AGREEMENT FOR PURCHASE AND SALE OF ASSETS
(MPI of Arizona)
This AGREEMENT FOR PURCHASE AND SALE OF ASSETS is entered into on
the 15th day of November, 1999, by and between MPI OF ARIZONA, an Arizona
general partnership (the "Seller"), and VENTURI TECHNOLOGIES, INC., a Nevada
corporation, having its principal office at ▇▇▇ ▇▇▇▇▇ ▇▇▇ ▇▇▇▇, ▇▇▇▇, ▇▇▇▇
▇▇▇▇▇ ("Purchaser" or "VTI").
WHEREAS, Seller owns and operates a carpet and furniture cleaning
business located in both Tucson and Tempe, Arizona (the "Business");
WHEREAS, Purchaser desires to purchase from Seller, and Seller
desires to sell to Purchaser all of the Seller's Assets used in, and
connected with, the Business in exchange for cash, a promissory note,
assumption by Purchaser of certain liabilities, and Purchaser's conveyance of
an amount of its common stock upon the terms described in this Agreement and
the original Global Agreement of Purchase and Sale, dated October 16, 1999
("Global Agreement").
NOW, THEREFORE, in consideration of the mutual agreements set forth
herein, the parties agree as follows:
1. PURCHASE AND SALE OF BUSINESS. Seller shall assign,
transfer, convey and deliver to the Purchaser all of its right, title and
interest in and to the properties, assets, claims, contracts and businesses
of every kind, character and description, whether tangible or intangible,
whether accrued, contingent or otherwise, and wherever located (each of which
is referred to as an "Asset") relating to or comprising the Business; and
including, without limitation, all equipment and machinery; goodwill and all
unfilled customer orders or service requests; all inventories, accounts
receivable, cash on hand and ▇▇▇▇▇ cash, prepayments, notes receivable,
advances, deposits and other receivables; all leaseholds, fixtures and
leasehold improvements; all supplies, vehicles, furniture, office furnishings
and fixtures; all claims, rights and benefits under contracts, purchase
orders or otherwise; all coverage under Seller's existing insurance policies
(if VTI so elects); all trade names and service marks and registrations and
applications therefor, trademarks, trademark applications and registrations,
copyright applications and registrations, patents and patent applications and
registrations; all trade secrets, know-how, licenses, processes, formulae
(excluding "Red Express"), royalties, customer lists and files, inventories,
discoveries, improvements, proprietary or technical information, computer
hardware and software, data, plans, specifications, drawings and the like,
all memberships; all financial, inventory, marketing, personnel, and other
books and records, product literature and advertising; governmental permits,
approvals and authorization (excluding telephone exchange); all business
records and plans, all licenses, assignments, secrecy and royalty agreements
relating to any proprietary rights or trade secrets; and
(i) all of the Assets reflected on the Balance Sheet
of the respective specific Business operation as of the Closing Date; and
(ii) Assets of a nature not normally reflected on a
Balance Sheet in accordance with generally accepted accounting principles
which are used primarily in or are primarily related to the Business; and
(iii) those Assets held by other divisions or affiliates
of the Seller set forth on Exhibit A attached to this Agreement.
The Assets described above and as set forth within Exhibit "A" are referred
to collectively as the "Seller's Assets."
2. PAYMENT FOR SELLER'S ASSETS.
2.1 The total payment for the Seller's Assets shall be in
the monetary equivalent amount of $400,000.00 comprised of the
following:
2.1.1 CASH AND PROMISSORY NOTE. At the Closing,
Purchaser will pay or deliver to Seller the following as partial
consideration for the Seller's Assets:
(a) $80,000.00 cash at closing;
(b) A promissory note duly executed by
Purchaser in the principal amount of
$160,000.00 in the form and pursuant to the
terms of Exhibit B, attached hereto.
2.1.2 VENTURI STOCK. As additional
consideration for the Seller's Assets, Purchaser shall issue to Seller and
deliver to the Escrow Agent 40,000 shares of Purchaser's authorized but
unissued $0.001 par value common stock (the "Venturi Shares").
2.1.3 LIABILITIES UNDERTAKING. At the Closing,
Purchaser shall also execute a "Liabilities Undertaking" in the form of the
attached Exhibit "C", pursuant to which Purchaser agrees to pay or discharge
the obligations set forth therein.
2.1.4 EMPLOYMENT OF SELLER'S PRINCIPALS. As
partial consideration for Seller's Assets, Purchaser has previously entered
into separate employment agreements with ▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇ and ▇▇▇▇▇ ▇.
▇▇▇▇▇▇▇▇.
3. CLOSING. The consummation of the purchase and sale of the
Seller's Assets as provided for in this Agreement will take place by the
execution of documents in counterpart in both Denver, Colorado and Orem,
Utah, by the appropriate and designated signatories ("Closing").
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4. SELLER'S OBLIGATIONS AT CLOSING; FURTHER ASSURANCES.
4.1 At the Closing, Seller shall deliver to the Escrow
Agent:
4.1.1 a ▇▇▇▇ of Sale and Assignment signed by
Seller in the form attached as Exhibit "D-1";
4.1.2 any other instruments of assignment and
transfer necessary to vest in Purchaser good and marketable title to Seller's
Assets;
4.1.3 all contracts and records relating to
Seller's Assets;
4.1.4 all documents required by this Agreement.
4.2 At any time after the Closing, Purchaser may
request and Seller must sign and/or deliver any documents necessary to
transfer and assign to Purchaser, and confirm Purchaser's title to Seller's
Assets, and to assist Purchaser in the exercise of all rights thereto. After
the Closing, Seller shall have access to the books and records pertaining to
its pre-closing operations.
4.3 Purchaser shall have the right to collect any
receivables that may be transferred to Purchaser under this Agreement as of
the Closing date and to endorse Seller's name on checks received for such
receivables. Seller shall transfer to Purchaser any cash or other property
Seller receives for such receivables.
4.4 The Parties agree that with each disbursement or
release from Escrow that upon instructions from Escrow Agent all payments on
the Note may be made directly to the constituent parties comprising the
Seller Entities. VTI further agrees to forward a photocopy of all checks or
wire transfer debits made to the Escrow Agent.
5. REPRESENTATIONS AND WARRANTIES BY SELLER. To the best of
its knowledge and belief, Seller represents and warrants to Purchaser as
follows:
5.1 ORGANIZATION, STANDING AND QUALIFICATION. Seller
is a general partnership duly organized, validly existing and in good
standing under the laws of the State of Arizona. All Fours Distributing,
Inc., a Colorado corporation, is the holder of 51% of the partnership
interest of the Seller, and B&K Management, Inc., an Arizona corporation, is
the holder of 49% of the partnership interest of Seller. Seller has all
requisite power and authority and is entitled to carry on its business as now
being conducted and to own, lease or operate its properties as and in the
places where such business is now conducted.
5.2 EXECUTION AND PERFORMANCE OF AGREEMENT; AUTHORITY.
The performance of this Agreement by Seller will not result in a default or
breach of any other agreement to which Seller is a party. Seller and the
signatories for Seller have the authority to enter into this Agreement.
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5.3 FINANCIAL STATEMENTS. The copies of the following
financial statements given to Purchaser and prepared by Seller (called the
"Financial Statements") are complete and correct, have been prepared from the
records of Seller in accordance with generally accepted accounting principles.
5.3.1 unaudited balance sheets of Seller (the
"Balance Sheet") as of December 25, 1998 (the "Balance Sheet Date") and
December 25, 1997 and Sellers' unaudited income or cash flow statement for
the periods ended December 25, 1998 and December 25, 1997; also attached as
Exhibit G are unaudited Balance Sheets for the period ending November 9,1999.
Such statements of earnings do not contain any items of special income or any
other income not earned in the ordinary course of business except as
specified therein, and such interim financial statements include all
adjustments, which consist only of normal recurring accruals, necessary for
such fair presentation.
5.4 ABSENCE OF UNDISCLOSED LIABILITIES. Except as
reflected in Exhibit D or on the Balance Sheet, as of the Balance Sheet Date
Seller had no debts or obligations of any nature whatsoever, including any
tax liabilities incurred in respect of Seller's income, or its period prior
to the close of business on the Balance Sheet Date or any other debts or
obligations relating to any act, omission or other condition which occurred
or existed on or before the Balance Sheet Date.
5.5 TAXES. All taxes and assessments imposed by any
taxing authority, whether federal, state, local, foreign or otherwise which
are due or payable by Seller, and all interest and penalties thereon, have
been paid in full (except Use tax returns). All tax returns required to be
filed have been accurately prepared and filed and all deposits required to be
made by Seller with respect to employees' withholding taxes have been made.
Seller and VTI further agree to each file Form 8594 based upon the allocation
stipulated to by the parties as to the Purchase Price.
5.6 ABSENCE OF CHANGES OR EVENTS. Between the Balance
Sheet Date and the Closing Date, there has not been any material adverse
change in the business, operations, properties, prospects, assets, or
condition of the Company, and no event has occurred or circumstance exists
that may result in such a material adverse change.
5.7 LITIGATION. There is no claim, order,
investigation or other proceeding against Seller, its employees, its
properties, or business or the transactions contemplated by this Agreement,
and Seller knows of no basis for the same.
5.8 COMPLIANCE WITH LAWS AND OTHER INSTRUMENTS. To the
best of Seller's knowledge Seller has complied with all laws applicable to
its business and the ownership and use of Seller's Assets as well as the
conduct of its business will not conflict with the rights of any other person
or entity, and will not cause a default under any agreement to which Seller
is a party. Seller is not aware of any proposed laws, condemnations or other
proceedings which would affect its business or Seller's Assets.
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5.9 TITLE TO PROPERTIES. Seller has good title to
Seller's Assets. None of Seller's Assets are subject to any lien, lease,
license, or adverse claim except (i) as expressly set forth in the schedules
attached to this Agreement, or (ii) insubstantial imperfections of title
which have arisen in the ordinary course of business. To the best of Seller's
knowledge, except as set forth in the schedules attached to this Agreement,
Seller's Assets are in good operating condition and repair, are suitable for
the purposes used, and are adequate for all current operations of Seller.
5.10 ENVIRONMENTAL COMPLIANCE. To the best of Seller's
knowledge: (a) Seller's business is being operated in compliance with all
environmental laws and with all terms of required permits and licenses, (b)
Seller is not aware of any circumstances that may interfere with its
compliance with environmental laws or which may give rise to any liability,
or which would otherwise form the basis of any claim or investigation, and
that is based on Seller's manufacture, storage, disposal, transport, or
handling, or the release into the environment, of any hazardous substance,
(c) Seller is unaware of any claim, investigation, or proceeding pending or
threatened against Seller, in connection with the Seller's Assets or its
business relating to environmental laws, and (d) Seller currently maintains
all material government permits, licenses and agreements required to operate
Seller's Assets and business, and has complied with all requirements relating
thereto.
5.11 SCHEDULES. Exhibit E contains a complete list and
description of:
5.11.1 All real property in which Seller has any
ownership or other interest and which is used in connection with the
operation of its business.
5.11.2 All equipment, motor vehicles, and other
personal property (other than inventory and supplies), owned or leased by
Seller setting forth a summary description of all leases, claims, and
conditions relating thereto.
5.11.3 All patents, trademarks, service marks,
service names, trade names, and copyrights together with any registrations,
applications and licenses related thereto, owned by Seller or used in the
operation of Seller's business.
5.11.4 All insurance policies insuring Seller or
its assets, specifying the name of the insurer, the risk insured against, the
limits of coverage, the deductible amount, the premium rate and the date
through which coverage will continue by virtue of premiums already paid.
5.11.5 All contracts or agreements relating to
the Assets to which Seller is a party.
5.11.6 All employment and consulting agreements,
compensation plans, pension plans or retirement plans, group life, health and
accident insurance and other employee benefit plans, including holiday,
vacation, Christmas and other bonus practices, to which Seller is a party.
To the best of Seller's knowledge, all of the agreements, leases and licenses
required to be listed on Exhibit E (other than those which have been fully
performed) are valid and binding. Except as
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disclosed in Exhibit E, no payment required to be made under any such
agreement, lease or license has been prepaid more than 30 days prior to its
due date, and there is not any default, or event which would constitute a
default, and none of such agreements, leases or licenses is unduly burdensome
or adverse to Seller's Assets or business or likely to result in any material
loss or liability. None of Seller's existing or completed contracts is
subject to renegotiation with any government body.
5.12 NO GUARANTIES. No obligation of Seller is
guaranteed by any other person or entity, nor has Seller guaranteed any
obligation of any other person or entity.
5.13 RECEIVABLES. All Seller's receivables have arisen
only from transactions in the ordinary course of business and are customarily
collectible within 90 days after each receivable arose, without offset or
resort to litigation.
5.14 RECORDS. The accounting books of Seller are
complete and correct, and to the best of Seller's knowledge, no transactions
which are required to be recorded therein have been omitted.
5.16 DISCLOSURE. All of Seller's representations made
in this Agreement and its related documents are true and contain no untrue
statements and do not omit important facts. Seller has disclosed to Purchaser
in writing all the adverse facts concerning the Seller's Assets and its
business.
5.17 NO CONFLICT. To the best of Seller's knowledge,
performance of this Agreement by Seller will not conflict with any
regulations or agreements to which Seller is a party. No authorization or
filing, which has not already been completed, is necessary for Seller to
perform this Agreement.
6. REPRESENTATIONS AND WARRANTIES BY PURCHASER. Purchaser
represents and warrants to Seller as follows:
6.1 ORGANIZATION. Purchaser is a corporation organized
and in good standing under the laws of the State of Nevada and has full
authority to enter into this Agreement and to carry on its business and to
own and operate its properties.
6.2 AUTHORIZATION AND APPROVAL OF AGREEMENT. All
actions required to be taken by Purchaser relating to the signing of this
Agreement shall have been taken at or prior to the Closing.
6.3 EXECUTION AND PERFORMANCE OF AGREEMENT. The
performance of this Agreement by Purchaser will not result in a default of
any other agreement to which Purchaser is a party. Purchaser has the
authority to enter into this Agreement.
6.4 LITIGATION. There is no claim, order,
investigation or other proceeding, against Purchaser relating to the
transactions contemplated by this Agreement and Purchaser does not know or
have any reason to be aware of any basis for the same.
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7. CONDUCT OF BUSINESS PRIOR TO CLOSING.
7.1 Prior to the Closing, Seller shall conduct its
business only in a manner consistent with its prior practice and shall
preserve its assets and properties in good condition and maintain insurance
thereon in accordance with present practices, and Seller will use its best
efforts (i) to preserve the business and organization of Seller intact, (ii)
to keep available the services of Seller's present employees, agents and
independent contractors, (iii) to preserve the goodwill of Seller's
suppliers, customers, landlords and others having business relations with it,
and (iv) to cooperate with Purchaser and assist in obtaining the consent of
any party to any lease or contract with Seller where the consent of such
party may be required by reason of this Agreement.
7.2 If there is a change in any information contained
in this Agreement or its related documents prior to closing, Seller shall
give Purchaser prompt written notice.
7.3 Seller shall consult with and follow the
recommendations of Purchaser with respect to (i) canceling agreements to
which Seller is a party, including purchase orders and commitments for
capital expenditures or improvements, (ii) discontinuing particular items or
operations and (iii) purchasing, pricing or selling policy (including
offering services at discounts); provided, however, that nothing contained in
this Section shall require Seller to take action that is likely to result in
a penalty or claim for damages against Seller, or in losses to Seller, or to
interfere with the conduct of Seller's business consistent with prior
practice, or to result in a breach by Seller of any of its representations
contained in this Agreement (unless the breach is waived by Purchaser).
8. ACCESS TO INFORMATION AND DOCUMENTS. Upon Purchaser's
request, Seller shall give Purchaser access to Seller's personnel and all its
properties, documents and records and shall furnish copies of documents
requested by Purchaser. Purchaser shall not improperly disclose the same
prior to the Closing.
9. EMPLOYMENT MATTERS.
9.1 Purchaser shall offer employment to those current
employees of Seller that are listed on Exhibit F attached hereto, at the
compensation listed therein.
9.2 Within a reasonable period following the Closing
Date Purchaser shall provide training and support to Seller's employees to
enable them to use and sell Purchaser's products and services.
10. CONDITIONS PRECEDENT TO PURCHASER'S OBLIGATIONS. All
obligations of Purchaser under this Agreement are subject to, at Purchaser's
option, each of the following conditions at or prior to the Closing, and
Seller shall use its best efforts to cause each condition to be fulfilled:
10.1 All representations of Seller in this Agreement or
the related documents shall be correct when made and shall be deemed to have
been made again as of the Closing Date, and shall then be correct except for
changes allowed under the terms of this Agreement.
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10.2 All duties required by this Agreement to be
performed by Seller at or before the Closing shall be performed.
10.3 Since the date of this Agreement there shall be no
material adverse change in the condition of Seller's Assets or its business.
10.4 All documents required to be delivered to
Purchaser at or prior to the Closing shall be delivered.
11. CONDITIONS PRECEDENT TO SELLER'S OBLIGATIONS. All
obligations of Seller at the Closing are subject to, at Seller's option, each
of the following conditions at or prior to the Closing, and Purchaser shall
use its best efforts to cause each condition to be fulfilled:
11.1 All representations of Purchaser contained in this
Agreement or the related documents shall be correct when made and as of the
Closing.
11.2 All duties required by this Agreement to be
performed by Purchaser at or before the Closing shall be performed.
12. INDEMNIFICATION.
12.1 Seller shall indemnify and agrees to hold
Purchaser harmless from:
12.1.1 any loss suffered by Purchaser because a
representation was not true, a warranty was breached or a duty was not
performed by Seller contained in this Agreement or a related document;
12.1.2 any loss suffered by Purchaser in
connection with any of Seller's liabilities which are not assumed by
Purchaser under the Liabilities Undertaking;
12.1.3 any liabilities or debts of Seller, which
exist as of the Closing Date or which arise after that date but which are
based upon any transaction, state of facts or other condition which occurred
on or before the Closing, except to the extent reflected on the schedules
attached to this Agreement;
12.1.4 any liabilities or debts of Seller, which
exist as of the Closing Date or which arise after that date but which are
based upon any transaction, state of facts or other condition which occurred
on or before the Closing Date, except to the extent (i) reflected on the
schedules attached to this Agreement or incurred in connection with a
purchase in the ordinary course of Seller's business and in conformity with
the representations contained in this Agreement, and (ii) assumed by
Purchaser under the terms of the Liabilities Undertaking; and
12.1.5 any claims, judgments and expenses,
including legal fees, incurred for any of the foregoing or for attempting to
avoid or oppose the same or for enforcing this indemnity.
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12.2 Purchaser hereby agrees to indemnify and hold
Seller harmless from:
12.2.1 any loss suffered by Seller because a
representation was not true, a warranty was breached or a duty was not
performed by Purchaser contained in this Agreement or a related document;
12.2.2 any liabilities or debts of Seller
assumed by Purchaser under this Agreement or the Liabilities Undertaking; and
12.2.3 any claims, judgments and expenses,
including legal fees, incurred for any of the foregoing or for attempting to
avoid or oppose the same or for enforcing this indemnity.
13. NATURE AND SURVIVAL OF REPRESENTATIONS AND WARRANTIES. All
representations and warranties contained in this Agreement shall survive the
Closing.
14. NOTICES. Any notices described under this Agreement shall
be in writing and shall be deemed given when personally delivered or mailed
by first class registered mail, return receipt requested, addressed to the
parties at the addresses set forth above.
15. ARBITRATION. Any action, dispute, controversy or claim
between or among the Parties, whether sounding in contract, tort, or
otherwise ("Dispute") shall, at the request of any Party, be finally resolved
by arbitration as set forth and provided for within Paragraph 10 of the
Global Agreement.
IN WITNESS WHEREOF, the parties have caused this Agreement to be
signed as of the date first written above.
SELLER:
MPI OF ARIZONA, an Arizona
General Partnership
By: ALL FOURS DISTRIBUTING, INC.,
a Colorado corporation
By: /s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
------------------------------
▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
By: /s/ ▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
------------------------------
▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
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STATE OF COLORADO )
) ss.
COUNTY OF ▇▇▇▇▇ )
The foregoing instrument was acknowledged before me this 16th day
of November, 1999, by ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇, President, and ▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇,
Vice President of ALL FOURS DISTRIBUTING, INC., a Colorado corporation,
general partner of MPI OF ARIZONA, an Arizona general partnership.
Witness my hand and official seal.
My commission expires: 3/30/2003
--------------------------------
▇▇▇▇ ▇. ▇▇▇▇▇
---------------------------------
Notary Public
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By: B&K MANAGEMENT, INC.,
General Partner
By: /s/ ▇▇▇▇▇ ▇▇▇▇▇▇
---------------------------
▇▇▇▇▇ ▇▇▇▇▇▇, President
STATE OF ARIZONA )
) ss.
COUNTY OF MARICOPA )
The foregoing instrument was acknowledged before me this 16th day
of November, 1999, by ▇▇▇▇▇ ▇▇▇▇▇▇, President of B&K MANAGEMENT INC., general
partner of MPI OF ARIZONA, an Arizona general partnership.
Witness my hand and official seal.
My commission expires: illegible .
---------------------------
▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
---------------------------------
Notary Public
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PURCHASER:
VENTURI TECHNOLOGIES, INC.,
a Nevada corporation
By: /s/ ▇▇▇▇ ▇▇▇▇▇▇▇
---------------------------
Its:
-----------------------
STATE OF UTAH )
) ss.
COUNTY OF UTAH )
The foregoing instrument was acknowledged before me this 15th day of
November, 1999, by ▇▇▇▇ ▇▇▇▇▇▇▇, President of VENTURI TECHNOLOGIES, INC., a
Nevada corporation.
Witness my hand and official seal.
My commission expires: 5-15-2001 .
---------------------------
/s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
---------------------------------
Notary Public
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