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Exhibit 10.1
ACQUISITION AGREEMENT
AMONG
MATERIAL TECHNOLOGIES, INC.,
BRIDGE TESTING CONCEPTS, INC.,
AND
BRENT PHARES
TABLE OF CONTENTS
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ARTICLE 1
SALE AND PURCHASE OF THE SHARES
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| 1.1 |
Issuance of the
Shares................................................................................... |
1
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| 1.2 |
Consideration................................................................................................ |
1
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| 1.3 |
Lockup
........................................................................................................ |
2
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ARTICLE 2
REPRESENTATIONS AND WARRANTIES
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| 2.1 |
Representations and Warranties of the
Parties................................................ |
2
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2.1.1 Organization,
Standing,
Power........................................................... |
2
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2.1.2
Authority........................................................................................... |
3
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2.1.3 Capitalization
of the
Parties................................................................ |
3
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2.1.4
Subsidiaries....................................................................................... |
4
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2.1.5 No
Defaults...................................................................................... |
4
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2.1.6 Governmental
Consents..................................................................... |
5
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2.1.7 Financial
Statements.......................................................................... |
5
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2.1.8 Absence of
Undisclosed
Liabilities..................................................... |
5
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2.1.9 Absence of
Changes......................................................................... |
5
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2.1.10 Patents and
Trademarks.................................................................... |
6
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2.1.11 Certain
Agreements........................................................................... |
6
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2.1.12 Compliance with Other
Instruments................................................... |
6
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2.1.1.13 Employee Benefit
Plans.................................................................. |
7
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2.1.14 Other Personal
Property.................................................................... |
7
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2.1.15 Properties and
Liens.......................................................................... |
7
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2.1.16
Inventory.......................................................................................... |
7
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2.1.17 Major
Contracts............................................................................... |
7
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2.1.18 Questionable
Payments..................................................................... |
8
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2.1.19 Recent
Transactions.......................................................................... |
9
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2.1.20 Leases in
Effect................................................................................. |
9
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2.1.21
Taxes................................................................................................ |
9
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2.1.22 Disputes and
Litigation...................................................................... |
9
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2.1.23 Compliance with
Laws...................................................................... |
10
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2.1.24 Related Party
Transactions................................................................ |
10
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2.1.25 Minute
Books................................................................................... |
10
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2.1.26
Disclosure......................................................................................... |
10
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2.1.27
Reliance............................................................................................ |
11
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| 2.2 |
Representations and Warranties of
Seller....................................................... |
11
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| 2.3 |
Representations and Warranties of
Buyer....................................................... |
11
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ARTICLE 3
CONDITIONS PRECEDENT
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| 3.1 |
Conditions to Each Party’s
Obligations.......................................................... |
12
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| 3.2 |
Conditions to Seller's
Obligations................................................................... |
12
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| 3.3 |
Conditions to Buyer's
Obligations.................................................................. |
13
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ARTICLE 4
CLOSING AND DELIVERY OF DOCUMENTS
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| 4.1 |
Time and
Place............................................................................................. |
14
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| 4.2 |
Deliveries by
Seller........................................................................................ |
14
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| 4.3 |
Deliveries by the
Company............................................................................ |
14
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| 4.4 |
Deliveries by
Buyer....................................................................................... |
15
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ARTICLE 5
INDEMNIFICATION
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| 5.1 |
Seller and the Company's Indemnity
Obligations............................................ |
15
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| 5.2 |
Buyer's Indemnity
Obligations........................................................................ |
15
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ARTICLE 6
DEFAULT, AMENDMENT AND WAIVER
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| 6.1 |
Default.......................................................................................................... |
16
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| 6.2 |
Waiver and
Amendment................................................................................ |
16
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ARTICLE 7
MISCELLANEOUS
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| 7.1 |
Expenses...................................................................................................... |
17
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| 7.2 |
Notices......................................................................................................... |
17
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| 7.3 |
Entire
Agreement.......................................................................................... |
18
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| 7.4 |
Survival of
Representations............................................................................ |
18
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| 7.5 |
Incorporated by
Reference............................................................................ |
18
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| 7.6 |
Remedies
Cumulative.................................................................................... |
18
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| 7.7 |
Execution of Additional
Documents............................................................... |
18
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| 7.8 |
Costs and
Fees............................................................................................. |
18
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| 7.9 |
Choice of
Law.............................................................................................. |
19
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| 7.10 |
Jurisdiction.................................................................................................... |
19
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| 7.11 |
Attorneys’
Fees............................................................................................ |
19
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| 7.12 |
Binding Effect and
Assignment....................................................................... |
19
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| 7.13 |
Counterparts; Facsimile
Signatures................................................................ |
19
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| 7.14 |
Conflict
Waiver............................................................................................. |
19
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Table of Contents
Table of Schedules and Exhibits
Exhibit
A
Intellectual Property of the Company
Exhibit
B
Material Technologies, Inc. Disclosure Schedule
Exhibit
C
Bridge Testing Concepts, Inc. Disclosure Schedule
Exhibit
D
Brent Phares Disclosure Schedule
THIS ACQUISITION AGREEMENT (the “Agreement”), dated
September 28, 2007, is by and among MATERIAL TECHNOLOGIES,
INC., a Delaware corporation (the “Buyer”),
BRIDGE TESTING CONCEPTS, INC., a California corporation (the
“Company”), and BRENT PHARES , an individual
(the “Seller”) (individually, a “Party”;
collectively, the “Parties”).
A. The
capital stock of the Company consists of 10,000,000 authorized
shares of Common Stock, of which 5,100,000 are currently issued and
outstanding and held by Seller (the “Shares”).
B. Upon
the terms and conditions set forth below, Seller desires to sell
all of the Company Shares to Buyer, such that, following such
transaction, the Company will be a 100% owned subsidiary of
Buyer.
C. For
United States federal income tax purposes, the Parties to this
Agreement intend that the transactions described in this Agreement
shall qualify as a “reorganization” within the meaning
of Section 368(a) of the Internal Revenue Code of 1986, as amended
(the “Code”), and that this Agreement shall be, and is
hereby, adopted as a “plan of reorganization” for
purposes of Section 368(a) of the Code.
NOW, THEREFORE , in consideration of the mutual covenants,
agreements, representations and warranties contained in this
Agreement, the Parties hereto agree as follows:
ARTICLE 1
SALE AND PURCHASE OF THE
SHARES
1.1
Issuance of the Shares . Subject to the terms and
conditions herein set forth, and on the basis of the
representations, warranties and agreements herein contained, Seller
shall sell and transfer to Buyer the Shares which constitute 100%
of the issued and outstanding common stock of the Company.
1.2
Consideration . In consideration for this Agreement,
the Parties shall provide the following:
1.2.1.
Buyer Assumption of Liabilities . Any indebtedness of
the Company incurred through the Closing (as defined in Article 4
of this Agreement) shall be the responsibility of Seller. Any
indebtedness of the Company incurred after the Closing shall be the
responsibility of Buyer.
1.2.2.
Buyer Acquisition of Intellectual Property . Subject
to the terms and conditions herein set forth, and on the basis of
the representations, warranties and agreements herein contained,
Seller agrees to sell to Buyer, and Buyer agrees to purchase from
Seller, for the purchase price as set forth in Section 1.2.3, any
and all intellectual property of Seller and the
Company, including but not limited to the intellectual property
described on Exhibit A , and all intellectual property used
in the business of the Company, including all graphics and logos;
all domain names and URL’s; any proprietary software and its
source code; all existing content and HTML files; all branding and
trademarks; all trade names; all services marks; all copywritten
material; all patents; and all products and proceeds of the
foregoing, in any form whatsoever and wheresoever located
(collectively the “Intellectual Property”).
1.2.3
Purchase Price . The purchase price for the Shares
shall be:
(a) 1,500,000
shares of common stock of Buyer (the “Buyer’s
Stock”); and
(b) $37,500
payable in cash.
1.3
Lockup . Seller hereby agrees (i) not to sell, assign,
transfer, convey, hypothecate, alienate or otherwise dispose of any
of the Buyer’s Stock, or any right or interest therein,
voluntarily or involuntarily, by operation of law or otherwise, or
make any offer or agreement relating to any of the foregoing, for a
period of two years from the date of this Agreement (the
“Lockup Period”), and (ii) authorizes the Buyer during
the Lockup Period to cause the transfer agent to decline to
transfer and/or to note stop transfer restrictions on the transfer
books and records of the Buyer with respect to the Buyer’s
Stock, and, in the case of any such Buyer’s Stock for which
Seller is the beneficial but not the record holder, agrees to cause
the record holder to cause the transfer agent to decline to
transfer and/or to note stop transfer restrictions on such books
and records with respect to such Buyer’s Stock.
ARTICLE 2
REPRESENTATIONS AND
WARRANTIES
2.1
Representations and Warranties of the Parties. Except
as disclosed in a document referring specifically to the
representations and warranties in this Agreement that identifies by
section number the section and subsection to which such disclosure
relates and is delivered by each Party to the others prior to the
execution of this Agreement (the “Disclosure
Schedules”), the Parties represent and warrant each to the
other, as of the date hereof and as of the Closing, as follows:
2.1.1
Organization, Standing, Power .
(a)
Buyer . Buyer is a corporation duly organized, validly
existing, and in good standing under the laws of the state of
Delaware. It has all requisite corporate power, franchises,
licenses, permits, and authority to own its properties and assets
and to carry on its business as it has been and is being
conducted. Buyer is duly qualified and in good standing to do
business in each jurisdiction in which a failure to so qualify
would have a Material Adverse Effect (as defined below) on
Buyer. For purposes of this Agreement, the term
“Material Adverse Effect” means any change or effect
that, individually or when taken together with all other such
changes or effects which have occurred prior to the date of
determination of the occurrence of the Material Adverse Effect, is
or is reasonably likely to be materially adverse to the business,
assets (including intangible assets), financial condition, or
results of operations of the entity.
(b)
The Company . The Company is a corporation duly
organized, validly existing, and in good standing under the laws of
the state of California. It has all requisite corporate
power, franchises, licenses, permits, and authority to own its
properties and assets and to carry on its business as it has been
and is being conducted. The Company is duly qualified and in good
standing to do business in each jurisdiction in which a failure to
so qualify would have a Material Adverse Effect (as defined above)
on the Company.
2.1.2
Authority . The Parties have all requisite power and
authority to enter into this Agreement and to consummate the
transactions contemplated hereby. The execution and delivery
by the Parties of this Agreement and the consummation of the
transactions contemplated hereby have been duly authorized by all
necessary action on the parts of the Parties, including the
approval of the Board of Directors of each Party. This
Agreement has been duly executed and delivered by the Parties to
each other and constitutes a valid and binding obligation of each
Party enforceable in accordance with its terms, except that such
enforceability may be subject to: (a) bankruptcy, insolvency,
reorganization, or other similar laws relating to enforcement of
creditors’ rights generally; and (b) general equitable
principles. Subject to the satisfaction of the conditions set
forth in Article 3 below, the execution and delivery of this
Agreement do not, and the consummation of the transactions
contemplated hereby will not, conflict with or result in any
violation of, or default (with or without notice or lapse of time,
or both) under, or give rise to a right of termination,
cancellation, or acceleration of any obligation, or to loss of a
material benefit under, or the creation of a lien, pledge, security
interest, charge, or other encumbrance on any assets of any of the
Parties (any such conflict, violation, default, right, loss, or
creation being referred to herein as a “Violation”)
pursuant to: (i) any provision of the organization documents of the
Parties; or (ii) any loan or credit agreement, note, bond,
mortgage, indenture, contract, lease, or other agreement, or
instrument, permit, concession, franchise, license, judgment,
order, decree, statute, law, ordinance, rule, or regulation
applicable to each of the Parties’ respective properties or
assets, other than in the case of any such Violation which
individually or in the aggregate would not have a Material Adverse
Effect on any of the Parties.
2.1.3
Capitalization of the Parties.
(a)
The Company . The capital stock of the Company
consists of 10,000,000 authorized shares of Common Stock, of which
5,100,000 are currently issued and outstanding and held by
Seller.
(b) Upon
issuance pursuant to the terms of this Agreement, the Shares will
be duly and validly issued, fully paid and nonassessable, and
issued in accordance with the registration or qualification
provisions of the Securities Act of 1933, as amended (the
“Act”), and any relevant state securities laws or
pursuant to valid exemptions therefrom. The Shares are free
of restrictions on transfer other than restrictions on transfer as
set forth in the Disclosure Schedules and under applicable state
and federal securities laws. The Shares shall be issued in a
private transaction and consequently will be deemed to be
“Restricted Securities” as set forth in Rule 144
promulgated under the Act.
(c) Except
as set forth on the Disclosure Schedules, there are no options,
warrants, rights, calls, commitments, plans, contracts, or other
agreements of any character granted or issued by any of the Parties
which provide for the purchase, issuance, or transfer of any
additional shares of the capital stock of the Parties nor are there
any outstanding securities
granted or issued by any of the Parties that are convertible into
any shares of the equity securities of the Parties, and none is
authorized. None of the Parties have outstanding any bonds,
debentures, notes, or other indebtedness the holders of which have
the right to vote (or convertible or exercisable into securities
having the right to vote) with holders of the Parties' capital
stock on any matter.
(d) Except
as set forth on the Disclosure Schedules, none of the Parties are a
party or subject to any agreement or understanding, and, to the
best of the Parties' knowledge, there is no agreement or
understanding between any persons and/or entities, which affects or
relates to the voting or giving of written consents with respect to
any security or by a shareholder or director of any of the
Parties.
(e) Except
as set forth on the Disclosure Schedules, none of the Parties have
granted or agreed to grant any registration rights, including
piggyback rights, to any person or entity.
2.1.4
Subsidiaries. “Subsidiary” or
“Subsidiaries” means all corporations, trusts,
partnerships, associations, joint ventures, or other Persons, as
defined below, of which any of the Parties or any Subsidiary of any
of the Parties owns not less than 20% of the voting securities or
other equity or of which any of the Parties or any Subsidiary of
any of the Parties possesses, directly or indirectly, the power to
direct or cause the direction of the management and policies,
whether through ownership of voting shares, management contracts,
or otherwise. “Person” means any individual,
corporation, trust, association, partnership, proprietorship, joint
venture, or other entity. Prior to the Closing of this
Agreement, there are no Subsidiaries of any of the Parties other
than as disclosed herein or disclosed on the Disclosure
Schedules.
2.1.5
No Defaults. None of the Parties has received notice
that they would be, with the passage of time, in default or
violation of any term, condition, or provision of: (i) their
Articles of Incorporation or Bylaws; (ii) any judgment, decree, or
order applicable to any of the Parties; or (iii) any loan or credit
agreement, note, bond, mortgage, indenture, contract, agreement,
lease, license, or other instrument to which any of the Parties is
now a party or by which they or any of their properties or assets
may be bound, except for defaults and violations which,
individually or in the aggregate, would not have a Material Adverse
Effect on any of the Parties.
2.1.6
Governmental Consents . Any consents, approvals,
orders, or authorizations of or registrations, qualifications,
designations, declarations, or filings with or exemptions by
(collectively “Consents”), any court, administrative
agency, or commission, or other federal, state, or local
governmental authority or instrumentality, whether domestic or
foreign (each a “Governmental Entity”), which may be
required by or with respect to any of the Parties in connection
with the execution and delivery of this Agreement or the
consummation by the Parties of the transactions contemplated
hereby, except for such Consents which if not obtained or made
would not have a Material Adverse Effect on any of the Parties for
the transactions contemplated by this Agreement, are the
responsibility of the respective Party. Each of the Parties
hereby represents and warrants that such Consents have been
obtained by them, if necessary.
2.1.7
Financial Statements . The Company does not have an
outside independent auditing firm. The Company will furnish
Buyer with any copies it may have, if there be any, of its
financial statements (the “Financial Statements”),
which will fairly present the financial positions of the Company as
at the dates thereof and the results of its operations and cash
flows for the periods then ended (subject, in the case of unaudited
statements, to normal, recurring audit adjustments not material in
scope or amount). To the best of the Company's directors'
knowledge and belief, there has been no change in the Company's
accounting policies or the methods of making accounting estimates
or changes in estimates that are material to the Financial
Statements, except as described in the notes thereto.
2.1.8
Absence of Undisclosed Liabilities . To the best of
their knowledge and belief, none of the Parties have any
liabilities or obligations (whether absolute, accrued, or
contingent) except: (i) liabilities that are accrued or reserved
against in their respective Balance Sheets; or (ii) additional
liabilities reserved against since the date of the Financial
Statements that (x) have arisen in the ordinary course of business;
(y) are accrued or reserved against on their books and records; and
(z) amount in the aggregate to less than $10,000.
2.1.9
Absence of Changes. To the best of their knowledge
and belief, since the date of the Financial Statements, the Parties
have conducted their businesses in the ordinary course and there
has not been: (i) any Material Adverse Effect on the business,
financial condition, liabilities, or assets of the Parties or any
development or combination of developments of which management of
the Parties has knowledge which is reasonably likely to result in
such an effect; (ii) any damage, destruction, or loss, whether or
not covered by insurance, having a Material Adverse Effect on the
Parties; (iii) any declaration, setting aside or payment of any
dividend or other distribution (whether in cash, stock, or
property) with respect to the capital stock of the Parties; (iv)
any increase or change in the compensation or benefits payable or
to become payable by the Parties to any of their employees, except
in the ordinary course of business consistent with past practice;
(v) any sale, lease, assignment, disposition, or abandonment of a
material amount of property of the Parties, except in the ordinary
course of business; (vi) any increase or modification in any bonus,
pension, insurance, or other employee benefit plan, payment, or
arrangement made to, for, or with any of their employees; (vii) the
granting of stock options, restricted stock awards, stock bonuses,
stock appreciation rights, and similar equity based awards; (viii)
any resignation or termination of employment of any office of the
Parties; and the Parties, to the best of their knowledge, do not
know of the impending resignation or termination of employment of
any such office; (ix) any merger or consolidation with another
entity, or acquisition of assets from another entity except in the
ordinary course of business; (x) any loan or advance by the Parties
to any person or entity, or guaranty by the Parties of any loan or
advance; (xi) any amendment or termination of any contract,
agreement, or license to which any of the Parties is a party,
except in the ordinary course of business; (xii) any mortgage,
pledge, or other encumbrance of any asset of any of the Parties;
(xiii) any waiver or release of any right or claim of the Parties,
except in the ordinary course of business; (xiv) any write off as
uncollectible any note or account receivable or portion thereof; or
(xv) any agreement by any of the Parties to do any of the things
described in this Section 2.1.9.
2.1.10
Intellectual Property . The Parties each have
sufficient title and ownership of all patents, trademarks, service
marks, trade names, copyrights, trade secrets, information,
proprietary rights, and processes (collectively, the
“Entitlements”) necessary for their businesses as now
conducted without any conflict with or infringement of the rights
of others. There are no
outstanding options, licenses, or agreements of any kind relating
to the Entitlements, nor are any of the Parties bound by or a party
to any options, licenses, or agreements of any kind with respect to
the Entitlements of any other person or entity. None of the
Parties has received any communications alleging that they have
violated or, by conducting their businesses as proposed, would
violate any of the Entitlements of any other person or
entity. None of the Parties are aware that any of their
employees is obligated under any contract (including licenses,
covenants, or commitments of any nature) or other agreement, or
subject to any judgment, decree, or order of any court or
administrative agency, that would interfere with the use of his or
her best efforts to promote the interests of the Parties or that
would conflict with each of the Parties' respective business as
proposed to be conducted. Neither the execution or delivery
of this Agreement, nor the carrying on of each of the Parties'
respective business by their respective employees, nor the conduct
of each of the Parties' respective business as proposed, will, to
the best of the Parties' knowledge, conflict with or result in a
breach of the terms, conditions or provisions of, or constitute a
default under, any contract, covenant, or instrument under which
any of such employees is now obligated. None of the Parties
believe that it is or will be necessary to utilize any inventions
of any of its employees (or people it currently intends to hire)
made prior to their employment by any of the Parties.
2.1.11
Certain Agreements . To the best of the Parties'
knowledge and belief, neither the execution and delivery of this
Agreement nor the consummation of the transactions contemplated
hereby will: (i) result in any payment (including, without
limitation, severance, unemployment compensation, parachute
payment, bonus, or otherwise), becoming due to any director,
employee, or independent contractor of any of the Parties, from any
other Party under any agreement or otherwise; (ii) materially
increase any benefits otherwise payable under any agreement; or
(iii) result in the acceleration of the time of payment or vesting
of any such benefits.
2.1.12
Compliance with Other Instruments . To the best of the
Parties' knowledge and belief, none of the Parties are in violation
or default of any provision of their respective articles of
incorporation or bylaws, or of any instrument, judgment, order,
writ, decree, or contract to which they are a party or by which
they are bound, or, to the best of their knowledge, of any
provision of any federal or state statute, rule, or regulation
which may be applicable to them. The execution, delivery, and
performance of this Agreement and the consummation of the
transactions contemplated hereby will not result in any such
violation or be in conflict with or constitute, with or without the
passage of time and giving of notice, either a default under any
such provision, instrument, judgment, order, writ, decree, or
contract, or an event that results in the creation of any lien,
charge, or encumbrance upon any assets of any Party or the
suspension, revocation, impairment, forfeiture, or nonrenewal of
any material permit, license, authorization, or approval applicable
to any Party, its businesses, or operations, or any of its assets
or properties.
2.1.13
Employee Benefit Plans . The Parties have no employee
benefit plans (including without limitation all plans which
authorize the granting of stock options, restricted stock, stock
bonuses, or other equity based awards) covering active, former, or
returned employees, other than as listed in the Disclosure
Schedules.
2.1.14
Other Personal Property . The books and records of
each of the Parties contain a complete and accurate description,
and specify the location, of all trucks, automobiles,
machinery, equipment, furniture, supplies, and other tangible
personal property owned by, in the possession of, or used by the
Parties in connection with their businesses. Except as set forth in
the Disclosure Schedules, no personal property used by the Parties
in connection with their businesses is held under any lease,
security agreement,
con
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