Exhibit
10.1
INVENTORY
PURCHASE AGREEMENT
This INVENTORY
PURCHASE AGREEMENT (this "Agreement) is entered into this 13th day
of January, 2009, by and between INDUSTRIAL SERVICES OF AMERICA,
INC., a Florida corporation (the "Buyer"), VENTURE METALS, LLC, a
Florida limited liability company (the "Seller"), STEVE JONES, JEFF
VALENTINE and CARLOS CORONA, the members of Seller (collectively,
the "Members").
PRELIMINARY STATEMENTS
The Seller
desires to sell or otherwise transfer certain of its assets;
and
The Buyer
desires to purchase such assets.
In
consideration of these preliminary statements and the mutual
covenants, representations, warranties and agreements hereinafter
set forth, and for other good and valuable consideration, the
receipt and sufficiency of which are hereby acknowledged, the
parties hereby agree as follows:
ARTICLE
I
PURCHASE AND SALE OF ASSETS
SECTION
1.1
Transfer of Assets .
(a)
Upon the terms and subject to the conditions set forth in this
Agreement, at the Effective Time (as hereinafter defined) the
Seller shall transfer to the Buyer, free and clear of all claims,
charges, liens, contracts, rights, options, security interests,
mortgages, encumbrances and restrictions whatsoever (collectively,
"Claims"), the inventory assets listed on Schedule 1.1(a)
("Transferred Assets").
(b)
The Seller shall transfer the Transferred Assets to the Buyer
pursuant to one or more Bills of Sale (the "Bill of Sale") in a
form reasonably acceptable to Buyer, and such other documents and
instruments as the Buyer or its counsel may reasonably request.
(c)
At any time and from time to time after the Closing Date, as
defined below, at the request of the Buyer and at Buyer's sole cost
and expense, the Seller shall execute and deliver such other
instruments of sale, transfer, conveyance, assignment and
confirmation as may be reasonably requested in order to more
effectively transfer, convey and assign to the Buyer and to confirm
the Buyer's title to the Transferred Assets.
SECTION
1.2
Consideration for the Transferred Assets .
(a)
In consideration for the transfer of the Transferred Assets, upon
the terms and subject to the conditions set forth in this
Agreement, the Buyer shall pay to Seller $8,846,794.00 for the
Transferred Assets (the "Purchase Price"). The Purchase Price shall
be paid in cash or other form of immediately available funds as
follows:
(i)
One hundred percent (100%) of the Purchase Price with respect to
any portion of the Transferred Assets which has been counted by the
Buyer on or before the Closing Date shall be paid to the Seller on
the Closing Date;
(ii)
Beginning on the first business day of the full calendar week
following the Closing Date and on the first business day of each
calendar week thereafter until the balance of the Purchase Price
shall be paid in full, the Buyer shall pay to Seller the applicable
portion of the Purchase Price with respect to any item Transferred
Assets which inventory weight was verified by Buyer during the
previous calendar week (the "Weight Date"), provided, however, that
if the weight of the applicable Inventory Assets on the applicable
Weight Date is different than the weight set forth on Schedule
1.1(a)(i), the Purchase Price will be adjusted accordingly.
ARTICLE
II
REPRESENTATIONS AND WARRANTIES OF THE SELLER
As an
inducement to the Buyer to enter into this Agreement and to
consummate the transactions contemplated hereby, the Seller and
Members, jointly and severally, represent and warrant to the Buyer
as follows:
SECTION
2.1
Organization and Qualification . The Seller is a
limited liability company duly organized, validly existing and in
good standing under the laws of the State of Florida and duly
qualified to do business as a foreign limited liability company in
the Commonwealth of Kentucky.
SECTION
2.2
Power and Authority . Seller (a) has the power and authority
to execute, deliver and perform this Agreement and the other
agreements, schedules, documents and instruments contemplated
hereby to be executed and delivered by it (collectively, the
agreements, schedules, documents and instruments contemplated by
this Agreement shall constitute the "Documents") and to consummate
the transactions contemplated hereby and thereby, and (b) has taken
all necessary company action to authorize and approve the
execution, delivery and performance of this Agreement and the
Documents to be executed and delivered by it and the consummation
of the transactions contemplated hereby and thereby. This
Agreement has been duly and validly executed and delivered by
Seller, and the Documents to be executed and delivered by it, when
executed, will be duly and validly executed and delivered by Seller
and, subject to due execution and delivery by Buyer, do and will
and constitute valid and binding obligations of Seller, enforceable
against Seller in accordance with their terms.
SECTION
2.3
Validity, Etc. Neither the execution and delivery of
this Agreement or the Documents, the consummation of the
transactions contemplated hereby or thereby, nor the performance of
this Agreement or the other Documents and such other agreements in
compliance with the terms and conditions hereof and thereof by the
Seller will (i) violate, conflict with or result in any breach of
any trust agreement, articles of organization, operating agreement,
judgment, decree, order, statute or regulation applicable to the
Seller, or (ii) result in the creation of any Claim upon the
Transferred Assets. No registration or filing with, or
consent or approval of or other action by any federal, state or
other governmental agency or instrumentality is or will be
necessary for the valid execution, delivery and performance by
Seller of this Agreement.
SECTION
2.4
Compliance with Law; Licenses and Permits . Seller is in
full compliance with all laws, ordinances, legal requirements,
rules, regulations and orders (collectively, "Legal Requirements")
applicable to it, its operations, properties, assets, products and
services. Seller has not received any notice or other
communication (whether oral or written) from any governmental body
or any other Person regarding (i) any actual, alleged, possible or
potential violation of, or failure to comply with any Legal
Requirement, or (ii) any actual, alleged, possible or potential
obligation on the part of Seller to undertake, or to bear all or
any portion of the cost of, any remedial action of any
nature. Seller possesses all franchises, permits, licenses,
certificates and consents required from any governmental or
regulatory authority in order for Seller to carry on its business
as currently conducted and to own and operate its properties and
assets as now owned and operated.
SECTION
2.5
Financial Statements and Absence of Undisclosed Liabilities
.
(a)
Attached hereto as Schedule 2.5 are, the audited balance
sheet of Seller (the "Balance Sheet") as at December 31, 2007 (the
"Balance Sheet Date") and the related audited income statement for
the fiscal year then ended. All such financial statements
(the "Financial Statements") were prepared from the books and
records of Seller in accordance with generally accepted accounting
principles, consistently applied ("GAAP"). The Financial
Statements fairly present the financial position and results of
operations, changes in members' equity and cash flows of Seller as
of the respective dates of and for the periods referred to in such
Financial Statements all in accordance with GAAP.
(b)
Seller has no liabilities or obligations of any nature whether
absolute, accrued, contingent or otherwise in relation to the
Transferred Assets and there is no basis for the assertion against
Buyer of any liability or obligation of Seller.
SECTION
2.6
Assets . Seller has good and marketable title to all of the
Transferred Assets, free and clear of all Claims. All
Transferred Assets consist of items which are good and merchantable
within normal trade practice, and are of a quality and quantity
presently usable or salable in the ordinary course of business
consistent with past practice. All Transferred Assets were
purchased in the ordinary course of business at a cost not
exceeding market prices prevailing at the time of
purchase.
SECTION
2.7
Insurance . Seller is, and will be through the Closing,
insured with insurers in respect of its properties, assets and
businesses, including all Transferred Assets. All insurance
policies held by Seller are (i) valid, outstanding and enforceable,
(ii) are issued by an insurer that is financially sound and
reputable; and (iii) taken together, provide adequate insurance
coverage of the Transferred Assets for all risks normally insured
against by a person carrying on the same business or businesses as
Seller in the same location. Such insurance shall remain in
full force and effect with respect to all events occurring prior to
the Effective Time. Seller (i) has not failed to give any
notice or present any claim under any such policy or binder in due
and timely fashion, (ii) has not received notice of cancellation or
non-renewal of any such policy or binder, (iii) is not aware of any
threatened or proposed cancellation or non-renewal of any such
policy or binder, and (iv) has not received notice of any insurance
premium which will be materially increased in the future.
There are no outstanding claims under any such policy which have
gone unpaid for more than 45 days, or as to which the insurer has
disclaimed liability.
SECTION
2.8
Taxes . All state and local property tax returns and
tax reports required to be filed by the Seller on or before the
Closing have been or will be timely filed with the appropriate
governmental agencies in all jurisdictions in which such returns
and reports are required to be filed and all amounts shown as owing
thereon have been paid. There are no Claims on any of the
Transferred Assets that arose in connection with any failure (or
alleged failure) to pay any tax, and there is no basis for
assertion of any claims attributable to taxes, which, if adversely
determined, would result in any such Claim.
SECTION
2.9
Litigation . There is no (i) action, suit, claim,
proceeding or investigation pending or threatened against or
affecting the Seller (whether or not such Seller is a party or
prospective party thereto), at law or in equity, or before or by
any federal, state, municipal or other governmental department,
commission, board, bureau, agency or instrumentality, domestic or
foreign, (ii) arbitration proceeding pending relating to the Seller
or (iii) governmental inquiry pending or threatened against or
involving Seller's business.
SECTION
2.10
Environmental Matters . Seller has at all times been
in full compliance with, and has not been and is not in violation
of or liable under any environmental law. There are no past,
present, or future events, conditions, circumstances, activities,
practices, incidents, actions, or plans of Seller or Seller's
predecessors which may interfere with or prevent continued
compliance with environmental laws. Seller has previously
provided Buyer with true, accurate and complete copies of all
reports or investigations conducted by or on behalf of Seller or
any of the Members with respect to environmental conditions at any
real property owned or used by the Seller in connection with its
business.
SECTION
2.11
Broker's or Finder's Fee . No agent, broker, person or
firm acting on behalf of Seller is, or will be, entitled to any
commission or broker's or finder's fees from Seller, or from any
person controlling, controlled by or under common control with
Seller, in connection with any of the transactions contemplated
herein.
SECTION
2.12
Disclosure . No representation or warranty or other
statement made by Seller in this Agreement (including the schedules
hereto) contains any untrue statement of material fact or omits to
state a material fact required to be stated herein or therein or
necessary to make the statements contained herein or therein not
misleading. No notice given by Seller in this Agreement
(including the schedules hereto) will contain any untrue statement
or omit to
