EXHIBIT 10.11
AGREEMENT FOR SALE AND PURCHASE OF ASSETS
This AGREEMENT (the "Agreement") made as of this __ day of
November, 1997, by and between PENTECH INTERNATIONAL, INC., a
Delaware corporation whose principal place of business is 000
Xxxxxx Xxxxx, Xxxxxx, XX 00000 (hereinafter referred to as
"Parent"), PENTECH COSMETICS, INC., a Delaware corporation whose
principal place of business is 000 Xxxxxx Xxxxx, Xxxxxx, Xxx
Xxxxxx 00000 (hereinafter referred to as "Cosmetics") (Parent and
Cosmetics are hereinafter collectively referred to as "Pentech"),
FUN COSMETICS, INC., a Delaware corporation whose principal place
of business is 000 Xxxxxx Xxxxx, Xxxxxx, Xxx Xxxxxx 00000 or its
assignee (hereinafter referred to as "Purchaser") and XXXXX XXXX,
whose residence is 0000 Xxxxxx Xxxxxx, 0X, Xxxx Xxx, XX 00000
("Blau").
1. Subject Matter of and Consideration for Sale.
1.1 Assets to be Transferred. Upon the terms and subject to all
of the conditions herein contained and upon the performance by
each of the parties hereto of its obligations hereunder,
Cosmetics agrees on the Closing Date (as hereinafter defined) to
sell, convey, transfer, assign and deliver to Purchaser and
Purchaser agrees that on the Closing Date it will purchase,
acquire and accept, all of Cosmetics' backlog, inventory, raw
materials, customer lists, equipment, purchase orders, trade
names, copyrights and trademarks used by it in connection with
the sale of cosmetics (all of such assets are hereinafter
referred to as the "Assets"). A list of the Assets is set forth
on Schedule 1.1(a) hereto. Backlog is defined as current,
unfinished, unbilled jobs in progress as of the Closing Date
(defined below). A list of the backlog as of the date hereof is
set forth on Schedule 1.1(b) hereto.
1.2 Liabilities and Obligations; Indemnification. On the
Closing Date, Purchaser shall not assume any of the liabilities
or obligations of Pentech, other than those set forth on Schedule
1.2 hereto. Pentech shall indemnify and hold Purchaser harmless
from and against any and all liabilities of Pentech that are not
assumed by Purchaser pursuant to this Agreement.
1.3 Instruments of Transfer. The transfer of the Assets shall
be effected by deeds, bills of sale, stock powers, endorsements,
assignments, drafts, checks and other instruments of transfer and
conveyance, in such form as is reasonably satisfactory to
Purchaser, Pentech and their respective counsel.
1.4 Consideration for Transfer. Purchaser, in consideration
for the purchase of the Assets and such other terms and
conditions hereof, shall pay Pentech the purchase price (the
"Purchase Price") which is comprised of the Cash Purchase Price
and the Stock Purchase Price, as follows:
1.4.1 Cash Purchase Price. The Cash Purchase Price shall equal
the net book value of the Assets as determined by Pentech, plus
the value of prepaid expenses, if any, on the Closing Date. It
is agreed that the net book value shall not be reduced by a
reserve in excess of Six Hundred Eighty-Seven Thousand ($687,000)
Dollars and that the equipment and store fixtures included in the
Assets shall have a net book value of Two Hundred Fifty Thousand
($250,000) Dollars.
(a) on the date hereof, Purchaser shall pay Pentech One
Hundred Thousand ($100,000) Dollars (the "Down Payment");
(b) on the Closing Date (defined below), Purchaser shall pay
Pentech One Hundred Fifty Thousand ($150,000) Dollars or the
remainder of the Cash Purchase Price, whichever is less;
(c) on the Closing Date, Purchaser shall execute a note for
the balance of the Cash Purchase Price, if any (the "Note"), a
copy of which is attached hereto as Exhibit 1.4.1(c)(1). The
terms of the Note shall provide that the principal thereof shall
be reduced by $150,000 per month commencing February 1, 1998
until fully repaid. The Note shall bear interest at a rate of 9%
per annum and shall be secured by all of the assets of Purchaser
pursuant to a Security Agreement (the "Security Agreement"), a
copy of which is attached hereto as Exhibit 1.4.1(c)(3), and a
pledge of 500,000 shares of Common Stock of the Purchaser
(representing approximately 7% of the outstanding capital stock
of Purchaser) by Blau pursuant to a Pledge Agreement (the "Pledge
Agreement"), a copy which is attached hereto as Exhibit
1.4.1(c)(3);
(d) on the Closing Date (or as otherwise agreed to by Xxxxxxx,
Math & Xxxxxxx, P.C. ("DM&W"), Purchaser shall pay DM&W to audit
Cosmetics' financial statements for its fiscal year ended
September 30, 1997, if any; and
(e) on the Closing Date, Purchaser shall pay Pentech One
Thousand Dollars ($1,000) for its occupancy of Pentech's premises
for up to 30 days from such date in accordance with the
provisions of Paragraph 7(f).
1.4.2 Stock Purchase Price. Purchaser shall issue and deliver
to Pentech 200,000 shares of Common Stock of the Purchaser (the
"Stock Purchase Price"). These shares shall be subject to a
lock-up similar to that of Blau with respect to his shares of
Common Stock of the Purchaser, but in no event in excess of two
years from the Closing Date. In the event Purchaser registers
its securities under the Securities Act of 1933 or participates
in a public offering of its securities, Purchaser shall offer
Pentech the opportunity to register the Stock Purchase Price on
the same terms and conditions as applicable to any other
shareholder participating in such registration. This
registration right shall not apply to any shares which may be
sold pursuant to Rule 144.
1.5 Closing Date. The closing under this Agreement (the
"Closing") shall take place at 10:00 A.M., on or before December
31, 1997 (the "Closing Date"), unless extended by mutual
agreement of the parties hereto.
2. Representations and Warranties of Pentech. Pentech hereby
warrants and represents to Purchaser and Blau as follows:
2.1 Organization and Good Standing of Pentech. Each of Pentech
and Cosmetics is a corporation duly organized, validly existing
and in good standing under the laws of the State of Delaware, and
has the full corporate power to carry on its business as now
conducted. Cosmetics is entitled to own or lease and to operate
the Assets now owned or operated by it directly, and has the
requisite power and authority to consummate the transactions
contemplated by this Agreement. Pentech is duly qualified to do
business and is in good standing under the laws of each
jurisdiction in which its ownership of property or assets or the
nature of business conducted therein requires such qualification,
possesses all licenses and franchises required under Federal,
state or local law to conduct its businesses in the manner in
which it is presently conducted, all of which are freely
assignable to Purchaser without the consent of any other party.
2.2 No Breach. Except as set forth on Schedule 2.2, neither the
execution or delivery of this Agreement by Pentech, nor
performance hereunder will result in a violation or breach of any
term or provision, or constitute a default under any indenture,
mortgage, deed of trust or other contract, agreement,
authorization or permit to which Pentech or Cosmetics is a party
or is subject.
2.3 Litigation and Claims; Compliance with Applicable Law.
(i) There is no litigation, claim, governmental or other
proceeding or investigation pending or, to the knowledge of
Pentech, threatened or in prospect which will have an adverse
effect on (a) the Assets, or (b) the subject matter of this
Agreement or any action contemplated hereby or incidental hereto.
(ii) To the best of Pentech's knowledge, Pentech is not in
violation of any, and has been and will be as of the Closing Date
in compliance with, all provisions of any law, decree, order or
regulation applicable to the operation of its business,
including, without limitation those relating to environmental
requirements (such as air, water and noise pollution) and to
employment practices (such as discrimination, health and safety),
nor is Pentech subject to any requirements to take remedial
action by reason of any violation (or to avoid in the future a
violation) of any such provision relating to the Assets.
2.4 Properties and Assets.
Cosmetics has good and marketable title to the Assets subject to
no liens or adverse claims other than the lien of BankAmerica
Business Credit, Inc. (the "Bank"). Schedule 1.1(a) is a
complete list of all tangible properties and assets included
within the Assets. Purchaser shall have the right to inspect, at
reasonable times, the Assets during the period between execution
of this Agreement and the Closing Date. This Agreement is
subject to the Bank's consent to the transfer of the Assets to
Purchaser on the Closing Date.
2.5 List of Customer Accounts. Schedule 2.5 contains a true,
correct and complete list of all customers of Cosmetics.
2.6 No Defaults or Undisclosed Liabilities. Pentech is not in
default with respect to any material indebtedness or liability
and does not know of any event which has occurred which upon the
passage of time would result in any such default. There are no
facts in existence on the date hereof and known to the Pentech
which might reasonably serve as a basis for any material
liabilities or obligations not disclosed in this Agreement or in
schedules attached hereto, incorporated herein by reference or
previously delivered to Purchaser as herein provided. Except as
provided herein, in a schedule attached hereto or a document
delivered hereunder, no consent of any party to any agreement or
document is required for the execution, delivery or performance
of this Agreement, and the consummation of the transactions
contemplated hereby will not result in a breach of, or give rise
to the right of cancellation of, any such agreement or document.
2.7 Financial Condition. A copy of the unaudited financial
statements of Cosmetics for its fiscal years ended September 30,
1996 and September 30, 1997 are or will be attached hereto as
Schedule 2.7. Such financial statements were true and correct at
the dates thereof and were prepared in accordance with and on the
basis of the principles described therein.
2.8 Insurance. Pentech reasonably believes it maintains
adequate insurance on the Assets with respect to risks normally
insured against by companies similarly situated and engaged in
similar business with assets similar to the Assets. All
insurance policies maintained by Pentech and the amounts of
coverage and deductible or co-insurance provisions provided in
such policies, are listed in Schedule 2.8 attached hereto, are
currently in full force and effect and are not in default and
will be in effect on the Closing Date. To Pentech's knowledge,
there has been no failure to give any notice or present any claim
under such policies in timely fashion. Pentech has not received
any notice providing for the termination of such insurance or
that insurance upon terms substantially the same as those
currently in effect will not be reoffered to it. No claim
covered by such insurance policies has arisen prior to the date
hereof, the anticipated loss from which is not adequately insured
against (subject to any applicable deductible or co-insurance
provisions). If any of the Assets are lost, stolen or damaged on
or before Closing, which loss, theft, damage or destruction is
covered by insurance, Pentech will assign to Purchaser, at the
Closing, the right to receive such insurance proceeds, subject to
a required prepayment of the Note and any amounts otherwise owed
to Pentech.
2.9 Brokerage and Finder's Fees. Neither Pentech nor any
affiliate of Pentech has employed any broker, finder or agent,
nor has it otherwise dealt with or become in any way obligated
for any finder's, broker's, agent's or similar fee with respect
to the transactions referred to herein.
2.10 Material Misstatements or Omissions. No representations or
warranties by Pentech in this Agreement nor any document,
statement, certificate or schedule furnished or to be furnished
to Purchaser pursuant hereto, or in connection with the
transactions contemplated hereby, contains or will contain any
untrue statement of a material fact, or omits or will omit to
state a material fact necessary to make the statements of facts
contained herein or therein not misleading.
2.11 Accounts Receivable of Cosmetics. Schedule 2.11 attached
hereto contains a true and correct statement of the accounts
receivable of Cosmetics as of the date hereof. The parties agree
that the accounts receivable schedule will be updated on the
Closing Date. Such receivables will be referred to herein as the
"Receivables". If a customer takes a credit, it shall be applied
against the Company that sold such customer the goods regardless
of when such payment is received. Each party shall cooperate
with the other in the proper collection of all such receivables,
with the first collections applied to the oldest receivables
unless it is clear that the party making such payment has a clear
reason not to pay such older Receivable.
2.12 Intangible Property. Schedule 2.12 attached hereto
contains a complete list of all of the patents, patent licenses,
patent applications, trademarks, trademark registrations, and
applications therefor, tradenames, copyrights and copyright
registrations and applications therefor of Cosmetics included in
the Assets (the "Intangible Property"). Specifically not
included in the Intangible Property is the trademark or right to
use the name "Pentech Cosmetics, Inc." or any variant thereof.
Included in such rights will be a perpetual royalty-free license
to manufacture and market so-called rubberized cosmetics pencils
to the extent of Cosmetics' proprietary rights to manufacture and
market such products. Pentech has not received any notice of
infringement or other complaint that its operations traverse or
infringe the rights of others under patents, trademarks,
tradenames, copyrights, or otherwise relating to the Assets. In
the event Purchaser's activities in manufacturing, selling or
otherwise exploiting the so-called rubberized cosmetics pencils
give rise to claims, suits, arbitrations or proceedings (the
"Claims"), Purchaser shall be solely responsible for defending
and, if required, satisfying such Claims. Purchaser shall defend
and indemnify and hold Pentech harmless from any claim, suit,
loss and/or damage and all expenses related thereto arising out
of alleged defects in the rubberized cosmetics pencils. In
connection with the defense of any such claim or suit, Purchaser
shall have the right to select counsel on behalf of Pentech
subject to the approval of Pentech, which approval shall not be
unreasonably withheld.
2.13 Conduct of the Business of Cosmetics Prior to the Closing
Date. Cosmetics agrees that at all times after the date hereof
and prior to the Closing Date:
(a) the business of Cosmetics shall be conducted in a limited
manner, as determined in Cosmetics' sole and absolute discretion;
(b) Cosmetics shall not (i) acquire any assets, other than in
the ordinary course of business; (ii) dispose of, encumber or
mortgage any assets or properties; (iii) incur any indebtedness
for borrowed money, discharge or satisfy any lien or encumbrance
or pay any obligation or liability (fixed or contingent), or
enter into any other material transaction, other than in the
ordinary course of business; (iv) waive, release, grant or
transfer any rights of value or modify or change in any material
respect any existing license, lease, contract or other document;
or (v) enter into any contract, agreement, commitment or
arrangement with respect to any of the foregoing;
(c) Cosmetics shall not (i) increase the compensation payable
or to become payable by it to any employee of Cosmetics, or (ii)
pay or provide for any bonus, profit sharing, stock option,
pension, retirement, deferred compensation, employment or other
payment plan, agreement or arrangement for the benefit of
employees of Pentech, except in the ordinary course of the
administration of its existing employment agreements and benefit
plans;
(d) the properties of Cosmetics shall be maintained in
customary repair, order and condition, reasonable wear and use
excepted, and insurance on such properties and with respect to
the conduct of the business of Cosmetics shall be maintained in
such amounts and of such kinds comparable to the insurance in
effect on the date hereof; and
(e) to the extent that Purchaser desires Cosmetics to make an
expenditure that would not be consistent with Pentech's operation
of Cosmetics in a limited manner as outlined above, Purchaser may
request Pentech to make such expenditure, and such expenditures,
if made, would be included as prepaid expenses that are to be
included in the Cash Purchase Price. Whether Pentech elects to
make any such expenditures will be determined solely by Pentech
in its sole and absolute discretion.
2.14 Representations and Warranties at Closing. Unless
expressly herein otherwise provided or contemplated, the
representations and warranties of Pentech set forth in this
Agreement shall be true on and as the Closing Date as though such
representations and warranties were made on and as of such date
and all such representations and warranties shall survive the
Closing. Nothing in this paragraph shall affect the obligations
and indemnities of the parties with respect to covenants and
agreements contained in this Agreement that are permitted or
required to be performed, in whole or in part, after the Closing
Date.
2.15 Indemnification. Subject to a limit of the Cash Purchase
Price, and provided any such claim arises on or before one year
from the Closing Date, Pentech agrees to indemnify, defend and
hold harmless Purchaser, its successors and legal
representatives, from all demands, claims, actions, or causes of
action, losses, damages, suits, judgments, costs and reasonable
attorneys' fees and expenses incurred by or asserted against
Purchaser by reason of any claims, obligations, debts, demands,
or liabilities arising from events occurring prior to the Closing
Date or a breach of any representations, warranties or covenants
contained in this Agreement.
2.16 Acquiring Shares for Investment. Pentech represents that it
is acquiring shares of Common Stock of Purchaser for investment
and not with a view toward the resale thereof.
3. Representations and Warranties of Purchaser and Blau.
Purchaser and Blau each hereby warrants and represents to and
agrees with Pentech as follows:
3.1 Organization and Good Standing of Purchaser. Purchaser is a
corporation duly organized, existing and in good standing under
the laws of the State of Delaware.
3.2 Authority of Purchaser. Purchaser and Blau, as the case
may be, have the full corporate authority to enter into the
Agreement, the Note, the Security Agreement, and the Pledge
Agreement and to carry out the terms of the Agreement, the Note,
the Security Agreement and the Pledge Agreement. Neither the
execution nor delivery of the Agreement, the Note, the Security
Agreement and the Pledge Agreement by the Purchaser or Blau, nor
performance hereunder will result in a violation or breach of any
term or provision nor constitute a default under any indenture,
mortgage, deed of trust or other contract or agreement to which
the Purchaser or Blau is a party. Except as provided herein or
in a schedule attached hereto, no consent of any party to any
such agreement or instrument is required for the execution,
delivery or performance of this Agreement, and the consummation
of the transactions contemplated hereby will not result in a
breach of, or give rise to a right of cancellation of, any such
agreement or instrument.
3.3 Material Misstatements or Omissions. No representations or
warranties by Purchaser or Blau in this Agreement, nor any
document, statement, certificate or schedule furnished or to be
furnished Pentech pursuant hereto, or in connection with the
transactions contemplated hereby, contains or will contain any
untrue statement of a material fact, or omits or will omit to
state a material fact necessary to make the statement of facts
contained herein or therein nor misleading.
3.4 Brokerage and Finder's Fees. Purchaser and Blau have not
employed any broker, finder or agent, nor has Purchaser become in
any way obligated for finder's, broker's, agent's or similar fee
with respect to the transactions referred to herein.
3.5 Representations and Warranties at Closing. Except as
expressly herein otherwise provided or contemplated, the
representations and warranties of Purchaser and Blau as set forth
in this Agreement shall be true on and as of the Closing Date as
though such representations and warranties were made on and as of
such date and all such representations and warranties shall
survive the Closing. Nothing in this paragraph shall affect the
obligations and indemnities of the parties with respect to
covenants and agreements contained in this Agreement that are
permitted or required to be performed, in whole or in part, after
the Closing Date.
4. Covenants of Pentech. Pentech hereby covenants to Purchaser
and Blau as follows:
4.1 Subject to Purchaser operating in compliance with the
provisions of this Agreement, Pentech covenants and agrees that
neither it nor any person, firm or corporation controlling,
controlled by, or under common control with it at any time during
the period of two years from and after the Closing Date within
any of the states or countries in which Pentech is doing business
on the Closing Date directly or indirectly, in any matter or
under any circumstances or conditions whatsoever, engage in any
activity in such areas which is the same or is directly
competitive with the marketing of cosmetics pencils as it was
done by Cosmetics on the Closing Date. This provision will be
null and void and of no further force and effect if Pentech or an
affiliate thereof is acquired, merged or involved in a similar
event with a company with consolidated revenues in excess of
$100,000,000 that in any way was engaged in the cosmetics
business prior to the date of any such event.
4.2 Pentech shall promptly notify Purchaser, as soon as Pentech
obtains knowledge thereof, of any fact, circumstances or
occurrences (including without limitation any actual or
threatened legal or other proceeding) which has materially
adversely affected or may materially adversely affect any of the
Assets or which might cause any of Pentech's warranties and
representations in this Agreement to be or become untrue.
4.3 Pentech shall arrange to deliver to the Purchaser unaudited
financials of Cosmetics for its fiscal years ended September 30,
1996 and September 30, 1997.
4.4 For one year from the Closing Date, provided Purchaser is
deemed a creditworthy customer, Pentech agrees to groove and
shape pencil slats for Purchaser at its cost plus 20%.
4.5 Pentech agrees to furnish Purchaser with open credit of
Fifty Thousand ($50,000) Dollars to purchase cosmetic pencils
from Pentech that Pentech purchases from Lapimex, subject to
ongoing credit review in the sole discretion of Pentech. Terms
will be sixty (60) days with interest accruing thereon at a rate
of 1% per month on the outstanding balance. This credit limit
shall be increased to the extent Pentech is able to obtain credit
insurance on such receivable provided Purchaser reimburses
Pentech for the cost of any such credit insurance. In the event,
in the sole judgment of Pentech, Purchaser pledges receivables to
Pentech that have not previously been pledged (to Pentech or
anyone else) then Pentech, at its option, may extend additional
credit up to 75% of such receivables up to a maximum of $150,000
subject to Pentech's receipt of documentation reasonably
satisfactory to it and its counsel.
4.6 Pentech agrees to use its best efforts to sell Purchaser
cosmetic pencils it acquires from Lapimex at Pentech's cost for
such pencils provided Purchaser is deemed a creditworthy customer
by Pentech. Other than in the event Purchaser is not deemed a
creditworthy customer by Pentech, if Pentech ceases to desire to
acquire such pencils from Lapimex, Pentech will use its best
efforts to transfer its cosmetic pencil relationship with Lapimex
to Purchaser and will not assign its agreement with Lapimex to
acquire cosmetic pencils to a third party without the consent of
Purchaser, which consent shall not unreasonably be withheld. In
the event Purchaser is not deemed a creditworthy customer by
Pentech, Pentech shall be entitled to take whatever actions it
desires with respect to its relationship with Lapimex.
5. Conditions Precedent to Purchaser's and Blau's Obligations.
5.1 The obligations of Purchaser and Blau to consummate this
Agreement shall be conditioned upon each of the following:
(i) Pentech's representations and warranties contained in this
Agreement shall be true at the Closing Date as though such
representations and warranties were made at such time.
(ii) Pentech shall have performed and complied with all
agreements, covenants and conditions required by this Agreement
to be performed or complied with prior to or at the Closing,
including furnishing the Schedules hereto specifically including
delivery of the financial statements required by Paragraph 4.3
hereof.
(iii) The fulfillment by Pentech of its obligations under
Section 6 required to be fulfilled on or before the Closing Date.
5.2 Prior to the Closing, Purchaser shall have the right to
inspect the books and records of Cosmetics relating to the Assets
being conveyed, transferred and delivered hereunder.
5.3 Prior to the Closing, Pentech shall use its best efforts to
obtain all consents necessary to consummate this transaction,
including the consent of the Bank, and shall have taken all other
action necessary to transfer, assign, set over and convey to
Purchaser all of the Assets free and clear of any and all claims,
liabilities, liens and encumbrances of any kind. There is no
assurance that Pentech shall be able to obtain the consent of the
Bank and if it does not obtain the consent of the Bank on or
before one month from the date hereof, this Agreement shall be
null and void, and this transaction shall terminate, in which
case, Pentech's sole obligation to Purchaser or Blau pursuant to
this Agreement shall be to return the Down Payment without
interest thereon or deduction therefrom.
6. Pentech's Obligations at Closing. At the Closing or
thereafter as herein required, Pentech shall deliver to Purchaser
the following:
(i) Deeds, bills of sale, assignments, and such other
instruments of transfer and conveyance as may be necessary or
appropriate to the sale and delivery of the Assets pursuant to
this Agreement, all free and clear of any encumbrances.
(ii) At any time and from time to time at Purchaser's request
(whether at or after the Closing and without further
consideration) such further assignments, powers of attorney, and
other instruments of conveyance and transfer as may reasonably be
required; and Pentech shall take such other action as Purchaser
may reasonably request to assign, grant, convey and transfer more
effectively to Purchaser any of the Assets to be sold, conveyed,
transferred and assigned to Purchaser hereunder.
7. Purchaser's and Blau's Obligations at Closing and Beyond.
(i) Purchaser shall deliver to Pentech the portion of the
Cash Purchase Price as specified in Paragraph 1.4(b) hereof.
(ii) Purchaser shall execute the Note as specified in
Paragraph 1.4(c) above.
(iii) Purchaser shall execute the Security Agreement in the
form attached hereto as Exhibit 1.4.1(c)(2). Purchaser agrees to
execute such additional documents as may be necessary to perfect
Pentech's security interest, including but not limited to
financing statements and continuation of financing statements.
(iv) Blau shall execute the Pledge Agreement in the form
attached hereto as Exhibit 1.4.1(c)(3). Purchaser agrees to
deliver a stock certificate representing 500,000 shares of Common
Stock of Purchaser with a signature guaranteed blank stock power,
and any such other documents as may be necessary from time to
time to perfect its pledge of such shares.
(v) Purchaser shall issue and deliver to Pentech the
certificate representing the Stock Purchase Price as specified in
Paragraph 1.4.2 hereof.
(vi) Pentech shall have received an opinion of counsel to the
Purchaser, dated the Closing Date and addressed to Pentech,
reasonably satisfactory in content and form to Pentech to the
effect that: (a) the Purchaser is a corporation duly organized,
validly existing and in good standing under the laws of its state
of incorporation; (b) the Board of Directors of the Purchaser has
duly approved this Agreement, the Note, the Security Agreement,
the Pledge Agreement and the transactions contemplated therein
and has authorized the execution and delivery of the Agreement by
a duly elected and acting officer, and that no further corporate
action on the part of the Purchaser is required for the approval
of the Agreement, the Note, the Security Agreement, and the
Pledge Agreement and the transactions contemplated hereby; (c)
the Agreement, the Note, the Security Agreement, and the Pledge
Agreement when executed in accordance with the terms thereof,
shall be legal and binding agreements enforceable against the
Purchaser (and any assignee) or Blau, as the case may be, except
to the extent limited by bankruptcy laws generally; (d) the
consummation of this Agreement will not result in a violation or
breach of any term or provision nor constitute a default under
any indenture, mortgage, deed or trust or other contract to which
the Purchaser (and any assignee) is a party of which said counsel
has knowledge; and (e) the shares of stock issued to Pentech as
payment of the Stock Purchase Price shall have been duly
authorized, validly issued, and fully-paid, and non-assessable
and shall have been issued in full compliance with any laws
applicable to such issuance.
(vii) At any time and from time to time at Pentech's
reasonable request (whether at or after the Closing and without
further consideration) Purchaser and Blau shall take such further
acts as may be required to more fully implement any of the
provisions of this Agreement.
(viii) Within 30 days after the Closing Date, Purchaser shall
relocate the Assets. Until such date, Purchaser shall pay
Pentech $1,000 for its occupancy of premises of Pentech.
8. Fees and Expenses. Each party hereto shall pay all fees and
expenses incurred by it incident to the preparation of this
Agreement, carrying this Agreement into effect, and the
consummation of the transaction contemplated hereby.
9. Notices. Any notice or communication given pursuant hereto
by any party to any party hereto shall be in writing and
delivered or mailed by registered or certified mail, postage
prepaid, as follows:
If to Pentech, a copy to the following address:
Pentech International, Inc.
Pentech Cosmetics, Inc.
000 Xxxxxx Xxxxx
Xxxxxx, Xxx Xxxxxx 00000
with a copy to:
Xxxxxxx X. Xxxxx, Esq.
Xxxxx & Banner
000 Xxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
If to Purchaser or Blau, a copy to the following:
Fun Cosmetics, Inc.
000 Xxxxxx Xxxx
Xxxxxx, Xxx Xxxxxx 00000
Attn.: Xx. Xxxxx Xxxx
with a copy to:
Xxxx Xxxxxxxxx, Esq.
0000 Xxxxxxxx Xxxx.
Xxxxx, XX 00000
or at such other address as hereafter shall be furnished in
writing by either party to the other party hereto.
10. Entire Agreement. This Agreement and all schedules and
exhibits set forth herein, each of which is expressly
incorporated herein by this reference, constitutes the entire
agreement between the parties relating to the subject matter
hereof and supersedes and replaced all prior agreements or
understandings, whether written or oral, and sets forth all of
the representations, covenants and warranties upon which either
party is relying in entering into this transaction.
11. Original and Counterparts; Binding Effect. This Agreement
may be executed in counterparts, each of which shall be deemed an
original, and all of which together shall constitute one and the
same instrument and shall inure to the benefit of and shall be
binding upon the parties hereto and their respective legal
representatives, heirs, successors and assigns.
12. Applicable Law. This Agreement shall be construed in
accordance with the laws of the State of New Jersey.
13. Headings. The headings contained in this Agreement are for
reference purposes only and shall not affect the meaning or
interpretation of this Agreement.
14. Severability. If any provision of this Agreement is found
to be void or unenforceable by a court of competent jurisdiction,
the remaining provisions of this Agreement shall be binding upon
the parties with the same force and effect as though the
unenforceable part has been severed and deleted.
IN WITNESS WHEREOF, the undersigned executed this agreement as of
the date first above written.
PENTECH INTERNATIONAL, INC.
By: s/Xxxx X. Xxxxxxx
(Authorized Officer)
PENTECH COSMETICS, INC.
By: s/Xxxx X. Xxxxxxx
(Authorized Officer)
FUN COSMETICS, INC.
By: s/Xxxxx Xxxx
(Authorized Officer)
s/Xxxxx Xxxx
Xxxxx Xxxx
LIST OF SCHEDULES AND EXHIBITS
Schedule 1.1(a) List of Assets
Schedule 1.1(b) List of Backlog as of Date of Agreement
Schedule 1.2 List of Assumed Liabilities
Schedule 1.4.1 Pricing Schedule for Inventory
Schedule 2.5 List of Customers
Schedule 2.7 Financial Statements
Schedule 2.8 Insurance
Schedule 2.11 Accounts Receivable
Schedule 2.12 Intangible Property
Exhibit 1.4.1(c)(1) Form of Promissory Note
Exhibit 1.4.1(c)(2) Form of Security Agreement
Exhibit 1.4.1(c)(3) Form of Pledge Agreement
PTK\EXH-10.11.D97
