AGREEMENT OF PURCHASE AND SALE
THIS AGREEMENT is made this ______ day of February, 2000 by and between
BRANDMAKERS, INC. ("Purchaser"} and JOSHUA FRIEDMAN and PHYLLIS ZYSKIND
(together, "Seller").
WHEREAS, Seller purchased assets of Multi-Page Communications, LLC, a
Delaware limited liability company ("Multi-Page"), pursuant to a foreclosure of
Seller's lien on such assets at a sale held on February 23, 2000; and
WHEREAS, Purchaser desires to purchase and receive from Seller and Seller
desires to sell and assign to Purchaser foreclosed assets of Multi-Page recently
located in Conyers, Rockdale County, Georgia;
NOW, THEREFORE, in consideration of the mutual promises and conditions
contained in this Agreement, the parties agree as follows:
1. Purchase and Sale
Purchaser agrees to purchase from Seller and Seller agrees to deliver to
Purchaser on the Closing Date, as defined below, all of the assets described in
the attached Schedule 1 of Multi-Page, except for the Excluded Assets listed in
Section 8.1 (the "Assets").
2. Purchase Price
2.1 On the Closing Date, Purchaser shall deliver to Standard Registrar and
Transfer Company (the "Escrow Agent") for the benefit of Seller 2,000,000
shares of the Purchaser's common stock (the "Escrowed Shares") registered
in the name of Seller. The Escrow Agent shall hold the escrowed shares in
accordance with its established policies and shall at all times account to
Purchaser and Seller therefore.
2.2 The Escrowed Shares issued by Purchaser as part of the purchase price
shall be restricted common stock and shall bear the following restrictive
language:
The shares represented by this Certificate are Restricted Shares and shall
not be sold, traded, pledged or otherwise hypothecated for a period of one
year from the date of this Agreement.
2.3 On January 1, 2001, the Escrow Agent shall release from escrow to Seller
the number of Escrowed Shares with a value (as determined by Section 2.4)
of $600,000 as of such date. Any Escrowed Shares in excess of the number
released to Seller shall be returned to Purchaser. Any shortfall shall be
paid by Purchaser to Seller directly in additional shares of Purchaser's
common stock, cash or a combination of both. Upon giving 10 days prior
written notice to the Escrow Agent and Seller, Purchaser may pay any or
all of the $600,000 to Seller in cash.
2.4 The value of shares shall be determined by dividing the average closing
price of Purchaser's common stock for a period of sixty days prior to
January 1, 2001 into the sum remaining after subtracting any cash paid to
Seller by Purchaser from the sum of $600,000.00.
3. Assumed Liabilities
3.1 The Purchaser agrees to assume any liability of Seller and Multi-Page for
repairs and warranty work related to the products of the Seller and
Multi-Page (the "Assumed Liabilities"). As an inducement to Purchaser to
assume the Assumed Liabilities, Seller represents and warrants that there
are no known warranty or repair claims other than those incurred in the
ordinary course of business.
Purchaser has not assumed and shall have no liability or obligation for
product liability claims for products manufactured by Multi-Page prior to
January 1, 2000.
4. Seller's Obligations at Closing
4.1 At the closing, Seller shall deliver to Purchaser all deeds, bills of
sale, endorsements, assignments and other good and sufficient instruments
of conveyance and transfer in form satisfactory to Purchaser's counsel, J.
Ed Segraves, and containing full warranties of title effective to vest in
Purchaser with good and marketable title to the Assets. Seller shall
deliver or shall cause to be delivered by Multi-Page to Purchaser all
contracts, agreements, commitments, purchase orders and rights pertaining
to Multi-Page's business and other data relating to the Assets, its
business and operation, except the books of account and supporting
records, corporate minute books and stock transfer records of Multi-Page.
Seller shall take all commercially reasonable steps that may be required
to put Purchaser in actual possession, operation and control of the assets
and business to be transferred under this Agreement.
4.2 Seller agrees that it will at any time and from time to time after the
Closing Date, upon reasonable request of the Purchaser, do, execute,
acknowledge and deliver or shall cause to be done, executed, acknowledged
and delivered all such further acts, deeds, assignments, transfers,
conveyances, powers of attorney and assurances as may be required for the
complete assigning, transferring, granting, assuring and confirming to the
Purchaser and to its successors and assigns of, and for aiding and
assisting in obtaining or collecting and reducing to possession, any or
all of the licenses, permits, assets or property of the corporation that
comprise the Assets.
5. Representations and Warranties of the Seller
The Seller represents and warrants to the Purchaser as follows:
5.1 Each Seller is an individual residing in the State of New York (with
respect to Phyllis Zyskind) and the State of New Jersey (with respect to
Joshua Friedman), is not a minor, and has the legal capacity and legal
competence to execute and deliver, and to perform his/her obligations
under, this Agreement.
5.2 This Agreement has been duly executed and delivered by the Seller and
constitutes a legal, valid and binding obligation of the Seller,
enforceable against the Seller in accordance with its terms, except as the
enforceability hereof and thereof may be limited or otherwise affected by
(i) bankruptcy, insolvency, reorganization, moratorium, fraudulent
transfer, fraudulent conveyance, or similar laws relating to or affecting
the enforcement of creditors' rights generally or providing for the relief
of debtors and (ii) general principles of equity. The execution and
delivery of this Agreement and the compliance with its terms will not
violate any agreement to which the Seller is a party; nor will such
actions violate, create a breach of, constitute a default under, or
prevent the Seller from fulfilling any of its obligations under any law,
agreement, commitment, instrument, order, judgment or decree to which the
Seller is subject or by which any of Seller's properties are bound; nor
will such actions cause the acceleration of any obligation of the Seller.
5.3 [This paragraph intentionally left blank.]
5.4 The Seller has good and marketable title to the Assets, free and clear of
all pledges, liens (except liens for taxes not yet due), security
interests or other encumbrances of any kind whatsoever, except as
otherwise disclosed in Schedule 5.4.
5.5 All leases pursuant to which Multi-Page leases to or from others any
property are listed in Schedule 5.5 attached hereto and all such leases
are valid, effective and in good standing, except as set out in Schedule
5.5 attached hereto.
Multi-Page is not a party to or bound by any other lease or
amendment or supplement thereto. All leased and owned real property and
the uses being made thereof by Multi-Page comply with all applicable
zoning laws.
5.6 Multi-Page, immediately prior to the foreclosure by Seller, had all
licenses necessary for the conduct of its business, and all license taxes
have been paid if due or accrued if not yet due. All franchises, patents,
trademarks, tradenames and other licenses used by Multi-Page in the
conduct of its business are listed in Schedule 5.6 attached hereto.
Multi-Page has not received any notice of conflict with the asserted
rights of others thereto and, to Seller's knowledge, Multi-Page is not
infringing such rights of others. The Seller is not aware of any claim of
such infringement.
5.7 The Seller has caused to be delivered to the Purchaser copies of
Multi-Page's financial records for the period August 1999 through December
1999. Except as disclosed in Schedule 5.7 attached, all such financial
statements are correct.
5.8 Except as otherwise disclosed in Schedule 5.8 attached hereto, since
December 1, 1999, there have been no material adverse changes in the
condition, financial or otherwise, assets, liabilities, properties, labor
relations or business of Multi-Page other than events and conditions
generally affecting the economy and the foreclosure by Seller on the
assets of Multi-Page. Since December 1, 1999, Multi-Page has not sold or
otherwise disposed of, or committed to dispose of, any assets other than
in the ordinary course of business except the foreclosure by Seller of the
assets of Multi-Page.
5.9 Except as otherwise disclosed in Schedule 5.9 attached hereto, all tax
returns of Multi-Page, including but not limited to, returns of income,
sales, social security, withholding and unemployment taxes that are
required to have been filed by Multi-Page to date have been duly prepared,
timely filed and are complete and correct, and all taxes, interest and
penalties shown thereon or due in connection therewith have been paid, if
due, or accrued, if not yet due. All payroll taxes that Multi-Page is
required by law to withhold have been withheld and properly deposited.
5.10 No Warranty on Assets. Except as provided in this Agreement, the Seller
makes no representation or warranty, either express or implied, as to the
merchantability, quality, condition or fitness for particular uses of any
of the Assets, all of the same being hereby expressly excluded and
disclaimed.
5.11 Except as otherwise disclosed in Schedule 5.11 attached hereto, Multi-Page
is not subject to, bound by or the beneficiary of any agreement not to
compete or other obligation in the nature of an agreement not to compete.
Multi-Page is not in default under any such agreement; nor has Multi-Page
waived any material rights under any such agreement. Except as otherwise
disclosed in Schedule 5.11, Multi-Page is not party to any guaranty or
endorsement and has no contingent obligation.
5.12 The Seller has no knowledge and has received no notice to the effect that
Multi-Page has failed to comply with any laws, regulations or orders
applicable to its business or properties or that the present uses by
Multi-Page of its properties violate any laws, regulations or orders, the
effect of which would have a material adverse affect on Multi-Page or the
Assets.
5.13 Except as otherwise disclosed in Schedule 5.13 attached hereto, Multi-Page
is not involved in any pending or threatened litigation or any
investigation by any government body or any legal, administrative or
arbitration proceeding and is not subject to any judgment, award, order or
decree, the effect of which would have a material adverse affect on
Multi-Page or the Assets. Except as otherwise disclosed in Schedule 5.13,
the Seller does not know of, and has no reason to know of, any action,
claim, suit, proceeding or investigation threatened against or affecting
Multi-Page or the Assets, the effect of which would have a material
adverse affect on Multi-Page or the Assets.
5.14 To Seller's knowledge, Multi-Page has fully complied with all laws,
ordinances, regulations and orders, including without limitation all
anti-trust, zoning, safety and environmental laws, ordinances, regulations
and orders, applicable to its business and properties, and the present
uses by Multi-Page of its properties, whether leased or owned, do not
violate any such laws, ordinances, regulations or orders except where the
failure to comply or the violation thereof would not have a material
adverse effect on Multi-Page or the Assets. Except as otherwise disclosed
in Schedule 5.14 attached hereto, to the Seller's knowledge there is not
currently and in the past there has not been (i) any use, treatment,
storage or disposal of any hazardous substance or material (as defined in
42 U.S.C. ss. 9601(14) and 40 C.F.F. ss. 302.4) or pollutant on any of
Multi-Page's properties, whether leased or owned, (ii) any spill, leakage,
discharge or release of any hazardous substance or material or pollutant
thereon or therefrom, (iii) any off-site disposal by Multi-Page of any
hazardous substance or material or pollutant in any location, or (iv) any
hazardous condition in existence on any of Multi-Page's properties,
whether leased or owned, that violates any law. Multi-Page has not
purchased or sold asbestos or sold any other hazardous substance except as
otherwise disclosed in Schedule 5.14.
5.15 To the knowledge of Seller, each lessor of any real or personal property
leased by Multi-Page and each other party to any other agreement to which
Multi-Page is a party, when and to the extent necessary pursuant to such
lease or other agreement, in the opinion of the Purchaser or its counsel,
has consented to the assignment of such lease or other agreement and not
taken any action or indicated any intention to terminate such lease or
other agreement, except where the failure to consent would not have a
material adverse effect on Multi-Page or the Assets. Purchaser is not
assuming any lease of real property under this Agreement, and nothing
contained in the subparagraph is intended to indicate otherwise.
5.16 [This paragraph intentionally left blank.]
6. Representations and Warranties of the Purchaser
The Purchaser represents and warrants to the Seller as follows:
6.1 The Purchaser is a corporation duly organized, validly existing and in
good standing under the laws of the State of Utah and properly registered
to do business in the State of Georgia and has all requisite corporate
power and authority to own and operate its properties and to carry on its
business as now being conducted. The Purchaser has full corporate power
and authority to execute, deliver and perform this Agreement, and doing so
will not violate any provision of law or contravene any provision of its
articles of incorporation or bylaws.
6.2 This Agreement has been duly executed and delivered by the Purchaser and
constitutes a legal, valid and binding obligation of the Purchaser
enforceable against the Purchaser in accordance with its terms, except as
the enforceability hereof and thereof may be limited or otherwise affected
by (i) bankruptcy, insolvency, reorganization, moratorium, fraudulent
transfer, fraudulent conveyance, or similar laws relating to or affecting
the enforcement of creditors' rights generally or providing for the relief
of debtors and (ii) general principles of equity.
6.3 The execution and delivery of this Agreement by the Purchaser and the
consummation and documentation of the transactions provided for herein do
not and will not constitute a breach of, or default under, any commitment,
agreement, judgment or pending suit or court proceeding to which the
Purchaser is a party or to which any of its assets is subject and will not
cause the acceleration of the maturity of any debt, liability or
obligation of the Purchaser.
6.4 Capital Stock.
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(a) The authorized capital stock of the Purchaser consists of
200,000,000 shares of common stock, and 0 shares of preferred stock.
As of December 31, 1999, there were outstanding 104,490,504 shares
of Common Stock and 0 shares of preferred stock. All of the issued
and outstanding shares of common stock and preferred stock were duly
authorized and validly issued, are fully paid, non-assessable and
free of preemptive rights.
(b) Except as set forth on Schedule 6.4, there are not outstanding
any (i) securities of the Purchaser convertible into or
exchangeable for any shares of capital stock or other securities
of the Purchaser, (ii) subscriptions, options, warrants, or other
rights obligating the Purchaser to issue or entitling any third
party to acquire from the Purchaser any shares of capital stock
or other securities of the Purchaser or (iii) other than this
Agreement, agreements or understandings to which the Purchaser is
a party with respect to the voting, sale, transfer or other
restriction on shares of capital stock of the Purchaser.
(c) To the best knowledge of Purchaser, all SEC filings made by the
Purchaser are true and correct.
7. Closing Conditions
7.1 Conditions to the Closing Obligation of Purchaser. The obligation of
Purchaser to consummate the transactions contemplated by this Agreement
shall be subject to the fulfillment at or prior to the Closing Date of the
following additional conditions:
(a) Seller shall have performed in all material respects its obligations
under this Agreement required to be performed by it at or prior to
the Closing Date; and
(b) The representations and warranties of Seller set forth in this
Agreement shall have been true and correct in all material respects
when made and shall be true and correct in all material respects at
and as of the Closing Date as if made at and as of the Closing Date,
except as affected by transactions contemplated or permitted by this
Agreement.
7.2 Conditions to the Closing Obligation of Seller. The obligation of Seller
to consummate the transactions contemplated by this Agreement shall be
subject to the fulfillment at or prior to the Closing Date of the
following additional conditions:
(a) Purchaser shall have performed in all material respects its
obligations under this Agreement required to be performed by it at
or prior to the Closing Date; and
(b) The representations and warranties of Purchaser set forth in this
Agreement shall have been true in all material respects when made
and shall be true and correct in all material respects at and as of
the Closing Date as if made at and as of the Closing Date, except as
affected by transactions contemplated or permitted by this
Agreement.
8. Excluded Assets
8.1 All cash, accounts receivable, creditor rebates, deposits and recoveries
from pending claims and lawsuits related to the business of Multi-Page
(the "Excluded Assets") shall remain the property of Seller or Multi-Page,
as the case may be.
9. The Closing
The closing hereunder (the "Closing") shall take place on February 24,
2000 (the "Closing Date") at the offices of Zachary & Segraves, P.A., 1000
Commerce Drive, Decatur, GA 30030, or transacted by fax and/or overnight mail.
10. Survival of Warranties
All covenants, representations and warranties contained herein shall
survive any investigation at any time made by or on behalf of the Purchaser or
the Seller and shall survive the Closing for a period of 13 months thereafter.
11. Indemnification of Purchaser
The Seller hereby agrees to indemnify and hold harmless the Purchaser, and
the Purchaser's successors and assignees in respect of any damage, expense, or
loss suffered by any of them resulting from:
11.1 Any misrepresentation, breach of warranty or nonfulfillment of any
covenant, undertaking or agreement on the part of the Seller under this
Agreement or any misrepresentation or omission from any certificate or
other instrument furnished or to be furnished to the Purchaser hereunder;
11.2 Excluding the Assumed Liabilities, all liabilities and obligations or, and
claims against, Multi-Page or its assets arising from the conduct of the
business of Multi-Page prior to the Closing Date including all debts,
liabilities and obligations of any nature, absolute or contingent,
foreseen or unforeseen, which are attributable or chargeable to the
ownership and operation of the business of Seller prior to the Closing
Date specifically including, without limiting the foregoing, liability for
products sold by Multi-Page or any subsidiary thereof and all
environmental liabilities;
11.3 That certain Lease between Fred Taylor as Landlord, Intek
Telecommunications, Inc. as Lessee for the property formerly occupied
by Multi-Page located at 1089 Culpepper Drive, Conyers, Georgia 30094;
11.4 Any claim which might be asserted against Purchaser arising out of the
security interest of ENK Telecom Co., Ltd. and the Uniform Commercial
Code Financing Statements filed in Rockdale County, Georgia, as listed
in Schedule 5.4.
11.5 All actions, suits, proceedings, demands, assessments, judgments, costs
and expenses (including interest paid thereon and all reasonable
attorneys' fees incurred) incident to the foregoing.
12. Indemnification of the Seller
The Purchaser hereby agrees to indemnify and hold harmless the Seller and
the Seller's successors and assigns against any claim, loss, damage, liability,
cost, demand or expense, including reasonable legal fees, sustained by the
Seller or Multi-Page that arises out of or result from the following:
(a) the Assumed Liabilities;
(b) any misrepresentation, breach of warranty or nonfulfillment of any
covenant, undertaking or agreement on the part of or made by the
Purchaser under this Agreement or any misrepresentation or omission
from any certificate or other instrument furnished or to be
furnished to the Seller hereunder;
(c) all actions, suits, proceedings, claims, demands, assessments,
judgments, reasonable legal fees, costs and expenses incident to or
arising out of any act or omission of the Purchaser in the use of or
related to the Assets on or after the Closing Date; and
(d) all actions, suits, proceedings, claims, demands, assessments,
judgments, reasonable legal fees, costs and expenses incident to any
of the foregoing.
13. Expenses of the Parties
Except as specifically provided herein, all expenses incurred by or on
behalf of the parties hereto including, without limitation, all fees and
expenses of agents, representatives, counsel and accountants employed by the
parties hereto in connection with the preparation of this Agreement and the
consummation of the transactions contemplated by this Agreement shall be borne
solely by the party who shall have incurred such expenses and the other party
shall have no liability in respect thereof. The Seller and the Purchaser agree
to share equally the fees and expenses of the Escrow Agent.
14. Right to Specific Performance; Waivers
In the event the Purchaser or the Seller fails to perform its respective
obligations hereunder, the other shall have the right (i) to terminate its
obligations hereunder by giving written notice of such termination or (ii) to
require specific performance of the obligation not performed. Either party has
the right to waive the other party's compliance with a condition to Closing and
to require specific performance of this Agreement.
15. Brokers
Seller and Purchaser warrant and represent that the introduction of Seller
to Purchaser and all negotiations on the part of Seller and Purchaser relative
to this Agreement and the transaction contemplated by this Agreement have been
effected and carried on by Seller directly with the Purchaser without the
intervention of any broker, finder or other person.
16. Miscellaneous
16.1 All notices and other communications provided for hereunder shall be in
writing, unless otherwise specified, and shall be deemed to have been duly
given if delivered personally, sent by receipted overnight courier, or
mailed, postage prepaid, registered or certified mail, to the following
addresses or at such other addresses as the parties hereto may designate
from time to time in writing:
If to the Seller:
Joshua Friedman and Phyllis Zyskind
Attn: Sol Friedman
1333 60th Street
Brooklyn, NY 11219-5019
With a copy to:
Greg Sergesketter, Esq.
Gardere Wynne Sewell & Riggs, LLP
1000 Louisiana, Suite 3400
Houston, TX 77002
If to the Purchaser:
Mr. Hank Cleare
Brandmakers, Inc.
1325 Capital Circle, Suite C
Lawrenceville, GA 30045
With a copy to:
J. Ed Segraves
Zachary & Segraves, P.A.
1000 Commerce Drive
Decatur, GA 30030
16.2 This Agreement shall be governed by and construed and enforced in
accordance with the laws of the State of Georgia. The section headings
contained herein are for reference purposes only and shall not in any way
affect the meaning or interpretation of this Agreement.
16.3 This Agreement may be amended, modified, superseded, or cancelled and any
of the terms, provisions, and conditions hereof may be waived only by a
written instrument executed by all of the parties hereto. Notice or
knowledge of any matter shall not constitute a waiver of any
representation or warranty with respect to such matter. The waiver by any
party of any breach of any provision shall not be construed as a waiver of
any other provision by such party. Each party shall have the right to
waive fulfillment of a condition or covenant or compliance with a
representation or warranty of which it is the beneficiary.
16.4 All understandings and agreements of the parties are merged into this
Agreement and the instruments and agreements referred to herein. This
Agreement inures to the benefit of and shall be binding on each of the
parties hereto or any of them, their respective representatives and
successors; provided, however, this Agreement and the rights and
obligations hereunder shall not be assignable by any party.
16.5 This Agreement may be executed in two or more counterparts, each of which
shall be deemed an original and all of which together shall constitute one
and the same instrument.
16.6 In the event any provision of this Agreement is deemed to be
unenforceable, the remainder of this Agreement shall not be affected
thereby and each provision hereof shall be valid and enforced to the
fullest extent permitted by law.
16.7 Sol Friedman individually agrees to indemnify Purchaser with respect to
Section 11.3 only.
WITNESS the following signatures:
SELLERS:
-------
[NOTARY STAMP &
SIGNATURE] /s/
- ---------------------- ------------------------------
Notary Public Joshua Friedman
[NOTARY STAMP &
SIGNATURE] /s/
- ---------------------- ------------------------------
Notary Public Phyllis Zyskind
PURCHASER:
---------
BRANDMAKERS, INC.
_______________________ By: ________/s/________________
Notary Public Hank Cleare
Its:_President & COO_____
WITH RESPECT TO SECTION 16.7 ONLY:
---------------------------------
[NOTARY STAMP &
SIGNATURE] /s/
- ----------------------- ------------------------------
Notary Public Sol Friedman
SCHEDULE 1
1. All pagers and parts inventory
2. All pager test equipment, work equipment, soldering equipment, label
machines, LCD machines, compressors, shielded rooms, cooling units
3. All office equipment and office supplies
4. Trade show booth
5. Two copy machines
6. Customer List
7. All other physical assets currently located at offices of Brandmakers,
Inc., 1325 Capital Circle, Suite C, Lawrenceville, GA 30045
SCHEDULE 5.4
None.
SCHEDULE 5.5
1. Lease on old Multi-Page property located at 1089 Culpepper Drive, Conyers,
Rockdale County, Georgia 30094. This lease is not being assumed by
Purchaser and is the subject of the indemnity contained in paragraph 11.3
of this Agreement.
2. Two vehicle leases: First Union National Bank Leases Nos.
25-2563-211227 and 25-2563-106369. Purchaser has agreed to assume the
responsibility for these leases upon proper assignment acceptable to
Lessor.
SCHEDULE 5.6
None.
SCHEDULE 5.7
None.
SCHEDULE 5.8
None.
SCHEDULE 5.9
None.
SCHEDULE 5.11
None.
SCHEDULE 5.13
Lawsuit by Mr. H.J. Kim, a former employee of Intek/MultiPage. Seller shall
be solely responsible for the defense and payment of any settlement or
judgment in connection therewith.
SCHEDULE 5.14
None.
SCHEDULE 6.4
1. Private Placement
Brandmakers currently has an offering outstanding to sell 8,000,000 units,
each unit consisting of two (2) shares of Common Stock, par value $001 per
share and 3/4 warrant of the company during a 356-day period.
This will add 16,000,000 shares to the total outstanding shares. Further
dilution will occur with the exercise of the associated warrants.
2. Brandmakers is in the process of acquiring businesses, which will require
the issuance of $650,000 of options in payment when complete.