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ASSET PURCHASE AGREEMENT
THIS AGREEMENT ("Agreement") made and entered into as of this 15th day
of September, 1998, by and between ▇▇▇▇▇▇ ▇▇▇▇▇▇, individually and d/b/a B&B
Associates, ▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇ ▇-▇, ▇▇▇ ▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
("Seller"), and LITEGLOW INDUSTRIES OF CALIFORNIA, INC., a corporation organized
under the laws of the State of Florida.
W I T N E S S E T H :
WHEREAS, Seller owns and operates an automobile accessories business as
a sole proprietorship under the name B&B Associates at ▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇,
▇▇▇▇ ▇-▇, ▇▇▇ ▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇ (the "Business"); and
WHEREAS, the parties desire that Buyer purchase all of the assets of
Seller used or useful in the operation of the Business as described herein.
NOW, THEREFORE, in consideration of the mutual promises and covenants
herein contained, the parties, intending to be legally bound, agree as follows:
1. PROPERTY AND LIABILITIES.
1.1 ASSETS TO BE CONVEYED. Seller hereby agrees to sell,
assign, transfer, convey and deliver to Buyer the following (the "Assets"):
(a) All the fixed and tangible personal property used
in the operation of the Business, which is described in Exhibit "1.1(a)"
attached hereto and made a part hereof, together with all inventory, equipment,
fixtures, furniture and other tangible property of Seller.
(b) The contracts, leases (including, without
limitation, the lease for the Business premises at the location described above)
and other agreements listed or described in Exhibit "1.1(b)," attached hereto
and made a part hereof (the "Contracts").
(c) All of Seller's right, title and interest in and
to the names "B&B Associates," "Baretta," "Force," and all other tradenames,
servicemarks, logos, copyrights and similar materials or rights used to identify
or promote the Business (the "Promotional Rights"). Immediately after closing,
Seller shall discontinue all use of the Promotional Rights, including without
limitation the names "B&B Associates," "Baretta," "Force," and all similar names
and abbreviations thereof.
(d) The goodwill and other intangible property used
in the operation of the Business, including, but not limited to, all magnetic
media, electronic data processing files,
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systems and programs, telephone number or numbers, patents, trade secrets,
know-how, sales and operating plans and non-competition covenants.
(e) All Seller's right, title and interest in any
licenses, permits and authorizations issued by any federal, state or local
regulatory agencies that are used in the operation of the Business to the extent
the same are transferrable.
(f) All business records of Seller used in the
operation of the Business and not relating solely to Seller's internal affairs,
in whatever medium they may be stored (the "Business Records"), subject to
Seller's right, after closing, to have access thereto and make copies thereof
pursuant to Article 11 hereof. The Business Records shall include, without
limitation, all books of account, customer lists, supplier lists, employee
personal files, business studies, consultants' reports, budgets and financial
reports and projections.
(g) All accounts receivable arising from the
operation of the Business (the "Accounts Receivable") (i) as described in
Exhibit "1.1(g)" attached hereto and made a part hereof, and (ii) otherwise
outstanding as of the Closing Date (as hereinafter defined).
(h) Seller's insurance policies in effect in the date
of this Agreement as described on Exhibit "1.1(h)" attached hereto and made a
part hereof.
(i) Property not otherwise included in subparagraphs
(a) through (h) above shall be INCLUDED property and shall be conveyed or
transferred by Seller to Buyer; provided, however, that the following shall be
EXCLUDED property (the "Excluded Property") and shall not be conveyed to Buyer:
(1) Such books and records as pertain solely
to the organization, existence and capitalization of Seller;
(2) Seller's cash and cash equivalents on
hand or in banks, certificates of deposit, money market funds, securities and
similar type investments as of the closing date (hereinafter defined);
(3) Except to the extent otherwise noted
herein, all employee pension benefit and profit-sharing plans, all trusts
established thereunder and all assets thereof.
1.2 LIABILITIES TO BE ASSUMED. On the closing date
(hereinafter defined), Buyer shall assume only those Business liabilities of
Seller specifically set forth in Exhibit "1.2" hereto (the "Liabilities").
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2. CLOSING DATE AND INSPECTION PERIOD.
2.1 The closing of this Agreement (the "Closing") shall occur
on September 25, 1998, at 10:00 A.M. (the "Closing Date") in the offices of
Seller's counsel or at such other location as is mutually agreed to by Buyer and
Seller. The Closing Date may be extended only by the mutual written consent of
the parties.
2.2 Commencing upon the date of execution of this Agreement
and continuing until the Closing Date (the "Investigation Period"), the Buyer
may, in Buyer's sole discretion, review all books and records relating to the
Business and the Assets, including but not limited to all accounting records and
support documents, all governmental licenses, all inventory, customer lists,
material contracts, the premises at which the Business is located, and all
documents relating to the management, operation, maintenance or ownership or use
of the Assets and the Business. Buyer and its agents shall have the right to
make copies of such books, documents and records and to conduct such review as
Buyer deems appropriate.
2.3 Buyer shall have the right to enter into any real property
owned, leased or managed by the Seller and review the books and records of the
Seller, wherever located, for the purpose of undertaking such investigations and
review as the Buyer shall deem appropriate. The Buyer shall conduct all visits,
inspections and reviews in a reasonable manner as to minimize the inconvenience
to the Seller. The Buyer shall not disclose any information or the content of
any documents to any person or entity without the prior written consent of the
Seller, except that the Buyer may disclose such information to Buyer's
attorneys, accountants, and proposed lenders, if any, acting on Buyer's behalf
in connection with this Agreement.
2.4 At any time if before the Closing Date, at Buyer's sole
discretion Buyer may provide written notice of termination of this Agreement to
the Seller based upon the Buyer's investigation described in this Article 2. In
the event that this Agreement is terminated by the Buyer in accordance with this
Paragraph 2.4, the Deposit (hereinafter defined) plus all accrued interest
thereon, if any, shall be returned to the Buyer and the Agreement shall be
terminated and null and void.
3. PURCHASE PRICE AND METHOD OF PAYMENT.
3.1 PURCHASE PRICE. The purchase price for the Assets shall be
Two Hundred Fifty Thousand Dollars ($250,000) (the "Purchase Price"), subject to
adjustment and payable in cash, note and stock, as provided in this Agreement.
An adjustment to the Purchase Price (the "Purchase Price Adjustment") will be
made at Closing as follows:
(a) All tangible personal property taxes on the
Assets shall be prorated on the basis of the taxes for the preceding year unless
the current year's taxes are available; and, if prorated on the basis of the
preceding year, the same will be adjusted and reprorated between
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the parties after the closing whenever the taxes for the current year are
available. Such taxes are to be prorated as of the end of the day immediately
preceding the date of closing and shall be based upon the net taxes remaining
after the deduction for the maximum allowable discount.
(b) All rent prepaid by Seller on the lease covering
the Business premises shall be prorated to the date of Closing and Seller shall
receive all unearned portion thereof from Buyer in cash at the time of the
Closing. Also, Buyer shall reimburse Seller at Closing for any security deposit
paid by Seller to and on deposit with landlord on such lease, provided that such
deposit shall be credited to the Buyer by the landlord.
(c) All deposits heretofore paid by Seller for
utilities, telephone services and other similar services shall remain the
property of Seller, which must obtain refunds of same from the firms to which
the deposits have been paid.
(d) Should Buyer elect to assume and transfer any of
the existing insurance policies of Seller covering the business activities
described herein or the assets described herein, the premium on such policies
which is prepaid past Closing shall be prorated as of the end of the day
immediately preceding Closing and Buyer shall reimburse Seller in cash at
closing for the amount of such premiums which have been prepaid past said date.
3.2 PAYMENT AT CLOSING. On the Closing Date, Buyer shall pay
to Seller the Purchase Price, subject to the Purchase Price Adjustment described
in Paragraph 3.1(a) above, which Purchase Price shall be paid in the following
manner:
(a) At closing Buyer shall deliver to Seller Buyer's
check in the amount of Fifty Thousand Dollars ($50,000).
(b) At closing Buyer shall deliver to Seller Buyer's
promissory note in the principal amount of One Hundred Thousand Dollars $100,000
in the form of Exhibit "3.2(b)" hereto (the "Note"). The Note shall not bear
interest. The Note shall be secured by a lien on the Assets payable in
accordance with a security agreement between Buyer and Seller to be executed and
delivered at closing and shall be evidenced by a financing statement on Form
UCC-1 which Seller shall execute and deliver to Buyer at closing.
(c) At closing Buyer shall deliver to Seller
1,000,000 shares of the common stock, par value $.001 (the "Stock"), of Buyer's
parent company, Liteglow Industries, Inc. ("Liteglow").
3.3 The Stock shall be "restricted" shares within the meaning
of Securities and Exchange Commission Rule 144 promulgated under the Securities
Act of 1933, as amended (the "Act"), and accordingly the certificate or
certificates representing the shares shall bear a restrictive legend restricting
the resale or transfer of the Stock.
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3.4 Buyer has advised Seller that Liteglow's current common
stock trading price may or may not necessarily reflect the value of Liteglow or
the Stock. In the event that the Stock has a "fair market value" (as hereinafter
defined) of less than One Hundred Thousand Dollars ($100,000) on the second
anniversary of the Closing, Liteglow shall deliver to Seller that number of
shares of Liteglow common stock (or like shares of its successor, if any) of
which shall have a fair market value equal to the difference between the fair
market value of the Stock and $100,000. For purposes of this paragraph 3.4,
"fair market value" shall mean the average daily high bid and low asking price
of the Liteglow's common stock for the five business days immediately preceding
the anniversary date of the Closing. By their execution of this Agreement, the
parties confirm their understanding that the bid price of the Liteglow's common
stock as of the date of this Agreement is approximately $.014 per share and that
the Stock, as presently constituted, would have to have a fair market value of
$.10 per share in order to have an aggregate fair market value of $100,000 as
determined in accordance with the terms of this paragraph 3.4. The rights
provided to Seller under this Section 3.4 may not be assigned, sold or
transferred.
3.5 Seller hereby confirms that neither Liteglow nor Buyer,
nor any officer, director or shareholder of Liteglow or Buyer, or any agent of
or professional employed by Liteglow or Buyer, has made any representation to
Seller as to the present or future value of the Stock, Liteglow, or Buyer, nor
has Liteglow, Buyer or any such person made any representation with respect to
the ability of Seller to sell all or any part of the Stock at the current market
price or any other price. Further, Seller hereby confirms his understanding that
the future bid or asking price of Liteglow's common stock, including the Stock,
may not bear any relationship to the net tangible book value of Liteglow's
common stock and, further, may be unrelated to any other generally accepted
method of valuation of the Stock.
3.6 By his execution of this Agreement, Seller hereby
confirms, warrants and represents to Buyer and Liteglow that (i) Seller has
received such information concerning Seller and Liteglow as Buyer has requested
in connection with the sale of the Assets to Buyer and the receipt of Stock in
partial payment of the purchase price of the Assets; and (ii) Seller has had an
opportunity to ask questions of Liteglow and Buyer, and of the management of
both companies, with respect to their respective companies and businesses,
including, without limitation, the existing and anticipated financial condition
and prospects of both companies; and (iii) Buyer has employed such accounting,
legal and other professionals as Seller has deemed appropriate or necessary in
connection with the transactions described in this Agreement, including the
acquisition of Stock as a part of the purchase price of the Business, and such
professional advisors have been given access to such materials, and have asked
such questions of management of Liteglow and Buyer, as they or Seller have
deemed necessary.
4. APPORTIONMENT OF INCOME AND EXPENSES.
In the event this transaction is ultimately closed on the
Closing Date or another date mutually agreeable to Seller and Buyer, Seller
shall be entitled to all income received by Seller
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from the operation of the Business until 11:59 p.m. on the day immediately
preceding the Closing. Upon Closing, Buyer shall be entitled to all income
received by Buyer from the operation of the Business (notwithstanding whether
such income is received on account of operations before or after Closing) after
11:59 p.m. on the day immediately preceding the Closing. In the event this
transaction does not close, no such apportionment of income shall occur.
5. EMPLOYEES.
Seller shall be responsible for the payment of all
compensation due to Seller's employees through 11:59 p.m. on the day immediately
preceding Closing, including without limitation all sales commissions,
profit-sharing and the like arising from the operation of the Business.
6. NONCOMPETITION COVENANT.
6.1 Except as otherwise provided herein, Seller, Seller's
wife, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇, and Seller's brother, ▇▇▇▇▇ ▇▇▇▇▇▇ (collectively the
"Covenantors"), covenant and agree that for a period of two (2) years after the
termination of Seller's employment contract with Buyer executed concurrently
herewith, they shall not, within any of the United States or within any foreign
country in which the Buyer or Liteglow now or may hereafter do business,
individually or collectively, directly or indirectly: (i) compete against Buyer
or Liteglow in the automotive security business; (ii) take any action to finance
or provide any other material assistance to any person or entity engaged in such
competition in the automotive security business against Buyer or Liteglow; or
(iii) without Buyer's prior written consent, offer employment to or solicit an
offer of employment from any employee of Buyer or Liteglow or attempt to
influence any employee of Buyer or Liteglow to terminate his or her employment
with Buyer or Liteglow.
6.2 Notwithstanding anything to the contrary in this Article
6, the Covenantors shall each have the right to be employed by a competitor of
Employer or Liteglow within the automotive security business, provided that the
Covenantors shall not be an owner of, or have an equity interest in, any such
employer and may not use confidential or proprietary information of the Employer
or Liteglow in connection with such other employment. As used in this Section
6.2, confidential and proprietary information shall include, without limitation,
information concerning any supplier, customer, the price paid for products, the
sale price of products to other than retail customers, or any other information
concerning the manner of operation, plans, processes of Employer or Liteglow.
6.3 The Covenantors each acknowledge that compliance with the
provision of this paragraph is of material importance to Buyer, and that in the
event of any breach of the foregoing provisions, Buyer could not be reasonably
or adequately compensated by monetary damages. Therefore, each Covenantor agrees
that Buyer shall be entitled to injunctive or other equitable relief in the
event of a breach or threatened breach of this paragraph by such
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Covenantor, in addition to, and not in lien of, any other relief to which Buyer
may be entitled.
7. CLOSING.
7.1 SELLER'S PERFORMANCE. Prior to or on the Closing Date of
this Agreement, Seller shall deliver to Buyer:
(a) THIRD-PARTY CONSENTS. Except as otherwise
provided herein, all third-party consents, assignments or approvals otherwise
required for Buyer's assumption of any contracts, leases and agreements
described hereunder (including, but not limited to, Seller's lease with respect
to premises at ▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇ ▇-▇, ▇▇▇ ▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇, so
that Buyer will enjoy all the rights and privileges of Seller under such
contracts or obligations, subject only to the same terms and conditions as are
binding on Seller pursuant to the present terms of such contracts, leases and
agreements. This provision shall not require Seller to undertake any
extraordinary measures to secure any required third-party consents, assignments
or approvals and shall not require Seller to pay for or to undertake any
extraordinary measures or to institute litigation against any third-party
failing to give such required consent, assignment or approval; however, if
Seller fails to deliver any covenant, assignment or approval required by this
Paragraph 7.1(a), Buyer shall have the absolute right to terminate this
Agreement.
(b) LESSORS' CERTIFICATES. Except as otherwise
provided herein, certificates from the lessors of all personal and real property
interests leased by Seller stating (i) that the lease is in full force and
effect and has not been modified, (ii) the date to which all rent and other sums
due thereunder have been paid, and (iii) that, to the best of lessor's
knowledge, Seller, as lessee, is not in default under the lease and no event has
occurred that, with notice, the passage of time or both, would constitute a
default thereunder by Seller.
(c) OPINION OF SELLER'S COUNSEL. The written opinion
of Seller's counsel dated as of Closing, to the following effect:
(1) This Agreement has been duly executed by
Seller and (i) the execution and delivery of this Agreement, (ii) the
consummation of the transactions contemplated by this Agreement, and (iii)
compliance with the terms and conditions hereof will not conflict with, or
violate any law, regulation, judgment, decree, order, agreement or other
instrument to which Seller is a party or by which Seller is legally bound.
(2) This Agreement constitutes the legal,
valid and binding obligation of Seller enforceable in accordance with its terms
except as its enforceability may be limited by bankruptcy, insolvency,
moratorium and other laws relating to or affecting creditors' rights generally
and by the exercise of judicial discretion in accordance with general equitable
principles.
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(3) There are no outstanding judgments,
suits, actions or claims pending, threatened or deemed by Seller to be probable
of assertion, or governmental proceeding that would have a material adverse
effect upon the Business or upon the Assets after closing, except as noted on
Exhibit "7.1(c)(3)" attached hereto and made a part hereof.
(4) No action or proceeding is pending or
threatened against Seller that questions or may affect the validity of any
action to be taken by Seller pursuant to this Agreement, or that seeks to
restrain Seller from carrying out the transaction contemplated by the Agreement
or Seller's obligation's hereunder.
(5) The foregoing opinions shall be for the
sole benefit of, and may be relied upon by, Buyer.
(d) Employment agreements of ▇▇▇▇▇▇ and ▇▇▇▇▇ ▇▇▇▇▇▇
in the forms of Exhibit 7.1(d) hereto.
(e) Unaudited income statement for the nine months
ended September 30, 1998, and an unaudited balance sheet dated September 30,
1998, together with Seller's certification to be delivered in accordance with
paragraph 8.15.
7.2 BUYER'S PERFORMANCE. Prior to or at Closing Buyer shall
deliver to Seller the cash payment and a certificate for the Stock to be
delivered at Closing as provided in Article 3 above and the delivery of all
other documents or instruments necessary or appropriate for the consummation of
this transaction, including but not limited to the delivery of the original Note
and security agreement described in Paragraph 3.2(b), above. After closing, the
parties shall execute such other instruments and documents and perform such
other acts as may be necessary or appropriate for the full implementation and
consummation of this Agreement.
8. SELLER'S REPRESENTATIONS, WARRANTIES AND COVENANTS.
Seller hereby represents, warrants and covenants as of the
date of execution of this Agreement and as of the Closing Date, as follows:
8.1 BINDING AGREEMENT. The execution, delivery and performance
of this Agreement by Seller has been duly authorized by all necessary action.
This Agreement has been duly executed and delivered to Buyer and constitutes a
legal, valid and binding agreement of Seller, enforceable in accordance with its
terms.
8.2 EFFECT OF AGREEMENT. The execution, delivery and
performance of this Agreement by Seller and the consummation of the transactions
contemplated hereby will not, with or without the giving of notice and the lapse
of time, or both, (a) violate any provision of law, statute, rule or regulation
to which the Seller is subject; (b) violate any judgment, order, writ or
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decree of any court applicable to the Seller; (c) have any effect on any of the
permits, licenses, orders or approvals referred to in Paragraph 8.3 hereof or
the ability of Buyer to make use of such permits, licenses, orders or approvals;
or (d) result in the breach of or conflict with any term, covenant, condition or
provision of, result in the modification or termination of, constitute a default
under, or result in the creation or imposition of any lien, security interest,
charge or encumbrance upon any of the properties or assets of the Seller
pursuant to its articles of incorporation, by-laws, commitments, contracts or
other agreements or instruments to which the Seller is a party or by which any
of its respective Assets is or may be bound or affected.
8.3 NO VIOLATION. The execution, delivery and performance of
this Agreement by Seller and the consummation of the transaction contemplated
hereby will not, with or without the giving of notice or the lapse of time or
both, violate, contravene, or conflict with or result in a material breach of or
constitute a default or accelerate the performance required under (i) any writ,
order, judgment or decree of any court, arbitrator or governmental agency
applicable to Seller; (ii) any law, rule or regulation applicable to Seller or
to the operation of the Business; or (iii) any mortgage, deed of trust, lien,
lease, restriction or other contract or agreement to which Seller is a party or
by which any of the Assets is bound.
8.4 COMPLIANCE WITH APPLICABLE LAWS. To the best of Seller's
knowledge, (i) Seller is not in default in any material respect under any
executive, legislative, judicial, administrative or private (such as
arbitration) ruling, order, writ, injunction or decree; and (ii) no material
permits, licenses or approvals of any governmental or administrative authorities
are required for Seller to own, lease and operate its properties and to carry on
the Business substantially as presently conducted except as set forth in Exhibit
"8.4" hereto.
8.5 GOVERNMENT AND OTHER CONSENTS. No consents, authorization
or approval of, or exemption by, any governmental or public body or authority is
required in connection with the execution, delivery and performance by the
Seller of this Agreement or any of the instruments or agreements herein referred
to, or the taking of any action herein contemplated.
8.6 NECESSARY PROPERTY. The Assets include all of Seller's
assets reasonably necessary for the operation of the Business as it is now being
operated by Seller.
8.7 TITLE TO PROPERTIES; ABSENCE OF LIENS AND ENCUMBRANCES,
ETC. The Seller owns in fee and has good and marketable title to all of its real
property and good title to all other properties and assets free and clear of all
mortgages, claims, liens, charges and encumbrances except (i) as referred to in
the Financial Statements (as defined in Paragraph 8.15) or disclosed in the
notes thereto, (ii) as referred to in Exhibit "8.7" to this Agreement, and (iii)
such imperfections of title, if any, which do not materially detract from the
value, or interfere with the use, of the properties of the Seller or otherwise
materially impair its business operations. The fixed assets of the Seller
referred to in the financial statements are all located on real property owned
or leased by the Seller. The leases and other agreements or instruments under
which the
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Seller holds, leases or is entitled to the use of any real or personal property
are in full force and effect and all rentals, royalties or other payments
accruing thereunder prior to the date hereof have been duly paid. No default or
event of default exists and no event which with notice or lapse of time (or
both) would constitute a default has occurred and is continuing under the terms
or provisions, express or implied, of any of such leases, agreements or other
instruments or under the terms or provisions of any agreement to which any of
such properties is subject. The Seller has not received notice of violation of
any applicable law, ordinance, regulation, order or requirement relating to its
operations or its owned or leased properties.
8.8 CONDITION OF BUILDINGS, EQUIPMENT. The buildings and
equipment owned, operated, or leased by the Seller are in good condition and
repair and suitable for the uses for which intended. All such buildings and
equipment are in conformity with all applicable laws, ordinances, regulations,
orders, and other requirements relating thereto currently in effect or scheduled
to come into effect.
8.9 CONTRACTS. The contracts listed or described in Exhibit
"8.9" include all the contracts to which Seller is a party or by which Seller is
bound and which have a material effect on Seller's revenues or expenses. To the
best of Seller's knowledge: (i) each contract is in full force and effect and is
unimpaired by any acts or omissions of Seller or Seller's officers, directors,
employees or agents; (ii) there has not occurred as to any contract any material
default by Seller or any event which, with the lapse of time or otherwise will
become a material default of Seller; and (iii) there has not occurred as to any
contract any material default by the other parties thereto or any event which,
with the lapse of time or the election of any person other than Seller, will
become a default under such contract. Neither the Seller, nor to the knowledge
of the Seller any other party, is in arrears in respect of the performance or
satisfaction of the terms or conditions on its part to be performed or satisfied
under any of the contractual commitments and no waiver or indulgence has been
granted by any of the parties thereto. Seller has no knowledge of any loss or
expected loss of any business relationship of the Seller, whether with a
customer, supplier, or significant employee. There are no existing laws,
regulations or decrees nor, to the knowledge of the Seller, any proposed laws,
regulations or decrees which adversely affect or might adversely affect the
rights of the Seller under any of its existing contracts by reason of the
present ownership by the Business or by reason of the proposed sale of the
Assets by the Seller to the Buyer as contemplated by this Agreement.
8.10 COMPLIANCE WITH LABOR LAWS. To the best of Seller's
knowledge, Seller is in compliance with all applicable laws, rules and
regulations relating to the employment of labor, including those relating to
wages, hours, equal employment opportunity, collective bargaining, pension and
welfare benefit plans, and the payment of Social Security and similar taxes, and
is not liable for any arrears of wages or any tax penalties for failure to
comply with any of the foregoing.
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8.11 EMPLOYEES. None of Seller's employees are represented by
a union or other collective bargaining unit, no application of recognition as a
collective bargaining unit is currently pending before the National Labor
Relations Board with respect to any of the Business' employees, and, to the best
of Seller's knowledge, no concerted effort to unionize any of its employees is
currently in progress. There are no material controversies pending or threatened
between the Seller and any of its employees, and Seller is not aware of any
facts which would reasonably result in any such controversy. There are no
discrimination, harassment, or unemployment claims threatened or pending against
Seller. Exhibit "8.11," attached hereto and made a part hereof, contains an
accurate list of all persons currently employed by Seller together with a
description of the terms and conditions of their respective employment as of the
date of this Agreement.
8.12 LITIGATION. There is no litigation, action, suit,
investigation or other proceeding pending or threatened that may give rise to
any claim against any of the Assets, or which may adversely affect the Business
to be acquired by the Buyer hereunder, or which may adversely affect Seller's
ability to perform in accordance with the terms of this Agreement, and Seller is
not aware of any facts that could reasonably result in any such proceeding.
8.13 LIABILITIES. The financial information contained in
Exhibit "8.15" delivered simultaneously with the execution of this Agreement
contains a complete, correct and accurate list of all liabilities of Seller as
of the date noted in such financial information.
8.14 TAX MATTERS. The Seller has: (i) prepared and filed with
the appropriate governmental agencies, and all foreign countries and political
subdivisions thereof, if applicable, all tax returns required to be filed; (ii)
paid all taxes shown on such tax returns to be payable or which have become due
pursuant to any assessment, deficiency, notice, 30-day letter or similar notice
received by it; and (iii) paid all withholding, FICA and other federal, state
and local tax payments required to be paid. Any provisions for income taxes
payable in the financial statements are sufficient for all accrued and unpaid
domestic and foreign taxes, whether or not disputed and for all periods to and
including the date of the Financial Statements. The Seller has not executed or
filed with the Internal Revenue Service or any other taxing authority any
agreement extending the period for assessment or collection of any income taxes
nor is it a party to any pending action or proceeding by any governmental
authority for assessment or collection of taxes, and no claim for assessment or
collection of taxes has been, or with reasonable cause could be, asserted
against it.
8.15 FINANCIAL INFORMATION. Seller has furnished Buyer with
the unaudited financial information and the Federal corporate tax returns listed
in Exhibit "8.15," attached hereto and made a part hereof (the "Financial
Statements"). All financial information contained in Exhibit "8.15": (i) has
been prepared in accordance with Seller's books and records for the Business on
a consistent basis throughout the periods involved and as compared with prior
periods, and, subject to normal year-end adjustments where applicable, is true,
complete and correct in all
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12
material respects and fairly presents the Business' financial position, income,
expenses, assets, liabilities and equity and the results of operation of the
Business as of the dates and for the periods indicated; (ii) is true, complete
and correct in all material respects; and (iii) fairly presents the Business'
financial position, income, expenses, assets, liabilities and shareholders'
equity, and the results of operation of the Business as of the dates and for the
periods indicated. The Seller shall provide Buyer at Closing a certificate
signed by him certifying as to the matters contained in the preceding sentence
of this Paragraph 8.15.
8.16 ABSENCE OF UNDISCLOSED LIABILITIES. The Financial
Statements described in Paragraph 8.15 make full and adequate provisions for all
obligations, liabilities and commitments of the Seller and as of the dates of
the Financial Statements the Seller shall not have had any additional
obligations, liabilities or commitments required to be reserved in the financial
statements.
8.17 ABSENCE OF CERTAIN CHANGES OR EVENTS. Since the dates of
the Financial Statements described in Paragraph 8.15 above, the Business has
not:
(a) incurred any obligation or liability (fixed or
contingent) except (i) trade or business obligations incurred in the ordinary
course of business, none of which is materially adverse, and (ii) obligations
and liabilities under this Agreement;
(b) suffered any material adverse change in its
financial condition, results of operations, properties, business or prospects
nor had any material contract or business relationship terminated or curtailed
except routine contracts of the kind generally performed by the Business;
(c) suffered the occurrence of any events which,
individually or in the aggregate, have had, or might reasonably be expected to
have, a material adverse effect on its financial condition, results of
operations, properties, business or prospects;
(d) incurred damage or destruction in any material
amount of its assets by fire, storm, or other like or unlike casualty, whether
or not covered by insurance;
(e) mortgaged, pledged or subjected to lien or any
other encumbrance any of its assets or properties;
(f) sold, transferred or leased any of its assets or
properties, except for sale, transfers or leases of assets or property in the
ordinary course of business and which is not material in the aggregate;
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13
(g) canceled or compromised any debt or claim except
for adjustments made with respect to contracts for its services in the ordinary
course of business, which in the aggregate are not material;
(h) waived or released any rights of any material
value;
(i) transferred or granted any rights under any
leases, licenses, agreements, patents, inventions, trademarks, trade names,
copyrights, or with respect to know-how;
(j) made or granted any general wage or salary
increase or engaged any new officer or employee or entered into any employment
agreement with any officer or employee for a period of employment of more than
30 days or given any bonus or other extra compensation to Seller or any employee
of Seller;
(k) made any increase in or commitment to increase
any employee benefits or adopted or made any commitments to adopt any additional
employee benefit plan;
(l) entered into any transaction other than in the
ordinary course of business;
(m) suffered any operating loss or any other loss
except as previously disclosed to Buyer and noted in the Financial Statements;
or
(n) made or entered into any contract or commitment
to make any capital expenditures in excess of $5,000 in the aggregate.
8.18 OPERATIONS PRIOR TO CLOSING. Between the date of this
Agreement and the Closing:
(a) Seller will operate the Business in the usual,
regular and ordinary manner; and, to the extent consistent with such operation,
has used and will use its best efforts to (i) preserve Seller's present business
organization intact; (ii) keep available the services of Seller's employees; and
(iii) preserve Seller's business relationship with customers, suppliers and
others having business dealings with it.
(b) Seller will advise Buyer of any material changes
in the financial condition or the results of its operations.
(c) Seller will not sell, factor or discount any
Accounts Receivable, or otherwise take any action, including but not limited to
offering discounts, bonuses or other consideration for prompt payment, to
accelerate or anticipate the collection of any Accounts
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14
Receivable except as is consistent with Seller's past practices and is in the
ordinary course of Seller's Business.
8.19 NO BROKERS OR COMMISSIONS. Buyer shall be solely
responsible for the payment of, and shall pay, to such broker employed any and
all commissions due such broker. Seller hereby agrees to indemnify, defend and
hold harmless Buyer on account of any commissions, fees, expense, or other
compensation due to such broker or any other broker which Seller has employed,
or which claims to have been employed, in connection with the sale of the
Business to the Buyer.
8.20 ABSENCE OF COUPONS, BONUS CERTIFICATES AND OTHER
PROMOTIONAL ARRANGEMENTS. Seller has not provided to any person any coupon,
discount arrangement, or bonus certificate or other promotional arrangement of
any kind for promotional or other purposes entitling any person to purchase
goods or services at less than the price normally charged by Seller for such
goods or services. Notwithstanding Seller's representation, in the event that
any such certificate, coupon or arrangement is presented to Buyer after the
Closing Date, or if Buyer independently learns of any such coupon, bonus
certificate or arrangement after the Closing Date, then Buyer may deduct the
amount of such discount, bonus certificate, or other promotional device from the
amount payable on the Note.
8.21 AGREEMENTS, PLANS, ARRANGEMENTS. Except as set forth in
Exhibit "8.9," or on any other Exhibit hereto, the Seller is not a party to, nor
are any of its respective properties and assets bound or affected by, any
(a) lease agreement (whether as lessor or lessee)
relating to real or personal property;
(b) license or franchise agreement or contract
relating to trademarks, patents, copyrights (or applications therefor),
unpatented designs or styles, know-how or technical assistance;
(c) agreements for the purchase or sale of goods,
materials, supplies, machinery or capital assets in excess of $5,000 in any one
case or in excess of $10,000 in the aggregate;
(d) agreement with any labor union;
(e) agreement with any distributor, dealer, sales
agent or representative;
(f) agreement with any manufacturer or supplier with
respect to discounts or allowances;
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15
(g) agreement guaranteeing, indemnifying or otherwise
becoming liable for the obligations or liabilities of another;
(h) agreement granting any person a lien, security
interest or mortgage on any property or asset of the Seller, including, without
limitation, any factoring agreement or agreement for the assignment of accounts
receivable or inventory;
(i) agreement for the construction or modification of
any building or structure or for the incurrence of any other capital
expenditure;
(j) bonus, deferred compensation, profit sharing,
pension, retirement, stock option, stock purchase, hospitalization, insurance or
other plan, arrangement or practice providing employee or executive benefits;
(k) advertising agreement with a newspaper, magazine
or radio or television station;
(l) agreement which restricts it from doing business
anywhere in the world;
(m) agreement, statute or regulation giving any party
the right to renegotiate or require a reduction in prices or the repayment of
any amount previously paid;
(n) policy of insurance (including surety bonds) in
force with respect to Seller or any of its properties, assets or executive
officers; or
(o) other agreement affecting the Seller or the
business except written contracts for the purchase or sale of goods or services
made in the usual and ordinary course of business terminable without liability
to the Seller upon notice to the other party thereto of not more than thirty
(30) days and not otherwise referred to above.
8.22 ACCOUNTS RECEIVABLE. The Accounts Receivable arose and
will arise from bonafide transactions in the ordinary course of business and
will have been collected in full within a reasonable period of time after the
date of Closing. As provided in Paragraph 3.1(b) the Seller guarantees the
collection by the Buyer within six (6) months of the date of Closing of all
Accounts Receivable outstanding as of Closing. Such guarantee shall be
enforceable by the right of set off provided in Paragraph 3.1(b).
8.23 PURCHASE OR SALE OBLIGATIONS. All unfilled purchases and
sales orders and other commitments for purchases and sales made by the Seller
were made in the usual and ordinary course of its business at the then current
market prices. None of such orders or commitments call for deliveries thereunder
beyond a period of ninety (90) days from the Closing.
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16
8.24 BOOKS AND RECORDS. The books of account and other
financial and corporate records of the Seller are in all material respects
complete and correct, are maintained in accordance with good business practices,
and are accurately reflected in the financial statements. The minute books of
the Seller as previously made or to be made available to Buyer contain accurate
records of all meetings and accurately reflect all other corporate action of the
stockholders and directors of the Seller.
8.25 ENVIRONMENTAL MATTERS. To the best knowledge of Seller
(a) there is no real or personal property now or in the past owned or leased by
the Seller (i) on which property there has ever been stored hazardous material,
waste, or other environmentally regulated substances which have created a
hazardous waste problem, or (ii) which property was or is environmentally
contaminated and Seller has received notice of such contamination; and (b) the
Seller and any property now or in the past owned or leased by the Seller are in
compliance with all federal, state, and local environmental laws and
regulations.
8.26 NO MATERIAL MISREPRESENTATIONS OR OMISSIONS. The
representations of Seller in this Agreement and the Exhibits hereto do not now,
nor shall they at Closing, contain any untrue statement of a material fact, nor
do this Agreement and the Exhibits hereto now omit, nor will they omit at
Closing, to state any material fact, necessary to make the representations of
Seller not misleading.
9. BUYER'S REPRESENTATIONS, WARRANTIES AND COVENANTS. Buyer hereby
represents, warrants and covenants as of the date of execution of this Agreement
and as of Closing as follows:
9.1 EXISTENCE AND POWER. Buyer is a corporation duly
organized, validly existing and in good standing under the laws of the State of
Florida, with full power under its Articles of Incorporation and Bylaws to enter
into and to perform this Agreement.
9.2 BINDING AGREEMENT. This Agreement has been duly executed
and delivered to Seller and constitutes the legal, valid and binding agreement
of Buyer enforceable in accordance with its terms.
9.3 NO VIOLATION. The execution, delivery and performance of
this Agreement by Buyer and the consummation of the transaction contemplated
hereby will not, with or without the giving of notice or the lapse of time or
both, violate, contravene or conflict with or result in a breach of or
constitute a default under (i) any writ, order, judgment or decree of any court
arbitrator or governmental agency applicable to Buyer; (ii) Buyer's Articles of
Incorporation or Bylaws; (iii) any contract, lease or other agreement to which
Buyer is a party or by which Buyer is bound; or (iv) to the best of Buyer's
knowledge, any law, rule or regulation applicable to Buyer.
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9.4 NO BROKERS OR COMMISSIONS. Buyer has engaged no brokers,
finders or similar individuals in connection with this transaction.
10. SURVIVAL OF REPRESENTATIONS; INDEMNIFICATION.
10.1 SURVIVAL OF REPRESENTATIONS AND WARRANTIES. All of the
representations and warranties of the Seller and the Buyer herein contained
shall survive the Closing for a period of twelve (12) months with respect to any
investigation made by or on behalf of either party and with respect to any
breach thereof.
10.2 BUYER'S RIGHT TO INDEMNIFICATION. Seller undertakes and
agrees to (a) indemnify, defend and hold harmless Buyer against and in respect
of, (b) reimburse Buyer upon demand for and against, and (c) give Buyer a right
of set off against Buyer's Note indebtedness to Seller under Section 3.2(b)
hereof, with respect to, any and all losses, costs, liabilities, claims,
obligations and expenses, including reasonable attorneys' fees, incurred or
suffered by Buyer arising from (i) the operation of the Business or ownership of
the Assets prior to Closing; (ii) the breach, misrepresentation or other
violation of any of Seller's covenants, warranties or representations contained
in this Agreement; (iii) all liabilities of Seller not expressly assumed by
Buyer pursuant to this Agreement; (iv) all liens, charges or encumbrances on any
of the Assets which are not expressly permitted by this Agreement; and (v) all
claims for damages made by any party to a Contract who refuses to consent to the
assignment hereof to Buyer and whose claim for damages is based on the premise
that Seller breached that Contract by assigning same to Buyer. The obligations
under this Paragraph 10.1 shall cease and terminate three years from the Closing
Date and Buyer shall have no right of indemnification unless such claim for
indemnification is made within three years from the Closing Date.
10.2 SELLER'S RIGHT TO INDEMNIFICATION. Buyer undertakes and
agrees to hold Seller harmless against any and all losses, costs, liabilities,
claims, obligations and expenses, including reasonable attorneys' fees, incurred
or suffered by Seller arising from (i) the operation of the Business after
Closing; (ii) breach, misrepresentation or other violation of any of Buyer's
covenants, warranties and representations contained in this Agreement; (iii) all
liabilities of Buyer and all Liabilities of Seller which are assumed by Buyer;
and (iv) all liabilities of the Business accruing after the Closing Date.
Buyer's obligations under this Paragraph 10.2 shall cease and terminate three
years from the Closing Date and Seller shall have no right of indemnification
unless such claim for indemnification is made within three years from the
Closing Date.
10.3 PROCEDURE. If any claim or proceeding covered by the
foregoing agreements to indemnify and hold harmless shall arise, the party who
seeks indemnification (the "Indemnified Party") shall given written notice
thereof to the other party (the "Indemnitor") promptly (in no event more than
ten (10) days) after it learns of the existence of such claim or proceeding. Any
claim for indemnification hereunder shall be accompanied by evidence
demonstrating the Indemnified Party's right or possible right to
indemnification, including a copy of all supporting
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documents relevant thereto. The Indemnitor shall have the right to employ
counsel reasonably acceptable to the Indemnified Party to defend against any
such claim or proceeding, or to compromise, settle or otherwise dispose of the
same; PROVIDED, HOWEVER, that no settlement or compromise shall be effected
without the consent of the Indemnified Party, which consent shall not be
unreasonably withheld and PROVIDED FURTHER, that in the event the Indemnified
Party does not consent to a BONA FIDE offer of settlement made by a third party
and the settlement involves only the payment of money, then the Indemnitor may,
in lieu of payment of such settlement to such third party, pay such amount to
the Indemnified Party. After the payment to the Indemnified Party, the
Indemnitor shall have no further liability with respect to such claim or
proceeding and the Indemnified Party shall assume full responsibility to defend
the same. After notice from the Indemnitor to the Indemnified Party of its
election to assume the defense of such claim or proceeding, the Indemnitor shall
not be liable to the Indemnified Party under this paragraph for any legal or
other expenses subsequently incurred by the Indemnified Party in connection with
the defense thereof; PROVIDED, HOWEVER, that the Indemnified Party shall have
the right to employ counsel to represent it if, in the Indemnified Party's sole
judgment, it is advisable for the Indemnified Party to be represented by
separate counsel, and in that event the fees and expenses of such separate
counsel shall be paid by the Indemnified Party. The parties will fully cooperate
in any such action, making available to each other books or records for the
defense of any such claim or proceeding. If the Indemnitor fails to acknowledge
in writing its obligation to defend against or settle such claim or proceeding
within twenty (20) days after receiving notice of the claim or proceeding from
the Indemnified Party (or such shorter time specified in the notice as the
circumstances of the matter may dictate), the Indemnified Party shall be free to
dispose of the matter, at the expense of the Indemnitor (but subject to the
Indemnitor's right subsequently to contest through appropriate proceedings its
obligation to provide indemnification), in any way which the Indemnified Party
deems in its best interest.
10.4 LIMITATIONS ON INDEMNIFICATION RIGHTS. Indemnification
shall be due only to the extent of the loss or damage actually suffered (i.e.,
reduced by any offsetting or related asset or service received and by any
recovery from any third party, such as an insurer), net after the amount equal
to any reduction in federal, state or local income, franchise or other taxes
occasioned by such loss or damage (even though the tax return by which such
reduction would have been realized is not yet due), but including an amount
equal to any increase in federal, state and local income, franchise or other
taxes occasioned by the indemnification payment and then only to the extent of
the excess over the Agreed De Minimis Amount (hereinafter defined). The
Indemnitor shall be subrogated to all rights of the Indemnified Party against
any third party with respect to any claim for which indemnification is paid.
Notwithstanding the foregoing, the Indemnitor shall not be liable to the
Indemnified Party for any individual misrepresentation, breach of warranty or
violation of covenant where the otherwise indemnifiable amount does not exceed
$500.00 and, as regards all such indemnifiable misrepresentations or breaches of
warranty that do not exceed $500.00, the Indemnitor shall not be liable except
to the extent that the aggregate amount thereof exceeds $2,000.00 (such sum
being herein referred to as the "Agreed De Minimis Amount"); PROVIDED, HOWEVER,
that the Agreed De Minimis Amount shall not apply
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with respect to the indemnification otherwise due for any third-party claims.
11. ACCESS TO INFORMATION AND DOCUMENTS AFTER CLOSING.
At Buyer's request, Seller shall permit Buyer to have reasonable
access, after closing, to the corporate books and records included in the
Excluded Property to the extent Buyer has legitimate need therefor, and to make
copies of such materials for Buyer's own and confidential use.
12. GENERAL PROVISIONS.
12.1 EXPENSES. Except as otherwise provided herein, each party
shall pay its own expenses incident to the negotiation and preparation of this
Agreement and the transaction contemplated hereby. All documentary stamp taxes
on the Note and the costs of filing or recording any security instrument
pertaining to the Note shall be paid by Buyer. All other recording costs for
bills of sale and other instruments of transfer, and all stamp, sales, use and
transfer taxes shall be paid by Seller.
12.2 NOTICES. All notices, requests, demands and other
communications pertaining to this Agreement shall be in writing and shall be
deemed duly given when delivered personally with a receipt, when delivered by an
overnight courier service or mailed by certified mail, return receipt requested,
postage prepaid, addressed as follows:
(a) To Buyer: Liteglow Industries of California, Inc.
▇▇▇▇ ▇.▇. ▇▇▇▇ ▇▇▇▇▇ #▇▇▇
▇▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇
With a copy to: ▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇, Esquire
Siegel, Lipman, ▇▇▇▇▇ & ▇▇▇▇▇▇▇
▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇ ▇▇▇
▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇
(a) To Seller: ▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
With a copy to:
--------------------------------------
--------------------------------------
--------------------------------------
Either party may change its address for notices by written notice to the other
given pursuant to this paragraph.
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12.3 PRIOR NEGOTIATIONS. This Agreement supersedes in all
respects all prior and contemporaneous oral and written negotiations,
understandings and agreements between the parties with respect to the subject
matter hereof. All of said prior and contemporaneous negotiations,
understandings and agreements are merged herein and superseded hereby.
12.4 ENTIRE AGREEMENT; AMENDMENT. This Agreement and the
Exhibits to this Agreement set forth the entire understanding between the
parties in connection with the transaction contemplated herein, there being no
terms, conditions, warranties or representations other than those contained
herein, referenced herein or provided for herein. Neither this Agreement nor any
term or provision hereof may be altered or amended in any manner except as an
instrument in writing signed by the party against whom the enforcement of any
such change is sought.
12.5 EXHIBITS. The Exhibits attached hereto or referred to
herein are a material part of this Agreement, as if set forth in full herein. In
the event any Exhibit is not attached hereto at the time of execution of this
Agreement, Seller shall attach such Exhibit as soon as practicable following the
date of execution of this Agreement.
12.6 SEVERABILITY. If any term of this Agreement is illegal or
enforceable at law or in equity, the validity, legality and enforceability of
the remaining provisions contained herein shall not in any way be affected or
impaired thereby. Any illegal or unenforceable term shall be deemed to be void
and of no force and effect only to the minimum extent necessary to bring such
term within the provisions of any applicable law or laws and such term, as so
modified, and the balance of this Agreement shall then be fully enforceable.
12.7 SURVIVAL OF REPRESENTATIONS AND WARRANTIES. Unless
otherwise specifically noted herein, the several representations, warranties and
covenants of the parties contained herein shall survive the closing for a period
of two years from the Closing Date. Thereafter neither party shall have any
liability to the other based upon any of the representations, warranties and
covenants set forth herein.
12.8 WAIVER. Unless otherwise specifically agreed in writing
to the contrary: (i) the failure of either party at any time to require
performance by the other of any provision of this Agreement shall not affect
such party's right thereafter to enforce the same, (ii) no waiver by either
party of any default by the other shall be taken or held to be a waiver by such
party of any other preceding or subsequent default, and (iii) no extension of
time granted by either party for the performance of any obligation or act by the
other party shall be deemed to be an extension of time for the performance of
any other obligation or act hereunder.
12.9 NUMBER AND GENDER. Whenever the context so requires,
words used in the singular shall be construed to mean or include the plural and
vice versa, and pronouns of any gender shall be construed to mean or include any
other gender or genders.
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12.10 HEADINGS AND CROSS-REFERENCES. The headings of this
Agreement are included for convenience of reference only, and shall in no way
limit or affect the meaning or interpretation of the specific provisions hereof.
All cross-references to paragraphs herein shall mean the paragraphs of this
Agreement unless otherwise stated or clearly required by the context. All
references to Exhibits herein shall mean the Exhibits to this Agreement which
have been separately initialed by Seller and Buyer. Words such as "herein" and
"hereof" shall be deemed to refer to this Agreement as a whole and not to any
particular provision of this Agreement unless otherwise stated or clearly
required by the context.
12.11 COUNSEL. Each party has been represented by its own
counsel in connection with the negotiation and preparation of this Agreement
and, consequently, each party hereby waives the application of any rule or law
that would otherwise be applicable in connection with the interpretation of this
Agreement, including, but not limited to, any rule of law to the effect that any
provision of this Agreement shall be interpreted or construed against the party
whose counsel drafted that provision.
12.12 CHOICE OF LAWS; VENUE. This Agreement is to be construed
and governed by the laws of the State of Florida, except for the choice of law
rules utilized in that jurisdiction. Venue for the resolution of any dispute
hereunder shall be Fort Lauderdale, Florida.
12.13 ARBITRATION. Any dispute arising under or related to
this Agreement that Seller and Buyer are unable to resolve by themselves shall
be settled by arbitration in Fort Lauderdale, Florida, by a panel of three
arbitrators. Seller and Buyer shall each designate one disinterested arbitrator,
and the two arbitrators so designated shall select the third arbitrator. The
persons selected as arbitrators need not be professional arbitrators, and
persons such as accountants, appraisers and bankers shall be acceptable. Before
undertaking to resolve the dispute, each arbitrator shall be duly sworn
faithfully and fairly to hear and examine the matters in controversy and to make
a just award according to the best of his or her understanding. The arbitration
hearing shall be conducted in accordance with the rules of the American
Arbitration Association. The written decision of a majority of the arbitrators
shall be final and binding on Seller and Buyer. Costs and expenses of the
arbitration proceeding shall be assessed between Seller and Buyer in a manner to
be decided by a majority of the arbitrators, and the assessment shall be set
forth in the decision and award of the arbitrators. No action at law or suit in
equity based upon any claim arising out of or relating to this Agreement shall
be instituted in any court by Seller or Buyer against the other except an action
to compel arbitration pursuant to this paragraph, an action to enforce the award
of the arbitration panel rendered in accordance with this paragraph, or a suit
for injunction or other equitable relief pursuant to Article 6.
12.14 SUCCESSORS. This Agreement shall be binding upon and
inure to the benefit of and be enforceable by the parties hereto and their
respective successors and assigns.
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12.15 THIRD PARTIES. Nothing in this Agreement, whether
expressed or implied, is intended to (i) confer any rights or remedies on any
person other than Buyer, Seller and their respective successors and assigns,
(ii) relieve or discharge the obligation or liability of any third party, or
(iii) or give any third party any right of subrogation or action against either
Buyer or Seller.
12.16 COUNTERPARTS. This Agreement may be signed in
counterparts with the same effect as if the signature on each counterpart were
on the same instrument. Each of the counterparts, when signed, shall be deemed
to be an original, and all of the signed counterparts together shall be deemed
to be one and the same instrument.
12.17 NO OFFER. This Agreement has been provided for
examination only and does not constitute an offer. This Agreement shall become
effective only after execution hereof (or counterparts hereof) by both Seller
and Buyer.
IN WITNESS WHEREOF, Seller and Buyer have caused this Agreement to be
executed by their duly authorized officers as of the date and year first above
written.
ATTEST/WITNESS: SELLER:
/s/ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇ /s/ ▇▇▇▇▇▇ ▇▇▇▇▇▇
------------------------------------ ------------------------------------
▇▇▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇
BUYER:
LITEGLOW INDUSTRIES OF
CALIFORNIA, INC.
/s/ ▇▇▇ ▇▇▇▇▇▇ By: /s/ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇
------------------------------------ ------------------------------------
▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇, President
As to Article 6 only:
/s/ ▇▇▇▇▇ ▇▇▇▇▇▇
------------------------------------
▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇ executes this Agreement for purposes of confirming her
agreement to the sale of the Assets and waiving any marital rights which she may
have in connection with the Assets, the Business, and the sale contemplated
herein.
/s/ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
------------------------------------
▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
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ASSET PURCHASE AGREEMENT
BETWEEN ▇▇▇▇▇▇ ▇▇▇▇▇▇
AND LITEGLOW INDUSTRIES OF CALIFORNIA, INC.
EXHIBIT INDEX
Exhibit 1.1(a) Fixed and Tangible Personal Property
Exhibit 1.1(b) Contracts, Leases, Other Agreements to be sold
Exhibit 1.1(g) Accounts Receivable
Exhibit 1.1(h) Insurance Policies
Exhibit 1.2 Liabilities
Exhibit 3.2(b) Promissory Note
Exhibit 7.1(c)(3) Judgments, Suits, Actions or Claims
Exhibit 7.1(d) Employment Agreements of ▇▇▇▇▇▇ and ▇▇▇▇▇ ▇▇▇▇▇▇
Exhibit 8.4 Compliance with Laws
Exhibit 8.7 Title, Liens, Encumbrances
Exhibit 8.9 Material Contracts
Exhibit 8.11 Employees
Exhibit 8.15 Federal Corporate Tax Returns and Financial Statements
(Income Statement for the seven months ended July 31, 1998,
and Balance Sheet dated July 31, 1998)
