exv10w5





Exhibit
10.5



 





ASSET PURCHASE AGREEMENT




among




PW STEPHENS, INC.

as Seller




HOME SOLUTIONS OF AMERICA, INC.

as Parent




and




P.W. STEPHENS ENVIRONMENTAL, INC.

as Buyer




dated as of July 3, 2008




 






 









 








CONTENTS




	 	 	 	 	 
	 
	 	 	 	 
	ARTICLE I
	 	DEFINITIONS; INTERPRETATION	 	1
	 
	 	 	 	 
	1.1
	 	Definitions	 	1
	1.2
	 	Terms Defined Elsewhere	 	5
	1.3
	 	Interpretation	 	6
	 
	 	 	 	 
	ARTICLE II
	 	THE ASSET PURCHASE	 	6
	 
	 	 	 	 
	2.1
	 	Agreement to Purchase and Sell	 	6
	2.2
	 	Assets	 	6
	2.3
	 	Excluded Assets	 	7
	2.4
	 	Assumed Liabilities	 	7
	2.5
	 	Excluded Liabilities	 	8
	 
	 	 	 	 
	ARTICLE III
	 	CONSIDERATION	 	8
	 
	 	 	 	 
	3.1
	 	Consideration	 	8
	3.4
	 	Tax Allocation	 	9
	 
	 	 	 	 
	ARTICLE IV
	 	THE CLOSING	 	9
	 
	 	 	 	 
	4.1
	 	Closing	 	9
	4.2
	 	Closing Deliveries	 	9
	 
	 	 	 	 
	ARTICLE V
	 	REPRESENTATIONS AND WARRANTIES OF SELLER AND PARENT	 	11
	 
	 	 	 	 
	5.1
	 	Organization	 	11
	5.2
	 	Authorization	 	11
	5.3
	 	Non-Contravention	 	11
	5.4
	 	No Consents	 	12
	5.5
	 	Financial Matters	 	12
	5.6
	 	Tax Matters	 	12
	5.7
	 	Legal Proceedings	 	12
	5.8
	 	Compliance with Laws; Permits	 	12
	5.9
	 	Title to, Condition of, and Sufficiency of, Assets	 	13
	5.10
	 	Material Contracts	 	13
	5.11
	 	Intellectual Property	 	14
	5.12
	 	Insurance	 	14
	5.13
	 	Employment, Labor and Benefits Matters	 	15
	5.14
	 	Absence of Changes	 	15
	5.15
	 	No Brokers	 	16
	5.16
	 	Related Party Transactions; No Improper Payments	 	16
	5.18
	 	Disclosure	 	16
	5.19
	 	Solvency	 	16
	 
	 	 	 	 
	ARTICLE VI
	 	REPRESENTATIONS AND WARRANTIES OF BUYER	 	17
	 
	 	 	 	 
	6.1
	 	Organization	 	17
	6.2
	 	Authority	 	17
	6.3
	 	Non-Contravention	 	17
	6.4
	 	No Brokers	 	17
	6.5
	 	Disclosure	 	17
	 
	 	 	 	 
	ARTICLE VII
	 	ADDITIONAL COVENANTS	 	18






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	7.1
	 	Further Assurances; Post-Closing Cooperation	 	18
	7.2
	 	Employees	 	18
	7.3
	 	Transfer Taxes	 	19
	7.4
	 	Publicity	 	19
	7.5
	 	Confidential Information	 	19
	7.6
	 	Expenses	 	20
	7.7
	 	Bulk Sales	 	20
	7.8
	 	Timberline Software License	 	20
	 
	 	 	 	 
	ARTICLE VIII
	 	INDEMNIFICATION	 	20
	 
	 	 	 	 
	8.1
	 	Indemnification Obligations of Seller and Parent	 	20
	8.2
	 	Indemnification Obligations of Buyer	 	21
	8.3
	 	Notice of Claims	 	21
	8.4
	 	Procedure for Third Party Claims	 	21
	8.5
	 	Survival; Limitations	 	23
	 
	 	 	 	 
	ARTICLE IX
	 	MISCELLANEOUS	 	24
	 
	 	 	 	 
	9.1
	 	Entire Understanding	 	24
	9.2
	 	Severability; Joint Drafting	 	24
	9.3
	 	Waiver and Amendment	 	24
	9.4
	 	Headings	 	24
	9.5
	 	Governing Law; Dispute Resolution; Jury Trial Waiver	 	24
	9.6
	 	Notices	 	25
	9.7
	 	Assignment; No Third Party Beneficiaries	 	25
	9.8
	 	Specific Performance	 	25
	9.9
	 	Counterparts	 	26






	 	 	 
	 
	 	 
	INDEX OF EXHIBITS:
	 
	 	 
	Exhibit A 
	 	Form of Bill of Sale
	Exhibit B 
	 	Form of Employee Services Agreement
	 
	 	 
	INDEX OF DISCLOSURE SCHEDULES:
	 
	 	 
	Schedule 2.2(b) 
	 	Assumed Contracts
	Schedule 2.3(g) 
	 	Certain Excluded Assets
	Schedule 2.4(b) 
	 	Assumed Liabilities
	Schedule 3.2 
	 	Purchase Price Adjustment
	Schedule 3.3 
	 	Purchase Price Allocation
	Schedule 5.4 
	 	Approvals
	Schedule 5.5 
	 	Financial Statements
	Schedule 5.7 
	 	Legal Proceedings
	Schedule 5.8(a) 
	 	Compliance with Applicable Laws
	Schedule 5.8(b) 
	 	Permits
	Schedule 5.9 
	 	Condition of Assets
	Schedule 5.10(a) 
	 	Material Contracts
	Schedule 5.10(d) 
	 	Leases
	Schedule 5.11(a) 
	 	IP
	Schedule 5.11(b) 
	 	Seller’s Rights to IP
	Schedule 5.12(a) 
	 	Seller Insurance Policies
	Schedule 5.13(a) 
	 	Employees and Independent Contractors
	Schedule 5.13(d) 
	 	Plans






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	Schedule 5.17 
	 	Hazardous Substances
	Schedule 7.2(a) 
	 	Transferred Employees







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ASSET PURCHASE AGREEMENT



THIS ASSET PURCHASE AGREEMENT (this “Agreement”) is entered into as of July 3, 2008 (the
“Effective Date”) among PW STEPHENS, INC., a California corporation (“Seller”),
Home Solutions of America, Inc., a Delaware corporation (“Parent”), and P.W. STEPHENS
ENVIRONMENTAL, INC., a Delaware corporation (“Buyer”). Seller, Parent and Buyer are
sometimes referred to herein interchangeably and collectively, as context requires, as a
“Party” or the “Parties.”



WHEREAS, the Parties desire to enter into this Agreement pursuant to which Seller proposes to sell
to Buyer, and Buyer proposes to purchase from Seller, substantially all of the assets used or held
for use by Seller in the conduct of the Business (as defined below), and Buyer proposes to assume
certain liabilities of Seller with respect to the Business; and



WHEREAS, the Parties desire to make and enter into certain representations, warranties and
covenants in connection with the transactions contemplated hereby.



NOW, THEREFORE, in consideration of the foregoing and the respective representations, warranties,
and covenants set forth herein, intending to be legally bound, the Parties agree as follows:




ARTICLE I DEFINITIONS; INTERPRETATION.



1.1 Definitions. These terms shall, for all purposes of this Agreement, have the following
meaning:




     (a) “Action” means any action, claim, proceeding, arbitration, suit, investigation or
regulatory inquiry or survey (whether civil, criminal, administrative or judicial), or any appeal
therefrom (including any claim, audit, litigation, administrative proceeding or arbitration against
any Person involving any matter related to employment including, but not limited to, claims of
discrimination, claims of unpaid wages, claims of wrongful discharge, claims of unfair labor
practices, workers’ compensation claims, and claims related to occupational safety and health law).



     (b) “Affiliate” means, with respect to any Person, any other Person directly or
indirectly controlling, controlled by, or under common control with such Person.



     (c) “Approval” means any approval, authorization, consent, license, franchise, order,
registration or permit of or by, filing with, or notice to, any Person.



     (d) “Business” means the business, as conducted by Seller as of the date hereof.



     (e) “Business Day” means any day except Saturday, Sunday or any day on which banks are
authorized or required by Law to close in Baltimore, Maryland.



     (f) “Closing Payment” means Five Million Dollars ($5,000,000) subject to adjustment as
set forth in Section 3.2.



     (g) “Code” means the Internal Revenue Code of 1986, as amended.



     (h) “Confidential Information” means any confidential or proprietary non-public
information concerning the Business that is known by Parent or Seller, but does not include
information that is or becomes (through no improper action or inaction, including a breach of this
Agreement, by Parent or Seller) generally available to the public after the date hereof.



 









 





     (i) “Contract” means any written or oral agreement, arrangement, lease, mortgage,
contract, note, power of attorney, insurance policy covenant, understanding, commitment or
instrument.



     (j) “Conveyance Documents” means, interchangeably and collectively as the context
requires, the Bill of Sale, the Seller Closing Certificate, the Buyer Closing Certificate, and all
other documents executed and delivered by Seller and Buyer at the Closing for the purpose of
evidencing the transactions contemplated hereby.



     (k) “Damages” means any loss, Liability, diminution of value, fine, penalty, judgment,
award, cost or expense (including, without limitation, reasonable attorneys’ fees or any other
reasonable out-of-pocket expenses incurred in connection with any Action) or damage.



     (l) “DeLage Lease” means that certain Equipment Lease, dated as of February 28, 2005,
by and between De Lage Landen Financial Services, Inc. and the Seller.



     (m) “Employees” means individuals employed in connection with the Business (including
those who are actively employed or on leave, disability or other absence from employment, and
including officers and directors).



     (n) “Environmental Law” shall mean any federal, state or local laws, statute,
ordinance or regulation pertaining to health, industrial hygiene, natural resources, or the
environment, including without limitation the Comprehensive Environmental Response, Compensation,
and Liability Act of 1980, as amended, 42 U.S.C. Sections 9601, et. seq. (“CERCLA”) and the
Resource Conservation and Recovery Act of 1978, as amended, 42 U.S.C. Section 6901, et.
seq.(“RCRA”).



     (o) “Enterprise Fleet Lease” means that certain Master Equity Lease Agreement, dated
as of May 1, 1999, by and between Enterprise Fleet Services and Seller.



     (p) “ERISA” means the Employee Retirement Income Security Act of 1974, as amended.



     (q) “GAAP” means United States generally accepted accounting principles consistently
applied.



     (r) “Government Entity” means any federal, state, local or foreign government, court,
agency (administrative, arbitrative, regulatory or otherwise), commission, department or other
authority or instrumentality.



     (s) “Hazardous Substance” shall mean:



          (i) Those substances within the definitions of “hazardous substances” in CERCLA, or “hazardous
wastes” or “solid waste” in RCRA, or the regulations promulgated pursuant to said laws;




          (ii) Those substances listed as a “hazardous material” by the United States Department of
Transportation or as “hazardous substances” by the Environmental Protection Agency; and




          (iii) Oil, petroleum, or any other substances, materials and wastes which are listed,
classified, defined, or regulated under the Environmental Laws.




     (t) “Highest Management Authority” means, with respect to any entity, (i) the Person
or group of Persons (as the case may be) who are elected or appointed by the owner(s) of such
entity to manage the business and affairs of such entity (by way of example, but not in limitation,
the board of



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directors of a corporation), including all committees thereof; or (ii) if there is no Person
or group of Persons within the scope of the preceding clause (i), the owner(s) of such entity (by
way of example, but not in limitation, the members of a member-managed limited liability company).



     (u) “Indemnified Party” means any Person entitled to indemnification pursuant to
Article VIII.



     (v) “Indemnifying Party” means any Person required to indemnify an Indemnified Party
pursuant to Article VIII.



     (w) “Independent Contractors” means individuals engaged as independent contractors in
connection with the Business.



     (x) “IP” means, interchangeably and collectively as context requires, the following:
(i) copyrights; (ii) patents and invention disclosures, including continuations, divisionals,
continuations-in-part, renewals and reissues; (iii) trademarks, service marks, trade names, trade
dress, designs, logos, emblems, signs or insignia, slogans, and other similar designations of
source or origin, together with all goodwill symbolized by the foregoing; (iv) copyrights and
copyrightable material; (v) trade secrets and other confidential information, know-how, customer
lists, prospect lists, business plans, inventions, proprietary processes, formulae, algorithms,
models and methodologies; (vi) rights of publicity and privacy relating to the use of the names,
likenesses, voices, signatures and biographical information of natural Persons; (vii) all rights
with respect to computer programs, computer program code, the algorithms underlying any computer
program, data and databases, to the extent not otherwise embodied in the foregoing clauses
(i)-(vii); (viii) all rights with respect to domain names, internet protocol addresses, software
code signing certificates, secure socket layer certificates and telephone numbers, to the extent
not otherwise embodied in the foregoing clauses (i)-(viii); (ix) all moral rights and/or rights of
attribution and/or integrity in any of the foregoing; (x) registrations and applications for any of
the foregoing; and (xi) the right to sue for past infringement of any of the foregoing.



     (y) “Laws” means all federal, state, local or foreign laws (including common law),
codes, statutes, ordinances, orders, judgments, arbitration awards, decrees, administrative or
judicial promulgations, injunctions, determinations, rules, regulations, Permits of, and agreements
with, all Governmental Entities, including, to the extent applicable, any of the foregoing
regarding (i) human health and safety; (ii) soil, land surface or subsurface strata, surface
waters, groundwaters, drinking water supply, stream sediments, ambient air (including indoor air),
plant and animal life and any other environmental medium or natural resource; or (iii) any
hazardous substances, oils, pollutants, contaminants, chemicals, materials or wastes, including
medical and other biohazardous waste, and/or the disposal thereof.



     (z) “Liability” means any debt, liability, commitment or obligation of any kind,
character or nature whatsoever, secured or unsecured, accrued, fixed, absolute, contingent or
otherwise, and whether due or to become due.



     (aa) “Liens” means all mortgages, liens, pledges, security interests, charges, claims,
restrictions, leases, possessory rights, options, rights of first refusal, covenants, easements,
title and survey matters and any other encumbrance, right or interest of any kind or character,
whether vested or contingent, including any (i) interest of joint tenants, tenants in common and
tenants by the entirety; (ii) community or other marital property interest; or (iii) interests
arising from any divorce decree, separation agreement, prenuptial agreement or other similar
domestic relations order or agreement.



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     (bb) “Material Adverse Effect” means (i) a material adverse effect on the condition
(financial or otherwise), operating results, operations, assets or properties of the Business taken
as a whole, or (ii) a material adverse effect on the ability of Seller or Parent to consummate the
transactions contemplated by this Agreement, other than, in either case, an effect resulting from
an Excluded Matter. “Excluded Matter” means any one or more of the following: (a) the
effect of any economic, financial or market change that generally affects the industry in which the
Business operates; (b) the effect of any change arising in connection with earthquakes,
hostilities, acts of war, sabotage or terrorism or military actions or any escalation or material
worsening of any such hostilities, acts of war, sabotage or terrorism or military actions existing
or underway as of the date hereof; (c) the effect of any changes in applicable Laws or accounting
rules; or (d) any effect resulting from the public announcement of this Agreement, compliance with
terms of this Agreement or the consummation of the transactions contemplated by this Agreement.



     (cc) “Ordinary Course” means the ordinary course of the Business, consistent with past
practice in nature, scope and magnitude.



     (dd) “Organizational Documents” means, (i) with respect to a corporation, the
corporation’s articles or certificate of incorporation and bylaws; or (ii) with respect to a
limited liability company, the limited liability company’s articles or certificate of organization
or formation and operating agreement; and (iii) all amendments and supplements to any of the
foregoing.



     (ee) “Permits” means all Approvals, permits (including environmental, construction and
operation permits), certificates, exemptions, classifications, registrations and other similar
documents, rights and authorizations issued by any Government Entity (but not including patents,
copyrights and trademarks).



     (ff) “Permitted Liens” means: (i) liens imposed by Law for Taxes, assessments or
charges or claims by Governmental Entities that are not yet due or are being properly contested
(provided such contest tolls collection of such taxes and the lien thereof and provided that
reasonably acceptable reserves are being maintained); (ii) carriers’, warehousemen’s, mechanics’,
materialmen’s, repairmen’s, landlords’ and other like liens imposed by Law or contract, arising in
the Ordinary Course and securing obligations that are not due and payable; (iii), solely with
respect to personal property, pledges and deposits made in the Ordinary Course in compliance with
workers’ compensation, unemployment insurance and other social security Laws or regulations; and
(iv), solely with respect to personal property, deposits to secure the performance of bids, trade
contracts, leases, statutory obligations, surety, indemnity and appeal bonds, performance and
return-of-money and fiduciary bonds and other obligations of a like nature, in each case in the
Ordinary Course.



     (gg) “Person” means an individual, a sole proprietorship, a partnership, a
corporation, an association, an institution, a joint stock company, a limited liability company, a
trust, a joint venture, an unincorporated organization, or a Government Entity or any other legal
entity.



     (hh) “Plans” means, interchangeably and collectively as context requires, all deferred
compensation and incentive compensation, stock purchase, stock option and other equity compensation
plans, programs, Contracts or arrangements; all severance or termination pay, medical, surgical,
hospitalization, life insurance and other “welfare” plans, funds or programs (within the meaning of
section 3(1) of ERISA); all profit-sharing, stock bonus or other “pension” plans, funds or programs
(within the meaning of section 3(2) of ERISA); all employment, termination or severance Contracts;
and all other employee benefit plans, funds, programs or Contracts, in each case that is sponsored,
maintained or contributed to or required to be contributed to by Seller or either Subsidiary for
the benefit of any current or former Employees.



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     (ii) “Retained Employees” means Employees and who are not Transferred Employees.



     (jj) “Seller Receivables” means all accounts receivable, other rights to payment from
customers, and notes receivable of Seller, and the full benefit of all security for all of the
foregoing, and all claims, remedies and other rights related to all of the foregoing.



     (kk) “Seller’s Knowledge” means all facts actually known, or with reasonable
investigation would have been known, by Frank Fradella and the executive officers of the Parent.



     (ll) “Subsidiaries” means Ronnie Tassin Enterprises, Inc., a California corporation,
d/b/a “Marble Man Stone Shapers,” and Fiber-Seal of Los Angeles, Inc., a California corporation.



     (mm) “Taxes” means all taxes, assessments, charges, duties, fees, levies or other
governmental charges (including interest, penalties or additions associated therewith), including
income, franchise, capital stock, real property, personal property, tangible, withholding,
employment, payroll, social security, unemployment compensation, disability, transfer, sales, use,
excise, gross receipts, value-added and all other taxes of any kind imposed by any Government
Entity, whether disputed or not, and any charges, interest or penalties imposed or that may be
imposed thereon by any Government Entity.



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


1.2 Terms Defined Elsewhere. In addition to the terms defined in Section 1.1, each
of the following terms is defined in the Section set forth opposite such term:




	 	 	 	 	 
	Term	 	Section
	 
	 	 	 	 
	Agreement

	 	Preamble

	Annual Financials

	 	5.5(a)
	Assets

	 	 	2.2
	Assumed Contracts

	 	 	2.2(b)
	Assumed Liabilities

	 	 	2.4
	Basket Amount

	 	 	8.5(c)
	Bill of Sale

	 	 	4.2(a)(i)
	Buyer

	 	Preamble

	Buyer Parties

	 	 	8.1
	Buyer Closing Certificate

	 	4.2(b)(vii)

	Claim Notice

	 	 	8.3
	Claims Period

	 	 	8.5(a)
	Closing

	 	 	4.1
	Closing Date

	 	 	2.1
	De Minimis Investment

	 	 	5.16(a)
	Effective Date

	 	Preamble

	Employee Services Agreement

	 	4.2(a)(ii)

	Excluded Assets

	 	 	2.3
	Excluded Contracts

	 	 	2.5(c)
	Excluded Liabilities

	 	 	2.5
	Financial Statements

	 	 	5.5(a)
	HSRL Loan

	 	 	4.2(a)(x)
	Interim Balance Sheet

	 	 	5.5(a)






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	Term	 	Section
	Interim Financials

	 	 	5.5(a)
	License Agreements

	 	 	5.10(a)(x)
	Lien Releases

	 	 	4.2(a)(x)
	Material Contracts

	 	 	5.10(a)
	Parent

	 	Preamble

	Parent Stockholder Claim

	 	 	8.1(d)
	Parties

	 	Preamble

	Payoff Letters

	 	4.2(a)(ix)

	Purchase Price

	 	 	3.1
	Related Party

	 	 	5.16(a)
	Response Period

	 	 	8.4(a)
	Seller

	 	Preamble

	Seller Insurance Policies

	 	 	5.12(a)
	Seller Parties

	 	 	8.2
	Seller Closing Certificate

	 	4.2(a)(iv)

	Third Party Action

	 	 	8.4(a)
	Third Party Action Notice

	 	 	8.4(a)
	Transferred IP

	 	 	2.2(c)
	Transferred Employees

	 	 	7.2(a)





1.3 Interpretation. Unless the context of this Agreement otherwise clearly requires, (a)
references to the plural include the singular, and references to the singular include the plural,
(b) references to any gender include the other genders, (c) the words “include,” “includes” and
“including” do not limit the preceding terms or words and shall be deemed to be followed by the
words “without limitation”, (d) the terms “hereof”, “herein”, “hereunder”, “hereto” and similar
terms in this Agreement refer to this Agreement as a whole and not to any particular provision of
this Agreement, (e) the terms “day” and “days,” if not capitalized, mean and refer to calendar
day(s), and (f) the terms “year” and “years” mean and refer to calendar year(s). Unless otherwise
set forth herein, references in this Agreement to any document, instrument or agreement (including
this Agreement) (A) includes and incorporates all schedules and other attachments thereto, (B)
includes all documents, instruments or agreements issued or executed in replacement thereof and (C)
means such document, instrument or agreement, or replacement or predecessor thereto, as amended,
modified or supplemented from time to time in accordance with its terms and in effect at any given
time. Unless otherwise specified, (x) all Article, Section and Schedule references herein are to
Articles, Sections and Schedules of this Agreement; (y) all accounting terms not defined in this
Agreement shall be construed in accordance with GAAP; and (z) the terms “financing statement” and
“termination statement” shall have the meanings assigned thereto in Article 9 of the Uniform
Commercial Code.




ARTICLE II THE ASSET PURCHASE.



2.1 Agreement to Purchase and Sell. Subject to the terms, conditions and other provisions
of this Agreement, at the Closing, Seller is granting, selling, assigning, transferring and
delivering to Buyer, and Buyer is purchasing from Seller, all right, title and interest of Seller
in and to all of the Assets (as hereinafter defined), free and clear of all Liens except for
Permitted Liens, and Buyer is assuming only the Assumed Liabilities. The date of the Closing is
referred to as the “Closing Date.”



2.2 Assets. Except as otherwise expressly set forth in Section 2.3, the term
“Assets” shall mean all the assets, properties and rights of Seller used, or held for use,
in the Business, including, without limitation:




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     (a) all furnishings, furniture, supplies, tools, machinery, equipment, vehicles and other
personal property and fixed assets that are owned by Seller and are used in the Business;



     (b) the Contracts listed on Schedule 2.2(b) (the “Assumed Contracts”);



     (c) all IP used or held for use in the Business, and all rights of Seller therein (the
“Transferred IP”);



     (d) all goodwill of the Business;



     (e) all prepaid expenses of the Business;



     (f) all inventory of the Business;



     (g) all original books and records of the Business, including, to the extent permitted by
applicable Law, all personnel records for Transferred Employees (after the termination of the
Employee Services Agreement), but not including personnel records for any Retained Employees;



     (h) all Permits related to the Business, to the extent transferable to Buyer pursuant to
applicable Law;



     (i) all cash and cash equivalents of Seller and all Seller Receivables;



     (j) the Enterprise Fleet Lease and the DeLage Lease;



     (k) The Seller’s rights under the HSRL Loan, unless Buyer waived the requirement of the HSRL
Loan; and



     (l) 100% of the ownership interest in each Subsidiary.


2.3 Excluded Assets. Notwithstanding anything herein to the contrary, the Assets will not
include the following assets, properties and rights of Seller (collectively, the “Excluded
Assets”):




     (a) all insurance policies of Seller;



     (b) all Plans;



     (c) all Permits that Seller is prohibited by applicable Law from transferring to Buyer;



     (d) personnel records for Retained Employees and, to the extent Seller is prohibited by
applicable Law from transferring such records to Buyer, for Transferred Employees;



     (e) the Organizational Documents of Seller and the minute books of Seller;



     (f) the rights that accrue to Seller under this Agreement and any other agreements between
Seller and Buyer to be delivered pursuant to this Agreement; and



     (g) the assets, properties and/or rights listed on Schedule 2.3(g).


2.4 Assumed Liabilities. In connection with the purchase by Buyer of the Assets, at and
effective as of the Closing, Buyer is assuming the following Liabilities relating to the Business
(collectively, the “Assumed Liabilities”), and no other Liabilities:




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     (a) Liabilities of Seller under the Assumed Contracts that are to be paid, performed or
discharged by such Seller after the Closing;



     (b) the accounts payable and accrued expenses listed on Schedule 2.4(b);



     (c) Liabilities under the Enterprise Fleet Lease and the DeLage Lease; and



     (d) Liabilities attributable to, or arising out of, the ownership of the Assets and the
operation of the Business after the Closing.


2.5 Excluded Liabilities. Notwithstanding anything herein to the contrary, the Assumed
Liabilities will not include, and in no event will Buyer assume, agree to pay, discharge or
satisfy, or otherwise have any responsibility for, any Liability of Parent or Seller of any kind,
whether known, unknown, contingent or otherwise other than those expressly described in Section
2.4 (collectively, the “Excluded Liabilities”), including all Liabilities of Seller of
any kind:




     (a) for any Taxes of Parent, Seller or any Affiliate of Parent or Seller, including any
payroll Taxes with respect to any Employee or Independent Contractor;



     (b) pertaining to any Excluded Asset;



     (c) under any Contract other than the Assumed Contracts (the “Excluded Contracts”);



     (d) arising out of or related to any Plan;



     (e) related to Retained Employees;



     (f) related to Transferred Employees to the extent such Liability is attributable to events or
circumstances occurring or existing at or prior to the Closing;



     (g) under the Assumed Contracts arising prior to the Closing;



     (h) relating to any payables from Seller to Parent or any affiliate of Parent or Seller;



     (i) owed to any former employee, contractor, officer, director, owner, member, shareholder or
partner of Seller, Parent or any of their Affiliate, including any Parent Stockholder Claims; or



     (j) without limiting any of the foregoing, otherwise attributable to or arising out of the
ownership or operation of any Assets or the Business (including any liabilities owed to
stockholders of the Seller) as of or prior to the Closing.



ARTICLE III CONSIDERATION.



3.1 Consideration. The consideration for the Assets (the “Purchase Price”) is (a)
the Closing Payment (subject to adjustment in accordance with Section 3.2 below), and (b) the
assumption of the Assumed Liabilities by Buyer.



3.2 Purchase Price Adjustment. The Closing Payment shall be adjusted on a
dollar-for-dollar basis (a) upward, to the extent that Parent provided Seller cash for working
capital purposes between May 31, 2008 and Closing; and (b) downward, to the extent that Seller
provided cash to Parent between May 31, 2008 and Closing, to (i) to pay any liability of the Parent
(ii) to pay liabilities of Seller to Parent or (iii) for any purpose other than the payment of
liabilities of the Seller. One day prior to Closing, Parent and




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Seller shall provide Buyer a statement (with reasonable supporting documentation) of the amounts
contemplated by this Section 3.2, which statement shall, as of the Closing Date, become
Schedule 3.2 to this Agreement.



3.3 Tax Allocation. The Purchase Price shall be allocated in accordance with Schedule
3.3, which shall be prepared by Buyer prior to Closing. The Parties agree to make consistent
use of such allocation for all Tax purposes and in all filings with, and declarations and reports
to, all Governmental Entities. In any Action relating to the determination of any Tax, no Party
shall contest such allocation or assert that such allocation is not correct.




ARTICLE IV THE CLOSING.



4.1 Closing. The closing of the transactions contemplated by this Agreement (the
“Closing”) is occurring simultaneously with the execution of this Agreement at the offices
of Venable LLP in Baltimore, Maryland or, at the election of the Parties, the Closing may take
place by facsimile or electronic mail delivery of closing documents.



4.2 Closing Deliveries. At the Closing:




     (a) Seller and Parent will deliver (executed as applicable) to Buyer:




	 	(i)	 	possession of the Assets and a Bill of Sale, Assignment and
Assumption Agreement from Seller in the form of Exhibit A (the
“Bill of Sale”);
	 
	 	(ii)	 	Employee Services Agreement from Seller in the form of
Exhibit B (the “Employee Services Agreement”);
	 
	 	(iii)	 	An opinion of counsel to Parent in a the form previously
approved by Buyer;
	 
	 	(iv)	 	written certification by Parent and Seller that (A) the
representations and warranties of Seller and Parent set forth in this Agreement
are true and correct in all material respects (except that those
representations and warranties that are limited by materiality are true and
correct in all respects) as of the Effective Date (except where such
representations or warranties are made expressly as of a specific date and then
as of such date); and (B) Seller and Parent have performed in all material
respects all obligations required to be performed by each of them under this
Agreement at or prior to the Closing (the “Seller and Parent Closing
Certificate”);
	 
	 	(v)	 	a certificate of good standing issued by the appropriate state
office with respect to Parent, Seller and the Subsidiaries within twenty (20)
days prior to the Effective Date;
	 
	 	(vi)	 	a copy of the resolutions of Seller’s Highest Management
Authority and owner(s) and resolutions of the Board of Directors of Parent
approving this Agreement and the transactions contemplated hereby, all of which
shall be certified by an authorized officer of Parent or Seller, as applicable;
	 
	 	(vii)	 	the approval of the lenders under the Credit Agreement dated
on or about November 1, 2006, as amended, among Parent, Texas Capital Bank,
National




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	 	 	 	Association, as Administrative Agent and a lender, the other lenders party
thereto and certain other parties;
	 
	 	(viii)	 	a payoff letter executed by each creditor to whom Seller is indebted, or to
whom Parent or any Affiliate of Seller or Parent is indebted in connection with
the Business (collectively, the “Creditors”), (A) pursuant to which
such creditor acknowledges and agrees as to the total payoff amount required to
completely satisfy such indebtedness, and (B) containing wire transfer or other
transmittal instructions for delivery of such payoff amount (the “Payoff
Letters”);
	 
	 	(ix)	 	documents executed by each Creditor terminating and releasing
all of the Creditor’s Liens on assets owned by Seller or otherwise used or held
for use in the Business (the “Lien Releases”);
	 
	 	(x)	 	Evidence of a loan in the amount of $500,000 from Seller to
Home Solutions Restoration of Louisiana, in a form reasonably acceptable to
Buyer (the “HSRL Loan”); and
	 
	 	(xi)	 	such other documents as are required under this Agreement.




(b) Buyer is delivering (executed as applicable) to Seller:





	 	(i)	 	by wire transfer of immediately available funds to a bank
account in the United States specified in advance by Seller, the Closing
Payment;
	 
	 	(ii)	 	the Employee Services Agreement;
	 
	 	(iii)	 	the Bill of Sale;
	 
	 	(iv)	 	[Reserved];
	 
	 	(v)	 	[Reserved];
	 
	 	(vi)	 	written certification by an authorized officer of Buyer that
(A) the representations and warranties of Buyer set forth in this Agreement are
true and correct in all material respects (except that those representations
and warranties that are limited by materiality are true and correct in all
respects) as of the Effective Date (except where such representations or
warranties are made expressly as of a specific date and then as of such date);
and (B) Buyer has performed in all material respects all obligations required
to be performed by it under this Agreement at or prior to the Closing (the
“Buyer Closing Certificate”);
	 
	 	(vii)	 	a certificate of good standing issued by the appropriate state
office with respect to Buyer within twenty (20) days prior to the Effective
Date;
	 
	 	(viii)	 	a copy of the resolutions of Buyer’s Highest Management Authority approving
this Agreement and the transactions contemplated hereby, which shall be
certified by an authorized officer of Buyer; and
	 
	 	(ix)	 	such other documents as are required under this Agreement.




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ARTICLE V   REPRESENTATIONS AND WARRANTIES OF SELLER AND PARENT.




Seller and Parent jointly and severally represent and warrant to Buyer as follows:


5.1 Organization. Seller and each Subsidiary (a) is a corporation duly organized, validly
existing and in good standing under the laws of the state of its incorporation; (b) has corporate
power to carry on the Business to the extent it is now being conducted; (c) is not required to be
qualified or licensed to do business in any jurisdiction (except where the failure to be so
qualified or licensed would not reasonably be expected, individually or in the aggregate, to have a
Material Adverse Effect), and Seller or the Subsidiary, as applicable, is so qualified or licensed
in such jurisdictions; (d) has made available to Buyer true and complete copies of Seller’s and
each Subsidiaries Organizational Documents, each as amended to date, which Organizational Documents
are in full force and effect; and (e) is not in violation of any provision of its Organizational
Documents. Seller has no subsidiaries or any direct or indirect ownership interest in any other
Person other than the Subsidiaries. No Person other than Parent has any ownership interest in
Seller. Parent (a) is a corporation duly organized, validly existing and in good standing under
the laws of the state of its incorporation; and (b) has made available to Buyer true and complete
copies of Seller’s and each Subsidiaries Organizational Documents, each as amended to date, which
Organizational Documents are in full force and effect.



5.2 Authorization. Seller and Parent each have the right, power and capacity to execute
and deliver this Agreement, the Conveyance Documents and any other agreement entered into in
connection with this Agreement to which it is a party, and to perform its respective obligations
under this Agreement, the Conveyance Documents and any other agreement entered into in connection
with this Agreement to which it is a party, and to consummate the transactions contemplated hereby.
The execution and delivery of this Agreement, the Conveyance Documents and any other agreement
entered into in connection with this Agreement by Parent or Seller, and the performance by Parent
or Seller of its respective obligations hereunder and thereunder, and the consummation of the
transactions provided for herein and therein have been duly and validly authorized and approved by
all necessary corporate action on the part of Parent or Seller, as applicable. This Agreement, the
Conveyance Documents and any other agreement entered into in connection with this Agreement (a) has
been duly executed and delivered by Seller and Parent, and (b) constitutes a valid and binding
agreement of Seller and Parent, enforceable against Seller and Parent in accordance with their
respective terms, subject to applicable bankruptcy, insolvency, reorganization, moratorium and
other similar laws affecting the enforceability of creditors’ rights generally, general equitable
principles and the discretion of courts in granting equitable remedies.



5.3 Non-Contravention. Subject to receipt of the consents and approvals described in
Schedule 5.4, neither the execution and delivery of this Agreement, the Conveyance
Documents or any other agreement entered into in connection with this Agreement by Seller or
Parent, nor the consummation of the transactions contemplated hereby or thereby, does or would,
after the giving of notice or the lapse of time or both, (a) conflict with, result in a breach of,
constitute a default under, or violate the Organizational Documents of Parent or Seller, or any Law
applicable to Seller or Parent; (b) conflict with, result in a breach of, constitute a default
under, result in the acceleration of any rights or obligations under, create in any Person the
right to accelerate any rights or obligations under or amend, modify, cancel or refuse to perform
under, or require any notice under any Contract or other arrangement to which Seller or Parent is a
party or by which Seller or any of Seller’s assets or properties, or Parent or his assets or
properties, are bound, including, without limitation, any documents under which Parent, Seller or
either Subsidiary has incurred, assumed or guaranteed any indebtedness for borrowed money unless
such conflicts, violations, defaults, or creation of Liens or other rights, would not reasonably be
expected, individually or in the aggregate, to have a Material Adverse Effect; or (c) result in the
creation of, or give any Person the right to create, any Lien, other than Permitted Liens, or upon
any right, property or asset of Seller or Parent, including any Asset.




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5.4 No Consents. Except as otherwise set forth on Schedule 5.4, no Approval of any
Government Entity or other Person is required in connection with the execution, delivery and
consummation of this Agreement, or any other agreement entered into in connection with this
Agreement, by Seller and Parent, except where the lack of such Approvals would not reasonably be
expected, individually or in the aggregate, to have a Material Adverse Effect. For avoidance of
doubt, Schedule 5.4 includes a complete and accurate list of all Approvals required to
assign the Assumed Contracts to Buyer.



5.5 Financial Matters. Attached hereto as Schedule 5.5 is a copy of (a) the
unaudited balance sheet and the related unaudited statements of income, cash flows and
stockholders’ equity of Seller as of and for the twelve (12) month periods ended December 31, 2006
and 2007 (collectively, the “Annual Financials”); and (b) the unaudited, internally
prepared balance sheet (the “Interim Balance Sheet”) and related unaudited, internally
prepared statements of income and cash flows of Seller as of and for the five (5) month period
ended May 31, 2008 (the “Interim Financials” and, together with the Annual Financials, the
“Financial Statements”). Each of the balance sheets included in the Financial Statements
fairly presents in all material respects the financial position of Seller as of the date of such
balance sheet, and each of the statements of income and statements of cash flows included in the
Financial Statements (including any related schedules) fairly presents in all material respects the
results of operations of Seller for the periods set forth therein, in each case in accordance with
GAAP. Seller has no Liability except for Liabilities (y) reflected or reserved in the Interim
Balance Sheet, and (z) incurred in the Ordinary Course since the date of the Interim Balance Sheet.
No inventory (raw materials, work in process, finished goods or otherwise) is held by Seller or
otherwise held in connection with the Business.



5.6 Tax Matters.




     (a) Seller has (i) duly and timely filed (or there has been filed on its behalf) with the
appropriate Governmental Entities all Tax Returns required to be filed by it, and all such Tax
Returns are complete and accurate; and (ii) timely paid all Taxes due from such Seller (whether or
not set forth on any Tax Return). To Seller’s Knowledge, no federal, state, local or foreign
audits, review, or other Actions exist with regard to any Taxes or Tax Returns of Seller, and
Seller has not received any notice of any such audit, review or other Action.



     (b) The individual signing this Agreement on behalf of Seller (i) certifies on behalf of
Seller, pursuant to Treasury Regulations Sections 1.1445-2(c)(3) and 1.897-2(h), that Seller is
not, and within the five-year period ending on the Effective Date was not, a U.S. real property
holding corporation, as defined in Section 897 of the Code, and that no equity security of Seller,
option, right or warrant to acquire any equity security of Seller, or security or instrument
convertible into or exchangeable for any equity security of Seller is a U.S. real property interest
within the meaning of Section 897(c)(1) of the Code; (ii) declares, under penalties of perjury,
that he/she has examined the certification in Section 5.6(b)(i) and declares that such
certification is true, correct and complete to the best of his/her knowledge and belief; and (iii)
further declares that he/she has authority to make such certification on behalf of Seller.


5.7 Legal Proceedings. Except as set forth on Schedule 5.7, there are no Actions
pending or, to Seller’s Knowledge, threatened against, relating to or involving Seller or either
Subsidiary, any Asset or the Business. There are no actual or, to Seller’s Knowledge, threatened
Actions that present a claim to restrain or prohibit the transactions contemplated herein. There
are no unsatisfied judgments, orders, injunctions, decrees, stipulations or awards (whether
rendered by a court, administrative agency, or by arbitration, pursuant to a grievance or other
procedure) against or affecting Seller, either Subsidiary, any Asset or the Business.



5.8 Compliance with Laws; Permits.




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     (a) Except as set forth on Schedule 5.8, Seller has conducted and is conducting the
Business in compliance with all applicable Laws. Seller has not received any written or, to
Seller’s Knowledge, oral notification that has not lapsed or been withdrawn by any Government
Entity (i) asserting a violation by Seller or the Business of any Law, (ii) threatening to revoke
any Permit applicable to Seller, any of the Assets or the conduct of the Business, or (iii)
restricting or limiting the operations of the Business.



     (b) Schedule 5.8(b) lists all Permits required for the operation of the Business.
Seller has obtained and maintained, an is in compliance with, all such Permits, which are all in
full force and effect.


5.9 Title to, Condition of, and Sufficiency of, Assets. Seller is the sole and exclusive
legal and equitable owner of all right, title and interest in, and has good and marketable title to
all of the Assets, free and clear of any and all Liens, other than Permitted Liens. Except as set
forth on Schedule 5.9, the Assets are (a) in good operating condition and repair, and are
adequate for the uses to which they are being put, normal wear and tear excepted; and (b) all of
the assets required for the operation of the Business as it is presently conducted.



5.10 Material Contracts.




     (a) Schedule 5.10(a) sets forth, as of the date hereof, a complete and accurate list
of all Contracts of the following types (i) to which Seller (or Parent if expressly so stated), or
either Subsidiary, is a party, (ii) by which any of the Assets are bound, or which otherwise relate
to the Business (the contracts listed below in this Section 5.10(a) are collectively called
the “Material Contracts”):




	 	(i)	 	Contracts involving an investment by Seller or either
Subsidiary in any Person, including any partnership, limited liability company
or joint venture;
	 
	 	(ii)	 	Contracts under which Seller or either Subsidiary has incurred,
assumed or guaranteed any indebtedness for borrowed money;
	 
	 	(iii)	 	Contracts with Employees and Contracts with Independent
Contractors;
	 
	 	(iv)	 	Contracts under which Seller or either Subsidiary has agreed to
indemnify any Person;
	 
	 	(v)	 	Contracts under which Seller, Parent or either Subsidiary have
outsourced any aspect of the Business;
	 
	 	(vi)	 	Contracts containing any “change of control” provision with
respect to Seller or either Subsidiary;
	 
	 	(vii)	 	sales agency and/or marketing Contracts;
	 
	 	(viii)	 	Contracts by Parent, Seller or either Subsidiary involving non-competition or
any other restriction with respect to the geographical area, scope or type of
operations of the Business;
	 
	 	(ix)	 	Contracts by Parent, Seller or either Subsidiary under which
any revenue, profit or income of the Business is required to be, or may be,
shared with any third Person;










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	 	(x)	 	Contracts (including, without limitation, any outstanding
decrees, orders, judgments, settlement agreements or stipulations) pursuant to
which Parent, Seller or either Subsidiary is granted, or grants to any other
Person, any rights in any IP (the “License Agreements”);
	 
	 	(xi)	 	Contracts that involve aggregate payments in excess of Five
Thousand Dollars ($5,000) per annum; and
	 
	 	(xii)	 	to the extent not described elsewhere in this Section
5.10(c), Contracts by Parent, Seller or either Subsidiary that are material
to the Business or the financial position or results of operations of Seller.





     (b) Seller has delivered a complete and accurate copy of each Material Contract to Buyer.



     (c) Each Material Contract is in full force and effect and is legal, valid, binding and
enforceable against Parent, Seller or the applicable Subsidiary, as applicable, and, to Seller’s
Knowledge, all other parties thereto in accordance with its terms. There does not exist under any
Material Contract, or any contract pursuant to which the Parent has incurred, assumed or guaranteed
any indebtedness for borrowed money on a secured basis, any default or condition or event that,
after notice or lapse of time or both, would constitute a material default on the part of Parent,
Seller or either Subsidiary, or to Seller’s Knowledge, on the part of any other party to such
Material Contract. None of Seller or either Subsidiary is a party to any Contract pursuant to
which a current or former Employee or Independent Contractor is, or could reasonably be, entitled
to indemnification by Parent, Seller or the Subsidiaries.



     (d) Except as set forth on Schedule 5.10(d), neither Seller or the Subsidiaries is a
party to, and Assets are bound by, any lease of personal property or lease, sublease or license of
real property.


5.11 Intellectual Property. Schedule 5.11(a) sets forth a complete and correct
list of all IP owned by Parent, Seller or the Subsidiaries used or held for use in the Business,
identifying for each, as applicable, the serial number, registration number or application number.
Except as set forth on Schedule 5.11(b), the Transferred IP has been duly maintained, is
valid and subsisting, is in full force and effect and has not been cancelled, expired or abandoned.
To Seller’s Knowledge, neither any of the Assets nor the conduct of the Business infringes,
violates, dilutes, or interferes with, any IP rights of any Person. Seller has not brought or
threatened a claim against any Person alleging infringement, violation, misappropriation, or
dilution of, or interference with, any IP. No trade secrets included in the Transferred IP have
been disclosed to any third Person other than pursuant to a written non-disclosure agreement, and
no third Person that is a party to any such agreement with Seller is in breach or default thereof.
Parent has no right, title or interest in or to any of the Transferred IP.



5.12 Insurance.




     (a) Schedule 5.12(a)  sets forth a true and complete list of all insurance policies
and binders maintained by or for the benefit of Seller or any of Seller’s directors, agents,
Employees or Independent Contractors in their capacity as such (collectively, the “Seller
Insurance Policies”). Seller has made available to Buyer complete and accurate copies of all
Seller Insurance Policies. All Seller Insurance Policies are in full force and effect and no
premiums due and payable thereon are delinquent, and Seller has complied, and is in compliance
with, the provisions of the Seller Insurance Policies. There are no pending claims by Seller
against a Seller Insurance Policy as to which the applicable insurer has denied liability. There
are no pending claims against Seller Insurance Policy that have not been properly and timely
submitted by Seller pursuant to the terms and conditions of the applicable Seller Insurance Policy.



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     (b) Seller has obtained a professional liability insurance policy covering Seller, Parent and
the Employees for a period of no less than three (3) years after the Effective Date (the “Tail
Policy”), which policy is in full force and effect as of the Closing. 


5.13 Employment, Labor and Benefits Matters.




     (a) Schedule 5.13(a) sets forth a true and complete list of all Employees and
Independent Contractors employed or engaged as of the Effective Date, and also sets forth, for each
Employee listed thereon, (i) the Employee’s base annual salary or base hourly pay rate, as the case
may be, as of the Business Day immediately preceding the Effective Date; (ii) all changes in the
Employee’s base annual salary or base hourly pay rate during 2007 and 2008; (iii) the amount of
salary or hourly pay, as the case may be, and any other wages (as “wages” is defined in Section
3401 of the Code) actually paid to such Employee since December 31, 2006; (iv) the amount of any
bonus paid, promised to be paid, or which the Employee is eligible to be paid, in each case in or
with respect to 2007 and 2008; (v) the Employee’s start date; and (vi) the Employee’s termination
date, if applicable.



     (b) To Seller’s Knowledge, Seller or either Subsidiary, as applicable, has at all times
properly classified Employees and Independent Contractors as employees or independent contractors,
as appropriate. Seller or either Subsidiary, as applicable, has at all times properly classified
Employees as exempt or non-exempt for purposes of the Fair Labor Standards Act. To Seller’s
Knowledge, all employment terminations effectuated by Seller or either Subsidiary, as applicable,
including, but not limited to, layoffs, were effectuated in compliance, in all material respects,
with all laws, statutes, regulations or ordinances governing employment or separation from
employment including, but not limited to, the Age Discrimination In Employment Act, Title VII of
the Civil Rights Acts of 1964 and 1991 as amended, the Consolidated Omnibus Budget Reconciliation
Act of 1985, the Americans With Disabilities Act, the Rehabilitation Act of 1973, the Family and
Medical Leave Act, the Fair Labor Standards Act, the Worker Adjustment and Retraining Act, and
ERISA.



     (c) To Seller’s Knowledge, no workers’ compensation claim has been filed by any Employee or
Independent Contractor since December 31, 2006.



     (d) Schedule 5.13(d) contains a true and complete list of all Plans. No Seller or
Subsidiary has a commitment or formal plan, whether legally binding or not, to create any
additional employee benefit plan or modify or change any existing Plan that would affect any
current or former Employees. None of the Plans is a “multiemployer plan,” as such term is defined
in section 3(37) of ERISA, nor is any Plan subject to section 302 or Title IV of ERISA or section
412 of the Code. Each Plan has been operated and administered in all material respects in
accordance with its terms and applicable law, including but not limited to ERISA and the Code.
There are no pending or, to Seller’s Knowledge, threatened or anticipated claims by or on behalf of
any Plan, by any Employee or beneficiary covered under any such Plan, or otherwise involving any
such Plan (other than routine claims for benefits) for the benefit of any current or former
Employee or director. The consummation of the transactions contemplated by this Agreement will
not, either alone or in combination with another event, (i) entitle any current or former Employee
to severance pay, unemployment compensation or any other payment, except as expressly provided in
this Agreement; or (ii) accelerate the time of payment or vesting, or increase the amount of
compensation due any such Employee.


5.14 Absence of Changes. Since March 31, 2008, Seller and each Subsidiary has conducted
the Business in the Ordinary Course, and there has not been any event, occurrence or development
which, individually or in the aggregate, was, or could reasonably be expected to, have a Material
Adverse Effect.




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5.15 No Brokers. There is no investment banker, broker, finder or other intermediary which
has been retained by or is authorized to act on behalf of Seller, Parent or any Affiliate of Seller
or Parent who is or will be entitled to any fee or commission in connection with the transactions
contemplated by this Agreement.



5.16 Related Party Transactions; No Improper Payments.




     (a) Neither Parent or any Affiliate of Parent, nor any officer or director of Parent, Seller
or either Subsidiary or any Affiliate of any such officer or director (each, a “Related
Party”) is currently indebted to Seller or either Subsidiary, nor is Seller or either
Subsidiary indebted (or committed to make loans or extend credit) to, or guarantees (or is
committed to guarantee) any indebtedness of, any Related Party; and (ii) to Seller’s Knowledge, no
Related Party has any direct or indirect ownership interest in any Person with which Seller has a
business relationship; provided, however, that the foregoing representation in this
Section 5.16(a)(ii) shall not apply in cases where a Related Party owns equity securities
of a publicly-traded company, which ownership constitutes less than one percent (1%) of the
outstanding equity securities of such publicly traded company (a “De Minimis Investment”).



     (b) None of Parent, Seller, either Subsidiary or, to Seller’s Knowledge, any other Person
involved in or engaged in connection with the Business has made, directly or indirectly, or
otherwise caused to be made on its behalf, any contribution, gift, bribe, rebate, payoff, influence
payment, kickback or other payment or transfer of any thing of value to any Person, private or
public, (i) to obtain or retain any business, favorable treatment or special concessions; or (ii)
in violation of the United States Foreign Corrupt Practices Act.


5.17 Hazardous Substances. Except as otherwise disclosed in Schedule 5.17, none of
Seller or either Subsidiary is in violation of, liable under, or subject to any existing, pending
or threatened investigation by any Government Entity under the Environmental Laws relating to the
Business or the Assets. None of Seller or either Subsidiary is required by any of the
Environmental Laws to obtain any permit or license to construct, operate or use any improvements,
fixtures or equipment or to operate the Business as it is currently conducted; and all of the
Assets have been upgraded as required by the Environmental Laws. The Seller and each Subsidiary
has not and will not own, generate, manufacture, handle, use, store, treat, release or dispose of
any Hazardous Substance on or into the environment, except in accordance with Environmental Laws
and in a manner that will not result in any liability to the Buyer. No Hazardous Substance has
been released into the environment (including the air, ground water, surface water, sediments,
soils or any sources) at, on, under, or from real property, in a manner that could result in
liability to the Buyer.



5.18 Disclosure. No representation or warranty or other statement made by Parent or Seller
in this Agreement or otherwise in connection with the transactions contemplated hereby contains any
untrue statement or omits to state a material fact necessary to make any of them, in light of the
circumstances in which it was made, not misleading.



5.19 Solvency. Each of Parent and Seller is, after giving effect to the transactions
contemplated hereby, solvent, able to pay its debts as they become due in the usual course of
business, now owns property having a value, both at fair valuation and at present fair saleable
value, greater than the amount required to pay its debts as they become due in the usual course of
business, and will not be rendered insolvent by the execution, delivery or performance of this
Agreement or by the completion of the transactions contemplated hereunder.



5.20 No Other Representations and Warranties. Except for the representations and
warranties contained in this Article V (as modified by the disclosure schedules to this Agreement),
neither Seller,



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Parent, either Subsidiary nor any other Person makes any express or implied representation or
warranty (including any implied or expressed warranty of merchantability or fitness for a
particular purpose, or of conformity to models or samples of materials) with respect to Seller,
Parent, either Subsidiary, the Business, the Assets, the Assumed Liabilities or the transactions
contemplated by this Agreement, and each of Seller and Parent expressly disclaims any other
representations or warranties, whether made by Seller, Parent, either Subsidiary, any Affiliate
thereof or any of their respective officers, directors, employees, agents or representatives.




ARTICLE VI REPRESENTATIONS AND WARRANTIES OF BUYER.



Buyer represents and warrants to Seller and Parent as follows:



6.1 Organization. Buyer is a limited liability company duly formed, validly existing and
in good standing under the laws of the State of Delaware. The Organizational Documents of Buyer
are in full force and effect, and Buyer is not in violation of any provision of its Organizational
Documents.



6.2 Authority. Buyer has the right, power and capacity to execute and deliver this
Agreement, the Conveyance Documents and any other agreement entered into in connection with this
Agreement to which it is a party, and to perform its obligations under this Agreement, the
Conveyance Documents and any other agreement entered into in connection with this Agreement to
which it is a party, and to consummate the transactions contemplated hereby and thereby. The
execution and delivery of this Agreement, the Conveyance Documents and any other agreement entered
into in connection with this Agreement by Buyer, and the performance by Buyer of its obligations
hereunder and thereunder, and the consummation of the transactions provided for herein and therein
have been duly and validly authorized and approved by all necessary corporate action on the part of
Buyer. This Agreement, the Conveyance Documents and any other agreement entered into in connection
with this Agreement have been duly executed and delivered by Buyer, and each constitutes a valid
and binding agreement of Buyer, enforceable against Buyer in accordance with their respective
terms, subject to applicable bankruptcy, insolvency, reorganization, moratorium and other similar
laws affecting the enforceability of creditors’ rights generally, general equitable principles and
the discretion of courts in granting equitable remedies.



6.3 Non-Contravention. Neither the execution and delivery of this Agreement, the
Conveyance Documents or any other agreement entered into in connection with this Agreement by
Buyer, nor the consummation of the transactions contemplated hereby or thereby, does or would,
after the giving of notice or the lapse of time or both, conflict with, result in a breach of,
constitute a default under, or violate the Organizational Documents of Buyer or any Law applicable
to Buyer.



6.4 No Brokers. There is no investment banker, broker, finder or other intermediary which
has been retained by or is authorized to act on behalf of Buyer or any Affiliate of Buyer who is or
might be entitled to any fee or commission in connection with the transactions contemplated by this
Agreement.



6.5 Disclosure. No representation or warranty or other statement made by Buyer in this
Agreement or otherwise in connection with the transactions contemplated hereby contains any untrue
statement or omits to state a material fact necessary to make any of them, in light of the
circumstances in which it was made, not misleading.



6.6 Independent Investigation. Buyer acknowledges that it has conducted to its
satisfaction its own independent investigation of the Business. To Buyer’s knowledge, Buyer has
had full access to Seller’s, Parent’s and each Subsidiary’s officers, directors, employees, records
and facilities to the extent Buyer has deemed necessary to enable Buyer to fully evaluate the
merits and risks of consummating the




-17-









 







transactions contemplated hereby. As of the date hereof, Buyer is not aware of any breach by
Seller and Parent of any of the representations and warranties set forth in Article V.



6.7 No Other Representations or Warranties. Except for the representations and warranties
contained in this Article VI, neither Buyer nor any other Person makes any express or implied
representation or warranty with respect to Buyer or the transactions contemplated by this
Agreement, and Buyer disclaims any other representations or warranties, whether made by the Buyer,
any Affiliate of Buyer or any of their respective officers, directors, employees, agents or
representatives.




ARTICLE VII ADDITIONAL COVENANTS.



7.1 Further Assurances; Post-Closing Cooperation.




     (a) From and after the Effective Date, from time to time and without further consideration,
each Party will execute and deliver such instruments and take such other commercially reasonable
action reasonably requested by one or more of the other Parties in order to effect the transactions
contemplated by this Agreement, including all steps necessary to obtain the consents contemplated
by Schedule 5.4 which were not obtained prior to Closing. Each of the Parties agrees to use
commercially reasonable best efforts to cause all conditions to closing for which such Party is
responsible to be satisfied as promptly as reasonably practicable after the Effective Date.



     (b) Following the Closing, unless otherwise prohibited by Law, each Party will afford each
other Party, its counsel and its accountants, during normal business hours, reasonable access to
the books, records and other data relating to the Business and the right to make copies and
extracts therefrom, to the extent that such access may be reasonably required by the requesting
Party in connection with (i) the preparation of Tax Returns, (ii) compliance with the requirements
of any Government Entity, (iii) any actual or threatened legal action, or (iv) for any other
legitimate or proper business purpose. No Party shall be entitled to charge any other Party for
the cost of providing copies of any books and records to such other Party.



     (c) If any Creditor fails to file or send a termination statement with respect to any
financing statement relating to the subject matter of any Lien Release, Seller shall, upon Buyer’s
request, promptly file such termination statement with the applicable Government Entity(ies) at
Seller’s expense.


7.2 Employees.




     (a) Buyer will, during the term of the Employee Services Agreement, make conditional offers of
employment to the Employees listed on Schedule 7.2(a) (the “Transferred
Employees”). Until the date upon which the Transferred Employees are actually transferred to
Buyer, Buyer will lease the services of the Transferred Employees from Seller pursuant to the terms
set forth in the Employee Services Agreement. Effective upon the termination of the Employee
Services Agreement, Seller will terminate the employment of all Transferred Employees.



     (b) Nothing in this Section 7.2, express or implied, shall confer upon any Transferred
Employees, or legal representative or beneficiary thereof, any rights or remedies, including any
right to employment or continued employment for any specified period, or compensation or benefits
of any nature or kind whatsoever under this Agreement. Except as set forth in this Section
7.2, nothing herein shall be construed to prevent Buyer from terminating or modifying to any
extent or in any respect any benefit plan that the Buyer may establish or maintain.



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     (c) As of termination of the Employee Services Agreement, unless otherwise agreed to in
writing by Buyer, all Transferred Employees shall cease participation in all Plans, except with
respect to benefits accrued as of, or claims incurred on or prior to, such time. Seller shall
provide all Transferred Employees with full vesting of any award or benefit under any Plan where
such vesting was otherwise conditioned upon the future performance of services with Seller,
including under any Plan that is intended to be tax-qualified under section 401(a) of the Code and
under any related non-qualified plan.



     (d) With respect to claims by Transferred Employees and their beneficiaries and dependents for
workers compensation or for the type of benefits described in Section 3(1) of ERISA (whether or not
covered by ERISA), (i) Seller shall assume and be responsible for such claims that are incurred on
or prior to the termination of the Employee Services Agreement; and (ii) Buyer shall assume and be
responsible for such claims that are incurred after the termination of the Employee Services
Agreement to the extent provided in the Employee Services Agreement or pursuant to employee benefit
plans established by Buyer. For purposes of the foregoing, a medical/dental claim shall be
considered incurred when the medical services are rendered or medical supplies are provided, and
not when the condition arose; provided that claims relating to a hospital confinement that
commences on or prior to the termination of the Employee Services Agreement but continuing
thereafter shall be treated as incurred on or prior to the termination of the Employee Services
Agreement. A disability or workers compensation claim shall be considered incurred on or prior to
the termination of the Employee Services Agreement if the injury or condition giving rise to the
claim occurred on or prior to the termination of the Employee Services Agreement.



     (e) Seller shall be responsible for satisfying any and all obligations and liabilities under
the continuation coverage provisions of the Consolidated Omnibus Budget Reconciliation Act of 1985,
as amended (“COBRA”), Sections 701 through 706 of ERISA and applicable state Law to provide
continuation coverage to or with respect to all employees or former employees of Seller and their
beneficiaries as a result of any “qualifying event,” defined in Sections 701 through 706 of ERISA,
occurring prior to the termination of the Employee Services Agreement or as a result of the
transactions contemplated by this Agreement.


7.3 Transfer Taxes. All national, federal, state, provincial or local transfer taxes in
any country, including excise, sales, use, value added, real property transfer, stamp, documentary,
filing, recordation, notarial and other similar taxes and fees that may be imposed or assessed as a
result of the transactions contemplated by this Agreement (if any), together with any interest,
additions or penalties with respect thereto and any interest in respect of such additions or
penalties shall be paid by Seller.



7.4 Publicity. A Party may only issue a press release or make a public statement
concerning this Agreement and the transactions contemplated hereby if such press release or public
statement is made in form and substance, and at a time, to which all other Parties have consented
after good faith consultation; provided, that prior to the issuance of a press release, no
Party hereto shall make any public disclosure of such transaction or publicly disclose the
existence of and/or particulars of any negotiations related thereto, including, but not limited to,
the terms, conditions, consideration to be paid or other facts related to this Agreement and the
related transactions, except to the extent that public disclosure is required by applicable Law, in
which case, to the extent practicable, the Parties will use their reasonable best efforts to reach
mutual agreement on disclosure language prior to making such disclosure.



7.5 Confidential Information. Parent and Seller (a) will keep all Confidential Information
confidential and will not (except as it believes is required, after consultation with outside
counsel, by applicable Law), without Buyer’s prior written consent, disclose any such Confidential
Information in any manner whatsoever in violation hereof, and (b) will not use any Confidential
Information in any manner; provided, however, that the Parent or Seller may reveal
Confidential Information to its representatives




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who need to know such Confidential Information for purposes not prohibited by this Section
7.5 and who are informed of the confidential nature of the Confidential Information.



7.6 Expenses. Except as otherwise set forth in this Agreement, the Parties shall pay all
of their own expenses relating to the transactions contemplated by this Agreement, including, the
fees and expenses of their own agents, representatives, financial advisors, accountants, appraisers
and counsel.



7.7 Bulk Sales. Buyer and Seller waive compliance, to the extent applicable to the
transaction contemplated hereby, of all “bulk sales” or similar Laws of all jurisdictions.



7.8 Timberline Software License. Parent and Seller shall provide Buyer access for a period
of 150 days from the date hereof to the software that is related to the Software License Agreement
between Timberline and the Parent, and, after such 150-day period, Parent and Seller shall permit,
and shall instruct Timberline to permit, Buyer access to the data that relates to any portion of
the Sellers’ Business that is contained within the software program to download such data into any
software program of Buyer.



7.9 Contractors License To the extent permitted by the relevant Government Entity, Buyer
and Subsidiaries shall have the right to use Seller’s Class C-2 license number 761207 and asbestos
certification issued by the State of California Contractors State License Board, which is in good
standing, until Buyer, using commercially reasonable efforts, is able to secure its own license.
In furtherance of the foregoing, Seller agrees to authorize, allow and joint venture with Buyer for
any and all uses of that license, including granting the right to Buyer to use Seller’s name.
Seller agrees to use their reasonable best efforts in assisting or any action necessary required by
the Contractors License Board regarding the obtaining of a license by Buyer. In furtherance of the
foregoing, each Party will execute and deliver such documents as are reasonably necessary to effect
the use of the license.



7.10 Bankruptcy. For a period of 90 days after the Closing, Seller shall not allow itself
to become insolvent; or make an assignment for the benefit of creditors or admit in writing its
inability to pay its debts as they mature; or consent to or acquiesce in the appointment of a
trustee or receiver for Seller or any property thereof; or permit any bankruptcy reorganization,
debt arrangement, or other proceeding under any bankruptcy or insolvency law to be instituted by or
against it; or consent to any involuntary petition filed pursuant to or purporting to be pursuant
to any bankruptcy, reorganization or insolvency law of any jurisdiction; or be adjudicated
bankrupt, except in the case of the filing of such a proceeding by the Parent for itself and its
subsidiaries.




ARTICLE VIII INDEMNIFICATION.



8.1 Indemnification Obligations of Seller and Parent. From and after the Closing Date,
Seller and Parent shall, jointly and severally, in accordance with this Article VIII,
indemnify, defend, protect and hold harmless Buyer and its assigns, successors and Affiliates
(collectively, the “Buyer Parties”) from, against and in respect of all Actions asserted
against, and all Damages asserted against or suffered, sustained, incurred or paid by, any Buyer
Party in connection with, resulting from or arising out of:




     (a) the inaccuracy of any representation or the breach of any warranty of Seller or Parent set
forth in this Agreement, the Conveyance Documents and any other agreement entered into in
connection with this Agreement (in each case, without regard to any qualification or limitation
with respect to materiality, whether by reference to “in any material respect” or any other use of
“material”);



     (b) the non-fulfillment of any covenant or agreement on the part of Seller or Parent set forth
in this Agreement, the Conveyance Documents and any other agreement entered into in connection with
this Agreement;



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     (c) the Excluded Liabilities; or



     (d) any suits or claims by or related to the stockholders of Parent, whether by such
stockholders, any Governmental Authority or otherwise (each, a “Parent Stockholder Claim”).


8.2 Indemnification Obligations of Buyer. From and after the Closing Date, Buyer shall, in
accordance with this Article VIII, indemnify, defend, protect and hold harmless Seller and
Parent and their respective assigns, successors and Affiliates (collectively, the “Seller
Parties”) from, against and in respect of all Actions asserted against, and all Damages
asserted against or suffered, sustained, incurred or paid by, any Seller Party in connection with,
resulting from or arising out of:




     (a) the inaccuracy of any representation or the breach of any warranty of Buyer set forth in
this Agreement, the Conveyance Documents and any other agreement entered into in connection with
this Agreement (in each case, without regard to any qualification or limitation with respect to
“materiality,” whether by reference to “in any material respect” or any other use of “material”);



     (b) the non-fulfillment of any covenant or agreement on the part of Buyer set forth in this
Agreement, the Conveyance Documents and any other agreement entered into in connection with this
Agreement; or



     (c) the Assumed Liabilities.


8.3 Notice of Claims. The Indemnified Party shall notify the Indemnifying Party in writing
promptly after becoming aware of any Damages which an Indemnified Party shall have determined has
given rise to a claim for indemnification under Article VIII. Such written notice (a
“Claim Notice”) shall include an estimate of the Damages, if known, the method of
computation thereof and a reference to the specific provisions of this Agreement in respect of
which it seeks indemnification. As soon as practicable after the date of such Claim Notice, the
Indemnified Party shall provide the Indemnifying Party or his or her agents access to all books and
records in the possession or control of the Indemnified Party which the Indemnifying Party
reasonably determines to be related to such claim. If the Indemnifying Party notifies the
Indemnified Party that it does not dispute the claim or the estimated amount of Damages described
in such Claim Notice, the estimated Damages in the amount specified in the Indemnified Party’s
Claim Notice will be conclusively deemed a Liability of the Indemnifying Party and the Indemnifying
Party shall pay the amount of such Damages to the Indemnified Party. If the Indemnifying Party
does not so notify the Indemnified Parties, the dispute shall be resolved, and the amount, if any,
of Damages payable by the Indemnifying Party to the Indemnified Party shall be determined, in
accordance with Section 9.5 below. The provisions of this Section 8.3 do not apply
to Third Party Actions.



8.4 Procedure for Third Party Claims.




     (a) If any third Person shall commence an Action against any Indemnified Party with respect
to any matter (a “Third Party Action”) which may give rise to a claim for indemnification
under Article VIII, then the Indemnified Party shall notify the Indemnifying Party as the
case may be, in writing promptly after becoming aware of such Third Party Action describing in
reasonable detail the Third Party Action (such notice being hereinafter called a “Third Party
Action Notice”), which notice shall include a reference to the specific provisions of this
Agreement in respect of which it seeks indemnification. It is agreed that no delay on the part of
any Indemnified Party in notifying the Indemnifying Party shall relieve the Indemnifying Party from
its obligations hereunder, except to the extent said Indemnifying Party is prejudiced by such
failure to give notice. The Indemnifying Party will have thirty (30) days from the delivery of
such Third Party Action Notice (the “Response Period”) to determine whether or not the
Indemnifying Party will, at its sole cost and expense, defend against such Third Party Action.



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     (b) If the Indemnifying Party (i) does not respond to the Third Party Action Notice by 5:00
p.m., Baltimore, Maryland time on the last day of the Response Period, or (ii) responds to the
Third Party Action Notice, but elects not to assume the defense, the Indemnified Party shall have
the right to defend against any such Third Party Action by appropriate proceedings or to settle or
pay any such Third Party Action for such an amount as the Indemnified Party shall deem appropriate
and the Indemnifying Party shall promptly pay all Damages resulting from such Third Party Action in
accordance with subparagraph (e) below; provided that in the case of clause (ii), any right of the
Indemnified Party to recover from the Indemnifying Party shall depend on the resolution of the
dispute as to the right of indemnity in accordance with Section 9.5 hereof.



     (c) If the Indemnifying Party affirmatively disputes the right to indemnity, but nevertheless
elects to defend against any such Third Party Action or settle or pay any such Third Party Action,
any right of the Indemnified Party to recover from the Indemnifying Party shall depend on the
resolution of the dispute as to the right of indemnity in accordance with Section 9.5
hereof.



     (d) Notwithstanding anything herein to the contrary, if the Indemnifying Party notifies the
Indemnified Party that it will defend against or settle any Third Party Action:




	 	(i)	 	such defense or settlement shall be at the sole cost and
expense of the Indemnifying Party, except for costs and expenses of the
Indemnified Party’s counsel, if any, pursuant to items (v) and (vi) below;
	 
	 	(ii)	 	the Indemnifying Party and its counsel shall conduct such
defense or settlement at all times in good faith;
	 
	 	(iii)	 	the Indemnifying Party and its counsel shall, at the
reasonable request of the Indemnified Party, provide periodic updates to the
Indemnified Party in order to keep the Indemnified Party reasonably informed as
to its conduct of such defense or settlement, and shall not compromise or
settle such Third Party Action without the prior written consent of the
Indemnified Party (not to be unreasonably withheld or delayed) unless such
settlement or compromise does not subject the Indemnified Party to any monetary
liability, and includes a complete, unconditional release of the Indemnified
Party from all Liability with respect to such Third Party Action;
	 
	 	(iv)	 	the Indemnified Party shall reasonably cooperate with the
Indemnifying Party, including making available to the Indemnifying Party, all
relevant witnesses and pertinent documents and information and appropriate
personnel;
	 
	 	(v)	 	the Indemnified Party may elect to employ its own counsel and
participate in such defense or settlement at the Indemnified Party’s sole cost
and expense, but the control of such defense and the settlement shall rest with
the Indemnifying Party;
	 
	 	(vi)	 	notwithstanding the Indemnifying Party’s election to defend
against or settle the Third Party Action, the Indemnified Party may, upon
written notice to the Indemnifying Party, elect to employ its own counsel (who
shall be reasonably acceptable to the Indemnifying Party) at the Indemnifying
Party’s expense (except that the Indemnifying Party shall not be obligated to
pay the fees of more than one separate counsel for all Indemnified Parties,
taken together) if (A) the Indemnifying Party is also a Person against whom the
Third Party Action is made










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	 	 	 	and the Indemnified Party has been advised by counsel that (x)
representation of both parties by the same counsel would be inappropriate
under applicable standards of professional conduct or (y) the Indemnified
Party has available to it one or more defenses or counterclaims that are
inconsistent with, different from, or in addition to one or more of those
that may be available to the Indemnifying Party with respect to such Third
Party Action; (B) a Parent Stockholder Claim, or (C) the Indemnifying Party
shall not in fact have employed counsel reasonably satisfactory to the
Indemnified Party for the defense or settlement of such Third Party Action;
provided, however, that the assumption of control of the defense or
settlement of a Third Party Action by the Indemnified Party pursuant to this
item (vi) shall not relieve the Indemnifying Party of its obligation to
indemnify and hold the Indemnified Party harmless; and
	 
	 	(vii)	 	in no event shall the Indemnified Party consent to the entry
of any judgment or enter into any settlement with respect to such Third Party
Action without the prior written consent of the Indemnifying Party (which
consent shall not be unreasonably withheld or delayed).




8.5 Survival; Limitations.




     (a) The period during which a claim for indemnification may be asserted hereunder (the
“Claims Period”) with respect to:




	 	(i)	 	any of Sections 5.2 (Authorization), 5.6 (Tax
Matters), 5.13 (Employee and Benefits Matters), 5.16 (Related
Party Transactions; No Improper Payments) or 5.19 (Solvency), any
Parent Stockholder Claim or fraud shall begin on the Effective Date and shall
terminate thirty (30) days after the expiration of the statute of limitations
applicable thereto; and
	 
	 	(ii)	 	all matters other than those specified in the preceding clause
(i) shall begin on the Effective Date and shall terminate on the first (1st)
anniversary of the Effective Date.





     (b) Notwithstanding the foregoing, if, prior to the close of business on the last day of the
Claims Period, an Indemnifying Party shall have been properly notified of a claim for indemnity
hereunder and such claim shall not have been finally resolved or disposed of at such date, such
claim shall continue to survive and shall remain a basis for indemnity hereunder until such claim
is finally resolved or disposed of in accordance with the terms hereof. All representations and
warranties herein shall survive the Closing until the last day of the Claims Period applicable
thereto or until all unresolved claims relating thereto have been finally resolved or disposed of.



     (c) Except for claims for breaches of the representations contained in Sections 5.2
(Authorization), 5.6 (Tax Matters), 5.13 (Employee and Benefits Matters),
5.16 (Related Party Transactions; No Improper Payments) or 5.19 (Solvency), or for
claims for Parent Stockholder Claims or for fraud, no Indemnifying Party shall have indemnification
obligation under Section 8.1(a) or Section 8.2(b), as applicable, unless and until
the aggregate amount of the Damages for which an Indemnified Party has asserted indemnification
claims exceeds Forty-Five Thousand Dollars ($45,000) (the “Basket Amount”), whereupon such
Indemnifying Party shall be liable to indemnify the Indemnified Party for all Damages indemnifiable
pursuant to Section 8.1(a) or Section 8.2(b), as applicable, in excess of the
Basket Amount.



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     (d) Except for claims for breaches of the representations contained in Sections 5.2
(Authorization), 5.6 (Tax Matters), 5.13 (Employee and Benefits Matters),
5.16 (Related Party Transactions; No Improper Payments) or 5.19 (Solvency), or for
claims for Parent Stockholder Claims or for fraud, the aggregate amount of all Damages for which an
Indemnifying Party shall be liable under Section 8.1(a) or Section 8.2(b), as
applicable, shall not exceed Nine Hundred Thousand Dollars ($900,000).



     (e) The right to indemnification, payment of Damages or other remedy afforded to the Buyer
based on such representations, warranties, covenants and obligations will not be affected by any
investigation or due diligence conducted by the Buyer with respect to, or any knowledge acquired,
or capable of being acquired at any time, whether before or after the execution and delivery of
this Agreement, with respect to the accuracy or inaccuracy of, or compliance with, any such
representation, warranty, covenant, or obligation. Furthermore, no information or knowledge
obtained in any investigation or due diligence pursuant this Agreement shall affect or be deemed to
modify any representation or warranty contained herein or in the conditions to the obligations of
the parties to consummate the transactions described herein.



ARTICLE IX MISCELLANEOUS.



9.1 Entire Understanding. This Agreement (including the documents and instruments referred
to herein) embodies the entire agreement and understanding of the Parties with respect to the
transactions contemplated hereby and supersedes all other prior commitments, arrangements or
understandings, both oral and written, between the parties with respect to the subject matter
hereof.



9.2 Severability; Joint Drafting. The provisions of this Agreement are intended to be
interpreted and construed in a manner so as to make such provisions valid, binding and enforceable.
In the event that any provision of this Agreement is determined to be partially or wholly invalid,
illegal or unenforceable, then such provision shall be deemed to be modified or restricted to the
extent necessary to make such provision valid, binding and enforceable, or, if such provision
cannot be modified or restricted in a manner so as to make such provision valid, binding and
enforceable, then such provision shall be deemed to be excised from this Agreement and the
validity, binding effect and enforceability of the remaining provisions of this Agreement shall not
be affected or impaired in any manner. The Parties have participated jointly in the negotiation
and drafting of this Agreement. In the event an ambiguity or question of intent or interpretation
arises, this Agreement shall be construed as if drafted jointly by the Parties and no presumption
or burden of proof shall arise favoring or disfavoring any Party by virtue of the authorship of any
of the provisions of this Agreement.



9.3 Waiver and Amendment. No waiver, amendment, modification or change of any provision of
this Agreement shall be effective unless and until made in writing and signed by the Parties. No
waiver, forbearance or failure by any Party of its rights to enforce any provision of this
Agreement shall constitute a waiver or estoppel of such Party’s right to enforce any other
provision of this Agreement or a continuing waiver by such Party of compliance with any provision.



9.4 Headings. The headings herein are for convenience only, do not constitute a part of
this Agreement, and shall not be deemed to limit or affect any of the provisions hereof.



9.5 Governing Law; Dispute Resolution; Jury Trial Waiver. This Agreement shall be governed
by and construed and enforced in accordance with the laws of the State of Maryland. The state or
federal courts located within the State of Maryland shall have exclusive jurisdiction over any and
all disputes between any Parties, whether in law or equity, arising out of or relating to this
Agreement and the agreements, instruments and documents contemplated hereby and the Parties consent
to and agree to




-24-









 




submit to the jurisdiction of such courts. The Parties hereby agree that mailing of process or
other papers in connection with any such Action or proceeding in the manner provided in Section
9.6 or in such other manner as may be permitted by law, shall be valid and sufficient service
thereof and hereby waive any objections to service accomplished in the manner herein provided.
EACH OF THE PARTIES IRREVOCABLY WAIVES, AND AGREES TO CAUSE ITS AFFILIATES TO WAIVE, ALL RIGHT TO A
TRIAL BY JURY IN ANY ACTION, PROCEEDING OR COUNTERCLAIM ARISING OUT OF OR RELATING TO THIS
AGREEMENT OR THE TRANSACTIONS CONTEMPLATED HEREBY.



9.6 Notices. Any notices or other communications required or permitted hereunder shall be
in writing and sent to the appropriate addresses designated below (or to such other address or
addresses as may hereafter be furnished by one Party to the other Party in compliance with the
terms hereof), by hand delivery, by facsimile transmission to the respective facsimile numbers
designated below (with electronic confirmation of delivery), by UPS or FedEx next-day service, or
by registered or certified mail, return receipt requested, postage prepaid:




	 	 	 
	If to Seller or Parent:

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

                                             

                                             

     Fax:                                 

     Attn:                              

	 	          Morgan, Lewis Bockius LLP

          101 Park Avenue

          New York, NY 10178-0060

          Fax: (212) 309-6241

          Attn: Howard Kenny

	 
	 	 
	If to Buyer:

	 	with a copies (which shall not constitute notice) to:
	 
	 	 
	     Scott Johnson

     P.W. Stephens Environmental, Inc.

     15201 Pipeline Lane #B

     Huntington Beach, CA 92649

	 	          Law Office of Joel J. Thomas

          46 Windjammer Ct.

          Long Beach, CA 90803

          562 430-3848

          562 493-8850 fax

          Attn: Joel Thomas

	 
	 	 
	 

	 	          Venable LLP

          Suite 900

          750 East Pratt Street

          Baltimore, MD 21202

          Fax: (410) 244-7742

          Attn: Charles J. Morton, Jr. Esq.





9.7 Assignment; No Third Party Beneficiaries. This Agreement may not be assigned (whether
by operation of law or otherwise) by any Party without the prior written consent of the other
Party; provided, that Buyer may assign this Agreement, without the prior written consent of Seller,
to any of the Buyer’s Affiliates, so long as such assignment would not change the Approvals
required for the consummation of the transactions contemplated hereby in such a way that the
Closing would reasonably be expected to be delayed as a result. Unless otherwise stated herein,
this Agreement shall not benefit or create any right of action in or on behalf of any Person other
than the Parties hereto; provided, however, that this Agreement will be binding upon, inure to the
benefit of, and be enforceable by, the Parties’ respective successors and permitted assigns.



9.8 Specific Performance. The Parties agree that the remedies at law of any Party for any
actual or threatened breach of this Agreement would be inadequate and that the Parties shall be
entitled to specific




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performance of this Agreement, including entry of an ex parte, temporary restraining order in state
or federal court, preliminary and permanent injunctive relief against activities in violation of
any of the covenants in this Agreement, or both, in addition to any damages and legal expenses
which a Party may be legally entitled to recover.



9.9 Counterparts. This Agreement may be executed in counterparts (including by facsimile
or optically-scanned electronic mail attachment), each of which shall be deemed to be original, but
all of which together shall constitute one and the same instrument.




* * *

The remainder of this page is left blank intentionally. Signatures follow on next page.




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     IN WITNESS WHEREOF, the Parties have each executed and delivered this Asset Purchase Agreement
as of the Effective Date.



BUYER:




	 	 	 	 	 
	 	P.W. STEPHENS ENVIRONMENTAL, INC.:

 	 
	 	By:  	 	 
	 	 	Name:  	Scott Johnson 	 
	 	 	Title:  	Chief Executive Officer and President 	 
	 



SELLER:




	 	 	 	 	 
	 	PW STEPHENS, INC.:

 	 
	 	By:  	 	 
	 	 	Name:  	Frank Fradella 	 
	 	 	Title:  	Chief Executive Officer 	 
	 



PARENT:




	 	 	 	 	 
	 	HOME SOLUTIONS OF AMERICA, INC.:

 	 
	 	By:  	 	 
	 	 	Name:  	Frank Fradella 	 
	 	 	Title:  	Chief Executive Officer 	 
	 



Signature page to Asset Purchase Agreement