AGREEMENT dated September 9, 1996 by and between Scent Overnight, Inc.
a Delaware corporation, with offices at 000 X 00xx Xxxxxx, Xxx Xxxx, Xxx Xxxx
00000 ("Seller"), and Scent 123, Inc., a Delaware corporation, with offices at
000 Xxxxxxx Xxxxxx, Xxx Xxxx, Xxx Xxxx ("Purchaser").
P R E A M B L E
A. Seller was formed to develop and operate a business of selling
fragrances for overnight delivery ("Business"). In connection with the Business,
Seller developed a plan and mode of operations, which included information
relating to sources of supply of fragrances, overnight delivery services, order
taking facilities and order fulfillment services.
B. Seller ceased active operations in or about June, 1994.
C. Seller desires to sell to Purchaser and Purchaser desires to
purchase from Seller: the following property which is referred to herein as the
"Assets": (i) all of the information, techniques, data, projections and other
information relating to, and which may be used or useful in the operation of the
Business; (ii) the 800 telephone number, 800-Scent123; (iii) Seller's right,
title and interest in and to the trademark "Scent Overnight"; and (iv) all other
personal property, tangible or intangible, owned by Seller and used or useful in
the operation of the Business.
NOW, THEREFORE, in consideration of the mutual premises herein
contained and other good and valuable consideration, the receipt and sufficiency
of which are hereby acknowledged, the parties agree as follows:
1. Sale of Assets. Seller agrees to sell the Assets to Purchaser
and Purchaser agrees to purchase same from Seller, subject to and upon the terms
and conditions hereinafter set forth.
2. Purchase Price. The purchase price shall be the sum of the
following:
(a) $225,000 by the execution and delivery of a promissory
note in the form attached as Exhibit A upon "Closing" (as hereinafter defined).
(b) The assumption by Purchaser of Seller's obligations under
a certain promissory note dated October 14, 1994 payable to the order of U.S.
Milestone Corp. ("Creditor") in the original principal amount of $210,000 and
having a balance due of approximately such amount ("Assumed Debt") and as
modified by subsequent agreements.
3. Xxxx of Sale. On the Closing, Seller agrees to execute and
deliver to Purchaser a xxxx of sale and other documents and instruments of
assignment in form satisfactory to Purchaser's counsel conveying and delivering
the Assets to Purchaser free from any liens or encumbrances.
4. Warranties and Representations of Seller. Seller hereby
warrants and represents that:
(a) Seller is a corporation duly organized, validly existing
and in good standing under the laws of Delaware, with full power and authority
to conduct its business as now conducted and to own and operate its assets,
properties and business.
(b) All corporate action necessary to authorize the execution
and delivery of this Agreement and the consummation of the transaction herein
contemplated has been, or prior to Closing will be, duly and validly taken by
Seller. Seller will, on the Closing, provide Purchaser with (i) a certificate by
a responsible officer of Seller to the foregoing effect, and (ii) a copy of such
shareholders' written consent. Seller has the full power and authority to
execute this Agreement and to consummate and perform the transactions
contemplated hereunder.
(c) Seller is the owner of, and has good and marketable title
to, the Assets, which on the Closing Date shall be free and clear of any
security interest or any other liens, encumbrances or restrictions.
(d) Seller is not a party to any executory contracts or
service agreements.
(e) Seller has paid all Social Security, withholding, sales,
unemployment insurance, income, business use, franchise and other taxes which
are owed to the city,
county, state and federal governments to date, and there are no tax liens
against Seller.
(f) The execution and delivery of this Agreement by Seller and
the performance by it of its obligations hereunder will not, as of the Closing
Date, violate any governmental statute, law, rule, regulation, nor result in any
breach of any terms or conditions or constitute a default (immediately or after
the giving of notice or the passage of time or both) under any indenture,
agreement or lease affecting any of the Assets. This Agreement is a valid
obligation of Seller and is binding upon it, its successors or assigns, and no
approval or consent is required in connection with the execution and delivery of
this Agreement and the consummation of the transactions contemplated hereunder.
(g) There are no actions, suits, judgments, liens,
proceedings, or violations existing, pending or threatened against or affecting
Seller or Assets before any federal, state, municipal or other court or
administrative or governmental agency or instrumentality nor is Seller or any of
its officers or directors aware of any facts which to its or their knowledge
might result in any such action, suit or proceeding. Seller is not in default
with respect to any order or decree of any court or of any governmental agency
or instrumentality.
(h) Purchaser is not assuming any liability or obligation of
any nature of Seller whether absolute, accrued, contingent or otherwise, and
whether due or to become due, except for the Assumed Debt, and Purchaser shall
not be subject to any such liabilities or obligations.
(i) Seller owns no inventory or tangible personal property
use or useful in the operation of the Business.
(j) No representation or warranty by Seller in this Agreement
or in any writing attached hereto, contains or will contain any untrue statement
of material or fact or omits or will omit to state any material fact (of which
the Seller or any of its directors or stockholders has knowledge or notice)
required to make the statements herein or therein contained not misleading.
5. Covenants of Seller. Seller covenants and agrees with
Purchaser as follows:
(a) The xxxx of sale and instruments of assignment to be
delivered at the Closing will contain the usual warranties and affidavit of
title, transferring all of the Assets to Purchaser free and clear of all liens
and encumbrances except as permitted by the terms of this agreement.
(b) Between the date hereof and the Closing Date, Seller shall
not enter into any contracts materially affecting its business or the Premises
without first obtaining Purchaser's written consent.
6. Warranties and Representation of Purchaser.
(a) Purchaser is a corporation duly organized and existing
under the laws of the state of its incorporation.
(b) This Agreement and all transactions contemplated hereunder
shall have been as of the Closing Date duly and properly approved by the board
of the directors of Purchaser at a meeting called and duly held and no other or
additional corporate action of any kind shall be required to authorize this
Agreement or such transactions or to make this Agreement the valid and binding
obligation of Purchaser enforceable in accordance with its terms.
7. Bulk Sales Law Requirements. The parties acknowledge that
this transaction is not subject to the Bulk Sales Law of the State of New York
(Uniform Commercial Code, Article 6) in view of the fact that no inventory,
merchandise or stock in trade of Seller is being conveyed hereunder.
8. Indemnification. Seller agrees to indemnify Purchaser in
respect of:
(i) Any and all damages (including special and consequential)
loss, and reasonable costs and expenses resulting from any misrepresentation,
breach or inaccuracy of the warranties and representations set forth herein, or
the nonfulfillment of any obligation on the part of Seller to be performed under
this Agreement.
(ii) any claims of creditors of Seller, including taxing and
other governmental authorities, but excluding the Creditor, that may be asserted
against Purchaser or the Assets.
(iii) Any and all actions, suits, proceedings, demands,
assessments, judgments, costs and reasonable legal and other expenses incident
to any of the foregoing.
As promptly as shall be feasible, and in any event within a reasonable
time after acquiring knowledge of any claim, demand, obligation or liability
against which Seller has indemnified and held Purchaser harmless, Purchaser
shall give to Seller written notice thereof. Seller shall then have the duty, at
its own expense, to defend and to contest any claim, demand, obligation or
liability against which it has indemnified and held Purchaser harmless. In the
event that Seller, after written notice thereof from Purchaser, fails to take
timely action to defend the same, Purchaser shall have the right to defend the
same by counsel of its own choosing, but at the cost and expense of Seller.
Purchaser shall have the right to settle or compromise any claim, demand or
litigation against it if it shall have given written notice thereof to Seller
and Seller shall have failed to take timely action to defend the same, and the
costs of any such settlement or compromise shall be borne by Seller.
The foregoing indemnification shall survive the Closing.
9. Conditions Precedent to Purchaser's Obligations. Each and every
obligation of Purchaser to be performed on Closing shall be subject to the
satisfaction, prior to or concurrently with the performance of such obligation,
of the following conditions unless waived, in writing, by Purchaser in its sole
discretion.
(a) The representations and warranties made by Seller in this
Agreement shall be true in every respect on and as of the Closing Date, with the
same force and effect as though they had been made or given on and as of such
date, and Seller shall deliver to Purchaser a certificate signed by the
President of Seller, dated the Closing Date to such effect.
(b) The Assets shall not have been materially and adversely
affected as of the Closing Date in any way.
(c) Seller shall have performed and complied with all
obligations under this Agreement which are to be performed or complied with by
it prior to or on the Closing.
(d) No creditor of Seller shall have (i) commenced any action
or proceeding to restrain or enjoin the closing of the transaction pursuant to
this Agreement or the transfer of the Assets to Purchaser, or to impose
transferee liability upon Purchaser; nor (ii) shall any insolvency proceeding
affecting Seller or any of the Assets be pending.
(e) All actions and proceedings to be taken in connection with
the transactions contemplated by this Agreement, and all instruments and
documents incident thereto, shall be satisfactory in form and substance to
Purchaser.
(f) Seller shall have executed and delivered the Xxxx of Sale
and other documents of conveyance.
(g) The Creditor shall have entered into an agreement, in form
and substance satisfactory to Purchaser, modifying the payment terms of the
Assumed Debt.
10. Conditions Precedent to Seller's Obligations. Each and every
obligation of Seller to be performed on the Closing or thereafter shall be
subject to the satisfaction, prior to or concurrently with the performance of
such obligation, of the following conditions unless waived, in writing, by
Seller in its sole discretion.
(a) The representations and warranties made by Purchaser in
this Agreement shall be true on and as of the closing, with the same force and
effect as though they had been made or given on and as of the closing.
(b) Purchaser shall have performed and complied with all its
obligations under this Agreement which are to be performed or complied with by
it prior to or on the closing or thereafter, as the case may be.
11. Survival of Representations and Warranties. All
representations and warranties made by the parties to this Agreement shall
remain operative and in full force and effect,
regardless of any investigations made on behalf of any party, and shall survive
the Closing.
12. Broker. Seller and Purchaser warrant and agree that they
have not engaged any broker or any other person who would be entitled to any
brokerage fee or commission in respect of the execution of this Agreement and/or
the consummation of the transactions contemplated hereby.
13. Closing. Subject to the fulfillment of the conditions set
forth herein, the Closing of this transaction shall take place at the offices
of Purchaser on September 30, 1996. The consummation of the transactions herein
contemplated is referred to herein as the "Closing" and the date upon which
the Closing occurs is referred herein to as the "Closing Date". If the
Closing does not occur on or before December 31, 1996, either party may
terminate this agreement on ten days' prior written notice to the other.
14. Purchaser's Additional Remedy. In the event of a breach of this
Agreement by Seller, Purchaser shall, in addition to and not in limitation of,
any and all other remedies which Purchaser may have at law or in equity, be
entitled to specific performance. In furtherance thereof, Purchaser shall be
entitled to a preliminary injunction prohibiting and restraining Seller from
transferring the Restaurant to any other party.
15. Notices. All notices demands or other communications and the
mailing of all copies provided for herein shall be deemed to have been properly
given only if in writing and mailed by registered or certified mail, return
receipt requested, postage prepaid, addressed to Seller or Purchaser at the
address set forth above or to such other address as any party may designate by
written notice given to the other parties in the aforesaid manner.
16. Covenants of the Parties. The parties shall, prior to or after the
closing, at the request of any one of them, execute and deliver such other
instruments and do and perform such other reasonable acts and things as may, in
the opinion of counsel, be necessary or desirable for effecting complete
consummation of this Agreement and the transactions herein contemplated.
17. General Provisions. This Agreement constitutes the entire agreement
among the parties. It cannot be changed orally but only by an agreement in
writing signed by the party against whom enforcement of any such change is
sought. This Agreement shall inure to the benefit of and shall bind the
respective parties hereto. Captions and headings of the various sections of this
Agreement are for convenience only and carry no legal effect and shall in no way
affect the interpretation or construction of the sections of this Agreement.
IN WITNESS WHEREOF, the parties hereto have duly executed this Agreement as of
the day and year first above written.
Scent Overnight, Inc. Scent 123, Inc.
By: /s/Xxxxxx Xxxxxx By: /s/Xxxxxxxxxxx Xxxxx
EXHIBIT A
THIS NOTE HAS NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED,
AND MAY NOT BE SOLD, TRANSFERRED, ASSIGNED, HYPOTHECATED OR OTHERWISE DISPOSED
OF UNTIL A REGISTRATION STATEMENT WITH RESPECT THERETO IS DECLARED EFFECTIVE
UNDER SUCH ACT OR THE COMPANY RECEIVES AN OPINION OF COUNSEL TO THE COMPANY THAT
AN EXEMPTION FROM THE REGISTRATION REQUIREMENTS OF SUCH ACT IS AVAILABLE.
SCENT 123, INC.
9% Promissory Note
$225,000
SCENT 123, INC., a Delaware Corporation (the "Company"), for value
received, hereby promises to pay to the order of Scent Overnight Inc. (the
"Holder"), on the earlier of December 31, 1998, or upon receipt by the Company
of gross proceeds of at least $1,000,000 pursuant to any public or private debt
or equity financing of any securities of Azurel Ltd., the parent of the Company
(the "Offering"), the principal sum of Two Hundred Twenty Five Thousand
($225,000) Dollars (or such lesser principal amount as may then be outstanding),
together with unpaid interest (computed on the basis of a 360-day year of twelve
30-day months) (i) on the unpaid balance at the rate of 9% pr annum from the
date hereof and (ii) to the extent legally enforceable, on any overdue
installment of interest at the rate of 12% per annum until the principal hereof
and interest thereon shall have been paid. The principal amount of the Note may
be prepaid by the Company, in whole or in part, without premium or penalty, at
any time. Upon any prepayment of this Note, all accrued but unpaid interest on
the principal amount being prepaid shall be paid to the holder on the date of
prepayment. All payments hereunder shall be applied first to interest then to
principal.
If the Company shall fail to make a payment of principal or interest
when due; or shall make an assignment for the benefit of creditors, file a
petition in bankruptcy, be adjudicated insolvent or bankrupt, suffer an order
for relief under any federal bankruptcy law, petition or apply to any tribunal
for the appointment of a custodian, receiver or any trustee for the Company or
any substantial part of his assets, or shall commence any proceeding under any
bankruptcy, reorganization, arrangement, readjustment of debt, dissolution or
liquidation law or statute of
any jurisdiction, whether now or hereafter in affect; or if there shall
have been filed any such petition or application, or any such proceeding shall
have been commenced against the Company, which remains undismissed for a period
of thirty (30) days or more, or if the Company, by any act or omission shall
indicate consent to, approve of or acquiescence in any such petition,
application or proceeding or the appointment of, a custodian, receiver or any
trustee for all of any substantial part of its properties, or if the Company
shall suffer such custodianship, receivership, or trusteeship to continue
undischarged for a period of thirty (30) days or more, or the Company violates
any term or provision of this Note and same remains uncured for a period of 15
days after notice thereof, then and in any such event (each such event, an
"Event of Default"), the outstanding principal amount of this Note, together
with all accrued and unpaid interest thereon, shall be and become immediately
due and payable.
Payments of principal, premium, if any, and interest are to be made in
lawful money of the United States of America at the principal office of the
Company.
1. Restrictions on Transfer.
The Holder acknowledges that he has been advised by the Company that
this Note has not been registered under the Securities Act of 1933, as amended
(the "Securities Act"), that the Note is being issued, on the basis of the
statutory exemption provided by Section 4 (2) of the Securities Act relating to
transactions by an issuer not involving any public offering, and that the
Company's reliance upon this statutory exemption is based in part upon the
representations made by the Holder in the Holder's Subscription Agreement. The
Holder acknowledges that he has been informed by the Company of, or is otherwise
familiar with, the nature of the limitations imposed by the Securities Act and
the rules and regulations thereunder on the transfer of securities. In
particular, the Holder agrees that no sale, assignment, hypothecation or
transfer of this Note shall be valid or effective, and the Company shall not be
required to give any effect to any such sale, assignment, hypothecation or
transfer, unless (i) the sale, assignment, hypothecation or transfer of the Note
is registered under the Securities Act, and the Company has no obligation or
intention to so register the Note except as provided in the Subscription
Agreement executed in connection herewith, or (ii) the Note is sold, assigned,
hypothecated or transferred in accordance with all the requirements and
limitations of Rule 144 under the Securities Act, or such sale, assignment, or
transfer is otherwise exempt from registration under the Securities Act.
2. Covenants of Company.
The Company covenants and agrees that, so long as
this Note shall be outstanding, it will:
(i) Promptly pay and discharge all lawful taxes,
assessments and governmental charges or levies imposed upon the Company or
upon its income and profits, or upon any of its property, before the same
shall become in default, as well as all lawful claims for labor, materials and
supplies which, if unpaid, might become a lien or charge upon such
properties or any part thereof; provided, however, that the Company shall
not be required to pay and discharge any such tax, assessment, charge, levy or
claim so long as the validity thereof shall be contested in good faith by
appropriate proceedings, and the Company shall set aside on its books adequate
reserves with respect to any such tax, assessment, charge, levy or claim so
contested.
(ii) Do or cause to be done all things necessary to
preserve and keep in full force and effect its corporate existence, rights and
franchises and comply with all laws applicable to the Company as its counsel
may advise;
(iii) At all times maintain, preserve, protect and
keep its property used and useful in the conduct of its business in good repair,
working order and conditions, and from time to time make all needful and proper
repairs, renewals, replacements, betterments and improvements thereto, so that
the business carried on in connection therewith may be properly and
advantageously conducted at all times;
(iv) Keep adequately insured by financially sound
insurers, all property of a character usually insured by similar corporations
and carry such other insurance as is usually carried by similar corporations;
and
(v) At all times keep true and correct books,
records and accounts.
3. Miscellaneous.
3.1 All the covenants and agreements made by the Company
in this Note shall bind its successors an assigns.
3.2 No recourse shall be had for the payment of the
principal, interest or premium, if any, on this Note or for any claim based
hereon or otherwise in any manner in respect hereof, against any incorporator,
stockholder, officer or director, past, present or future, of the Company or of
any predecessor corporation, whether by virtue of any constitutional provision
or statute or rule of law, or by the enforcement of any assessment or penalty or
in any other manner, all such liability being expressly waived and released by
the acceptance hereof and as part of the consideration for the issue hereof.
3.3 No course of dealing between the Company and the holder
hereof shall operate as a waiver of any right of any holder hereof, and no delay
on the part of the Holder in exercising any right hereunder shall so operate.
Any such waiver must be in writing and signed by the Holder and the Company.
3.4 This Note may be amended only by a written instrument
executed by the Company and the holder hereof. Any amendment shall be endorsed
upon this Note, and all future holders shall be bound thereby.
3.5 All communications provided for herein shall be sent,
except as may be otherwise specifically provided, by registered or certified
mail: if to the holder of this Note, to the address shown on the books of the
Company; and if to the Company, to: c/o Azurel, Ltd., 000 Xxxxxxx Xxxxxx, Xxx
Xxxx, Xxx Xxxx 00000, Attention: President, or to such other address as the
Company may advise the holder of this Note in writing. Notices shall be deemed
given when mailed.
3.6 All agreements between the Company and the Holder
expressly are limited so that in no event whatsoever shall the amount paid or
agreed to be paid by the Company to the Holder hereunder exceed the higher
lawful contractual rate of interest permissible under the law which a court of
competent jurisdiction by a final order which is not appealed or is
nonappealable, determines is applicable to this Note. If fulfillment of any
provision of this Note at the time performance of such provision becomes due
involves exceeding such highest lawful contractual rate, then such obligation
shall be reduced to such highest lawful contractual rate. If by any circumstance
the Holder shall ever receive as interest an amount which exceeds such highest
lawful
contractual rate, any amount which may be deemed excessive interest shall
be applied as payment of the principal of the indebtedness evidenced hereby and
not as payment of interest. The terms and provisions of this paragraph shall
control all other terms and provisions contained in this Note.
3.7 The provisions of this Note shall in all respects be
construed according to, and the rights and liabilities of the parties hereto
shall in all respects be governed by, the laws of the State of New York. This
Note shall be deemed a contract made under the laws of the State of New York and
the validity of this Note and all rights and liabilities hereunder shall be
determined under the laws of said State.
3.8 In the event that this Note is placed in the hands of an
attorney for collection, or in the event that any action be instituted on this
Note, or any action is taken with respect to a default hereunder, the holder
hereof shall be entitled to the payment by the Company and any other party
liable for the obligations of the Company hereunder of all expenses in
connection therewith, including, without limitation, reasonable attorney fees.
3.9 The headings of the Sections of this Note are inserted for
convenience only and shall not be deemed to constitute a part of this Note.
IN WITNESS THEREOF, SCENT 123, INC., has caused this Note to
be executed in its corporate name by its President, and its seal to be affixed
hereto.
Dated: , 1996
SCENT 123, INC.
By: ______________________
Xxxxxxxxxxx Xxxxx
President
(seal)
-------------------------------------------
Secretary
