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EXHIBIT 2.01
ASSET PURCHASE AGREEMENT
THIS ASSET PURCHASE AGREEMENT (together with the schedules and
exhibits
attached hereto, the "APA") is made and
entered into as of this 27th day of
June, 2005 (the "EFFECTIVE DATE"), by and
between Seawright Holdings, Inc., a
Delaware corporation ("BUYER") and QuiBell
Partners, L.L.C., a Virginia
limited liability company ("SELLER").
RECITALS
WHEREAS, Buyer wishes to acquire from Seller, and Seller desires
to
sell to Buyer, certain assets as set forth
herein.
NOW, THEREFORE, in consideration of the foregoing, of the
mutual
promises herein contained, and of other
good and valuable consideration, the
receipt and sufficiency of which are hereby
acknowledged, the parties, intending
to be legally bound, hereby agree as
follows:
1.
DEFINITIONS.
1.1. DEFINED TERMS. As used herein, the terms defined below shall
have
the following meanings:
"ASSETS" has the meaning given such term in Section 2.1.
"CONFIDENTIAL INFORMATION" has the meaning given such term in
Section
7.2.
"INTELLECTUAL PROPERTY" means all of the following as they exist in
all
jurisdictions throughout the world: (i)
trademarks, service marks, trade dress,
trade names, brand names, designs, or
logos, whether registered or unregistered,
and all registrations and applications for
pending registration thereof; and
(ii) formulas for flavored sparkling waters
and for teas.
"LIEN" shall mean any claim, lien, pledge, option, charge,
security
interest, encumbrance, mortgage or other
similar right.
"PERMITTED LIEN" means the security interest of Seller under
the
Security Agreement.
"TRADEMARK ASSIGNMENT AGREEMENT" means the Trademark Assignment
Agreement by and between Buyer and Seller
dated as of the date hereof pursuant
to which Seller assigns the Trademarks to
Buyer.
"TRADEMARKS" has the meaning given such term in SECTION 2.1(a).
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2.
ASSETS.
2.1. PURCHASED ASSETS. Seller hereby conveys, assigns, transfers
and
delivers to Buyer and Buyer hereby accepts
and takes possession from Seller,
free and clear of any Liens, the following
assets and other rights of Seller
(the "ASSETS"):
(a) all of Seller's right, title and interest in and to the
trademarks, service marks, trade names,
service names and logos set forth on
EXHIBIT 2.1(A) hereto, including all
Intellectual Property rights therein (the
"TRADEMARKS");
(b) all of Seller's right, title and interest in and to the
glass bottle designs for 1 l, 750 ml, 385
ml and 237 ml set forth on EXHIBIT
2.1(B);
(c) all of Seller's right, title and interest in and to the
artwork for 237 ml sparkling water bottle
carrypacks; 237 ml, 385 ml, 750 ml
sparkling water bottle labels; 1.5 l, 1.0
l, 16.9 oz spring water bottle labels;
and, 1.5 l, 16.9 oz tea bottle labels set
forth on EXHIBIT 2.1(C);
(d) all of Seller's right, title and interest in and to the
formulas for flavored sparkling water and
for teas set forth on EXHIBIT 2.1(D);
(e) A list of customers and the most recently available
wholesale and retail pricing set forth on
Exhibit 2.1(e);
(f) Copies of vendor and or supplier invoices for major raw
materials set forth on Exhibit 2.1(f);
(g) Bar Code assignments set for on Exhibit 2.1(e);
(h) Web site coding; and
(i) Six cases of Quibell 237 ml Tangerine/Orange, one case of
private label 237 ml Lemon/Lime and one
case of private label 237 ml Natural
sparkling water.
3.
PURCHASE PRICE; SECURITY INTEREST.
3.1. PURCHASE PRICE. Upon the terms and subject to the conditions
set
forth in this Agreement, in reliance upon
the representations, warranties,
covenants and agreements of Seller
contained herein, and in exchange for the
sale, conveyance, assignment, transfer and
delivery of the Assets, Buyer agrees
to pay to Seller the sum of Ten Thousand
Dollars ($10,000), payable on the
Effective Date.
3.2. ROYALTY. Buyer agrees to pay Seller a royalty of $0.02 per
case
for the first 4,000,000 cases of bottled
water or tea sold under the Trademarks.
Such royalty to be paid to Seller by the
15th day following the month of sale.
In the event that as of the fifth
anniversary of the Effective Date Buyer shall
not have paid to Seller at least $50,000 in
royalties hereunder, Buyer shall pay
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to Seller an amount equal to $50,000 less
the amount of royalties paid to Buyer
hereunder during such five year period.
Such payment to be paid to Seller by the
15th day of the month following the month
of the fifth anniversary of the
Effective Date. Seller shall have the
right, at any reasonable time upon five
(5) business days prior written notice to
audit, inspect and copy all of Buyer's
records related to the sale of bottled
water or tea sold under the Trademarks.
3.3. IN KIND PAYMENTS. For as long as Seller markets and sells
water or
tea under the Trademarks, Buyer shall be
entitled to 240 cases of bottled water
or tea, per year at no cost, as selected by
Buyer, provided that Buyer must
arrange for pick-up at Buyer's co-packing
facility. In the event that Buyer
ceases to market and sell water or tea
under the Trademarks, Buyer will
extinguish the foregoing obligation by
making a one-time payment of $10,000 to
Seller. Such payment will be made by the
15th day following the month in which
Buyer ceases to market and sell water or
tea under the Trademarks. Upon any such
payment, Seller's annual entitlement to
water or tea shall terminate.
3.4. SECURITY INTEREST. To secure the prompt payment and
performance in
full when due, whether by lapse of time or
otherwise, of Buyer's obligations
under Section 3.2, Buyer hereby pledges and
grants to Seller, a first priority
security interest in any and all right,
title and interest of Buyer in and to
the Assets. This Section 3.4 shall be a
continuing agreement in every respect
and shall remain in full force and effect
so long as any amounts are payable to
Seller under Section 3.2. Upon satisfaction
by Buyer of its obligations under
Section 3.2, this Section 3.4 shall
automatically terminate. Buyer hereby
authorizes Seller to file a UCC financing
statement with respect to its security
interest.
4.
CLOSING DELIVERIES.
4.1. DELIVERIES BY BUYER. Simultaneously herewith, Buyer is
executing
and delivering to the Seller the
following:
(a) the Trademark Assignment Agreement.
4.2. DELIVERIES BY SELLER. Simultaneously herewith, Seller is
executing
and delivering to the Buyer the
following:
(a)
the Trademark Assignment Agreement.
5.
REPRESENTATIONS AND WARRANTIES OF BUYER.
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5.1. GOOD STANDING; CORPORATE AUTHORITY. Buyer is a corporation
duly
incorporated, validly existing in good
standing under the laws of its state of
incorporation.
5.2. VALIDITY AND EFFECT OF AGREEMENTS. This Agreement constitutes,
and
all agreements and documents contemplated
hereby (when executed and delivered
pursuant hereto for value received) will
constitute, the valid and legally
binding obligations of Buyer, enforceable
in accordance with their terms,
subject as to enforcement to bankruptcy,
insolvency, reorganization and other
laws of general applicability relating to
or affecting creditors' rights and to
general equity principles. The consummation
of the transactions contemplated
hereby does not require the consent of any
third party not obtained, will not
result in the material breach of any term
or provision of, or constitute a
default under, any judgment, decree,
indenture, mortgage, other agreement or
instrument to which Buyer is a party or by
which it is bound, and will not
violate or conflict with any provision of
the bylaws or articles of
incorporation of Buyer.
5.3. AUTHORIZATION OF AGREEMENTS. The execution and delivery of
this
Agreement and all agreements and documents
contemplated hereby by Buyer, and the
consummation by it of the transactions
contemplated hereby, have been duly
authorized by all requisite corporate
action.
6.
REPRESENTATIONS AND WARRANTIES OF SELLER.
6.1. GOOD STANDING; CORPORATE AUTHORITY; COMPLIANCE WITH LAW.
Seller is
a limited liability company duly formed,
validly existing in good standing under
the laws of its state of formation.
6.2. VALIDITY AND EFFECT OF AGREEMENTS. This Agreement constitutes,
and
all agreements and documents contemplated
hereby (when executed and delivered
pursuant hereto for value received) will
constitute, the valid and legally
binding obligations of
