREAS, Buyer has researched the financial, operational and potential
enhanced product benefits to Buyer's dry-stacked block masonry products that may
be achieved utilizing the Perlite, together with the potential for a stable,
long-term supply of such Perlite from Seller, and Buyer has determined that the
purchase of an initial quantity of the Perlite owned by Seller on the terms and
conditions and subject to the limited exceptions set forth herein would be in
the best interest of Buyer.
NOW, THEREFORE, in consideration of the mutual representations,
warranties, covenants, and agreements of the parties hereinafter set forth, the
parties hereto, intending to be legally bound, do hereby agree as follows.
Section 1
PURCHASE AND SALE OF PERLITE
1.1 Purchase and Sale of Perlite Assets. Upon the terms and subject to
the conditions of this Agreement, Buyer hereby purchases, accepts, and acquires
from Seller, and Seller hereby sells, transfers, assigns, conveys, and delivers
to Buyer, all right, title, and interest of Seller in and to all of the rights
and assets, real, personal, and mixed, tangible or intangible, an undivided
interest in One Million Six Hundred Thousand Tons (1,600,000 Tons) of In-Situ or
In-Place Perlite assets, as owned or held by Seller. Subject to such express
exclusion and qualification, the foregoing rights and assets shall hereinafter
collectively be referred to as the "Assets." Without in any way limiting the
generality of the foregoing, the Assets shall include all right and interest
owned or held by the Seller in the following:
a. Technical Documentation All technical and descriptive
materials relating to the acquisition, design, development, use, or
maintenance of the Perlite (the "Technical Documentation").
b. Perlite. The Perlite as more fully in Exhibit A hereto (the
"Perlite").
c. Authorizations. All governmental approvals, authorizations,
certifications, consents, variances, permissions, licenses, and permits
to or from, or filings, notices, or recordings to or with, federal,
state, and local governmental authorities that relate to the Perlite.
1.2 No Liabilities Assumed. Except as expressly set forth in Section 2
below, Buyer shall not assume or be responsible for any liability or obligation
of Seller of any kind, known or unknown, contingent or otherwise.
Section 2
PRICE AND PAYMENT
2.1 Consideration for Asset Assignment. The aggregate consideration for
the Assets (the "Purchase Price") shall be at the appraised value for the
In-Situ Perlite of $5.00 per ton, as set forth in Exhibit 2.1, attached hereto
and incorporated herein by reference, for a Total Purchase Price of EIGHT
MILLION DOLLARS US ($8,000,000 US), and such total purchase price shall be paid
to Seller by Buyer with the issuance of ONE MILLION SIX HUNDRED THOUSAND
(1,600,000) SHARES of Buyer's restricted common stock (the "Shares") to Seller.
2.2 Closing. The Closing of the purchase of the Assets (the "Closing")
shall take place in Utah at the offices of Buyer. The Closing shall take place
on a date no later than the 31st of January, 2004 (the "Closing Date") or at
such other place and time as the Buyer and the Seller may otherwise agree. At
the Closing, the Company will deliver to the Seller certificates evidencing the
1,600,000 shares of Common Stock that Seller is being issued as the full
purchase price and Seller shall deliver to the Buyer all documents and approvals
required to transfer all right, title and interest to the CD from the Investor
to the Company free and clear of any and all Liens.
Section 3
REPRESENTATIONS AND WARRANTIES OF SELLER
3.1 Representations and Warranties. Seller hereby represents and
warrants the following to Buyer. Buyer and Seller have entered into this
Agreement on the condition that Seller make the following representations and
warranties, which representations and warranties were and are a material
inducement to Buyer entering into this Agreement, and Buyer would not have
entered into this Agreement except in reliance upon the representations and
warranties of Seller made herein.
3.1.1 Consents. All required approvals or consents have been
obtained in connection with the execution of this Agreement by Seller and with
the performance by Seller of Seller's obligations hereunder.
3.1.2 Contracts. Neither this Agreement nor the transactions
contemplated hereby violates or shall violate any contract, document,
understanding, agreement or instrument to which Seller is a party or by which
Seller may be bound, or any contract, document, understanding, agreement or
instrument affecting the Assets.
3.1.3 Lawsuits. Seller has received no written notice of any
pending or threatened lawsuits or asserted or unasserted claims, condemnation or
eminent domain proceedings, or proceedings in lieu thereof, relating to the
Assets.
3.1.4 Notice of Violation. Seller has not received
notification of any violation of any laws, rules or regulations with respect to,
or which would affect the use of the Assets.
3.1.5 Contracts. There are no contracts relating to the Assets
to which Seller is a party, or which Seller has assumed, has agreed to be bound
by or has agreed to pay on, that will obligate Buyer.
3.1.6 Authority. Seller has been duly authorized to enter into
this Agreement and to sell the Assets pursuant to the terms and conditions
hereof, and the parties and persons executing this Agreement on behalf of Seller
have been duly authorized to execute this Agreement and to take such other
actions as may be necessary or appropriate to consummate the transactions
contemplated hereby.
3.1.7 Good and Marketable Title. Upon the mutual execution of
this Agreement, Buyer shall obtain good and marketable title to all of the
Assets, free and clear of all title defects, liens, restrictions, claims,
charges, security interests, or other encumbrances of any nature whatsoever
(except for the Assumed Invoice) leases, chattel mortgages, conditional sales
contracts, collateral security arrangements, or other title or interest
retention arrangements.
3.1.8 Accredited Investor Status. Seller is an "accredited
investor" for purposes of Regulation D under the Securities Act of 1933, as
amended (the "Securities Act") and Seller has sufficient knowledge and
experience in evaluating and investing in companies similar to Buyer in terms of
Buyer's stage of development so as to be able to evaluate the risks and merits
of its investment in Buyer and is able financially to bear the risks thereof.
Seller was not organized for the purpose of acquiring the Shares.
3.1.9 Investment Purposes. Seller is acquiring the Shares,
subject to the terms hereof, for investment for its own account and not with a
view to, or for resale in connection with, any distribution thereof, and Seller
has no present intention of selling or granting any participation in, or
otherwise distributing the same. By executing this Agreement, Seller further
represents and warrants that it has no contract, undertaking, agreement or
arrangement with any person to sell, transfer or grant participations to such
person or to any third person, with respect to any of the Shares.
3.1.10 Access to Information. Seller has had access to any and
all information concerning Buyer that it and its financial, tax and legal
advisors required or considered necessary to make a proper evaluation of this
investment. Specifically, Seller has had the opportunity to review Buyer's last
annual report on Form 10-KSB, dated March 31, 2003, and all subsequent filings
by Buyer with the Securities and Exchange Commission. Further, Buyer has advised
Seller that (i) there have been material developments that are not fully
described in such filings, (ii) Buyer's financial statements and other
information contained in such filings do not reflect material changes that have
occurred since the date of the last Buyer financial statement and (iii) Buyer
believes that updated financial and business information would be material to an
investment decision. Notwithstanding the foregoing, Seller has declined to
review, accept or consider additional information in making an investment
decision. In making the decision to acquire the Shares, Seller and its advisers
have relied solely upon their own independent investigations, and fully
understand that there are no guarantees, assurances or promises in connection
with any investment hereunder and understand that the particular tax
consequences arising from this investment in Buyer will depend upon its
individual circumstances. Seller further understands that no opinion is being
given as to any securities or tax matters involving the offering.
3.1.11 Exempt Transaction. Seller understands that the Shares
have not been registered under the Securities Act and must be held indefinitely
unless a subsequent disposition thereof is registered under the Securities Act
or is exempt from such registration.
3.1.12 Legend. Seller also understands and agrees that stop
transfer instructions relating to the Shares will be placed in Buyer's stock
transfer ledger, and that the certificates evidencing the Shares will bear
legends in substantially the following form:
The securities represented by this certificate have not been
registered under the Securities Act of 1933 (the "Act") and
are "restricted securities" as that term is defined in Rule
144 under the Act. The securities may not be offered for sale,
sold or otherwise transferred except pursuant to an effective
registration statement under the Act or pursuant to an
exemption from registration under the Act, the availability of
which is to be established to the satisfaction of the Company.
3.2 Survival of Representations and Warranties. All of the
representations and warranties of the Seller set forth in Section 3.1 hereof
shall survive the execution, deliver and closing of the transactions described
herein.
Section 4
REPRESENTATIONS AND WARRANTIES OF BUYER
4.1 Representations and Warranties. Buyer hereby makes the following
representations and warranties to Seller. Buyer and Seller have entered into
this Agreement on the condition that Buyer make the following representations
and warranties, which representations and warranties were and are a material
inducement to Seller entering into this Agreement, and Seller would not have
entered into this Agreement except in reliance upon the representations and
warranties of Buyer made herein.
4.1.1 Consents. All required approvals or consents have been
obtained in connection with the execution of this Agreement by Buyer and with
the performance by Buyer of Buyer's obligations hereunder.
4.1.2 Contracts. Neither this Agreement nor the transactions
contemplated hereby violates or shall violate any contract, document,
understanding, agreement or instrument to which any Buyer is a party or by which
Buyer may be bound.
4.1.3 Authority. Buyer has been duly authorized to enter into
this Agreement and to purchase the Assets pursuant to the terms and conditions
hereof, and the person executing this Agreement on behalf of Buyer has been duly
authorized to execute this Agreement and to take such other actions as may be
necessary or appropriate to consummate the transactions contemplated hereby.
4.2 Survival of Representations and Warranties. All of the
representations and warranties of Buyer set forth in Section 4.1 hereof shall
survive the execution, deliver and closing of the transactions described herein.
Section 5
DELIVERIES
5.1 Deliveries. On the closing date hereof or as soon thereafter as is
reasonably practicable, Buyer and Seller shall take the following actions, in
addition to such other actions as may otherwise be required under this
Agreement:
a. Conveyance Instruments. Seller and Buyer shall mutually
execute and deliver to each other a bill of sale in substantially the
same form as attached hereto as Exhibit 5.1, and such other assignments
and other instruments of conveyance and transfer as such party may
reasonably request to effect the transactions described herein.
5.2 Further Assurances. After the date hereof, without further
consideration, the parties shall take all such other action and shall procure or
execute, acknowledge, and deliver all such further certificates, conveyance
instruments, consents, and other documents as the other party or its counsel may
reasonably request (1) to vest in Buyer, and perfect and protect Buyer's right,
title, and interest in, and enjoyment of, the Assets, or (2) as otherwise
required to achieve the purposes hereof.
Section 6
MISCELLANEOUS
6.1 Entire Agreement. This Agreement (including the Exhibits), and the
other certificates, agreements, and other instruments to be executed and
delivered by the parties in connection with the transactions contemplated
hereby; constitute the sole understanding of the parties with respect to the
subject matter hereof. No amendment, modification, or alteration of the terms or
provisions of this Agreement shall be binding unless the same shall be in
writing and duly executed by the parties hereto.
6.2 Parties Bound by Agreement; Successors and Assigns. The terms,
conditions, and obligations of this Agreement shall inure to the benefit of and
be binding upon the parties hereto and the respective successors and assigns
thereof. With the prior written consent of Seller, which consent shall not be
unreasonably withheld, Buyer may assign its rights, duties, or obligations
hereunder or any part thereof to any other person or entity, which shall
thereupon become Buyer, provided that at the time of such assignment Buyer
unconditionally and irrevocably guarantees the payment and performance of any
duties or obligations so assigned.
6.3 Counterparts. This Agreement may be executed in one or more
counterparts, each of which shall for all purposes be deemed to be an original
and all of which shall constitute the same instrument. Facsimile signatures
shall be deemed to be original signatures for purposes of this Agreement.
6.4 Headings. The headings of the Sections and paragraphs of this
Agreement are inserted for convenience only and shall not be deemed to
constitute part of this Agreement or to affect the construction hereof.
6.5 Modification and Waiver. Any of the terms or conditions of this
Agreement may be waived in writing at any time by the party that is entitled to
the benefits thereof. No waiver of any of the provisions of this Agreement shall
be deemed to or shall constitute a waiver of any other provision hereof (whether
or not similar).
6.6 Expenses. The parties shall each pay all costs and expenses
incurred by it or on its behalf in connection with this Agreement and the
transactions contemplated hereby, including fees and expenses of its own
financial consultants, accounts, and counsel.
6.7 Notices. Any notice or other communication in connection with this
Agreement shall be deemed to be delivered if in writing addressed as provided
below and if either (a) actually delivered at said address, (b) in the case of a
letter, seven business days shall have elapsed after the same shall have been
deposited in the United States mails, postage prepaid and registered or
certified, return receipt requested or (c) transmitted to any address outside of
the United States, by telecopy and confirmed by overnight or two-day courier. If
to the Seller, to the Seller's address as set forth in Annex I or at such other
address as the Seller shall have specified by notice to Buyer. If to Buyer, to
Buyer's address set forth herein, or at such other address as Buyer shall have
specified by notice to the Seller.
6.8 Governing Law. This Agreement shall be construed in accordance with
and governed by the laws of the State of Utah without giving effect to the
principles of conflicts of law thereof. Any judicial proceeding brought to
enforce this Agreement, or any matter related thereto, shall be brought in the
appropriate courts for Davis County, State of Utah or the appropriate United
States District Court located in the State of Utah. By execution of this
Agreement, each party accepts and agrees to the exclusive jurisdiction of the
aforesaid courts and irrevocably agrees to be bound by any judgment rendered
thereby in connection with this Agreement.
6.9 Survival of Agreements. All Covenants, agreements, representations,
and warranties made herein shall survive the execution and delivery of this
Agreement.
6.10 Severability. The invalidity or unenforceability of any provision
of this Agreement shall not affect the validity or enforceability of any other
provision, the remaining provisions being deemed to continue in full force and
effect.
6.11 Construction. This Agreement shall not be construed against the
party preparing it, and shall be construed without regard to the identity of the
person who drafted it or the party who caused it to be drafted, and any
uncertainty or ambiguity shall not be interpreted against any one party. As a
result of the foregoing, any rule of construction that a document is to be
construed against the drafting party shall not be applicable.
IN WITNESS WHEREOF, each of the parties hereto has caused this
Agreement to be executed on its behalf as of the 21st of January 2004.
BUYER SELLER
NOXSO CORPORATION THE FOUNDATION FOR ADAVANCED RESEARCH
By /s/ Richard J. Anderson By /s/ Clint W. Walker
------------------------------- -----------------------------------
Richard J. Anderson, President Clinton W. Walker, President & CEO
EXHIBIT A
DESCRIPTION OF PERLITE
TO BE COMPLETED
EXHIBIT 5.1
BILL OF SALE AND ASSIGNMENT
For good and valuable consideration, the receipt of which is hereby
acknowledged, effective as of January ___, 2004 (the "Closing"), and pursuant to
the terms of the Asset Purchase Agreement dated December 22, 2003 (the "Asset
Purchase Agreement"), between Noxso Corporation, a Virginia corporation
("Buyer"), as transferee of certain rights, title and interest of The FOUNDATION
FOR ADVANCED RESEARCH, a California non-profit corporation ("Seller") (with all
capitalized terms not otherwise defined herein having the meanings ascribed to
them in the Asset Purchase Agreement), Seller hereby sells, assigns, grants,
conveys, transfers and delivers to Buyer all of the Assets (as defined in the
Asset Purchase Agreement), free and clear of all Liens.
After the date hereof, the Seller will execute and deliver from time to
time at the request of Buyer all such further instruments as, in the reasonable
opinion of Buyer's counsel, may be required in order to vest in Buyer full and
complete title to and the right to access and utilize the Assets.
The delivery by Seller of this Bill of Sale and Assignment and the
acceptance by Buyer of this Bill of Sale and Assignment shall not alter, in any
manner, any of the rights or obligations of the parties to the Asset Purchase
Agreement as set forth therein.
The FOUNDATION FOR ADVANCED RESEARCH,
a California non-profit corporation
By:
---------------------------------
Clinton M. Walker
Its: President & CEO
Acceptance
Noxso Corporation, a Virginia corporation ("Buyer") hereby accepts the
foregoing sale and assignment of the Assets, as defined in the Asset Purchase
Agreement, and hereby agrees to pay for such Assets with the issuance of the
shares of restricted Common Stock as set forth in the Asset Purchase Agreement.
Buyer is not assuming or agreeing to pay or perform any Liens or obligations of
Seller.
Dated as of January __, 2004 NOXSO CORPORATION,
a Virginia corporation
By:
------------------------
Richard J. Anderson
Its: President