BINDING LETTER OF INTENT
Dated as of July 1, 2006
Among
LE' ELEGANT BATH, INC. - DBA, AMERICAN BATH FACTORY
And
GATEWAY DISTRIBUTORS, LTD
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AGREEMENT
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THIS Binding letter of intent ("Agreement"), dated as of July 1, 2006 is by
and among Le' Elegant Bath, Inc. - DBA, AMERICAN BATH FACTORY, a California
Corporation (the "Buyer"), and GATEWAY DISTRIBUTORS, LTD 0000 Xxxx Xxxxxxxx
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Xxxx, Xxxxx Xxx Xxxxx 00000, a Nevada Corporation (the "Company").
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R E C I T A L S
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A. The parties hereto wish to provide for the terms and conditions upon
which the Buyer will acquire Products, Services, Technology and day to day
consulting needs to be offered by the Company.
C. The parties hereto wish to make certain representations, warranties,
covenants and agreements in connection with the purchase of these services and
assumption of liabilities and also to prescribe various conditions to such
transaction.
A G R E E M E N T
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Accordingly, and in consideration of the representations, warranties,
covenants, agreements and conditions herein contained, the parties hereto agree
as follows:
ARTICLE 1
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PURCHASEOF SERVICES
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1.1 Services to be purchased. Upon satisfaction of all conditions to the
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obligations of the parties contained herein (other than such conditions as shall
have been waived in accordance with the terms hereof), the Buyer shall purchase
from the Company Products, Services, Technology and day to day consulting needs
to be offered by the Company.
(i) the right to use the names and all variations thereof related to the
services delivered, products, displays and material, marketing literature and
programs, personnel, facilities, and equipment.
1.2 Assumptions of Liabilities. Upon satisfaction of all conditions to the
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obligations of the parties contained herein (other than such conditions as shall
have been waived in accordance with the terms hereof), shall assume liabilities
and obligations regarding product quality and replacements. The Buyer is not
assuming, and will not be obligated or liable for, any liability of the Company
as it relates to the services provided. The Company will not assume and will not
be obligated for any product related issues. All products related issues will be
the responsibility of the Buyer. All information in the marketing material and
corresponded will be the liability of the Buyer. The Company will serve as the
distribution center for the marketing material.
1.3 Purchase Price. The Buyer shall pay for services on an agreed to price
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on each request for services. The Buyer and the Company will determine the price
and a purchase order will be submitted for services. (the "Purchase Price"):
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The initial order for services rendered will be for approximately $800,000 which
is for marketing and fulfillment services utilized in the development of
collateral material.
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1.3.1 Payment. Buyer will make payment per agreement and pre-arranged terms on
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the order as indicated in 1.3 above. The Company will invoice for future
services rendered on a regular basis and payments will be due within ten days of
such invoice.
1.3.2 Closing. A closing (the "Closing") will be held on or before September
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15, 2006 ("Closing Date"), provided, however, that if any of the conditions not
satisfied or waived by such date, then the party to this Agreement which is
unable to satisfy such condition or conditions, despite the best efforts of such
party, shall be entitled to postpone the Closing by notice to the other parties
until such condition or conditions shall have been satisfied (which such
notifying party will seek to cause to happen at the earliest practicable date)
or waived, but in no event shall the Closing occur later than the "Termination
Date" which shall be October 1, 2006 the parties hereto shall agree in writing
to extend the date of such Closing. The Closing shall be held a place the
parties agree to.
ARTICLE 2
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REPRESENTATIONS AND WARRANTIES OF COMPANY
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The Company hereby represents and warrant to the Buyer as of the date
hereof as follows:
2.1 Corporate Organization. The Company is a Nevada corporation duly
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organized, validly existing and in good standing under the laws of the state of
Nevada, has full corporate power and authority to carry on its business as it is
now being conducted and to own, lease and operate its properties and assets, is
duly qualified or licensed to do business as a foreign corporation in good
standing in every other jurisdiction in which the character or location of the
properties and assets owned, leased or operated by it or the conduct of its
business requires such qualification or licensing, except in such jurisdictions
in which the failure to be so qualified or licensed and in good standing would
not, individually or in the aggregate, have a Material Adverse Effect (as
hereinafter defined) on the Company. The Company has heretofore delivered to
the Buyer complete and correct copies of its articles or certificate of
organization and bylaws, as presently in effect. The Company is qualified and
licensed to do business.
2.2 Intellectual Property Rights. The Company owns the industrial and
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intellectual property rights, including without limitation the patents, patent
applications, patent rights, trademarks, trademark applications, trade names,
service marks, service xxxx applications, copyrights, computer programs and
other computer software, inventions, know-how, trade secrets, technology,
proprietary processes and formulae (collectively, "Intellectual Property
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Rights")
2.3 Tax Matters.
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(a) Tax Returns. The Company has duly and timely filed all tax and
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information reports, returns and related documents required to be
filed by it with respect to the income-type, sales/use-type and
employment-related taxes of the United States and the states and other
jurisdictions. (b) Cooperation on Tax Matters.
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ARTICLE 3
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REPRESENTATIONS AND WARRANTIES OFBUYER
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The Buyer, jointly and severally, represents and warrants to the Company as
of the date hereof as follows:
3.1. Corporate Organization. The Buyer is a corporation duly organized,
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validly existing and in good standing under the laws of the State of California.
The Buyer is qualified to do business and is in good standing as a foreign
corporation in each jurisdiction where the nature of the activities conducted by
it or the character of the property owned, leased or operated by it make such
qualification necessary or appropriate, except for those jurisdictions where the
failure to be so qualified has not and could not reasonably be expected to have
a Material Adverse Effect on the ability of the Buyer to fulfill its obligations
under this Agreement.
3.2. Authorization. The Buyer has full corporate power and authority to
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enter into this Agreement and the Buyer Delivered Documents and to carry out the
transactions contemplated herein and therein. The Boards of Directors of the
Buyer have taken all action required by law, their respective articles of
incorporation and bylaws or otherwise to authorize the execution, delivery and
performance of this Agreement and the consummation of the transactions
contemplated herein. This Agreement is the valid and binding legal obligation
of the Buyer enforceable against it in accordance with its terms.
ARTICLE 4
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4.1 Confidentiality. Each of the parties hereto agrees that it will not
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use, or permit the use of, any of the information relating to any other party
hereto furnished to it in connection with the transactions contemplated herein
("Information") in a manner or for a purpose detrimental to such other party or
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otherwise than in connection with the transaction, and that they will not
disclose, divulge, provide or make accessible, or permit the Disclosure of
(collectively, "Disclose" or "Disclosure" as the case may be), any of the
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Information to any person or entity, other than their responsible directors,
officers, employees, investment advisors, accountants, counsel and other
authorized representatives and agents, except as may be required by judicial or
administrative process or, in the opinion of such party's regular counsel, by
other requirements of Law; provided, however, that prior to any Disclosure of
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any Information permitted hereunder, the disclosing party shall first obtain the
recipients' undertaking to comply with the provisions of this subsection with
respect to such information. The term "Information" as used herein shall not
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include any information relating to a party which the party disclosing such
information can show: (i) to have been in its possession prior to its receipt
from another party hereto; (ii) to be now or to later become generally available
to the public through no fault of the disclosing party; (iii) to have been
available to the public at the time of its receipt by the disclosing party; (iv)
to have been received separately by the disclosing party in an unrestricted
manner from a person entitled to disclose such information; or (v) to have been
developed independently by the disclosing party without regard to any
information received in connection with this transaction. Each party hereto
also agrees to promptly return to the party from who originally received all
original and duplicate copies of written materials containing Information should
the transactions contemplated herein not occur. A party hereto shall be deemed
to have satisfied its obligations to hold the Information confidential if it
exercises the same care as it takes with respect to its own similar information.
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4.2 Public Announcements. None of the parties hereto shall make any public
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announcement with respect to the transactions contemplated herein without the
prior written consent of the other parties, which consent shall not be
unreasonably withheld or delayed; provided, however, that any of the parties
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hereto may at any time make any announcements which are deemed by its counsel to
be required by applicable Law so long as the party so required to make an
announcement promptly upon learning of such requirement notifies the other
parties of such requirement and discusses with the other parties in good faith
the exact proposed wording of any such announcement.
ARTICLE 5
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TERMINATION AND ABANDONMENT
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5.1 Methods of Termination. This Agreement may be terminated and the
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transactions contemplated herein may be abandoned at any time notwithstanding
approval thereof by the Company, but not later than the Closing:
5.2 Governing Law. This Agreement and the legal relations among the parties
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hereto shall be governed by and construed in accordance with the internal
substantive laws of the State of Nevada (without regard to the laws of conflict
that might otherwise apply) as to all matters, including without limitation
matters of validity, construction, effect, performance and remedies.
5.3 Arbitration. Any controversy or claim arising out of or relating to
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this Agreement, or the making, performance or interpretation thereof, including
without limitation alleged fraudulent inducement thereof, shall be settled by
binding arbitration in Las Vegas, Nevada by a panel of three arbitrators in
accordance with the Commercial Arbitration Rules of the American Arbitration
Association. Judgment upon any arbitration award may be entered in any court
having jurisdiction thereof and the parties consent to the jurisdiction of the
courts of the State of Nevada for this purpose.
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be duly
executed as of the day and year first above written.
"BUYER"
Xxxxxxxx Distributing, Inc.
By: Date:
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Xxxxx Xxxxxx,
President
"COMPANY"
Le' Elegant Bath, Inc. - DBA, American Bath Factory
By: Date:
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Xxxxxxx X. Xxxxxxx
President
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