ASSIGNMENT AND ASSUMPTION
AGREEMENT
THIS ASSIGNMENT AND ASSUMPTION AGREEMENT, dated as of December 31, 1997
(the "Agreement"), between Hilite Industries-Texas, Inc., a Delaware corporation
("Transferor"), and Hilite Industries-Delaware, Inc., a Delaware corporation and
a wholly-owned subsidiary of Transferor ("Transferee").
W I T N E S S E T H:
WHEREAS, pursuant to the terms of this Agreement, Transferor is agreeing
to transfer and Transferee is agreeing to accept all of the Assets (as
hereinafter defined) and assume all of the liabilities of Transferor, except for
those assets and liabilities expressly excluded herein;
NOW THEREFORE, for good and valuable consideration, the receipt and
sufficiency of which is hereby acknowledged, Transferee and Transferor hereby
agree as follows:
1. ASSIGNMENT. Transferor agrees to transfer, convey and assign to
Transferee, and Transferee hereby agrees to accept from Transferor, all of
the assets and properties owned by Transferor, of every kind and
description, real, personal and mixed, tangible and intangible, wherever
located, except for the Excluded Assets (as hereinafter defined)
(collectively, the "Assets"). The Assets shall include, but not be limited
to:
(a) all machinery, equipment, computers, computer hardware,
tools, inventory, supplies, construction in progress, furniture,
automobiles and all other tangible assets of Transferor whether
located at the Transferor's facilities in Carrollton, Texas (the
"Real Property") or elsewhere;
(b) all the interest of and the rights and benefits accruing
to Transferor as lessee under all leases or rental agreements
covering the Fixed Assets;
(c) all of the rights and benefits accruing to Transferor
under all written or oral contracts, agreements, arrangements or
understandings, including without limitation any loan agreement or
indenture, purchase, sales, supply or service order or agreement,
real property, equipment or other lease, or license of trade rights,
to which the Transferor is a party or by which the Transferor or any
of the Assets are bound (the "Contracts");
(d) all operating data and records of Transferor, including
without limitation client lists and records, referral sources,
mailing lists, equipment logs, operating guides and manuals, copies
of financial, accounting and personnel records, correspondence and
other similar documents and records;
(e) all of Transferor's rights to any intellectual property;
(f) the Real Property and all other real property owned by
Transferor;
(g) all prepaid expenses; and
(h) all receivables of the Transferor.
2. EXCLUDED ASSETS. Anything contained in Section 1 hereof to the
contrary notwithstanding, the Assets shall exclude and Transferee shall not
purchase the following property and assets (collectively, the "Excluded
Assets"):
(a) the shares of common stock of Transferee received by
Transferor in consideration for the transfer of the Assets to
Transferee;
(b) the corporate minute books, stock books, tax returns or
other records (other than the records relating to the Business
included in the Assets of Transferor;
(c) those accounts receivable of the Transferor as set forth
on the closing certificate, dated as of the date of the Closing, a
form of which is attached hereto as Exhibit A;
(d) the rights which accrue or will accrue to Transferor
under this Agreement.
3. ASSUMPTION.
3.1 Transferee hereby assumes and shall discharge in accordance with
their terms, all of the obligations and liabilities of Transferor relating to
the Assets to the extent that they shall remain uncompleted and outstanding as
of the date hereof. Such liabilities and obligations shall include but not be
limited to all liabilities and obligations of Transferor under the Contracts.
3.2 Transferee and Transferor further agree that Transferee shall assume
and become liable for or perform when due all liabilities (contingent or
otherwise), debts, contracts, commitments and other obligations of Transferor of
any nature other than those related to the Excluded Assets.
3.3 To the extent that any Contract shall not be assignable from
Transferor to Transferee because a party to such Contract shall not have
consented to such assignment ("Non-Assignable Contract"), Transferor
acknowledges and agrees that Transferee is hereby granted, to the fullest extent
permitted by law, the same rights and privileges enjoyed by Transferor under the
Non-Assignable Contracts and Transferee assumes all liabilities under the
Non-Assignable Contracts.
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4. CONSIDERATION. Subject to the terms and conditions of this
Agreement, in consideration of the conveyance, assignment, transfer and delivery
of the Assets, the Transferee shall issue one hundred (100) shares (the
"Shares") of its common stock ("Transferee's Common Stock") to Transferor.
5. CLOSING. The closing (the "Closing") of the transaction contemplated
by this Agreement shall take place at the offices of counsel to the Transferor,
Xxxxxx Xxxxxx Flattau & Klimpl, LLP, 0000 Xxxxxx xx xxx Xxxxxxxx, Xxx Xxxx, Xxx
Xxxx 00000, at 6:00 p.m. local time on January 31, 1998 or on a date designated
by Transferor which shall be after all requisite approvals have been received by
Transferor. The execution and/or delivery of each document to be executed and/or
delivered at the Closing and each other action to be taken at the Closing shall
be subject to the condition that every other document to be executed and/or
delivered at the Closing is so executed and/or delivered and every other action
to be taken at the Closing is so taken, and all such documents and actions shall
be deemed to be executed and/or delivered or taken, as the case may be,
simultaneously.
6. DELIVERY OF CONSIDERATION. Upon signing of this Agreement,
Transferee shall deliver one (1) Share to Transferor. At the Closing, Transferee
shall deliver the remaining ninety nine (99) authorized Shares to Transferor. If
the Closing does not occur on or before March 31, 1998 the Share delivered upon
signing of this Agreement shall be returned by Transferee to Transferor.
7. UNREGISTERED SHARES.
7.1 Transferor understands that (i) the Shares have not been registered
under the Securities Act of 1933, as amended (the "Act") or the securities laws
of any state by reason of their issuance in a transaction exempt from the
registration requirements of the Act, (ii) the Shares must be held indefinitely
unless a subsequent disposition thereof is registered under the Act and any
applicable state securities law or is exempt from such registration, (iii) all
of the Shares will bear a legend to such effect as set forth in Section 7.2
hereof, and (iv) the Transferee will make notation on its transfer books to such
effect.
7.2 Each certificate representing Shares and each certificate issued
upon exchange or transfer of any Shares shall be stamped or otherwise imprinted
with a legend substantially in the following form:
THIS SECURITY HAS NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS
AMENDED OR THE SECURITIES LAWS OF ANY STATE. SUCH SECURITIES MAY NOT BE
TRANSFERRED OR OTHERWISE DISPOSED OF ABSENT SUCH REGISTRATION OR THE
RECEIPT BY HILITE INDUSTRIES-TEXAS, INC. OF AN OPINION OF COUNSEL FOR THE
HOLDER HEREOF, WHICH COUNSEL AND OPINION SHALL BE REASONABLY ACCEPTABLE TO
HILITE INDUSTRIES-TEXAS, INC. THAT SUCH REGISTRATION IS NOT REQUIRED.
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8. FURTHER ASSURANCES. Each party hereto covenants and agrees promptly
to execute, deliver, file or record such agreements, instruments, certificates
and other documents and to perform such other and further acts as the other
party hereto may reasonably request or as may otherwise be necessary or proper
to consummate and perfect the transactions contemplated hereby.
9. BINDING EFFECT. This Assignment shall be binding upon and inure to
the benefit of the parties hereto and their respective legal representatives,
successors and permitted assigns.
10. CHOICE OF LAW. This Assignment shall be governed by, and interpreted
and enforced in accordance with, the laws of the State of Delaware.
11. MULTIPLE COUNTERPARTS. This Agreement may be executed in any number
of counterparts, each of which shall be deemed an original, but all of which
together shall constitute one and the same instrument.
12. HEADINGS. All section titles or captions in this Agreement are for
convenience. They shall not be deemed part of this Agreement and shall in no way
define, limit, extend or describe the scope or intent of provisions herein.
13. SEPARABILITY. Inapplicability or unenforceability of any provision
of this Agreement shall not impair the operation or validity of any other
provision hereof.
14. ENTIRE AGREEMENT. This Agreement, and all other agreements delivered
contemporaneously with this Agreement, collectively constitute the entire
agreement between the parties hereto with respect to the matter addressed
herein.
IN WITNESS WHEREOF, Transferee and Transferor have caused this Xxxx
of Sale, Assignment and Assumption Agreement to be duly executed as of the date
first written above.
HILITE INDUSTRIES-TEXAS, INC.
By: /s/ Xxxxxx X. Xxxxx
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Xxxxxx X. Xxxxx
Vice Chairman of the Board of
Directors and Chief Operating
Officer
HILITE INDUSTRIES-DELAWARE, INC.
By: /s/ Xxxxx X. Xxxxxxxxxx, Xx.
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Xxxxx X. Xxxxxxxxxx, Xx.
President and Treasurer
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