Exhibit 10.1
ASSET PURCHASE AND INDEMNITY AGREEMENT
This Asset Purchase and Indemnity Agreement (this “Agreement”) is made and
entered into as of this the 16th day of October, 2007 by and among Fireline
Restoration, Inc., a Florida corporation as the purchaser (the “Purchaser”), RG
America, Inc., a Nevada corporation (“RGA”) and the following RGA subsidiaries:
Restoration Group America 2003, Inc., a Texas corporation, Restoration Group
America, Inc., a Texas corporation (“Restoration Group America”), RG
Restoration, Inc., a Texas corporation, RG Insurance Services, Inc., a Texas
corporation, CTFD, Inc., a Texas corporation (“CTFD”), CTFD Marine, Inc., a
Texas corporation (“CTFD Marine”), RG Risk Management, Inc., a Texas corporation
(“RGRM”), Invvision Funding, Inc., a Texas corporation, Practical Building
Solutions 2000, Inc., a Texas corporation, and RG Florida GC, Inc., a Florida
corporation, as the seller (RGA and the foregoing subsidiaries are referred to
herein collectively as the "Seller” and individually as a “Seller Entity”).
R E C I T A L S:
A. The Seller desires to sell to the Purchaser, and the Purchaser desires to
purchase from the Seller, certain equipment and vehicles comprising the Assets
(as defined below) used in the restoration and construction business and
Restoration Group America’s PropertySMARTTM risk management program (the
restoration and construction business and the PropertySMARTTM risk management
program are collectively referred to herein as the "Business”).
B. Laurus Master Fund, Ltd. (“Laurus”) has provided financing to the Seller (the
“Laurus Debt”) and in connection therewith was granted Liens (as defined below)
on all assets of the Seller, including, without limitation, Liens on the Assets
(as defined below), all pursuant to that certain Security Agreement dated as of
October 1, 2005.
C. The Purchaser is a party to that certain Consulting Agreement, dated as of
March 2007 (the "Consulting Agreement”), among Home Solutions of America, Inc.,
a Delaware corporation and parent company of the Purchaser (“HSOA”), RGA and
certain of RGA’s subsidiaries that are parties thereto, whereby, among other
things, RGA and certain of the RGA subsidiaries granted to the Purchaser certain
of their respective rights to collect certain accounts receivable (the
“Consulting Assets”).
D. Laurus and HSOA are parties to that certain Release Agreement of even date
herewith (the "Release Agreement”), whereby Laurus has agreed, among other
things, to release its Liens on all of the assets of RGA and its subsidiaries,
including the Assets, and whereby HSOA has agreed to issue to Laurus, 2,000,000
shares of its common stock, par value $.001 per share (the “Shares”).
E. At the closing of the transactions contemplated by this Agreement, HSOA has
agreed to enter into the Royalty Agreement with RGRM in the form attached hereto
as Exhibit “A” (the "Royalty Agreement”), pursuant to which HSOA agrees to pay
RGRM the Royalty (as defined in the Royalty Agreement).

 

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F. HSOA enters into this Agreement for the limited purpose of agreeing to enter
into the Royalty Agreement with RGRM.
A G R E E M E N T:
NOW, THEREFORE, for and in consideration of the premises, the mutual covenants
and agreements contained in this Agreement, and for other good and valuable
consideration, the receipt and sufficiency of which are hereby acknowledged, the
Seller and the Purchaser agree as follows:
ARTICLE I
PURCHASE AND SALE
1.01 Purchase and Sale of Assets. Subject to the terms and conditions in this
Agreement, the Seller agrees to sell and convey, and the Purchaser agrees to
purchase and accept, all of the Seller’s right, title and interest in and to
(i) the equipment and vehicles listed on Schedule 1.01 together with all
ownership and maintenance records, title certificates, and warranties related
thereto and (ii) the PropertySMARTTM risk management program as described on
Schedule 1.01 (collectively, the “Assets”), free and clear of any and all liens,
prior assignments, security interests, charges, pledges, claims or encumbrances
of any kind or character whatsoever (collectively, “Liens”), except for the Lien
set forth on Schedule 3.05.
1.02 Purchase Price. The purchase price for the Assets (the “Purchase Price”) is
(i) HSOA obtaining Laurus’ release of the Laurus Debt and its Liens on the
Assets pursuant to the Release Agreement, in exchange for HSOA’s issuance of the
Shares to Laurus pursuant to and in accordance with the Release Agreement; and
(ii) the amounts due to RGRM pursuant to the Royalty Agreement. The Seller
acknowledges and agrees that Laurus’ release of the Laurus Debt and its Liens on
the Assets in exchange for HSOA’s issuance of the Shares to Laurus, and the
amounts due to RGRM pursuant to the Royalty Agreement are material benefits to
the Seller and as such, represent sufficient consideration for the sale of the
Assets to the Purchaser.
1.03 Date, Time and Place of Closing. The closing of the transactions
contemplated by this Agreement (the “Closing”) shall take place at the offices
of the Seller at 10:00 a.m., local time, on November 5, 2007, or as promptly as
practicable thereafter as soon as the conditions set forth in Article VI are
satisfied, or at such other date, time or place fixed by mutual written consent
of the Purchaser and the Seller, but in no event later than November 30, 2007,
unless the Purchaser agrees to extend such date (such date, as it may be
extended, the “Termination Date”). All proceedings to take place at the Closing
shall take place simultaneously, and no delivery shall be considered to have
been made until all such proceedings have been completed (the date of such
Closing is referred to herein as the “Closing Date”).
1.04 Effective Time. The transactions contemplated by this Agreement shall be
deemed effective for tax and all other purposes as of 8:00 a.m., Dallas, Texas
time, on the Closing Date (the “Effective Time”), unless otherwise mutually
agreed in writing by the parties. Notwithstanding the foregoing, for accounting
purposes, the effective time of the transactions contemplated by this Agreement
shall be the effective time determined by Purchaser as reflected in its books
and records.

 

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1.05 Assumed Liabilities. Purchaser is not assuming any liability or obligation
of the Seller or with respect to the Assets, including, without limitation,
accounts payable, or any obligations with respect to the Seller’s lenders and
creditors.
1.06 Instruments Delivered at Closing.
(a) At the Closing, the Seller shall execute and/or deliver to the Purchaser:
(i) a bill of sale, in form and substance satisfactory to the Purchaser, for the
Assets;
(ii) such other instruments of transfer as the Purchaser shall deem necessary or
appropriate to convey the Assets to the Purchaser, including, without
limitation, assignments of patents, trademarks and other intellectual property
rights sufficient to transfer the rights to the PropertySMARTTM risk management
program to the Purchaser, and individual assignments and bills of sale for each
vehicle and piece of equipment comprising a portion of the Assets in forms
reasonably acceptable to Purchaser, title certificates, and such other
documents, bills of sale, certificates of title, endorsements, assignments and
instruments necessary, advisable or desirable to vest in Purchaser good and
marketable title to all of the Assets;
(iii) such keys and other similar items as the Purchaser shall require to obtain
full occupation, possession and control of the Assets;
(iv) written consents from all third parties required for the transfer and
assignment of the Assets;
(v) corporate resolutions of each Seller Entity pursuant to Section 3.02.
(b) At the Closing, the Purchaser shall cause to be delivered to the Seller:
(i) a counterpart to the Royalty Agreement, duly executed by HSOA; and
(ii) corporate resolutions pursuant to Section 4.01.

 

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ARTICLE 2
COSTS AND ALLOCATIONS
2.01 Closing Costs. The Purchaser shall pay any sales and other transfer tax
attributable to the transfer of the Assets to the Purchaser. All legal,
accounting, or other costs incurred by the Seller or the Purchaser in connection
with the transactions contemplated herein shall be borne by the party who
incurred such costs; provided, however, that the Purchaser agrees to reimburse
the Seller for bona fide legal fees incurred by the Seller solely in connection
with the negotiation of the transactions contemplated by this Agreement and the
preparation and filing of the Information Statement (as defined in Section 4.04
herein), subject to the offset rights of HSOA set forth in the Royalty
Agreement, in an amount not to exceed Fifty Thousand and NO/100 Dollars
($50,000.00), upon the Purchaser’s receipt of invoice from the Seller’s legal
counsel.
2.02 Allocation of Purchase Price. The Seller and the Purchaser agree to
allocate the Purchase Price among the Assets on the basis set forth on Exhibit
“B”. The Seller and the Purchaser agree to furnish such reports and returns to
the Internal Revenue Service and the Secretary of the Treasury as may be
required by Section 1060 of the Internal Revenue Code of 1986, as amended and
Treasury Regulations thereunder, and such returns or reports shall be consistent
with the allocation of Purchase Price set forth on Exhibit “B”.
2.03 Liabilities. Except for the liabilities set forth on Section 2.03 of the
Seller’s Disclosure Schedule (herein so called), Purchaser shall not assume and
shall not be liable for or obligated to pay or assume, and none of the Assets or
the assets of Purchaser shall be or become liable for or subject to, any
liability, indebtedness, commitment or obligation of any Seller Entity or any of
their Affiliates (as hereinafter defined), whether known or unknown, fixed or
contingent, recorded or unrecorded, currently existing or hereafter arising or
otherwise. As used herein, the term “Affiliate” shall mean, with respect to any
party to this Agreement, any entity or person that directly or indirectly
controls, is controlled by or is under common control with such party. The
Seller agrees that the Seller will pay all of its liabilities.
2.04 Prorations. All insurance, licenses, etc. shall be prorated between the
Purchaser and the Seller as of the day of Closing.
2.05 Covenants and Further Assurance. The Seller shall, at any time and from
time to time after the Closing Date, upon request of the Purchaser and without
further cost or expense to Purchaser, execute and deliver such instruments of
conveyance and assignment and shall take such actions as the Purchaser may
reasonably request to more effectively carry out the transactions contemplated
by this Agreement.
ARTICLE III
REPRESENTATIONS OF SELLER
Each Seller Entity, jointly and severally, represents to the Purchaser the
following:

 

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3.01 Good Standing. RGA is a corporation duly organized, validly existing and in
good standing under the laws of the State of Nevada. Each Seller Entity is a
corporation duly organized, validly existing and in good standing under the laws
of the state in which it is incorporated.
3.02 Corporate and Stockholder Approval. This Agreement, and the execution,
delivery and performance of same, have been duly approved by the Seller (and
each Seller Entity) and constitutes a valid and binding obligation against the
Seller (and each Seller Entity), enforceable in accordance with its terms,
subject as to enforceability, to bankruptcy, insolvency reorganization,
moratorium and other laws of general applicability relating to or affecting
creditors’ rights and to general principles of equity (regardless of whether
such enforceability is considered in a proceeding in equity or at law). A copy
of all corporate resolutions of each Seller Entity approving this Agreement and
the transactions contemplated hereby shall be delivered by the Seller to the
Purchaser upon the execution hereof. Other than the RGA Stockholder Consent (as
hereinafter defined), no consent, approval, or order of any person, entity,
organization, third party, lender, creditor or the shareholders of any entity is
required in connection with the execution, delivery or performance of the
transactions contemplated by this Agreement.
3.03 Conflicts; Defaults. The execution and delivery of this Agreement and the
performance by the Seller of the transactions contemplated hereby, do not and
will not (a) violate, conflict with, or constitute a breach or default under any
of the terms of the certificate of incorporation, articles of incorporation,
bylaws, or other organizational documents of the Seller (or any entity
comprising the Seller), (b) result in the creation or imposition of any Liens in
favor of any third party upon any of the Assets or the Business, (c) violate or
require any authorization, approval, consent or other action by, or
registration, declaration or filing with or notice to any governmental authority
pursuant to any law, statute, judgment, decree, injunction, order, writ, rule or
regulation of any governmental authority affecting the Business or the Assets,
or (d) conflict with or result in a breach of, create an event of default (or
event that, with the giving of notice or lapse of time or both, would constitute
an event of default) under, any contract, lease, agreement, note, deed of trust,
indenture, order, judgment or decree to which any Seller is a party or by which
any Seller or any of the Assets is bound or affected.
3.04 Enforceability. This Agreement has been, and the other agreements and
instruments to be executed and delivered by the Seller in connection herewith
will be, on or prior to the Closing Date, duly executed and delivered by each
Seller Entity and (assuming due authorization, execution and delivery hereof by
the Purchaser) constitute or, upon execution and delivery, will constitute the
valid, legal and binding obligations of each Seller Entity, enforceable against
each Seller Entity in accordance with their respective terms; subject as to
enforceability, to bankruptcy, insolvency, reorganization, moratorium and other
laws of general applicability relating to or effecting creditors’ rights and the
exercise of judicial discretion in accordance with principles of equity.
3.05 Clear Title. The Seller is the owner of, and has good and marketable title
to, all of the Assets. Except as set forth on Schedule 3.05 of the Seller’s
Disclosure Schedule, the Assets are owned by the Seller, and shall be delivered
to the Purchaser, free and clear of all Liens.

 

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3.06 Adverse Agreements and Changes. The Seller is not (a) a party to any
agreement or instrument, or to the best of Seller’s knowledge, subject to any
judgment, order, writ, injunction, decree, rule or regulation which materially
adversely affects the Assets or the Business, or (b) aware of any pending event
or condition which will have a material adverse impact on the Assets or
Business, except as set forth on Schedule 3.08 of the Seller’s Disclosure
Schedule.
3.07 Brokers or Finders Fees. No person is entitled to compensation by reason of
any agreement or understanding with the Seller, as a broker or finder in
connection with the sale and purchase of the Assets.
3.08 Litigation. Except as set forth on Schedule 3.08 of the Seller’s Disclosure
Schedule, there is not pending or, to the best knowledge of the Seller,
threatened, any litigation, action, suit, arbitration, investigation, inquiry,
audit, complaint, charge, or other proceeding to which the Seller is a party
involving the Assets or Business, or to which the Assets or the Business is or
could be subject, before or by any court or governmental or regulatory agency or
body.
3.09 Assets. Schedule 1.01 contains a true, complete and accurate list of all of
the Assets, including (i) for vehicles and equipment comprising a portion of the
Assets, a description of each vehicle or piece of equipment, the year of
manufacture, the complete address of its location, the state of registration,
and title registration number(s), the name of the Seller Entity owning each such
Asset, and the name of the Seller Entity in which title for each such Asset is
registered, respectively, and (ii) with respect to PropertySMARTTM risk
management program, a complete description of such program.
3.10 Stockholder Consent. RGA has obtained the written affirmative consent of no
less than 66 2/3% of the stockholders of RGA in connection with the execution,
delivery or performance of this Agreement and the consummation of the
transactions contemplated hereby (“RGA Stockholder Consent”). A true and correct
copy of the RGA Stockholder Consent has been delivered to the Purchaser. No
stockholder of RGA has rescinded its consent or informed Seller that such
stockholder intends to rescind its consent.
3.11 Absence of Undisclosed Information. Except as set forth on Schedule 3.11 of
the Seller’s Disclosure Schedule, the Assets are not subject to (i) any
liabilities or obligations of any nature, fixed or contingent, or any facts that
might give rise to any such liabilities or obligations, which would materially
adversely affect the Assets, or (ii) any liabilities or adverse claims against
or relating to the Assets.
3.12 Personal Property Leases. None of the Assets are subject to a personal
property, vehicle, equipment or other lease or contingent sale arrangement.

 

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3.13 Taxes.
(a) Each Seller Entity has, on the Closing Date will have, (i) timely filed all
returns, schedules and declarations (including any withholding and information
returns) required to be filed by any jurisdiction to which any Seller Entity is
or has been subject with respect to any Taxes (as defined below), all of which
returns, schedules and declarations are, or will, when filed by the applicable
filing date (including any extensions thereof), be true, complete, accurate and
correct in all material respects, (ii) paid in full all Taxes due and payable
(or claimed to be due and payable by any federal, state, local or foreign Taxing
authority), including all taxes on the Assets, (iii) paid or finally settled all
Tax deficiencies asserted or assessed against any Seller Entity, and (iv) made
timely payments to the proper governmental authorities of the Taxes required to
be deducted and withheld from the wages paid to its employees.
(b) No Seller Entity (i) is delinquent in the payment of any Tax, (ii) has been
granted an extension of time to file any Tax return which has expired, or will
expire, on or before the Closing Date without such return having been filed, and
(iii) has granted to any other person or entity a power of attorney or similar
authorization with respect to the settlement of its liability for Taxes.
(c) No deficiencies for any Tax has been claimed, proposed or assessed (whether
or not finally or tentatively, orally or in writing), no requests for waivers of
the time to assess any deficiency for any Taxes are pending, and there are no
pending or threatened Tax audits, investigations or claims for or relating to
(i) the assessment or collection of Taxes, or (ii) a claim for refund made with
respect to Taxes previously paid. There are no matters under discussion or
dispute with any governmental authorities with respect to Taxes that may have
been raised, nor are there any issues Seller believes will be raised in the
future, by any Taxing authority with respect to Taxes accruing on or prior to
the Closing Date.
(d) There are, and as of the Closing Date there will be, no Liens for Taxes upon
the Assets except for statutory Liens for Taxes not yet due and not delinquent.
On the Closing Date, Purchaser will take title to the Assets free and clear of
all Liens for Taxes except for statutory Liens for Taxes not yet due and not
delinquent.
As used in this Agreement, “Taxes” (and all derivations thereof) means all
federal, state, local and foreign income, sales, use, property, payroll and
other taxes imposed by any governmental authority with respect to the ownership,
operation, transfer or use of the Business or the Assets, or in any other way
relating to the Business or the Assets.
3.14 Environmental Laws. To the best knowledge of each Seller Entity, neither
any Seller Entity nor the Business is or has been (a) subject to any
environmental hazards, risks, or liabilities, or (b) in violation of any
federal, state or local statutes, regulations, laws or orders pertaining to
environmental matters, including, without limitation, the Comprehensive
Environmental Response, Compensation and Liability Act of 1980 (“CERCLA”), as
supplemented and amended, 42 U.S.C. Section 9601 et seq.; the Resource
Conservation and

 

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Recovery Act, as amended (“RCRA”), 42 U.S.C. Section 6901, et seq.; the Federal
Clean Air Act, 42 U.S.C. Section 7401, et seq.; the Federal Water Pollution
Control Act, Federal Clean Water Act of 1977, 33 U.S.C. Section 1251, et seq.;
Federal Hazardous Materials Transportation Act, 48 U.S.C. Section 1801, et seq.;
Federal Toxic Substances Control Act, 15 U.S.C. Section 2601, et seq.; and the
Federal Safe Drinking Water Act, 42 U.S.C. Section 300f, et seq. To the best
knowledge of each Seller Entity, no Hazardous Substances (which for purposes of
this Section 3.14 shall mean and include any hazardous or toxic substances,
pollutants, contaminants, materials or wastes, including but not limited to
those substances, pollutants, contaminants, materials and wastes listed in the
United States Department of Transportation Table (49 CFR 172.101) or by the
Environmental Protection Agency as hazardous substances pursuant to 40 CFR Part
302, or such substances, materials and wastes which are regulated under any
federal environmental law or any applicable local or state environmental law,
including without limitation CERCLA, ECRA, RCRA; toxic substances as defined
under the Toxic Substance Control Act, 15 U.S.C. 2601, et seq.; or any of the
following: hydrocarbons, petroleum and petroleum products, asbestos,
polychlorinated biphenyls, formaldehyde, radioactive substances, flammables and
explosives) have been and through the Closing Date will be, disposed of or
released or discharged from or onto (including groundwater contamination) any
Asset or any place where the Business has been operated or services have been
provided by any Seller Entity in violation of any applicable environmental
statute, regulation, or ordinance. To the best knowledge of each Seller Entity,
neither any Seller Entity, nor any Affiliate of any Seller Entity has allowed
any Hazardous Substances to be discharged, possessed, managed, processed, or
otherwise handled in a manner which is in violation of applicable law, and each
Seller Entity has complied and is compliant with all environmental laws
applicable to the Assets. Neither any Seller Entity nor its Affiliates or agents
have received any communication (written or oral) that alleges that any Seller
Entity or the Business is not in compliance with all applicable environmental
laws.
3.15 Full Disclosure. The information provided and to be provided by the Seller
to Purchaser in this Agreement, in the Schedules attached hereto or in any other
writing pursuant hereto does not and will not contain any untrue statement of a
material fact and does not and will not omit to state a material fact required
to be stated herein or therein or necessary to make the statements contained
herein or therein, in light of the circumstances in which they are made, not
false or misleading. Copies of all statements, reports, documents and other
materials heretofore or hereafter delivered or made available to the Purchaser
pursuant hereto and thereto were or will be at the time of their delivery to the
Purchaser true, complete and accurate copies of such statements, reports,
documents and other materials.
3.16 Intellectual Property.
(a) The Seller (i) owns and has independently developed or acquired or (ii) has
the valid right or license to all Seller IP Rights (as hereinafter defined)
relating to the Assets. The Seller IP Rights are sufficient for the conduct of
PropertySMARTTM risk management program as it has been historically conducted in
all material respects.
(b) Seller has not transferred ownership of any Intellectual Property that is or
was Seller-Owned IP Rights and that relates or was related to the Assets to any
third party or knowingly permitted Seller’s rights in any Intellectual Property
that is or was Seller-Owned IP Rights to enter the public domain or, with
respect to any Intellectual Property for which Seller has submitted an
application or obtained a registration, lapse (other than through the expiration
of registered Intellectual Property at the end of its maximum statutory term).

 

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(c) Seller owns and has good and exclusive title to each item of Seller-Owned IP
Rights and each item of Seller Registered Intellectual Property that comprises a
portion of the Assets, free and clear of any Liens (other than non-exclusive
licenses granted by Seller in the ordinary course of its business consistent
with past practice on its standard form of customer agreement and on terms
materially similar to such standard form). “Seller Registered Intellectual
Property” means all United States, international and foreign: (i) patents and
patent applications (including provisional applications); (ii) registered
trademarks, applications to register trademarks, intent-to-use applications or
other registrations or applications related to trademarks; (iii) registered
Internet domain names; (iv) registered copyrights and applications for copyright
registration; and (v) any other Intellectual Property that is the subject of an
application, certificate, filing, registration or other document issued, filed
with or recorded by any governmental authority owned by, registered or filed in
the name of Seller. “Third-Party Intellectual Property Rights” means any
Intellectual Property owned by a third party.
(d) Schedule 3.16 of the Seller Disclosure Schedule lists all Seller Registered
Intellectual Property that comprises a portion of the Assets, including the
jurisdictions in which each such item of Intellectual Property has been issued
or registered or in which any application for such issuance and registration has
been filed or in which any other filing or recordation has been made.
(e) All registration, maintenance and renewal fees currently due in connection
with each item of Seller Registered Intellectual Property have been paid and all
documents, recordations and certificates in connection with such Seller
Registered Intellectual Property currently required to be filed have been filed
with the relevant patent, copyright, trademark or other authorities in the
United States or foreign jurisdictions, as the case may be, for the purposes of
prosecuting, maintaining and perfecting such Seller Registered Intellectual
Property and recording the Seller’s ownership interests therein.
(f) There are no royalties, honoraria, fees or other payments payable by the
Seller to any person or entity (other than salaries payable to employees,
consultants and independent contractors not contingent on or related to use of
their work product), as a result of the ownership, use, possession, license-in,
license-out, sale, marketing, advertising or disposition of any Seller-Owned IP
Rights by Seller.
(g) To the best knowledge of the Seller, there is no unauthorized use,
unauthorized disclosure, infringement or misappropriation of any Seller-Owned IP
Rights by any third party, including any employee or former employee of Seller.
Seller has not brought any action, suit or proceeding for infringement or
misappropriation of any Intellectual Property or breach of any Seller IP Rights
Agreement.

 

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(h) To the best knowledge of the Seller, no current or former employee,
consultant or independent contractor of Seller has any right, license, claim or
interest whatsoever in or with respect to any Seller-Owned IP Rights.
For purposes of this Agreement, (i) “Intellectual Property” means any and all
worldwide industrial and intellectual property rights and all rights associated
therewith, including all patents and applications therefor and all reissues,
divisions, renewals, extensions, provisionals, continuations and
continuations-in-part thereof, all inventions (whether patentable or not),
invention disclosures, improvements, trade secrets, proprietary information,
know how, technology, technical data, proprietary processes and formulae,
algorithms, specifications, customer lists and supplier lists, all industrial
designs and any registrations and applications therefor, all trade names, logos,
common law trademarks and service marks, trademark and service mark
registrations and applications therefor, Internet domain names, Internet and
World Wide Web URLs or addresses, all copyrights, copyright registrations and
applications therefor, and all other rights corresponding thereto, all mask
works, mask work registrations and applications therefor, and any equivalent or
similar rights in semiconductor masks, layouts, architectures or topology, all
computer software, including all source code, object code, firmware, network and
network equipment monitoring, management and security related tools and
utilities, development tools, files, records and data, all schematics, netlists,
test methodologies, test vectors, emulation and simulation tools and reports,
hardware development tools, and all rights in prototypes, breadboards and other
devices, all databases and data collections and all rights therein, all moral
and economic rights of authors and inventors, however denominated, and any
similar or equivalent rights to any of the foregoing, and all tangible
embodiments of the foregoing, (ii) “Seller IP Rights” means any and all
Intellectual Property related to the Assets, and (iii) “Seller-Owned IP Rights”
means Seller IP Rights that are owned or are purportedly owned by Seller.
3.17 No Violation. The execution, delivery and performance of this Agreement and
all other agreements and instruments executed and delivered by the Seller in
connection with this Agreement and the consummation of the transactions
contemplated hereby and thereby will not conflict with or result in the breach
of any term or provision of, or violate or constitute a judgment, decree, writ,
law or regulation to which the Seller is a party or by which the Seller is in
any way bound or obligated.
3.18 Representations as of the Effective Date and Closing. The Seller Entities’
representations set forth in this Agreement shall be true on and as of the date
of this Agreement and the Closing as though such representations were made on
and as of such times.
3.19 Disclaimer of Other Representations and Warranties. Except as expressly set
forth in this Article III, the Seller makes no representations or warranties,
express or implied, at law or in equity, in respect of any of its assets
(including, without limitation, the Assets), liabilities or operations,
including without limitation, with respect to merchantability or fitness for any
particular purpose, and any such other representations or warranties are hereby
expressly disclaimed. The Purchaser hereby acknowledges and agrees that, except
to the extent specifically set forth in this Article III, the Purchaser is
purchasing the Assets on an “as-is, where-is basis.” Without limiting the
generality of the foregoing, the Seller makes no representation or warranty
regarding any assets other than the Assets and none shall be implied, at law or
in equity.

 

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ARTICLE IV
AGREEMENTS OF THE PARTIES
4.01 Access and Information. Each Seller Entity shall afford to the Purchaser
and Purchaser’s accountants, counsel and other representatives full and
reasonable access from time to time throughout the period from the date hereof
until the Closing Date to Seller’s properties, books, contracts, commitments,
personnel and records relating to the Business and the Assets, and, during such
period, each Seller Entity will (or will cause its representatives to) furnish
to the Purchaser and the Purchaser’s accountants, counsel and other
representatives copies of such documents and all such other information as the
Purchaser may reasonably request as well as any other information that the
Purchaser or its accountants, counsel and other representatives deem necessary
to complete any filings necessary under the Securities Act of 1933, as amended
(the "Securities Act”) or the Securities Exchange Act of 1934, as amended (the
“Exchange Act”).
4.02 Conduct of the Business Pending Closing. From the date hereof through the
Closing Date:
(a) Ordinary Course of Business. Each Seller Entity shall use all reasonable
efforts to preserve the business organization of the Business intact, and to
preserve for Purchaser the goodwill of those suppliers, customers, employees and
others having business relations involving the Assets;
(b) Operation of Business. Each Seller Entity shall maintain the Assets in good
order and condition, subject to ordinary wear and tear;
(c) Contracts. No Seller Entity shall enter into any contract, purchase order or
other commitment directly or indirectly affecting the Assets, except contracts
and commitments entered into in the ordinary course of business consistent with
past practices, which are freely transferable to Purchaser without the consent
of any party, and with respect to which Seller has obtained Purchaser’s prior
written consent;
(d) Material Adverse Effect. Seller shall give prompt written notice (but not
later than two (2) business days after the occurrence thereof) to Purchaser of
any (i) Material Adverse Effect; and (ii) change that would render any
representation or warranty made by any Seller Entity hereunder untrue or
incomplete in any material respect as of the date of such change;
(e) Compliance with Representations and Warranties. Without limiting the
foregoing, each Seller Entity agrees that it shall not take any action or permit
to occur any event, directly or indirectly within the control of Seller, that
would cause any representation or warranty contained herein to be inaccurate or
untrue on or prior to the Closing Date; and

 

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(f) Consents. Each Seller Entity shall use its best efforts to obtain all
consents and approvals of third parties necessary for the consummation of the
transactions contemplated by this Agreement.
4.03 Exclusivity. From and after the date hereof through the Closing Date, no
Seller Entity nor any of their respective Affiliates, partners, shareholders,
officers, directors, employees, or agents, shall, directly or indirectly,
solicit, initiate or engage in or continue (including without limitation,
furnishing any information concerning the Assets) discussions, inquiries or
proposals, or enter into any negotiations for the purpose or with the intention
of leading to any proposal, concerning the acquisition or purchase by any other
party of the Business or any part thereof or any Asset.
4.04 Stockholders’ Consent; Information Statement.
(a) RGA shall, as soon as practicable after the execution of this Agreement,
distribute to its stockholders, the RGA Stockholder Consent; together with the
written recommendation of the Board of Directors of RGA that the terms of this
Agreement are fair to and in the best interest of the stockholders of RGA and
declaring this Agreement to be advisable.
(b) As promptly as practicable but in no event later than ten (10) days after
the execution of this Agreement, RGA, after consultation with Purchaser, shall
file an information statement (the “Information Statement”) under and pursuant
to the provisions of the Exchange Act. RGA, after consultation with Purchaser,
shall respond promptly to all comments made by the Securities and Exchange
Commission (the “SEC”) with respect to the preliminary Information Statement and
cause a definitive Information Statement to be filed with the SEC and mailed to
its stockholders, as required by the Exchange Act. RGA will notify Purchaser
promptly of the receipt of any comments from the SEC or its staff and of any
request by the SEC or its staff for amendments or supplements to the Information
Statement, or for additional information, and will supply Purchaser with copies
of all correspondence between RGA and the SEC or its staff with respect to the
Information Statement. RGA shall provide draft Information Statements to
Purchaser and use commercially reasonable efforts to accept Purchaser’s comments
related thereto.
(c) Each of Purchaser and RGA agrees to provide as promptly as practicable to
the other such information concerning its business and financial statements and
affairs as, in the reasonable judgment of the other party, may be required or
appropriate for inclusion in the Information Statement or in any amendments or
supplements thereto, and to cause its counsel and auditors to cooperate with the
other’s counsel and auditors in the preparation of the Information Statement.
(d) At the time the Information Statement is mailed to RGA’s stockholders, RGA
will ensure that the Information Statement will (i) not contain any untrue
statement of a material fact, or omit to state any material fact required to be
stated therein as necessary, in order to make the statements therein, in light
of the circumstances under

 

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which they were made, not misleading or necessary and (ii) comply in all
material respects with the provisions of the Securities Act and Exchange Act, as
applicable, and the rules and regulations thereunder; provided, however, no
representation is made by Purchaser or RGA with respect to statements made in
the Information Statement based on information supplied by the other party
expressly for inclusion or incorporation by reference in the Information
Statement or information omitted with respect to the other party.
4.05 Casualty. If, prior to the Closing, the Business or any Asset sustains
material damage or destruction by fire or other casualty that Seller does not
completely repair prior to Closing, Purchaser may elect to either (a) terminate
this Agreement by providing written notice thereof to Seller, or (b) consummate
the transactions contemplated by this Agreement subject to a mutually agreeable
adjustment in the Purchase Price to reflect such unrepaired casualty loss
insurance.
4.06 Employment Matters.
(a) Employment. Each Seller Entity agrees that Purchaser is under no obligation
to: (i) hire any employees of the Business; (ii) maintain any of RGA’s or any of
its Affiliates’ employees that it does hire at the same position, title or level
of responsibility that they had with RGA or any of its Affiliates; (iii) grant
seniority or service credit or recognize accrued vacation or sick leave time to
any such employee; or (iv) pay any specified level of compensation or benefits
to any such employee.
(b) Employment Liabilities. Purchaser does not assume, and Seller or its
Affiliates, as applicable, hereby retains, any and all employment related costs,
obligations and liabilities of the Business, including, without limitation,
costs, obligations and liabilities relating to severance rights of employees of
the Business (including those rights to health care continuation coverage under
the Consolidated Omnibus Budget Reconciliation Act of 1985, as amended
(“COBRA”)), employment discrimination, unfair labor practices, wage and hour
laws, health and safety, workers compensation, wrongful discharge, compensation,
fringe benefits, insurance, employee benefit plans, pensions, retiree medical,
severance pay, vacations, torts, accidents, disabilities, injuries, sickness,
exposure to harmful conditions, breach of oral or written employment contracts
or collective bargaining agreements, or breach of law, statute, judgment,
decree, injunction, order, writ, rule or regulation of any governmental
authority. The entire liability for continuing acts or conditions (such as
exposure to harmful conditions or continuing discrimination) shall be retained
and assumed by Seller.
(c) Employment Agreement. HSOA and James Rea agree to use commercially
reasonable efforts to negotiate and execute an agreement for the employment of
James Rea by HSOA or one of its subsidiaries upon terms mutually acceptable to
HSOA and James Rea. Notwithstanding the foregoing sentence, (i) James Rea
acknowledges and agrees that neither HSOA nor any of its subsidiaries has any
obligation to hire James Rea, and (ii) HSOA acknowledges and agrees that James
Rea has no obligation to agree to any employment arrangement with HSOA or any of
its subsidiaries.

 

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4.07 Pre-closing Deliveries.
(a) The Seller’s Deliveries. Concurrently with the execution of this Agreement,
the Seller shall deliver to the Purchaser, each of the following:
(i) the Seller’s Disclosure Schedule to this Agreement, satisfactory to the
Purchaser in all respects;
(ii) all corporate resolutions of each Seller Entity approving this Agreement
and the transactions contemplated hereby;
(iii) the duly executed RGA Stockholder Consent; and
(iv) a duly executed counterpart to the Equipment Lease between CTFD, CTFD
Marine and the Purchaser (the “Lease”), pursuant to which CTFD and CTFD Marine
agree to lease certain equipment to the Purchaser upon the terms set forth
therein.
(b) The Purchaser’s Deliveries. Concurrently with the execution of this
Agreement, the Purchaser shall deliver to the Seller, each of the following:
(i) the corporate resolutions of the Purchaser approving this Agreement and the
transactions contemplated hereby; and
(ii) a duly executed counterpart to the Lease.
ARTICLE V
REPRESENTATIONS OF PURCHASER
The Purchaser represents the following:
5.01 Good Standing. The Purchaser is a corporation duly organized, validly
existing and in good standing under the laws of the State of Florida.
5.02 Corporate Approval. This Agreement, and the execution, delivery and
performance of same, have been duly approved by the Purchaser and HSOA and
constitutes a valid and binding obligation against the Purchaser and HSOA,
enforceable in accordance with its terms. No consent, approval or order of any
person, entity, organization or third party is required in connection with the
execution, delivery or performance of the transactions contemplated by the
Agreement other than such consents that have been obtained or that will be
obtained prior to the Closing Date. A copy of all corporate resolutions of the
Purchaser and HSOA relating to this Agreement and the transactions contemplated
hereby shall be delivered by the Purchaser to the Seller upon the execution
hereof.

 

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5.03 Brokers or Finders Fees. No person is entitled to compensation by reason of
any agreement or understanding with the Purchaser, as a broker or finder in
connection with the sale and purchase of the Assets.
5.04 Litigation. Other than in relation to any claims or causes of action of
Laurus, including based on the lawsuits filed August 31, 2007 in the New York
County Clerk’s Office entitled Laurus Master Fund, Ltd. v. Home Solutions of
America, Inc. and Fireline Restoration, Inc. and Laurus Master Fund, Ltd. v.
Frank Fradella, there is not pending or, to the knowledge of the Purchaser,
threatened, any litigation, action, suit, arbitration, investigation, inquiry,
audit, complaint, charge or other proceeding to which the Purchaser is a party
involving the Purchaser’s business, or to which the Purchaser’s business is or
could be subject, before or by any court or governmental or regulatory agency or
body.
5.05 No Violation. The execution, delivery and performance of this Agreement and
all other agreements and instruments executed and delivered by the Purchaser in
connection with this Agreement and the consummation of the transactions
contemplated hereby and thereby will not conflict with or result in the breach
of any term or provision of, or violate or constitute a judgment, decree, writ,
law or regulation to which the Purchaser is a party or by which the Purchaser is
in any way bound or obligated.
5.06 Financial Capability. The Purchaser has the financial capability to
purchase the Assets on the terms and subject to the conditions set forth in this
Agreement.
5.07 Representations as of the Effective Date and Closing. The Purchaser’s
representations set forth in this Agreement shall be true on and as of the date
of this Agreement and the Closing as though such representations were made on
and as of such times.
ARTICLE VI
CONDITIONS PRECEDENT TO PERFORMANCE
6.01 Conditions Precedent to Seller’s Performance. The obligations of the Seller
to consummate the sale of the Assets to Purchaser contemplated by this Agreement
under this Agreement are subject to the satisfaction of all the conditions set
out in this Section 6.01. The Seller may waive any or all of these conditions in
whole or in part without prior notice, provided, however, that no such waiver of
a condition shall constitute a waiver by the Seller of any of its other rights
or remedies, at law or in equity, if the Purchaser shall be in default of any of
its representations, warranties or covenants under this Agreement:
(a) all representations by the Purchaser contained in this Agreement, shall be
true on and as of the date of this Agreement and the Closing;

 

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(b) the Purchaser shall have performed all covenants and agreements and
satisfied all conditions required by this Agreement to be performed, complied
with or satisfied, shall have released the Laurus Debt and its Liens on the
Assets pursuant to the terms and conditions of the Release Agreement, and HSOA
shall have issued the Shares to Laurus under the Release Agreement; and
(c) the Purchaser shall have furnished a certificate, executed on behalf of the
Purchaser, confirming the matters expressed in Sections 6.01(a) and (b); and
(d) all applicable waiting periods including those promulgated under the rules
and regulations of the Securities and Exchange Commission shall have expired.
6.02 Conditions Precedent to Purchaser’s Performance. The obligations of the
Purchaser to consummate the purchase of the Assets from Seller contemplated by
this Agreement under this Agreement are subject to the satisfaction of all the
conditions set out in this Section 6.02. The Purchaser may waive any or all of
these conditions in whole or in part without prior notice, provided, however,
that no such waiver of a condition shall constitute a waiver by the Purchaser of
any of its other rights or remedies, at law or in equity, if the Seller shall be
in default of any of its representations, warranties or covenants under this
Agreement:
(a) all representations by the Seller contained in this Agreement, or in any
written statement delivered to Purchaser pursuant to the Agreement, shall be
true on and as of the date of this Agreement and the Closing;
(b) the Seller shall have performed all covenants and agreements and satisfied
all conditions required by this Agreement to be performed, complied with or
satisfied;
(c) the Seller shall have timely delivered to the Purchaser all schedules,
documents, instruments, licenses and agreements required under this Agreement;
(d) Seller shall have executed and delivered to Purchaser, all transfer
documents, instruments and other closing deliveries contemplated by Section 1.06
hereof;
(e) Seller shall have furnished a certificate, executed on behalf of Seller,
confirming the matters expressed in Sections 6.02(a), (b), (c) and (d) hereof;
(f) Each Seller Entity shall have furnished to Purchaser (i) certificates of the
secretary of state of the state in which each is incorporated, dated as of a
date nor more than five (5) business days prior to the Closing Date, attesting
to the due incorporation, existence and good standing of each such Seller
Entity, (ii) copies, certified by the Secretary of State of the state in which
each is incorporated, dated as of a date not more than five (5) business days
prior to the Closing Date, of each Seller Entity’s Articles or Certificate of
Incorporation together with all amendments, (iii) copies, certified by the
Secretaries of each Seller Entity, of the Bylaws of each Seller Entity, each as
amended and in effect as of the Closing Date, (iv) copies, certified by the
Secretaries of each Seller Entity, of resolutions duly adopted by the Board of
Directors of each Seller Entity duly authorizing the transactions contemplated
by this Agreement, and (v) a copy, certified by the Secretary of RGA, of the RGA
Stockholder Consent;

 

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(g) HSOA shall have obtained the written consent of its lender(s) to the
transactions contemplated by this Agreement, and shall have entered into such
agreements with its lender as are necessary or required to consummate the
transactions contemplated hereby;
(h) Laurus shall have released the Laurus Debt and its Liens on the Assets, and
Laurus and HSOA shall have entered into the Release Agreement on terms and
conditions satisfactory to HSOA and its Board of Directors;
(i) There shall not have occurred any material adverse effect on the Assets, and
there shall be no pending or threatened litigation affecting any Seller Entity
or the Assets other than as disclosed on Schedule 3.08 of the Seller’s
Disclosure Schedule and existing on the date this Agreement is executed, or with
respect to the transactions contemplated by this Agreement;
(j) the RGA Stockholder Consent shall be subsisting and valid and not revoked;
(k) all applicable waiting periods including those promulgated under the rules
and regulations of the Securities and Exchange Commission shall have expired;
(l) the Purchaser shall have received the Non-Compete, Non-Hire and
Non-Solicitation Agreements duly executed by the Designated Employees; and
(m) the Closing occurs no later than the Termination Date.
ARTICLE VII
INDEMNIFICATION; RELEASE
7.01 SELLER INDEMNITY. EACH SELLER ENTITY, ON A JOINT AND SEVERAL BASIS, SHALL
INDEMNIFY, DEFEND AND HOLD HARMLESS FROM AND AGAINST, PURCHASER AND HSOA AND
THEIR RESPECTIVE OFFICERS, DIRECTORS, AGENTS AND AFFILIATES (EACH, A “PURCHASER
INDEMNIFIED PARTY” AND COLLECTIVELY, THE “PURCHASER INDEMNIFIED PARTIES”), AND
REIMBURSE THE PURCHASER INDEMNIFIED PARTIES FOR, ANY AND ALL CLAIMS, LOSSES,
LIABILITIES, DAMAGES, COSTS AND EXPENSES (INCLUDING, WITHOUT LIMITATION,
REASONABLE ATTORNEYS’ FEES) (COLLECTIVELY, “LIABILITIES”) THAT MAY BE INCURRED
BY, IMPOSED UPON OR ASSERTED AGAINST ANY PURCHASER INDEMNIFIED PARTY ARISING
FROM OR RELATING TO: (I) ANY FAILURE OF ANY SELLER ENTITY TO ASSUME, PAY,
PERFORM AND DISCHARGE ANY LIABILITY OR OBLIGATION OF ANY SELLER ENTITY; (II) ANY
ACTION, CLAIM OR JUDICIAL OR OTHER PROCEEDING ASSERTED AGAINST ANY PURCHASER
INDEMNIFIED PARTY BY ANY PERSON

 

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OR ENTITY, INCLUDING, WITHOUT LIMITATION, THE ACTIONS, CLAIMS AND JUDICIAL
PROCEEDINGS DESCRIBED ON SCHEDULE 3.08 OF THE SELLER’S DISCLOSURE SCHEDULE, OR
ANY STOCKHOLDER ACTION OR CLAIM WITH RESPECT TO THIS AGREEMENT OR THE
TRANSACTIONS CONTEMPLATED HEREBY, OR ANY LIEN OR OTHER CLAIM ON OR WITH RESPECT
TO THE ASSETS, OR THE FAILURE OF THE SELLER TO OBTAIN THE CONSENT OF ANY PERSON
OR ENTITY OR ANY STOCKHOLDER OF RGA TO THIS AGREEMENT OR THE TRANSACTIONS
CONTEMPLATED HEREBY, OR THE RELEASE AGREEMENT AND THE TRANSACTIONS CONTEMPLATED
THEREBY, OR THE CONSULTING AGREEMENT AND THE TRANSACTIONS CONTEMPLATED THEREBY,
OR ANY RELATIONSHIP AMONG HSOA, LAURUS, AND RGA AND ITS SUBSIDIARIES,
RESPECTIVELY, (III) ANY INACCURACY IN OR BREACH OF ANY REPRESENTATION, WARRANTY,
COVENANT, OBLIGATION OR AGREEMENT OF ANY SELLER ENTITY CONTAINED HEREIN, OR IN
ANY DOCUMENT OR INSTRUMENT DELIVERED PURSUANT HERETO; (IV) THE OPERATION OF THE
BUSINESS OR THE OWNERSHIP, USE OR SALE OF THE ASSETS BY THE SELLER PRIOR TO THE
CLOSING (INCLUDING, WITHOUT LIMITATION, ANY CONTRACTUAL, TAX, PRODUCT, WARRANTY,
TORT OR OTHER LIABILITY WHATSOEVER); (V) ALL LIABILITIES AND OBLIGATIONS,
INCLUDING, WITHOUT LIMITATION, TAX OBLIGATIONS, OF ANY SELLER ENTITY, AND
(VI) ACT OR OMISSION OF ANY SELLER ENTITY CONSTITUTING OR ALLEGEDLY CONSTITUTING
FRAUD, EMBEZZLEMENT OR ANY CRIME FOR WHICH IMPRISONMENT IS A PUNISHMENT, OR ANY
ACT INVOLVING MORAL TURPITUDE.
7.02 PURCHASER INDEMNITY. PURCHASER AND HSOA, ON A JOINT AND SEVERAL BASIS,
SHALL INDEMNIFY, DEFEND AND HOLD HARMLESS FROM AND AGAINST, EACH SELLER ENTITY
AND THEIR RESPECTIVE OFFICERS, DIRECTORS, AGENTS AND AFFILIATES (EACH, A “SELLER
INDEMNIFIED PARTY” AND COLLECTIVELY, THE “SELLER INDEMNIFIED PARTIES”), AND
REIMBURSE THE SELLER INDEMNIFIED PARTIES FOR, ANY AND ALL LIABILITIES THAT MAY
BE INCURRED BY, IMPOSED UPON OR ASSERTED AGAINST ANY SELLER INDEMNIFIED PARTY
ARISING FROM OR RELATING TO (I) ANY INACCURACY IN OR BREACH OF ANY
REPRESENTATION, WARRANTY, COVENANT, OBLIGATION OR AGREEMENT OF THE PURCHASER OR
HSOA CONTAINED HEREIN, OR IN ANY DOCUMENT OR INSTRUMENT DELIVERED PURSUANT
HERETO, AND (II) ANY ACTION, CLAIM OR JUDICIAL OR OTHER PROCEEDING ASSERTED
AGAINST ANY SELLER INDEMNIFIED PARTY ARISING FROM OR RELATING TO THE PURCHASER’S
PERFORMANCE AND/OR MANAGEMENT OF SELLER CONSTRUCTION PROJECTS UNDER OR PURSUANT
TO THE CONSULTING AGREEMENT.

 

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7.03 RELEASE BY SELLER. FOR GOOD AND VALUABLE CONSIDERATION INCLUDING THE
PROMISES, AGREEMENTS, COVENANTS, REPRESENTATIONS AND OBLIGATIONS OF PURCHASER
SET FORTH HEREIN, EFFECTIVE AS OF THE CLOSING DATE AND SUBJECT TO THE
CONSUMMATION OF THE TRANSACTIONS CONTEMPLATED BY THIS AGREEMENT, EACH SELLER
ENTITY HEREBY JOINTLY AND SEVERALLY IRREVOCABLY AND UNCONDITIONALLY RELEASES,
ACQUITS AND FOREVER DISCHARGES EACH PURCHASER INDEMNIFIED PARTY FROM AND AGAINST
ANY AND ALL CLAIMS, COMPLAINTS, GRIEVANCES, LIABILITIES, OBLIGATIONS, PROMISES
AGREEMENTS, DAMAGES, CAUSES OF ACTION, RIGHTS, DEBTS, DEMANDS, CONTROVERSIES,
COSTS, LOSSES, DAMAGES, AND EXPENSES (INCLUDING, WITHOUT LIMITATION, ATTORNEYS
FEES AND EXPENSES) WHATSOEVER (INCLUDING, WITHOUT LIMITATION, UNDER ANY
MUNICIPAL, LOCAL, STATE OR FEDERAL LAW, COMMON OR STATUTORY), WHICH THEY OR ANY
OF THEIR SUCCESSORS, ASSIGNS OR OTHER LEGAL REPRESENTATIVES OWNED, HELD, HAD OR
CLAIMED TO HAVE HAD OR MAY OWN, HOLD, HAVE OR CLAIM TO HAVE ARISING ON OR PRIOR
TO THE DATE OF THIS AGREEMENT. EACH SELLER ENTITY UNDERSTANDS, ACKNOWLEDGES AND
AGREES THAT THE RELEASE SET FORTH ABOVE MAY BE PLEADED AS A FULL AND COMPLETE
DEFENSE AND MAYBE USED AS A BASIS FOR INJUNCTION AGAINST ANY ACTION, SUIT OR
OTHER PROCEEDING WHICH MAY BE INSTITUTED, PROSECUTED OR ATTEMPTED IN BREACH OF
THE PROVISIONS OF SUCH RELEASE. SIMILARLY, EACH SELLER ENTITY AGREES THAT NO
FACT, EVENT, CIRCUMSTANCE, EVIDENCE OR TRANSACTION WHICH COULD NOW BE ASSERTED
OR WHICH MAY HEREAFTER BE DISCLOSED SHALL AFFECT IN ANY MANNER THE FINAL,
ABSOLUTE AND UNCONDITIONAL NATURE OF THE RELEASE SET FORTH ABOVE. THE PURCHASER
INDEMNIFIED PARTIES UNDERSTAND, ACKNOWLEDGE AND AGREE THAT THE RELEASE SET FORTH
ABOVE SHALL NOT EXTEND TO OR LIMIT IN ANY MANNER WHATSOEVER ANY RIGHTS OF SELLER
UNDER THIS AGREEMENT OR ANY CLAIMS OR CAUSES OF ACTION OF SELLER THAT MAY ARISE
OUT OF OR RELATE TO THIS AGREEMENT.
7.04 PURCHASER RELEASE. FOR GOOD AND VALUABLE CONSIDERATION INCLUDING THE
PROMISES, AGREEMENTS, COVENANTS, REPRESENTATIONS AND OBLIGATIONS OF SELLER SET
FORTH HEREIN, EFFECTIVE AS OF THE CLOSING DATE AND SUBJECT TO THE CONSUMMATION
OF THE TRANSACTIONS CONTEMPLATED BY THIS AGREEMENT, EACH OF PURCHASER AND HSOA
HEREBY JOINTLY AND SEVERALLY IRREVOCABLY AND UNCONDITIONALLY RELEASES, ACQUITS
AND FOREVER DISCHARGES EACH SELLER INDEMNIFIED PARTY FROM AND AGAINST ANY AND
ALL CLAIMS, COMPLAINTS, GRIEVANCES, LIABILITIES, OBLIGATIONS, PROMISES
AGREEMENTS, DAMAGES, CAUSES OF ACTION, RIGHTS, DEBTS, DEMANDS, CONTROVERSIES,
COSTS, LOSSES, DAMAGES, AND EXPENSES (INCLUDING, WITHOUT LIMITATION, ATTORNEYS
FEES AND EXPENSES) WHATSOEVER (INCLUDING, WITHOUT LIMITATION, UNDER ANY
MUNICIPAL, LOCAL, STATE OR FEDERAL LAW, COMMON OR STATUTORY), WHICH THEY OR ANY
OF THEIR SUCCESSORS, ASSIGNS OR OTHER LEGAL REPRESENTATIVES OWNED, HELD, HAD OR
CLAIMED TO HAVE HAD OR MAY

 

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OWN, HOLD, HAVE OR CLAIM TO HAVE ARISING ON OR PRIOR TO THE DATE OF THIS
AGREEMENT. EACH OF PURCHASER AND HSOA UNDERSTANDS, ACKNOWLEDGES AND AGREES THAT
THE RELEASE SET FORTH ABOVE MAY BE PLEADED AS A FULL AND COMPLETE DEFENSE AND
MAYBE USED AS A BASIS FOR INJUNCTION AGAINST ANY ACTION, SUIT OR OTHER
PROCEEDING WHICH MAY BE INSTITUTED, PROSECUTED OR ATTEMPTED IN BREACH OF THE
PROVISIONS OF SUCH RELEASE. SIMILARLY, EACH OF PURCHASER AND HSOA AGREES THAT NO
FACT, EVENT, CIRCUMSTANCE, EVIDENCE OR TRANSACTION WHICH COULD NOW BE ASSERTED
OR WHICH MAY HEREAFTER BE DISCLOSED SHALL AFFECT IN ANY MANNER THE FINAL,
ABSOLUTE AND UNCONDITIONAL NATURE OF THE RELEASE SET FORTH ABOVE. THE SELLER
INDEMNIFIED PARTIES UNDERSTAND, ACKNOWLEDGE AND AGREE THAT THE RELEASE SET FORTH
ABOVE SHALL NOT EXTEND TO OR LIMIT IN ANY MANNER WHATSOEVER ANY RIGHTS OF
PURCHASER AND HSOA UNDER THIS AGREEMENT OR ANY CLAIMS OR CAUSES OF ACTION OF
PURCHASER AND HSOA THAT MAY ARISE OUT OF OR RELATE TO THIS AGREEMENT.
ARTICLE VIII
TERMINATION OF AGREEMENT
8.01 Termination of Agreement. This Agreement and the transactions contemplated
hereby may be terminated and abandoned at any time on or prior to the Closing as
follows:
(a) by the written consent of Purchaser and Seller;
(b) by Purchaser, (i) if there is or occurs an inaccuracy in any material
respect in the representations and warranties of any Seller Entity set forth in
this Agreement, which inaccuracy is not capable of being cured by the
Termination Date, (ii) if there has been a breach in any material respect of a
covenant of any Seller Entity, or a failure in any material respect on the part
of any Seller Entity to comply with their respective obligations hereunder, and
such breach or failure is not capable of being cured by the Termination Date;
(iii) if there occurs any casualty with respect to the any Asset as described
herein, or (iv) if any proposed supplement, change or amendment to any Schedule
submitted by Seller to Purchaser is unacceptable to Purchaser;
(c) by Purchaser if any of the conditions of the Seller set forth in Section
6.02 hereof are not satisfied on or before the Termination Date;
(d) by Seller, (i) if there is or occurs an inaccuracy in any material respect
in the representations and warranties of Purchaser set forth in this Agreement,
which inaccuracy is not capable of being cured by the Termination Date, or
(ii) if there has been a breach in any material respect on the part of Purchaser
to comply with its obligations hereunder, and such breach or failure is not
capable of being cured by the Termination Date;

 

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(e) by Seller if any of the conditions set forth in Section 6.01 hereof are not
satisfied on or before the Termination Date; or
(f) by Purchaser if the Closing Date shall not have occurred before the
Termination Date for any reason other than the failure of the Purchaser to
perform in any material respect its obligations hereunder or the breach or
inaccuracy in any material respect of a representation or warranty made by such
party.
8.02 Obligations Upon Termination.
(a) In the event that this Agreement is terminated pursuant to the provisions of
Section 8.01(a) or (f), neither party shall have any further obligation to the
other.
(b) If either party shall terminate this Agreement pursuant to Sections 8.01(b),
(c), (d) or (e) because a condition to the terminating party’s obligations under
this Agreement is not satisfied as a result of the other party’s failure to
comply with its obligations under this Agreement, the terminating party’s right
to pursue any and all rights it may have at law or equity or hereunder shall
survive unimpaired.
ARTICLE IX
MISCELLANEOUS
9.01 Survival of Representations. All statements contained in any exhibit,
schedule, certificate or other instrument delivered by or on behalf of the
Seller or the Purchaser pursuant to this Agreement, or in connection with the
transaction contemplated hereby, shall be deemed representations by the Seller
or by the Purchaser, respectively, hereunder. All representations and agreements
made by the Seller and the Purchaser shall survive until the third anniversary
date following the Closing.
9.02 Legal Expenses. If any legal action or any arbitration or other proceeding
is brought for the enforcement of this Agreement, or because of an alleged or
actual dispute, breach, default or misrepresentation in connection with any of
the provisions of this Agreement, the successful or prevailing party shall be
entitled to recover reasonable attorneys’ fees and other costs incurred in that
action or proceeding, in addition to any other relief to which it may be
entitled.
9.03 Invalid Provisions. If any one or more of the provisions of this Agreement
shall be held invalid or unenforceable, such provision shall be modified to the
minimum extent necessary to make it valid and enforceable, and the validity and
enforceability of all other provisions of this Agreement shall not be affected
thereby.
9.04 Binding Effect. This Agreement shall be binding upon and inure to the
benefit of the Seller and the Purchaser, and their respective heirs, successors
and assigns. This Agreement may not be assigned or transferred without the
written consent of all parties thereto.

 

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9.05 Casualty. The Seller shall bear all risk of casualty loss or damage to the
Assets until and through the Closing. The Purchaser shall bear all risk of
casualty loss or damage to the Assets after the Closing.
9.06 Public Announcements. Any public announcement concerning this Agreement
before the Closing or any of the terms hereof shall be made only with the prior
approval of the Seller and Purchaser, other than required filings under
applicable securities laws.
9.07 Delivery of Exhibits. All exhibits, schedules, and documents referred to in
or attached to this Agreement are integral parts of this Agreement and are
incorporated herein for all purposes as if fully set forth herein.
9.08 Further Assurances. The parties shall give further assurances, take such
actions and execute such further documents as are necessary or desirable to
effectuate the purpose of this Agreement.
9.09 Notices. All notices, requests, demands and other communications hereunder
shall be in writing and shall be deemed to have been duly given (a) on the date
of delivery if personally delivered, delivered by nationally recognized
overnight delivery service guaranteeing at least second business day delivery,
or (b) on the date of delivery as evidenced by the return receipt or similar
evidence or on the fifth calendar day after mailing, whichever is earlier in
time, if mailed, by registered or certified mail or delivered by any express
delivery service, postage prepaid, and properly addressed as set forth below or
at such other address as the addressee may have previously specified by notice
delivered in accordance with this paragraph.
(a) If to Seller:
RG America, Inc.
Restoration Group America 2003, Inc.
Restoration Group America, Inc.
RG Restoration, Inc.
RG Insurance Services, Inc.
CTFD, Inc.
CTFD Marine, Inc.
RG Risk Management, Inc.
Invvision Funding, Inc.
Practical Building Solutions 2000, Inc.
RG Florida GC, Inc.
Attn: James Rea
1507 Capital Avenue, Suite 101
Plano, Texas 75074
Facsimile: (972) 665-0865

 

-22-

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With a copy (which shall not constitute notice) to:
Hughes & Luce LLP
1717 Main Street
Suite 2800
Dallas, Texas 75201
Attention: I. Bobby Majumder, Esq.
Facsimile: (214) 939-5849
(b) If to Purchaser:
Fireline Restoration, Inc.
Attn: Brian Marshall, President
3018 Horatio Street
Tampa, Florida 33609
Facsimile: (813) 353-972
9.10 GOVERNING LAW. THIS AGREEMENT SHALL BE GOVERNED BY, AND CONSTRUED IN
ACCORDANCE WITH, THE LAWS OF THE UNITED STATES AND THE STATE OF TEXAS AND WILL,
TO THE MAXIMUM EXTENT PRACTICABLE, BE DEEMED TO CALL FOR PERFORMANCE IN DALLAS
COUNTY, TEXAS.
9.11 Effect of Captions. The captions of sections of this Agreement shall have
been inserted solely for convenience and reference, and shall not control or
affect the meaning or construction of any of the provisions of this Agreement.
9.12 Entire Agreement; Modification; Waiver. This Agreement constitutes the
entire Agreement between the Seller and the Purchaser pertaining to the subject
matter contained herein, and supersedes all prior agreements, representations
and all understandings of the parties. The parties acknowledge and agree that no
supplement or amendment of this Agreement shall be binding unless expressed as
such and executed in writing by the Seller and the Purchaser. No waiver of any
of the provisions of this Agreement shall be deemed or constitute a waiver of
any other provision, whether or not similar, nor shall any waiver constitute a
continuing waiver.
[The remainder of this page is left blank intentionally.]

 

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IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be executed
as of the day and year first above written.

          SELLER:   RG AMERICA, INC.
 
       
 
  By:   /s/ James A. Rea
 
       
 
  Name:   James A. Rea
 
  Title:   Chief Executive Officer
 
        PURCHASER:   FIRELINE RESTORATION, INC.
 
       
 
  By:   /s/ Brian Marshall
 
       
 
  Name:   Brian Marshall
 
  Title:   President
 
        OTHER SELLER ENTITIES:   RESTORATION GROUP AMERICA, 2003, INC.
 
       
 
  By:   /s/ James A. Rea
 
       
 
  Name:   James A. Rea
 
  Title:   Chief Executive Officer
 
            RESTORATION GROUP AMERICA, INC.
 
       
 
  By:   /s/ James A. Rea
 
       
 
  Name:   James A. Rea
 
  Title:   Chief Executive Officer
 
            RG RESTORATION, INC.
 
       
 
  By:   /s/ James A. Rea
 
       
 
  Name:   James A. Rea
 
  Title:   Chief Executive Officer

 

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              RG INSURANCE SERVICES, INC.
 
       
 
  By:   /s/ James A. Rea
 
       
 
  Name:   James A. Rea
 
  Title:   Chief Executive Officer
 
            CTFD, INC.
 
       
 
  By:   /s/ James A. Rea
 
       
 
  Name:   James A. Rea
 
  Title:   Chief Executive Officer
 
            CTFD MARINE, INC.
 
       
 
  By:   /s/ James A. Rea
 
       
 
  Name:   James A. Rea
 
  Title:   Chief Executive Officer
 
            RG RISK MANAGEMENT, INC.
 
       
 
  By:   /s/ James A. Rea
 
       
 
  Name:   James A. Rea
 
  Title:   Chief Executive Officer
 
            INVVISION FUNDING, INC.
 
       
 
  By:   /s/ James A. Rea
 
       
 
  Name:   James A. Rea
 
  Title:   Chief Executive Officer

 

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              PRACTICAL BUILDING SOLUTIONS 2000, INC.
 
       
 
  By:   /s/ James A. Rea
 
       
 
  Name:   James A. Rea
 
  Title:   Chief Executive Officer
 
            RG FLORIDA GC, INC.
 
       
 
  By:   /s/ James A. Rea
 
       
 
  Name:   James A. Rea
 
  Title:   Chief Executive Officer

AGREED AND ACCEPTED AS TO SECTION 4.06(c):

     
/s/ James Rea
 
James Rea
   

 

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THE PROVISIONS OF SECTION 1.02 ARE HEREBY AGREED TO AND ACCEPTED:

              HOME SOLUTIONS OF AMERICA, INC.
 
       
 
  By:   /s/ Jeff Mattich
 
       
 
  Name:
Title:   Jeff Mattich
Chief Financial Officer

 

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List of Exhibits

     
Exhibit A
  Royalty Agreement
 
   
Exhibit B
  Allocation of Purchase Price

List of Schedules

     
Schedule 1.01
  Assets
 
   
Schedule 2.03
  Liabilities
 
   
Schedule 3.05
  Liens
 
   
Schedule 3.08
  Litigation
 
   
Schedule 3.11
  Absence of Undisclosed Information
 
   
Schedule 3.16
  Intellectual Property

 

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EXHIBIT A
Royalty Agreement

 

 

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EXHIBIT B
Allocation of Purchase Price