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EXHIBIT 10.19
STOCK REPURCHASE AGREEMENT
Between and Among
XXXXXX XXXXXXXX,
DC ENTERPRISES, INC.
and
BIKERS DREAM, INC.
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TABLE OF CONTENTS
Section Page
1. Sale and Purchase of Shares ......................................... 1
1.1 Shares Sold and Acquired ....................................... 1
1.2 Consideration; Dealership Rights ............................... 1
1.3 Additional Consideration ....................................... 3
1.4 Balance Sheet .................................................. 3
1.5 Assumption of Liabilities; Lease ............................... 4
1.6 Sales and Use Taxes ............................................ 4
2. Representations and Warranties of Seller and Xxxxxxxx ............... 4
2.1 Power .......................................................... 4
2.2 Binding Obligation ............................................. 4
2.3 No Conflicts ................................................... 5
2.4 Litigation and Other Proceedings ............................... 5
2.5 No Consent ..................................................... 5
2.6 Title .......................................................... 5
2.7 Due Diligence .................................................. 5
3. Representations and Warranties of Purchaser .......................... 5
3.1 Organization .................................................... 6
3.2 Authority ....................................................... 6
3.3 Binding Obligation .............................................. 6
3.4 No Conflicts .................................................... 6
3.5 Litigation and Other Proceedings ................................ 6
3.6 No Consent ...................................................... 6
4. The Closing .......................................................... 7
4.1 The Closing Date and Place ...................................... 7
4.2 Actions and Deliveries by Purchaser at the Closing .............. 7
4.3 Actions and Deliveries by Seller at the Closing ................. 7
5. Conditions to Closing ................................................ 8
5.1 Conditions Precedent of Purchaser ............................... 8
5.2 Conditions Precedent of Seller .................................. 8
5.3 Condition Subsequent ............................................ 9
6. Obligations After Closing ............................................ 9
6.1 Further Assurances .............................................. 9
6.2 Indemnification by Seller and Xxxxxxxx .......................... 9
6.3 Indemnification by Purchaser .................................... 9
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6.4 Defense of Claim . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10
6.5 Resignation. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10
6.6 Florida License. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10
6.7 Solicitation of Employees. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10
6.8 Guarantee. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10
7. Costs and Broker's Fees. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10
7.1 Costs Borne by Parties . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10
7.2 Broker's Fees. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11
8. Form of Agreement and Severability . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11
8.1 Headings . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11
8.2 Entire Agreement . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11
8.3 Counterparts . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11
8.4 Severability . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11
9. Parties. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11
9.1 Other Parties. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11
9.2 Assignment . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11
10. Survival of Representations and Warranties . . . . . . . . . . . . . . . . . . . . . . . . . 12
11. Notices . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12
12. Confidentiality and Non-Compete . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13
12.1 Confidential Information . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13
12.2 Covenant Not to Compete . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13
12.3 Remedies . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 14
13. Governing Law . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 14
14. Advice of Counsel . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 14
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STOCK REPURCHASE AGREEMENT
THIS STOCK REPURCHASE AGREEMENT (this "Agreement"), effective as of
September 9, 1996, is made between and among XXXXXX XXXXXXXX, an individual
resident of Florida, for himself and as trustee and sole grantor under the
"Xxxxxx Xxxxx Xxxxxxxx Revocable Trust datd 9/27/94" ("Xxxxxxxx"), DC
ENTERPRISES, INC., a Nevada corporation (the "Seller") and BIKERS DREAM, INC.,
a California corporation (the "Purchaser"):
WITNESSETH:
WHEREAS, Seller is wholly owned by Xxxxxxxx, who is currently
President of Purchaser; and
WHEREAS, Xxxxxxxx has contributed 950,000 shares of Purchaser's common
stock, no par value per share (the "Shares") held in the name of "Xxxxxx Xxxxx
Xxxxxxxx Revocable Trust dtd 9/27/94" to Seller; and
WHEREAS, Xxxxxxxx desires to cause Seller to sell the Shares to
Purchaser in exchange for, among other consideration, Purchaser granting
Seller dealership rights in Purchaser's motorcycle, motorcycle parts,
accessories and service business (the "Business") located at 0000 Xxxxxxxx
Xxxx, Xxxxxxxxxx, Xxxxxxx 00000 (the "Location"); and
WHEREAS, Purchaser desires to acquire such Shares from Seller upon the
terms and conditions set forth in this Agreement;
NOW, THEREFORE, in consideration of the foregoing, the mutual promises
herein set forth and other good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, and subject to the terms and
conditions hereof, the parties agree as follows:
SECTION 1
SALE AND PURCHASE OF SHARES
1.1 SHARES SOLD AND ACQUIRED. Subject to the terms and conditions
set forth in this Agreement, Seller does hereby agree to sell, transfer, and
deliver to Purchaser, and Purchaser does hereby agree to purchase, acquire, and
accept from Seller, on the Closing Date all fights, title and interest of
Seller in and to the Shares.
1.2 CONSIDERATION; DEALERSHIP RIGHTS. Purchaser agrees to grant
Seller dealership rights (the "Rights") to the Location in accordance with its
standard dealership agreement, a copy of which is attached as Exhibit 1.2
hereto, with the following additional terms and conditions:
(a) The Rights shall be royalty-free for a period of
three years from the Closing Date (as defined in Section 4.1, below);
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(b) At the Closing (as defined in Section 4.1, below),
Purchaser shall transfer, assign and convey to Seller all inventory at the
Location as shown on the Balance Sheet (as defined in Section 1.4, below),
which inventory shall have a value of at least $250,000, valued at cost to
Purchaser for inventory selection purposes;
(c) At Closing, Purchaser shall retain rights to all
accounts receivable and shall remain obligated for all accounts payable
incurred or accrued by the Business conducted at the Location prior to the
Closing as shown on the Balance Sheet;
(d) At Closing Purchaser shall cause there to be ten
motorcycles at the Location as part of the Inventory, comprised as follows:
five motorcycles presently located at the Location, one "Low Boy" presently
located at Purchaser's location in Santa Ana, California, and four motorcycles
with stock numbers of HD5327, HD6419, HD7103A and HD9305 and to be shipped from
Purchaser's location in Dallas, Texas;
(e) At Closing Purchaser shall transfer, assign and
convey to Seller all merchandise located on Purchaser's rented U-haul support
vehicle, which merchandise shall have a value of $100,000, valued at cost to
Purchaser;
(f) At Closing Purchaser shall cause there to be $10,000
cash on hand at the Location, which cash on hand Purchaser shall transfer,
assign and convey to Seller;
(g) Purchaser shall pay all costs relative to the
transportation of one shipment of inventory from Purchaser's location at Santa
Ana, California to the Location, including motorcycles, and will likewise pay
all costs relating to the transportation of motorcycles that are required to be
shipped to the Location from Purchaser's location at Dallas, Texas;
(h) Purchaser shall cause all payroll to be fully paid
through the Closing Date with respect to all employees employed by Purchaser at
any time up to and through the Closing Date at the Location;
(i) Purchaser agrees to grant Seller future dealership
rights (cancelable by Purchaser upon 90 days' written notice) for new "Bikers
Dream" motorcycle, motorcycle parts, accessories and service businesses within
the one hundred square mile area surrounding the Location, which new stores
shall be granted pursuant to Purchaser's standard dealership agreement, a copy
of which is attached as Exhibit 1.2 hereto, and which dealership agreements
will not include the supplemental terms described in Section 1.2(a) through (h)
or in Section 1.3 hereof, or in any other provision of this Agreement,
inconsistent with such standard dealership agreement;
(j) Notwithstanding anything contained in Purchaser's
standard dealership agreement, Seller and Xxxxxxxx acknowledge that they have no
rights to the name "Bikers Dream" or any related trademark except to the extent
granted to them as part of the Rights, and, in particular, without limiting the
foregoing, shall have no rights to open a restaurant or conduct or engage in any
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other business, except as specifically described herein, using the name "Bikers
Dream" or any derivative thereof or any other name or xxxx that is confusingly
similar thereto; and
(k) The Rights may be canceled at any time by Purchaser
upon 90 days' written notice.
1.3 ADDITIONAL CONSIDERATION. In addition to the foregoing,
Purchaser agrees to pay the following consideration:
(a) In cancellation of prior indebtedness of $115,500,
Purchaser shall pay Xxxxxxxx the aggregate amount of $19,500 at Closing and the
balance in equal monthly installments starting 30 days after Closing for a
period of 24 months;
(b) At Closing Purchaser shall pay the balance on
Xxxxxxxx'x MBNA credit card (the "Credit Card") up to the amount of $24,000;
(c) Purchaser agrees to maintain and continue Xxxxxxxx'x
coverage under Purchaser's health care plan through December 31, 1996, to the
same extent to which Xxxxxxxx was covered by such plan as of the day prior to
the Closing Date, and to assume all costs relating to such continuing coverage;
(d) At Closing Purchaser shall transfer, assign and
convey to Seller all of the furniture located in Xxxxxxxx'x office at
Purchaser's location at Santa Ana, California, including without limitation, a
desk, chair, bookcase and credenza, not including any computers and printers;
and
(e) At Closing Purchaser shall cause the 50,000 options
previously granted to Xxxxxxxx pursuant to an option agreement dated April 4,
1995 to become fully vested, and Purchaser shall cause there to be issued
100,000 non-qualified plan options to purchase shares of Purchaser at a price
of $3 per share, exercisable at any time within three years from the Closing
Date, with a "cashless exercise" provision whereby optionee shall sell
sufficient shares at exercise to generate the exercise price, which shall be
paid to the Company.
1.4 BALANCE SHEET. A physical count of all inventory of the
business conducted at the Location will be taken by representatives of Seller
and Purchaser on or before the Closing Date and again, if necessary, in an
abbreviated fashion, on the Closing Date. For the purposes of this Agreement,
the value of each item of inventory shall be determined at Purchaser's cost for
such item, and only useable, merchantable items of the inventory shall be
included in the calculation of the value of the inventory. Based on the
results of such physical count of inventory, Seller and Purchaser shall create
a balance sheet of the Location as of September 5, 1996 (the "Balance Sheet"),
which balance sheet shall have been prepared in accordance with generally
accepted accounting principles consistently applied with prior periods, will be
complete and correct, and will contain and reflect accruals for any obligations
of any nature, whether absolute, contingent or otherwise, known to Purchaser as
of the date of such Balance Sheet, except for accruals not required to be
maintained under general accepted accounting principles. Such Balance Sheet
will reflect the accounts payable and the accounts receivables to be retained
by Purchaser pursuant to Section 1.2(c) hereof.
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1.5 ASSUMPTION OF LIABILITIES; LEASE.
(a) Purchaser shall have paid rent and wages relating to
the business conducted at the Location up to the Closing Date, and Seller and
Xxxxxxxx at Closing will assume all liabilities, claims and other obligations
of Purchaser, whether now existing or arising in the future, whether accrued,
contingent or otherwise, including, without limitation, the payment of rent,
utilities, wages (and other employee benefits), taxes, material supplies,
unpaid installments of the price of inventory, equipment, furniture and
fixtures, and any other liabilities of Purchaser accrued from and after the
Closing Date, relating to, or arising out of the business conducted at, the
Location.
(b) In addition to the foregoing, Seller and Xxxxxxxx
agree that they will assume any and all obligations under the presently
existing lease relating to the Location (the "Lease"). As a condition to
Closing under this Agreement, Purchaser, Seller and Xxxxxxxx shall enter into
an Assignment of Lease, Acceptance and Assumption and Consent of Lessor in the
form attached as Exhibit 1.5(b) hereto (the "Lease Assignment"), which
Assignment shall either (i) release Purchaser from any further liability
relating to such Lease or (ii) provide, in the event landlord under the Lease
does not sign the Lease Assignment, for 150,000 shares (which number shall be
reviewed two years from the date hereof) of the Purchaser's common stock owned
by Xxxxxxxx to be placed in escrow to be utilized to compensate Purchaser for
any Losses (defined in Section 6.2) arising out of any breach by Seller or
Xxxxxxxx under the Lease.
1.6 SALES AND USE TAXES. All sales and use taxes, and any other
transfer taxes, payable with respect to this Agreement shall be paid by
Purchaser.
SECTION 2
REPRESENTATIONS AND WARRANTIES OF SELLER AND XXXXXXXX
In order to induce Purchaser to enter into this Agreement, Seller and
Xxxxxxxx jointly and severally represent and warrant to, and covenant with,
Purchaser as set forth below:
2.1 POWER. Seller is a Nevada corporation, duly organized,
validly existing and in good standing under the laws of Nevada, and will be
qualified to do business in Florida, and has the corporate power and authority
to execute and deliver, and to perform its obligations under, this Agreement
and any agreements to be executed in connection with this Agreement on the
Closing Date. Xxxxxxxx is under no legal disability and has the power and
authority to execute and deliver, and to perform his obligations under, this
Agreement and any agreements to be executed in connection with this Agreement
on the Closing Date. Xxxxxxxx owns all the issued and outstanding securities
of Seller.
2.2 BINDING OBLIGATION. This Agreement has been, and any
agreements to be executed in connection with this Agreement on the Closing Date
will have been, duly executed by Xxxxxxxx
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and by and on behalf of Seller and constitutes, or will constitute when
executed, valid and binding obligations of Seller and Xxxxxxxx in accordance
with their terms, which obligations are enforceable in accordance with their
terms.
2.3 NO CONFLICTS. The execution, delivery, and performance of
this Agreement, and any agreements to be executed in connection with this
Agreement on the Closing Date, by Seller or Xxxxxxxx do not and will not
violate, conflict with, or result in a breach of, or constitute a default
under, any of the terms, conditions or provisions of any statute, law or
regulation of any jurisdiction as it relates to Seller or Xxxxxxxx, or any
judgment, order, injunction, decree or award of any court, arbitrator,
administrative agency or governmental or regulatory body against or binding
upon Seller or Xxxxxxxx, or any agreement, contract or obligation binding upon
Seller or Xxxxxxxx, or as to which any of their assets may be subject.
2.4 LITIGATION AND OTHER PROCEEDINGS. There are no claims,
actions, suits or proceedings pending before any court or governmental
authority or any investigations pending, nor has Seller nor Xxxxxxxx received
notice of any claims, actions, suits, proceedings or investigations threatened,
which question or challenge the validity of this Agreement, and any agreements
to be executed in connection with this Agreement on the Closing Date, or any
action taken or to be taken by Seller or Xxxxxxxx in connection with the
transactions contemplated hereby.
2.5 NO CONSENT. No consent of any other party and no consent,
license, approval or authorization of, or exemption by, or registration or
declaration or filing with, any governmental authority is required in
connection with the execution, delivery or performance of this Agreement with
respect to Seller or Xxxxxxxx, or the consummation by Seller or Xxxxxxxx of the
transactions contemplated hereby.
2.6 TITLE. Seller has, or will have on the Closing Date, good and
marketable title to the Shares, with full right and authority to sell and
deliver the same in accordance with this Agreement, and the Shares are free and
clear of all liens, mortgages, claims, charges, security interests,
encumbrances or other restrictions or limitations of any nature whatsoever.
2.7 DUE DILIGENCE. Xxxxxxxx is the sole stockholder of Seller and
is at the date hereof President and a Director of Purchaser, and Xxxxxxxx has
fully satisfied himself as to Purchaser's current financial condition and the
future direction of Purchaser's business, and has likewise fully satisfied
himself as to the current financial condition of the Location, and has availed
himself of a full opportunity to inspect all of Purchaser's books and records,
including those relating to the Location.
SECTION 3
REPRESENTATIONS AND WARRANTIES OF PURCHASER
In order to induce Seller and Xxxxxxxx to enter into this Agreement,
Purchaser represents and warrants to, and covenants with, Seller and Xxxxxxxx
as set forth below:
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3.1 ORGANIZATION. Purchaser is a corporation duly organized,
validly existing, and in good standing under the laws of the State of
California, and has the corporate power and authority to execute and deliver,
and to perform obligations under, this Agreement and any agreements to be
executed in connection with this Agreement on the Closing Date.
3.2 AUTHORITY. The execution, delivery, and performance of this
Agreement have been, and any agreements to be executed in connection with this
Agreement on the Closing Date will have been, duly and validly authorized and
approved by the Board of Directors of Purchaser, and no further corporate
action is required to authorize the execution, delivery, or performance of this
Agreement, and any agreements to be executed in connection with this Agreement
on the Closing Date, by such corporation.
3.3 BINDING OBLIGATION. This Agreement has been, and any
agreements to be executed in connection with this Agreement on the Closing Date
will have been, duly executed by and on behalf of Purchaser and constitutes, or
will constitute when executed, the valid and binding obligation of such
corporation, which obligations are enforceable in accordance with their terms,
subject only to applicable bankruptcy, insolvency, reorganization, moratorium
or similar laws.
3.4 NO CONFLICTS. The execution, delivery, and performance of
this Agreement, and any agreements to be executed in connection with this
Agreement on the Closing Date, by Purchaser, do not and will not violate,
conflict with, or result in a breach of, or constitute a default under, any of
the terms, conditions, or provisions of the Articles of Incorporation or Bylaws
of such corporation, any statute, law, or regulation of any jurisdiction as it
relates to such corporation, or any judgment, order, injunction, decree, or
award of any court, arbitrator, administrative agency, or governmental or
regulatory body against or binding upon such corporation.
3.5 LITIGATION AND OTHER PROCEEDINGS. There are no claims,
actions, suits or proceedings pending before any court or governmental
authority or any investigations pending, or claims, actions, suits, proceedings
or investigations threatened, which question or challenge the validity of this
Agreement, and any agreements to be executed in connection with this Agreement
on the Closing Date, or any action taken or to be taken by each such
corporation in connection with the transactions contemplated hereby.
3.6 NO CONSENT. No consent of any other party and no consent,
license, approval or authorization of, or exemption by, or registration or
declaration or filing with, any governmental authority is required in
connection with the execution, delivery or performance of this Agreement with
respect to Purchaser, or the consummation by Purchaser of the transactions
contemplated hereby.
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SECTION 4
THE CLOSING
4.1 THE CLOSING DATE AND PLACE. The closing of the transactions
contemplated by this Agreement (the "Closing") shall take place at the offices
of Purchaser in Santa Ana, California, on or about 10:00 a.m. Pacific Standard
Time on September 9, 1996 (the "Closing Date").
4.2 ACTIONS AND DELIVERIES BY PURCHASER AT THE CLOSING. At the
Closing, Purchaser shall deliver or cause to be delivered to Seller or
Xxxxxxxx, as required by this Agreement, against delivery of the items
specified in Section 4.3:
(a) A Dealership Agreement Granting Seller the Rights on
the terms set forth herein (the "Dealership Agreement");
(b) A general xxxx of sale, in the form of Exhibit 4.2(b)
attached hereto and incorporated herein by reference, conveying, assigning,
transferring and selling the inventory and other assets required to be
transferred, assigned and conveyed by Purchaser to Seller pursuant to Section
1.2 hereof, to Seller, together with the relevant documents of title thereto,
if any;
(c) The cash and additional consideration required to be
paid by Purchaser to Seller or Xxxxxxxx at Closing in accordance with Section
1.3 hereof;
(d) The Lease Assignment; and
(e) Possession of the Location.
4.3 ACTIONS AND DELIVERIES BY SELLER AT THE CLOSING. At the
Closing, Seller or Xxxxxxxx or both, as the case may be, shall deliver or cause
to be delivered to Purchaser, against delivery of the items specified in
Section 4.2:
(a) Seller will deliver the stock certificate(s)
representing the Shares, duly endorsed for transfer to Purchaser or together
with duly executed stock assignments or transfer powers sufficient to transfer
and assign to Purchaser all right, title and interest therein;
(b) The Dealership Agreement;
(c) The Lease Assignment; and
(d) Xxxxxxxx'x written resignation as an officer,
director and employee of Purchaser.
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SECTION 5
CONDITIONS TO CLOSING
5.1 CONDITIONS PRECEDENT OF PURCHASER. The obligations of
Purchaser under this Agreement to be performed on the Closing Date shall be
subject to the conditions that, on or before the Closing Date:
(a) Representations and Warranties True at Closing. Each
of the representations and warranties of Seller and Xxxxxxxx contained in this
Agreement or any certificate or document delivered pursuant to the provisions
of this Agreement shall be true in all respects on and as of the Closing Date
as though such representations and warranties were made at and as of such date;
(b) Compliance with Agreement. Seller or Xxxxxxxx shall
have performed and complied with all agreements and conditions required by
this Agreement to be performed or complied with by such parties prior to or at
the Closing Date;
(c) Lease. The Landlord under the Lease shall have given
and delivered to Purchaser its written consent to the assignment of the Lease
to Seller and shall have released Purchaser from any and all liability with
respect to or arising pursuant to or in connection with the Lease; and
(d) Actions and Deliveries. Seller and Xxxxxxxx shall be
prepared to deliver or cause to be delivered the documents required to be
delivered to Purchaser pursuant to Section 4.3 hereof.
5.2 CONDITIONS PRECEDENT OF SELLER. The obligations of Seller and
Xxxxxxxx under this Agreement to be performed on the Closing Date shall be
subject to the following conditions that, on or before the Closing Date:
(a) Representations and Warranties True at Closing. Each
of the representations and warranties of Purchaser contained in this Agreement
or any certificate or document delivered pursuant to the provisions of this
Agreement shall be true in all respects on and as of the Closing Date as though
such representations and warranties were made at and as of such date;
(b) Compliance with Agreement. Purchaser shall have
performed and complied with all agreements and conditions required by this
Agreement to be performed or complied with by such parties prior to or at the
Closing Date; and
(c) Actions and Deliveries. Purchaser shall be prepared
to deliver or cause to be delivered the documents required to be delivered to
Seller pursuant to Section 4.2 hereof.
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5.3 CONDITION SUBSEQUENT. Notwithstanding anything contained elsewhere
herein, in the event the Dealership Agreement shall not have been executed and
delivered at Closing, the Closing shall be subject to a condition subsequent
that the parties shall enter into a Dealership Agreement which shall include
the terms set forth in Section 1.2 (a) through (h) hereof, each of the parties
hereto agreeing to negotiate such Dealership Agreement in good faith and
agreeing further that the execution and delivery thereof by such party shall
not be unreasonably withheld.
SECTION 6
OBLIGATIONS AFTER CLOSING
6.1 FURTHER ASSURANCES. The parties hereto, on and at any time
after the Closing Date, will execute, acknowledge, and deliver any further
assignments, conveyances, and other assurances, documents, and instruments of
transfer reasonably requested by any other party and will take any other action
consistent with the terms of this Agreement that may be reasonably requested by
such party for the purpose of giving effect to the transactions described
herein.
6.2 INDEMNIFICATION by SELLER AND XXXXXXXX. Seller and Xxxxxxxx,
jointly and severally, hereby agree to indemnify and hold harmless Purchaser
and its officers, directors, partners, employees, agents, and counsel, from and
against any and all losses, claims, assessments, judgments, costs and expenses,
damages or deficiencies (including, but not limited to, reasonable attorneys'
fees and other costs and expenses incident to proceedings or investigations or
to the defense of any claim) ("Losses") or deficiencies resulting from (i) any
misrepresentation, breach of warranty or nonfulfillment of any covenant,
indemnity, undertaking or agreement on the part of Seller or Xxxxxxxx contained
in this Agreement or any agreement executed in connection with this Agreement,
and (ii) any and all actions, suits, proceedings, demands, assessments or
judgments, costs or expenses (including, but not limited to, reasonable
attorneys' fees and other costs and expenses incident to proceedings or
investigations or to the defense of any claim) related to any of the foregoing.
Any liability under this Section 6.2 shall accrue and be due and payable to
Purchaser as and when such damages or deficiencies are accrued and due and
payable by Purchaser.
6.3 INDEMNIFICATION BY PURCHASER. Purchaser hereby agrees to
indemnify and hold harmless Seller, its respective heirs and successors, from
and against any and all Losses or deficiencies resulting from (i) any
misrepresentation, breach of warranty or nonfulfillment of any covenant,
indemnity, undertaking or agreement on the part of Purchaser contained in this
Agreement or any agreement executed in connection with this Agreement, and (ii)
any and all actions, suits, proceedings, demands, assessments or judgments,
costs, or expenses (including, but not limited to, reasonable attorneys' fees
and other costs and expenses incident to proceedings or investigations or to the
defense of any claim) related to any of the foregoing. Any liability under this
Section 6.3 shall accrue and be due and payable to Seller, as and when such
damages or deficiencies are accrued and due and payable by Seller.
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6.4 DEFENSE OF CLAIM. If any party (the "Indemnified Party")
asserts that another party (the "Indemnifying Party") has become obligated to
the Indemnified Party pursuant to Section 6.2 or 6.3, or in the event that any
suit, action, investigation, claim or proceeding is begun, made or instituted
as a result of which the Indemnifying Party may become obligated to the
Indemnified Party under Section 6.2 or 6.3, then the Indemnified Party shall
give prompt written notice thereof to the Indemnifying Party. The Indemnifying
Party shall have the right, at its expense and with counsel of their choosing,
to control and defend, contest, settle (at no cost to the Indemnified Party),
or otherwise protect against any such suit, action, investigation, claim or
proceeding. The Indemnified Party shall have the right, but not the
obligation, to participate at its own expense in the defense thereof by counsel
of the Indemnified Party's choice. In any event, the Indemnified Party shall
cooperate with the Indemnifying Party in the defense of any such suit, action,
investigation, claim or proceeding. Without limiting the generality of the
foregoing, the Indemnified Party shall furnish documentary or other evidence as
is then in its possession as may reasonably be requested by the Indemnifying
Party for the purpose of defending against any such suit, action,
investigation, claim or proceeding. In the event that the Indemnifying Party
does not elect to control and defend, contest, settle or otherwise protect
against any such suit, action, investigation, claim or proceeding, the
Indemnified Parry may do so and the Indemnifying Party shall indemnify the
Indemnified Party with respect thereto and reimburse the Indemnified Party's
expenses as incurred.
6.5 RESIGNATION. Xxxxxxxx will resign as an employee, officer and
director of Purchaser as of the Closing Date.
6.6 FLORIDA LICENSE. Seller agrees to permit Purchaser to use
Seller's license for three years in order to sell motorcycles in Florida, for
a fee of $200 per motorcycle, if required by Purchaser.
6.7 SOLICITATION OF EMPLOYEES. Purchaser agrees that for a period
of at least one year following the Closing Date it will not induce or attempt
to persuade any employee, agent, customer or supplier of the Location to
terminate such employment, agency or business relationship in order to enter
into any such relationship on behalf of any other business organization in
competition with the Location.
6.8 GUARANTEE. Xxxxxxxx hereby agrees to guarantee each and every
obligation, covenant and agreement of Seller contained herein.
SECTION 7
COSTS AND BROKER'S FEES
7.1 COSTS BORNE BY PARTIES. Except as otherwise provided herein,
Seller, Xxxxxxxx and Purchaser shall pay all costs and expenses incurred by
them in negotiating and preparing this Agreement and in closing and carrying
out the transactions contemplated by this Agreement.
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7.2 BROKER'S FEES. Purchaser and Seller and Xxxxxxxx each
represent and warrant to the other that it or they did not deal directly or
indirectly with or through any broker or finder in connection with the
transactions contemplated by this Agreement.
SECTION 8
FORM OF AGREEMENT AND SEVERABILITY
8.1 HEADINGS. The subject headings of the Sections of this
Agreement are included for purposes of convenience only, and shall not affect
the construction or interpretation of any of its provisions.
8.2 ENTIRE AGREEMENT. Except to the extent specifically referred
to in any other agreement, this Agreement constitutes the entire agreement
between the parties pertaining to the specific subject matter contained in it
and supersedes all prior and contemporaneous agreements, representations,
negotiations and understandings of the parties. No supplement, modification,
or amendment of this Agreement shall be binding unless executed in writing by
the party against whom enforcement is sought. No waiver of any of the
provisions of this Agreement shall be deemed, or shall constitute, a waiver of
any other provision, whether or not similar, nor shall any waiver constitute a
continuing waiver. No waiver shall be binding unless executed in writing by
the party making, the waiver.
8.3 COUNTERPARTS. This Agreement may be executed simultaneously
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.
8.4 SEVERABILITY. If any terms or provisions of this Agreement
shall be held to be invalid, illegal, or unenforceable, the validity of the
other terms and provisions hereof shall in no way be affected thereby.
SECTION 9
PARTIES
9.1 OTHER PARTIES. Nothing in this Agreement, whether express or
implied, is intended to confer any rights or remedies under or by reason of
this Agreement on any persons other than the parties to it and their respective
successors and assigns, nor is anything in this Agreement intended to relieve
or discharge the obligation or liability of any third persons to any party to
this Agreement, nor shall any provision give any third persons any right of
subrogation or action against any party to this Agreement.
9.2 ASSIGNMENT. This Agreement and all of the provisions hereof
shall be binding upon and inure to the benefit of the parties hereto and their
respective successors and permitted assigns,
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but neither this Agreement nor any of the rights, interests, and obligations
hereunder shall be assigned by any of the parties hereto without prior written
consent of each of the other parties hereto.
SECTION 10
SURVIVAL OF REPRESENTATIONS AND WARRANTIES
The representations, warranties, opinions, or other writings provided
for in this Agreement and the covenants and agreements to be performed or
complied with by the respective parties before or on or after the Closing Date
shall be deemed to be continuing and shall survive the Closing for a period of
two (2) years.
SECTION 11
NOTICES
All notices, requests, demands, and other communications under this
Agreement shall be in writing and shall be deemed to have been duly given (a)
on the date of service if served personally on the party to whom notice is to
be given, or (b) on the day of mailing, if mailed to the party to whom notice
is to be given by first class mail, registered or certified, postage prepaid,
and properly addressed as set forth below:
To Seller or Xxxxxxxx: Bikers Dream
0000 Xxxxxxxx Xxxx
Xxxxxxxxxx, Xxxxxxx 00000
Attn: Xxxxxx Xxxxxxxx
With a copy to: Xxxxxxx X. Xxxx, Xx., Esq.
0000 Xxxx Xxxxx Xxxxxxx, Xxxxx 000
Xxxxxxx Xxxxx, Xxxxxxxxxx 00000
To Purchaser: Bikers Dream, Inc.
0000 Xxxxxxx Xxx
Xxxxx Xxx, XX 00000
Attention: President
With a Copy To: Day Xxxxxxxx & XxXxxx
0000 Xxxxxxx Xxxxxx
Xxxxx 000
Xxxxx Xxxx, XX 00000
Attention: Xxxxxxxx X. Xxxxxxxx, Esq.
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Any party may change its address for purposes of this Section by giving the
other parties notice of the new address in the manner set forth above;
provided, however, any notice of change of address shall not be effective until
received.
SECTION 12
CONFIDENTIALITY AND NON-COMPETE
12.1 CONFIDENTIAL INFORMATION.
(a) DEFINITION. For the purposes of this Agreement,
"Confidential Information" shall mean any information, knowledge and know-how,
not known to the general public, regarding the Purchaser Entities or the
Purchaser Entities' processes and products, customers, suppliers, accounts,
financial statements, business systems and any other information, knowledge and
know-how relating to the Purchaser Entities or the Purchaser Entities'
business. In addition, "Confidential Information" shall mean any information
disclosed to Seller, or to which they obtained access as a franchisee of
Purchaser, which they should reasonably believe to be confidential or
proprietary to the Purchaser Entities, or which is treated by the Purchaser
Entities as being confidential or proprietary. "Confidential Information" shall
include, but not be limited to, trade secrets and all customer information of
the Purchaser Entities.
(b) NONDISCLOSURE AND NONUSE. Neither Seller nor
Xxxxxxxx shall in any manner or form disclose, provide or otherwise make
available, in whole or in part, any Confidential Information to any person or
entity without the prior written consent of Purchaser unless disclosed pursuant
to court or government actions. Seller shall not in any manner or form use or
permit others within its control to use any Confidential Information for its
own account or for the account of others without the prior written consent of
Purchaser.
12.2 COVENANT NOT TO COMPETE. From the Closing Date to and
including the later of (a) the third anniversary of the Closing Date or (b) the
third anniversary of the termination of the Dealership Agreement, Seller and
Xxxxxxxx hereby agree that, except pursuant to the Dealership Agreement or any
other written agreement between Purchaser and Seller or Xxxxxxxx, neither he
nor it nor their affiliates shall, directly or indirectly, engage or be
interested in any business that competes with, and shall not, directly or
indirectly, have any interest in, own, manage, operate, control, be connected
with as a stockholder (other than as a stockholder of less than five percent
(5%) of the issued and outstanding stock of a publicly held corporation), joint
venturer, or otherwise engage or invest or participate in, any business that
competes with the business of Purchaser as conducted on the date hereof in any
county or any other political subdivision of the following states of the United
States: South Dakota, Florida (save as permitted by this Agreement or in
connection with the Rights), South Carolina, Nevada, California, Arizona, New
Mexico and Texas. The business of Purchaser is defined for purposes of this
Agreement as the operation of retail motorcycle and motorcycle parts,
motorcycle accessories, and motorcycle service centers, both in fixed and
mobile sites, and electronically over the Internet, and related retailing of
clothing and other items bearing a
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relationship with or signifying a motorcycle theme. All of the parties agree
that the duration and area for which the covenant not to compete set forth in
this Section 12.2 is to be effective are reasonable. In the event that any
court determines that the time period or the geographical areas provided for in
this Section 12.2, or both of them, are unreasonable and that such covenant is
to that extent unenforceable, such covenant shall remain in full force and
effect for the greatest time period and in the greatest geographical area that
would not render it unenforceable. The parties intend that this covenant shall
be deemed to be a series of separate covenants, one for each and every county
of each and every state of the United States of America where this covenant is
intended to be effective. Notwithstanding the foregoing, Xxxxxxxx shall not be
prohibited from lending money to or doing business with Colormania in the
custom paint business.
12.3 REMEDIES. Seller and Xxxxxxxx expressly agree that the
foregoing is reasonable and needed to protect the legitimate business interests
of the Purchaser Entities. Seller and Xxxxxxxx also agree that Purchaser will
be irreparably harmed and that damages alone cannot adequately compensate
Purchaser if there is a violation or breach by Seller or Xxxxxxxx of the
provisions of Section 12.1 or 12.2, and that injunctive relief is essential for
the protection of Purchaser. Therefore, Purchaser shall be entitled to obtain
injunctive relief without posting any bond or security, in addition to all of
their rights and remedies which may be available under this Agreement or
applicable law.
SECTION 13
GOVERNING LAW
This Agreement, the rights and obligations hereunder, and the remedies
available hereunder or at law or in equity, shall be governed by and construed
in accordance with the laws of the State of California. By execution of this
Agreement, the parties hereto agree and submit to personal jurisdiction in the
State of California for the purposes of any suit or proceeding brought to
enforce or construe the terms and conditions of this Agreement and agree that
venue for any such suit or proceeding shall be in Orange County, California.
SECTION 14
ADVICE OF COUNSEL
Each party acknowledges and represents to the other that it has had
the advice of counsel of its own choosing in connection with the negotiation
and execution of this Agreement.
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IN WITNESS WHEREOF, the parties hereto have caused this Agreement to
be duly executed and effective as of the date first above written.
The "Seller"
DC ENTERPRISES, INC.
By: /s/ XXXXXX XXXXXXXX
-----------------------------------
Name: Xxxxxx Xxxxxxxx
Title: President
"XXXXXXXX"
/s/ XXXXXX XXXXXXXX
--------------------------------------
Xxxxxx Xxxxxxxx
The "Purchaser"
BIKERS DREAM, INC.
By: /s/ XXX XXXXX
-----------------------------------
Name: Xxx Xxxxx
Title: Member, Executive Committee
By: /s/ ROWLAND W. DAY
-----------------------------------
Name: Rowland W. Day
Title: Member, Executive Committee
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XXXX OF SALE
For good and valuable consideration, receipt of which is hereby
acknowledged, the undersigned, BIKERS DREAM INC., a California corporation
("Seller"), does hereby sell, transfer, assign, convey and deliver to DC
ENTERPRISES, INC., a Nevada corporation ("Buyer"), pursuant to that certain
Stock Repurchase Agreement dated as of September 9, 1996 between Seller, Buyer
and Xxxxxx Xxxxxxxx (the "Purchase Agreement"), all of Seller's rights, title
and interest in and to each item of tangible personal property (the "Personal
Property") required to be conveyed by Seller to Buyer by the Purchase Agreement
as described at Section 1.2 of the Purchase Agreement.
This instrument is made without representation or warranty by, or
recourse against, Seller.
At or after the Closing, Seller, at the request of Buyer, shall
execute and deliver to Buyer all such further bills of sale or other documents,
in form and substance reasonably satisfactory to Buyer and its counsel, and
take such further action as Buyer may reasonably request in order to vest in
Buyer title to and possession of the Personal Property.
All references to "Seller" and "Buyer" herein shall be deemed to
include their respective heirs, representatives, nominees, successors and/or
assigns, where the context permits.
Dated: September 9, 1996 BIKERS DREAM, INC.,
a California corporation
By: _______________________________
Its:
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EXHIBIT 1.5(b)
ASSIGNMENT OF LEASE, ACCEPTANCE AND ASSUMPTION
AND CONSENT OF LESSOR
THIS ASSIGNMENT OF LEASE, ACCEPTANCE AND ASSUMPTION AND CONSENT OF
LESSOR ("Assignment") is made as of the __ day of September 1996, by and among
BIKERS DREAM, INC., a California corporation ("Assignor"), DC ENTERPRISES, INC.,
a Nevada corporation ("Assignee"), , a
("Landlord"), and XXXXXX XXXXXXXX, the sole stockholder of
Assignee, as Guarantor ("Xxxxxxxx").
RECITALS
A. Landlord, as landlord, and Assignor, as tenant, entered into
that certain Lease Agreement, dated 199 a copy of which is
attached hereto as Exhibit A (the "Lease"), pursuant to which Landlord leased to
Assignor the real property in Clearwater, Florida, as more particularly
described in the Lease (the "Premises").
B. Assignor desires to assign all its right, title and interest
in the Lease and the Premises to Assignee, Assignee desires to accept such
assignment and assume the obligations of Assignor under the Lease, Xxxxxxxx
agrees to guarantee all of the obligations of Assignee hereunder, and Landlord
is willing to consent to such assignment.
NOW, THEREFORE, for good and valuable consideration, receipt of which
is hereby acknowledged, the parties hereto agree as follows:
1. Assignment. Assignor hereby assigns, conveys and transfers
to Assignee all of Assignor's right, title and interest in and to the Lease and
the Premises. This Assignment includes all options to lease additional space or
to acquire the Premises or other rights and privileges whether similar or
dissimilar to the foregoing under the terms of the Lease.
2. Leasehold Improvements and Personal Property. Effective as of
the Closing Date, Assignor grants, bargains, sells, conveys, sets over and
transfers to assignee, to have and to hold, to itself and its successors and
assigns forever, to the full extent allowed by the Lease, Assignor's right,
title and interest in and to those certain leasehold fixtures and personal
property which Assignor owns and which are located within or incorporated into
the Premises (collectively, the "Leasehold Improvements").
3. Assumption. Assignee accepts the foregoing Assignment and
assumes the Lease and agrees with and for the benefit of Landlord to perform,
observe and be bound by all of the obligations, covenants, terms and conditions
contained in the Lease on the part of the tenant therein to be performed and
observed on and after the date hereof, to all intents and purposes as though
Assignee were, from and after such date, the original tenant under the Lease.
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4. Consent of Landlord. Landlord hereby consents to the foregoing
Assignment of the Lease by Assignor and assumption thereof by Assignee and
agrees to the provisions of this Assignment, subject to the express condition
that no further assignment, mortgage, encumbrance or use by others shall be
made, created or permitted, except upon the terms of and in strict compliance
with, the Lease.
5. Release. Landlord hereby releases and discharges Assignor
from any and all obligations, covenants, agreements, liabilities, claims and
causes of action arising under or relating to the Lease, the Premises, or
Assignor's interest in the Lease or the Premises of every kind and description
whether known or unknown, to the extent that such obligations, covenants,
agreements, liabilities, claims, or causes of action accrue or arise on or
after the Closing Date, it being the intention of the parties that the
foregoing provisions of this paragraph shall release and discharge Assignor
from all obligations, covenants, terms and conditions assumed by Assignee.
6. Landlord's Representation. To the knowledge of Landlord,
there is at the date hereof no default under the Lease nor any event or
condition which with the passage of time, or the giving of notice or both, would
be or become an event of default under the Lease and all rent to and including
the period ending September , 1996 has heretofore been paid in full. Landlord
agrees to advise Assignee of the occurrence of any event of default under the
Lease or the occurrence of any event or condition which with the passage of
time, or the giving of notice, or both, would be or become an event of default
under the Lease, which may arise or occur between the date of this Assignment
and the Closing Date.
7. Binding Effect. This Assignment shall be binding upon and
shall inure to the benefit of the parties hereto and their respective heirs,
distributees, executors, administrators, successors and, except as otherwise
provided herein or the Lease, their assigns.
8. Guarantee. Xxxxxx Xxxxxxxx, for good and valuable
consideration, and as President and sole stockholder of Assignee, hereby
guarantees all of Assignee's obligations hereunder and under the Lease.
9. Governing Law. This Assignment shall be governed by and
construed in accordance with the laws of the State of Florida.
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IN WITNESS WHEREOF, Assignor, Assignee and Landlord have respectively
signed this Assignment as of the date first above written.
SIGNED AND SEALED "LANDLORD"
IN THE PRESENCE OF:
a ___________________________________
___________________________ By: _________________________________
AS TO LANDLORD
Its: _____________________________
"ASSIGNOR"
BIKERS DREAM, DX.,
a California corporation
___________________________ By: _________________________________
AS TO ASSIGNOR
"ASSIGNEE"
DC ENTERPRISES, INC.,
a Nevada corporation
___________________________ By: _________________________________
AS TO ASSIGNEE Xxxxxx Xxxxxxxx
President
"GUARANTOR"
_____________________________________
Xxxxxx Xxxxxxxx
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STATE OF FLORIDA )
)ss.
COUNTY OF )
On before me, the undersigned, a notary public
in and for said State, personally appeared ,
personally known to me (or proved to me on the basis of satisfactory evidence
to be the person(s) whose name(s) is/are subscribed to the within instrument
and acknowledged to me that he/she/they executed the same in his/her/their
signatures) on the instrument the person(s), or the entity upon behalf of which
the person(s) acted, executed the instrument.
WITNESS my hand and official seal.
Signature _____________________________________ (SEAL)
NOTARY PUBLIC
STATE OF FLORIDA )
) ss.
COUNTY OF )
On before me, the undersigned, a notary public in and
for said State, personally appeared , personally known to
me (or proved to me on the basis of satisfactory evidence to be the person(s)
whose name(s) is/are subscribed to the within instrument and acknowledged to me
that he/she/they executed the same in his/her/their signatures) on the
instrument the person(s), or the entity upon behalf of which the person(s)
acted, executed the instrument.
WITNESS my hand and official seal.
Signature _____________________________________ (SEAL)
NOTARY PUBLIC
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STATE OF FLORIDA )
)ss.
COUNTY OF )
On before me, the undersigned, a notary public
in and for said State, personally appeared ,
personally known to me (or proved to me on the basis of satisfactory evidence to
be the person(s) whose name(s) is/are subscribed to the within instrument and
acknowledged to me that he/she/they executed the same in his/her/their
signatures) on the instrument the person(s), or the entity upon behalf of which
the person(s) acted, executed the instrument.
WITNESS my hand and official seal.
Signature _______________________________________________ (SEAL)
NOTARY PUBLIC
STATE OF FLORIDA )
)ss:
COUNTY OF )
On before me, the undersigned, a notary public in and
for said State, personally appeared , personally known to
me (or proved to me on the basis of satisfactory evidence to be the person(s)
whose name(s) is/are subscribed to the within instrument and acknowledged to me
that he/she/they executed the same in his/her/their signatures) on the
instrument the person(s), or the entity upon behalf of which the person(s)
acted, executed the instrument.
WITNESS my hand and official seal.
Signature _______________________________________________ (SEAL)
NOTARY PUBLIC
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EXHIBIT 4.2(5)
XXXX OF SALE
For good and valuable consideration, receipt of which is hereby
acknowledged, the undersigned, BIKERS DREAM, INC., a California corporation
("Seller"), does hereby sell, transfer, assign, convey and deliver to DC
ENTERPRISES, INC., a Nevada corporation ("Buyer,"), pursuant to that certain
Stock Repurchase Agreement dated as of September 9, 1996 between Seller, Buyer
and Xxxxxx Xxxxxxxx (the "Purchase Agreement"), all of Seller's rights, title
and interest in and to each item of tangible personal property (the "Personal
Property") required to be conveyed by Seller to Buyer by the Purchase Agreement
as described at Section 1.2 of the Purchase Agreement.
This instrument is made without representation or warranty by, or
recourse against, Seller.
At or after the Closing, Seller, at the request of Buyer, shall
execute and deliver to Buyer all such further bills of sale or other documents,
in form and substance reasonably satisfactory to Buyer and its counsel, and
take such further action as Buyer may reasonably request in order to vest in
Buyer title to and possession of the Personal Property.
All references to "Seller" and "Buyer" herein shall be deemed to
include their respective heirs, representatives, nominees, successors and/or
assigns, where the context permits.
Dated: September 9, 1996 BIKERS DREAM, INC.,
a California corporation
By: _________________________________
Its:
