CONTRACT FOR SALE OF BUSINESS AND ASSETS
----------------------------------------
This agreement ("Agreement") is made as of June 30, 2006, between Xxxxxxxx
Distributing, L.L.C., a Utah limited liability company and EMS Business
Development, Inc., a California corporation (collectively "Seller"), Xxxxx X.
Xxxxxxx ("Property Owner") and Gateway Distributors, Ltd., a Nevada corporation,
("Buyer").
RECITALS
A. The Seller is the owner and operator of a herbal and health food
supplement distributing business (the 'Business Operations") with its principal
business office located at 0000 Xxxx 0000 Xxxxx Xxxx Xxxx Xxxx, Xxxx, 00000,
(the "Property"). Sellers assets relating to the Business Operations are
hereinafter referred to as the "Business Assets" and are described in Exhibit
"A" attached hereto.
B. Property Owner owns the Property and currently leases the Property
to Seller.
C. Seller desires to sell and Buyer desires to purchase the Business
Operations and Business Assets from Seller upon the terms and conditions set
forth herein.
D. Property Owner desires to sell and Buyer desires to purchase the
Property from the Property Owner upon the terms and conditions set forth herein.
NOW, THEREFORE, in consideration of the promises and for other good and
valuable consideration, the receipt and adequacy of which are hereby
acknowledged, Buyer, Seller and Property Owner agree as follows:
1. Purchase and Sale. Upon the terms and subject to the conditions set
-----------------
forth in this Agreement, Seller and Property Owner shall sell, convey, assign,
transfer and deliver to Buyer and Buyer shall purchase and acquire from Seller
and Property Owner the following:
a. The Business Operations as conducted by Seller as of June 30,
2006.
b. The Business Assets of the Seller which are utilized in
conjunction with the Business Operations as of June 30, 2006,
specifically including all right, title and interest in and to the assets,
personal properties, goodwill and rights as a going concern, of every
nature, kind and description, tangible and intangible, wherever located and
whether or not carried or reflected on the books and records of the Seller.
The Business Assets shall include, without limitation, all items reflected
on the Seller's June 30, 2006 balance sheet (the "Balance Sheet") a copy of
which is attached hereto as Exhibit "A". The Business assets shall only
include those assets of E.M.S. Business Development, Inc., which are
described on Exhibit "A-1" attached hereto. All other assets of E.M.S.
Business Development, Inc., are excluded form the Business Assets. Except
as otherwise provided in this Agreement, the Business Assets shall be
conveyed at the Closing (as defined below) free and clear of any mortgage,
pledge, lien, security interest, encumbrance, claim, easement, restriction
or charge of any kind or nature (whether or not of record).
1
c. The Property which shall be free and clear of all liens,
encumbrances and other matters of record except for items
______________________________ and ______________ (the "Permitted
Exceptions") shown on the preliminary title report ("PTR") attached hereto
as Exhibit "B". Seller and Property Owner shall mutually terminate their
existing lease agreement pertaining to the Property (the "Lease") at the
Closing.
2. Purchase Price. The purchase price for the Business Operations,
---------------
Business Assets and the Property (the "Purchase Price") shall be $6,000,000.00
plus Buyer's assumption of the liabilities set forth in the Liabilities
Undertaking attached hereto as Exhibit "C". The Purchase Price shall be
allocated as follows:
Business Operations $
-----------------------
Business Assets $
-----------------------
Property $
-----------------------
Total Purchase Price $
=======================
3. Payment of Purchase Price. The Purchase Price shall be paid as
----------------------------
follows:
a. On or before the Closing Date, Buyer shall execute and deliver
to Seller Buyer's promissory note in the sum of Five Million Two
Hundred Thirty Thousand and No/100 Dollars ($5,230,000.00) (the "Operations
& Assets Note") in the form attached as Exhibit "D". The Operations &
Assets Note shall be secured as provided in the Security Agreement attached
hereto as Exhibit "E" and the Financing Statement UCC-1 attached hereto as
Exhibit "F".
b. On or before the Closing Date, Buyer shall execute and deposit
in Escrow an all inclusive installment note (the "Property Note") in
the principal sum of Seven Hundred Seventy Thousand and No/100 Dollars
($770,000.00) payable to the Property Owner in the form attached hereto as
Exhibit "G". The Property Note shall be secured by an all inclusive deed of
trust on the Property (the "Property Deed of Trust") which shall be in the
form attached hereto as Exhibit "H".
c. On or before the Closing Date, Buyer shall execute and deliver
to Seller the Liabilities Undertaking and shall assume the liabilities
as provided in this Agreement.
d. Seller and Property Owner covenant and agree that:
i. a portion of the Operations & Assets Note proceeds
(approximately $3,786,062) will be used to pay the balance owing
on the following obligations which are currently owed by the Seller
and/or its affiliates to Xxxxxxxx Xxxxxxx and/or Xxxx Xxxxxxx (the
"Janssens"): ($1,025,000 Bank of Stockton #1, $437,450 Bank of
Stockton #2, $748,612 Farmers & Merchants #1, $75,000 Xxxxx Fargo,
$225,000 Xxxxx Xxxxxxx Personal Note #1, $525,000 Xxxxxxx Personal
Note #2, $750,000 Farmers & Merchants #2 to be drawn upon through
transition)(hereafter collectively the "Xxxxxxx Debts"); and
2
ii. the proceeds from the Property Note (approximately
$770,000) will be paid to the Property Owner for the Property as
provided in Paragraph 2 above and the Property Owner shall satisfy and
discharge the underlying note and underlying deed of trust. Seller and
Property Owner further covenant and agree that the proceeds from the
Purchase Price shall be applied as follows:
iii. First to the unpaid balance of the Xxxxxxx Debts to the
Janssens;
iv. Second to pay the unpaid balance on the Property Note and
the Property Deed of Trust; ($770,000) in favor of Xxxxx Xxxxxxx;
v. Third, One Million Dollars to the Janssens;
vi. Fourth, the remainder of the Purchase Price will be
disbursed to the Seller.
Notwithstanding the pro visions of this subparagraph 3 above, it is
understood and agreed that the Janssens' Debt will continue to be serviced by
Buyer throughout the Holding Period. Any accrued and unpaid interest at the end
of the Holding Period will be added to the Purchase Price and to the Operations
& Assets Note.
e. Payment of the Purchase Price will be secured by the (a)
Business Operations; and (b) the Business Assets and (c) 12,000,000
shares of Cal-Bay International, Inc., preferred B Stock (the "CBAY
Shares") owned by Buyer. Buyer will deposit into an escrow account with
("Escrow Holder") the CBAY Shares which shall be restricted for one year
and which shall be retained by Escrow Holder as part of the security for
the full and timely payment of the Purchase Price. At the Closing Buyer
shall provide the Escrow Holder with irrevocable instructions to pay the
Purchase Price in full on or before the fourteenth (14th) month after the
Closing (the "Holding Period"). Said instructions shall further provide
that if the Purchase Price has not been paid in full at the end of the
Holding Period, the CBAY Shares shall (to the extent necessary) be sold by
the Escrow Holder and the proceeds shall be used to pay the Purchase Price.
4. Representations, Warranties and Covenants of Seller. In order to
------------------------------------------------------
induce Buyer to enter into this Agreement, Seller represents, warrants and
covenants to Buyer that:
x. Xxxxxxxx Distributing, LLC is a limited liability company duly
organized, validly existing and in good standing under the laws of the
state of Utah, and is qualified and licensed to do business as it is now
being conducted.
b. EMS Business Development, Inc., is a California corporation,
validly existing and in good standing under the laws of the State of
California and is qualified and licensed to do business as it is now being
conducted.
c. The Seller has good and marketable title to the Business Assets
free and clear of all mortgages, pledges, charges, security interests,
encumbrances and any other liens of any nature whatsoever except as
described herein and/or shown on the Balance Sheet.
3
d. The Property Owner has and shall deliver good and marketable
title to the Property except or the Permitted Exceptions shown on the
PTR.
e. Upon execution of this Agreement by all parties this Agreement
shall be a valid and binding Agreement of Seller except as limited by
bankruptcy, insolvency, reorganization, moratorium or similar laws
affecting creditors' rights.
f. There are no suits or claims relating to the Seller, the
Property Owner, the Business Operations, the Business Assets, or the
Property which are currently pending against Seller, or the Property Owner
which have been threatened or asserted against Seller or the Property
Owner.
g. Except as disclosed pursuant to this Agreement, there are no
liabilities (whether absolute or contingent, liquidated or
unliquidated, due or to become due) relating to the Seller or the Property,
nor has any condition existed or event occurred which could reasonably be
expected to give rise to such liability.
5. Representations, Warranties and Covenants of Buyer. In order to
------------------------------------------------------
induce Seller and Property Owner to enter into this Agreement, Buyer represents,
warrants and covenants to Seller and Property Owner that:
a. Buyer is a corporation duly organized, validly existing and in
good standing under the laws of the State of Nevada and is qualified
and licensed to do business as it is now being conducted.
b. The Buyer has full corporate power and authority to enter into
this Agreement and to carry out the transactions contemplated herein.
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.
c. Upon execution of this Agreement by all parties this Agreement
shall be a valid and binding legal obligation of the Buyer enforceable
against it in accordance with its terms.
d. Buyer is the sole owner of the CBAY Shares, free and clear of
any liens or encumbrances save and except the restrictions imposed on
all preferred B shares issued by CBAY.
e. Buyer and any entity or person that owns or controls Buyer are
not bankrupt or insolvent under any applicable Federal state standard,
have not filed for protection or relief under any applicable bankruptcy or
creditor protection statute and have not been threatened by creditors with
an involuntary application of any applicable bankruptcy or creditor
protection statute.
f. Neither this Agreement, nor any of the Exhibits hereto, nor any
document, certificate, or statement referred to herein or furnished to
the Seller by Buyer in connection with the transaction contemplated herein
(whether delivered prior to,
4
simultaneously with, or subsequent to the execution of this Agreement)
contains any untrue statement of material fact, or omits to state a
material fact in any way concerning the Buyer or the transaction
contemplated hereby.
g. Purchaser covenants and agrees that during the period from the
Closing and continuing through the end of the Holding Period that:
i. Buyer shall continue to manage and operate the Seller's
Business Operations in accordance with Seller's current practices
and that Buyer shall make no change in Seller's current management,
personnel, practices or policies regarding the Business Operations
unless it receives the Seller's prior written consent thereto.
ii. Buyer shall pay its employees all wages, salaries and
benefits of any kind, including without limitation, vacation
accruing to such employees in a timely manner and the Seller shall
have no duty or obligation to pay any salary, benefits, or other
compensation to Buyer's employees for the time period following the
Closing.
iii. Buyer shall not sell, mortgage, pledge, hypothecate or
otherwise transfer or dispose of all or any part of the Business
Assets; the assets acquired as a result of the Business Operations
following the Closing; or any interest therein except (a) for
inventory in the ordinary course of the Business Operations; or (b) if
the Seller consents thereto in writing.
iv. Buyer shall not terminate, modify, extend, amend or
assign any lease or contract or enter into any new lease or
contract without the prior written consent of the Seller except that
the consent of Seller shall not be necessary for new contracts which
are entered into in the ordinary course of business.
v. Buyer shall maintain in full force and effect, the same
insurance coverages currently maintained by Seller in conjunction
with its Business Operations.
vi. Upon prior notice and at reasonable times Seller shall
have access to the Property and the Business Assets to inspect
the same to and assure that Buyer is complying with the requirements
of this Agreement.
vii. Buyer acknowledges and agrees that a monthly review of
the Business Operations, Business Assets and the Property are
contemplated by the Seller and Seller shall be provided access to the
Property, Business Assets and Buyer's business records during normal
business hours for such purposes.
6. Conditions Precedent to Buyer's Obligation to Close. Buyer's
---------------------------------------------------------
obligation to purchase the Business Operations, Business Assets and Property and
to take the other actions required to be taken by Buyer on or before the Closing
is subject to the satisfaction or waiver by Buyer of each of the following
conditions on or before the Closing Date:
5
a. Each of Seller's representations and warranties in this
Agreement shall have been accurate in all material respects as of the
date of this Agreement, and shall be accurate in all material respects as
of the time of the Closing as if then made.
b. Each of the covenants and obligations that Seller is required
to perform or to comply with pursuant to this Agreement at or prior to
the Closing shall have been duly performed and complied with in all
material respects.
c. Any consents required to sell assign and transfer the Business
Operations, Business Assets and the Property to Buyer shall have been
obtained and shall be in full force and effect.
d. Seller shall have caused the following documents to be
delivered (or tendered subject only to Closing) to Buyer:
i. A copy of each of the Seller's articles of organization
and all amendments thereto.
ii. Certificates or other documents dated as of a date not
earlier than the thirty business days prior to the Closing
confirming the good standing of Xxxxxxxx Distributing, LLC in the
State of Utah and EMS Business Development, Inc., in the State of
California.
iii. An Assignment and Xxxx of Sale in the form attached
hereto as Exhibit "I".
iv. a termination of the Lease executed by both Seller and
the Property Owner.
v. Escrow Holder's commitment to issue Title insurance
insuring that fee title to the Property is held by Buyer free and
clear of all easements, liens, encumbrances, covenants and/or
restrictions, except the Permitted Exceptions.
7. Conditions Precedent to Seller's Obligation to Close. Seller's
---------------------------------------------------------
obligations to sell the Business Operations, Business Assets and the Property
and to take the other actions to be taken by Seller on or before the Closing are
subject to the satisfaction or waiver by Seller of each of the following
conditions on or before the Close of Escrow:
a. Each of Buyer's representations and warranties in this
Agreement shall have been accurate in all material respects as of the
date of this Agreement, and shall be accurate in all material respects as
of the time of the Closing as if then made.
b. Each of the covenants and obligations that Buyer is required to
perform or to comply with pursuant to this Agreement at or prior to
the Closing shall have been performed and complied with in all material
respects.
c. Buyer shall cause each of the following documents to be duly
executed and delivered to Seller on or before the Close of Escrow:
i. Operations & Assets Note;
6
ii. Security Agreement;
iii. Financing Statement;
iv. Property Note;
v. Property Deed of Trust; and
vi. Liability Undertaking.
d. Buyer shall have deposited the CBAY Shares with Escrow Holder
and the duly executed irrevocable escrow instruction as provided in
paragraph 3e above.
8. Termination. Buyer acknowledges that each of Buyer's
-----------
representations, warranties and covenants set forth in paragraph 5 above are
material to the Seller entering into this Agreement. Buyer and Seller expressly
agree that the Seller shall have the absolute right to terminate this Agreement
at any time should the Seller in the Seller's sole and absolute discretion,
determine that the Buyer is in default of or has breached any of the
representations, warranties and/or covenants set forth in Paragraph 5 above. In
the event the Seller elects to terminate this Agreement as provided in this
paragraph 8:
a. Seller shall give written notice to Buyer of its election to
terminate and except as otherwise provided in this paragraph 8 the
Agreement will terminate and be of no further force or effect.
b. Escrow Holder shall liquidate sufficient CBAY Shares held in
the escrow account and shall pay to the Seller (on behalf of Buyer)
the sum of $200,000.00 in consideration for the Seller having entered into
this Agreement and having removed the business from the market place.
c. The Business Operations shall be immediately turned over to
Seller.
d. All Business Assets as well as any additional Business Assets
acquired as a result of the Business Operations conducted after the
Closing shall thereupon be deemed assigned to the Seller and possession
thereof shall immediately be returned to Seller.
e. Possession and title to the Property shall immediately be
reconveyed to the Property Owner. Title to the Property, shall be free
and clear of all matters of record, save and except those matters of record
at the Closing.
f. If termination occurs pursuant to this paragraph 8, the parties
will cooperate to return the Business Operations and Business Assets
to the Seller and the Property to Property Owner.
9. Indemnity Agreement. Other than the Seller's liabilities expressly
--------------------
assumed by Buyer as provided herein, Seller shall indemnify and hold Buyer
harmless from any and all liabilities, obligations and claims arising out of or
relating to: a) the Business Operations conducted by the Seller prior to the
Closing; or b) the ownership or operation of the Business
7
Assets by Seller prior to the Closing; or c) the use and/or ownership of the
Property by the Seller and/or Property Owner prior to the Closing.
10. Buyer's Indemnity Agreement. Other than the Seller's obligation to
---------------------------
discharge the Xxxxxxx'x Debt and the Property Note and Property Deed of Trust as
provided in paragraph 3d above, Buyer shall indemnify and hold Seller and
Property Owner harmless from any and all liabilities, obligations and claims
arising out of or relating to: a) the Business Operations conducted by the Buyer
after the Closing; or b) the ownership or operation of the Business Assets by
Buyer after the Closing; or c) the use and/or ownership of the Property by the
Buyer after the Closing.
11. Compliance With Bulk Sales Law. Buyer and Seller each waive the
---------------------------------
requirement, if any, to publish, record or otherwise prove any notices of this
transaction to Seller's creditors or other third parties. The parties have
agreed that since the balance of the Purchase Price is payable at the end of the
Holding Period that any such notice need not be given as part of this purchase
and sale.
12. As Is Condition.
-----------------
a. Buyer hereby acknowledges and agrees that except and only as
expressly set forth in this Agreement, neither Seller, Property Owner
nor anyone acting for or on behalf of Seller or Property Owner has made any
representations, warranties or promises whatsoever to Buyer concerning (i)
The Business Operations, Business Assets and/or the Property or any part
thereof (including, without limitation, the presence or absence of any
Hazardous Materials as defined by any environmental statutes or
regulations); (ii) the feasibility, desirability or suitability of Business
Operations, Business Assets and/or the Property or any part thereof for
Buyer's intended use or for any other particular use or purpose; (iii) the
compliance or non-compliance of Business Operations, Business Assets and/or
the Property or any part thereof with any applicable laws, rules or
regulations, including, without limitation, licenses, use permits, building
codes, fire and safety codes; (iv) the accuracy or completeness of any
business records, returns or reports provided by Seller to Buyer.
b. Buyer further acknowledges and agrees that (i) except and only
as expressly set forth in this Agreement, it has not relied on any
representations, warranties or covenants of either Seller, Property Owner
or anyone acting for or on behalf of Seller or Property Owner; (ii) all of
the matters set forth in 12a above, or otherwise concerning Business
Operations, Business Assets and/or the Property have been independently
reviewed and verified by Buyer to its full satisfaction; (iii) Buyer shall
purchase the Business Operations, Business Assets and Property based on its
own independent inspection and examination thereof; and (iv) Buyer shall
purchase the Business Operations, Business Assets and the Property in their
"AS-IS" condition as they exist on the Close of Escrow.
13. Time and Place of Closing. The sale and purchase shall close on
----------------------------
June 30, 2006 at 5:00 p.m. at 0000 Xxxx 0000 Xxxxx, Xxxx Xxxx Xxxx Xxxx, 00000
(the "Closing" and/or the "Close of Escrow").
14. General Provisions. The General Provisions are as follows:
-------------------
8
a. Except as otherwise provided in this Agreement, each party to
this Agreement will bear its respective fees and expenses incurred in
connection with the preparation, negotiation, execution and performance of
this Agreement and the transactions contemplated herein.
b. Any public announcement, press release or similar publicity
with respect to this Agreement or the transactions contemplated herein
will be issued, if at all, at such time and in such manner as Buyer
determines.
c. All notices, consents, waivers and other communications
required or permitted by this Agreement shall be in writing and shall
be deemed given to a party when (i) delivered to the appropriate address by
hand or by nationally recognized overnight courier service (costs prepaid);
(ii) sent by facsimile or email with confirmation of transmission by the
transmitting equipment; or (iii) received or rejected by addressee, if sent
by certified mail, return receipt requested, in each case to the following
addresses, facsimile numbers or email addresses and marked to the attention
of the person (by name or title) designated below (or to such other
address, facsimile number, email address or person as a party may designate
by notice to the other parties):
SELLER: Xxxxxxxx Distributing, LLC
Attention: Xxxxx Xxxxxx
0000 Xxxx 0000 Xxxxx
Xxxx Xxxx Xxxx, XX 00000
Phone No:
----------------------
Fax No:
-------------------------
Email Address:
------------------
And EMS Business Development, Inc.
Attention: Xxxxxxxx X. Xxxxxxx
0000 X. Xxxxxx Xxxx Xxxx
Xxxxxxx, XX 00000
Phone No: (000) 000-0000
Fax No: (000) 000-0000
Email Address: XXX@Xxxxxxx.xxx
---------------
BUYER Gateway Distributors, Ltd.
Attention:
---------------------
---------------------------------
Phone No:
-----------------------
Fax No:
--------------------------
Email Address:
------------------
d. Notwithstanding the fact that the Business Operations are
primarily conducted in Utah, the Buyer and Seller hereby agree that
any proceeding arising out of or relating to this Agreement or any
transaction contemplated herein shall be brought in the courts of the State
of Nevada and each of the parties irrevocable submits to the exclusive
jurisdiction of such court in any such proceeding, waives any objection it
may now or hereafter have to venue or to convenience of forum, agrees that
all claims in
9
respect to the proceeding shall be heard and determined only in any
such court and agrees not to bring any proceeding arising out of or
relating to this Agreement or any transaction contemplated herein in any
other court. The parties further agree that with the sole exception of the
injunctive relief contemplated in paragraph e below; the enforcement of any
security interest granted to Seller pursuant to this Agreement; or an
action for Possession of the Property, any controversy or claim arising out
of or relating to 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 located
in the State of Nevada for this purpose.
e. Buyer acknowledges and agrees that Seller and Property Owner
would be irreparably damaged if any of the provisions of this
Agreement are not performed in accordance with their specific terms and
that any breach of this Agreement by Buyer could not be adequately
compensated in all cases by monetary damages alone. Accordingly, in
addition to any other right or remedy to which Seller and Property Owner
may be entitled, at law or in equity, each of them, Seller and/or Property
Owner, shall be entitled to enforce any provisions of this Agreement by a
decree of specific performance and to temporary, preliminary and permanent
injunctive relief to prevent breaches or threatened breaches of any of the
provisions of this Agreement.
f. The rights and remedies of the parties to this Agreement are
cumulative and not alternative.
g. This Agreement supersedes all prior agreements, whether written
or oral, between the parties with respect to its subject matter
(including any letter of intent and any confidentiality agreement between
Buyer and Seller) and constitutes (along with the Exhibits and other
documents delivered pursuant to this Agreement) a complete and exclusive
statement of the terms of the agreement between the parties with respect to
its subject matter. This Agreement may not be amended, supplemented, or
otherwise modified except by a written agreement executed by the party to
be charged with the amendment.
h. No party may assign any of its rights or delegate any of its
obligation under this Agreement without the prior written consent of
the other party. Subject to the preceding sentence, this Agreement will
apply to, be binding in all respect upon and inure to the benefit of the
successors and permitted assigns of the parties. Nothing expressed or
referred to in this Agreement will be construed to give any person other
than the parties to this Agreement any legal or equitable right, remedy or
claim under or with respect to this Agreement or any provision of this
Agreement, except such rights as shall inure to a successor or permitted
assignee pursuant to this paragraph.
i. If any provision of this Agreement is held invalid or
unenforceable by any court of competent jurisdiction, the other
provisions of this Agreement will remain in full force and effect. Any
provision of this Agreement held invalid or unenforceable only in part or
degree will remain in full force and effect to the extent not held invalid
or unenforceable.
10
j. The headings of Any Articles, Sections or Paragraphs in this
Agreement are provided for the convenience only and will not affect
its construction or interpretation.
k. This Agreement will be governed by and construed under the laws
of the State of California without regard to conflicts-of-laws
principals that would require the application of any other law.
l. This Agreement may be executed in one or more counterparts,
each of which will be deemed to be an original copy of this Agreement
and all of which, when taken together, will be deemed to constitute one and
the same agreement. The exchange of copies of this Agreement and of
signature pages by facsimile transmission shall constitute effective
execution and delivery of this Agreement as to the parties and may be used
in lieu of the original Agreement for all purposes. Signature of the
parties transmitted by facsimile shall be deemed to be their original
signatures for all purposes.
IN WITNESS WHEREOF, the parties have executed this Agreement as of the date
first written above.
SELLER: BUYER:
Xxxxxxxx Distributing, L.L.C. Gateway Distributors, Ltd.
a Utah limited liability company a Nevada corporation
By: By:
--------------------------------- ---------------------------------
By: By:
--------------------------------- ---------------------------------
EMS Business Development, Inc.
a California corporation
By:
---------------------------------
Xxxxxxxx X. Xxxxxxx, President
By:
---------------------------------
Xxxx Xxxxxxx, Secretary
11
JUNE 30, 2006
BALANCE SHEET
ASSETS AND LIABILITIES AS OF JUNE 30, 2006
TO BE ATTACHED
EXHIBIT "A"
EMS ASSETS
TO BE SOLD WITH
XXXXXXXX DISTRIBUTING
(ATTACHED)
EXHIBIT "A-1"
PRELIMINARY TITLE REPORT
(ATTACHED)
EXHIBIT "B"
LIABILITY UNDERTAKING
(ATTACHED)
EXHIBIT "C"
OPERATIONS & ASSETS NOTE
(ATTACHED)
EXHIBIT "D"
SECURITY AGREEMENT
(ATTACHED)
EXHIBIT "E"
FINANCING STATEMENT
UCC-1
(ATTACHED)
EXHIBIT "F"
PROPERTY NOTE
(ATTACHED)
EXHIBIT "G"
PROPERTY DEED OF TRUST
(ATTACHED)
EXHIBIT "H"
ASSIGNMENT
AND
XXXX OF SALE
(ATTACHED)
EXHIBIT "I"
