EXHIBIT 10.6
AMENDED AND RESTATED
ASSET PURCHASE AGREEMENT
BETWEEN
USN CORPORATION
(F/K/A PREMIER CONCEPTS, INC.)
and
LGS HOLDINGS, INC.
Dated as of August 2, 2005
ASSET PURCHASE AGREEMENT
This AMENDED AND RESTATED ASSET PURCHASE AGREEMENT ("AGREEMENT") is
made and entered into as of August 2, 2005, by and between USN Corporation
(formerly known as Premier Concepts, Inc.), a Colorado Corporation ("USN CORP"),
and LGS Holdings, Inc., a California Corporation ("BUYER"). This Agreement
hereby amends and restates in its entirety that certain Asset Purchase Agreement
(the "ORIGINAL AGREEMENT") dated as of June 17, 2005, by and between USN Corp
and Buyer.
RECITALS
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WHEREAS, USN Corp is engaged in, among other things, the business of
selling fashion jewelry at 14 retail outlets (the "Stores").
WHEREAS, USN Corp desires to sell to Buyer the Stores and certain
assets associated with the Stores, and Buyer desires to purchase such assets.
USN Corp further desires to assign to Buyer certain liabilities associated with
the Stores, and Buyer desires to assume such liabilities (the "Transaction");
WHEREAS, the Original Agreement inaccurately provided for the sale of
certain membership interests (the "MEMBERSHIP INTERESTS") of Spotlight, LLC, a
California limited liability company from USN Corp to Buyer, in addition to the
sale of the Stores;
WHEREAS, pursuant to that certain Amended and Restated Assignment and
Purchase Agreement by and among Buyer, USN Corp, Xxxxxxx Xxxxxxxxx and Xxxxx
Xxxxx dated August 2, 2005, Buyer will purchase the Membership Interests
directly from Messrs. Xxxxxxxxx and Xxxxx (collectively the "Sellers") and not
from USN Corp; and
WHEREAS, Buyer and USN Corp desire to amend and restate the Original
Agreement in its entirety to accurately reflect the terms of the Transaction.
AGREEMENT
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NOW THEREFORE, in consideration of the mutual covenants and upon and
subject to the terms and conditions hereinafter set forth, the parties hereto
agree as follows:
ARTICLE I
PURCHASE AND SALE
1.1 SALE AND TRANSFER OF THE ASSETS. In consideration of the assumption
by Buyer of liabilities as contemplated by Section 1.3, USN Corp agrees to sell,
convey, transfer, assign, quitclaim and deliver to Buyer on the date hereof (the
"EFFECTIVE DATE") all of its right, title and interest in and to the assets
specifically set forth on Exhibit 1, as well as the following assets of USN
Corp, in each case to the extent specifically and solely used by USN Corp in its
operation of the Stores (collectively, the "ASSETS"):
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(a) all of the computer software licenses, including but not
limited to the Retail Pro and Great Plains Accounting systems;
(b) all leases for real property and additional vendor and
employee contracts listed on Schedule 1.1(a) (collectively, the
"ASSIGNED CONTRACTS");
(c) any intellectual property including but not limited to the
"Impostors"; "Elegant Pretenders" and "Joli-Joli" trademarks, logos,
web addresses; (including xxx.xxxxxxxxx.xxx and
xxx.xxxxxxxxxxxxxx.xxx), signage, stationary, described on Schedule
1.1(b);
(d) any inventory, fixtures, and computers; and
(e) all goodwill appurtenant to the foregoing Assets.
1.2 ADDITIONAL CONSIDERATION; ISSUANCE OF SHARES.
(a) As additional consideration for the assumption by Buyer of
liabilities as contemplated by Section 1.3, USN Corp agrees to issue to
the Buyer One Million Three Hundred Sixty Eight Four Hundred Twenty Two
(1,368,422) shares (the "Shares") of the common stock, $0.001 par value
per share, of USN Corp. However, to the extent such liabilities exceed
$2,650,000, including the indebtedness forgiven by Spotlight LLC in the
amount of $2,600,000, USN Corp. shall issue additional Shares at a
price of $1.75 per Share to cover such excess liability.
(b) The Buyer acknowledges that USN Corp is issuing the Shares
in a transaction not registered under the Securities Act of 1933, as
amended (the "Securities Act"). Buyer further understands that, in
addition to any other legends required by applicable state securities
laws, a legend will be placed on any certificate or certificates
representing the Shares substantially to the following effect:
THE SECURITIES REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN
REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED, OR UNDER THE
SECURITIES LAWS OF ANY STATE AND MAY NOT BE SOLD, TRANSFERRED OR
OTHERWISE DISPOSED OF UNLESS REGISTERED UNDER THAT ACT AND UNDER
APPLICABLE STATE SECURITIES LAWS OR USN CORPORATION (THE "COMPANY")
SHALL HAVE RECEIVED AN OPINION OF ITS COUNSEL THAT REGISTRATION OF SUCH
SECURITIES UNDER THAT ACT AND UNDER THE PROVISIONS OF APPLICABLE STATE
SECURITIES LAWS IS NOT REQUIRED.
(c) In connection with the issuance of the Shares to the
Buyer, USN Corp and the Buyer agree to enter into a Registration Rights
Agreement substantially in the form set forth as Exhibit A attached
hereto.
1.3 ASSUMPTION OF LIABILITIES. In consideration of the transfer by USN
Corp to Buyer of the Assets as contemplated by Section 1.1 and the issuance by
USN Corp to Buyer of the Shares as contemplated by Section 1.3, Buyer hereby
assumes, undertakes and agrees to satisfy, pay, discharge and perform when due
each and all of the liabilities of the Stores set forth on EXHIBIT 2.
(collectively, the "ASSUMED LIABILITIES").
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1.4 EXCLUDED ASSETS AND LIABILITIES. Buyer expressly understands and
agrees that any assets and properties of USN Corp (or any of its direct or
indirect subsidiaries) not set forth on Exhibit 1 HERETO OR SECTION 1.1 HEREOF
(collectively, the "EXCLUDED ASSETS") shall be excluded from the Assets and
shall remain the separate property of USN Corp. Buyer does not assume, nor shall
it at any time hereafter become liable for any liabilities of USN Corp (or any
of its direct or indirect subsidiaries) other than the Assumed Liabilities
(collectively, the "EXCLUDED LIABILITIES").
1.5 SALE WITHOUT REPRESENTATIONS. The parties agree that, other than as
set forth in Article II hereof, USN Corp is making no representation or warranty
concerning the Assets, the Liabilities or the Stores, including representations
and or warranties as to the quality, condition, merchantability, salability,
obsolescence, working order or fitness for a particular purpose thereof. The
Assets are sold to Buyer "as is and where is."
ARTICLE II
REPRESENTATIONS AND WARRANTIES
2.1 REPRESENTATIONS AND WARRANTIES OF USN CORP. The Company represents
and warrants to Buyer as of the Effective Date and as of the Closing as follows:
(a) ORGANIZATION. USN Corp is a corporation duly incorporated,
validly existing and in good standing under the laws of the State of
Colorado. USN Corp has all requisite corporate power and authority to
own, lease and operate its properties and to carry on its business. USN
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Corp is duly qualified and in good standing as a foreign corporation in
each jurisdiction where its ownership of property or operation of its
business requires qualification, except where the failure to be
qualified would not have a material adverse effect on USN Corp.
(b) AUTHORITY. USN Corp has full power and lawful authority to
execute and deliver this Agreement and to consummate and perform the
transactions contemplated thereby. The Agreement constitutes (or shall,
upon execution, constitute) a valid and legally binding obligation upon
USN Corp, enforceable in accordance with its terms. Neither the
execution and delivery of the Agreement by USN Corp, nor the
consummation and performance of the transactions contemplated thereby,
conflicts with, requires the consent, waiver or approval of, results in
a breach of or default under, or gives to others any interest or right
of termination, cancellation or acceleration in or with respect to, any
material agreement by which USN Corp is a party or by which USN Corp or
any of its material properties or assets are bound or affected.
2.2 REPRESENTATIONS AND WARRANTIES OF BUYER. The Buyer represents and
warrants to USN Corp as of the Effective Date as follows:
(a) ORGANIZATION. The Buyer is a corporation duly
incorporated, validly existing and in good standing under the laws of
the State of California. The Buyer has all requisite corporate power
and authority to own, lease and operate its properties and to carry on
its business. The Buyer is duly qualified and in good standing as a
foreign corporation in each jurisdiction where its ownership of
property or operation of its business requires qualification, except
where the failure to be qualified would not have a material adverse
effect on the Buyer.
(b) AUTHORITY. The Buyer has full power and lawful authority
to execute and deliver this Agreement and to consummate and perform the
transactions contemplated thereby. The Agreement constitutes (or shall,
upon execution, constitute) a valid and legally binding obligation upon
the Buyer, enforceable in accordance with its terms. Neither the
execution and delivery of the Agreement by the Buyer, nor the
consummation and performance of the transactions contemplated thereby,
conflicts with, requires the consent, waiver or approval of, results in
a breach of or default under, or gives to others any interest or right
of termination, cancellation or acceleration in or with respect to, any
material agreement by which the Buyer is a party or by which the Buyer
or any of its material properties or assets are bound or affected.
(c) ACCESS TO INFORMATION. Buyer has been provided an
opportunity to ask questions of, and Buyer has received answers thereto
satisfactory to Buyer from, USN Corp and its representatives regarding
matters pertaining to this investment, and Buyer has obtained all
additional information requested by Buyer from USN Corp and its
representatives.
(d) ABILITY TO BEAR ECONOMIC RISKS. Buyer has such knowledge
and experience in financial affairs that Buyer is capable of evaluating
the merits and risks of an investment in the Shares. Buyer has not
relied in connection with this investment upon the identity of or
advice from USN Corp or any other investor in USN Corp or upon any
representations, warranties or agreements other than those set forth in
this Agreement. Buyer's financial situation is such that Buyer can
afford to bear the economic risk of holding the Shares for an
indefinite period of time, and Buyer can afford to suffer the complete
loss of Buyer's investment in the Shares.
(e) INVESTMENT INTENT. Buyer is subscribing for the Shares
pursuant to this Agreement for Buyer's own account and not with a view
to or for sale in connection with any distribution of all or any part
of the Shares or Buyer's interest in any of the Shares. Buyer hereby
agrees that Buyer will not, directly or indirectly, transfer, offer,
sell, pledge, hypothecate or otherwise dispose of all or any part of
the Shares or Buyer's interest in any of the Shares (or solicit any
offers to buy, purchase or otherwise acquire or take a pledge of all or
any part thereof) except in a manner that does not violate the
registration or any other applicable provisions of the Securities Act
(or any other applicable federal securities laws) or any applicable
state securities laws. Buyer understands that Buyer must bear the
economic risk of an investment in the Shares for an indefinite period
of time because, among other reasons, the offering and sale of the
Shares have not been registered under the Securities Act, and
therefore, the Shares cannot be sold unless they are subsequently
registered under the Securities Act or an exemption from such
registration is available.
(f) ACCREDITATION. Buyer qualifies as an "accredited investor"
(as such term is defined in Rule 501 of Regulation D promulgated under
the Securities Act).
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ARTICLE III
INDEMNIFICATION
3.1 INDEMNIFICATION BY USN CORP. USN Corp shall indemnify, hold
harmless and defend Buyer (with counsel selected and paid for solely by USN
Corp), its directors, officers, attorneys, successors, assigns, partners,
members, agents, representatives, employees and lenders, against and in respect
of any and all damages, costs, expenses, reasonable fees of attorneys and
consultants, claims, losses, liens, encumbrance and other liabilities arising
from any (i) breach of USN Corp's representations, warranties or covenants in
this Agreement that survive the Closing and (ii) failure of USN Corp to pay,
satisfy, discharge or otherwise resolve any of the Excluded Liabilities.
Notwithstanding anything to the contrary contained herein, the indemnity and
covenants contained in this Paragraph shall survive the execution and delivery
of this Agreement.
3.2 INDEMNIFICATION BY BUYER. Buyer shall indemnify, hold harmless and
defend USN Corp (with counsel selected and paid for solely by Buyer), its
directors, officers, attorneys, successors, assigns, partners, members, agents,
representatives, employees and lenders, against and in respect of any and all
damages, costs, expenses, reasonable fees of attorneys and consultants, claims,
losses, liens, encumbrance and other liabilities arising from any (i) breach of
Buyer's representations, warranties or covenants in this Agreement that survive
the Closing and (ii) failure of Buyer to pay, satisfy, discharge or otherwise
resolve any of the Assumed Liabilities. Notwithstanding anything to the contrary
contained herein, the indemnity and covenants contained in this Paragraph shall
survive the execution and delivery of this Agreement.
ARTICLE IV
GENERAL PROVISIONS
4.1 EXPENSES. All fees, costs and expenses incurred in connection with
this Agreement and the transactions contemplated hereby shall be paid by the
party incurring such fees, costs or expenses.
4.2 ARBITRATION. Any controversy, claim or dispute arising out of or in
any way relating to this Agreement or the alleged breach thereof, shall be
determined by final and binding arbitration administered by JAMS in Los Angeles,
California in accordance with the JAMS Arbitration Rules and Procedures (the
"RULES") which are in effect at the time of the arbitration or the demand
therefore. In the event of such an arbitration proceeding, the parties shall
select a mutually acceptable neutral arbitrator from among the JAMS panel of
arbitrators. In the event the parties cannot agree on an arbitrator, the
Administrator of JAMS shall appoint an arbitrator. California Code of Civil
Procedure ss. 1283.05, which provides for certain discovery rights, shall apply
to any such arbitration, and said code section is also hereby incorporated by
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reference. In reaching a decision, the arbitrator shall have no authority to
change, extend, modify or suspend any of the terms of this Agreement. The
arbitration shall be commenced and heard in Los Angeles, California. The
arbitrator(s) shall apply the substantive law (and the law of remedies, if
applicable) of California or federal law, or both, as applicable to the claim(s)
asserted, and the arbitrator is without jurisdiction to apply any different
substantive law. The arbitrator shall render an award and a written, reasoned
opinion in support thereof, stating all findings of fact and conclusions of law.
Judgment on the award may be entered in any court of competent jurisdiction,
even if a party who received notice under the Rules fails to appear at the
arbitration hearing(s). The parties may seek, from a court of competent
jurisdiction, provisional remedies or injunctive relief in support of their
respective rights and remedies hereunder without waiving any right to
arbitration. However, the merits of any action that involves such provisional
remedies or injunctive relief shall be determined by arbitration under this
Section 4.2.
4.3 FURTHER ASSURANCES. If at any time after the Effective Date any
further action is reasonably necessary or desirable to carry out the purposes of
this Agreement, then promptly upon the request of the other party, the Buyer or
Buyer, as the case may be, shall take such action (including, but not limited
to, the execution of additional documents and instruments).
4.4 AMENDMENTS. No amendment to this Agreement shall be effective
unless it shall be in writing and signed by the parties hereto.
4.5 NOTICES. All notices or other communications required or permitted
to be given hereunder shall be in writing and shall be delivered by hand or
sent, postage prepaid, by registered or certified mail, and shall be deemed
given when so delivered, as follows:
(i) IF TO BUYER:
Xxxxxx Xxxxxxxx
0000 Xxxxxx Xxxxxx
Xxx Xxxxxxx, XX 00000
(ii) IF TO USN CORP:
USN CORPORATION
2121 Avenue of the Stars
Xxxxx 0000
Xxx Xxxxxxx, Xxxxxxxxxx 00000
4.6 INTERPRETATION; EXHIBITS AND SCHEDULES. The headings contained in
this Agreement and in any exhibit attached hereto are for reference purposes
only and shall not affect in any way the meaning or interpretation of this
Agreement.
4.7 COUNTERPARTS. This Agreement may be executed in one or more
counterparts, all of which shall be considered one and the same agreement, and
shall become effective when one or more such counterparts have been signed by
each of the parties and delivered to the other parties.
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4.8 ENTIRE AGREEMENT. This Agreement, together with all exhibits and
schedules attached hereto, contains the entire agreement and understanding
between the parties hereto with respect to the subject matter hereof and
supersede all prior oral and written agreements and understandings relating to
such subject matter.
4.9 SEVERABILITY. If any provision of this Agreement or the application
of any such provision to any person or circumstance shall be held invalid,
illegal or unenforceable in any respect by a court of competent jurisdiction,
such invalidity, illegality or unenforceability shall not affect any other
provision hereof.
4.10 GOVERNING LAW. This Agreement shall be governed by and construed
in accordance with the internal laws of the State of California applicable to
agreements made and to be performed entirely within such state, without regard
to the conflicts of law principles of such state.
4.11 CONSTRUCTION. Each party has had a full and complete opportunity
to review this Agreement, and make suggestions or changes and seek legal advice.
Accordingly, each party understands that this Agreement is deemed to have been
drafted jointly by the parties and agrees that the common-law principles of
construing ambiguities against the drafter shall have no application hereto. It
should be construed fairly and not in favor of or against one party as the
drafter hereof.
[SIGNATURE PAGE FOLLOWS]
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IN WITNESS WHEREOF, the parties have caused this Amended and Restated
Asset Purchase Agreement to be duly executed as of the date first written above.
SELLER:
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USN Corporation (f/k/a Premier Concepts, Inc.),
a Colorado Corporation
By: /S/ XXXXX XXXXXXXX
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Name: Xxxxx Xxxxxxxx
Title: Chief Executive Officer
BUYER:
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By: /S/ XXXXXX XXXXXXXX
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Name: Xxxxxx Xxxxxxxx
Title: CEO
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