ASSIGNMENT AND ASSUMPTION AGREEMENT
THIS ASSIGNMENT AND ASSUMPTION AGREEMENT, dated as of December 31, 1997,
(the "Agreement"), between Hilite Industries, Inc., a Delaware corporation
("Transferor"), and Hilite Industries-Texas, 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 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") at the Closing (as hereinafter defined). 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 Pur chaser 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. the shares of common stock of North American Spring & Stamping
Corp., a Delaware corporation and a wholly-owned subsidiary of
Transferor ("NASS"); and
d. the rights which accrue or will accrue to Transferor under this
Agreement.
3. ASSUMPTION.
3.1 Transferee agrees to assume, 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 Closing. 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 will be granted at the Closing, to the
fullest extent permitted by law, the same rights and privileges enjoyed by
Transferor under the Non-Assignable Contracts and Transferee will assume all
liabilities under the Non-Assignable Contracts.
4. CONSIDERATION. Subject to the terms and conditions of this Agreement, in
consideration of the sale, 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
as set forth in paragraph 6 below.
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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 issue and deliver one (1) Share to Transferor. At the Closing,
Transferee shall issue and 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 Transferor to Transferee.
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.
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.
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9. BINDING EFFECT. This Agreement 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 Agreement 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 Assignment
and Assumption Agreement to be duly executed as of the date first written above.
HILITE INDUSTRIES, INC.
By: /s/ Xxxxxx X. Xxxxx
----------------------------
Xxxxxx X. Xxxxx
President, Chief Operating
Officer and Director
HILITE INDUSTRIES-TEXAS, INC.
By: /s/ Xxxxxx X. Xxxxx
----------------------------
Xxxxxx X. Xxxxx
Vice Chairman of the
Board of Directors and
Chief Operating Officer
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