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ASSET PURCHASE AGREEMENT
dated as of
June 6, 2006
by and between
ADVANCED BEAUTY SOLUTIONS, LLC,
and
CIRTRAN CORPORATION
ASSET PURCHASE AGREEMENT
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This ASSET PURCHASE AGREEMENT, dated as of June 6, 2006, is
made by and between CirTran Corporation, a Nevada corporation, and/or its
designee (collectively, "Purchaser"), and Advanced Beauty Solutions, LLC, a
California limited liability company ("Seller"), as debtor and
debtor-in-possession in the chapter 11 case (the "Bankruptcy Case") pending in
the United States Bankruptcy Court for the Central District of California, San
Xxxxxxxx Valley Division (the "Bankruptcy Court").
WHEREAS, Seller has been in the business of manufacturing,
marketing, advertising, and selling consumer beauty products (the "Business");
WHEREAS, on January 24, 2006 (the "Filing Date"), Seller filed
a voluntary petition with the Bankruptcy Court under chapter 11 of title 11 of
the United States Code, Section 101, et seq. (the "Bankruptcy Code"); and
WHEREAS, Seller desires to sell substantially all of its
assets to Purchaser, and Purchaser desires to purchase and acquire substantially
all of the assets of Seller upon the terms and subject to the conditions set
forth herein;
NOW, THEREFORE, IN CONSIDERATION OF THE FOREGOING, OF THE
REPRESENTATIONS, WARRANTIES, COVENANTS AND MUTUAL AGREEMENTS HEREINAFTER
CONTAINED, AND OF OTHER GOOD AND VALUABLE CONSIDERATION, RECEIPT AND SUFFICIENCY
OF WHICH ARE HEREBY ACKNOWLEDGED, THE PARTIES AGREE AS FOLLOWS:
Article I
DEFINITIONS
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The terms defined in this Article I, whenever used herein
(including without limitation the Exhibits and Schedules hereto), shall have the
following meanings for all purposes of this Agreement:
"Actual Inventory" means the number of non-defective, saleable
Units transferred to Purchaser on the Closing Date pursuant to this Agreement.
"Affiliate" of a Person means any other Person that directly
or indirectly through one or more intermediaries controls, is controlled by, or
is under common control with such Person.
"Agreement" means this agreement among the parties set forth
on the first page hereof, including, without limitation, all Exhibits and
Schedules hereto, as the same may be amended from time to time.
"AMS" means Advantage Media Services, Inc.
"Apportioned Obligations" has the meaning set forth in Section
6.6 hereof.
"Assets" has the meaning set forth in Section 2.1 hereof.
"Assumed Contracts" has the meaning set forth in Section
2.1(c) hereof.
"Assumed Liabilities" has the meaning set forth in Section 2.3
hereof.
"Bankruptcy Case" has the meaning given to it in the recitals
hereto.
"Bankruptcy Code" has the meaning given to it in the recitals
hereto.
"Bankruptcy Court" has the meaning given to it in the recitals
hereto.
"Bidding Procedures Order" means the "Order: (1) Establishing
Bidding Procedures in Connection with Sale of the Debtor's Business Assets; (2)
Setting a Hearing Date for a Final Bidding Round with Qualified Bidders and
Confirming the Sale of the Debtor's Business Assets Free and Clear of Liens; and
(3) Approving Manner of Notice to be Provided to Creditors and Parties in
Interest," which was entered by the Bankruptcy Court in the Bankruptcy Case on
February 24, 2006.
"Xxxx of Sale" has the meaning set forth in Section 2.5(a)
hereof.
"Business" has the meaning given to it in the recitals hereto.
"Business Day" means any day other than a Saturday, Sunday or
other day on which commercial banks in New York City are required or authorized
by law to be closed.
"Closing" means the closing of the transactions contemplated
by this Agreement.
"Closing Date" means the date in which the conditions set
forth in Article VII are satisfied or waived, or such other date as the parties
may mutually agree, upon which the Closing takes place. The Closing Date shall
be no later than June 6, 2006 unless the Bankruptcy Court issues an order
extending this deadline.
"Code" means the Internal Revenue Code of 1986, as amended,
and the Treasury Regulations promulgated thereunder.
"Consent" means any consent, approval, authorization, license
or order of, registration, declaration or filing with, or notice to, or waiver
from, any federal, state, local, foreign or other Governmental Entity or any
Person, including, without limitation, any security holder or creditor which is
necessary to be obtained, made or given in connection with the execution and
delivery of this Agreement and/or any Operative Document, the performance by a
Person of its obligations hereunder and/or thereunder and the consummation of
the transactions contemplated hereby and/or thereby.
"Datapak" means Datapak Services Corporation.
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"Defective Units" has the meaning set forth in Section 3.1(a)
hereof.
"Deposit" has the meaning set forth in Section 2.4(d) hereof.
"Directly or Indirectly" means as an individual, partner,
shareholder, member, creditor, director, officer, principal, agent, employee,
trustee, consultant, advisor or in any other relationship or capacity.
"Disclosure Schedule" means the disclosure schedule attached
to this Agreement as Exhibit 1, and includes but is not limited to each of the
Schedules expressly referred to in Article IV.
"Encumbrances" means collectively, any and all security
interests, liens, pledges, claims, defenses, setoffs, rights of recoupment,
leases, levies, charges, escrows, encumbrances, options, rights of first
refusal, transfer restrictions, conditional sale contracts, title retention
contracts, mortgages, hypothecations, indentures, security agreements or other
agreements, arrangements, contracts, commitments, understandings or obligations
of any kind whatsoever, whether written or oral.
"Environment" means any surface or subsurface physical medium
or natural resource, including, air, land, soil, surface waters, ground waters,
stream and river sediments.
"Environmental Laws" means any federal, state, local or common
law, rule, regulation, ordinance, code, order or judgment (including the common
law and any judicial or administrative interpretations, guidances, directives,
policy statements or opinions) relating to the injury to, or the pollution or
protection of, human health and safety or the Environment.
"Environmental Liabilities" means any claims, judgments,
damages (including punitive damages), losses, penalties, fines, liabilities,
encumbrances, liens, violations, costs and expenses (including attorneys' and
consultants' fees) of investigation, assessment, remediation or defense of any
matter relating to human health, safety or the Environment of whatever kind or
nature by any Person or Governmental Entity, (A) which are incurred as a result
of (i) the existence of Hazardous Substances in, on, under, at or emanating from
any Real Property, (ii) the off-site transportation, treatment, storage or
disposal of Hazardous Substances generated by Seller, or (iii) the violation of
any Environmental Laws, or (B) which arise under the Environmental Laws.
"Estimated Inventory" has the meaning set forth in Section
3.1(a) hereof.
"Excluded Assets" has the meaning set forth in Section 2.2
hereof.
"Excluded Liabilities" shall mean all of the debts,
liabilities or obligations of Seller other than the Assumed Liabilities,
including, without limitation, the Environmental Liabilities, Taxes accruing
prior to the Pre-Closing Tax Period, and liabilities for product returns and
quality claims in respect of products manufactured and sold by Seller prior to
the Closing Date.
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"Filing Date" has the meaning given to it in the recitals
hereto.
"GAAP" means United States generally accepted accounting
principles, applied on a consistent basis.
"General Assignment" has the meaning set forth in Section
2.5(a) hereof.
"Global Settlement" means the settlement that was reached
among Seller, ICG, MFC, Datapak, Tristar, AMS, and Purchaser regarding, among
other things, the distributions to be made from the proceeds of the sale of the
Assets pursuant to this Agreement.
"Governmental Entity" means any federal, state, local or
foreign government, political subdivision, legislature, court, agency,
department, bureau, commission or other governmental regulatory authority, body
or instrumentality, including any industry or other non-governmental
self-regulatory organizations.
"Hazardous Substance" means petroleum, petroleum products,
petroleum-derived substances, radioactive materials, hazardous wastes,
polychlorinated biphenyls, lead based paint, radon, urea formaldehyde, asbestos
or any materials containing asbestos, and any materials or substances regulated
or defined as or included in the definition of "hazardous substances,"
"hazardous materials," "hazardous constituents," "toxic substances,"
"pollutants," "contaminants" or any similar denomination intended to classify or
regulate substances by reason of toxicity, carcinogenicity, ignitability,
corrosivity or reactivity under any Environmental Law.
"ICG" means Inventory Capital Group, Inc.
"Independent Auditor" has the meaning given to it in Section
3.2(b) hereof.
"Infomercial means the True Ceramic Pro - Live Ops (TCP5)
infomercial and the master tapes relating to the same and owns all trademarks,
patents, patent applications and copyrights relating to the True Ceramic Pro
product and all advertising and marketing materials relating thereto.
"Insider Noteholders" means Xxxxx Dodo, Direct Success, Xxxx
Xxxxxx, Pacstar and Kiss'D Inc.
"Insider Noteholders Claim" means the $2,100,000 aggregate
claim of the Insider Noteholders, which is expected to be allowed pursuant to
the Settlement Order.
"Instruments of Assignment" has the meaning set forth in
Section 2.5(a) hereof.
"Instruments of Assumption" has the meaning set forth in
Section 2.5(b) hereof.
"Lease Assignment" has the meaning set forth in Section 2.5(a)
hereof.
"Marks" has the meaning as set forth in Section 4.5(a)(iii)
hereof.
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"Material Adverse Effect" means a material adverse effect
(financial or otherwise) on (a) the Business or on the results of operations,
condition or prospects of the Business, taken as a whole, or the ability of
Buyer to succeed to or exercise rights or interests of Sellers that are
necessary to operate the Business, taken as a whole, or (b) the ability of
Sellers to consummate the transactions contemplated by this Agreement, taken as
a whole, including material delays of the Closing, other than effects directly
arising as a result of (i) the performance of this Agreement or (ii) events,
changes or developments relating to the financial, banking or capital markets or
the economy in general or industry-wide developments affecting Persons in
businesses similar to the Business.
"MFC" means Media Funding Corporation.
"Operative Document" means any agreement, instrument or other
document to be executed and delivered in connection with the consummation of the
transactions contemplated by this Agreement and shall include, without
limitation, any item that is set forth in Sections 2.10 and 2.11 hereof.
"Other Instruments" has the meaning set forth in Section
2.5(a) hereof.
"Person" means an individual, corporation, partnership,
limited liability company, firm, joint venture, association, joint stock
company, trust, unincorporated organization or other entity, or any Governmental
Entity or quasi-governmental body or regulatory authority.
"Permits" means all licenses, certificates of authority,
permits, orders, consents, approvals, registrations, local siting approvals,
authorizations, qualifications and filings under any federal, state or local
laws or with any Governmental Entities or other private Persons.
"Post-Closing Tax Period" shall mean (i) any Tax period
beginning the day after the Closing Date and (ii) with respect to a Tax period
that commences before but ends after the Closing Date, the portion of such
period beginning the day after the Closing Date.
"Pre-Closing Tax Period" shall mean (i) any Tax period ending
on or before the Closing Date and (ii) with respect to a Tax period that
commences before but ends after the Closing Date, the portion of such period up
to and including the Closing Date.
"Profit Share Obligation" has the meaning set forth in Section
2.4(a) hereof.
"Property" (or "Properties" when the context requires) means
any Real Property and any personal or mixed property, whether tangible or
intangible.
"Purchase Price" has the meaning set forth in Section 2.4(a)
hereof.
"Purchaser" has the meaning given to it in the recitals
hereto.
"Reduced Claim" has the meaning set forth in Section 3.1(a)
hereof.
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"Xxxx Xxxxxxxx Xxxxx" has the meaning set forth in Section
6.5(c) hereof.
"Sale Hearing" has the meaning set forth in Section 6.5(b)
hereof.
"Seller" has the meaning given to it in the recitals hereto.
"Seller Intellectual Property Rights" has the meaning set
forth in Section 4.5(a) hereof.
"Seller License Rights" has the meaning set forth in Section
4.5(b) hereof.
"Seller's Representative" has the meaning set forth in Section
9.15 hereof.
"Seller Rights" has the meaning set forth in Section 4.5(b)
hereof.
"Seller Rights Assignment" has the meaning set forth in
Section 2.5(a) hereof.
"Settlement Agreement" means that certain Settlement Agreement
dated as of January 24, 2006 by and among Seller, ICG, and MFC.
"Settlement Order" means the "Order Approving Settlement and
Compromise of Disputed Secured Claims of Inventory Capital Group, Inc., and
Media Funding Corporation as Modified in Open Court to Address Allowance and
Payment of Other Claims," which was entered by the Bankruptcy Court in the
Bankruptcy Case on __________, 2006, and which, among other things, approved the
Settlement Agreement and the Global Settlement.
"Taxes" (or "Tax" where the context requires) shall mean all
federal, state, county, provincial, local, foreign and other taxes (including,
without limitation, income, profits, premium, estimated, excise, sales, use,
occupancy, gross receipts, franchise, ad valorem, severance, capital levy,
production, transfer, withholding, employment and payroll related and property
taxes and other governmental charges and assessments), whether attributable to
statutory or nonstatutory rules and whether or not measured in whole or in part
by net income, and including, without limitation, interest, additions to tax or
interest, charges and penalties with respect thereto, and expenses associated
with contesting any proposed adjustment related to any of the foregoing.
"Trade Secrets" means any information which (i) is used in a
business, (ii) is not generally known to the public or to Persons who can obtain
economic value from its disclosure, and (iii) is subject to reasonable efforts
to maintain its secrecy or confidentiality; the term may include but is not
limited to inventions, processes, know-how, formulas, computer software, and
mask works which are not patented and are not protected by registration (e.g.,
under copyright or mask work laws); lists of customers, suppliers, and
employees, and data related thereto; business plans and analyses; and financial
data.
"Tristar" means Tristar Products, Inc.
"Undertaking" has the meaning set forth in Section 2.5(b)
hereof.
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"Unit" has the meaning set forth in Section 2.4 hereof.
Article II
SALE AND PURCHASE OF ASSETS; CLOSING
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2.1 Asset Purchase. Upon the terms and subject to the
conditions hereof, and upon the basis of the agreements, representations and
warranties contained in this Agreement, on the Closing Date, Seller agrees to
sell, transfer, assign, convey and deliver to Purchaser, and Purchaser shall
purchase, acquire and accept from Seller, all of Seller's right, title and
interest in and to all of the assets, properties and rights of Seller, as and to
the extent existing on the Closing Date (such assets, properties and rights are
hereinafter collectively referred to as the "Assets"), free and clear of all
Encumbrances. Without limitation of the foregoing, the Assets include the
following as and to the extent existing on the Closing Date:
(a) Personal Property. All personal property owned by
Seller, including but not limited to those set forth on Schedule 2.1(a);
(b) Intellectual Property. All right, title and interest to
intellectual property owned by Seller, including but not limited to the
Infomercial and the Seller Rights set forth on Schedules 4.5(a), 4.5(a)(i),
4.5(a)(ii), 4.5(a)(iii) and (b);
(c) Contracts. All executory contracts and unexpired leases
set forth on Schedule 2.1(c)(i) to which Seller is a party and which are being
assumed and assigned to Purchaser in connection with this Agreement (the
"Assumed Contracts") as well as all Assets, rights, and privileges of Seller
under or relating to: (i) the Assumed Contracts and (ii) all contracts or leases
to which Seller is or was a party that are not capable of being assumed and/or
assigned under Section 365 of the Bankruptcy Code, including but not limited to
those set forth on Schedule 2.1(c)(ii);
(d) Inventory. All raw materials, work-in-process, finished
goods and merchandise, past and future customer returns of finished goods,
packaging materials and other supplies related thereto that are owned by Seller,
including but not limited to those set forth on Schedule 2.1(d);
(e) Insurance. All rights of Seller under insurance policies
covering the Assets or the Business, including but not limited to those set
forth on Schedule 4.7;
(f) Deposits and Prepaid Expenses. All deposits and prepaid
expenses, including but not limited to those set forth on Schedule 2.1(f);
(g) Books and Records. All general, financial and personnel
records, correspondence and other files and records (whether in electronic form
or otherwise), including customer and supplier lists, customer files, data,
pricing and cost information, purchase and sale records, sales and promotional
materials, property records, financial and accounting records, compliance
records, parts lists, manuals, patterns, plans, and all blueprints, drawings,
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formulas, and manufacturing specifications, of Seller (provided, however, that
Seller shall be provided reasonable access to such books and records and other
documents as necessary to fulfill its duties as debtor-in-possession and may
make copies of such books and records and documents for such purpose);
(h) Goodwill. All goodwill and other intangibles owned by
Seller;
(i) Causes of Action. Except to the extent specifically
excluded under Section 2.2(i) of this Agreement or being settled as part of the
Global Settlement, all causes of action, rights of recovery and rights of
set-off owned by Seller, including but not limited to those set forth on
Schedule 2.1(i);
(j) Permits. All of Seller's rights, title and interest in
and to any and all Permits, licenses, permits, approvals and authorizations by a
federal, state, local or foreign governmental or non-governmental board, bureau,
agency or regulatory body owned by Seller, to the extent transferable or
assignable, including but not limited to those set forth on Schedule 2.1(j);
(k) Customer and Supplier Lists. All customer and supplier
lists and related information of Seller, as well as all existing advertising
plans of any kind, sales literature and related items.
(l) Telephone Numbers and Listings. All of Seller's
telephone, cell phone, and facsimile numbers, e-mail listings and addresses, web
sites, post office boxes, and all listings in all telephone books, directories,
and web sites, including but not limited to those set forth on Schedule 2.1(l).
2.2 Excluded Assets. Any provision of this Agreement to the
contrary notwithstanding, Purchaser shall not acquire and there shall be
excluded from the Assets the following (the "Excluded Assets"):
(a) all cash or cash equivalents on hand or held by Seller
in bank, brokerage, or other accounts as set forth on Schedule 2.2(a);
(b) all marketable securities as set forth on Schedule
2.2(b);
(c) all executory contracts and unexpired leases that are
not Assumed Contracts, including, but not limited to, those set forth on
Schedule 2.2(c);
(d) accounts and monetary obligations receivable as set
forth on Schedule 2.2(d) and original records representing such accounts and
monetary obligations receivable of Seller, including, but not limited to,
invoices, ledgers, and proofs of delivery;
(e) credit card reserves of Seller held by TransFirst and
ePayment Services of Omaha NE as set forth on Schedule 2.2(e);
(f) any assets that Purchaser designates in writing within
120 days following the Closing to leave in the possession or ownership of
Seller;
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(g) Seller's interest, if any, in the $75,000 retainer paid
to Seller's bankruptcy counsel, Xxxxxxx Xxxxxx & Xxxxxxx LLP, in the Bankruptcy
Case;
(h) any Hazardous Substances; and
(i) All bankruptcy avoidance claims of Seller, including,
without limitation, any claims arising under Sections 544, 545, 547, 548 549,
550 and 551 of the Bankruptcy Code.
2.3 Assumed Liabilities. Except as otherwise expressly
provided in this Section 2.3, Purchaser shall not assume or be responsible for,
and shall in no event be liable for any debts, liabilities or obligations of
Seller, whether fixed or contingent, known or unknown, liquidated or
unliquidated, suspected or unsuspected, material or immaterial, absolute or
contingent, matured or unmatured, determinable or undeterminable, direct or
indirect, secured or unsecured, or otherwise. As the sole exceptions to the
first sentence of this Section 2.3, effective as of the Closing Date, Purchaser
hereby assumes and agrees to pay, discharge or perform, as appropriate, (i) the
obligations of Seller under the Assumed Contracts that accrue after the Closing
Date and (ii) the cure payments in connection with the executory contracts
and/or unexpired leases in the respective amounts set forth on Schedule 2.3
(collectively, the "Assumed Liabilities").
2.4 Consideration. i)The aggregate consideration for the
Assets (the "Purchase Price") shall be the following: (i) a cash payment in the
amount of $1,125,000, (ii) reduction of Purchaser's $2,350,000 allowed general
unsecured claim in the Bankruptcy Case by $750,000, leaving Purchaser with an
allowed general unsecured claim in the amount of $1,600,000, (iii) the
assumption of the Assumed Liabilities, and (iv) obligation to pay Seller $3.00
per True Ceramic Pro flat iron unit (a "Unit") sold by Purchaser in accordance
with Section 2.4(b) and pursuant to the Settlement Agreement, the Global
Settlement, and the Settlement Order (the "Profit Share Obligation").
(b) The Profit Share Obligation shall be due upon
Purchaser's receipt of payment in full for a Unit and payable on a monthly basis
on the last day of each month based upon payments received during the previous
month. Thus, on July 31, 2006, Purchaser shall pay Seller $3.00 per Unit for
each Unit paid for in full between June 1, 2006 and June 30, 2006. The Profit
Share Obligation shall be capped at $4,135,000. Purchaser agrees that to the
extent the amounts paid to Seller on account of the Profit Share Obligation
equal less than $435,000 on the 2 year anniversary of the Closing, then, within
30 days of such anniversary, Purchaser shall pay Seller an amount equal to
$435,000 less the payments made to date.
(c) Commencing on July 31, 2006 and no later than the last
day of each month thereafter, Purchaser shall provide to Seller an accounting of
all sales used to calculate the Profit Share Obligation. Seller shall have the
right, at its expense, to audit any such accounting provided and Purchaser shall
make available to Seller all documents and information reasonably necessary to
confirm the accuracy of such accounting and Purchaser's satisfaction of the
Profit Share Obligation. In the event such audit reveals a discreprancy in
Seller's favor resulting in an increase in the Profit Share Obligation due and
owing, Seller shall remit such amount within 2 business days of discovery by
Seller and if such increase results in a variance of more than 10% and $5,000 of
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the amount due and owing by Purchaser for any monthly period, Purchaser shall
reimburse Seller for all reasonable expenses incurred in performing such audit.
(d) The Purchase Price shall be allocated among the Assets
as set forth on Schedule 2.4(c).
(e) As of the date hereof, Purchaser has delivered to
counsel for Seller a deposit (together with any interest accrued thereon, the
"Deposit") in the amount of $100,000 to be held in accordance with the terms of
this Agreement and the Bidding Procedures Order, and applied to the cash portion
of the Purchase Price at Closing. In the event of termination of this Agreement,
the Deposit shall be disbursed as provided in Section 9.2(b).
(f) In the event Purchaser defaults on the Profit Share
Obligation by failing to make any payment as and when due, and Purchaser has not
cured such default within 30 days of notice of such default, Seller shall have
the right to pursue all remedies available under law and equity.
2.5 Transfer of Assets and Assumed Liabilities.
(a) At the Closing, Seller shall effect the sale,
conveyance, assignment, transfer and delivery of the Assets to Purchaser by
delivering to Purchaser or its designee each of the following: (i) a duly
executed xxxx of sale, substantially in the form of Exhibit 3 hereto (the "Xxxx
of Sale"); (ii) a duly executed assignment of real property leases with respect
to the leased Real Property, substantially in the form of Exhibit 4 hereto (the
"Lease Assignment"); (iii) a duly executed assignment and assumption agreement
relating to the Assumed Contracts, Permits and other Assets, substantially in
the form of Exhibit 5 hereto (the "General Assignment"); (iv) a duly executed
assignment of Seller Rights, substantially in the form of Exhibit 6 hereto (the
"Seller Rights Assignment"); and (v) such other good and sufficient instruments
of conveyance and transfer (collectively, the "Other Instruments" and, together
with the Xxxx of Sale, the General Assignment, the Lease Assignment and Seller
Rights Assignment, the "Instruments of Assignment") as are reasonably necessary
to vest in Purchaser good and valid title to the Assets, free and clear of all
Encumbrances, except the Assumed Liabilities.
(b) At the Closing, Purchaser shall deliver to Seller an
undertaking, substantially in the form of Exhibit 7 hereto (the "Undertaking"),
whereby Purchaser shall assume and agree to perform, pay, or discharge, when
due, the Assumed Liabilities, effective as of the Closing, and such other
instruments, documents or agreements (collectively, the "Instruments of
Assumption") as are reasonably necessary to evidence Purchaser's assumption of
and agreement to pay and discharge the Assumed Liabilities.
2.6 Possession. Right to possession of the Assets shall
transfer to Purchaser on the Closing Date. Seller shall transfer and deliver to
Purchaser on the Closing Date such keys, lock and safe combinations and other
similar items as Purchaser shall require to obtain immediate and full occupation
and control of the Assets, and shall also make available to Purchaser at
Seller's then existing locations all documents in Seller's possession that are
required to be transferred to Purchaser by this Agreement.
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2.7 Transfer Taxes. Provided that the Sale Approval Order
(as defined in Section 6.5(c) hereof) includes the finding set forth in clause
(xiii) of Section 6.5(c) in accordance with Section 1146(a) of the Bankruptcy
Code, the making or delivery of any instrument of transfer, including the filing
of any deed or other document of transfer to evidence, effectuate or perfect the
rights, transfers and interest contemplated by this Agreement, shall be in
contemplation of a plan to be confirmed under Section 1129 of the Bankruptcy
Code in the Bankruptcy Case, and such shall be free and clear of any and all
transfer tax, stamp tax or similar taxes. Such instruments, orders and
agreements transferring the Assets to Purchaser shall contain the following
endorsement:
"Because this [instrument] has been
authorized pursuant to an order of the
United States Bankruptcy Court for the
Central District of California (San
Xxxxxxxx Valley Division), in
contemplation of a chapter 11 plan of the
Grantor, it is exempt from transfer taxes,
stamp taxes or similar taxes pursuant to
11 U.S.C. ss.1146(a)."
If such transfer, stamp or similar taxes are ultimately payable, notwithstanding
Section 1146(a) of the Bankruptcy Code or for any other reason, Seller shall pay
any and all such transfer, stamp or similar taxes, which may be payable by
reason of the transaction contemplated in this Agreement and any and all claims,
charges, interest or penalties assessed, imposed or asserted in relation to any
such taxes.
2.8 Non-Assignable Permits.
(a) To the extent that any Permit included among the Assets
is not capable of being assigned to Purchaser at the Closing without the Consent
of the issuer thereof, or if such assignment or attempted assignment would
constitute a breach thereof, or a violation of any applicable federal, state,
local or foreign law, statute, ordinance, rule, regulation, order, judgment or
decree, administrative order or decree, administrative or judicial decision, and
any other executive or legislative proclamation , neither this Agreement nor any
Instrument of Assignment shall constitute an assignment thereof, or an attempted
assignment, unless such Consent has been obtained.
(b) In the event that any Consent referred to in Section
2.8(a) has not been obtained prior to the Closing and Purchaser nevertheless
determines to effect the Closing, Seller shall use its commercially reasonable
efforts, and Purchaser shall cooperate with Seller, to obtain each and every
such Consent and to resolve the impracticalities of assignment referred to in
Section 2.8(a) after the Closing; provided, however, that each party shall bear
its own costs and expenses, and neither Seller nor Purchaser shall be obligated
to pay any consideration therefore to the Person from whom the Consent is
requested (other than filing and similar fees payable to any Governmental Entity
customarily paid in connection with transactions of the type contemplated
hereby).
(c) To the extent that Consents referred to in Section
2.8(a) have not been obtained by Seller prior to the Closing and Purchaser
nevertheless determines to effect the Closing, until the impracticalities of
assignment referred to in Section 2.8(a) hereof are resolved, Seller shall use
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its commercially reasonable efforts to (i) provide Purchaser the benefits of any
Permit referred to in Section 2.8(a), (ii) cooperate in any reasonable and
lawful arrangement designed to provide such benefits to Purchaser, without
incurring any financial obligation to Purchaser, and (iii) enforce for the
account and benefit of Purchaser any and all rights of Seller arising from the
Permits referred to in Section 2.8(a) against such issuer thereof (including the
right to elect to terminate in accordance with the terms thereof on the advice
of Purchaser).
(d) To the extent that Purchaser is provided the benefits
pursuant to Section 2.8(c) of any Permit, Purchaser shall perform, on behalf of
Seller, for the benefit of the issuer thereof, and/or all other parties thereto,
the obligations of Seller thereunder or in connection therewith, but only to the
extent that (i) such action by Purchaser would not result in any material
default thereunder or in connection therewith and (ii) such obligation would
have been an Assumed Liability but for the non-assignability or
non-transferability thereof.
2.9 The Closing. The Closing shall take place at 9:00 a.m.,
local time, on the Closing Date, at the offices of XxXxxxxxx Will & Xxxxx LLP,
2049 Century Park East, 34th Floor, Los Angeles, California, or at such other
time, date or place as the parties may mutually agree, subject to the
satisfaction or waiver of all of the conditions to Closing set forth in Article
VII hereof. At the Closing, Purchaser and Seller shall deliver or cause to be
delivered the items necessary to convey, assign, transfer and deliver the Assets
to Purchaser.
2.10 Deliveries by Sellers. At the Closing, Seller shall
deliver, or cause to be delivered, to Purchaser each of the following, duly
executed by or on behalf of Sellers:
(a) the Xxxx of Sale referred to in Section 2.5(a) hereof;
(b) the Lease Assignment referred to in Section 2.5(a)
hereof;
(c) the General Assignment referred to in Section 2.5(a)
hereof;
(d) Seller Rights Assignment referred to in Section 2.5(a)
hereof;
(e) the Other Instruments referred to in Section 2.5(a)
hereof;
(f) executed copies of the Consents referred to in Section
7.1(c) hereof;
(g) the officer's certificate of Seller referred to in
Section 7.1(e) hereof;
(h) a copy of the Sale Approval Order referred to in Section
6.5(c) hereof;
(i) a copy of the Settlement Order referred to in Section
6.5(f) hereof; and
(j) a copy of the Bankruptcy Court's docket sheet for the
Bankruptcy Cases evidencing that there has been no appeal or stay of the Sale
Approval Order.
2.11 Deliveries by Purchaser. At the Closing, Purchaser shall
deliver or cause to be delivered to Seller each of the following, duly executed
by or on behalf of Purchaser:
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(a) an amount equal to the cash portion of the Purchase
Price (less the amount of the Deposit), by wire transfer of immediately
available funds to the account or accounts designated in writing by Seller at
least two (2) Business Days prior to the Closing Date;
(b) the Undertaking referred to in Section 2.5(b) hereof;
(c) the Instruments of Assumption referred to in Section
2.5(b) hereof; and
(d) the officer's certificate of Purchaser referred to in
Section 7.2(e) hereof.
Article III
PURCHASE PRICE ADJUSTMENT
-------------------------
3.1 Purchase Price Adjustments. The following adjustments to
the Purchase Price shall be made:
(a) Inventory Adjustment. On or before the third Business
Day prior to the Closing Date, Seller and Purchaser shall jointly agree on an
estimate of the Actual Inventory to be transferred to Purchaser on the Closing
Date (the "Estimated Inventory"). The Estimated Inventory shall be determined in
good faith on a reasonable basis using then available information of Seller and
based upon the books and records of Seller. The defective units identified on
Schedule 3.1(a) (the "Defective Units") shall be included in the calculation of
Estimated Inventory. In the event the Actual Inventory is less than the value of
$376,000 based on the quantity listed on Schedule 3.1(a) and Schedule 2.1(d),
then the Insider Noteholders Claim shall be reduced dollar for dollar in an
amount equal to the cost value allocated to such missing Inventory or Defective
Units that are not replaced or repaired to the reasonable satisfaction of
Purchaser (the "Reduced Claim"). In the event the Actual Inventory is greater
than the value of $376,000 based on the quantity listed on Schedule 3.1(a) and
Schedule 2.1(d), there shall be no upward adjustment in the Purchase Price or
the Insider Noteholders Claim and no reduction in Purchaser's allowed claim in
the Bankruptcy Case.
3.2 Calculation of Actual Inventory. The determination of
the Actual Inventory shall be made pursuant to the following provisions:
(a) Seller agrees to use its best efforts to repair or
replace any Defective Units within thirty (30) days after the Closing Date. Any
Defective Units will not be included in the calculation of Actual Inventory
unless and until they are repaired or replaced. Failure of Seller to repair or
replace the Defective Units shall result in the Reduced Claim.
(b) Within forty-five (45) days after the Closing Date,
Purchaser shall prepare a calculation of Actual Inventory as of the close of
business on the Closing Date (subject to adjustment set forth herein above) in
accordance with GAAP and deliver to Seller' Representative such calculation of
Actual Inventory.
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(c) The Seller's Representative will have a period of thirty
(30) days following the delivery of the calculation of Actual Inventory to
notify Purchaser of any disagreements with the calculation of Actual Inventory.
Failure to notify Purchaser within such 30-day period shall be deemed acceptance
of such calculation. In the event Seller's Representative timely notifies
Purchaser of any disagreement, the parties agree that each of them shall attempt
in good faith to resolve such disagreements. If within thirty (30) days after
delivery to Purchaser of the notification by Seller's Representative of a
disagreement, the parties are unable to resolve such disagreement, either
Seller's Representative, on the one hand, or Purchaser, on the other hand, shall
have the right to submit the determination of such matters to an independent
accountant of national standing reasonably acceptable to Seller's Representative
and Purchaser (the "Independent Auditor"), whose decision shall be binding on
the parties. The cost of the Independent Auditor shall be paid by the party
whose aggregate estimate of the disputed amount or amounts, as the case may be,
differs most greatly from the determination of the Independent Auditor.
Article IV
REPRESENTATIONS AND WARRANTIES OF SELLER
----------------------------------------
Seller hereby represents and warrants to Purchaser, to the
best of its knowledge and belief, as follows (all such representations and
warranties are qualified by the Disclosure Schedule attached to this Agreement
as Exhibit 1):
4.1 INTENTIONALLY OMITTED
4.2 Authority.
(a) Seller has all requisite power and authority to execute
and deliver this Agreement and the Operative Documents to which it is or shall,
pursuant to this Agreement, be a party, and to perform, carry out and consummate
the transactions contemplated hereby and thereby. The execution, delivery and
performance of this Agreement and the Operative Documents to which it is or
shall, pursuant to this Agreement, be a party have been duly authorized by all
necessary action on the part of Seller. This Agreement has been duly executed
and delivered by Seller and constitutes the legal, valid and binding obligation
of Seller, enforceable against Seller in accordance with its terms.
(b) INTENTIONALLY OMITTED
4.3 Title to Assets. Upon the Closing and transfer to
Purchaser of the Assets, Purchaser shall receive good and marketable title to
all of the Assets free and clear of any and all Encumbrances, pursuant to
Section 363 of the Bankruptcy Code and any other applicable sections of the
Bankruptcy Code and as set forth in the Sale Approval Order.
4.4 Real Property Leases. Schedule 4.4 of the Disclosure
Schedule contains a complete and correct list of all Real Property leased by
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Seller. Seller has previously delivered to Purchaser true, complete and correct
copies of all lease documents relating to such Real Property.
4.5 Intellectual Property.
(a) Except as disclosed in Schedule 4.5(a) of the Disclosure
Schedule, Seller is the exclusive owner of all right, title and interest in and
to all of the intellectual property in which Seller has an ownership interest or
that has been used in the Business of Seller, and/or has been or is being
developed or acquired for potential use in the Business of Seller and/or that
has been promoted, sold, licensed or otherwise distributed by Seller to any
third parties, including, but not limited to, each of the following:
(i) all copyrights and copyright registrations set
forth in Schedule 4.5(a)(i) of the Disclosure Schedule;
(ii) all patents and applications set forth in
Schedule 4.5(a)(ii) of the Disclosure Schedule;
(iii) All trademarks, service marks and tradenames
(collectively the "Marks"), and the registrations of, and/or applications to
register, any one or more of the Marks in federal, state or foreign
jurisdictions set forth in Schedule 4.5(a)(iii) of the Disclosure Schedule; and
(iv) all Trade Secrets and other proprietary rights.
The items referred to in subparagraphs (i) through (iv) of
this Section 4.5(a) are herein referred to collectively as the "Seller
Intellectual Property Rights." The Seller Intellectual Property Rights
constitute all such rights necessary to operate the Business of Seller as it is
has been conducted in the past three years.
(b) Schedule 4.5(b) of the Disclosure Schedule sets forth a
list of all license and similar agreements between Seller and third parties,
under which Seller is granted rights to the use, reproduction, distribution,
manufacture, sale or licensing of items embodying the patent, copyright, Trade
Secret, trademark or other proprietary rights of such third parties
(collectively, the "Seller License Rights"). Except as disclosed in Schedule
4.5(b), Seller is not, nor will Seller be as a result of the execution and
delivery of this Agreement or the consummation of the transactions contemplated
thereby, in violation of or will lose any rights pursuant to any license and
similar agreements described in Schedule 4.5(b) of the Disclosure Schedule.
Except as set forth in Schedules 4.5(a) and 4.5(b) of the Disclosure Schedule,
no Person is entitled to any royalty, fee and/or other payment or other
consideration of whatever nature with respect to Seller License Rights or Seller
Intellectual Property Rights. The Seller License Rights and Seller Intellectual
Property Rights are sometimes collectively referred to as the "Seller Rights".
(c) Schedule 4.5(c) of the Disclosure Schedule sets forth a
list of all agreements under which Seller has granted any rights of whatever
nature to third parties of, to or under Seller Rights. Except as set forth in
Schedule 4.5(c), all such rights granted shall be terminated as of the Closing
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Date. True, correct and complete copies of all such agreements have been
delivered to Purchaser.
(d) No claims with respect to Seller Rights have been
asserted or, to the knowledge of Seller, are threatened by any Person, nor does
Seller know of any valid grounds for any bona fide claims against the use by
Seller of any Seller Rights. To the knowledge of Seller, there has not been any
infringement, misappropriation or any other unauthorized use of any of the
Seller Rights by any third party, employee, consultant or former employee or
consultant of Seller.
(e) Seller has not, by reason of its use, license, sale or
other distribution of the Seller Rights or otherwise, nor has Seller been
alleged to have, infringed upon, violated, misappropriated or misused any
intellectual property right or other proprietary right (including, without
limitation, any patent right, copyright, trade name or Trade Secret) of any
third party.
4.6 Contracts and Commitments. Schedule 4.6 of the
Disclosure Schedule contains a complete and correct list of each contract and
agreement to which Seller is a party. Seller has previously delivered to
Purchaser true, complete and correct copies of all such contracts and
agreements, together with all amendments thereto.
4.7 Insurance. Schedule 4.7 of the Disclosure Schedule
contains a true and complete list of all insurance policies covering Seller or
otherwise held by or on behalf of it, or any aspect of its Assets or Business,
indicating the type of coverage, name of insured, the insurer, the amount of
coverage, the deductibles, the premium, and the expiration date. Except as set
forth on Schedule 4.7, there are no pending claims under any of the foregoing.
4.8 INTENTIONALLY OMITTED
4.9 INTENTIONALLY OMITTED
4.10 Environmental Matters. Except as set forth on Schedule
4.10, Seller is not subject to any material Environmental Liabilities.
4.11 INTENTIONALLY OMITTED
4.12 INTENTIONALLY OMITTED
4.13 INTENTIONALLY OMITTED
4.14 Finders. None of Seller nor any of Seller's directors,
officers, members, or managers, have taken any action that, Directly or
Indirectly, would obligate Purchaser or Seller, to anyone acting as broker,
finder, financial advisor or in any similar capacity in connection with this
Agreement or any of the transactions contemplated hereby.
4.15 Disclosure. No representation or warranty by Seller in
this Agreement, in any documents or papers furnished to Purchaser or its
representatives by or on behalf of Seller, pursuant to this Agreement or any
statement contained in the Disclosure Schedule or any certificates delivered
hereunder contains or will contain any untrue statement of material fact or
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omits to state a material fact required to be stated therein or necessary to
make the statements contained therein in light of the circumstances under which
it was made, not false or misleading. All copies of contracts, agreements and
other documents made available to Purchaser or any of its representatives
pursuant hereto are complete and accurate.
Article V
REPRESENTATIONS AND WARRANTIES OF THE PURCHASER
-----------------------------------------------
Purchaser hereby represents and warrants as follows:
5.1 Organization and Qualification. It is duly organized,
validly existing and in good standing in its jurisdiction of organization.
5.2 Authority. It has all requisite power and authority to
execute and deliver this Agreement and to perform, carry out and consummate the
transactions contemplated hereby. The execution, delivery and performance of
this Agreement have been duly authorized by all necessary corporate action on
its part. This Agreement has been duly executed and delivered by it and
constitutes its legal, valid and binding obligation, enforceable against it in
accordance with its terms.
5.3 No Breach. Neither the execution and delivery of this
Agreement by it nor the consummation of the transactions contemplated herein and
the full performance by it of its obligations hereunder do or will: (i) violate
any provision of its organizational documents; (ii) conflict with, violate,
result in a breach of or constitute a default under any writ, injunction,
statute, law, ordinance, rule, regulation, judgment, award, decree, order, or
process of any Governmental Entity; or (iii) require it to obtain any Consent.
Article VI
COVENANTS
---------
6.1 Conduct of Business of Seller. Purchaser acknowledges
that Seller has not been in operation since before the Filing Date. From the
date hereof and until the Closing Date, except as contemplated by this Agreement
or expressly consented to by an instrument in writing signed by Purchaser,
Seller shall: (i) maintain and preserve the Assets in good repair, order and
condition, including, without limitation, performing, in a manner and on a basis
consistent with past practice, all periodic maintenance and necessary
reconditioning, (ii) endeavor in good faith to preserve its business operations
and organizations intact, (iii) endeavor in good faith to preserve its current
advantageous business relationships, including, without limitation, the goodwill
of its customers and suppliers and others having business relationships with it,
and (iv) not enter into any agreement or make any other commitment involving an
amount in excess of $25,000. Without limiting the generality of the foregoing,
and, except as contemplated in this Agreement, prior to the Closing Date Seller
shall use all commercially reasonable efforts to not take any action that would
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result in the incorrectness as of the Closing Date of any representation and
warranty contained in Article IV without the prior written consent of Purchaser.
6.2 Sellers Records. Prior to the Closing Date, Seller shall
afford Purchaser, its attorneys, accountants and representatives, free and full
access to Seller's Business, books, records and employees, and shall provide to
Purchaser and its representatives such additional financial and operating data
and other information as Purchaser shall from time to time reasonably request.
Seller shall permit Purchaser to contact customers and suppliers of Seller for
determining and verifying the precise terms and nature of their arrangements.
6.3 Filings and Authorizations. Each of Seller and
Purchaser, as promptly as practicable, (i) shall make, or cause to be made, all
such filings and submissions under laws, rules and regulations applicable to it
or its Affiliates, as may be required to consummate the transactions
contemplated herein, in accordance with the terms of this Agreement, (ii) shall
use all commercially reasonable best efforts to obtain, or cause to be obtained,
all authorizations, approvals, consents and waivers from all governmental and
non-governmental Persons necessary to be obtained by it or its Affiliates, in
order to consummate the transactions contemplated herein; provided, however,
that, any provision hereof to the contrary notwithstanding, Seller shall have no
obligation to (A) pay any fee to any third party for the purpose of obtaining
any Consent or any costs and expenses of any third party resulting from the
process of obtaining such Consent or (B) sell any material portion of the
Business; provided further, however, that neither Purchaser nor Seller shall be
obligated to consummate the transactions contemplated by this Agreement absent
the prior approval of the Bankruptcy Court and neither Purchaser nor Seller
shall be obligated to modify the Agreement in any material respect to satisfy
the Bankruptcy Court, and (iii) shall use all commercially reasonable efforts to
take, or cause to be taken, all other actions necessary, proper or advisable in
order for him, her or it to fulfill his, her or its obligations hereunder. The
Sellers and Purchaser shall coordinate and cooperate with one another in
exchanging such information and supplying such reasonable assistance as may be
reasonably requested by each in connection with the foregoing.
6.4 Further Assurances. Simultaneous with the Closing,
Seller shall take such steps as may be necessary to put Purchaser in actual
possession and operating control of the Assets and the Business. At or after the
Closing, Sellers shall, at the reasonable request of Purchaser, without further
consideration, promptly execute and deliver, or cause to be executed and
delivered, to Purchaser such assignments, bills of sale, consents and other
instruments in addition to those required by this Agreement, in form and
substance reasonably satisfactory to Purchaser, and take all such other actions
as Purchaser may reasonably deem necessary or desirable to implement any
provision of this Agreement and to more effectively transfer to and vest in
Purchaser, and to put Purchaser in possession of, all of the Assets, free and
clear of any and all Encumbrances.
6.5 Bankruptcy Covenants.
(a) Cure of Defaults. Seller shall promptly, on or prior to
the Closing Date, cure any and all defaults and breaches and satisfy any
liability or obligation arising from or relating to pre-Closing periods under
the Assumed Contracts, except as expressly assumed by Purchaser under this
Agreement, so that such Assumed Contracts may be assigned by Sellers to
-19-
Purchaser in accordance with the provisions of section 365 of the Bankruptcy
Code, the Sale Approval Order, any other orders of the Bankruptcy Court
effectuating such assignments, and this Agreement.
(b) Motions, Orders, etc. Seller shall promptly provide
Purchaser with the proposed final drafts of all documents, motions, orders, or
pleadings that Seller proposes to file with the Bankruptcy Court which relate to
the approval of this Agreement, the Settlement Agreement, the Global Settlement,
the Assets, or the consummation of the transactions contemplated hereby, or any
provision therein or herein, and shall provide Purchaser and its counsel with a
reasonable opportunity to review and comment on such documents, motions, orders,
or pleadings. Seller shall promptly notify Purchaser of any hearing relating to
the approval of this Agreement (the "Sale Hearing"), the Settlement Agreement,
the Global Settlement, or the consummation of the transactions contemplated
hereby.
(c) Sale Approval Order. Without limiting the generality of
the foregoing Section 6.5(b), the sale approval order, in the form annexed
hereto as Exhibit 2 (the "Sale Approval Order"), shall be acceptable in form and
substance to Purchaser and shall include provisions, among other things (i)
providing that Purchaser shall not incur any liability as a successor to the
Business, (ii) approving the sale of the Assets to Purchaser on the terms and
conditions set forth in this Agreement and authorizing Seller to proceed with
this transaction, (iii) stating that any objections filed with respect to the
sale of the Assets, which have not been withdrawn, are overruled or the
interests of such objections have been otherwise satisfied or adequately
provided for by the Bankruptcy Court, (iv) finding that the Purchase Price
represents fair value for the Assets, (v) finding that the sale is in the best
interests of Seller's estate and creditors, (vi) finding that Purchaser is a
good faith purchaser of the Assets under Section 363(m) of the Bankruptcy Code
and that the provisions of Section 363(n) of the Bankruptcy Code have not been
violated, (vii) providing that the sale of the Assets to Purchaser shall be free
and clear of all Encumbrances whatsoever under section 363 of the Bankruptcy
Code and any other applicable sections of the Bankruptcy Code, (viii) providing
that the Bankruptcy Court shall retain jurisdiction for the purpose of enforcing
the provisions of the Sale Approval Order including, without limitation,
compelling delivery of the Assets to Purchaser and protecting Purchaser against
any Encumbrances against Seller or the Assets, (ix) finding that there are no
brokers involved in consummating the sale and no brokers' commissions are due,
(x) providing that the parties hereto shall be authorized to close this
transaction immediately upon execution of the Sale Approval Order pursuant to
Rules 6004(g) and 6006(d) of the Federal Rules of Bankruptcy Procedure, (xi)
authorizing and directing Seller to execute, deliver, perform under, consummate
and implement this Agreement, together with all additional instruments and
documents that may be reasonably necessary or desirable to implement the
foregoing, (xii) determining that Purchaser is not a successor to Seller or
otherwise liable for any of the Excluded Liabilities or Excluded Assets and
permanently enjoining each and every holder of any of the Excluded Liabilities
or Excluded Assets from commencing, continuing or otherwise pursuing or
enforcing any remedy, claim, cause of action or Encumbrance against Purchaser or
the Assets related thereto, (xiii) finding that, pursuant to Section 1146(a) of
the Bankruptcy Code, the within transaction is "in contemplation of a plan to be
confirmed under Section 1129 of the Bankruptcy Code in the Bankruptcy Case," and
as such shall be free and clear of any and all transfer tax, stamp tax or
similar taxes, and (xiv) declaring that Seller owns all the copyrights to the
True Ceramic Pro - Live Ops (TCP5) infomercial and the master tapes relating to
-20-
the same and owns all trademarks, patents, patent applications and copyrights
relating to the True Ceramic Pro product and all advertising and marketing
materials relating thereto, and (xv) declaring that any licenses to Seller's
Intellectual Property (or any third party's contributed as part of the sale),
including patents, copyrights, and trademarks, granted to third parties prior to
the Closing shall be nullified as of the Closing Date. To the extent that there
is any inconsistency between this paragraph and the Sale Approval Order, the
Sale Approval Order shall govern.
(d) Assumed Contracts. Seller shall not reject under Section
365 of the Bankruptcy Code, waive or release any of its rights under, amend or
otherwise modify any of the Assumed Contracts without the prior written consent
of Purchaser. Seller shall obtain an order or orders (which may include the Sale
Approval Order) in a form satisfactory to Purchaser, among other things (i)
approving the assumption and assignment of the Assumed Contracts to Purchaser
pursuant to, and subject to the provisions of, Section 365 of the Bankruptcy
Code, (ii) providing that all defaults of Seller under the Assumed Contracts
arising or accruing prior to the date of the Closing (without giving effect to
any acceleration clauses or any default provisions in such contracts of a kind
specified in Section 365(b)(2) of the Bankruptcy Code) have been cured or will
be promptly cured by Seller so that Purchaser shall have no liability or
obligation with respect to any default or obligation arising or accruing prior
to the date of the Closing or in respect of any cure obligations, except as may
otherwise be specifically agreed as set forth in this Agreement, and (iii)
providing that the Assumed Contracts shall be transferred to, and remain in full
force and effect for the benefit of, Purchaser, notwithstanding any provision in
any such Assumed Contract or in applicable Law (including those described in
Sections 365(b)(2) and (f) of the Bankruptcy Code) that prohibits, restricts, or
limits in any way such assignment or transfer.
(e) Other Bankruptcy Covenants. Seller shall promptly make
any filings, take all actions, and use its best efforts to obtain any and all
other approvals and orders necessary or appropriate for consummation of the sale
of the Assets, subject to its obligations to comply with any order of the
Bankruptcy Court. In the event an appeal is taken, or a stay pending appeal is
requested, from any of the foregoing orders of the Bankruptcy Court, Seller
shall immediately notify Purchaser of such appeal or stay request and, upon
Purchaser's request, shall provide to Purchaser within two days after Seller's
receipt thereof a copy of the related notice of appeal or order of stay. Seller
shall also provide Purchaser with written notice of any motion, application,
brief or other pleading filed in connection with any appeal from any of such
orders.
(f) Settlement Order. The Settlement Order shall be
acceptable in form and substance to Purchaser, and shall include provisions,
among other things, (i) allowing Purchaser's claim in the Bankruptcy Case in the
amount of $2,350,000 and (ii) releasing Purchaser of any and all claims of
Seller and its bankruptcy estate.
6.6 Apportioned Obligations. All real property Taxes,
personal property Taxes and similar ad valorem obligations levied with respect
to the Assets for a taxable period which includes (but does not end on) the
Closing Date (collectively, the "Apportioned Obligations") shall be apportioned
between Seller and Purchaser based on the number of days of such taxable period
included in the Pre-Closing Tax Period and the number of days of such taxable
period included in the Post-Closing Tax Period. The Seller shall be liable for
the proportionate amount of such Taxes that is attributable to the Pre-Closing
-21-
Tax Period, and Purchaser shall be liable for the proportionate amount of such
Taxes that is attributable to the Post-Closing Tax Period. Upon receipt of any
xxxx for real or personal property taxes relating to the Assets, each of Seller
and Purchaser shall present a statement to the other setting forth the amount of
reimbursement to which each is entitled under this Section 6.6 together with
such supporting evidence as is reasonably necessary to calculate the proration
amount. The proration amount shall be paid by the party owing it to the other
within ten (10) Business Days after delivery of such statement. In the event
that either Seller or Purchaser shall make any payment for which it is entitled
to reimbursement under this Section 6.6, the other party shall make such
reimbursement promptly but in no event later than ten (10) Business Days after
the presentation of a statement setting forth the amount of reimbursement to
which presenting party is entitled along with such supporting evidence as is
reasonably necessary to calculate the amount of reimbursement. Purchaser shall
notify Seller's Representative of any audit or examination of the Apportioned
Obligations. The Seller's Representative shall have the right to participate in
any such audit or examination and Purchaser shall not settle any such audit or
examination without the consent of Seller's Representative, which consent shall
not be unreasonably withheld.
Article VII
CONDITIONS TO CLOSING
---------------------
7.1 Conditions Precedent to Obligations of Purchaser. The
obligation of Purchaser under this Agreement to consummate the transactions
contemplated by this Agreement on the Closing Date shall be subject to the
satisfaction, at or prior to the Closing Date, of all of the following
conditions, any one or more of which may be waived by Purchaser:
(a) Representations and Warranties Accurate. The
representations and warranties of Seller contained in this Agreement which are
qualified as to materiality shall be true and correct in all respects, and those
not so qualified shall be true and correct in all material respects, as of the
date of this Agreement and as of the Closing Date with the same force and effect
as though made on and as of the Closing Date.
(b) Performance by Seller. Seller shall have performed and
complied in all material respects with all covenants and agreements required to
be performed or complied with by such Person hereunder on or prior to the
Closing Date.
(c) Consents. All Consents required in connection with the
consummation of the transactions contemplated by this Agreement and the Closing
(including those set forth on Schedule 7.1(c) hereto) shall have been duly
obtained, made or given and shall be in full force and effect, without the
imposition upon Purchaser or Seller of any condition, restriction or required
undertaking.
(d) No Legal Prohibition. No suit, action, investigation,
inquiry or other proceeding by any Governmental Entity or other Person shall
have been instituted or threatened which arises out of or relates to this
Agreement, or the transactions contemplated hereby and no injunction, order,
decree or judgment shall have been issued and be in effect or threatened to be
-22-
issued by any Governmental Entity of competent jurisdiction, and no statute,
rule or regulation shall have been enacted or promulgated by any Governmental
Entity and be in effect, which in each case restrains or prohibits the
consummation of the transactions contemplated hereby.
(e) Certificate. Purchaser shall have received a
certificate, dated the Closing Date, signed on behalf of Seller by an officer of
Seller, to the effect that the conditions set forth in Sections 7.1(a), 7.1(b),
and 7.1(c) have been satisfied.
(f) Completion of Disclosure Schedules. Seller shall have
completed and delivered the Disclose Schedules to Purchaser, and the Disclosure
Schedules shall be acceptable to Purchaser in its sole discretion.
(g) No Material Adverse Change. No material adverse change
shall have occurred in the business of Seller and no other event, loss, damage,
condition or state of facts of any kind shall exist which has a Material Adverse
Effect or can reasonably be expected to have a Material Adverse Effect.
(h) Additional Documents, etc. There shall have been
delivered to Purchaser each of the agreements, documents, certificates and other
items set forth on Schedule 7.1(h) of this Agreement.
(i) Entry of Order; Appeal. The Bankruptcy Court shall have
entered the Sale Approval Order in accordance with Section 6.5(c), the
Settlement Order in accordance with Section 6.5(f), and any other order in
accordance with Section 6.5(d) relating to the assignment of the Assumed
Contracts, all in form and substance reasonably acceptable to Purchaser, and the
Sale Approval Order, the Settlement Order, and any other order in accordance
with Section 6.5(d) relating to the assignment of the Assumed Contracts, shall
not have been stayed.
7.2 Conditions Precedent to Obligations of Seller. The
obligations of Seller under this Agreement to consummate the transactions
contemplated by this Agreement on the Closing Date shall be subject to the
satisfaction, at or prior to the Closing Date, of all of the following
conditions, any one or more of which may be waived by Seller:
(a) Representations and Warranties Accurate. The
representations and warranties of Purchaser contained in this Agreement which
are qualified as to materiality shall be true and correct in all respects, and
those not so qualified shall be true and correct in all material respects, as of
the date of this Agreement and as of the Closing Date with the same force and
effect as though made on and as of the Closing Date.
(b) Performance by Purchaser. Purchaser shall have performed
and complied in all material respects with all covenants and agreements required
to be performed or complied with by them hereunder on or prior to the Closing
Date.
(c) Consents. All Consents required in connection with the
purchase and sale of the Assets and the Closing shall have been duly obtained,
made or given and shall be in full force and effect.
-23-
(d) No Legal Prohibition. No suit, action, investigation,
inquiry or other proceeding by any Governmental Entity or other Person shall
have been instituted or threatened which arises out of or relates to this
Agreement or the transactions contemplated hereby and no injunction, order,
decree or judgment shall have been issued and be in effect or threatened to be
issued by any Governmental Entity of competent jurisdiction, and no statute,
rule or regulation shall have been enacted or promulgated by any Governmental
Entity and be in effect, which in each case restrains or prohibits the
consummation of the transactions contemplated hereby.
(e) Certificate. Seller's Representative shall have received
a certificate, dated the Closing Date, signed on behalf of Purchaser by an
officer of Purchaser, to the effect that the conditions set forth in Sections
7.2(a), 7.2(b) and 7.2(c) have been satisfied.
(f) Additional Documents, etc. There shall have been
delivered to Seller's Representative each of the agreements, documents and other
items set forth on Schedule 7.(h) of this Agreement to be delivered to Seller.
(g) Entry of Order; Appeal. The Sale Approval Order shall
have been entered by the Bankruptcy Court and shall not have been stayed.
Article VIII
INDEMNIFICATION
---------------
8.1 Non-Survival of Representations and Warranties. All
representations and warranties contained in Articles IV and V shall expire at
the close of business on the Closing Date.
Article IX
MISCELLANEOUS
-------------
9.1 Termination. This Agreement may be terminated, and the
transactions contemplated herein may be abandoned:
(a) any time before the Closing, by mutual written agreement
of Seller and Purchaser;
(b) any time before the Closing, by Seller, on the one hand,
or Purchaser, on the other hand, in the event of a material breach hereof by any
non-terminating party if such non-terminating party fails to cure such breach
within five (5) Business Days following notification thereof by the terminating
party; or
-24-
(c) by Purchaser, upon five (5) Business Days' prior written
notice to Seller's Representative, if through no fault of Purchaser (i) the Sale
Approval Order and any other order in accordance with Section 6.5(d) relating to
the assignment of the Assumed Contracts shall not have been entered by June 6,
2006 or (ii) the Closing has not taken place by the sixtieth (60th) day
following the date hereof, other than by reason of a material breach of this
Agreement by Purchaser.
9.2 Effect of Termination.
(a) If this Agreement is validly terminated pursuant to
Section 9.1, this Agreement will forthwith become null and void, and there will
be no liability or obligation on the part of any party (or any of their
respective officers, directors, employees, partners, agents or other
representatives or Affiliates), except as provided in Section 9.2(b).
(b) Notwithstanding the provisions of Section 9.2(a), above:
(i) if Purchaser or Seller terminates this Agreement
pursuant to Section 9.1(a), Purchaser shall receive the prompt return of the
Deposit;
(ii) if Purchaser terminates this Agreement pursuant
to Section 9.1(b) or Section 9.1(c), Purchaser shall receive the prompt return
of the Deposit;
(iii) if Seller terminates this Agreement pursuant to
Section 9.1(b), Seller shall receive, as its sole and exclusive remedy available
under any Law, including the Bankruptcy Code, the Deposit.
9.3 Expenses. Except as otherwise set forth herein, each
party hereto shall pay its own expenses incurred in connection with this
Agreement and the transactions contemplated hereby.
9.4 Amendment. This Agreement may not be modified, amended,
altered or supplemented except by a written agreement executed by Purchaser and
Seller.
9.5 Entire Agreement. This Agreement, together with the
Exhibits and Schedules hereto and the instruments and other documents delivered
pursuant to this Agreement, contain the entire agreement of the parties relating
to the subject matter hereof, and supersede all prior agreements,
understandings, representations, warranties and covenants of any kind between
the parties. All others are specifically waived.
-25-
9.6 Waivers. Waiver by any party of any breach of or failure
to comply with any provision of this Agreement by the other party shall not be
construed as, or constitute, a continuing waiver of such provision, or a waiver
of any other breach of, or failure to comply with, any other provision of this
Agreement. No waiver of any such breach or failure or of any term or condition
of this Agreement shall be effective unless in a written notice signed by the
waiving party and delivered, in the manner required for notices generally, to
each affected party.
9.7 Notices. All notices and other communications hereunder
shall be validly given or made if in writing, (i) when delivered personally (by
courier service or otherwise), (ii) when sent by telecopy, or (iii) when
actually received if mailed by first-class certified or registered United States
mail or recognized overnight courier service, postage-prepaid and return receipt
requested, and all legal process with regard hereto shall be validly served when
served in accordance with applicable law, in each case to the address of the
party to receive such notice or other communication set forth below, or at such
other address as any party hereto may from time to time advise the other parties
pursuant to this Subsection:
If to Seller:
ADVANCED BEAUTY SOLUTIONS LLC
Xxxxx Dodo, Managing Member
0000 00xx Xxxxxx #0
Xxxxx Xxxxxx, XX 00000
Tel: 000-000-0000
Fax: 000-000-0000
with a copy to:
Xxxxx X. Xxxxxxx, Xx., Esq.
XXXXXXX XXXXXX & XXXXXXX LLP
00000 Xxxxx Xxxxxx Xxxxx , Xxxxx 000
Xxxxxxxx Xxxxx, Xxxxxxxxxx 00000-0000
Tel: 000-000-0000
Fax: 000-000-0000
If to Purchaser:
Xxxxx Xxxxxxxx
CirTran Corporation
0000 Xxxxx 0000 Xxxx
Xxxx Xxxxxx Xxxx, Xxxx 00000
Tel: 000-000-0000
Fax: 000-000-0000
-26-
with a copy to:
Xxxxx Xxxxx, Esq.
XxXxxxxxx Will & Xxxxx LLP
0000 Xxxxxxx Xxxx Xxxx
Xxx Xxxxxxx, XX 00000
Tel: 000-000-0000
Fax: 000-000-0000
and
Xxxxx Xxxxxxxx, Esq.
XxXxxxxxx Will & Xxxxx LLP
000 Xxxxxxx Xxxxxx
Xxx Xxxx, XX 00000
Tel: 000-000-0000
Fax: 000-000-0000
9.8 Counterparts. This Agreement may be executed in two or
more counterparts, each of which shall be deemed to be an original, but all of
which together shall constitute one and the same document.
9.9 Governing Law. All disputes arising out of or related to
this Agreement, including, without limitation, any dispute relating to the
interpretation, meaning or effect of any provision hereof, will be resolved in
the Bankruptcy Court and the parties hereto will each submit to the exclusive
jurisdiction of the Bankruptcy Court for the purposes of adjudicating any such
dispute, to the extent the jurisdiction of the Bankruptcy Court is applicable.
If the jurisdiction of the Bankruptcy Court is not applicable, any legal action,
suit or proceeding arising out of or relating to this Agreement, each and every
agreement and instrument contemplated hereby or the transactions contemplated
hereby and thereby shall be instituted in any Federal court of the Central
District of California. This Agreement shall be governed by and construed in
accordance with the internal laws of the State of California (i.e., without
regard to its conflicts of law rules).
9.10 Binding Effect; Third Party Beneficiaries; Assignment.
This Agreement shall be binding upon, inure to the benefit of, and be
enforceable by, the parties hereto and their respective legal representatives,
successors and permitted assigns. Except as expressly set forth herein, nothing
expressed or referred to in this Agreement is intended or shall by construed to
give any Person other than the parties to this Agreement, or their respective
legal representatives, successors and permitted assigns, any legal or equitable
right, remedy or claim under or in respect of this Agreement or any provision
contained herein. Neither party may assign this Agreement nor any of its rights
hereunder, other than any right to payment of a liquidated sum, nor delegate any
of its obligations hereunder, without the prior written consent of the other,
except that Purchaser may assign its rights under this Agreement to any
Affiliate or to any Person providing financing for the transaction.
-27-
9.11 Severability. Any provision of this Agreement which is
prohibited or unenforceable in any jurisdiction shall not invalidate the
remaining provisions hereof, and any such prohibition or unenforceability in any
jurisdiction shall not invalidate or render unenforceable such provision in any
other jurisdiction, and any such provision, to the extent invalid or
unenforceable, shall be replaced by a valid and enforceable provision which
comes closest to the intention of the parties underlying such invalid or
unenforceable provision.
9.12 Specific Performance. Notwithstanding anything to the
contrary contained herein, each party hereto acknowledges that money damages
would be incalculable and an insufficient remedy for any breach of this
Agreement by such party and that any such breach would cause the other party
hereto irreparable harm. Accordingly, each party hereto also agrees that, in the
event of any breach or threatened breach of the provisions of this Agreement by
such party, the other party hereto shall be entitled to equitable relief without
the requirement of posting a bond or other security, including in the form of
injunctions and orders for specific performance.
9.13 Headings. The headings contained in this Agreement are
for reference purposes only and shall not modify define, limit, expand or
otherwise affect in any way the meaning or interpretation of this Agreement.
9.14 No Agency. Except as provided in Section 9.15 hereof, no
party hereto shall be deemed hereunder to be an agent of, or partner or joint
venturer with, any other party hereto.
9.15 Seller's Representative. Seller hereby irrevocably
appoints Xxxxx Dodo (herein called the "Seller's Representative") as its true
and lawful attorney-in-fact and agent, with full power of substitution or
resubstitution, to act solely and exclusively on behalf of Seller with respect
to any matters relating to this Agreement and any document, certificate or other
agreement to be executed and delivered by or on behalf of Seller pursuant
hereto, with the full power, without the consent of Seller, to exercise as it in
its sole discretion deems appropriate, all of the powers which Seller could
exercise under the provisions of this Agreement or any document, certificate or
other agreement to be executed and delivered by or on behalf of Seller pursuant
hereto, including, without limitation, to (i) accept and give notices hereunder
or thereunder on behalf of Seller, (ii) consent to any modification or amendment
hereof or thereof or (iii) give any waiver or consent hereunder or thereunder.
Seller's Representative does hereby accept such appointment. Purchaser shall be
entitled to rely exclusively upon such notices, waivers, consents, amendments,
modifications and other acts of Seller's Representative as being the binding
acts of Seller, and Purchaser shall be entitled to deliver any notices, payments
or other items required to be delivered by it to Seller hereunder or thereunder
only to Seller's Representative, and any such delivery shall be fully effective
as if it were made directly to Seller. Seller's Representative shall not effect
any substitution for himself as Seller's Representative without the prior
written consent of Purchaser, which consent shall not be unreasonably withheld.
-28-
9.16 Knowledge Qualifications; Accounting Terms. ii)Whenever
any party makes any representation, warranty or other statement to such party's
knowledge, such party will be deemed to have made due inquiry into the subject
matter of such representation, warranty or other statement, including due
inquiry of each officer and director of such party as well as any other person
who has responsibility with respect to the relevant subject matter.
(b) Any accounting terms used in this Agreement shall,
unless otherwise defined in this Agreement, have the meaning ascribed thereto by
GAAP.
9.17 Interpretation. In this Agreement, unless a contrary
intention appears, (i) the words "herein", "hereof" and "hereunder" and other
words of similar import refer to this Agreement as a whole and not to any
particular Article, Section or other subdivision, and to any certificates
delivered pursuant hereto; and (ii) reference to any Article or Section means
such Article or Section hereof.
-29-
IN WITNESS WHEREOF, the parties have executed this Agreement
as of the date first above written.
ADVANCED BEAUTY SOLUTIONS, LLC
By: _/s/_____________________________
Name:
Title:
CIRTRAN CORPORATION
By: _/s/_____________________________
Name:
Title:
-30-
================================================================================
Exhibit 1
Disclosure Schedule
Unless otherwise noted, capitalized terms in these Exhibits and Disclosure
Schedules shall have the meaning as set forth in the Asset Purchase Agreement.
References to Seller's Bankruptcy Schedules means the Bankruptcy Schedules filed
in Seller's bankruptcy case pending in the Central District of California, San
Xxxxxxxx Valley Division entitled In re Advanced Beauty Solutions, LLC, Case No.
SV 06-10076 GM and any and all amendments to the Bankruptcy Schedules.
Exhibit 2
Sale Approval Order
To be provided once entered by the Bankruptcy Court.
Exhibit 3
Xxxx of Sale Form
Xxxx of sale
THIS XXXX OF SALE (this "Xxxx of Sale") is made as of this 7th day of
June, 2006, by Advanced Beauty Solutions, LLC, a California limited liability
company, the debtor and debtor in possession in the Chapter 11 Bankruptcy Case
of In re Advanced Beauty Solutions, LLC, Case No. SV 06-10076 GM (the "Seller
"), pursuant to the Order Pursuant to Sections 105, 363, 365 and 1146 of the
Bankruptcy Code: (A) Approving the Terms and Conditions of an Agreement for the
Sale of Substantially All Assets of the Debtor And the Assumption and Assignment
of Related Executory Contracts and Unexpired Leases; (B) Authorizing the
Consummation of the Transactions Contemplated Therein; and (C) Granting Related
Relief entered by the Bankruptcy Court on June 7, 2006 (the "Sale Order"), in
favor of CirTran Corporation, a Nevada corporation ("Purchaser"). Unless
otherwise defined herein, capitalized terms shall be used herein as defined in
the Asset Purchase Agreement (as such term is defined below).
W I T N E S S E T H:
WHEREAS, pursuant to the Sale Order, Seller and Purchaser are parties
to an Asset Purchase Agreement, dated as of May 25, 2006 (the "Asset Purchase
Agreement"), pursuant to which Purchaser is purchasing substantially all of
Seller's assets subject to the terms of the Sale Order; and
WHEREAS, the execution and delivery of this Xxxx of Sale by Seller is a
condition to the obligations of Purchaser to consummate the transactions
contemplated by the Asset Purchase Agreement subject to the terms of the Sale
Order.
NOW, THEREFORE, for good and valuable consideration, receipt of which
is hereby acknowledged, and pursuant to the Asset Purchase Agreement and the
Sale Order, Seller, intending to be legally bound hereby, hereby agrees as
follows:
1. Conveyance of Purchased Assets. Subject to the terms of the Sale
Order and the Asset Purchase Agreement, Seller hereby sells, transfers, conveys,
assigns and delivers to Purchaser, its successors and assigns, to have and to
hold forever, all right, title and interest in, to and under all of the Assets.
Notwithstanding anything in this Xxxx of Sale or the Asset Purchase Agreement to
the contrary, it is understood that none of the Excluded Assets are being
transferred or assigned to Purchaser. Seller warrants that, upon delivery to
Purchaser of the Assets sold, assigned, transferred, conveyed, granted,
bargained, set over, released, delivered, vested and confirmed from Seller to
Purchaser pursuant to this Xxxx of Sale, Purchaser will own, with good and
marketable title and free and clear of all Encumbrances, the Assets.
2. Obligations and Liabilities Not Assumed. Nothing expressed or
implied in this Xxxx of Sale shall be deemed to be an assumption by Purchaser of
any liabilities of Seller. Purchaser does not by this Xxxx of Sale assume or
agree to pay, perform or discharge any liabilities of Seller of any nature, kind
or description whatsoever.
3. No Third Party Beneficiaries. This Xxxx of Sale shall be binding
upon and inure solely to the benefit of the parties hereto and their permitted
assigns and nothing herein, express or implied, is intended to or shall confer
upon any other person any legal or equitable right, benefit or remedy of any
nature whatsoever, under or by reason of this Xxxx of Sale.
4. Binding Nature. This Xxxx of Sale shall be binding upon and inure
to the benefit of the parties hereto without limitation, and their successors
and assigns.
5. Counterparts. This Xxxx of Sale may be executed in several
counterparts, each of which shall be deemed an original, and all such
counterparts shall constitute one and the same instrument.
6. Governing Law. This Agreement shall be governed by, and construed
in accordance with, the laws of the State of California, applicable to contracts
executed in and to be performed entirely within that state..
[Remainder of Page Intentionally Left Blank]
Assignor
ADVANCED BEAUTY SOLUTIONS, LLC
By:
Its:
ACKNOWLEDGED AND AGREED:
CIRTRAN CORPORATION
By:______________________
Name:
Title:
Exhibit 4
Assignment of Real Property Leases
None - No Real Property Leases To Be Assigned.
Exhibit 5
General Assignment
GENERAL GRANT AND ASSIGNMENT
FOR VALUE RECEIVED, ADVANCED BEAUTY SOLUTIONS, LLC, a California limited
liability company ("Seller") hereby hereby unconditionally and irrevocably
assigns and transfers unto CIRTRAN CORPORATION, a Nevada corporation
("Purchaser") all of Seller's right, title, and interest in and to the Assets
described in the Asset Purchase Agreement dated as of May 25, 2006 by and
between the Seller and the Purchaser subject to the terms and conditions of that
certain Order Pursuant to Sections 105, 363, 365 and 1146 of the Bankruptcy
Code: (A) Approving the Terms and Conditions of an Agreement for the Sale of
Substantially All Assets of the Debtor And the Assumption and Assignment of
Related Executory Contracts and Unexpired Leases; (B) Authorizing the
Consummation of the Transactions Contemplated Therein; and (C) Granting Related
Relief entered by the Bankruptcy Court on June 7, 2006 (the "Sale Order"). The
undersigned fully warrants that it has full rights and authority to enter into
this Assignment subject to the terms of the Sale Order and that the rights and
benefits assigned hereunder are free and clear of any lien, encumbrance, adverse
claim or interest by any third party.
The assignment shall be binding upon and inure to the benefit of the parties,
and their successors and assigns.
AGREED TO AND ACCEPTED as of June 7, 2006.
Assignor
ADVANCED BEAUTY SOLUTIONS, LLC
By:
Its:
Assignee
CIRTRAN CORPORATION
By:
Its:
Exhibit 6
Assignment of Seller Rights
Trademark Assignment
Copyright Assignment
Patent Assignment
TRADEMARK ASSIGNMENT
--------------------
WHEREAS, ADVANCED BEAUTY SOLUTIONS, LLC (the "Assignor"), a California
limited liability company, is using certain trademarks in conjunction with its
business, including but not limited to the trademarks and registrations thereof
set forth in Schedule A attached hereto (all hereinafter collectively referred
to as the "Trademarks");
WHEREAS, CIRTRAN CORPORATION (the "Assignee"), a Nevada corporation, is
desirous of acquiring the entire right, title and interest in and to said
Trademarks, including the right to bring actions for infringement of said
Trademarks occurring prior to the date of this Assignment; and
WHEREAS, Assignor wishes to herein memorialize said assignment,
transfer and sale of the Trademarks to Assignee.
NOW, THEREFORE, TO ALL WHOM IT MAY CONCERN, be it known that for good
and valuable consideration set forth in the Asset Purchase Agreement entered
into between Assignor and Assignee as of May 25, 2006, the receipt and legal
sufficiency of which is hereby acknowledged, subject to the terms of that
certain Order Pursuant to Sections 105, 363, 365 and 1146 of the Bankruptcy
Code: (A) Approving the Terms and Conditions of an Agreement for the Sale of
Substantially All Assets of the Debtor And the Assumption and Assignment of
Related Executory Contracts and Unexpired Leases; (B) Authorizing the
Consummation of the Transactions Contemplated Therein; and (C) Granting Related
Relief entered by the Bankruptcy Court on June 7, 2006 (the "Sale Order"), the
Assignor has sold, assigned and transferred, and by these presents does sell,
assign and transfer unto the Assignee, the entire right, title and interest in
and to the Trademarks, and in and to all of the goodwill of the business
appurtenant thereto, together with all claims for damages by reason of past or
current infringement of same, with the right to xxx for and collect the same for
its own use and enjoyment, and for the use and enjoyment of its successors,
assigns or other legal representatives.
AND, the Assignor hereby requests the United States Commissioner of
Patents and Trademarks (the "Commissioner"), as well as his or her foreign
counterparts in the foreign jurisdictions which exercise authority over any of
the Trademarks to record this Trademark Assignment. The Assignor hereby further
requests the Commissioner and his or her foreign counterparts to issue any and
all registrations resulting from applications to register the Trademarks
resulting from applications among the Trademarks or derived therefrom to
Assignee as assignee of the entire interest.
AND, the Assignor hereby warrants and covenants that pursuant to the
Sale Order, it has full right to convey the entire interest herein assigned, and
that the Assignor has not executed, and will not execute, any agreement
inconsistent herewith.
AND, the Assignor, for itself and its successors and assigns, hereby
covenants and agrees that at any time and from time to time forthwith upon the
request of the Assignee, the Assignor will, at its expense, do, execute,
acknowledge and deliver or cause to be done, executed, acknowledged and
delivered, all such further acts, deeds, instruments, transfers and assurances
as may be reasonably required by the Assignee in order to assign, transfer, set
over and convey unto, and vest in, the Assignee, its respective successors and
assigns, any and all of the Trademarks, and to put the Assignee in actual
possession and operating control thereof, to assist the Assignee in exercising
all rights with respect thereto and to assure the Assignee of the full benefits
thereof.
AND, the Assignor hereby constitutes and appoints the Assignee and its
successors and assigns as its true and lawful attorneys in fact in connection
with the transactions contemplated by this instrument, with full power of
substitution to demand and receive, in the name and stead of the Assignor but on
behalf of and for the benefit of the Assignee and its successors and assigns,
any and all of the assets, properties, rights and business hereby conveyed,
assigned, and transferred or intended so to be, and to give receipt and releases
for and in respect of the same and any part thereof, and from time to time to
institute and prosecute, in the name of the Assignor or otherwise, for the
benefit of the Assignee or its successors and assigns, proceedings at law, in
equity, or otherwise, which the Assignee or its successors or assigns deem
proper in order to collect or reduce to possession or endorse any of the
Trademarks, and to do all acts and things in relation to such assets which the
Assignee or its successors or assigns reasonably deem desirable.
In the event that any provision of this Agreement would, under
applicable law, be invalid or unenforceable in any respect, such provision shall
be construed by modifying or limiting it so as to be valid and enforceable to
the maximum extent compatible with, and possible under, applicable law. Any term
or provision of this Agreement that is invalid or unenforceable in any situation
in any jurisdiction shall not affect the validity or enforceability of the
remaining terms and provisions hereof or the validity or enforceability of the
offending item or provision in any other situation or in any other jurisdiction.
This Agreement shall be binding upon and shall inure to the benefit of
the respective successors and permitted assigns of the Assignor and the
Assignee. This Agreement shall not confer any rights or remedies upon any person
other than the parties hereto, and their respective successors and permitted
assigns.
This Agreement shall be governed by and construed in accordance with
the domestic laws of the State of California without giving effect to any choice
or conflict of law.
IN TESTIMONY WHEREOF, the Assignor has caused this Assignment to be
executed by its duly authorized representative on June 7, 2006.
ADVANCED BEAUTY SOLUTIONS, LLC
By: /s/
-----------------------------------------
Name:
---------------------------
Title:
--------------------------
CIRTRAN CORPORATION
By: /s/
-----------------------------------------
Name:
---------------------------
Title:
--------------------------
CERTIFICATE OF ACKNOWLEDGEMENT
------------------------------
STATE OF ______________)
)SS.
COUNTY OF _____________)
I, ______________________, a Notary Public in and for the County and
State aforesaid, do hereby certify that ___________________________________,
personally known to me to be the same person(s) whose name(s) is (are)
subscribed to the foregoing instrument, appeared before me this day in person
and acknowledged that they signed, sealed and delivered the said instrument as a
free act and deed on behalf of the identified company, ADVANCED BEAUTY
SOLUTIONS, LLC, a California limited liability company, with authority to do so.
IN WITNESS WHEREOF, I have hereunto set my hand and Notarial Seal, this
_____ day of ___________________, 2006.
----------------------------------
Notary Public
Commission Expires:
--------------
STATE OF ______________)
)SS.
COUNTY OF ____________)
I, ______________________, a Notary Public in and for the County and
State aforesaid, do hereby certify that ___________________________________,
personally known to me to be the same person(s) whose name(s) is (are)
subscribed to the foregoing instrument, appeared before me this day in person
and acknowledged that they signed, sealed and delivered the said instrument as a
free act and deed on behalf of the identified corporation, CIRTRAN CORPORATION,
a Nevada corporation, with authority to do so.
IN WITNESS WHEREOF, I have hereunto set my hand and Notarial Seal, this
_____ day of ______________, 2006.
----------------------------------
Notary Public
Commission Expires:
--------------
SCHEDULE A TO TRADEMARK ASSIGNMENT
----------------------------------
TRADEMARK REGISTRATIONS
-----------------------
============== ================= =========== ============== ====================
Date Serial/
Country Xxxx Date Filed Registered Registration Number
-------------- ----------------- ----------- -------------- --------------------
United States True Ceramic Pro 4-9-2004 n/a 78/399698
-------------- ----------------- ----------- -------------- --------------------
International True Ceramic Pro 10-13-2004 10-13-2004 0861761
-------------- ----------------- ----------- -------------- --------------------
United States Heatplay n/a n/a n/a
-------------- ----------------- ----------- -------------- --------------------
International Heatplay n/a n/a n/a
-------------- ----------------- ----------- -------------- --------------------
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============== ================= =========== ============== ====================
COPYRIGHT ASSIGNMENT
--------------------
For good and sufficient consideration, receipt of which is hereby
acknowledged, ADVANCED BEAUTY SOLUTIONS, LLC, a California limited liability
company ("Assignor") subject to the terms of that certain Order Pursuant to
Sections 105, 363, 365 and 1146 of the Bankruptcy Code: (A) Approving the Terms
and Conditions of an Agreement for the Sale of Substantially All Assets of the
Debtor And the Assumption and Assignment of Related Executory Contracts and
Unexpired Leases; (B) Authorizing the Consummation of the Transactions
Contemplated Therein; and (C) Granting Related Relief entered by the Bankruptcy
Court on June 7, 2006 (the "Sale Order"), hereby sells, assigns, transfers, and
quitclaims to CIRTRAN CORPORATION, a Nevada corporation ("Assignee"), all
Assignor's right, title and interest of every kind and nature in and to all
copyrights and author's rights, whether published or unpublished, including
rights to prepare, reproduce and distribute copies, compilations, and derivative
works, and all copyright licenses and copyright interests of every kind and
nature, and any and all renewals and extensions thereof that may be secured
under all laws now or hereafter in force and any and all causes of action
heretofore accrued in Assignor's favor for infringement of such copyrights,
author's rights, copyright licenses and copyright interests, and any and all
copyright registrations therefor, whether currently in force or obtained
hereafter, including but not limited to, all copyrights listed on Schedule A
hereto, which are owned, possessed and/or controlled by Assignor, in all
countries throughout the world wherein Assignor owns, possesses or controls the
rights herein being transferred to Assignee, to the full extent of such rights.
At any time and from time to time hereafter, at Assignee's request,
Assignor shall take any and all steps and execute, acknowledge and deliver to
Assignee any and all future instruments and assurances necessary or expedient in
order to vest the aforesaid copyrights, author's rights, copyright licenses and
copyright interests more effectively in Assignee.
Assignor hereby constitutes and appoints Assignee, its true and lawful
attorney-in-fact, with full power of substitution in Assignor's name and stead
but for Assignee's benefit to take any and all steps including proceedings at
law, in equity or otherwise, and to execute, acknowledge and deliver any and all
instruments and assurances necessary or expedient in order to vest the aforesaid
copyrights, author's rights, copyright licenses and copyright interests and
causes of action more effectively in Assignee or to protect the same, or to
enforce any claim or right of any kind with respect thereto (at Assignor's cost
and expense).
IN WITNESS WHEREOF, Assignor has caused this Assignment to be signed in
its corporate name by its duly authorized officer, this 7th day of June, 2006.
ADVANCED BEAUTY SOLUTIONS, LLC
By: /s/
----------------------------------------
Name:
---------------------------
Title:
--------------------------
CIRTRAN CORPORATION
By: /s/
----------------------------------------
Name:
---------------------------
Title:
--------------------------
CERTIFICATE OF ACKNOWLEDGEMENT
STATE OF ______________)
)SS.
COUNTY OF _____________)
I, ______________________, a Notary Public in and for the County and
State aforesaid, do hereby certify that ___________________________________,
personally known to me to be the same person(s) whose name(s) is (are)
subscribed to the foregoing instrument, appeared before me this day in person
and acknowledged that they signed, sealed and delivered the said instrument as a
free act and deed on behalf of the identified company, ADVANCED BEAUTY
SOLUTIONS, LLC, a California limited liability company, with authority to do so.
IN WITNESS WHEREOF, I have hereunto set my hand and Notarial Seal, this
_____ day of ___________________, 2006.
----------------------------------
Notary Public
Commission Expires:
--------------
STATE OF ______________)
)SS.
COUNTY OF _____________)
I, ______________________, a Notary Public in and for the County and
State aforesaid, do hereby certify that ___________________________________,
personally known to me to be the same person(s) whose name(s) is (are)
subscribed to the foregoing instrument, appeared before me this day in person
and acknowledged that they signed, sealed and delivered the said instrument as a
free act and deed on behalf of the identified corporation, CIRTRAN CORPORATION,
a Nevada corporation, with authority to do so.
IN WITNESS WHEREOF, I have hereunto set my hand and Notarial Seal, this
_____ day of ______________, 2006.
----------------------------------
Notary Public
Commission Expires:
--------------
SCHEDULE A TO COPYRIGHT ASSIGNMENT
----------------------------------
COPYRIGHT REGISTRATIONS
-----------------------
NAME OF WORK REGISTRATION NO. REGISTRATION DATE
------------ ---------------- -----------------
Advanced Beauty TX-6-064-955 10-4-2004
Solutions website and web
pages
Advanced Beauty TX-6-064-956 10-4-2004
Solutions brochure and
literature
True Ceramic Pro - Live n/a n/a
Ops (TCP5) infomercial
and related master tapes
PATENT ASSIGNMENT
-----------------
WHEREAS, ADVANCED BEAUTY SOLUTIONS, LLC, a California limited liability
company ("Assignor"), subject to the terms of that certain Order Pursuant to
Sections 105, 363, 365 and 1146 of the Bankruptcy Code: (A) Approving the Terms
and Conditions of an Agreement for the Sale of Substantially All Assets of the
Debtor And the Assumption and Assignment of Related Executory Contracts and
Unexpired Leases; (B) Authorizing the Consummation of the Transactions
Contemplated Therein; and (C) Granting Related Relief entered by the Bankruptcy
Court on June 7, 2006 (the "Sale Order"), hereby sells, assigns, transfers, and
quitclaims to CIRTRAN CORPORATION, a Nevada corporation ("Assignee"), all
Assignor's right, title and interest in and to the inventions, patents, patent
applications, and any continuations, continuations-in-part, divisions, reissues,
reexaminations, extensions, and foreign patents and patent applications thereof
(collectively, the "Patent Applications"), and any rights to file applications
and receive patents thereon, the same to be held and enjoyed by Assignee for its
own use and enjoyment, and for the use and enjoyment of its successors, assigns
or other legal representatives, to the end of the term or terms for which the
said Patent Applications are or may be granted or reissued, as fully and
entirely as the same would have been held and enjoyed by Assignor if this
assignment and sale had not been made, including but not limited to, all
inventions listed on Schedule A hereto, together with all claims for past and
future damages by reason of infringement of same, with the right to xxx for past
and future damages and collect the same for its own use and enjoyment, and for
the use and enjoyment of its successors, assigns or other legal representatives.
AND, Assignor hereby requests the United States Commissioner of Patents
and Trademarks (the "Commissioner"), as well as his or her foreign counterparts
in the foreign jurisdictions which exercise authority over any of the Patent
Applications to record this Patent Assignment. Assignor hereby further requests
the Commissioner and his or her foreign counterparts to issue any and all
patents resulting from applications among the Patent Applications or derived
therefrom to Assignee as assignee of the entire interest.
AND, Assignor hereby warrants and covenants that subject to the terms
of the Sale Order, it has full right to convey the entire interest herein
assigned, and that Assignor has not executed, and will not execute, any
agreement inconsistent herewith.
AND, Assignor, for itself and its successors and assigns, hereby
covenants and agrees that at any time and from time to time forthwith upon the
request of Assignee, Assignor will, at Assignee's expense, do, execute,
acknowledge and deliver or cause to be done, executed, acknowledged and
delivered, all such further acts, deeds, instruments, transfers and assurances
as may be reasonably required by Assignee in order to assign, transfer, set over
and convey unto, and vest in, Assignee, its respective successors and assigns,
any or all of the Patent Applications, and to put Assignee in actual possession
and operating control thereof, free and clear of all liens, to assist Assignee
in exercising all rights with respect thereto and to assure Assignee of the full
benefits thereof.
AND, Assignor hereby constitutes and appoints Assignee and its
successors and assigns as its true and lawful attorneys in fact in connection
with the transactions contemplated by this instrument, with full power of
substitution to demand and receive, in the name and stead of Assignor but on
behalf of and for the benefit of Assignee and its successors and assigns, any
and all of the assets, properties, rights and business hereby conveyed,
assigned, and transferred or intended so to be, and to give receipt and releases
for and in respect of the same and any part thereof, and from time to time to
institute and prosecute, in the name of Assignor or otherwise, for the benefit
of Assignee or its successors and assigns, proceedings at law, in equity, or
otherwise, which Assignee or its successors or assigns deem proper in order to
collect or reduce to possession or endorse any of the Patent Applications, and
to do all acts and things in relation to such assets which Assignee or its
successors or assigns reasonably deem desirable.
In the event that any provision of this Agreement would, under
applicable law, be invalid or unenforceable in any respect, such provision shall
be construed by modifying or limiting it so as to be valid and enforceable to
the maximum extent compatible with, and possible under, applicable law. Any term
or provision of this Agreement that is invalid or unenforceable in any situation
in any jurisdiction shall not affect the validity or enforceability of the
remaining terms and provisions hereof or the validity or enforceability of the
offending item or provision in any other situation or in any other jurisdiction.
This Agreement shall be binding upon and shall inure to the benefit of
the respective successors and permitted assigns of Assignor and Assignee. This
Agreement shall not confer any rights or remedies upon any person other than the
parties hereto, and their respective successors and permitted assigns.
This Agreement shall be governed by and construed in accordance with
the domestic laws of the State of California giving effect to any choice or
conflict of law.
IN TESTIMONY WHEREOF, Assignor has caused this Assignment to be
executed by its duly authorized representative on June 7, 2006.
ADVANCED BEAUTY SOLUTIONS, LLC
By: /s/
----------------------------------------
Name:
---------------------------
Title:
--------------------------
CIRTRAN CORPORATION
By: /s/
----------------------------------------
Name:
---------------------------
Title:
--------------------------
CERTIFICATE OF ACKNOWLEDGEMENT
------------------------------
STATE OF ______________)
)SS.
COUNTY OF _____________)
I, ______________________, a Notary Public in and for the County and
State aforesaid, do hereby certify that ___________________________________,
personally known to me to be the same person(s) whose name(s) is (are)
subscribed to the foregoing instrument, appeared before me this day in person
and acknowledged that they signed, sealed and delivered the said instrument as a
free act and deed on behalf of the identified company, ADVANCED BEAUTY
SOLUTIONS, LLC, a California limited liability company, with authority to do so.
IN WITNESS WHEREOF, I have hereunto set my hand and Notarial Seal, this
_____ day of ___________________, 2006.
----------------------------------
Notary Public
Commission Expires:
--------------
STATE OF ______________)
)SS.
COUNTY OF _____________)
I, ______________________, a Notary Public in and for the County and
State aforesaid, do hereby certify that ___________________________________,
personally known to me to be the same person(s) whose name(s) is (are)
subscribed to the foregoing instrument, appeared before me this day in person
and acknowledged that they signed, sealed and delivered the said instrument as a
free act and deed on behalf of the identified corporation, CIRTRAN CORPORATION,
a Nevada corporation, with authority to do so.
IN WITNESS WHEREOF, I have hereunto set my hand and Notarial Seal, this
_____ day of ______________, 2006.
----------------------------------
Notary Public
Commission Expires:
--------------
SCHEDULE A
TO
PATENT TRANSFER AND ASSIGNMENT
========= ================ ========================= ===========================
Country Title Date Filed/ Patent/Application
National Phase Entered Number
--------- ---------------- ------------------------- ---------------------------
n/a True Ceramic Pro n/a n/a
--------- ---------------- ------------------------- ---------------------------
--------- ---------------- ------------------------- ---------------------------
--------- ---------------- ------------------------- ---------------------------
--------- ---------------- ------------------------- ---------------------------
--------- ---------------- ------------------------- ---------------------------
--------- ---------------- ------------------------- ---------------------------
--------- ---------------- ------------------------- ---------------------------
--------- ---------------- ------------------------- ---------------------------
--------- ---------------- ------------------------- ---------------------------
--------- ---------------- ------------------------- ---------------------------
--------- ---------------- ------------------------- ---------------------------
--------- ---------------- ------------------------- ---------------------------
--------- ---------------- ------------------------- ---------------------------
--------- ---------------- ------------------------- ---------------------------
--------- ---------------- ------------------------- ---------------------------
========= ================ ========================= ===========================
Exhibit 7
Undertaking Form
Not Applicable.
Schedule 2.1(a)
List of Personal Property Owned by Seller to be Sold to Purchaser
Seller owns miscellaneous office equipment, furnishings and supplies valued in
its Bankruptcy Schedules at approximately $1,500 which is not included in the
Assets to be sold to Purchaser. No personal property to be to be sold,
transferred, assigned, or conveyed to the Purchaser under the Asset Purchase
Agreement.
Schedule 2.1(c)(i)
Contracts to be Assumed
None - no contracts to be assumed.
Schedule 2.1(c)(ii)
Contracts or leases to which Seller is or was a party that are not capable of
being assumed and/or assigned under Section 365 of the Bankruptcy Code
None. - no contracts to be assumed.
Schedule 2.1(d)
Inventory
Actual Inventory Schedule
--------------------------------------------------------------------------------
INVENTORY PURCHASE
--------------------------------------------------------------------------------
---------------------------- ----------- --------- --------
Sku Cost Count Value
------------------- ---------------------------- ----------- --------- --------
IRONS Iron $16.95 137 $2,322
Basic Kit $24.46 75 $1,835
Deluxe Kit $31.47 30 $ 944
VHS Kit $24.24 311 $7,539
Iron $19.00 0 $ -
------------------- ---------------------------- ----------- --------- --------
------------------- ---------------------------- ----------- --------- --------
COMPONENTS Kit - Assembled (No Iron) $3.45 9,306 $32,106
Retail Box - Basic $0.95 40,000 $38,000
Retail Box - Deluxe $1.39 12,000 $16,680
Bag $2.30 1,666 $ 3,832
Comb $0.22 850 $ 187
Clips $1.70 3,870 $ 6,579
Brush $1.50 5,474 $ 8,211
Instructional VHS $1.35 1,246 $ 1,682
Instructional DVD $0.57 3,840 $ 2,189
------------------- ---------------------------- ----------- --------- --------
------------------- ---------------------------- ----------- --------- --------
WET GOODS Shine Spray 2 oz $1.03 10,404 $10,716
Thermal Styler 2oz $1.04 29,295 $30,467
Shine Spray & Thermal Combo $2.07 $ -
Daily Conditioner - 2 oz $1.05 5,978 $ 6,277
Weekend Shampoo - 2 oz $1.31 4,056 $ 5,313
Daily Shampoo - 12 oz $1.65 72 $ 119
Daily Conditioner - 12 oz $1.96 1,282 $ 2,513
Weekend Shampoo - 6 oz $1.95 72 $ 140
Weekend Conditioner - 6 oz $2.52 2,184 $ 5,504
Leave-In Conditioner - 8oz $1.76 4,392 $ 7,730
Thermal Styler - 6oz $1.79 983 $ 1,760
Weekend Conditioner - 6 oz $1.66 12,273 $20,373
Thermal Active Straightener $1.38 19,476 $26,877
Kits - Deluxe Upsells $9.05 1,584 $14,335
Kits - Basic - Continuity $3.38 1,590 $ 5,374
Kits - Deluxe - Continuity $9.20 1,465 $13,478
------------------- ---------------------------- ----------- --------- --------
--------- --------
173,911 273,081
========= ========
Schedule 2.1(f)
Deposits and Prepaid Expenses
None
Seller is not transferring any deposits and/or prepaid expenses on hand or held
by Seller in any and all banks, brokerages, or other accounts and any and all
deposits with public utilities, telephone companies, landlords, taxing agencies
and others, including but not limited to those listed in Seller's Bankruptcy
Schedules.
Schedule 2.1(i)
Causes of Action to be Assigned
None.
Schedule 2.1(j)
Permits.
None.
Schedule 2.1(l)
All of Seller's telephone, cell phone, and facsimile numbers, e-mail listings
and addresses, web sites, post office boxes, and all listings in all telephone
books, directories, and web sites
No telephone, cell phone, and facsimile numbers, e-mail listings and addresses,
post office boxes, or listings in telephone books and/o directories are being
sold or conveyed to the Seller. Only Seller's website, "www.
XxxxXxxxxxxXxx.xxx". is being transferred to the Seller under the Asset Purchase
Agreement.
Schedule 2.2(a)
Excluded Assets - all cash or cash equivalents on hand or held by Seller in
bank, brokerage, or other accounts.
Excluded Assets includes any and all cash or cash equivalents on hand or held by
Seller in any and all banks, brokerages, or other accounts and any and all
deposits with public utilities, telephone companies, landlords, taxing agencies
and others, including but not limited to those listed in Seller's Bankruptcy
Schedules.
Schedule 2.2(b)
Excluded Assets - all marketable securities
Excluded Assets includes any and all marketable securities in which Seller has
an interest, if any.
Schedule 2.2(c)
Excluded Assets - all executory contracts and unexpired leases
that are not Assumed Contracts
--------------------------------------- ---------------------------------------
Other Parties to the Rejected Contract Description Of Rejected Contract
--------------------------------------- ---------------------------------------
Tristar Products Inc License Agreement
Attn President or CFO
000 Xxxxx 00 Xxxx
Xxxxxxxxx, XX 00000
--------------------------------------- ---------------------------------------
CirTran Corporation Exclusive Manufacturing Agreement
Attn Ichab J Xxxxxxxx President
4125 So 0000 Xxxx XxxXxxx provides contact manufacturing
Xxxx Xxxxxx Xxxx, XX 00000 of the TrueCeramicPro which the Debtor
markets and sells exclusively through
television, the Internet and mail
order channels.
--------------------------------------- ---------------------------------------
Media Funding Corporation Media Funding and Servicing Agreement
Attn Xxxxx Xxxxxx President
00000 Xxxxxxxxxxxx Xxxx provides funding for media purchases
Xxxxxx, XX 00000 to allow the broadcast of the Debtor's
infomercial for the True Ceramic Pro
--------------------------------------- ---------------------------------------
Media Funding Corporation Performance Agreement and
Attn Xxxxx Xxxxxx President supplements/amendments
00000 Xxxxxxxxxxxx Xxxx
Xxxxxx, XX 00000 Debtor manufactures a beauty supply
product known as the "TrueCeramicPro"
CirTran Corporation infrared ceramic hair styler which the
Attn Ichab J Xxxxxxxx Debtor markets and sells exclusively
4125 So 6000 West through television, the Internet and
Xxxx Xxxxxx Xxxx, XX 00000 mail order channels. CirTran provides
contact manufacturing of the
Datapak Services Corporation TrueCeramicPro; Inpulse Response
Attn President or CFO or Group, Inc., provides inbound and
Xxxxxx Xxxxxx General Counsel outbound telemarketing services;
00000 Xxxx Xxxxxxxxxx Xxxxx Datapak Services Corporation provides
Xxx Xxxxxx, XX 00000 warehousing, fulfillment and customer
services and Media Funding Corporation
Inpulse Response Group Inc provides funding for media services
Attn Xxxxx Xxxxxxxxxxx CEO under the terms of its Media Funding
000 X 00xx Xx Xxxxx 000 and Servicing Agreement with Debtor as
Xxxxxxx, XX 00000 amended.
--------------------------------------- ---------------------------------------
Inventory Capital Group Inc Master Procurement Agreement
Attn Xxxx Xxxxxxxxx CEO
00000 Xxxxxxxx Xxxx Inventory Capital Group, Inc.,
Suite 1430 procures product for the Debtor which
Xxx Xxxxxxx, XX 00000 it resells to the Debtor
--------------------------------------- ---------------------------------------
--------------------------------------- ---------------------------------------
Other Parties to the Rejected Contract Description Of Rejected Contract
--------------------------------------- ---------------------------------------
Datapak Services Corporation Order Fulfillment and Administrative
Attn President or CFO or Services Agreement; Instructions to
Xxxxxx Xxxxxx General Counsel Fulfillment Company and
00000 Xxxx Xxxxxxxxxx Xxxxx supplements/amendments
Xxx Xxxxxx, XX 00000
Datapak Services Corporation provides
Media Funding Corporation warehousing, fulfillment and customer
Attn Xxxxx Xxxxxx President services relating to the sale of the
00000 Xxxxxxxxxxxx Xxxx XxxxXxxxxxxXxx.
Xxxxxx, XX 00000
--------------------------------------- ---------------------------------------
Euro RSCG DRTV Media Funding Accommodation Agreement
Attn President or CFO
0000 Xxxxx Xxxxxx #000 Media purchase relationship for the
Xxxxxxxx, XX 00000 purchase of commercial broadcast and
cable television time for the
Media Funding Corporation TrueCeramicPro infomercial.
Attn Xxxxx Xxxxxx President
00000 Xxxxxxxxxxxx Xxxx
Xxxxxx, XX 00000
--------------------------------------- ---------------------------------------
TransFirst Credit card processing agreement
Attn President or CFO
0 Xxx Xxxxxxx Xxxxx Xxxxx 000
Xxxxxxx Xxxxx, XX 00000
--------------------------------------- ---------------------------------------
SKO Xxxxxxx American Contract for Collection Agent
00 Xxxxxx Xxxxxx
Xxxxxxxxxxx, XX 00000
--------------------------------------- ---------------------------------------
Applied Perceptions LLC Customer Service Contract
Attn Xxxxx Xxxxx
XX Xxx 0000
Xxxxxxxx Xxxx, XX 00000
--------------------------------------- ---------------------------------------
Script to Screen Inc Informercial Production Contract
Attn President or CFO
000 X Xxxxxx Xxxxxx Xxx #000
Xxxxx Xxx, XX 00000 XXX
--------------------------------------- ---------------------------------------
Pioneer Pacific List Marketing Inc List Management Contract
Attn Xxxx Xxxxx President
00000 Xxxxxxx Xxxx Xxxxx 000
Xxxxxxx Xxxx, XX 00000
--------------------------------------- ---------------------------------------
Guy Merchant House Manufacturing Contract
000 X Xxx Xxxxxx #X
Xxxxxxxx, XX 00000
--------------------------------------- ---------------------------------------
Seaside Marketing Inc Retail Representative Contract
Attn President or CFO
0000 Xxxxx Xxxxx
Xxxxx, XX 00000
--------------------------------------- ---------------------------------------
--------------------------------------- ---------------------------------------
Other Parties to the Rejected Contract Description Of Rejected Contract
--------------------------------------- ---------------------------------------
Advantage Media Services Inc Fulfillment Contract
Attn President or CFO
00000 Xxxxxxxx Xxxxxx Xxxxx #0
Xxxxxxxx, XX 00000
--------------------------------------- ---------------------------------------
Bank of the West Cash Management Contract
00000 Xxxxxxx Xxxx # 000
Xxxxxx, XX 00000
--------------------------------------- ---------------------------------------
Interglobal International LTD Distribution Agreement
Attn President or CFO
St Xxxxxx Xxxxx Xxxxxx Xxxx
Xxxxxx
Xxxxx XX0 0XX XX
--------------------------------------- ---------------------------------------
Xxxxxxxx Worldwide Television Distribution Agreement
(Worldwide Marketing Solutions Inc)
Attn President or CFO
0000 Xxxxxxxx Xxxx Xxxxx 000
Xxxxx Xxxxxx, XX 00000
--------------------------------------- ---------------------------------------
Northern Response Distribution Agreement
00 Xxxxxxx Xxx
Xxxxxxx, Xxxxxxx
Xxxxxx X0X 0X0
--------------------------------------- ---------------------------------------
Global Telesourcing LLC Call Center and Telemarketing
Attn President or CFO Agreement
0000 Xxxxx Xxxxx Xxxxxx Xxxxx 000
Xxxxxxxxxx, XX 00000-0000
Global Telesourcing, LLC
00000 Xxx Xxxxx Xxxxxx, #000
Xxx Xxxxxxx, XX 00000
Global Telesourcing, LLC
00000 XX 00xx Xxxxx
Xxxxxxxx, XX 00000
--------------------------------------- ---------------------------------------
Media Purchasing Acquisition LLC Media Services Agreement
dba
ATC Agency Services
0000 Xxxxxxxx Xxxx
Xxxx Xxxxxxx, XX 00000
--------------------------------------- ---------------------------------------
Xxxxxxxxx.Xxx Corp Request for Expanded Credit-Return
000 Xxxxx 000 Xxxx Xxxxx 000 Xxxxxxxxxxxx
Xxxxxxxx Xxxx, XX 00000
--------------------------------------- ---------------------------------------
Bank of American Fork Deposit Control Agreements (CirTran
000 X 0000 Xxxxx Xxxxxxxxxxx)(Xxxxxx Xxxx Xxxxxxx, XXX
Xxxxxx, XX 00000 Cash Account)
--------------------------------------- ---------------------------------------
Livemercial Corporation Agreement for Professional Online
Attn President or CFO Marketing Services
0000 Xxxxxxx Xxxxx
0xx Xxxxx
Xxxxxxxxxx, XX 00000
--------------------------------------- ---------------------------------------
--------------------------------------- ---------------------------------------
Other Parties to the Rejected Contract Description Of Rejected Contract
--------------------------------------- ---------------------------------------
LiveOps Inc Service Agreement (Live operator
Attn President or CFO service)
X X Xxx #00000 Xxx Xxxx, XX 00000-0000
--------------------------------------- ---------------------------------------
Protocol Marketing Services Agreement
Attn Xxxx Xxxxxxx TrafficMarketplace Inc
PO Box #74586 00000 Xxxxxxx Xxxx Xxxxx 0000
Xxxxxxx, XX 00000 Xxxxxxx Xxxx, XX 00000
--------------------------------------- ---------------------------------------
Rackspace Managed Hosting Service Order Form, Service Xxxxx
0000 Xxxxxxxxx Xxxxx Xxxxx 000 Agreement Acceptable Use Policy and
Xxx Xxxxxxx, XX 00000 Master Services Agreement
--------------------------------------- ---------------------------------------
Revenue Frontier LLC Guarantee Orders Agreement
Attn Xxxxx Xxxxx
0000 Xxxxx Xxxx Xxxx #0000
Xxxxx Xxxxxx, XX 00000
--------------------------------------- ---------------------------------------
Seaside TCP Inc Exclusive Sales and Marketing
0000 Xxxxx Xxxxx Xxxxxxxxx
Xxxxx, XX 00000
--------------------------------------- ---------------------------------------
Tranvia Inc dba Tranvia Business Merchant Processing Agreement
Solutions
00-00 Xxxx 00xx Xxxxxx 00xx Xxxxx
Xxx Xxxx, XX 00000
--------------------------------------- ---------------------------------------
TrafficMarketplace Inc Ad Insertion Order and Contract
00000 Xxxxxxx Xxxx Xxxxx 0000
Xxxxxxx Xxxx, XX 00000
TrafficMarketplace Inc
Attn President or CFO
0000 Xxxxxxxxx Xxxx Xxxxx 0000
Xx Xxxxxxx, XX 00000
--------------------------------------- ---------------------------------------
VANTAGEdr Vantagedr End User Agreement
Vantage Direct Response,LLC
Attn President or CFO
00000 XX 00xx Xxxxxx Xxx 000
Xxxxxxxx, XX 00000
--------------------------------------- ---------------------------------------
West Corporation telecommunications agreement
Xxxxxx X. Xxxxxx is Chief
Executive Officer
West Telemarketing, LP
Xxxx X. Xxxxx, President
00000 Xxxxxxx Xxxxx Xxxxx
Xxxxx, XX 00000
--------------------------------------- ---------------------------------------
--------------------------------------- ---------------------------------------
Other Parties to the Rejected Contract Description Of Rejected Contract
--------------------------------------- ---------------------------------------
QTVC Holdings LLC Letter Understanding dated February 1,
Agent for Service Corporation 2005
Service Company
0000 Xxxxxxxxxxx Xxxx Xxxxx 000
Xxxxxxxxxx, XX 00000
QTVC Holdings LLC
Attn Xxxxxxxx Xxxx
0000 Xxxxxxx Xxxx Xxxxxx Xxxxx 000
Xxx Xxxxxxx, XX 00000
--------------------------------------- ---------------------------------------
Listen Up Contact Solutions LLC Letter agreement dated August 25, 2005
Attn Managing Member for call center services
00 Xxxxxx Xxxxx Xx.
Xxxxxxxxxxx, XX 00000
--------------------------------------- ---------------------------------------
Any and all contracts listed on the
Sale Approval Order as not to be
assumed under the sale transaction
--------------------------------------- ---------------------------------------
Schedule 2.2(d)
Excluded Assets - accounts and monetary obligations receivable and original
records representing such accounts and monetary obligations receivable of
Seller, including, but not limited to, invoices, ledgers, and proofs of delivery
None - Excluded Assets includes any and all accounts and monetary obligations
receivable and original records representing such accounts and monetary
obligations receivable of Seller, including, but not limited to, invoices,
ledgers, and proofs of delivery.
Schedule 2.2(e)
Excluded Assets - credit card reserves of Seller
Excluded Assets includes any and all credit card reserves of Seller including,
but not limited to, those held by TransFirst ePayment Services, Inc., 00000
Xxxxxxxx Xxxxx Xxxxx 000, Xxxxx, XX 00000
Schedule 2.3
Assumed Liabilities. (Liabilities to be assumed by the Purchaser
effective as of the Closing Date - Purchaser hereby assumes and agrees to
pay, discharge or perform, as appropriate, (i) the obligations of Seller
under the Assumed Contracts that accrue after the Closing Date and (ii)
the cure payments in connection with the executory contracts and/or
unexpired leases in the respective amounts set forth on Schedule 2.3
collectively, the "Assumed Liabilities")
None.
Schedule 2.4(c)
Allocation of the Purchase Price
Purchaser and Seller shall allocate the Purchase Price in accordance with
Section 1060 of the Internal Revenue Code and any related Regulations
thereunder.
Schedule 3.1(a)
Defective Units
Defective Units
--------------------------------------------------------------------------------
INVENTORY PURCHASE
--------------------------------------------------------------------------------
----------- -------------- ----------- ------------
Sku Cost Count Value
------------------------- ----------- -------------- ----------- ------------
IRONS Iron $16.95 6,200 $ 105,090
------------------------- ----------- -------------- ----------- ------------
6,200 $ 105,090
=========== ============
Schedule 4.4 of the Disclosure Schedule
List of all Real Property leased by Seller
None. As of the commencement of the Seller's Bankruptcy Case, the Seller was not
a party to any real property leases.
Schedules 4.5(a), 4.5(a)(i), 4.5(a)(ii), 4.5(a)(iii) of the Disclosure Schedule
Except as disclosed in Schedule 4.5(a) of the Disclosure Schedule, Seller is the
exclusive owner of all right, title and interest in and to all of the
intellectual property in which Seller has an ownership interest or that has been
used in the Business of Seller, and/or has been or is being developed or
acquired for potential use in the Business of Seller and/or that has been
promoted, sold, licensed or otherwise distributed by Seller to any third parties
as follows:
Schedules 4.5(a)(i) of the Disclosure Schedule: Copyrights and registrations, if
any, related to "True Ceramic Pro" and "HeatPlay"" and the following:
----------------------- --------------------------------------------------------
Registration Number Description
----------------------- --------------------------------------------------------
TX-6-064-955 Advanced Beauty Solutions LLC website or web page:
"www. XxxxXxxxxxxXxx.xxx"
----------------------- --------------------------------------------------------
TX-6-064-956 Advanced Beauty Solutions LLC brochure and literature
----------------------- --------------------------------------------------------
Not Applicable True Ceramic Pro - Live Ops (TCP5) informercial and
master tapes relating to the same
----------------------- --------------------------------------------------------
Schedules 4.5(a)(ii) of the Disclosure Schedule: Patents and applications, if
any, related to "True Ceramic Pro" and "HeatPlay"
Schedules 4.5(a)(iii)of the Disclosure Schedule: "True Ceramic Pro" trademark
filing, Serial Number 78399698, which was filed with the U.S. Patent and
Trademark Office on October 13, 2004, and the International Registration Number
0861761, with an International Registration Date of October 13, 2004.
Seller has no other Intellectual Property or Seller Intellectual Property
Rights.
Schedule 4.5 (b) of the Disclosure Schedule
All license and similar agreements between Seller and third parties, under
which Seller is granted rights to the use, reproduction, distribution,
manufacture, sale or licensing of items embodying the patent, copyright, Trade
Secret, trademark or other proprietary rights of such third parties
(collectively, the "Seller License Rights").
None. Any such agreements are being rejected.
Schedule 4.5(c) of the Disclosure Schedule
All agreements under which Seller has granted any rights of whatever nature
to third parties of, to or under Seller Rights. Except as set forth in
Schedule 4.5(c), all such rights granted shall be terminated as of the
Closing Date. True, correct and complete copies of all
such agreements have been delivered to Purchaser
None. Any such agreements are being rejected.
Schedule 4.6 of the Disclosure Schedule
List of each contract and agreement to which Seller is a party.
A list of the Seller's agreements and contracts is included on the Sale Approval
Order and none of the agreements and contracts are to be assumed by the Seller
and assigned to the Purchaser.
Schedule 4.7 of the Disclosure Schedule
List of all insurance policies covering Seller or otherwise held by or on behalf
of it, or any aspect of its Assets or Business, indicating the type of coverage,
name of insured, the insurer, the amount of coverage, the deductibles, the
premium, and the expiration date.
Hartford/ Burlington
$2,000,000 general aggregate
Face of Policy indicates it expires on August 23, 2006, however as the premium
has only been paid through February 242006, and the Seller has conducted no
business after such date, the Seller has viewed this policy as canceled.
There are no pending claims under the foregoing.
Schedule 4.10
Environmental Matters. Except as set forth on Schedule 4.10, Seller is
not subject to any material Environmental Liabilities.
None.
Schedule 7.1(c)
All Consents required in connection with the consummation of the transactions
contemplated by this Agreement and the Closing (including those set forth on
Schedule 7.1(c) hereto) shall have been duly obtained, made or given
and shall be in full force and effect, without the imposition upon Purchaser
or Seller of any condition, restriction or required undertaking
None.
Schedule 7.1(h)
Additional Documents, etc. There shall have been delivered to
Purchaser each of the agreements, documents, certificates and other
items set forth on Schedule 7.1(h) of this Agreement
None.
--------------------------------------------------------------------------------
