Exhibit
10.1


 


AGREEMENT
FOR PURCHASE AND SALE OF BUSINESS ASSETS


 


THIS AGREEMENT FOR PURCHASE AND SALE OF BUSINESS ASSETS (“Agreement”)
is entered into as of October 1, 2003 by and between Quality Products, Inc., a
Delaware corporation (“Buyer”); KSD Packaging & Shipping, Ltd., an Ohio
limited liability company (“KSD”) and Dennis Mellman (“Mellman”) whose address
is          . KSD and Mellman are
collectively referred to herein as “Seller”.


 


WHEREAS, Seller is in the business of packaging and shipping (the “Business”),
and owns the assets identified herein related to such operation; and


 


WHEREAS, Seller desires to sell to Buyer and Buyer desires to purchase
such assets on the terms and conditions set forth herein;


 


NOW, THEREFORE, in consideration of the foregoing premises and for
other good and valuable consideration, the parties agree as follows:


 


1.             Recitals.  The Recitals set forth above are fully
incorporated herein by reference as though fully rewritten herein.


 


2.             Purchase of
Assets.  Upon the terms and subject
to the conditions set forth in this Agreement, Seller agrees to sell, transfer,
convey, assign and deliver to Buyer, and Buyer agrees to purchase the
equipment, vehicles and inventory identified on the attached Exhibit A
(“Equipment”), the books and records of the Business (including, but not
limited to, customer files, customer lists, pricing schedules, standard
invoices, supplier lists and files and unit pricing information), the telephone
numbers and goodwill of the Business (collectively, the “Assets”).  Notwithstanding the foregoing, the assets
listed on Exhibit B are not included in the sale.


 


3.             Purchase Price
and Payment.  Subject to the terms
of this Agreement and in full consideration for the purchase of the Assets,
Buyer shall pay to Seller the sum of Twenty-Two  Thousand and 00/100 Dollars ($22,000.00) payable in cash at
Closing.


 


4.             Closing Date;
Place.  The Closing shall take place
on October 1, 2003 at the offices of QPI Multipress, Inc., 2222 South Third
Street, Columbus, Ohio 43207 at 2:00 p.m.


 


5.             No Assumption of
Seller’s Liabilities.  It is
expressly agreed that Buyer will not assume and will not discharge or be liable
for any leases, debts, liabilities, or obligations of any kind of Seller or the
Business incurred or accrued prior to or after the Closing whether sounding in
tort or contract, liquidated or unliquidated, known or unknown, contingent or
absolute, accrued or unaccrued, asserted or unasserted.


 


6.             Seller’s
Employees.  Buyer and Seller
acknowledge that this Agreement is solely for the Assets and Buyer shall have
no obligation to employ any of Seller’s employees as employees of Buyer;
provided, however, in the event that Buyer should elect to offer employment to
any employee of Seller, Seller agrees to release any such prospective employee
of


 

















 


Buyer from any contractual obligations, confidentiality agreements or
restrictive covenants by which such prospective employee may be bound to
Seller, effective as of October 1, 2003.


 


7.             Conduct of
Business Pending Closing.  Until
Closing, Seller shall conduct business in the ordinary course and Seller will
use its best efforts, without making any commitment on Buyer’s behalf, to
preserve the business organization intact. 
Seller shall not enter into (a) any material equipment lease or (b)
other long-term agreement affecting the business, which would become an
obligation of Buyer, without the prior written consent of Buyer.


 


8.             Covenant Not to
Compete.  For a period of two (2)
years after the date of Closing, Seller covenants that without the prior
written consent of Buyer, which consent shall specifically refer to this
covenant, Seller shall not, directly or indirectly, for any reason, engage in,
assist or have any interest as principal, owner, consultant, advisor, agent,
shareholder, director, officer, member, manager, or financier, in any business
which is or which is about to become engaged in packaging or shipping within
the State of Ohio.  In the event that
the foregoing provisions should ever be deemed to exceed the time or geographic
limitations permitted by applicable case or statutory law then such provision
shall be deemed reformed to the maximum time or geographic limitation permitted
by the then applicable case or statutory law. 
In the event of a breach or threatened breach by Seller, Seller
acknowledges that Buyer’s remedies at law will be inadequate and Buyer shall be
entitled to a temporary restraining order and injunction restraining any party
breaching, or intending to breach, the terms of this Section from such breach
or threatened breach without any showing of irreparable harm or the posting of
any bond.


 


9.             Representations
and Warranties of Seller.  Seller
represents and warrants to Buyer that each of the following is true in all
material respects:


 


(a)           Organization
and Authorization.  The Seller is
duly organized, validly existing and in good standing under the laws of the
State of Ohio, and has corporate power and authority to own all of its
property.  Seller has full power and
authority to carry on the Business as it is now being conducted.  The execution and delivery of this Agreement
and the performance of the transactions contemplated hereby have been duly and
validly authorized by the Seller, and no other person or entity has, may have,
or is claiming or has claimed any interest in or rights to the Business or the
Assets.


 


(b)           Ownership.  Seller owns the Assets free and clear of any
liens, claims, encumbrances or restrictions of any kind.  On or before Closing, Seller has paid in
full all past and future lease payments as such amounts are now or may become
due under the terms of the lease agreement, dated December 27, 2000 (“Lease
Agreement”), a copy of which is attached hereto as Exhibit D and
incorporated herein by reference, said Lease Agreement having been assumed by
Seller on April 26, 2001. Seller has fulfilled all the terms and conditions of
the Lease Agreement. Upon Buyer’s provision of notice and tender of One Dollar
($1.00) to the lessor of said Lease Agreement, which notice and tender is made
presently to the lessor, Buyer shall take good, marketable and insurable


 


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title to the “Clark 127” Mast, 42” Forks LPG System H2691,
685-0007-7415FA. No labor, services or material will have been made or furnished
to Seller or the Business by any person or entity, including, without
limitation, contractors, subcontractors, mechanics or materialmen, which could
give rise to any lien as provided under the laws of the State of Ohio.  Seller has good, marketable and insurable
title to and rightful possession of the Assets, free and clear of all liens,
charges, security interests, encumbrances, restrictions, and other matters
affecting title.


 


(c)           Tax
Matters.  The Seller has duly filed
with the appropriate governmental agencies all tax reports and returns required
to be filed by them relative to the Business. 
Seller has paid all taxes, interest, penalties, assessments and
deficiencies.


 


(d)           Contracts
and Leases.  Seller shall pay the
Lease Agreement in full  on or before
Closing. Seller is a party to a certain real property lease concerning real
property located at 1040 Woodland Avenue, Columbus, Ohio 43219 (“Real Property
Lease”).  The Real Property Lease shall
remain an obligation of the Seller. Seller is current on all payments due under
the Real Property Lease. Except for the aforementioned Lease Agreement and Real
Property Lease (only affecting the real property leased),  neither the Seller nor the Assets is a party
or subject to any written or oral contract or lease for the purchase, sale or
lease of real or personal property.


 


(e)           Litigation.  Notwithstanding KSD Packaging &
Shipping v.  Threadworks Embroidery, LLC,
2003 CV 01033, no litigation or other judicial, administrative or investigative
proceeding, at law or in equity or otherwise, is pending or threatened before
any court of   any federal, state, local
or other governmental department, commission, board, bureau, or agency or
non-governmental arbitration board or commission against or affecting Seller,
the Business or the Assets, and neither Seller nor the Business are operating
under, subject to or in default with respect to any order, writ, injunction or
decree of any court or federal, state, local or governmental department,
commission, board, bureau, or agency or non-governmental arbitration board or
commission.


 


(f)            Finder’s
Fees.  No person or entity is
entitled to any brokerage commission, finder’s fee or similar compensation from
any of the parties hereto in connection with the execution and delivery of this
Agreement or the consummation of the transactions herein contemplated.


 


(g)           Absence
of Undisclosed Liabilities.  Seller
does not have any knowledge of, and at Closing will not knowingly or
intentionally have created, any liability or obligation, secured or unsecured,
whether accrued, absolute, contingent or otherwise affecting Seller’s ability
to sell the Assets in accordance with the provisions hereof.


 


(h)           Employee
Relations.  Seller is in compliance
with all federal, state and municipal laws respecting employment and employment
practices, terms and conditions of employment including but not limited to
wages and hours, payment of wages and


 


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social security taxes.  None of
Seller’s employees have written employment contracts and all employees are
at-will employees.  At the Closing,
Seller will be in full compliance with, and will have taken all steps required
by, the Employment Retirement Income Security Act of 1974 and the Internal
Revenue Codes of 1954 and 1986, as it relates to employee benefit plans and
will not have incurred or become liable for any penalties thereunder.


 


(i)            Disclosure.  No information contained in or
representations or warranties made by Seller herein or any Exhibit hereto or in
any document or information delivered or to be delivered pursuant hereto,
including all financial statements, contains or will contain any statement of
material fact known to Seller to be untrue or omits or will omit any material
fact necessary in order to make the statements contained therein not
misleading.


 


(j)            Financial Statements.  Seller warrants that all financial statements provided to Buyer
as of the close of business on September 26, 2003 are substantially correct and
accurately reflect the business operations and Assets of the Business.


 


Each of the foregoing warranties and
representations are true and correct on the date of full execution hereof and
Seller has a continuing obligation to disclose to Buyer any change in
circumstance that would effect the truthfulness or accuracy of the foregoing
warranties and representations.


 


10.           Representations
and Warranties of Buyer.  Buyer
represents and warrants the following to the Seller as of the Closing;


 


(a)           Organization. 
The Buyer is duly organized, validly existing and in good standing under
the laws of the State of Delaware.  The
execution, delivery and performance of this Agreement and the consummation of
the transactions contemplated hereby do not and will not conflict with, or
result in a breach or violation of, or constitute a default in the performance,
observance, or fulfillment of any obligation, covenant or condition contained
in, or constitute, or, but for any requirement of notice or lapse of time or
both, would constitute, an event of default by Buyer under any applicable
contract, lease, mortgage or other Agreement to which Buyer is a party or by
which it is bound.


 


(b)           No Legal Proceedings.  There is no suit, action or other proceeding against Buyer
pending or threatened before any court or governmental agency in which it is,
or will be, sought to restrain or prohibit, or to obtain damages or other
relief in connection with, this Agreement, or the transactions contemplated
hereby.


 


(c)           Finder’s Fees. 
No person or entity is entitled to any brokerage commission, finder’s
fee or similar compensation from any of the parties hereto in connection with
the execution and delivery of this Agreement or the consummation of the
transactions herein contemplated.


 


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Each of the foregoing warranties and
representations are true and correct on the date of full execution hereof and
Buyer has a continuing obligation to disclose to Seller any change in
circumstance that would effect the truthfulness or accuracy of the foregoing
warranties and representations.


 


11.           Survival
of Representations, Warranties and Agreements.  The representations, warranties and agreements of the parties
hereto contained in this Agreement and exhibits hereto and in any certificate or
other writing delivered pursuant hereto or in connection herewith shall survive the making of this Agreement, any
investigation by or on behalf of any party to this Agreement and the Closing.


 


12.           Conditions Precedent. 
The obligation of Buyer and Seller to close the transaction is subject
to the fulfillment, prior to or at the time of Closing, of each of the
following conditions and failure of any one or more of these conditions, unless
waived by the Buyer, shall void the transaction.


 


(a)           Each of the warranties and representations of Seller and
Buyer contained herein being true and correct and the truth and correctness of
same continuing to the date of Closing except as effected by transactions
permitted or contemplated hereby.


 


(b)           Seller and Buyer having performed and complied with all
the terms, covenants and provisions hereof.


 


(c)           There being no action or proceeding or other occurrence or
event that would materially and adversely affect the Business or the Assets.


 


(d)           Seller having satisfied any and all financing obligations
regarding the items listed on Exhibit A.


 


(e)           Seller having satisfied any and all obligations due and
owing to Larry Leming, an employee of Seller, within three weeks from the date
of Closing.


 


13.           Deliveries
by Seller to Buyer.  At Closing,
Seller shall execute and deliver or cause to be delivered to Buyer:


 


(a)           This Agreement;


 


(b)           Sufficient evidence of satisfaction of the financing
obligations listed on Exhibit A;


 


(c)           Sufficient evidence that any and all outstanding obligations owed to Larry Leming shall be satisfied within three weeks from the date of closing;


 


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(d)           Documentation
from the Lessor under the Real Property Lease that all payments due are paid in
full;


 


(e)           The Bill of Sale attached as Exhibit C and the
original titles properly endorsed and create endorsements, affidavits,
assignments, corporate resolutions and other good and sufficient instruments of
conveyance and transfer containing full warranties of title for the Assets as
shall be effective to vest in Buyer good, absolute and marketable title to the
Assets; and


 


(f)            Such
other instruments and documents as are (i) required by any other provision of
this Agreement; or (ii) reasonably necessary in the opinion of Buyer to effect
the performance of the Agreement by Seller.


 


14.           Deliveries
by Buyer to Seller.  At Closing,
Buyer shall execute and deliver or cause to be delivered to Seller:


 


(a)           This Agreement; and


 


(b)           Twenty Two Thousand Dollars ($22,000.00) in cash by
certified check.


 


15.           Risk
of Loss.  Seller assumes all risk of
destruction, loss or damage due to fire or other casualty up to and including
the date of Closing.  Upon said
destruction, loss or damage due to fire or other casualty of a substantial portion
of the Assets, Buyer shall have the option to terminate this Agreement and all
rights and obligations of Buyer and Seller shall terminate.


 


16.           Indemnification.


 


(a)           By Seller. 
Seller shall indemnify Buyer and hold Buyer harmless from and against,
and shall pay and reimburse Buyer for, any and all damage, loss, liability,
obligation, costs and expense (including, without limitation, reasonable legal
and accounting and other costs and expenses associated with any action, suit,
or proceeding brought against Buyer or relating to the enforcement of this
indemnification), paid, incurred or suffered by Buyer as a result of or
relating to (i) any misrepresentation, breach of warranty or nonperformance or
nonfulfillment of any agreement by Seller, or (ii) any claim or cause of action
against, or liability of any kind, whether liquidated or unliquidated, actual
or contingent, arising out of or on account of or with respect to events or
conditions occurring or existing at or prior to Closing, or after closing, if
effected by Seller.


 


(b)           By Buyer. 
Buyer shall indemnify Seller and hold Seller harmless from and against
and shall pay and reimburse Seller for any and all damage, loss, liability,
obligation, costs and expenses, (including, without limitation, reasonable
legal and accounting and other costs and expenses in connection with any
action, suit, or proceeding brought against Seller or relating to the
enforcement of this indemnification) paid, incurred or suffered by Seller as a
result of or relating to (i) any misrepresentation, breach of


 


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warranty or nonperformance or nonfulfillment
of any of this agreement by Buyer; (ii) any claim or cause of action against,
or liability of any kind, whether liquidated or unliquidated, actual or
contingent, arising out of or on account of or with respect to events or
conditions occurring after Closing, except those effected by the Seller.


 


17.           Assignment.  Neither party may assign its rights,
obligations, or benefits without the prior written consent of the other party.


 


18.           Arbitration.  Any controversy or claim arising out of or
relating to this Agreement, or the breach thereof, except for any controversy
or claim arising pursuant to Section 8 shall be settled by arbitration in
Columbus, Ohio, in accordance with the rules of the American Arbitration
Association and judgment upon the award rendered by the arbitration may be
entered in any court having jurisdiction thereof.  Notwithstanding the provisions of this paragraph, either party
shall have the right to seek injunctive relief in relation to any threatened
conduct, which is permitted by applicable law. 
Costs of the arbitration proceeding, unless the selected arbitrator
shall determine otherwise, shall be shared by the parties.  The procedure for arbitration shall be in
accordance with the rules of the American Arbitration Association, except Buyer
and Seller shall each select one arbitrator, and the two (2) selected
arbitrators shall select a third arbitrator. 
Should either the Buyer or Seller fail to select an arbitrator within
ten (10) days after arbitration is sought, or if the two (2) arbitrators shall
fail to select a third arbitrator within fifteen (15) days after arbitration is
sought, the American Arbitration Association shall select the arbitrator.


 


19.           Notices.  All notices, requests, demands and other
communications under or in connection with this Agreement shall be in writing
addressed to:


 


	
   

  	
  if to Buyer:

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  Quality Products, Inc.

  	
   

  
	
   

  	
  222 South Third Street

  	
   

  
	
   

  	
  Columbus, Ohio 43207

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  with a copy to:

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  Gary D. Greenwald, Esq.

  	
   

  
	
   

  	
  Shayne & Greenwald
  Co., L.P.A.

  	
   

  
	
   

  	
  221 South High Street

  	
   

  
	
   

  	
  Columbus, Ohio 43215

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  if to Seller:

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  KSD Packaging &
  Shipping LTD.

  	
   

  
	
   

  	
  1040 Woodland Ave

  	
   

  
	
   

  	
  Columbus, OH 43219

  	
   

  



 


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  Dennis
  Mellman

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  with a copy to:

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  



 


All such notices requests, demands or
communications shall be mailed postage prepaid, certified or registered mail,
return receipt requested, or delivered personally, and shall be sufficient and
effective when delivered to or received at the address so specified.  Any party may change the address at which it
is to receive notice by written notice to the other parties.


 


20.           General
Provisions.


 


(a)           Integrated Agreement; Modification; Waiver.  This Agreement constitutes the entire
understanding and agreement between the parties pertaining to the subject
matter contained herein and supersedes all prior and contemporaneous
agreements, representations and understandings of the parties not otherwise
contained in this document.  No
alteration, modification, amendment or change of this Agreement shall be
binding unless executed in writing by the parties.  No waiver of any of the provisions of this Agreement shall be
deemed a waiver of any other provision, whether or not similar, nor shall any
waiver constitute a continuing waiver.


 


(b)           Governing Law. 
The provisions of this Agreement shall be construed under and the
respective rights and obligations of the parties shall be determined with
reference to the laws of the State of Ohio.


 


(c)           Captions. 
The paragraph headings contained in this Agreement are for reference
purposes only and shall not affect in any way the meaning or interpretation of
the Agreement.


 


(d)           Counterpart Execution.  This Agreement may be executed in one or more counterparts, each
of which shall be deemed an original, but all of which together shall
constitute one and the same instrument.


 


(e)           Successors and Assigns.  All of the terms and provisions of this Agreement shall be
binding upon and inure to the benefit of and be enforceable by the Buyer,
Seller, their heirs, personal representatives, successors and assigns.


 


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(f)            Expenses. 
Except as otherwise provided, each of the parties shall bear all
expenses incurred by them in connection with this Agreement and in the
consummation of the transaction contemplated hereby and in preparation thereof.


 


(g)           Gender.  All
personal pronouns used in this Agreement shall include the other genders,
whether used in the masculine, feminine or neuter, and the singular shall
include the plural whenever and as often as may be appropriate.


 


(h)           Agreement to Take Necessary and Desirable Actions.  Seller agrees to execute and deliver such
other assignments, conveyances, instruments of transfer, documents,
certificates and other writings and to take such other actions as may be
necessary or desirable in order to consummate or implement expeditiously the transactions
contemplated by this Agreement.


 


(i)            Severability. 
Any term or provision of this Agreement which is finally determined to
be invalid or unenforceable in any jurisdiction shall, as to such jurisdiction,
be ineffective to the extent of such invalidity or unenforceability without
rendering invalid or unenforceable the remaining terms and provisions of this
Agreement or affecting the validity or enforceability of any of the terms or
provisions of this Agreement in an other jurisdiction.


 


(j)            Enforceability. 
This document shall not be deemed for any purpose to represent the
agreement or basis of the bargain between the parties until it has been
completely executed by all parties.


 


(k)           Further Assurances.  After Closing, Seller shall, from time to time, upon the
reasonable request of Buyer, execute, acknowledge and deliver in the proper
form any instrument of conveyance or further assurance necessary or reasonably
desirable to perfect title in the Assets and Buyer or its nominees, successors
and assigns as the case may be, entitled to the Assets.


 


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


 


 


	
  QUALITY PRODUCTS, INC.

  	
   

  	
  KSD PACKAGING & SHIPPING, LTD.

  
	
   

  	
   

  
	
  By:

  	
  /s/Theodore P. Schwartz

  	
   

  	
  By:

  	
  /s/Dennis Mellman

  	
   

  
	
   

  	
  Theodore P. Schwartz,
  President

  	
   

  	
  Dennis Mellman, President

  
	
   

  	
   

  
	
  /s/Dennis Mellman

  	
   

  	
   

  
	
  Dennis Mellman,
  Individually

  	
   

  
								



 


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EXHIBIT A


 


PURCHASED
ASSETS


 


Table Saw


 


Air Compressor


 


Office Furnishings including all file
cabinets and the contents thereof


 


Hand Drills


 


Two (2) Scales


 


Pallet Jack


 


Floor Model Drill Press


 


Sealer


 


Crown Staple Gun


 


Assorted Boxes


 


Two (2) Computers


 


Two (2) Printers


 


Fax Machine


 


Copy Machine


 


Typewriter


 


Tow Motor subject only to the One Dollar
Purchase Option


 


Ford E 350 Truck, Vehicle Identification
Number 1FDWDE35L91HA24439 and Year 2001


 


Miter Saw


 


Nail Gun


 


Two (2) Work Benches


 


Entire Inventory


 


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EXHIBIT B


 


EXCLUDED ASSETS


 


All Accounts Receivable


All Cash/Cash Equivalents


 


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EXHIBIT C


 


BILL  OF 
SALE


 


KSD
PACKAGING & SHIPPING, LTD., an Ohio limited liability
company (“KSD”) and Dennis Mellman (“Mellman”) whose address is
                                                                 
(KSD and Mellman are collectively referred to herein  as “Seller,”) in consideration of Twenty Two Thousand Dollars
($22,000) and other good and valuable consideration paid by QUALITY PRODUCTS,
INC., a Delaware corporation, (“as Buyer”), the receipt of which is
acknowledged, hereby sells, grants, transfers and conveys to Buyer the
following described goods:


 


SEE
EXHIBIT “A”


 


Seller covenants
and agrees that Seller is the lawful owner of the goods; that they are free
from all encumbrances; that Seller has the right to sell the goods; and that
Seller, will warrant and defend the same against the lawful claims and demands
of all persons.


 


Executed on
October 1, 2003.


 


KSD
PACKAGING & SHIPPING, LTD.,


An Ohio Limited
Liability Company


 


 


	
  /s/Dennis Mellman

  	
   

  	
  By:

  	
  /s/Dennis Mellman

  	
   

  
	
  Dennis Mellman,
  Individually

  	
   

  	
  Dennis Mellman,
  President

  



 


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