AGREEMENT FOR PURCHASE AND SALE
OF PERCENTAGE INTEREST
OF PARTNERSHIP
(MPI OF WASHINGTON)
THIS AGREEMENT FOR PURCHASE AND SALE OF PERCENTAGE INTEREST OF PARTNERSHIP
is entered into with an effective date as of February 1, 2000, by and between
VENTURI TECHNOLOGIES, INC., a Nevada corporation having its principal office at
000 Xxxxx 000 Xxxx, Xxxx, Xxxx 00000 ("Purchaser") and XXXXXXXXX ENTERPRISES,
INC., a Washington Corporation ("Seller").
WHEREAS, Seller is a co-partner, with ALL FOURS DISTRIBUTING, INC., a
Colorado corporation ("All Fours") with respect to that certain general
partnership, organized and existing under Washington law, commonly known and
referred to as "MPI of Washington" ("Partnership"); and together, All Fours and
Seller collectively comprise one hundred percent (100%) of the Partnership; and
WHEREAS, Purchaser desires to purchase from Seller, and Seller desires to
sell to Purchaser all of the Seller's interest in and to the Partnership in
exchange for cash, a promissory note, assumption by Purchaser of certain
liabilities, and Purchaser's conveyance of an amount of its common stock upon
the terms described in this Agreement and the original Restated Global Agreement
of Purchase and Sale, dated October 16, 1999, as later amended by Amendment No.
1, dated as of January 24, 2000 (hereinafter collectively "Global Agreement").
NOW, THEREFORE, in consideration of the mutual agreements set forth herein,
the parties agree as follows:
1. PURCHASE OF PARTNERSHIP INTEREST. Seller shall assign, transfer, convey
and deliver to the Purchaser its total percentage interest in and to the
Partnership which said Partnership owns certain properties, assets, claims,
contracts and businesses of every kind, character and description, whether
tangible or intangible, whether accrued, contingent or otherwise, and wherever
located (each of which is referred to as an "Asset" and cumulatively referred to
as "Business Assets") relating to or comprising the Business; and including,
without limitation, all equipment and machinery; goodwill and all unfilled
customer orders or service requests; all inventories, accounts receivable, cash
on hand and xxxxx cash, prepayments, notes receivable, advances, deposits and
other receivables; all leaseholds, fixtures and leasehold improvements; all
supplies, vehicles, furniture, office furnishings and fixtures; all claims,
rights and benefits under contracts, purchase orders or otherwise; all coverage
under Seller's existing insurance policies (if VTI so elects); all trade names
and service marks and registrations and applications therefor, trademarks,
trademark applications and registrations, copyright applications and
registrations, patents and patent applications and registrations; all trade
secrets, know-how, licenses, processes, formulae, royalties, customer lists and
files, inventories, discoveries, improvements, proprietary or technical
information, computer hardware and software, data, plans, specifications,
drawings and the like, all memberships; all financial, inventory, marketing,
personnel, and other books and records, product literature and advertising;
governmental permits, approvals and authorization (excluding telephone
exchange); all business records and plans, all licenses, assignments, secrecy
and royalty agreements relating to any proprietary rights or trade secrets; and
(i) all of Seller's interest in and to the Partnership reflected on
the Balance Sheet of the Business Operation as of the Closing Date; and
(ii) all of Seller's interest in and to the Partnership of a nature
not normally reflected on a Balance Sheet in accordance with generally accepted
accounting principles which are used primarily in or are primarily related to
the Business; and
(iii) any interest in the certain Partnership held by other divisions
or affiliates of the Seller set forth on Exhibit A attached to this Agreement,
if any.
The interest described above and as set forth within Exhibit A are referred to
collectively as the "Seller's Percentage Interest of Partnership. For purposes
of this and any companion agreement dealing with Purchaser's acquisition of the
Seller's Partnership Interest, Seller shall be deemed to own an undivided
forty-nine percent (49%) interest and All Fours shall be deemed the owner of the
balance of the Partnership. By virtue of a companion Stock Purchase Agreement of
even date, the shareholders of All Fours are selling their total interests in
and to the corporate stock to Purchaser. It is the intent of the Parties that
said transactions will vest one hundred percent (100%) of the Partnership
Interest of MPI of Washington into Purchaser.
2. PAYMENT FOR SELLER'S INTEREST.
2.1 The payment for the Seller's interest in and to the Partnership
shall be in the monetary equivalent amount of $245,000 comprised of
the following:
2.1.1 CASH AND PROMISSORY NOTE. At the Closing, Purchaser will
pay or deliver to Escrow Agent the following as partial consideration for the
Seller's interest:
(a) $49,000.00 cash at closing;
(b) A promissory note duly executed by Purchaser in the
principal amount of $98,000.00 in the form and pursuant to
the terms of Exhibit B, attached hereto.
2.1.2 VENTURI STOCK. As additional consideration for the
acquisition
of Seller's Interest, Purchaser shall issue to Seller and deliver to the Escrow
Agent 24,500 shares of Purchaser's authorized but unissued $0.001 par value
common stock ("Venturi Shares").
2.1.3 LIABILITIES UNDERTAKING. At the Closing, Purchaser shall
also execute a "Liabilities Undertaking" in the form of the attached Exhibit
"C", pursuant to which Purchaser agrees to pay or discharge the obligations
specifically set forth therein.
3. CLOSING. The consummation of the purchase and sale of the Business
Assets as provided for in this Agreement will take place by the execution of
documents in Boulder, Colorado by the appropriate and designated signatories
("Closing").
4. SELLER'S OBLIGATIONS AT CLOSING; FURTHER ASSURANCES.
4.1 At the Closing, Seller shall arrange for delivery to the Escrow
Agent:
4.1.1 a Xxxx of Sale and Assignment signed by Seller in the form
attached as Exhibit "D";
4.1.2 any other instruments of assignment and transfer necessary
to vest in Purchaser good and marketable title to Seller's Partnership Interest;
4.1.3 all contracts and records relating to Seller's Partnership
Interest;
4.1.4 all documents required by this Agreement.
4.2 At any time after the Closing, Purchaser may request and Seller
must sign and/or deliver any documents necessary to transfer and assign to
Purchaser, and confirm Purchaser's title to Seller's Partnership Interest, and
to assist Purchaser in the exercise of all rights thereto. After the Closing,
Seller shall have access to the books and records pertaining to its pre-closing
operations.
4.3 Purchaser shall have the right to collect any receivables that may
be transferred to Purchaser under this Agreement as of the Closing date and to
endorse Seller's name on checks received for such receivables. Seller shall
transfer to Purchaser any cash or other property Seller receives for such
receivables.
4.4 The Parties agree that with each disbursement or release from
Escrow that all payments on the Note may be made directly to the Seller. VTI
further agrees to forward a photocopy of all checks or wire transfer debits made
to the Escrow Agent.
5. REPRESENTATIONS AND WARRANTIES BY SELLER. To the best of its knowledge
and belief, Seller represents and warrants to Purchaser as follows:
5.1 ORGANIZATION, STANDING AND QUALIFICATION. MPI of Washington is a
general partnership duly organized, validly existing and in good standing under
the laws of the State of Washington. All Fours is the holder of a 51%
partnership interest therein, and Seller, a Washington corporation, is the
holder of a 49% partnership interest therein. Seller has all requisite power and
authority and is entitled to carry on its business as now being conducted and to
own, lease or operate its properties as and in the places where such business is
now conducted.
5.2 EXECUTION AND PERFORMANCE OF AGREEMENT; AUTHORITY. The performance
of this Agreement by Seller will not result in a default or breach of any other
agreement to which Seller or All Fours is a party. Seller, All Fours and their
respective signatures have the authority to enter into and consummate this
transaction.
5.3 FINANCIAL STATEMENTS. The copies of the following financial
statements given to Purchaser and prepared by Seller's representatives (called
the "Financial Statements") are complete and correct, have been prepared from
the records of MPI of Washington in accordance with generally accepted
accounting principles.
5.3.1 unaudited balance sheet of MPI of Washington (the "Balance
Sheet") as of January 31, 2000 (the "Balance Sheet Date"); MPI of Washington'
unaudited income or cash flow statement for the period 12/26/00 to 1/31/00. Also
attached as Exhibit G is unaudited Balance Sheet for the period 12/26/99 to
1/31/00.
Such statements of earnings do not contain any items of special income or any
other income not earned in the ordinary course of business except as specified
therein, and such interim financial statements include all adjustments, which
consist only of normal recurring accruals, necessary for such fair presentation.
5.4 ABSENCE OF UNDISCLOSED LIABILITIES. Except as reflected in Exhibit
D or on the Balance Sheet, as of the Balance Sheet Date MPI of Washington had no
debts or obligations of any nature whatsoever, including any tax liabilities
incurred in respect of its income, or its period prior to the close of business
on the Balance Sheet Date or any other debts or obligations relating to any act,
omission or other condition which occurred or existed on or before the Balance
Sheet Date.
5.5 TAXES. All taxes and assessments imposed by any taxing
authority, whether federal, state, local, foreign or otherwise which are due
or payable by Seller and/or MPI of Washington, and all interest and penalties
thereon, have been paid in full (except Use tax returns). All tax returns
required to be filed have been accurately prepared and filed and all deposits
required to be made by Seller and or MPI of Washington with respect to
employees' withholding taxes have been made. Seller and Purchaser agree that
Seller is responsible for taxes only on the income of the Partnership through
January 31, 2000. Accordingly, Purchaser agrees to terminate the Partnership
pursuant to IRC Section 708(b)(1) upon the consummation of this transaction
and in conjunction with the closing of the Stock Purchase Agreement for All
Fours effective as of the commencement of business on February 1, 2000. The
accounting firm of Xxxxxxxx, Xxxxxx and Xxxxxxxx, P.C. will prepare the
Partnership return through January 31, 2000. Seller and Purchaser agree to
use the book value of the inventory
for the Partnership in conformity with the Financial Statements as the fair
market value of such inventory and to use the amounts determined by the
Seller as the fair market value of the fixed assets of the Partnership as of
January 31, 2000 for all tax purposes. Seller and All Fours agree to make an
election under IRC Section 754 on the January 31, 2000 Partnership return if
so requested by Buyer on or before May 1, 2000.
5.6 ABSENCE OF CHANGES OR EVENTS. Between the Balance Sheet Date and
the Closing Date, there has not been any material adverse change in the
business, operations, properties, prospects, assets, or condition of the
Partnership, and no event has occurred or circumstance exists that may result in
such a material adverse change.
5.7 LITIGATION. To the best of its knowledge, there is no claim,
order, investigation or other proceeding against Seller and/or MPI of
Washington, its employees, its properties, or business or the transactions
contemplated by this Agreement, and Seller knows of no basis for the same.
5.8 COMPLIANCE WITH LAWS AND OTHER INSTRUMENTS. To the best of
Seller's knowledge MPI of Washington has complied with all laws applicable to
its business and the ownership and use of Business Assets as well as the conduct
of its business will not conflict with the rights of any other person or entity,
and will not cause a default under any agreement to which Seller and/or MPI of
Washington is a party. Seller is not aware of any proposed laws, condemnations
or other proceedings which would adversely effect the Partnership or its
business undertakings.
5.9 TITLE TO PROPERTIES. Seller has a valued percentage interest in
and to Partnership. Neither the Partnership Interest nor the Business Assets are
subject to any lien, lease, license, or adverse claim except (i) as expressly
set forth in the schedules attached to this Agreement, or (ii) insubstantial
imperfections of title which have arisen in the ordinary course of business. To
the best of Seller's knowledge, except as set forth in the schedules attached to
this Agreement, the Business Assets are in good operating condition and repair,
are suitable for the purposes used, and are adequate for all current operations.
5.10 ENVIRONMENTAL COMPLIANCE. To the best of Seller's and MPI of
Washington's knowledge: (a) the Partnership is being operated in compliance with
all environmental laws and with all terms of required permits and licenses, (b)
Seller is not aware of any circumstances that may interfere with its compliance
with environmental laws or which may give rise to any liability, or which would
otherwise form the basis of any claim or investigation, and that is based on
Seller's manufacture, storage, disposal, transport, or handling, or the release
into the environment, of any hazardous substance, (c) Seller is unaware of any
claim, investigation, or proceeding pending or threatened against Seller and/or
MPI of Colorado, in connection with the Business Assets or its business relating
to environmental laws, and (d) Seller currently maintains all material
government permits, licenses and agreements required to operate the Partnership
and its business, and has complied with all requirements relating thereto.
5.11 SCHEDULES. Exhibit E contains a complete list and description of:
5.11.1 All real property in which Seller has any ownership or
other interest and which is used in connection with the operation of its
business.
5.11.2 All equipment, motor vehicles, and other personal property
(other than inventory and supplies), owned or leased by Seller setting forth a
summary description of all leases, claims, and conditions relating thereto.
5.11.3 All patents, trademarks, service marks, service names,
trade names, and copyrights together with any registrations, applications and
licenses related thereto, owned by Seller and/or MPI of Washington, or used in
the Business Operation.
5.11.4 All insurance policies insuring Seller or MPI of
Washington or its assets, specifying the name of the insurer, the risk insured
against, the limits of coverage, the deductible amount, the premium rate and the
date through which coverage will continue by virtue of premiums already paid.
5.11.5 All contracts or agreements relating to the Partnership or
Business Assets to which Seller is a party.
5.11.6 All employment and consulting agreements, compensation
plans, pension plans or retirement plans, group life, health and accident
insurance and other employee benefit plans, including holiday, vacation,
Christmas and other bonus practices, to which Seller is a party.
To the best of Seller's knowledge, all of the agreements, leases and licenses
required to be listed on Exhibit E (other than those which have been fully
performed) are valid and binding. Except as disclosed in Exhibit E, no payment
required to be made under any such agreement, lease or license has been prepaid
more than 30 days prior to its due date, and there is not any default, or event
which would constitute a default, and none of such agreements, leases or
licenses is unduly burdensome or adverse to Seller's Assets or business or
likely to result in any material loss or liability. None of Seller's existing or
completed contracts is subject to renegotiation with any government body.
5.12 NO GUARANTIES. No obligation of MPI of Washington is guaranteed
by any other person or entity, nor has Seller guaranteed any obligation of any
other person or entity.
5.13 RECEIVABLES. All of the prior receivables have arisen only from
transactions in the ordinary course of business and are customarily collectible
within 90 days after each receivable arose, without offset or resort to
litigation.
5.14 RECORDS. The accounting books of the Partnership are complete and
correct, and to the best of Seller's knowledge, no transactions which are
required to be recorded therein have been omitted.
5.15 DISCLOSURE. All of Seller's representations made in this
Agreement and its related documents are true and contain no untrue statements
and do not omit
important facts. Seller has disclosed to Purchaser in writing all the adverse
facts concerning the Business Assets, the Partnership and its business
operation.
5.16 NO CONFLICT. To the best of Seller's knowledge, performance of
this Agreement by Seller will not conflict with any regulations or agreements to
which Seller is a party. No authorization or filing, which has not already been
completed, is necessary for Seller to perform this Agreement.
6. REPRESENTATIONS AND WARRANTIES BY PURCHASER. Purchaser represents and
warrants to Seller as follows:
6.1 ORGANIZATION. Purchaser is a corporation organized and in good
standing under the laws of the State of Nevada and has full authority to enter
into this Agreement and to carry on its business and to own and operate its
properties.
6.2 AUTHORIZATION AND APPROVAL OF AGREEMENT. All actions required to
be taken by Purchaser relating to the signing of this Agreement shall have been
taken at or prior to the Closing.
6.3 EXECUTION AND PERFORMANCE OF AGREEMENT. The performance of this
Agreement by Purchaser will not result in a default of any other agreement to
which Purchaser is a party. Purchaser has the authority to enter into this
Agreement.
6.4 LITIGATION. There is no claim, order, investigation or other
proceeding, against Purchaser relating to the transactions contemplated by this
Agreement and Purchaser does not know or have any reason to be aware of any
basis for the same.
7. CONDUCT OF BUSINESS PRIOR TO CLOSING.
7.1 Prior to the Closing, the Partnership shall be conducted in a
manner consistent with its prior practice and shall preserve its assets and
properties in good condition and maintain insurance thereon in accordance with
present practices, and Seller will use its best efforts (i) to preserve the
business and organization of Seller intact, (ii) to keep available the services
of Seller's present employees, agents and independent contractors, (iii) to
preserve the goodwill of Seller's suppliers, customers, landlords and others
having business relations with it, and (iv) to cooperate with Purchaser and
assist in obtaining the consent of any party to any lease or contract with
Seller where the consent of such party may be required by reason of this
Agreement.
7.2 If there is a change in any information contained in this
Agreement or its related documents prior to closing, Seller shall give Purchaser
prompt written notice.
7.3 Seller shall consult with and follow the recommendations of
Purchaser with respect to (i) canceling agreements to which Seller is a party,
including purchase orders and commitments for capital expenditures or
improvements, (ii) discontinuing particular items or operations and (iii)
purchasing, pricing or selling policy (including offering services at
discounts); provided, however, that nothing contained in
this Section shall require Seller to take action that is likely to result in a
penalty or claim for damages against Seller, or in losses to Seller, or to
interfere with the conduct of Seller's business consistent with prior practice,
or to result in a breach by Seller of any of its representations contained in
this Agreement (unless the breach is waived by Purchaser).
8. ACCESS TO INFORMATION AND DOCUMENTS. Upon Purchaser's request, Seller
shall give Purchaser access to Seller's personnel and all its properties,
documents and records and shall furnish copies of documents requested by
Purchaser. Purchaser shall not improperly disclose the same prior to the
Closing.
9. EMPLOYMENT MATTERS.
9.1 Purchaser shall offer employment to those current employees of
Seller that are listed on Exhibit F attached hereto, at the compensation listed
therein.
9.2 Within a reasonable period following the Closing Date Purchaser
shall provide training and support to Seller's employees to enable them to use
and sell Purchaser's products and services.
10. CONDITIONS PRECEDENT TO PURCHASER'S OBLIGATIONS. All obligations of
Purchaser under this Agreement are subject to, at Purchaser's option, each of
the following conditions at or prior to the Closing, and Seller shall use its
best efforts to cause each condition to be fulfilled:
10.1 All representations of Seller in this Agreement or the related
documents shall be correct when made and shall be deemed to have been made again
as of the Closing Date, and shall then be correct except for changes allowed
under the terms of this Agreement.
10.2 All duties required by this Agreement to be performed by Seller
at or before the Closing shall be performed.
10.3 Since the date of this Agreement there shall be no material
adverse change in the condition of Seller or the Business Assets.
10.4 All documents required to be delivered to Purchaser at or prior
to the Closing shall be delivered.
11. CONDITIONS PRECEDENT TO SELLER'S OBLIGATIONS. All obligations of Seller
at the Closing are subject to, at Seller's option, each of the following
conditions at or prior to the Closing, and Purchaser shall use its best efforts
to cause each condition to be fulfilled:
11.1 All representations of Purchaser contained in this Agreement or
the related documents shall be correct when made and as of the Closing.
11.2 All duties required by this Agreement to be performed by
Purchaser
at or before the Closing shall be performed.
12. INDEMNIFICATION.
12.1 Seller shall indemnify and agrees to hold Purchaser harmless
from:
12.1.1 any loss suffered by Purchaser because a representation
was not true, a warranty was breached or a duty was not performed by Seller
contained in this Agreement or a related document;
12.1.2 any loss suffered by Purchaser in connection with any of
Seller's liabilities which are not assumed by Purchaser under the Liabilities
Undertaking;
12.1.3 any liabilities or debts of Seller, which exist as of the
Closing Date or which arise after that date but which are based upon any
transaction, state of facts or other condition which occurred on or before the
Closing, except to the extent reflected on the schedules attached to this
Agreement;
12.1.4 any liabilities or debts of Seller, which exist as of the
Closing Date or which arise after that date but which are based upon any
transaction, state of facts or other condition which occurred on or before the
Closing Date, except to the extent (i) reflected on the schedules attached to
this Agreement or incurred in connection with a purchase in the ordinary course
of Seller's business and in conformity with the representations contained in
this Agreement, and (ii) assumed by Purchaser under the terms of the Liabilities
Undertaking; and
12.1.5 any claims, judgments and expenses, including legal fees,
incurred for any of the foregoing or for attempting to avoid or oppose the same
or for enforcing this indemnity.
12.2 Purchaser hereby agrees to indemnify and hold Seller harmless
from:
12.2.1 any loss suffered by Seller because a representation was
not true, a warranty was breached or a duty was not performed by Purchaser
contained in this Agreement or a related document;
12.2.2 any liabilities or debts of Seller assumed by Purchaser
under this Agreement or the Liabilities Undertaking; and
12.2.3 any claims, judgments and expenses, including legal fees,
incurred for any of the foregoing or for attempting to avoid or oppose the same
or for enforcing this indemnity.
13. NATURE AND SURVIVAL OF REPRESENTATIONS AND WARRANTIES. All
representations and warranties contained in this Agreement shall survive the
Closing.
14. NOTICES. Any notices described under this Agreement shall be in writing
and shall be deemed given when personally delivered or mailed by first class
registered mail, return receipt requested, addressed to the parties at the
addresses set forth above.
15. ARBITRATION. Any action, dispute, controversy or claim between or among
the Parties, whether sounding in contract, tort, or otherwise ("Dispute") shall,
at the request of any Party, be finally resolved by arbitration as set forth and
provided for within Paragraph 10 of the Restated Global Agreement, as amended.
IN WITNESS WHEREOF, the parties have caused this Agreement to be signed as
of the date first written above.
ALL FOURS DISTRIBUTING, INC.,
a Colorado corporation,
By:
-------------------------------------------
Xxxxx X. Xxxxxxxx
By:
-------------------------------------------
Xxxxxxxx X. Xxxxxx
STATE OF COLORADO )
) ss.
COUNTY OF )
The foregoing instrument was acknowledged before me this _____ day of
____________, 2000, by Xxxxx X. Xxxxxxxx, President, and Xxxxxxxx X. Xxxxxx,
Vice President of ALL FOURS DISTRIBUTING, INC., a Colorado corporation, general
partner of MPI OF ____________, an ___________________ general partnership.
Witness my hand and official seal.
My commission expires: ___________________________.
------------------------------------------
Notary Public
VENTURI TECHNOLOGIES, INC.,
a Nevada corporation
By:
-------------------------------------------
STATE OF )
) ss.
COUNTY OF )
The foregoing instrument was acknowledged before me this _____ day of
____________, 2000, by _____________________________________, of VENTURI
TECHNOLOGIES, INC., a Nevada corporation.
Witness my hand and official seal.
My commission expires: ___________________________.
------------------------------------------
Notary Public
XXXXXXXXX ENTERPRISES, INC.,
a Washington Corporation
By:
-------------------------------------------
________________________, President
STATE OF )
) ss.
COUNTY OF )
The foregoing instrument was acknowledged before me this _____ day of
____________, 2000, by _______________, President of XXXXXXXXX ENTERPRISES,
INC., a Washington Corporation.
Witness my hand and official seal.
My commission expires: ___________________________.
------------------------------------------
Notary Public
EXHIBIT A
MPI OF WASHINGTON
(Assets)
EXHIBIT B
MPI OF WASHINGTON
(Promissory Note)
EXHIBIT C
MPI OF WASHINGTON
(Liabilities Undertaking)
EXHIBIT D
MPI OF WASHINGTON
(Xxxx of Sale and Assignment)
EXHIBIT E
MPI OF WASHINGTON
1. All Real Property in which Seller's interest.
2. All equipment/motor vehicles/personal property (owned or leased)
3. All pertinent Trademarks, Service marks
4. Policies of Insurance
5. Contracts
6. Employment/Consulting Agreements and Contracts
EXHIBIT F
MPI of Washington
(Employment Matters)
