Assumption Agreement
ASSUMPTION AGREEMENT (this “Agreement”), dated as
of December 31, 2010, among Vinyl Products, Inc., a Nevada corporation (“VPI”), and Xxxxxxx
Xxxxxxxxxx and Xxxxxx Xxxxx (together, the “VFC
Buyers”).
WHEREAS, VPI and Xxxxxxx X’Xxxxxx LLC
(the “Company”)
are parties to that certain Equity Exchange Agreement, dated December 31, 2010
(the “Equity Exchange
Agreement”); and
WHEREAS,
pursuant to that certain Stock Purchase Agreement, dated December 31, 2010,
among VPI and the VFC Buyers, the VFC Buyers have agreed to assume certain
liabilities of VPI;
NOW, THEREFORE, in consideration of the
foregoing and the agreements herein contained, VPI and the VFC Buyers agree as
follows:
1. The VFC Buyers, jointly
and severally, assume and agree to pay, perform and discharge promptly and fully
when due any and all of the liabilities of VPI arising from or relating to
periods prior to the date hereof, other than liabilities of the Company (the
“Assumed
Liabilities”). Notwithstanding the foregoing sentence, all filings with
the Securities and Exchange Commission after December 31, 2010 (“Post-Closing
Filings”), and any audits that may be required in connection with such
Post-Closing Filings, shall be the financial responsibility of VPI, and all
expenses associated with Post-Closing Filings and any audits related thereto
shall be excluded from the definition of Assumed
Liabilities. Post-Closing Filings shall include (i) ongoing periodic
reports, proxy statements and current reports in the regular course, and (ii)
all filings that may be required in connection with the Equity Exchange
Agreement and the related transactions.
2. The VFC
Buyers, jointly and severally, agree to indemnify and hold harmless VPI and its
officers, directors, stockholders, employees and agents against any and all
losses, liabilities, damages, and expenses whatsoever (which shall include for
all purposes, but not be limited to, reasonable counsel fees and any and all
expenses whatsoever incurred in investigating, preparing, or defending against
any litigation, commenced or threatened, or any claim whatsoever, and any and
all amounts paid in settlement of any claim or litigation) as and when incurred
arising out of, based upon, or in connection with (i) any breach of any
representation, warranty, covenant, or agreement of VPI contained in the Equity
Exchange Agreement or (ii) any Assumed Liability. The
indemnification obligations under this Agreement shall terminate as of December
31, 2011, and shall be capped at $75,000 in the aggregate.
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3. 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. It shall be governed by and construed in accordance with
the laws of the State of Nevada, without giving effect to conflict of
laws. Any action, suit, or proceeding arising out of, based on, or in
connection with this Agreement or the transactions contemplated hereby may be
brought in Orange County, California and each party covenants and agrees not to
assert, by way of motion, as a defense, or otherwise, in any such action, suit,
or proceeding, any claim that it or he is not subject personally to the
jurisdiction of such court, that its or his property is exempt or immune from
attachment or execution, that the action, suit, or proceeding is brought in an
inconvenient forum, that the venue of the action, suit, or proceeding is
improper, or that this Agreement or the subject matter hereof may not be
enforced in or by such court.
IN
WITNESS WHEREOF, the parties have duly executed this Agreement as of the date
first written above.
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By:
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Xxxxxxx
Xxxxxxxxxx
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Xxxxxx
Xxxxx
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