Exhibit 2.9
ASSET
PURCHASE AGREEMENT
PARTIES:
This Agreement is made and entered into as of the 4th day of June, 1998, by
and between ARC, INC. of 00000 Xxxxxx Xxxxxx, Xxxxx, Xxxxxxxxxx 00000, a
California corporation (hereinafter referred to as the "Seller"), and
XENOTECH-STRONG, INC., 0000 XxXxxxxx Xxxxxx, Xxxxx, Xxxxxxxx 00000, a Nebraska
corporation (the "Buyer").
RECITALS:
A. Seller is engaged in the business of providing and operating lighting
and special effects equipment for live entertainment shows and
productions.
B. Buyer desires to purchase from Seller, and Seller desires to sell to
Buyer, substantially all of the assets of Seller pertaining to its
business.
AGREEMENT:
NOW, THEREFORE, in consideration of the mutual covenants and promises
contained herein and for other food and valuable consideration, the receipt and
adequacy of which are hereby acknowledged, the parties hereto agree as follows:
I. DEFINITIONS
For all purposes of this agreement, the following terms shall have the
following definitions:
A. "Contract" shall mean those contracts of Seller, a true and
correct list of which is attached hereto as Exhibit 1.
B. "Fixtures and Equipment" shall mean all of the lighting equipment,
special effects equipment, vehicles, and all other equipment of Seller,
a true and correct list of which is attached hereto as Exhibit 2.
C. "Inventory" shall mean all of Seller's inventories, a true and correct
list of which is attached hereto as Exhibit 3.
D. "Purchased Assets" shall mean all of the following Assets of Seller as
of the date of the Closing:
1. All Contract rights of Seller, including all customer deposits
received by Seller in connection with Contracts not yet performed by
Seller;
2. All Fixtures and Equipment;
3. All Inventory;
4. All trademarks, trade names, and all other intangible assets of
Seller, including, but not limited to the trade name "ARC EFX"; and
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5. Any and all other assets of Seller of any kind or nature whatsoever
except Seller's cash assets (other than customer deposits) and
Seller's accounts receivable.
II. SALE OF ASSETS
A. At closing, Seller shall sell, assign, transfer, convey and deliver to
Buyer the Purchased Assets, free and clear of all liabilities, obligations,
liens, security interests and encumbrances of any kind. Buyer shall not assume
any liabilities of Seller whatsoever, except for Seller's obligations under the
contracts of Seller set forth on Exhibit 1.
B. At Closing, Buyer shall wire transfer Seventy-five Thousand Dollars
($75,000) to Seller's bank account, subject to any amounts required to discharge
any liens or encumbrances against the purchased Assets, or required by law to be
withheld to pay any obligations of Seller.
C. At Closing, Buyer shall execute and deliver to Seller its Promissory Note
in the principal amount of Fifty Thousand Dollars ($50,000) payable in full on a
date which shall be one (1) year after the date of Closing.
III. CLOSING
The closing of the sale (the "Closing") shall take place on or before June 1,
1998, or as soon thereafter as all of the conditions of the Agreement shall be
complied with by the parties. At the Closing, Seller shall deliver to Buyer such
bills of sale, endorsements, assignments, and other goods and sufficient
instruments of transfer and conveyance as shall be effective to vest in the
Buyer good and marketable title to the Purchased Assets as provided in this
Agreement.
IV. PURCHASE PRICE
The Purchase Price shall be One Hundred Twenty five Thousand Dollars
($125,000), subject to adjustment as herein set forth, which shall be paid to
Seller in accordance with Article II herein. Buyer and Seller agree that for all
purposes, the Purchase Price shall be allocated in the manner set forth on
Exhibit 4 attached hereto.
V. FURTHER ASSURANCES
From time to time, at Buyer's request, whether at or after the closing and
without further consideration, Seller will execute and deliver such further
instruments of conveyance and transfer and take such other action as Buyer
reasonably may require more effectively to convey and transfer to Buyer any of
the Purchased Assets.
VI. XXXX XXXXX EMPLOYMENT AGREEMENT
Buyer shall engage Xxxx Xxxxx (the sole shareholder of Seller) as an Employee
effective immediately upon the Closing of the transactions herein contemplated,
for a term of five (5) years at an annual compensation of sixty-five thousand
Dollars ($65,000). At Closing, Buyer and Xxxx Xxxxx shall enter into a written
Employment Agreement in the form and of the content of Exhibit 5, attached
hereto, the terms and conditions of which are incorporated herein by this
reference.
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VII. REPRESENTATIONS AND WARRANTIES OF SELLER
Seller represents, warrants and covenants to and with Buyer as follows:
A. Seller is a corporation duly organized, validly existing and in good
standing under the laws of the State of California, and has full corporate power
and authority to conduct it business as it is presently being conducted and to
own, sell and convey its properties as Assets.
B. Seller has all necessary corporate power and authority and has taken all
corporate action necessary to enter into this Agreement, to consummate the
transactions contemplated hereby and to perform its obligations hereunder. This
Agreement has been duly executed and delivered by Seller and constitutes a
legal, valid and binding obligation of Seller, enforceable against Seller in
accordance with its respective terms.
C. Neither the execution and delivery of this Agreement, nor the consummation
of the transactions contemplated hereby will result in (1) a violation of or a
conflict with any of the provisions of the certificate of Incorporation or
Bylaws of Seller, (2) a breach of, or a default under, any term or provision of
any contract, agreement, indebtedness, lease, commitment, license, franchise,
permit, authorization or concession to which Seller is a party, which breach or
default would have material adverse effect on the business or financial
condition of Seller or its ability to consummate the transactions contemplated
hereby, or (3) a violation by Seller of any statute, rule regulation, ordinance,
code, order, judgement, writ, injunction, decree or award, which violation would
have a material adverse effect on the business or financial condition of Seller
or its ability to consummate the transactions contemplated hereby.
D. Except as otherwise provided herein, Seller currently has and will have
and will transfer to Buyer at Closing, good and marketable title to all of the
Purchased assets, free and clear of all mortgages, pledges, liens, security
interests, conditional sales agreements, charges, encumbrances, restrictions,
liabilities and equities.
E. There are no material actions, suits, claims, proceedings or
investigations pending or, to the best knowledge of seller, threatened against
or affecting the Purchased Assets, at law or in equity, or before or by any
federal, state, municipal or other government court, department, commission,
board, bureau, agency or instrumentality.
F. Seller has disclosed to Buyer all facts known by Seller to be material to
the Assets to be acquired by Buyer pursuant to this Agreement. No written
representation or warranty by the Seller in this Agreement or any written
statement or certificate furnished or to be furnished to the Buyer pursuant
hereto, contains or will contain any untrue statement of a material fact known
to Seller, or omits or will omit to state a material fact known to Seller
necessary to make the statements contained therein not misleading. During the
period from the date of this Agreement to the Closing date, Seller represents
and covenants that its business shall in all respects continue to be operated
only in the ordinary course. Seller shall give prompt notice to Buyer with
respect to any material changes in the operation of its business and any matter
or event which comes to Seller's attention and which, if it had occurred as of
the date hereof, would constitute a material breach of the representations and
warranties of Seller contained in this Agreement.
G. The execution and delivery of this Agreement to Buyer and the consummation
of the transactions contemplated hereby have been duly authorized by Seller's
Board of Directors, and by Seller's Shareholders in accordance with the business
corporation laws of the State of California.
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IX. REPRESENTATIONS AND WARRANTIES OF BUYER
Buyer hereby represents and warrants to Seller as follows:
A. Buyer is a corporation duly organized, validly and in good standing under
the laws of the State of Delaware and has full corporate power and authority to
conduct its business as it is presently being conducted and to own and lease its
properties and Assets.
B. Buyer has all necessary corporate power and authority and has taken all
corporate action necessary to enter into this Agreement, to consummate the
transactions contemplated hereby and to perform its obligations hereunder. This
Agreement has been duly executed and delivered by Buyer and constitutes a legal,
valid and binding obligation of Buyer, enforceable against Buyer in accordance
with its respective terms.
C. Neither the execution and delivery of this Agreement, nor the consummation
of the transactions contemplated hereby will result in (1) a violation of or a
conflict with any of the provisions of the Certificate of Incorporation or
Bylaws of Buyer, (2) a breach of, or a default under, any term or provision of
any contract, agreement, indebtedness, lease, commitment, license, franchise,
permit, authorization or concession to which Buyer is a party, which breach or
default would have a material adverse effect on the business or financial
condition of Buyer of its ability to consummate the transactions contemplated
hereby, or (3) a violation by Buyer of any statute, rule, regulation, ordinance,
code, order, judgement, writ, injunction, decree or award, which violation would
have a material adverse effect on the business or financial condition of Buyer
or its ability to consummate the transactions contemplated hereby.
X. COVENANTS OF SELLER AND BUYER
Seller covenants with Buyer and Buyer covenants with Seller as follows:
A. Seller shall assign to Buyer all transferable manufacturer, supplier of
contractor warranties or guaranties respecting any of the Purchased Assets.
B. Effective upon closing of the transactions contemplated hereby, Seller
shall no longer use, in any respect, the name or term "ARC EFX, INC." without
the express written consent of Buyer. Within seventy-five (75) days after
Closing, Seller shall change its corporate name to a name, which bears no
resemblance to the name "ARC EFX," and thereafter shall never use a name or
names, which shall be similar to such name.
XI. BULK SALES
Seller agrees to cooperate with Buyer in complying with the provisions of
Article 6 of the California Uniform commercial Code Bulk Transfer - relating to
bulk transfers in connection with the transactions contemplated by this
Agreement. If Buyer shall waive the provisions of the Bulk Sales Law, seller
shall indemnify and hold Buyer harmless from any damages, losses or expenses
(including reasonable attorneys' fees) suffered by Buyer from any claim which
may be asserted against Buyer by creditors of Seller for obligations not assumed
by Buyer hereunder which result from noncompliance with the California Bulk
Transfer Law.
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XII. COVENANT NOT TO COMPETE
At the Closing, Seller and Xxxx Xxxxx will execute a Non-Competition
Agreement in the form of Exhibit 6 hereto; the effectiveness of this Agreement
and of the Non-competition Agreement will be contingent upon the execution of
each other.
XIII. ACTIONS BY SELLER AND BUYER AFTER THE CLOSING
A. Seller and Buyer agree that so long as any books, records, and files
relating to the business, Assets or operations of the Seller remain in existence
and available, Buyer (at its expense) shall have the right to inspect and to
make copies of the same at any time during business hours for any proper purpose
with reasonable advance notice. Seller further agrees that it shall preserve and
maintain all of its existing books and record relating to the Purchased Assets
for a period of at least three (3) years following the date of Closing.
B. On and after the Closing date, Seller and Buyer will take all appropriate
action and execute all documents, instruments or conveyances of any kind which
may be reasonably necessary or advisable to carry out any of the provisions
hereof.
XIV. INDEMNIFICATIONS
A. BY SELLER: It is specifically acknowledged that Buyer does not assume and
will not be responsible for any liabilities of Seller, except as may be
expressly stated herein. Effective as of the Closing date, Seller shall
indemnify and hold harmless Buyer against and in respect of:
1. All liabilities and obligations of, or claims against, Seller not
expressly assumed by Buyer in this Agreement.
2. Any damage or deficiency resulting from any material
misrepresentation, breach of warranty, or non fulfillment of any agreement on
the part of Seller under this Agreement or from any material
misrepresentation in or omission from any certificate or other instrument
furnished or to be furnished to Buyer under this Agreement.
B. BY BUYER: Buyer agrees that, on and after the date hereof, it shall
indemnify and save and hold harmless Seller from and against any and all
damages incurred in connection with or arising out of or resulting from (1)
any material breach of any covenant or warranty, or the inaccuracy of any
representation, made by Buyer in or pursuant to this Agreement; (2) any
liability, obligation or commitment of Buyer relating in any way to the
Purchased Assets or Assumed Liabilities; or (3) any claim, liability,
obligation or commitment of any nature which is specifically assumed by Buyer
pursuant to this Agreement.
XV. CONDITIONS PRECEDENT TO OBLIGATION OF BUYER
The obligations of Buyer to purchase the Purchased Assets from Seller are
subject to the satisfaction, on or before the Closing date, of all of the
following conditions, which conditions may be waived in writing by Buyer:
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A. The representations and warranties of Seller contained in this Agreement
shall have been true in all material respects when made and, in addition,
shall be true in all material respects on and as of the Closing date with the
same force and effect as though made on an as of the Closing date.
B. Seller and its sole shareholder shall have, or have caused to be performed
and observed, in all material respects, all obligations and agreements
hereunder and shall have complied with all covenants and conditions contained
in this agreement to be performed and complied with by it at or prior to the
closing date.
C. If, prior to the closing date, any material part of the Purchased Assets
is damaged by fire, other casualty, or any cause or activity not attributable
to or under the control of Buyer, Seller shall give Buyer written notice
thereof and Buyer may, at its option, terminate this Agreement by written
notice of such election given to seller no later than five (5) working days
after receipt of Seller's notice, and upon giving such notice, both parties
shall be fully discharged from all duties hereunder and all obligations
hereof. However, if Buyer shall not so elect, or if an immaterial part of the
Assets is damaged, then Seller hereby assigns to Buyer all of its rights,
title and interest in and to any and all insurance proceeds payable by reason
of such destruction or damage to the Purchased Assets and Seller hereby
agrees to pay Buyer a sum equal to the deductible amount provided in such
policies to the extent necessary to correct such damage.
D. There shall not have been, between the date of this Agreement and the
Closing date, any materially adverse change in any of the Purchased assets or
the current operation of Seller.
E. Prior to closing, Buyer shall have completed, to its satisfaction, such
financial, technical and legal due diligence of seller as Buyer, its counsel and
its accountants shall deem necessary and appropriate.
XVI. CONDITIONS PRECEDENT TO OBLIGATIONS OF SELLER
The obligation of Seller to sell the Purchased Assets under this Agreement of
Buyer is subject to the satisfaction, on or before the Closing date, of all the
following conditions, which conditions may be waived in writing by Seller:
A. The representations and warranties of Buyer contained in this Agreement
shall have been true in all material respects when made and, in addition, shall
be true in all material respects on and as of the Closing date with the same
force and effect as though made on and as of the Closing date.
B. Buyer shall have, or have caused to be, performed and observed, in all
material respects, all covenants, agreements and conditions hereof to be
performed or observed by Buyer at or before the Closing.
C. Seller shall have received approval from its Board of Directors and
Shareholders for consummation of this transaction of the terms and conditions
contained herein.
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XVII. NON-ASSIGNMENT
Any party without the prior written consent of the other parties hereunder
may assign neither this Agreement nor any of the rights or obligations. Subject
to the foregoing, this Agreement shall be binding upon and inure to the benefit
of the parties hereto and their respective successors and assigns, and no other
person shall have any right, benefit or obligation hereunder, as a third-party
beneficiary or otherwise.
XVIII. EXPENSES
Except as otherwise provided in this Agreement, each party shall pay its
respective expenses, taxes, charges and liabilities incurred in connection with
or arising out of this Agreement, including, without limitation thereto, counsel
fees, accounting fees, and other expenses related to the assignment and delivery
of the Purchased Assets to buyer.
XIX. NOTICES
Unless otherwise provided herein, any notices, request, instruction or other
document to be given hereunder by either party to the other shall be in writing
and delivered personally or mailed by certified mail, postage prepaid, return
receipt requested (such mailed notice to be effective on the date such receipt
is acknowledged or refused), as follows:
IF TO SELLER: ARC EFX, INC.
Attention: Xxxx Xxxxx
00000 Xxxxxx Xxxxxx
Xxxxx, XX 00000
WITH COPY TO:
---------------------
---------------------
---------------------
---------------------
IF TO BUYER: XENOTECH-STRONG, INC.
Attn: Xxxx X. Xxxxxxx
0000 XxXxxxxx Xxxxxx
Xxxxx, XX 00000
WITH COPY TO: Xxxxx, Xxxxx & Xxxxxxxx
Xxxxx X. Xxxxxx, Esq.
00000 Xxxxxxx Xxxxx Xx., Xxxxx 000
Xxxxx, XX 00000
Or at such other address or designation as is provided by one party to the other
in writing.
XX. CHOICE OF LAW
This Agreement shall be construed, interpreted and the rights of the parties
determined in accordance with the laws of the State of California (without
reference to the choice of law provisions of California law).
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XXI. SURVIVAL OF WARRANTIES AND REPRESENTATIONS
The representations, warranties and covenants of the parties hereto contained
herein, or in any certificates or other documents delivered prior to or at the
Closing, shall not be deemed waived or otherwise affected by any investigation
theretofore made by either party. Each and every representation, warranty and
covenant of Seller and buyer and the indemnification provisions set forth in
Article XIII herein shall survive the Closing date and remain operative and in
full force and effect as herein provided.
XXII. ENTIRE AGREEMENT; AMENDMENTS AND WAIVERS
This Agreement, together with all exhibits and schedules hereto, constitutes
the entire agreement between the parties pertaining to the subject matter hereof
and supersedes all prior agreements, understandings, negotiations and
discussions, whether oral or written. No supplement, modification or waiver of
this Agreement shall be binding unless executed in writing by the party to be
bound thereby. No waiver of any of the provisions of this Agreement shall be
deemed or shall constitute a waiver of any other provision hereof (whether or
not similar), nor shall such waiver constitute a continuing waiver unless
otherwise expressly provided.
XXIII. MULTIPLE COUNTERPARTS
This Agreement may be executed in one or more counterparts, each of which
shall be deemed an original, but all of which together constitute one and the
same instrument.
XXIV. INVALIDITY
In the event that any one or more of the provisions contained in this
Agreement or in any other instrument referred to herein shall, for any reason,
be held to be invalid, illegal or unenforceable in any respect, then to the
maximum extent permitted by law, such invalidity, illegality or unenforceable
shall not affect any other provision of this agreement or any other such
instrument.
XXV. CONFIDENTIAL INFORMATION
In connection with the negotiation of this Agreement, each party acknowledges
that it has had access to confidential information relating to the other party.
Each party shall treat such information as confidential, preserve the
confidentiality thereof and not duplicate or make use of any other such
information, except to advisors, consultants, lenders and affiliates in
connection with the transactions contemplated hereby or pursuant to or as
required by law. If the transaction is not closed, each party shall return to
the other all confidential information in tangible form, belonging or relating
to the other party or provide a certificate of destruction of such material
acceptable to the other party.
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IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be duly
executed on their respective behalf, by their respective officers thereunto duly
authorized, on this 4th day of June, 1998.
"Seller"
ARC EFX, INC.
By: /s/ Xxxx Xxxxx
--------------------------------
Xxxx Xxxxx, President
"Buyer"
XENOTECH-STRONG, INC.
A Nebraska corporation
By: /s/ Xxxx X. Xxxxxxx
--------------------------------
Xxxx X. Xxxxxxx, President
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STATE OF CALIFORNIA )
) SS.
COUNTY OF LOS ANGELES )
On June 4, 1998, before me, Y. Xxxxxxx Xxxxx, notary Public, personally
appeared XXXX XXXXX, President of ARC EFX, INC., personally known to me - OR -
proved to me on a basis of satisfactory evidence to be the person whose name is
subscribed to the within instrument and acknowledged to me that he executed the
same.
WITNESS my hand and official seal.
/S/ Y. Xxxxxxx Xxxxx
--------------------------------
Signature of Notary Public
STATE OF NEBRASKA )
) SS.
COUNTY OF XXXXXXX )
On this 5th day of June, 1998, before me, the undersigned, a Notary
Public in and for said County, personally appeared the above-named XXXX X.
XXXXXXX, President of XENOTECH STRONG, INC., to me known to be the identical
person named in and who executed the foregoing instrument and acknowledged that
he executed the same as his voluntary act and deed and the voluntary act deed of
said corporation.
/s/ Xxxxx X. Xxxxxx
--------------------------------
Notary Public
Exhibit 4.4
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