EXHIBIT 10.1

ASSET PURCHASE AGREEMENT

This Asset Purchase Agreement (the “Agreement”) has been entered into as of
April 1, 2013 (the “Effective Date”) by and between DAVID P. STAPLETON, solely
in his capacity as court-appointed receiver (in such capacity, the “Receiver”)
for Cleaire Advanced Emission Controls, LLC, a Delaware limited liability
company (“Cleaire”), and ENVIRONMENTAL SOLUTIONS WORLDWIDE, INC., a Florida
corporation (“ESW”, or such other Affiliate selected by ESW, the “Purchaser”).
Receiver and Purchaser are sometimes collectively referred to as the “Parties.” 
Capitalized terms used herein are defined in Section 12.19 of this Agreement.

RECITALS

The Receiver and Purchaser hereto hereby acknowledge the following:

WHEREAS, Cleaire was engaged in the design, development, and manufacturing of
retrofit emission control systems for diesel engines (the “Business”); 

WHEREAS, on or about January 25, 2013, Wells Fargo Bank, National Association
(“Wells Fargo”), filed a Verified Complaint for (1) possession of collateral,
(2) foreclosure of security interest under California Commercial Code Section
9601(1), (3) appointment of receiver and (4) injunctive relief against Cleaire
and certain other parties (named as “Does” therein), which case is administered
under Case No. 37-2013-00031595-CU-MC-CTL, pending in the Superior Court of the
State of California in and for the County of San Diego – Central Division (the
“Court”); 

WHEREAS, on or about January 30, 2013, the Court entered an Order Appointing
Receiver, appointing David P. Stapleton, as receiver over the assets and
personal property of Cleaire (the “Receivership Order”); 

WHEREAS, the Receivership Order authorizes the Receiver to take possession of,
manage and control the personal property and other assets of Cleaire (the
“Receivership Estate”), including the ability to “sell, liquidate or otherwise
dispose of, all or any portion of the Receivership Estate”, with the consent of
Wells Fargo.  However, an order from the Court is required for “any sale of the
entire business of Cleaire or any of its intellectual property assets”;

WHEREAS, the Purchaser desires to purchase and acquire the Purchased Assets,
which constitute substantially all of the assets of Cleaire, from the Receiver,
and the Receiver desires to sell, transfer and assign the Purchased Assets to
the Purchaser (the “Contemplated Transactions”), in the manner and subject to
the terms and conditions set forth herein; and

WHEREAS, in connection with the Contemplated Transactions, the Purchaser has
delivered to the Receiver such financial statements, bank statements, or other
documentation reasonably sufficient to demonstrate that the Purchaser has the
ability to pay the Purchase Price and perform under this Agreement on the terms
specified herein;

 

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NOW, THEREFORE, in consideration of the foregoing and their respective
representations, warranties, covenants and undertakings herein contained, and
other good and valuable consideration, the receipt and sufficiency of which are
hereby acknowledged, the Receiver and the Purchaser hereby agree as follows:

AGREEMENT

1.               TRANSFER OF ASSETS.

1.1            PURCHASE AND SALE OF ASSETS; EXCLUDED ASSETS.  ON THE CLOSING
DATE AND ON THE TERMS AND CONDITIONS HEREINAFTER SET FORTH HEREIN, INCLUDING BUT
NOT LIMITED TO SECTION 6 BELOW, THE RECEIVER SHALL SELL, ASSIGN, AND TRANSFER TO
THE PURCHASER, AND THE PURCHASER SHALL PURCHASE, ACQUIRE, AND ACCEPT FROM THE
RECEIVER, ALL OF THE RIGHTS, TITLE AND INTEREST OF THE RECEIVER IN AND TO ALL OF
CLEAIRE’S ASSETS, PROPERTIES, AND RIGHTS, INCLUDING THE SPECIFIC ASSETS,
PROPERTIES AND RIGHTS DESCRIBED IN THIS SECTION, BELOW, IN EACH CASE TO THE
EXTENT HELD, OWNED OR TRANSFERABLE BY THE RECEIVER, AS OF THE CLOSING DATE (ANY
SUCH ASSETS, THE “PURCHASED ASSETS”), BUT SPECIFICALLY EXCLUDING THE EXCLUDED
ASSETS ENUMERATED IN SECTION 1.2 BELOW:

(A)             ALL ASSETS SET FORTH IN SCHEDULE 1.1 ATTACHED HERETO AND
INCORPORATED HEREIN BY REFERENCE;

(B)            THAT CERTAIN INVENTORY, THE VALUE OF WHICH HAS BEEN WRITTEN OFF
CLEAIRE’S BOOKS OF ACCOUNT, WHICH CONSTITUTES EVIDENCE USED OR TO BE USED BY
CLEAIRE’S INSURANCE CARRIER, AND WHICH IS STORED IN A TRAILER LOCATED AT 7485
TRADE STREET, SAN DIEGO CALIFORNIA, BUT ONLY TO THE EXTENT THAT ANY SUCH
INVENTORY IS RETURNED TO THE RECEIVER BY SUCH INSURANCE CARRIER;

(C)             ALL DATABASES, INTERNET SERVERS, INTELLECTUAL PROPERTY AND OTHER
INFORMATION OWNED OR HEREAFTER USED BY CLEAIRE IN THE BUSINESS;

(D)            HISTORIC CATALOGS, ENGINEERING, ARTWORK, COPYWRITING, DOCUMENT
AND DATA FILES, IMAGES, PICTURES, PHOTOS, CREATIVE COPY AND DRAFTS, BROCHURES,
CATALOGS, BRAND LOGOS, OFFICE SUPPLIES, AND TOOLS;

(E)             (I) ALL PARTS AND SUPPLIES SET ASIDE BY THE RECEIVER TO BE USED
TO FULFILL THE HAWES PO CONTEMPLATED BY SECTION 2.2 HEREOF, BUT ONLY TO THE
EXTENT THAT THE PARTS AND SUPPLIES ARE NOT ACTUALLY USED TO FULFILL THE HAWES PO
IN ACCORDANCE WITH SECTION 2.2 HEREOF, AND (II) ALL PARTS AND SUPPLIES SET ASIDE
BY THE RECEIVER TO FULFILL AN ORDER TO HAWES FOR 60 UNITS OF INVENTORY, AS
CONTEMPLATED BY SECTION 7.2, TO THE EXTENT THAT SUCH ORDER IS CANCELLED BY HAWES
OR THE INVENTORY IS RETURNED BY HAWES;

(F)             (I) ALL SALE ORDERS, CUSTOMER CONTRACTS OR OTHER SIMILAR
CONTRACTS ENTERED INTO BY CLEAIRE WITH ANY CUSTOMERS, AND (II) ALL OUTSTANDING
PURCHASE ORDERS OR OTHER SIMILAR CONTRACTS ENTERED INTO BY CLEAIRE WITH ANY
SUPPLIER; PROVIDED  HOWEVER, NOTWITHSTANDING ANYTHING TO THE CONTRARY IN THIS
AGREEMENT, THE PURCHASED ASSETS SHALL NOT INCLUDE ANY CONTRACT RIGHTS THAT
RELATE TO ANY OF THE EXCLUDED ASSETS;

 

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(G)            ALL ASSETS RELATED TO THE CALIFORNIA AIR RESOURCES BOARD (“CARB”)
VERIFICATION, CARB EXECUTIVE ORDERS, AND ALL RELATED DATA, SUBMISSIONS, AND
DOCUMENTATION;

(H)            ALL OTHER ASSETS, PROPERTIES AND RIGHTS NOT ENUMERATED AS
EXCLUDED ASSETS IN SECTION 1.2 HEREOF.

1.2            EXCLUDED ASSETS.  NOTWITHSTANDING ANYTHING TO THE CONTRARY IN
SECTION 1.1 OR ANY OTHER PROVISION OF THIS AGREEMENT, THE ASSETS LISTED ON
SCHEDULE 1.2 ATTACHED HERETO AND INCORPORATED HEREIN BY THIS REFERENCE
(COLLECTIVELY, THE “EXCLUDED ASSETS”) ARE EXCLUDED FROM AND SHALL NOT BE
INCLUDED AMONG THE PURCHASED ASSETS FOR ANY PURPOSE WHATSOEVER.

1.3            NO ASSUMED LIABILITIES.  NOTWITHSTANDING ANYTHING TO THE CONTRARY
CONTAINED IN THIS AGREEMENT, THE PURCHASER SHALL NOT BE OBLIGATED, AND HEREBY
DISCLAIMS ANY OBLIGATION, TO ASSUME, PERFORM OR DISCHARGE ANY LIABILITY OF ANY
PERSON.  WITHOUT LIMITING THE FOREGOING, THE PURCHASER SHALL NOT BE OBLIGATED TO
ASSUME OR TO PERFORM OR DISCHARGE, AND DOES NOT ASSUME OR AGREE TO PERFORM OR
DISCHARGE, ANY LIABILITY: (I) ARISING BEFORE THE CLOSING DATE; (II) FOR ANY
OBLIGATION, COST OR EXPENSE WHICH SHALL BE BORNE BY THE RECEIVER UNDER THIS
AGREEMENT; (III) ARISING OUT OF OR RELATED TO THE WINDING UP OF CLEAIRE OR THE
FINAL ADMINISTRATION OR ITS RECEIVERSHIP ESTATE; (IV) ARISING OUT OF OR RELATED
TO ANY CONTRACTS ENTERED INTO PRIOR TO THE CLOSING DATE; (V) ARISING OUT OF OR
RELATED TO ANY THIRD PARTY CLAIMS AGAINST THE RECEIVER OR CLEAIRE, PENDING,
THREATENED, OR UNASSERTED; (VI) WHETHER NOW EXISTING OR HEREAFTER ARISING UNDER
ANY ENVIRONMENTAL LAWS AND ARISING OUT OF OR RELATED TO THE BUSINESS (INCLUDING,
WITHOUT LIMITATION, ANY LIABILITY FOR ADMINISTRATIVE OR CIVIL FINES OR PENALTIES
FOR VIOLATIONS OF ENVIRONMENTAL LAWS, OR REMEDIATION OR RESPONSE COSTS FOR
CONTAMINATION); (VII) FOR BROKERAGE FEES OF THE RECEIVER INCURRED ON BEHALF OF
CLEAIRE AND THE RECEIVERSHIP ESTATE; (VIII) WITH RESPECT TO THE WARN ACT, ANY
AND ALL COMPARABLE STATE LAW OBLIGATIONS, INCLUDING WITHOUT LIMITATION, THE
CALIFORNIA WARN ACT, AS AMENDED, CAL. LAB. CODE § 1400 ET SEQ. (“CAL WARN”), OR
ANY RULES OR REGULATIONS RELATING THERETO; (IX) RELATED TO ANY CURRENT OR FORMER
EMPLOYEES OR EXECUTIVES OF CLEAIRE, WHETHER FOR WAGES, VACATION PAY, PAYROLL
(INCLUDING PAYROLL TAXES), SEVERANCE, RETENTION, EMPLOYMENT, CHANGE-OF-CONTROL,
PENSION, RETIREMENT, EQUITY OR OTHER BENEFITS, AND WHETHER OR NOT ARISING UNDER
EMPLOYMENT AGREEMENTS, EXPRESS OR IMPLIED; (IX) ARISING OUT OF OR RELATED TO ANY
EMPLOYEE BENEFIT PLAN; (X) ARISING OUT OF ANY COMMISSIONS PAYABLE FROM THE SALE
PRIOR TO THE CLOSING DATE OF ANY CLEAIRE PRODUCTS, OR COMMISSIONS PAYABLE WITH
RESPECT TO THE HAWES PARTICIPATION DEFINED BELOW; OR (XI) FOR ANY TAXES OF
CLEAIRE OR THE RECEIVERSHIP ESTATE EXCEPT AS TO THE PURCHASER’S OBLIGATIONS TO
PAY TRANSFER TAXES PURSUANT TO SECTION 3.6. 

2.               CONSIDERATION; DEPOSIT.

2.1            PURCHASE PRICE.  THE CONSIDERATION TO BE DELIVERED TO THE
RECEIVER, FOR THE BENEFIT OF THE RECEIVERSHIP ESTATE, FOR THE PURCHASED ASSETS
SHALL CONSIST OF THE SUM OF (A) $1,260,000 IN CASH (THE “CASH CONSIDERATION”)
(B) THE HAWES PO GROSS PROFITS AND (C) THE DEPOSIT, AS DEFINED BELOW (TOGETHER,
THE “PURCHASE PRICE”). 

2.2            HAWES PARTICIPATION.  HAWES, A KOREAN COMPANY (“HAWES”), HAS
EXPRESSED AN INTEREST IN PURCHASING 100 UNITS OF SPECIFIED PRODUCTS, WITH AN
ANTICIPATED INVOICE PRICE OF $725,000 (THE “HAWES PARTICIPATION”).  THE RECEIVER
SHALL HAVE SOLE AND ABSOLUTE DISCRETION AS TO WHETHER TO GO FORWARD WITH THE
HAWES PARTICIPATION AND SHALL MAKE SUCH DETERMINATION ON OR

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BEFORE APRIL 3, 2013, AT 4:00 P.M. PACIFIC TIME.  IF THE RECEIVER DOES ELECT TO
GO FORWARD, THE PURCHASER AND THE RECEIVER SHALL USE COMMERCIALLY REASONABLE
EFFORTS TO CAUSE HAWES TO ISSUE A FIRM PURCHASE ORDER FOR THOSE PRODUCTS AND THE
PROCEEDS FROM SUCH PURCHASER ORDER SHALL BE ALLOCATED AS FOLLOWS:

total invoice

$725,000

new materials (estimate; will be based on Purchaser’s invoicing of actual costs)

$(200,000)

direct labor (estimate; will be based on Purchaser’s invoicing of actual cost,
including fully-burdened payroll)

$(50,000)

commissions and other direct costs

$(50,000)

Overhead

$(25,000)

Gross profit (estimate) 

$400,000

 

(A)             IF HAWES ISSUES A FIRM PURCHASE ORDER FOR THE 100 UNITS (THE
“HAWES PO”) WHICH IS ACCEPTABLE TO THE RECEIVER, THE PURCHASER WILL PROCEED WITH
ASSEMBLY AND DELIVERY OF THE PRODUCTS FOR SALE IN ACCORDANCE WITH THE TERMS SET
FORTH IN THIS SECTION.  THE PURCHASER SHALL BE RESPONSIBLE FOR ALL COSTS OTHER
THAN COMMISSIONS.  WITHIN FIVE (5) CALENDAR DAYS AFTER RECEIPT OF THE HAWES PO,
THE PURCHASER SHALL COMMENCE WORK AND MAKE ARRANGEMENTS FOR ALL MATERIALS AND
OTHER ITEMS NEEDED TO COMPLETE THE HAWES PO, EXCEPT COMMISSIONS. HAWES SHALL BE
DIRECTED TO REMIT PAYMENT TO THE RECEIVER.  THE PURCHASER SHALL BE PROMPTLY
REIMBURSED BY THE RECEIVER FOR ALL OF THE PURCHASER’S ADVANCED COSTS UPON
RECEIPT OF PAYMENT FROM HAWES.  THE RECEIVER SHALL PAY THE COMMISSIONS
DIRECTLY.  THE PURCHASER SHALL SHIP THE PRODUCTS (OR OTHERWISE MAKE THEM
AVAILABLE TO HAWES ON THE TERMS SET FORTH IN THE HAWES PO) ONCE PAYMENT HAS BEEN
RECEIVED FROM HAWES AND ALL DIRECT AND INDIRECT EXPENSES DESCRIBED ABOVE HAVE
BEEN PAID.  THE GROSS PROFIT FROM THE TRANSACTION, UP TO THE FIRST $325,000,
WILL BE RETAINED BY THE RECEIVER.  THE NEXT $75,000, IN PROFIT, IF ANY, WILL BE
PAID TO THE PURCHASER. IF THERE IS PROFIT ABOVE AND BEYOND THE ANTICIPATED
$400,000, THE PURCHASER AND THE RECEIVER WILL SHARE THE PROFIT EQUALLY
(COLLECTIVELY, “HAWES PO GROSS PROFITS”).  THE MAXIMUM NUMBER OF UNITS SUBJECT
TO THE HAWES PARTICIPATION IS 100, WITH A MAXIMUM CONTRIBUTION BY THE PURCHASER
OF EXISTING CLEAIRE INVENTORY OF $100,000 (BOOK VALUE).  THE RECEIVER WILL HAVE
NO RIGHTS WITH RESPECT TO ANY HAWES PARTICIPATION OR HAWES PO GROSS PROFITS IF
THE HAWES PO IS NOT RECEIVED AND ACCEPTED WITHIN 90 DAYS AFTER THE CLOSING DATE.

2.3            DEPOSIT.  ON MARCH 25, 2013, THE PURCHASER DELIVERED TO THE
RECEIVER, IMMEDIATELY AVAILABLE FUNDS IN AN AGGREGATE AMOUNT OF $140,000, AS A
NON-REFUNDABLE DEPOSIT (EXCEPT AS OTHERWISE PROVIDED HEREIN, IN ACCORDANCE WITH
SECTION 10.5 BELOW) TO ASSURE THE PURCHASER’S PERFORMANCE HEREUNDER (THE CASH
DEPOSIT TOGETHER WITH ANY AND ALL INTERESTED EARNED THEREON, THE “DEPOSIT”). 

3.               CLOSING TRANSACTIONS.

3.1            CLOSING.  THE CLOSING OF THE TRANSACTIONS PROVIDED FOR HEREIN
(THE “CLOSING”) SHALL TAKE PLACE AT THE OFFICES OF KATTEN MUCHIN ROSENMAN LLP,
515 S. FLOWER STREET, SUITE 1000, LOS ANGELES, CA 90071, OR SUCH OTHER PLACE AS
THE PARTIES MAY AGREE UPON IN WRITING, SUBJECT TO THE SATISFACTION OF THE
CONDITIONS SET FORTH IN SECTION 9.1(E) AND 9.2(F).  THE DATE ON WHICH THE

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CLOSING ACTUALLY OCCURS IS THE “CLOSING DATE.”  THE “SCHEDULED CLOSING DATE” IS
THE SECOND BUSINESS DAY (NO LATER THAN 4:00 P.M. PACIFIC TIME) AFTER THE DATE ON
WHICH THE COURT ENTERS THE SALE ORDER.  THE CLOSING MAY ALSO BE EXTENDED TO SUCH
OTHER DATE, PLACE, AND TIME AS THE PARTIES MAY AGREE IN WRITING.  IN ADDITION,
IF AN OBJECTION TO THE SALE OF THE PURCHASED ASSETS IS RAISED AT OR BEFORE THE
HEARING, THE PURCHASER MAY, AT ANY TIME BEFORE THE SCHEDULED CLOSING DATE AND
WITH NOTICE TO THE RECEIVER, EXTEND THE CLOSING BY UP TO TWENTY-ONE DAYS AFTER
THE SCHEDULED CLOSING DATE (THE “EXTENDED SCHEDULED CLOSING DATE”).  DURING THE
PERIOD BETWEEN THE SCHEDULED CLOSING DATE AND THE EXTENDED SCHEDULED CLOSING
DATE (A) THE PURCHASER MAY GIVE A NOTICE TO ADVANCE THE CLOSING DATE TO NO
EARLIER THAN ONE BUSINESS DAY AFTER THE DATE ON WHICH THE PURCHASER GIVES SUCH
NOTICE, AND (B) THE RECEIVER IS FREE TO SOLICIT OTHER POTENTIAL PURCHASERS AND
TO CLOSE A SALE WITH ANOTHER PURCHASER EXCEPT AS OTHERWISE PROVIDED IN THIS
AGREEMENT.

3.2            THE RECEIVER’S DELIVERIES TO THE PURCHASER AT CLOSING. ON THE
CLOSING DATE, RECEIVER SHALL DELIVER, TO OR FOR THE BENEFIT OF THE PURCHASER:

(A)             A BILL OF SALE AND ASSIGNMENT, SUBSTANTIALLY IN THE FORM
ATTACHED HERETO AS EXHIBIT A, DULY EXECUTED BY THE RECEIVER, PURSUANT TO WHICH
THE RIGHTS, TITLE AND INTEREST OF THE RECEIVER IN AND TO ANY PURCHASED ASSETS
NOT OTHERWISE ASSIGNED AT THE CLOSING SHALL BE ASSIGNED TO THE PURCHASER (THE
“BILL OF SALE”); 

(B)            ANY KEYS IN THE RECEIVER’S POSSESSION TO THE PREMISES, ANY
VEHICLES, ETC.; AND

(C)             ANY SUCH OTHER DOCUMENTS OR OTHER THINGS REASONABLY REQUESTED BY
THE PURCHASER OR CONTEMPLATED BY THIS AGREEMENT TO BE DELIVERED BY THE RECEIVER
TO THE PURCHASER AT THE CLOSING.

3.3            THE PURCHASER’S DELIVERIES TO THE RECEIVER AT CLOSING.  ON THE
CLOSING DATE, THE PURCHASER SHALL, FOR THE BENEFIT OF THE RECEIVER:

(A)             PAY TO THE RECEIVER, BY WIRE TRANSFER OF IMMEDIATELY AVAILABLE
FUNDS TO A BANK ACCOUNT DESIGNATED BY THE RECEIVER IN WRITING TO THE PURCHASER
ON OR PRIOR TO THE CLOSING DATE, THE CASH CONSIDERATION;

(B)            RESERVED; 

(C)             DELIVER TO THE RECEIVER APPROPRIATE EVIDENCE OF ALL CORPORATE
ACTION BY THE PURCHASER IN CONNECTION WITH THE CONTEMPLATED TRANSACTIONS,
INCLUDING, COPIES OF RESOLUTIONS DULY ADOPTED BY THE PURCHASER’S SOLE MEMBER,
MANAGING MEMBER, BOARD OF DIRECTORS, OR ANY OTHER APPLICABLE GOVERNING BODY,
APPROVING THE CONTEMPLATED TRANSACTIONS AND AUTHORIZING THE EXECUTION, DELIVERY,
AND PERFORMANCE BY THE PURCHASER OF THIS AGREEMENT;

(D)            DELIVER TO THE RECEIVER A COUNTERPART EXECUTED ORIGINAL OF THE
BILL OF SALE;

(E)             RESERVED; AND

(F)             DELIVER TO THE RECEIVER ANY SUCH OTHER DOCUMENTS OR OTHER THINGS
REASONABLY REQUESTED BY THE RECEIVER OR CONTEMPLATED BY THIS AGREEMENT TO BE
DELIVERED BY THE PURCHASER TO THE RECEIVER AT THE CLOSING.

 

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3.4            DELIVERIES TO THE PURCHASER BY OTHERS AT CLOSING.  ON THE CLOSING
DATE, THE FOLLOWING PERSONS SHALL HAVE DELIVERED TO OR FOR THE BENEFIT OF THE
PURCHASER THE FOLLOWING DOCUMENTS AND ITEMS, THE DELIVERY OF EACH OF WHICH SHALL
BE A CONDITION TO THE PURCHASER’S OBLIGATION TO CONSUMMATE THE TRANSACTIONS
CONTEMPLATED HEREIN:

(A)             WELLS FARGO SHALL HAVE DELIVERED TO THE PURCHASER WRITTEN
AUTHORIZATION TO FILE APPROPRIATE UCC AMENDMENT STATEMENTS WHICH EVIDENCE THE
RELEASE OF ALL LIENS AND INTERESTS (INCLUDING, WITHOUT LIMITATION, SECURITY
INTERESTS) OF WELLS FARGO IN AND TO THE PURCHASED ASSETS/ AND

(B)            THE COURT SHALL HAVE ENTERED AN ORDER APPROVING THE SALE OF THE
PURCHASED ASSETS TO THE PURCHASER AND THE TRANSACTIONS CONTEMPLATED UNDER THIS
AGREEMENT, FREE AND CLEAR OF ALL LIENS, CLAIMS AND ENCUMBRANCES, IN ACCORDANCE
WITH SECTIONS 9.1(E) AND 9.2(F)  (THE “SALE ORDER”) ON OR BEFORE APRIL 30,
2013.  THE SALE ORDER SHALL NOT BE SUBJECT TO ANY SUBSEQUENT ORDER BY ANY COURT
OF COMPETENT JURISDICTION STAYING THE EFFECTIVENESS OF THE SALE ORDER AS OF THE
DATE AND TIME SCHEDULED FOR CLOSING.

3.5            ALLOCATION OF THE PURCHASE PRICE.  AT LEAST TWO (2) BUSINESS DAYS
BEFORE THE CLOSING, THE RECEIVER MUST DELIVER TO THE PURCHASER A PROPOSED
ALLOCATION OF THE PURCHASE PRICE AMONG THE PURCHASED ASSETS.  THE PURCHASER
SHALL, ON OR BEFORE CLOSING, APPROVE SUCH ALLOCATION IN WRITING UNLESS THE
ALLOCATION IS MANIFESTLY UNREASONABLE; PROVIDED  THAT THE ALLOCATION SHALL BE
CONSIDERED MANIFESTLY UNREASONABLE IF MORE THAN TEN PERCENT (10%) OF THE
PURCHASE PRICE IS ALLOCATED TO THE GENERAL INTANGIBLE ASSETS, INTELLECTUAL
PROPERTY AND FURNITURE, FIXTURES, AND EQUIPMENT OF THE BUSINESS.

3.6            SALES, USE AND OTHER TAXES.  ANY SALES, PURCHASE, TRANSFER, BULK
SALE OR BULK TRANSFER, STAMP, DOCUMENTARY STAMP, USE OR SIMILAR TAXES UNDER THE
LAWS OF THE STATES IN WHICH ANY PORTION OF THE PURCHASED ASSETS ARE LOCATED, OR
ANY SUBDIVISION OF ANY SUCH STATE, OR UNDER ANY FEDERAL LAW OR THE LAWS OR
REGULATIONS OF ANY FEDERAL AGENCY OR AUTHORITY, WHICH MAY BE PAYABLE BY REASON
OF THE SALE OR TRANSFER OF THE PURCHASED ASSETS UNDER THIS AGREEMENT OR THE
CONTEMPLATED TRANSACTIONS (THE “TRANSFER TAXES”), IF ANY, SHALL BE BORNE AND
PAID BY THE PURCHASER.  THE RECEIVER SHALL BE SOLELY RESPONSIBLE FOR THE
PREPARATION AND FILING OF ALL RELEVANT TAX RETURNS REQUIRED TO BE FILED IN
RESPECT OF SUCH TRANSFER TAXES AND SHALL PAY ALL SUCH TRANSFER TAXES, AND, IF
REQUIRED BY APPLICABLE LAW, THE PURCHASER SHALL JOIN IN THE EXECUTION OF ANY
SUCH TAX RETURNS.  THE RECEIVER SHALL PROVIDE THE PURCHASER WITH A COPY OF SUCH
TAX RETURNS BEFORE THEY ARE FILED.

3.7            TRANSFER OF POSSESSION.  ON THE CLOSING DATE, THE RECEIVER SHALL
DELIVER THE EXECUTED ORIGINAL OF THE BILL OF SALE TO PURCHASER AND MAKE THE
ASSETS AVAILABLE TO THE PURCHASER.

3.8            CLOSING DATE.  ALL ACTIONS TO BE TAKEN ON THE CLOSING PURSUANT TO
THIS AGREEMENT SHALL BE DEEMED TO HAVE OCCURRED SIMULTANEOUSLY, AND NO ACT,
DOCUMENT OR TRANSACTION SHALL BE DEEMED TO HAVE BEEN TAKEN, DELIVERED OR
EFFECTED UNTIL ALL SUCH ACTIONS, DOCUMENTS AND TRANSACTIONS HAVE BEEN TAKEN,
DELIVERED OR EFFECTED.  UNLESS PROVIDED OTHERWISE HEREIN OR AGREED OTHERWISE IN
WRITING BY THE PARTIES, DOCUMENTS DELIVERED AT THE CLOSING SHALL BE DATED AS OF
THE CLOSING DATE.  BY PROCEEDING WITH THE CLOSING, (A) THE PURCHASER SHALL BE
DEEMED TO HAVE ACKNOWLEDGED THAT THE PARTIES HAVE COMPLIED WITH ALL OBLIGATIONS
TO THE PURCHASER TO BE

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PERFORMED BY THE PARTIES AT OR PRIOR TO THE CLOSING, THE CONDITIONS OF SECTION
9.2 HAVE BEEN FULLY SATISFIED AND, TO THE PURCHASER’S KNOWLEDGE, THE
CONTEMPLATED TRANSACTIONS MAY AND SHOULD IMMEDIATELY CLOSE, AND (B) THE RECEIVER
SHALL BE DEEMED TO HAVE ACKNOWLEDGED THAT THE PARTIES HAVE COMPLIED WITH ALL
OBLIGATIONS TO THE RECEIVER TO BE PERFORMED BY THE PARTIES AT OR PRIOR TO THE
CLOSING, THE CONDITIONS OF SECTION 9.1 HAVE BEEN FULLY SATISFIED AND, TO THE
RECEIVER’S KNOWLEDGE, THE CONTEMPLATED TRANSACTIONS MAY AND SHOULD IMMEDIATELY
CLOSE.

4.               REPRESENTATIONS AND WARRANTIES BY THE RECEIVER.

4.1            THE RECEIVER HEREBY REPRESENTS AND WARRANTS TO THE PURCHASER,
EXCEPT ONLY AS SET FORTH HEREIN AND IN THE SCHEDULES DELIVERED BY THE RECEIVER
TO THE PURCHASER ON THE DATE OF THIS AGREEMENT, AS FOLLOWS:

(A)             AUTHORIZATION AND VALIDITY.  SUBJECT TO THE COURT’S APPROVAL
PURSUANT TO THE SALE ORDER, THE RECEIVER HAS ALL REQUISITE POWER AND AUTHORITY
TO ENTER INTO THIS AGREEMENT, THE BILL OF SALE, AND ANY OTHER ANCILLARY DOCUMENT
RELATED TO THE CONTEMPLATED TRANSACTIONS TO WHICH HE WILL BE A PARTY AND, TO
CARRY OUT HIS OBLIGATIONS HEREUNDER AND THEREUNDER. SUBJECT TO THE COURT’S
APPROVAL PURSUANT TO THE SALE ORDER, THIS AGREEMENT HAS BEEN DULY AND VALIDLY
EXECUTED AND DELIVERED BY THE RECEIVER AND CONSTITUTES A VALID AND BINDING
AGREEMENT OF THE RECEIVER, ENFORCEABLE AGAINST THE RECEIVER IN ACCORDANCE WITH
ITS TERMS, EXCEPT AS TO THE EFFECT, IF ANY, OF (I) APPLICABLE BANKRUPTCY,
INSOLVENCY, MORATORIUM, REORGANIZATION, OR OTHER SIMILAR LAWS AFFECTING THE
RIGHTS OF CREDITORS GENERALLY AND (II) RULES OF LAW GOVERNING SPECIFIC
PERFORMANCE, INJUNCTIVE RELIEF AND OTHER EQUITABLE REMEDIES.

(B)            BROKER’S OR FINDER’S FEES.  NO AGENT, BROKER, PERSON OR FIRM
ACTING ON BEHALF OF THE RECEIVER IS, OR WILL BE, ENTITLED TO ANY COMMISSION OR
BROKER’S OR FINDER’S FEES FROM THE RECEIVER IN CONNECTION WITH THE CONTEMPLATED
TRANSACTIONS.

(C)             SALE OF INVENTORY.  EXCEPT FOR THOSE SALES LISTED ON SCHEDULE
4.1(C) ATTACHED HERETO AND INCORPORATED HEREIN WITH REFERENCE, SINCE HIS
APPOINTMENT AS THE RECEIVER PURSUANT TO THE RECEIVERSHIP ORDER, THE RECEIVER HAS
NOT SOLD ANY INVENTORY.

(D)            TITLE TO ASSETS.  TO THE BEST OF THE RECEIVER’S KNOWLEDGE, AND
WITHOUT THE IMPOSITION OF ANY DUTY OF INQUIRY OR INVESTIGATION, THERE ARE NO
ASSERTED DEFECTS TO CLEAIRE’S TITLE TO OR OWNERSHIP OF ANY PORTION OF THE
PURCHASED ASSETS, OTHER THAN POTENTIAL CLAIMS, IF ANY, BY ELECTRICAL SALES,
INC.  THE RECEIVER MAKES NO OTHER REPRESENTATION OR WARRANTY WHATSOEVER
REGARDING TITLE TO OR CLEAIRE’S OWNERSHIP OF ANY PORTION OF THE PURCHASED
ASSETS.

5.               WARRANTIES AND REPRESENTATIONS BY THE PURCHASER.

5.1            IN ADDITION TO THE REPRESENTATIONS AND WARRANTIES CONTAINED
ELSEWHERE IN THIS AGREEMENT, THE PURCHASER HEREBY REPRESENTS AND WARRANTS TO THE
RECEIVER, EXCEPT AS SET FORTH HEREIN AND IN THE SCHEDULES DELIVERED BY THE
PURCHASER TO THE RECEIVER ON THE DATE OF THIS AGREEMENT, AS FOLLOWS:

(A)             ORGANIZATION.  THE PURCHASER IS A CORPORATION DULY ORGANIZED,
VALIDLY EXISTING AND IN GOOD STANDING UNDER THE LAWS OF FLORIDA.  THE PURCHASER
HAS ALL REQUISITE ENTITY POWER AND

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AUTHORITY TO OWN, LEASE AND OPERATE ITS PROPERTIES, EXECUTE AND DELIVER THIS
AGREEMENT, AND TO PERFORM ITS OBLIGATIONS HEREUNDER AND CONSUMMATE THE
CONTEMPLATED TRANSACTIONS.

(B)            AUTHORIZATION AND VALIDITY.  THE PURCHASER HAS ALL REQUISITE
POWER AND AUTHORITY TO ENTER INTO THIS AGREEMENT AND TO EXECUTE AND DELIVER THIS
AGREEMENT, THE BILL OF SALE AND ANY OTHER ANCILLARY DOCUMENT RELATED TO THE
CONTEMPLATED TRANSACTIONS TO WHICH IT WILL BE PARTY AND TO CARRY OUT ITS
OBLIGATIONS HEREUNDER AND THEREUNDER.  THE EXECUTION AND DELIVERY OF THIS
AGREEMENT, THE BILL OF SALE AND ANY OTHER ANCILLARY DOCUMENT RELATED TO THE
CONTEMPLATED TRANSACTIONS TO WHICH IT WILL BE PARTY AND THE PERFORMANCE OF THE
PURCHASER’S OBLIGATIONS HEREUNDER AND THEREUNDER HAVE BEEN DULY AUTHORIZED BY
ALL NECESSARY ACTION ON BEHALF OF THE PURCHASER, AND NO OTHER PROCEEDINGS ON THE
PART OF THE PURCHASER ARE NECESSARY TO AUTHORIZE SUCH EXECUTION, DELIVERY AND
PERFORMANCE.  THIS AGREEMENT AND THE BILL OF SALE AND ANY OTHER ANCILLARY
DOCUMENT RELATED TO THE CONTEMPLATED TRANSACTIONS TO WHICH IT WILL BE PARTY HAVE
BEEN DULY EXECUTED BY THE PURCHASER AND, SUBJECT TO THE COURT’S APPROVAL
PURSUANT TO THE SALE ORDER, CONSTITUTE ITS VALID AND BINDING OBLIGATION,
ENFORCEABLE AGAINST THE PURCHASER IN ACCORDANCE WITH THE TERMS HEREIN AND
THEREIN.

(C)             NO CONFLICT OR VIOLATION.  THE EXECUTION, DELIVERY AND
PERFORMANCE BY THE PURCHASER OF THIS AGREEMENT, THE BILL OF SALE AND ANY OTHER
ANCILLARY DOCUMENT RELATED TO THE CONTEMPLATED TRANSACTIONS TO WHICH IT WILL BE
PARTY DO NOT AND WILL NOT VIOLATE OR CONFLICT WITH ANY PROVISION OF THE
ORGANIZATIONAL DOCUMENTS OF THE PURCHASER AND DO NOT AND WILL NOT VIOLATE ANY
PROVISION OF LAW, OR ANY ORDER APPLICABLE TO THE PURCHASER, NOR WILL THEY RESULT
IN A BREACH OF, OR CONSTITUTE (WITH DUE NOTICE OR LAPSE OF TIME OR BOTH) A
DEFAULT UNDER ANY MATERIAL CONTRACT TO WHICH THE PURCHASER IS A PARTY OR BY
WHICH IT IS BOUND OR TO WHICH ANY OF ITS PROPERTIES OR ASSETS ARE SUBJECT.

(D)            CONSENTS, APPROVALS AND NOTIFICATIONS.  THE EXECUTION, DELIVERY
AND PERFORMANCE OF THIS AGREEMENT, THE BILL OF SALE AND ANY OTHER ANCILLARY
DOCUMENT RELATED TO THE CONTEMPLATED TRANSACTIONS BY THE PURCHASER DO NOT
REQUIRE THE CONSENT OF, OR FILING WITH OR NOTIFICATION OF, ANY GOVERNMENT OR ANY
OTHER PERSON, THE FAILURE OF WHICH TO OBTAIN, FILE OR NOTIFY WOULD REASONABLY BE
EXPECTED TO MATERIALLY IMPAIR THE ABILITY OF THE PURCHASER TO CONSUMMATE THE
TRANSACTION CONTEMPLATED BY, AND IN ACCORDANCE WITH THE TERMS OF, THIS
AGREEMENT.

(E)             AVAILABILITY OF FUNDS.  THE PURCHASER HAS, AND ON THE CLOSING
DATE WILL HAVE, SUFFICIENT FUNDS AVAILABLE TO CONSUMMATE THE TRANSACTIONS
CONTEMPLATED BY THIS AGREEMENT.

(F)             BROKER’S OR FINDER’S FEES.  NO AGENT, BROKER, PERSON OR FIRM
ACTING ON BEHALF OF THE PURCHASER IS, OR WILL BE, ENTITLED TO ANY COMMISSION OR
BROKER’S OR FINDER’S FEES FROM THE RECEIVER IN CONNECTION WITH THE CONTEMPLATED
TRANSACTIONS.

(G)            CARB RESOLUTION.  ON OR PRIOR TO 2:00 P.M. ON MARCH 29, 2013, THE
PURCHASER REACHED A RESOLUTION WITH CARB ON TERMS THAT ARE ACCEPTABLE TO THE
PURCHASER.  THE PURCHASER AGREES THAT ANY CONDITION PRECEDENT TO CLOSING THE
PURCHASER MAY HAVE HAD RELATED TO CARB HAS BEEN SATISFIED OR WAIVED AND THAT THE
PURCHASER NO LONGER HAS THE RIGHT TO TERMINATE THIS AGREEMENT BASED ON ANY
CARB-RELATED CONDITION PRECEDENT.

6.               “AS IS” TRANSACTION.

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The Purchaser hereby acknowledges and agrees that, except only as provided in
Section 4.1 above, the Receiver makes no representation or warranty whatsoever,
express or implied, with respect to any matter relating to the Purchased Assets
(including, without limitation, the accuracy or completeness of Schedule 1.1,
income to be derived or expenses to be incurred in connection with the Purchased
Assets, the physical condition of any tangible Purchased Assets, the value of
the Purchased Assets (or any portion thereof), the transferability of the
Purchased Assets or any portion thereof, the terms, amount, validity,
collectability or enforceability of the Receivables, the merchantability or
fitness of the Inventory or any other portion of the Purchased Assets for any
particular purpose, any royalty fees, licensing fees, or any other amounts due
to third parties in connection operating the Business, or any other matter or
thing relating to the Purchased Assets or any portion thereof).  Without in any
way limiting the foregoing, the Receiver hereby disclaims any warranty (express
or implied) of merchantability or fitness for any particular purpose as to any
portion of the Purchased Assets.

The Purchaser acknowledges and agrees that upon Closing, the Receiver shall
execute the Bill of Sale to the Purchaser hereof, and the Purchaser shall
receive from the Receiver, the Purchased Assets “AS IS, WHERE IS, WITH ALL
FAULTS.”  Except as set forth herein, the Purchaser has not relied and will not
rely on, and the Receiver is not liable for or bound by, any express or implied
warranties, guarantees, statements, representations or information pertaining to
the Purchased Assets or relating thereto, orally or in writing, that have been
made or furnished by the Receiver or its representatives.  The Purchaser also
acknowledges that the Purchase Price reflects and takes into account that the
Purchased Assets are being sold by the Receiver “AS IS, WHERE IS, WITH ALL
FAULTS” on the terms and conditions set forth in this Agreement.

7.               COVENANTS 

7.1            RIGHT OF FIRST REFUSAL FOR WELLS FARGO LOAN.  RECEIVER SHALL USE
COMMERCIALLY REASONABLE EFFORTS THROUGH AND INCLUDING THE CLOSING DATE, TO
REQUEST THAT WELLS FARGO GRANT TO THE PURCHASER A RIGHT OF FIRST REFUSAL TO
PURCHASE THE LOAN, DESCRIBED IN THAT CERTAIN CREDIT AGREEMENT (“WF CREDIT
AGREEMENT”), DATED AUGUST 10, 2011 BETWEEN WELLS FARGO AND CLEAIRE, INCLUDING
ANY PROMISSORY NOTE ISSUED BY CLEAIRE IN CONNECTION THEREWITH, AND ALL RIGHTS OF
WELLS FARGO UNDER THE WF CREDIT AGREEMENT AND ANY OTHER LOAN DOCUMENT EXECUTED
IN CONNECTION THEREWITH.

7.2            SALE OF INVENTORY.  EXCEPT AS DISCLOSED ON SCHEDULE 4.1(C), THE
RECEIVER AGREES AND COVENANTS TO THE PURCHASER THAT FROM AND AFTER MARCH 22,
2013, HE HAS NOT SOLD, AND HE SHALL NOT SELL ANY INVENTORY TO ANY THIRD PARTY
UNTIL AFTER THE EARLIER OF (A) SUCH TIME, IF ANY, AS THE PURCHASER IS OUTBID AT
THE AUCTION BY A QUALIFIED BIDDER, OR (B) THE PRIOR CONSENT OF THE PURCHASER. 
PURCHASER ACKNOWLEDGES THAT THE RECEIVER HAS SOLD 110 UNITS OF INVENTORY TO
HAWES, AS SET FORTH IN SCHEDULE 4.1(C), AND 60 OF THE 110 UNITS OF INVENTORY ARE
IN THE PROCESS OF BEING FINALIZED FOR SHIPMENT.  FOR THE AVOIDANCE OF DOUBT,
SUCH 60 UNITS ARE IN ADDITION TO THE HAWES PARTICIPATION CONTEMPLATED UNDER
SECTION 2.2 HEREOF.  PURCHASER AGREES AND ACKNOWLEDGES THAT IT SHALL BE
RESPONSIBLE FOR THE FINAL ASSEMBLY AND PACKAGING OF SUCH 60 UNITS OF INVENTORY,
AT THE PURCHASER’S FACILITIES AND THE RECEIVER SHALL PAY THE PURCHASER FOR
REASONABLE LABOR EXPENSES IN CONNECTION THEREWITH, WHICH AMOUNT SHALL BE
MUTUALLY AGREED UPON BY THE PARTIES.

8.               RESERVED. 

 

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9.               CLOSING CONDITIONS.

9.1            CONDITIONS TO THE RECEIVER’S OBLIGATIONS.  THE RECEIVER’S
OBLIGATIONS HEREUNDER SHALL BE SUBJECT TO THE SATISFACTION AND FULFILLMENT OF
EACH OF THE FOLLOWING CONDITIONS, EXCEPT AS THE RECEIVER MAY EXPRESSLY WAIVE THE
SAME IN WRITING:

(A)             THE REPRESENTATIONS AND WARRANTIES OF THE PURCHASER SET FORTH
HEREIN SHALL BE TRUE AND CORRECT IN ALL MATERIAL RESPECTS, AND NOT MISLEADING IN
ANY MATERIAL RESPECT, ON AND AS OF THE DATE GIVEN, AND ON AND AS OF THE CLOSING
DATE WITH THE SAME FORCE AND EFFECT AS THOUGH SUCH REPRESENTATIONS AND
WARRANTIES WERE MADE ON AND AS OF THE CLOSING DATE;

(B)            AS OF THE CLOSING DATE, THE PURCHASER SHALL HAVE MADE AND
COMPLIED IN ALL MATERIAL RESPECTS WITH, AND SHALL HAVE FULLY PERFORMED, IN ALL
MATERIAL RESPECTS, ALL CONDITIONS, COVENANTS AND OBLIGATIONS OF THIS AGREEMENT
TO BE PERFORMED BY THE PURCHASER AT, OR PRIOR TO, THE CLOSING DATE;

(C)             THE PURCHASER HAS PAID THE PURCHASE PRICE AND OTHERWISE MADE ALL
DELIVERIES TO THE PURCHASER REQUIRED BY SECTION 3.3(A) ABOVE;

(D)            THE PURCHASER SHALL PAY TO THE RECEIVER THE PRORATED AMOUNT OF
RENT DUE AND OWING UNDER THE REAL PROPERTY LEASE FOR THE MONTH ON WHICH THE
CLOSING DATE OCCURS. SUCH RENTS DUE AND OWING TO THE RECEIVER SHALL BE THE SUM
OF (I) THE AMOUNT OF MONTHLY RENTAL PAYMENT PAYABLE (INCLUDING ANY COMMON AREA
MAINTENANCE CHARGES), LESS  (II) THE AGGREGATE AMOUNT OF SUCH PAYMENTS ALLOCABLE
ON A PER DIEM BASIS (CALCULATED BASED ON THE TOTAL AMOUNT OF SUCH RENT PAYMENT
DIVIDED BY THE NUMBER OF DAYS IN SUCH MONTH) TO THE PERIOD THAT BEGINS ON
CLOSING DATE AND ENDS ON THE LAST DAY OF SUCH MONTH

(E)             A SALE ORDER SHALL HAVE BEEN ENTERED BY THE COURT APPROVING SALE
OF THE PURCHASED ASSETS TO THE PURCHASER AND THE TRANSACTIONS CONTEMPLATED UNDER
THIS AGREEMENT, FREE AND CLEAR OF ALL LIENS, CLAIMS AND ENCUMBRANCES, IN FORM
AND SUBSTANCE REASONABLY SATISFACTORY TO THE RECEIVER, ON OR BEFORE APRIL 30,
2013, AND THE SALE ORDER IS NOT SUBJECT TO ANY SUBSEQUENT ORDER BY ANY COURT OF
COMPETENT JURISDICTION STAYING THE EFFECTIVENESS OF THE SALE ORDER AS OF THE
DATE AND TIME SCHEDULED FOR CLOSING, EXCEPT AS OTHERWISE PROVIDED FOR HEREIN.

9.2            CONDITIONS TO THE PURCHASER’S OBLIGATIONS.  THE PURCHASER’S
OBLIGATIONS HEREUNDER SHALL BE SUBJECT TO THE SATISFACTION AND FULFILLMENT OF
EACH OF THE FOLLOWING CONDITIONS, EXCEPT AS THE PURCHASER MAY EXPRESSLY WAIVE
THE SAME IN WRITING:

(A)             THE REPRESENTATIONS AND WARRANTIES OF THE RECEIVER SET FORTH
HEREIN SHALL BE TRUE AND CORRECT IN ALL MATERIAL RESPECTS, AND NOT MISLEADING IN
ANY MATERIAL RESPECT, ON AND AS OF THE DATE GIVEN, AND ON AND AS OF THE CLOSING
DATE WITH THE SAME FORCE AND EFFECT AS THOUGH SUCH REPRESENTATIONS AND
WARRANTIES WERE MADE ON AND AS OF THE CLOSING DATE;

(B)            AS OF THE CLOSING DATE, THE RECEIVER SHALL HAVE MADE AND COMPLIED
IN ALL MATERIAL RESPECTS WITH, AND SHALL HAVE FULLY PERFORMED, IN ALL MATERIAL
RESPECTS, ALL CONDITIONS, COVENANTS AND OBLIGATIONS OF THIS AGREEMENT TO BE
PERFORMED BY THE RECEIVER AT, OR PRIOR TO, THE CLOSING DATE;

 

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(C)             THE RECEIVER AND THE OTHERS SPECIFIED THEREIN SHALL HAVE MADE
ALL DELIVERIES TO THE PURCHASER REQUIRED BY SECTION 3.2 ABOVE;

(D)            ALL ACTIONS AND DELIVERIES REQUIRED BY SECTION 3.4 ABOVE SHALL
HAVE OCCURRED OR BEEN MADE, AS APPLICABLE;

(E)             ALL PURCHASED ASSETS SHALL HAVE BEEN TRANSFERRED AND DELIVERED
TO THE PURCHASER AND THE PURCHASER SHALL HAVE OBTAINED POSSESSION AND CONTROL OF
ALL PURCHASED ASSETS;

(F)             A SALE ORDER SHALL HAVE BEEN ENTERED BY THE COURT APPROVING SALE
OF THE PURCHASED ASSETS TO THE PURCHASER AND THE TRANSACTIONS CONTEMPLATED UNDER
THIS AGREEMENT, FREE AND CLEAR OF ALL LIENS, CLAIMS AND ENCUMBRANCES, IN FORM
AND SUBSTANCE REASONABLY SATISFACTORY TO THE PURCHASER, ON OR BEFORE APRIL 30,
2013, AND THE SALE ORDER IS NOT SUBJECT TO ANY SUBSEQUENT ORDER BY ANY COURT OF
COMPETENT JURISDICTION STAYING THE EFFECTIVENESS OF THE SALE ORDER AS OF THE
DATE AND TIME SCHEDULED FOR CLOSING, EXCEPT AS OTHERWISE PROVIDED FOR HEREIN;
AND

(G)            IF AN OBJECTION TO THE SALE OF THE PURCHASED ASSETS IS RAISED AT
OR BEFORE THE HEARING, THE TIME FOR FILING AN APPEAL OF THE SALE ORDER HAS
EXPIRED, AND NO APPEAL OF THE SALE ORDER HAS BEEN FILED, OR IF FILED, REMAINS
PENDING.

10.            TERMINATION AND EFFECT OF TERMINATION

10.1         MUTUAL TERMINATION.  THIS AGREEMENT MAY BE TERMINATED AT ANY TIME
PRIOR TO THE CLOSING BY MUTUAL WRITTEN AGREEMENT OF THE RECEIVER AND THE
PURCHASER.

10.2         TERMINATION BY EITHER THE RECEIVER OR THE PURCHASER.  THIS
AGREEMENT MAY BE TERMINATED AT ANY TIME PRIOR TO THE CLOSING:

(A)             BY EITHER THE RECEIVER OR THE PURCHASER, BY GIVING WRITTEN
NOTICE OF SUCH TERMINATION TO THE OTHER PARTY, IF THE CLOSING HAS NOT OCCURRED
ON OR BEFORE THE SCHEDULED CLOSING DATE OR, IF THE PURCHASER EXERCISES THE
OPTION DESCRIBED IN SECTION 3.1 HEREOF, ON OR BEFORE THE EXTENDED SCHEDULED
CLOSING DATE; PROVIDED  FURTHER, HOWEVER, THAT THE RIGHT TO TERMINATE THIS
AGREEMENT UNDER THIS SECTION 10.2(A) SHALL NOT BE AVAILABLE TO ANY PARTY WHOSE
BREACH OF, OR FAILURE TO FULFILL ANY MATERIAL OBLIGATION UNDER THIS AGREEMENT
HAS BEEN THE CAUSE OF OR RESULTED IN THE FAILURE OF THE CLOSING TO OCCUR ON OR
PRIOR TO SUCH DATE;

(B)            BY EITHER THE RECEIVER OR THE PURCHASER IF THE COURT HAS NOT
ENTERED THE SALE ORDER ON OR BEFORE APRIL 30, 2013; PROVIDED, HOWEVER, THAT THE
RIGHT TO TERMINATE THIS AGREEMENT UNDER THIS SECTION 10.2(B) SHALL NOT BE
AVAILABLE TO ANY PARTY WHO IS IN BREACH OF ANY REPRESENTATION, WARRANTY,
COVENANT OR AGREEMENT SET FORTH IN THIS AGREEMENT; OR

(C)             BY EITHER THE RECEIVER OR THE PURCHASER IN THE EVENT THAT ANY
GOVERNMENT AUTHORITY SHALL HAVE ISSUED A FINAL, NON-APPEALABLE ORDER OR RULING
OR TAKEN ANY OTHER FINAL, NON-APPEALABLE ACTION, OR ADOPTED ANY APPLICABLE
STATE, FEDERAL OR FOREIGN LAW, IN EACH CASE PERMANENTLY RESTRAINING, ENJOINING
OR OTHERWISE PROHIBITING THE TRANSACTIONS CONTEMPLATED BY THIS AGREEMENT.

 

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10.3         TERMINATION BY THE PURCHASER.  THIS AGREEMENT MAY BE TERMINATED AT
ANY TIME PRIOR TO THE CLOSING BY THE PURCHASER:

(A)             IF THERE HAS BEEN A BREACH BY THE RECEIVER OF ANY
REPRESENTATION, WARRANTY, COVENANT OR AGREEMENT SET FORTH IN THIS AGREEMENT,
WHICH BREACH HAS NOT BEEN CURED WITHIN THREE (3) BUSINESS DAYS FOLLOWING RECEIPT
BY THE RECEIVER OF NOTICE OF SUCH BREACH; OR

(B)            IF THE RECEIVER CLOSES A TRANSACTION FOR THE SALE OF THE
PURCHASED ASSETS TO A QUALIFIED BIDDER (OTHER THAN THE PURCHASER).

10.4         TERMINATION BY THE RECEIVER.  THIS AGREEMENT MAY BE TERMINATED AT
ANY TIME PRIOR TO THE CLOSING BY THE RECEIVER:

(A)             IF THERE HAS BEEN A BREACH BY THE PURCHASER OF ANY
REPRESENTATION, WARRANTY, COVENANT OR AGREEMENT SET FORTH IN THIS AGREEMENT,
WHICH BREACH HAS NOT BEEN CURED WITHIN THREE (3) BUSINESS DAYS FOLLOWING RECEIPT
BY THE PURCHASER OF NOTICE OF SUCH BREACH; OR

(B)            IF THE RECEIVER CLOSES A TRANSACTION FOR THE SALE OF THE
PURCHASED ASSETS TO A QUALIFIED BIDDER (OTHER THAN THE PURCHASER).

10.5         EFFECT OF TERMINATION. 

(A)             IF THIS AGREEMENT IS TERMINATED UNDER SECTION 10, WRITTEN NOTICE
THEREOF WILL FORTHWITH BE GIVEN TO THE OTHER PARTY AND THIS AGREEMENT WILL
THEREAFTER BECOME VOID AND HAVE NO FURTHER FORCE AND EFFECT AND, EXCEPT FOR
THOSE PROVISIONS THAT EXPRESSLY SURVIVE THE TERMINATION OF THIS AGREEMENT (AND
EXCEPT FOR THE OBLIGATIONS SET FORTH IN SECTION 10.5(B), SECTION 10.5(C) AND
SECTION 10.5(D) BELOW), ALL FURTHER OBLIGATIONS OF THE RECEIVER AND THE
PURCHASER TO EACH OTHER UNDER THIS AGREEMENT WILL TERMINATE WITHOUT FURTHER
OBLIGATION OR LIABILITY OF THE RECEIVER OR THE PURCHASER TO THE OTHER (AND
NEITHER PARTY HERETO SHALL HAVE ANY CLAIM AGAINST THE OTHER).

(B)            PURCHASER BREACH.  IF THE CIRCUMSTANCES GIVING RISE TO A
TERMINATION WERE CAUSED BY THE PURCHASER’S BREACH OF THIS AGREEMENT, THEN THE
DEPOSIT SHALL BE RETAINED BY THE RECEIVER AS LIQUIDATED AND AGREED DAMAGES FOR
SUCH BREACH BY THE PURCHASER, IT BEING AGREED THAT SUCH BREACH WILL CAUSE
SUBSTANTIAL DAMAGES THAT ARE NOT READILY ASCERTAINABLE AS TO AMOUNT, AND THE
LOSS OF THE DEPOSIT IS A REASONABLE ESTIMATE OF SUCH ACTUAL DAMAGES AND NOT A
PENALTY.

(C)             REFUND OF DEPOSIT.  IF THIS AGREEMENT IS TERMINATED FOR ANY
REASON OTHER THAN PURCHASER’S BREACH OF THIS AGREEMENT, THE DEPOSIT SHALL
PROMPTLY BE REFUNDED TO THE PURCHASER.

(D)            BREAK-UP FEE.  (I) IF THIS AGREEMENT IS TERMINATED BY THE
RECEIVER OR THE PURCHASER PURSUANT TO SECTION 10.3(B), (II) IF THE RECEIVER
CLOSES ON A SALE OF THE PURCHASED ASSETS WITHIN SIXTY DAYS AFTER THE PURCHASER
EXERCISES ITS OPTION TO EXTEND THE SCHEDULED CLOSING DATE IN ACCORDANCE WITH
SECTION 3.1 HEREOF, OR (II) IF THE OWNER OR HOLDER OF THE WELLS FARGO LOAN DOES
NOT CONSENT TO THE SALE OF THE PURCHASED ASSETS PURSUANT TO THIS AGREEMENT, BY
THE RECEIVER TO THE PURCHASER, THEN THE PURCHASER SHALL BE ENTITLED TO THE
BREAK-UP FEE DESCRIBED IN SECTION 11.3 BELOW, FROM THE RECEIVER.

 

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(E)             RETURN OF INFORMATION.  NOTWITHSTANDING ANYTHING TO THE CONTRARY
HEREIN, IF THIS AGREEMENT IS TERMINATED, EACH PARTY WILL RETURN ALL DOCUMENTS,
WORKPAPERS AND OTHER MATERIAL OF ANY OTHER PARTY RELATING TO THE TRANSACTIONS
CONTEMPLATED BY THIS AGREEMENT, WHETHER SO OBTAINED BEFORE OR AFTER THE
EXECUTION OF THIS AGREEMENT, TO THE PARTY FURNISHING THE SAME, AND ALL
CONFIDENTIAL INFORMATION RECEIVED BY ANY PARTY TO THIS AGREEMENT WITH RESPECT TO
THE BUSINESS OF ANY OTHER PARTY WILL BE TREATED IN ACCORDANCE WITH THE
CONFIDENTIALITY AGREEMENT BETWEEN THE PARTIES.

(F)             LIMITED LIABILITY.  NOTWITHSTANDING ANYTHING TO THE CONTRARY
HEREIN, THE RECEIVER SHALL IN NO EVENT BE LIABLE FOR DAMAGES OR FOR OTHER
MONETARY RELIEF UNDER OR WITH RESPECT TO THIS AGREEMENT OR THE ACTUAL OR ALLEGED
BREACH HEREOF, EXCEPT AS SET FORTH IN THIS AGREEMENT.

11.            COURT APPROVAL.

11.1         SUBJECT TO OTHER OFFERS; COURT APPROVAL.  NOTWITHSTANDING ANYTHING
EXPRESSED OR IMPLIED HEREIN TO THE CONTRARY, THE PARTIES ACKNOWLEDGE, UNDERSTAND
AND AGREE THAT (A) THIS AGREEMENT SHALL BE SUBJECT TO HIGHER AND BETTER OFFERS
TO BE SOLICITED AT AN AUCTION, WHICH SHALL TAKE PLACE ON OR BEFORE APRIL 10,
2013 (THE “AUCTION”) HELD IN ACCORDANCE WITH BIDDING PROCEDURES ESTABLISHED BY
THE RECEIVER DESCRIBED IN EXHIBIT B ATTACHED HERETO (THE “BIDDING PROCEDURES”),
(B) ALL OBLIGATIONS OF THE RECEIVER UNDER THIS AGREEMENT ARE SUBJECT TO ANY
HIGHER AND BETTER OFFERS THAT MAY BE MADE AT THE AUCTION, AS DETERMINED BY THE
RECEIVER IN HIS SOLE DISCRETION, AND (C) THE RECEIVER’S OBLIGATIONS UNDER THIS
AGREEMENT ARE CONTINGENT UPON THE COURT’S APPROVAL AND SUCH REQUIREMENTS AS MAY
BE DETERMINED BY THE COURT.

11.2         ENTRY OF ORDERS.  EACH OF THE PURCHASER AND THE RECEIVER (EACH AT
ITS OWN EXPENSE) SHALL USE ITS REASONABLE EFFORTS TO OBTAIN ENTRY OF THE SALE
ORDER, AND SHALL EXECUTE SUCH AFFIDAVITS, APPEAR AND TESTIFY IN THE COURT, AND
TAKE SUCH OTHER ACTIONS AS MAY REASONABLY BE REQUIRED TO OBTAIN ENTRY OF SUCH
ORDER.

11.3         STALKING HORSE BIDDER FEES.  IN CONNECTION WITH THE AUCTION, THE
PURCHASER HAS AGREED TO ACT AS THE “STALKING HORSE BIDDER.”  IF THE PURCHASER
FAILS TO BE THE HIGHEST AND BEST OFFER AT THE AUCTION AND THE SALE OF THE
PURCHASED ASSETS IS CONSUMMATED WITH A QUALIFIED BIDDER, THE PURCHASER SHALL
RECEIVE A FEE OF $75,000 (“BREAK-UP FEE”), WHICH SHALL BE PAID BY THE RECEIVER
FROM THE RECEIVERSHIP ESTATE, IN ACCORDANCE WITH SECTION 10.5(D) HEREIN, WITHIN
TEN (10) BUSINESS DAYS AFTER THE RECEIVER CLOSES A SALE OF THE PURCHASED ASSETS
TO A QUALIFIED BIDDER.

11.4         NOTICE OF COURT APPROVAL.  THE RECEIVER MUST PROVIDE WRITTEN NOTICE
OF THE HEARING TO APPROVE THE SALE OF ASSETS, WHETHER TO PURCHASER OR ANOTHER
QUALIFIED BIDDER, TO ALL KNOWN HOLDERS OF CLAIMS AGAINST CLEAIRE, WHETHER
SECURED OR UNSECURED, DISPUTED OR UNDISPUTED, CONTINGENT OR MATURED, FIXED OR
UNLIQUIDATED.

12.            MISCELLANEOUS. 

12.1         NOTICES.  UNLESS OTHERWISE PROVIDED HEREIN, ANY NOTICE, TENDER, OR
DELIVERY TO BE GIVEN HEREUNDER BY ANY PARTY TO THE OTHER SHALL BE DEEMED
EFFECTED UPON PERSONAL DELIVERY IN WRITING, ONE BUSINESS DAY AFTER BEING
DISPATCHED BY REPUTABLE OVERNIGHT COURIER (E.G., FEDEX), POSTAGE PREPAID, OR IN
THE CASE OF DELIVERY BY FACSIMILE, AS OF THE DATE OF FACSIMILE TRANSMISSION

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(WITH ANSWER BACK CONFIRMATION OF SUCH TRANSMISSION).  NOTICES SHALL BE
ADDRESSED AS SET FORTH BELOW, BUT EACH PARTY MAY CHANGE HIS ADDRESS BY WRITTEN
NOTICE IN ACCORDANCE WITH THIS SECTION 12.1. 

If to the Receiver:

Stapleton Group
515 S. Flower Street, 36th Floor
Los Angeles, CA 90071
Attention: David Stapleton
Facsimile: (213) 235-0620
Email: david@stapletoninc.com

With a copy to (which shall not constitute notice):

Katten Muchin Rosenman LLP
515 S. Flower Street, Suite 1000
Los Angeles, CA 90071
Attn: William Freeman and Iane Saenam
Facsimile: (213) 947-4170 and (213) 947-4175

Email: bill.freeman@kattenlaw.com
iane.saenam@kattenlaw.com

If to the Purchaser:

Environmental Solutions Worldwide, Inc.
200 Progress Drive
Montgomeryville, PA 18936
Attn: Mark Yung
Facsimile: (323)297-2825
Email: myung@cleanerfuture.com

With a copy to (which shall not constitute notice):

Allen Matkins Leck Gamble Mallory & Natsis LLP
501 West Broadway, 15th Floor
San Diego, CA 92101-3541
Attn: Robert R. Barnes, Esq.
Facsimile: (619) 233-1158
Email: bbarnes@allenmatkins.com

12.2         ENTIRE AGREEMENT.  THIS AGREEMENT AND THE DOCUMENTS TO BE EXECUTED
PURSUANT HERETO CONTAIN THE ENTIRE AGREEMENT BETWEEN THE PARTIES RELATING TO THE
SALE OF THE PURCHASED ASSETS AND REPLACE IN ITS ENTIRETY THE PREVIOUSLY EXECUTED
LETTER OF INTENT.  ANY ORAL REPRESENTATIONS OR MODIFICATIONS CONCERNING THIS
AGREEMENT OR ANY SUCH OTHER DOCUMENT SHALL BE OF NO FORCE AND EFFECT EXCEPTING A
SUBSEQUENT MODIFICATION IN WRITING, SIGNED BY THE PARTY TO BE CHARGED.

 

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12.3         MODIFICATION.  THIS AGREEMENT MAY BE MODIFIED, AMENDED OR
SUPPLEMENTED ONLY BY A WRITTEN INSTRUMENT DULY EXECUTED BY ALL THE PARTIES
HERETO WHICH EXPRESSLY INDICATES THE INTENTION TO MODIFY, AMEND OR SUPPLEMENT
THIS AGREEMENT.

12.4         SEVERABILITY.  SHOULD ANY TERM, PROVISION OR PARAGRAPH OF THIS
AGREEMENT BE DETERMINED TO BE ILLEGAL OR VOID OR OF NO FORCE AND EFFECT, THE
BALANCE OF THE AGREEMENT SHALL SURVIVE.

12.5         CAPTIONS.  ALL CAPTIONS AND HEADINGS CONTAINED IN THIS AGREEMENT
ARE FOR CONVENIENCE OF REFERENCE ONLY AND SHALL NOT BE CONSTRUED TO LIMIT OR
EXTEND THE TERMS OR CONDITIONS OF THIS AGREEMENT.

12.6         FURTHER ASSURANCES.  EACH PARTY HERETO WILL EXECUTE, ACKNOWLEDGE
AND DELIVER ANY FURTHER ASSURANCE, DOCUMENTS AND INSTRUMENTS REASONABLY
REQUESTED BY ANY OTHER PARTY FOR THE PURPOSE OF GIVING EFFECT TO THE
CONTEMPLATED TRANSACTIONS OR THE INTENTIONS OF THE PARTIES WITH RESPECT
THERETO.  WITHOUT LIMITATION, FROM TIME TO TIME FOLLOWING THE CLOSING, THE
RECEIVER SHALL EXECUTE, ACKNOWLEDGE AND DELIVER ALL SUCH FURTHER CONVEYANCES,
NOTICES, ASSUMPTIONS, RELEASES AND ACQUAINTANCES AND SUCH OTHER INSTRUMENTS, AND
SHALL TAKE SUCH FURTHER ACTIONS, AS MAY BE REASONABLY NECESSARY OR APPROPRIATE
TO ASSURE FULLY TO THE PURCHASER AND THEIR RESPECTIVE SUCCESSORS OR ASSIGNS, ALL
OF THE ASSETS, RIGHTS, TITLES, INTERESTS, ESTATES, REMEDIES, POWERS AND
PRIVILEGES INTENDED TO BE CONVEYED TO THE PURCHASER UNDER THIS AGREEMENT AND TO
OTHERWISE MAKE EFFECTIVE THE CONTEMPLATED TRANSACTIONS.

12.7         WAIVER.  NO WAIVER OF ANY OF THE PROVISIONS OF THIS AGREEMENT SHALL
BE DEEMED, OR SHALL CONSTITUTE, A WAIVER OF OTHER PROVISIONS, WHETHER OR NOT
SIMILAR, NOR SHALL ANY WAIVER CONSTITUTE A CONTINUING WAIVER. NO WAIVER SHALL BE
BINDING UNLESS EXECUTED IN WRITING BY THE PARTY MAKING THE WAIVER.

12.8         PAYMENT OF FEES AND EXPENSES.  EXCEPT AS OTHERWISE SPECIFICALLY
PROVIDED IN THIS AGREEMENT, EACH SIGNATORY OF THIS AGREEMENT SHALL BE
RESPONSIBLE FOR, AND SHALL PAY, ALL OF ITS OWN FEES AND EXPENSES, INCLUDING
THOSE OF ITS COUNSEL, INCURRED IN THE NEGOTIATION, PREPARATION AND CONSUMMATION
OF THE AGREEMENT AND THE CONTEMPLATED TRANSACTIONS.

12.9         ASSIGNMENTS.  THIS AGREEMENT SHALL NOT BE ASSIGNED BY ANY PARTY
HERETO WITHOUT THE PRIOR WRITTEN CONSENT OF THE OTHER PARTY HERETO, WHICH
CONSENT THE PARTIES MAY GRANT OR WITHHOLD IN THEIR SOLE AND ABSOLUTE DISCRETION,
EXCEPT THAT THE PURCHASER MAY ASSIGN ANY OR ALL OF THEIR RIGHTS OR OBLIGATIONS
TO ANY OF THEIR RESPECTIVE AFFILIATES AND MAY COLLATERALLY ASSIGN ANY OR ALL OF
THEIR RIGHTS OR OBLIGATIONS HEREUNDER TO A LENDER OF THE PURCHASER.

12.10     BINDING EFFECT.  THIS AGREEMENT SHALL BIND AND INURE TO THE BENEFIT OF
THE RESPECTIVE HEIRS, PERSONAL REPRESENTATIVES, SUCCESSORS, AND ASSIGNS OF THE
PARTIES HERETO.

12.11     PUBLIC ANNOUNCEMENTS.  EXCEPT FOR (A) THE NOTICE OF CREDITORS REQUIRED
IN SECTION 11.4 AND ANY NOTIFICATIONS BY THE RECEIVER TO POTENTIAL OVERBIDDERS
TO ENCOURAGE OVERBIDDING, AND (B) ANY DISCLOSURES THE PURCHASER IS REQUIRED TO
MAKE TO THE SECURITIES AND EXCHANGE COMMISSION, CONSISTENT WITH ITS REPORTING
REQUIREMENTS, NO PARTY SHALL MAKE ANY PRESS RELEASE OR PUBLIC ANNOUNCEMENT
CONCERNING THE TRANSACTIONS CONTEMPLATED BY THIS AGREEMENT WITHOUT THE

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PRIOR WRITTEN APPROVAL OF THE OTHER PARTIES, UNLESS A PRESS RELEASE OR PUBLIC
ANNOUNCEMENT IS REQUIRED BY LAW OR ORDER OF THE COURT, OR IS REASONABLY
NECESSARY FOR APPROVAL OF THE TRANSACTIONS CONTEMPLATED HEREIN BY THE COURT.  IF
ANY SUCH ANNOUNCEMENT OR OTHER DISCLOSURE IS REQUIRED BY LAW OR ORDER OF THE
COURT, THE DISCLOSING PARTY SHALL GIVE THE NONDISCLOSING PARTY OR PARTIES PRIOR
NOTICE OF, AND AN OPPORTUNITY TO COMMENT ON, THE PROPOSED DISCLOSURE..

12.12     CONSTRUCTION.  IN THE INTERPRETATION AND CONSTRUCTION OF THIS
AGREEMENT, THE PARTIES ACKNOWLEDGE THAT THE TERMS HEREOF REFLECT EXTENSIVE
NEGOTIATIONS BETWEEN THE PARTIES AND THAT THIS AGREEMENT SHALL NOT BE DEEMED,
FOR THE PURPOSE OF CONSTRUCTION AND INTERPRETATION, DRAFTED BY EITHER PARTY
HERETO.

12.13     GOVERNING LAW; JURISDICTION.  THIS AGREEMENT SHALL BE CONSTRUED,
PERFORMED AND ENFORCED IN ACCORDANCE WITH, AND GOVERNED BY, THE LAWS OF THE
STATE OF CALIFORNIA IN ACCORDANCE WITH THE LAWS APPLICABLE TO CONTRACTS EXECUTED
IN SUCH STATE (WITHOUT GIVING EFFECT TO THE PRINCIPLES OF CONFLICTS OF LAWS
THEREOF), PROVIDED THAT, THE VALIDITY AND ENFORCEABILITY OF ALL CONVEYANCE
DOCUMENTS OR INSTRUMENTS EXECUTED AND DELIVERED PURSUANT TO THIS AGREEMENT
INSOFAR AS THEY AFFECT TITLE TO REAL PROPERTY SHALL BE GOVERNED BY AND CONSTRUED
IN ACCORDANCE WITH THE LAWS OF THE JURISDICTION IN WHICH SUCH PROPERTY IS
LOCATED.  THE PARTIES AGREE THAT THE COURT SHALL RETAIN JURISDICTION OVER ANY
LEGAL ACTION OR PROCEEDING WITH RESPECT TO THIS AGREEMENT. EACH OF THE PARTIES
IRREVOCABLY WAIVES ANY OBJECTION, INCLUDING ANY OBJECTION TO THE LAYING OF VENUE
OR BASED ON THE GROUNDS OF FORUM NON CONVENIENS, WHICH IT MAY NOW OR HEREAFTER
HAVE TO THE BRINGING OF ANY ACTION OR PROCEEDING IN SUCH JURISDICTION IN RESPECT
OF THIS AGREEMENT OR THE TRANSACTIONS CONTEMPLATED HEREBY.

12.14     COUNTERPARTS.  THIS AGREEMENT MAY BE SIGNED IN COUNTERPARTS. THE
PARTIES FURTHER AGREE THAT THIS AGREEMENT MAY BE EXECUTED BY THE EXCHANGE OF
FACSIMILE OR ELECTRONIC PDF SIGNATURE PAGES PROVIDED THAT BY DOING SO THE
PARTIES AGREE TO UNDERTAKE TO PROVIDE ORIGINAL SIGNATURES AS SOON THEREAFTER AS
REASONABLE IN THE CIRCUMSTANCES.

12.15     NON-RECOURSE; PERSONAL LIABILITY. 

(A)             THE PURCHASER, THE RECEIVER, OR ANY PAST, PRESENT OR FUTURE
STOCKHOLDER, DIRECTOR, OFFICER, EMPLOYEE, OR INCORPORATOR OF THE PURCHASER,
SHALL NOT HAVE ANY PERSONAL LIABILITY FOR ANY OBLIGATION OR LIABILITY OF THE
PURCHASER, THE RECEIVER OR CLEAIRE, AS THE CASE MAY BE, UNDER THIS AGREEMENT OR
FOR ANY CLAIM, COUNTER-CLAIM, CAUSE OF ACTION OR DEMAND BASED ON, IN RESPECT OF,
OR BY REASON OF, THE CONTEMPLATED TRANSACTIONS EXCEPT FOR ANY CLAIM AGAINST ANY
INDIVIDUAL BASED ON THE FRAUD OR GROSS NEGLIGENCE OF SUCH INDIVIDUAL IN
CONNECTION WITH ANY REPRESENTATIONS OF THE RECEIVER OR THE PURCHASER HEREUNDER,
AS THE CASE MAY BE.

(B)            NO RISK OR OBLIGATION INCURRED BY THE RECEIVER UNDER THIS
AGREEMENT SHALL BE THE PERSONAL RISK OR OBLIGATION OF DAVID P. STAPLETON, THE
STAPLETON GROUP, OR ANY OF THEIR AFFILIATES, BUT SHALL BE THE SOLE RISK OR
OBLIGATION OF THE RECEIVERSHIP ESTATE.

12.16     TIME IS OF THE ESSENCE.  TIME IS OF THE ESSENCE IN THIS AGREEMENT, AND
ALL OF THE TERMS, COVENANTS AND CONDITIONS HEREOF.

 

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12.17     INTERPRETATION AND RULES OF CONSTRUCTION.  IN THIS AGREEMENT, EXCEPT
TO THE EXTENT THAT THE CONTEXT OTHERWISE REQUIRES: (A) WHEN A REFERENCE IS MADE
IN THIS AGREEMENT TO AN ARTICLE, SECTION, EXHIBIT OR SCHEDULE, SUCH REFERENCE IS
TO AN ARTICLE OR SECTION OF, OR AN EXHIBIT OR A SCHEDULE TO, THIS AGREEMENT
UNLESS OTHERWISE INDICATED; (B) RESERVED; (C) WHENEVER THE WORDS “INCLUDE,”
“INCLUDES” OR “INCLUDING” ARE USED IN THIS AGREEMENT, THEY ARE DEEMED TO BE
FOLLOWED BY THE WORDS “WITHOUT LIMITATION”; (D) THE WORDS “HEREOF,” “HEREIN” AND
“HEREUNDER” AND WORKS OF SIMILAR IMPORT, WHEN USED IN THIS AGREEMENT, REFER TO
THIS AGREEMENT AS A WHOLE AND NOT TO ANY PARTICULAR PROVISION OF THIS AGREEMENT;
(E) ALL TERMS DEFINED IN THIS AGREEMENT HAVE THE DEFINED MEANINGS WHEN USED IN
ANY CERTIFICATE OR OTHER DOCUMENT MADE OR DELIVERED PURSUANT HERETO, UNLESS
OTHERWISE DEFINED THEREIN; (F) THE DEFINITIONS CONTAINED IN THIS AGREEMENT ARE
APPLICABLE TO THE SINGULAR AS WELL AS THE PLURAL FORMS OF SUCH TERMS; (G) ANY
LAW DEFINED OR REFERRED TO HEREIN OR IN ANY AGREEMENT OR INSTRUMENT THAT IS
REFERRED TO HEREIN MEANS SUCH LAW OR STATUTE AS FROM TIME TO TIME AMENDED,
MODIFIED OR SUPPLEMENTED, INCLUDING BY SUCCESSION OF COMPARABLE SUCCESSOR LAWS;
(H) REFERENCES TO A PERSON ARE ALSO TO ITS PERMITTED SUCCESSORS AND ASSIGNS; AND
(I) THE USE OF “OR” IS NOT INTENDED TO BE EXCLUSIVE UNLESS EXPRESSLY INDICATED
OTHERWISE.

12.18     THIRD PARTY BENEFICIARIES.  THIS AGREEMENT IS INTENDED TO BE SOLELY
FOR THE BENEFIT OF THE PARTIES HERETO AND IS NOT INTENDED TO CONFER, AND SHALL
NOT BE DEEMED TO CONFER, ANY BENEFITS UPON, OR CREATE ANY RIGHTS IN OR IN FAVOR
OF, ANY PERSON OTHER THAN THE PARTIES HERETO, AND THEIR RESPECTIVE PERMITTED
ASSIGNS.

12.19     DEFINITIONS.  FOR THE PURPOSES OF THIS AGREEMENT, THE FOLLOWING WORDS
AND TERMS SHALL HAVE THE MEANING SET FORTH BELOW (SUCH MEANINGS BEING EQUALLY
APPLICABLE TO BOTH THE SINGULAR AND PLURAL FORM OF THE TERMS DEFINED). THE
EXHIBITS AND SCHEDULES REFERENCED IN THIS SECTION 12.19 AND THROUGHOUT THE
AGREEMENT ARE DEEMED TO BE PART OF THE AGREEMENT AND ARE INCORPORATED HEREIN BY
REFERENCE.

“Affiliate” of a Person means a Person that directly or indirectly, through one
or more intermediaries, controls, is controlled by, or is under common control
with, the first-mentioned Person.  For purposes of this definition, “control,”
when used with respect to any specified Person, means the power to direct or
cause the direction of the management and policies of such Person, directly or
indirectly, whether through ownership of voting securities or by contract or
otherwise, and the terms “controlling” and “controlled by” have meanings
correlative to the foregoing.

“Agreement” shall have the meaning set forth in the Preamble hereof.

“Applicable Law” means any applicable federal, state, local, municipal, foreign
or other law, statute, legislation, constitution, principle of common law,
resolution, ordinance, code, edict, decree, proclamation, treaty, convention,
rule, regulation, ruling, directive, pronouncement, requirement, notice
requirement, guideline, Order, specification, determination, decision, opinion
or interpretation issued, enacted, adopted, passed, approved, promulgated, made,
implemented or otherwise put into effect by or under the authority of any
Governmental Body.

“Auction” shall have the meaning set forth in the Section 11.1 hereof.

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“Bidding Procedures” shall have the meaning set forth in the Section 11.1
hereof.

“Bill of Sale” shall have the meaning set forth in the Section 3.2(a) hereof.

“Break-Up Fee” shall have the meaning set forth in the Section 11.3 hereof.

“Business” shall have the meaning set forth in the Recitals hereof.

“Business Day” means any calendar day other than a Saturday or Sunday or a legal
holiday on which banks in Los Angeles, California are closed.

“Cal WARN” shall have the meaning set forth in the Section 1.3 hereof.

“GARB” shall have the meaning set forth in Section 1.1(f).

“Cash Consideration” shall have the meaning set forth in the Section 2.1 hereof.

“Claim” means any claim, cause of action, right of recovery, right of set-off,
and right of recoupment of every kind and nature including but not limited to
prepayments, warranties, guarantees, refunds, reimbursements.

“Cleaire” shall have the meaning set forth in the Preamble hereof.

“Closing” shall have the meaning set forth in the Section 3.1 hereof.

“Closing Date” shall have the meaning set forth in the Section 3.1 hereof.

“Contemplated Transactions” shall have the meaning set forth in the Recitals
hereof.

“Contract” means any contract, lease or other agreement, oral or written.

“Effective Date” shall have the meaning set forth in the Preamble hereof.

“Entity” means any corporation (including any non profit corporation), general
partnership, limited partnership, limited liability partnership, joint venture,
estate, trust, cooperative, foundation, society, political party, union, company
(including any limited liability company or joint stock company), firm or other
enterprise, association, organization or entity.

“Environmental Laws” means all federal, state and local Laws regulating
hazardous wastes, toxic substances, pollutants or contaminants or otherwise
governing health and safety, pollution or the protection of the environment.

“Governmental Body” means any: (a) nation, principality, state, commonwealth,
province, territory, county, municipality, district or other jurisdiction of any
nature; (b) federal, state, local, municipal, foreign or other government; (c)
governmental or quasi governmental authority of any nature (including any
governmental division, subdivision, department, agency, bureau, branch, office,
commission, council, board, instrumentality, officer, official, representative,
organization, unit, body or Entity and any court or other tribunal); (d) multi
national organization or body; or (e) individual, Entity or body exercising, or
entitled to exercise, any executive, legislative, judicial, administrative,
regulatory, police, military or taxing authority or power of any nature.

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“Hawes” shall have the meaning set forth in the Section 2.2 hereof.

“Hawes Participation” shall have the meaning set forth in the Section 2.2
hereof.

“Hawes PO” shall have the meaning set forth in the Section 2.2(a) hereof.

“Hawes PO Gross Profits” shall have the meaning set forth in the Section 2.2(a)
hereof.

“Intellectual Property” means patents, trademarks, trade names, service marks,
domain names, and other similar designations of source or origin, copyrights
(and all applications and registrations for the foregoing), trade secrets, know
how, and any other tangible and intangible proprietary information and
materials.

“Inventory” means all finished and saleable goods, and other items of inventory
owned, wherever located.

“Liability” means any direct or indirect liability, indebtedness, obligation,
commitment, expense, claim, deficiency, guaranty or endorsement of any type
whatsoever, whether accrued or unaccrued, absolute or contingent, matured or
unmatured, liquidated or unliquidated, known or unknown, asserted or unasserted,
due or to become due.

“Lien” means any lien, security interest, pledge, deed of trust, mortgage,
charge, easement, right-of-way, encroachment, building or use restriction,
conditional sales agreement, Tax assessment, option, encumbrance or other right
of third parties of any sort whatsoever, whether voluntarily incurred or arising
by operation of law, and includes any agreement to give any of the foregoing in
the future, and any contingent sale or other title retention agreement or lease
in the nature thereof.

“Order” means any order, judgment, decision, consent decree, injunction, or
ruling of any Governmental Body, or any stipulation entered before any
Governmental Body, that is binding on any Person or its property under any
Applicable Law.

“Parties” shall have the meaning set forth in the Preamble hereof.

“Person” means an individual, Entity or Governmental Body.

“Purchase Price” shall have the meaning set forth in the Section 2.1 hereof.

“Purchased Assets” shall have the meaning set forth in the Section 1.1 hereof.

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“Purchased Inventory” shall have the meaning set forth in the Section 1.1(b)
hereof.

“Purchaser” shall have the meaning set forth in the Preamble hereof.

“Purchaser’s Knowledge” for the purposes of this Agreement, means only the
actual current knowledge, without inquiry of Mark Yung, as of the Closing Date.

“Qualified Bidder” means any person or entity that desires to participate in the
Auction and is a bidder satisfying the requirements of a “qualified bidder” set
forth in the Bidding Procedures.

“Receiver” shall have the meaning set forth in the Preamble hereof.

“Receiver’s Knowledge” for the purposes of this Agreement, means only the actual
current knowledge, without inquiry of David P. Stapleton, as of the Closing
Date.

“Receivership Order” shall have the meaning set forth in the Recitals hereof.

“Sale Order” shall have the meaning set forth in the Section 3.4(b) hereof.

“Tax” means any federal, state, local or foreign income, gross receipts,
license, payroll, employment, excise, severance, stamp, occupation, premium,
windfall profits, environmental, customs duties, capital stock, franchise,
profits, withholding, social security, unemployment, disability, real property,
personal property, sales, use, transfer, registration, value added, alternative
or add-on minimum, estimated, or other tax of any kind whatsoever, including any
interest, penalty, or addition thereto, whether disputed or not.

“Tax Return” means any return, declaration, report, claim for refund, transfer
pricing report or information return or statement relating to Taxes, including
any schedule or attachment thereto, and including any amendment thereof.

“Transfer Taxes” shall have the meaning set forth in the Section 3.4 hereof.

“WARN Act” means the United States Worker Adjustment and Retraining Notification
Act, and the rules and regulations promulgated thereunder.

“Wells Fargo” shall have the meaning set forth in the Recitals hereof.

“WF Credit Agreement” shall have the meaning set forth in Section 7 hereof.

(Signature Pages Follow)

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IN WITNESS WHEREOF, the Parties have executed this Agreement as of the day and
year first above written.

PURCHASER:

ENVIRONMENTAL SOLUTIONS WORLDWIDE, INC., a Florida corporation

By:      /s/ Mark Yung                                                     

Name: Mark Yung

Its:       Executive Chairman

THE RECEIVER:

DAVID P. STAPLETON, solely in his capacity as
court-appointed Receiver for Cleaire Advanced
Emission Controls, LLC

By:      /s/ David P. Stapleton                                           

Name: David P. Stapleton