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SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
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FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d)
of the Securities Exchange Act of 1934
DATE OF REPORT: October 19, 1999
(Date of earliest event reported)
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VENTURI TECHNOLOGIES, INC.
(Exact name of registrant as specified in its charter)
NEVADA 000-25183 87-0580279
(State or other jurisdiction of Commission File Number (I.R.S. Employer
incorporation) Identification Number)
763 NORTH 530 EAST 84097
OREM, UTAH (Zip Code)
(Address of principal executive offices)
Registrant's telephone number, including area code: (801) 235-9552
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Item 2. Acquisition or Disposition of Assets
On October 19, 1999, Venturi Technologies, Inc. (the
"Company") entered into a Restated Global Agreement for Purchase and Sale,
pursuant to which the Company agreed to acquire all of the assets of six
related partnerships and all of the outstanding stock of four related
corporations, in separate closings between October 1999 and January 2000. The
entities are all engaged in the professional carpet cleaning services
business in the states of Colorado, Florida, Arizona, Nevada, Oregon, Georgia
and Washington, and in the province of British Columbia, Canada.
The consideration for the assets and stock consists of a
total of $1,650,000 cash, promissory notes in the aggregate principal amount
of $3,200,000 (which will be amortized over 15 years and require a balloon
payment in three years, with interest on the unpaid principal accruing at 9%
per annum) and a total of 800,000 shares of restricted Venturi common stock,
which is to be valued at $4.00 per share for purposes of this transaction.
The cash portion of the purchase price is from general working capital of the
Company. The purchase price was arrived at as a multiple of adjusted EBITDA
(earnings before taxes, interest, depreciation and amortization). Mitchell J.
Martin and Lloyd E. Peterman, the principals of the MPI entities, will become
employees of Venturi as part of the acquisition.
The partnerships whose assets are being acquired are as
follows: MPI of Arizona, MPI of Nevada, MPI of Washington, MPI of Southern
Florida, MPI of Northern Florida and MPI of Georgia. The corporations whose
stock is being acquired are as follows: Martin & Peterman, Inc.; MPI of
Florida, Inc.; MPI of Oregon, Inc.; and 593693 B.C. LTD., doing business as
Sunburst Carpet Services.
Each of the partnerships whose assets is being acquired is
a Colorado general partnership whose 51% partner is All Fours Distributing,
Inc., a Colorado corporation with all of its stock owned by Mitchell J.
Martin and Lloyd E. Peterman. Each of the corporations whose stock is being
acquired, with the exception of 593693 B.C. LTD, is a Colorado corporation
with all of its outstanding stock owned by Messrs. Martin and Peterman.
593693 B.C. LTD is a British Columbia, Canada, corporation whose stock was
acquired 51% from All Fours Distributing, Inc. and 49% from Jason Dupuis
(49%).
The assets of the partnerships and the corporations being
acquired consist primarily of carpet cleaning equipment, inventory, cash,
accounts receivable, customer lists and good will. The Company intends to
sell the used carpet cleaning equipment in the open market, and to replace it
with proprietary Venturi equipment.
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Pursuant to the Global Agreement for Purchase and Sale, on
October 19, 1999, the Company acquired the assets of MPI of Nevada, a
Colorado corporation, and the stock of 593693 B.C. LTD., a British Columbia,
Canada, corporation doing business under the name Sunburst Carpet Services.
The consideration for the assets of MPI of Nevada consisted of $20,000 cash,
10,000 shares of the Company's common stock and a promissory note in the
principal amount of $40,000. The promissory note accrues interest at the rate
of 9% per annum and is amortized over a 15 year term, with a balloon payment
due in three years. The Company also assumed certain debt and liabilities in
the total amount of approximately $90,000. The consideration for the stock of
593693 B.C. LTD. consisted of $50,000 cash and the assumption of certain debt
and liabilities in the total amount of approximately $19,000.
Item 7. Financial Statements, PRO FORMA Financial Information and Exhibits
(a) FINANCIAL STATEMENTS OF BUSINESSES ACQUIRED.
Because of the interconnected nature of their financial
record keeping, it is impracticable to provide the required financial
statements for MPI of Nevada and 593693 B.C. LTD until all of the related
entities have been acquired, which is presently scheduled for the end of
January 2000. The required financial statements will be filed no later than
sixty (60) days after the closing of the last of the related entities being
acquired by the Company.
(b) PRO FORMA FINANCIAL INFORMATION.
Not Applicable.
(c) EXHIBITS.
The following are filed as exhibits to this Form 8-K:
<TABLE>
<CAPTION>
Item No. Exhibit
- -------- -------
<S> <C>
10.62 Restated Global Agreement for Purchase and
Sale between Venturi Technologies, Inc. and
various seller entities as described
therein, dated October 19, 1999
10.63 Agreement for Purchase and Sale of Assets
between MPI of Nevada, a Colorado general
partnership, and Venturi Technologies, Inc.
dated October 19, 1999
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10.64 Stock Purchase Agreement between All Fours
Distributing, Inc. and Jason Dupuis (as the
shareholders of 593693 B.C. LTD.) and
Venturi Technologies, Inc. dated October 19,
1999
</TABLE>
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934,
the registrant has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.
VENTURI TECHNOLOGIES, INC.
/s/ Gaylord M. Karren
------------------------------------
Gaylord M. Karren
Chairman and Chief Executive Officer
Date: November 10, 1999
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Exhibit 10.62
AGREEMENT FOR PURCHASE AND SALE OF ASSETS
(MPI of Nevada)
This AGREEMENT FOR PURCHASE AND SALE OF ASSETS is entered into on the
19th day of October, 1999, by and between MPI OF NEVADA, a Colorado general
partnership (the "Seller"), and VENTURI TECHNOLOGIES, INC., a Nevada
corporation, having its principal office at 763 North 530 East, Orem, Utah
84097 ("Purchaser" or "VTI").
WHEREAS, Seller owns and operates a carpet and furniture cleaning
business located in Las Vegas, Nevada (the "Business");
WHEREAS, Purchaser desires to purchase from Seller, and Seller desires
to sell to Purchaser all of the Seller's Assets used in, and connected with,
the Business 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 Restated Global
Agreement of Purchase and Sale, dated as of October 6, 1999 (hereinafter
referred to as the "Global Agreement").
NOW, THEREFORE, in consideration of the mutual agreements set forth
herein, the parties agree as follows:
1. PURCHASE AND SALE OF BUSINESS. Seller shall assign, transfer,
convey and deliver to the Purchaser all of its right, title and interest in
and to the 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") 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 petty 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
(excluding "Red Express"), 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 the Assets reflected on the Balance Sheet of the
respective specific Business operation as of the Closing Date; and
(ii) Assets of a nature not normally reflected on a Balance Sheet
in accordance
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with generally accepted accounting principles which are used primarily in or
are primarily related to the Business; and
(iii) those Assets held by other divisions or affiliates of the
Seller set forth on Exhibit A attached to this Agreement.
The Assets described above and as set forth within Exhibit "A" are referred
to collectively as the "Seller's Assets."
2. PAYMENT FOR SELLER'S ASSETS.
2.1 The total payment for the Seller's Assets shall be in the
monetary equivalent amount of $100,000.00 comprised of the following:
2.1.1 CASH AND PROMISSORY NOTE. At the Closing, Purchaser
will wire transfer or deliver to the Escrow Agent under the terms of a Global
Escrow Agreement entered into by the parties as of October 19, 1999, the
following as partial consideration for the Seller's Assets:
(a) $20,000.00 cash at closing;
(b) A promissory note duly executed by Purchaser in the
principal amount of $40,000.00 in the form and pursuant
to the terms of Exhibit "B", attached hereto.
2.1.2 VENTURI STOCK. As additional consideration for the
Seller's Assets, Purchaser shall issue to Seller and deliver to the Escrow
Agent 10,000 shares of Purchaser's authorized but unissued $0.001 par value
common stock (the "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 set forth therein.
2.1.4 EMPLOYMENT OF SELLER'S PRINCIPALS. As partial
consideration for Seller's Assets, at the Closing the Purchaser shall enter
into separate employment agreements with Mitchell J. Martin and Lloyd E.
Peterman, which Employment Agreements shall be in a form acceptable to the
Seller and the Purchaser.
3. CLOSING. The consummation of the purchase and sale of the Seller's
Assets as provided for in this Agreement will take place at the offices of
Seller's counsel, Fenton A. Bain, P.C., 3100 Arapahoe Avenue, Suite 400,
Boulder, CO 80303 at 5:00 p.m. on October 19, 1999, or at such other time
and place as the parties may agree ("Closing").
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4. SELLER'S OBLIGATIONS AT CLOSING; FURTHER ASSURANCES.
4.1 At the Closing, Seller shall deliver to the Escrow Agent:
4.1.1 a Bill of Sale and Assignment signed by Seller in the
form attached as Exhibit "D-1";
4.1.2 any other instruments of assignment and transfer
necessary to vest in Purchaser good and marketable title to Seller's Assets;
4.1.3 all contracts and records relating to Seller's Assets;
4.1.4 the Global Escrow Agreement signed by both Seller and
Purchaser.
4.1.5 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 Assets, 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 upon instructions from Escrow Agent all payments on the Note may
be made directly to the constituent parties comprising the Seller Entities.
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. Seller is a
general partnership duly organized, validly existing and in good standing
under the laws of the State of Colorado. All Fours Distributing, Inc., a
Colorado corporation, is the holder of 51% of the partnership interest of the
Seller, and 565876 B.C., LTD., a British Columbia corporation, is the holder
of 49% of the partnership interest of Seller. 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 is a party. Seller and the
signatories for Seller have the authority to enter into this Agreement.
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5.3 FINANCIAL STATEMENTS. The copies of the following financial
statements given to Purchaser and prepared by Seller (called the "Financial
Statements") are complete and correct, have been prepared from the records of
Seller in accordance with generally accepted accounting principles.
5.3.1 unaudited balance sheets of Seller (the "Balance
Sheet") as of December 25, 1998 (the "Balance Sheet Date") and December 25,
1997 and Sellers' unaudited income or cash flow statement for the periods
ended December 25, 1998 and December 25, 1997; also attached as Exhibit "G"
are unaudited Balance Sheets for the period ending October 18,1999.
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 Seller had no
debts or obligations of any nature whatsoever, including any tax liabilities
incurred in respect of Seller's 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 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 with respect to employees' withholding taxes have been made. Seller
and VTI further agree to each file Form 8594 based upon the allocation
stipulated to by the parties as to the Purchase Price.
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
Company, and no event has occurred or circumstance exists that may result in
such a material adverse change.
5.7 LITIGATION. There is no claim, order, investigation or other
proceeding against Seller, 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 Seller has complied with all laws applicable to its
business and the ownership and use of Seller's 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 is a
party. Seller is not aware of any proposed laws, condemnations or other
proceedings which would affect its business or Seller's Assets.
5.9 TITLE TO PROPERTIES. Seller has good title to Seller's
Assets. None of Seller's Assets are subject to any lien, lease, license, or
adverse claim except (i) as expressly set forth in the
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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, Seller's Assets are in good operating condition and repair, are
suitable for the purposes used, and are adequate for all current operations
of Seller.
5.10 ENVIRONMENTAL COMPLIANCE. To the best of Seller's knowledge:
(a) Seller's business 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, in connection with the Seller's Assets or its business
relating to environmental laws, and (d) Seller currently maintains all
material government permits, licenses and agreements required to operate
Seller's Assets and 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 or used in the
operation of Seller's business.
5.11.4 All insurance policies insuring Seller 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 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
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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 Seller is guaranteed by any
other person or entity, nor has Seller guaranteed any obligation of any other
person or entity.
5.13 RECEIVABLES. All Seller's 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 Seller are complete and
correct, and to the best of Seller's knowledge, no transactions which are
required to be recorded therein have been omitted.
5.16 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 Seller's Assets and its business.
5.17 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.
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7. CONDUCT OF BUSINESS PRIOR TO CLOSING.
7.1 Prior to the Closing, Seller shall conduct its business only
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.
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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's Assets or its business.
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.
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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 Global
Agreement.
IN WITNESS WHEREOF, the parties have caused this Agreement to be signed
as of the date first written above.
SELLER:
MPI OF NEVADA, a Colorado
General Partnership
By: ALL FOURS DISTRIBUTING, INC.,
a Colorado corporation
By: /s/ Lloyd E. Peterman
------------------------
Lloyd E. Peterman,
By: /s/ Mitchell J. Martin
------------------------
Mitchell J. Martin
By: 565876 B.C., LTD., a British Columbia
corporation
By:
------------------------
Jason Dupuis, President
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STATE OF COLORADO )
) ss.
COUNTY OF ADAMS )
The foregoing instrument was acknowledged before me this 19th day of
October, 1999, by Lloyd R. Peterman, President, and Mitchell J. Martin, Vice
President of ALL FOURS DISTRIBUTING, INC., a Colorado corporation, general
partner of MPI OF NEVADA, a Colorado general partnership.
Witness my hand and official seal.
My commission expires: 3/30/2003
/s/ Lisa M. Huber
[SEAL] ------------------------
Notary Public
STATE OF )
) ss.
COUNTY OF )
The foregoing instrument was acknowledged before me this _____ day of
October, 1999, by ____________________________________________, of 565876
B.C., Ltd., a British Columbia corporation dba SUNBURST CARPET SERVICES,
general partner of MPI OF NEVADA, a Colorado general partnership.
Witness my hand and official seal.
My commission expires: ___________________________.
------------------------
Notary Public
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PURCHASER:
VENTURI TECHNOLOGIES, INC.,
a Nevada corporation
By: /s/ Gaylord Karren
----------------------------
Its: CEO
------------------------
STATE OF )
) ss.
COUNTY OF )
The foregoing instrument was acknowledged before me this 25th day of
October, 1999, by Gaylord Karren of VENTURI TECHNOLOGIES, INC., a Nevada
corporation.
Witness my hand and official seal.
My commission expires: 5-15-2001.
/s/ Vickie F. Johnson
[SEAL] ------------------------
Notary Public
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Exhibit 10.63
R E S T A T E D
GLOBAL AGREEMENT FOR
PURCHASE AND SALE
THIS RESTATED GLOBAL AGREEMENT FOR PURCHASE AND SALE ("Global
Agreement") is entered into with an effective date as of the 6th day of
October, 1999 ("Effective Date"), by and between VENTURI TECHNOLOGIES, INC.,
a Nevada corporation ("VTI"), having its principal offices at 763 North 530
East, Orem, Utah 84097 and various Seller Entities as described herein.
WHEREAS, VTI is interested in purchasing the issued and outstanding
corporate stock of those certain corporate entities known as MARTIN &
PETERMAN, INC., a Colorado corporation, dba MPI, INC. (hereinafter
"MPI/Colorado"), MPI OF FLORIDA, INC., a Florida corporation (hereinafter
"MPI/Florida"), MPI OF OREGON, INC., an Oregon corporation (hereinafter
"MPI/Oregon") and 565876 B.C. LTD., dba "Sunburst Carpet Services," a British
Columbia corporation ("MPI/BC") (the foregoing corporations are hereinafter
collectively referred to as the "Corporate Entities", and the outstanding and
issued capital stock thereof shall hereinafter collectively be referred to as
the "Corporate Shares").
WHEREAS, VTI is also interested in purchasing certain assets, both
personal and intangible, currently owned by MPI OF ARIZONA, an Arizona
general partnership ("MPI/Arizona"), MPI OF GEORGIA, a Georgia general
partnership ("MPI/Georgia"), MPI OF WASHINGTON, a Washington general
partnership ("MPI/Washington"), MPI OF NORTHERN FLORIDA, a Colorado general
partnership ("MPI/No. Fla."), MPI OF SOUTHERN FLORIDA, a Colorado general
partnership ("MPI/So. Fla."), and MPI OF NEVADA, a Colorado general
partnership ("MPI/Nevada"); (hereinafter the collective and combined assets
as associated with the foregoing entities shall be referred to as the
"Business Assets").
WHEREAS, a preliminary Global Agreement for the Purchase and Sale was
executed by the parties on October 6, 1999 with the caveat that it would be
revised and replaced by this document, and the parties intend to cancel the
preliminary agreement.
NOW, THEREFORE, in consideration of the mutual understandings as set
forth herein, the undersigned parties hereby agree as follows:
1. PURCHASE OF CORPORATE SHARES. It is the intent of the parties
to enter into separate Stock Purchase Agreements for the sale to and
acquisition by VTI of the Corporate Shares, and accordingly, for each of the
Corporate Entities to assign, transfer, convey and vest in VTI all their
right, title and interest as associated therewith. Specific Corporate Shares
for a specific entity such as MPI of Oregon, Inc. shall be correspondingly
identified as "Corporate Shares/MPI Oregon", etc.
2. PURCHASE OF BUSINESS ASSETS. It is the intent of the parties
hereto that VTI acquire all right, title and interest in and to the Business
Assets by entering into separate Asset Purchase
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Agreements with the appropriate conveying partnerships. Those Business
Assets for a particular, segregated portion of the Business will hereinafter
be annotated with a specific locale to differentiate the Business Assets
affected. For example, the Business Assets associated with the Las Vegas,
Nevada operation shall be referred to as the "Business Assets/Nevada", while
those associated with the Jacksonville, Florida operation shall be referred
to as "Business Assets/North Florida," etc.
3. BUSINESS LOCATIONS. VTI recognizes that the Business Assets
and Corporate Shares deal with assets and business operations located at
numerous sites throughout the continental United States and are owned by
various affiliated individuals and/or entities (hereinafter collectively the
"Seller Entities"). The parties also acknowledge that it will require a
period of time for VTI to assimilate and take over operations at each
location.
4. TIMING OF CLOSINGS. In light of the time period required by
VTI to assimilate control and continue operations at the various locales, the
parties hereto have agreed to a consummation of the Purchase Agreements
("Closings") pursuant to a phased closing schedule. Said Closing schedule is
set out within Exhibit A hereto. The parties agree to close the first four
(4) locales in calendar year 1999, at the frequency set forth in Schedule A.
The balance of the locales will be closed simultaneously on or before January
25, 2000 ("Closing Deadline Date"). However, should a breach of this Global
Agreement or any of the Purchase Agreements occur prior to the Closing
Deadline Date, all unclosed transactions will be suspended until the
"Dispute" is settled by the parties or resolved pursuant to Paragraph 10
hereof.
5. PAYMENT OF PURCHASE PRICE.
5.1 CASH. Each Purchase Agreement will require a cash
payment at Closing in the amount of twenty percent (20%) of the Purchase
Price, except in the instance of the British Columbia transaction, which will
be all cash. The specific cash amounts are itemized within the Schedule
comprising Exhibit A hereto.
5.2 PROMISSORY NOTES. Each Closing (except for British
Columbia) will also require the execution and delivery by VTI of its
corporate promissory note for forty percent (40%) of the purchase price, with
interest to accrue at the rate of nine percent (9%) per annum, 15 year
amortization, providing for monthly payments of principal and interest, with
the initial installment due on the first day of the calendar month following
Closing and with all principal and accrued interest due thirty-six (36)
months from the date of the first installment.
5.3. VTI STOCK. The VTI stock comprising forty percent (40%)
of the purchase price (except for British Columbia) shall be in an amount
equivalent to the number of shares of $.001 par value unissued common stock
for VTI valued for purposes of this transaction at $4 per share, which shares
shall be delivered to the Escrow Agent pursuant to the terms of a companion
Global Escrow Agreement, dated October 19, 1999.
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6. ESCROW. The terms of the Global Escrow Agreement shall provide
for the appointment of Colorado Business Bank - Boulder to function as escrow
agent ("Escrow Agent"). The VTI shares shall be held by Escrow Agent
pursuant to the terms of the Global Escrow Agreement.
a. ESCROW LEGEND. The stock certificates representing the
VTI Shares shall contain, for so long as the VTI Shares are held in Escrow, a
legend in substantially the following form:
THE SHARES REPRESENTED BY THIS CERTIFICATE ARE
SUBJECT TO FORFEITURE AND ARE SUBJECT TO CERTAIN
RESTRICTIONS ON TRANSFER, INCLUDING AN AGREEMENT
BETWEEN THE COMPANY AND THE ORIGINAL HOLDER OF THE
SHARES REPRESENTED BY THIS CERTIFICATE THAT THE
SHARES MAY NOT BE OFFERED OR SOLD FOR A CERTAIN
PERIOD OF TIME AFTER THE DATE OF ISSUANCE.
b. RESTRICTED STOCK. The VTI Shares have not been
registered with the Securities and Exchange Commission, nor have they been
qualified under the securities laws of any state. The selling party
acknowledges that the VTI Shares are subject to the following restriction
which will be printed in the following form on the certificates representing
the VTI Shares:
THE SECURITIES REPRESENTED BY THIS CERTIFICATE HAVE
NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF
1933, AS AMENDED (THE "ACT") OR QUALIFIED UNDER THE
SECURITIES LAWS OF ANY STATE (THE "LAW"). SUCH
SECURITIES HAVE BEEN ACQUIRED FOR INVESTMENT AND
NEITHER SAID SHARES NOR ANY INTEREST THEREIN MAY BE
SOLD OR OFFERED FOR SALE IN THE ABSENCE OF AN
EFFECTIVE REGISTRATION STATEMENT FOR THE SHARES
UNDER THE ACT AND QUALIFICATION UNDER THE LAW OR AN
OPINION OF COUNSEL SATISFACTORY TO THE CORPORATION
THAT SUCH REGISTRATION AND QUALIFICATION ARE NOT
REQUIRED AS TO SAID SALE OR OFFER.
c. REPRESENTATIONS. The Seller Entities make the following
representations to VTI in order to establish exemptions from registration
under Federal and state securities laws. The Seller Entities are acquiring
the VTI Shares for their own account, for investment, and not for resale in
connection with any distribution thereof. The Seller Entities have such
knowledge and experience in business and financial matters that they are
capable of evaluating the risks of acquiring the VTI
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Shares. The Seller Entities understand the speculative nature of the VTI
Shares. The Seller Entities have adequate net worth and means to provide for
their respective current needs and to sustain a complete loss of their
respective investment. The Seller Entities have no need of liquidity of
their investment. The Seller Entities understand that at present only a
limited public market exists, and that a more general public market may never
exist, for the VTI Shares and that the VTI is under no obligation to provide
a market for the VTI Shares.
d. CONSENT TO DILUTION. The parties understand that VTI
plans to acquire other businesses and assets by issuing stock, and that VTI
may issue shares of its stock for other reasons in the future. The Seller
Entities understand and consent that future issuances of stock will dilute
the Seller Entities' proportionate ownership of VTI.
7. EMPLOYMENT OF PRINCIPALS. As partial consideration for the
Purchase Agreements, VTI shall enter into separate employment agreements
("Employment Agreements") with Mitchell J. Martin and Lloyd E. Peterman,
which Employment Agreements shall be in a form acceptable to Peterman, Martin
and VTI.
8. CLOSING BONUS. In the event that all Closings itemized in
Exhibit A occur on or before January 25, 2000, the Closing Deadline Date, VTI
has agreed to transfer and deposit 12,500 additional shares of VTI Stock
with the Escrow Agent to be held and disbursed pursuant to the terms of the
Global Escrow Agreement.
9. NOTICES. Any notices described under this Restated Global
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 within Exhibit B,
attached hereto and incorporated herein by this reference.
10. ARBITRATION.
10.1 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 below, and shall include any Dispute arising out of
or relating to this Agreement or any agreements or instruments relating to
this Agreement or delivered in connection with this Agreement. Any such
Dispute shall be determined by arbitration in accordance with the Commercial
Arbitration Rules of the American Arbitration Association. The arbitration
proceedings shall be conducted in Denver, Colorado. The arbitrator(s) shall
have the qualifications set forth in Section 10.2. All defenses and statutes
of limitation which would otherwise be applicable in a judicial action
brought by a party shall apply to any arbitration proceeding under this
Agreement.
10.2 The arbitrator(s) shall be selected in accordance with
the rules of the American Arbitration Association from panels maintained by
the Association. A single arbitrator shall be knowledgeable in the subject
matter of the arbitration proceeding. If more than one arbitrator is
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selected, at least one of the arbitrators must be knowledgeable in the
subject matter of the Dispute and at least one of whom must be a practicing
attorney. If more than one arbitrator is selected, the controversy shall be
decided by a majority vote of the arbitrators. The arbitrator(s) may award
recovery of all costs and fees (including attorneys' fees, administrative
fees, arbitrators' fees, and court costs) to the prevailing party. The
arbitrator(s) also may grant provisional or ancillary remedies such as, for
example, injunctive relief, attachment, or the appointment of a receiver,
either during the pendency of the arbitration proceeding or as part of the
arbitration award.
10.3 Notwithstanding the applicability of other law to any
agreements or instruments between or among the Parties, the Federal
Arbitration Act, 9 U.S.C. Sec. 1 ET SEQ. shall apply to the construction and
interpretation of this Agreement.
10.4 The Parties acknowledge that they have read and
understand the following disclosures:
ARBITRATION IS FINAL AND BINDING ON THE PARTIES.
THE PARTIES ARE WAIVING THEIR RIGHT TO LITIGATE IN COURT,
INCLUDING THEIR RIGHT TO A JURY TRIAL.
PRE-ARBITRATION DISCOVERY IS GENERALLY MORE LIMITED AND
DIFFERENT FROM COURT PROCEEDINGS.
ARBITRATORS' AWARDS ARE NOT REQUIRED TO INCLUDE FACTUAL
FINDINGS OR LEGAL REASONING AND ANY PARTY'S RIGHT TO APPEAL
OR TO SEEK MODIFICATION OF RULINGS BY ARBITRATORS IS
STRICTLY LIMITED.
11. LEGAL AND OTHER COSTS. In the event that any party defaults in
its obligations under this Agreement and, as a result thereof, another party
seeks to legally enforce its rights hereunder against the defaulting party,
then, in addition to all damages and other remedies to which the
non-defaulting party is entitled by reason of such default, the defaulting
party shall be liable for and shall promptly pay to the non-defaulting party
an amount equal to all costs and expenses (including reasonable attorneys'
fees) paid or incurred by the non-defaulting party in connection with such
enforcement to the extent awarded by arbitration.
12. MISCELLANEOUS.
12.1 This Restated Global Agreement and the agreements
referred to herein contain the entire agreement of the parties concerning the
subject matter hereof and they may not be amended or terminated except by a
written agreement signed by all the Parties. This Restated Global Agreement
restates and replaces in its entirety the Global Agreement executed by some
of the parties
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on or about October 6, 1999 ("Preliminary Global Agreement"), and the
Preliminary Global Agreement is hereby canceled in its entirety.
12.2 No waiver of any default is valid unless in writing and
signed by the waiving party, and no such waiver shall be deemed a waiver of
any subsequent default.
12.3 This Restated Global Agreement shall be binding upon and
inure to the benefit of each corporate party, each limited liability company,
their successors and assigns, and each individual party hereto and his/her
heirs, personal representatives, successors and assigns.
12.4 The paragraph headings are for the purposes of
convenience only and are not intended to define or limit the contents of the
paragraphs.
12.5 Each party shall cooperate and take such further action
as may be reasonably requested by any other party to carry out the provisions
and purposes of this Restated Global Agreement.
12.6 This Restated Global Agreement may be executed in one or
more counterparts, all of which taken together shall be deemed one original.
12.7 This Restated Global Agreement, the Purchase Agreements,
the Bills of Sale and Assignments, the Liabilities Undertakings, the
Employment Agreements, the Promissory Notes, the Global Escrow Agreement, and
any amendments shall be governed by and construed in accordance with laws of
the State of Colorado.
12.8 Any information revealed pursuant to this Restated
Global Agreement or previously in the course of negotiations shall be held in
confidence and solely for the purpose of consummating the Purchase Agreements
in allowing the parties to exercise prudent care. If the Purchase Agreements
are not consummated, no further use shall be made of such information (except
to the extent such information was already known prior to this Agreement) and
the parties may be held accountable for any unauthorized use. If the
Purchase Agreements are not consummated, the parties shall return all
documents received from any party in connection therewith. If the Purchase
Agreements are consummated, neither party shall disclose any information
concerning the other party's business or the terms except (i) as approved by
the other party, (ii) as necessary for the conduct of the current businesses
owned and operated by either TI or the Seller Entities, (iii) as required by
law, or (iv) as is ascertainable from public information.
12.9 Each provision of this Restated Global Agreement shall
be interpreted in such a way as to be valid under all laws, but in case any
of the provisions shall be held to be illegal or unenforceable, such
illegality or unenforceability shall not affect any other provision and this
Restated Global Agreement shall be interpreted as if the invalid provision
was not included unless the absence of such provision would make completing
the transactions contemplated hereby unreasonable.
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12.10 Either party shall have ten (10) days from receipt of a
written notice to cure any default hereunder.
12.11 VTI has agreed to enter into a lease agreement for the
premises currently owned by ALL FOURS II, LLC, a Colorado limited liability
company, and located at 6295 E. 56th Avenue, Commerce City, Colorado, for the
primary term of two (2) years at the triple net rate of $9,000/month. A more
definitive lease agreement will be drafted by Seller's counsel and submitted
to VTI for its review and approval prior to the Closing Deadline Date.
12.12 VTI counsel and staff have agreed to cooperate with the
Selling Party's counsel whenever possible in generating the closing documents
necessary to timely close the Purchase and Sale transactions pursuant to
Exhibit A prior to the Closing Deadline Date.
12.13 The Selling Parties are responsible to pay legal and
accounting fees to Fenton A. Bain, P.C. and Kreisman, Wolach & Williams,
P.C., respectively. However, the Selling Parties and VTI have agreed to
equally allocate the fees and costs incurred by said professional entities
with respect to this VTI/MPI transaction.
12.14 The parties expressly agree that, upon written
instructions by the Escrow Agent, payments on the respective Notes may be
made by Venturi directly to such parties as the Escrow Agent may designate.
VTI shall promptly send to the Escrow Agent a copy of any checks or wire
transfer so paid.
IN WITNESS WHEREOF, the parties have caused this Agreement to be
signed as of the date first written above.
SELLER:
MARTIN AND PETERMAN, INC., MPI OF ARIZONA, an Arizona
a Colorado corporation, General Partnership
dba "MPI"
By: /s/ Lloyd E. Peterman By: ALL FOURS DISTRIBUTING, INC.,
--------------------------- a Colorado corporation
Lloyd E. Peterman
By: /s/ Mitchell J. Martin By: /s/ Lloyd E. Peterman
--------------------------- -----------------------------------
Mitchell J. Martin Lloyd E. Peterman
By: /s/ Mitchell J. Martin
-----------------------------------
Mitchell J. Martin
By: B&K MANAGEMENT, INC.
By:
-----------------------------------
Brian Ritter, President
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565876 B.C. LTD., MPI OF FLORIDA, INC.,
dba "SUNBURST CARPET SERVICES" a Florida corporation
By: ALL FOURS DISTRIBUTING, INC., By: /s/ Lloyd E. Peterman
a Colorado corporation ----------------------------------
Lloyd E. Peterman
By: /s/ Lloyd E. Peterman
------------------------ By: /s/ Mitchell J. Martin
Lloyd E. Peterman ----------------------------------
Mitchell J. Martin
By: /s/ Mitchell J. Martin
------------------------
Mitchell J. Martin
By: DUPUIS ENTERPRISES, INC.
By:
-------------------------------
Jason Dupuis, President
MPI of GEORGIA, a Georgia MPI OF NORTHERN FLORIDA,
General Partnership a Colorado general partnership
By: ALL FOURS DISTRIBUTING, INC., By: ALL FOURS DISTRIBUTING, INC.,
a Colorado corporation a Colorado corporation
By: /s/ Lloyd E. Peterman By: /s/ Lloyd E. Peterman
------------------------ ----------------------------------
Lloyd E. Peterman Lloyd E. Peterman
By: /s/ Mitchell J. Martin By: /s/ Mitchell J. Martin
------------------------ ----------------------------------
Mitchell J. Martin Mitchell J. Martin
By: MCNAMARA ENTERPRISES, INC. By: MCNAMARA ENTERPRISES, INC.
By: By:
------------------------------- ----------------------------------
Lanny McNamara, President Lanny McNamara, President
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MPI OF NEVADA, a Colorado MPI OF WASHINGTON, a Washington
general partnership general partnership
By: ALL FOURS DISTRIBUTING, INC., By: ALL FOURS DISTRIBUTING, INC.,
a Colorado corporation a Colorado corporation
By: /s/ Lloyd E. Peterman By: /s/ Lloyd E. Peterman
------------------------ ------------------------
Lloyd E. Peterman Lloyd E. Peterman
By: /s/ Mitchell J. Martin By: /s/ Mitchell J. Martin
------------------------ ------------------------
Mitchell J. Martin Mitchell J. Martin
By: DUPUIS ENTERPRISES, INC. By: DELABARRE ENTERPRISES, INC.
By: By:
----------------------- -------------------------
Jason Dupuis, President Russel J. Delabarra,
President
MPI OF SOUTHERN FLORIDA, a MPI OF OREGON,
Colorado general partnership an Oregon corporation
By: ALL FOURS DISTRIBUTING, INC., By: ALL FOURS DISTRIBUTING, INC.,
a Colorado corporation a Colorado corporation
By: /s/ Lloyd E. Peterman By: /s/ Lloyd E. Peterman
------------------------ ------------------------
Lloyd E. Peterman Lloyd E. Peterman
By: /s/ Mitchell J. Martin By: /s/ Mitchell J. Martin
------------------------ ------------------------
Mitchell J. Martin Mitchell J. Martin
By: EIKOV ENTERPRISES, INC. By:
By: By:
------------------------ ------------------------
Matt Eikov, President
"VTI"
VENTURI TECHNOLOGIES, INC.,
a Nevada corporation
By: /s/ Gaylord Karren
-------------------------
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STOCK PURCHASE AGREEMENT
(British Columbia)
This STOCK PURCHASE AGREEMENT is made as of October 19, 1999, by VENTURI
TECHNOLOGIES, INC., a Nevada corporation ("Buyer"), and ALL FOURS
DISTRIBUTING, INC., a Colorado corporation and JASON DUPUIS (hereinafter
collectively referred to as "Sellers").
RECITALS
A. Sellers own all of the issued and outstanding capital stock (the
"Corporate Shares" or "Shares") of 593693 B.C. LTD., a British Columbia
corporation (hereinafter referred to as the "Company").
B. Sellers desire to sell, and Buyer desires to purchase, all of the
Corporate Shares (hereinafter "Shares") for the consideration and on the
terms set forth in this Agreement.
AGREEMENT
The parties, intending to be legally bound, agree as follows:
1. SALE AND TRANSFER OF SHARES; CLOSING
1.1 PURCHASE AND SALE OF SHARES. Subject to the terms and
conditions of this Agreement, at the Closing, Sellers will sell and transfer
the Shares to Buyer, and Buyer will purchase the Shares from Sellers.
1.2 PURCHASE PRICE.
1.2.1 CASH. At the Closing, Buyer will pay or deliver to
Sellers the following as partial consideration for the Shares of the Company
Fifty Thousand U.S. Dollars (U.S. $50,000.00) cash.
1.4 CLOSING. The purchase and sale (the "Closing") provided for
in this Agreement will take place at a time, place and date agreed to
mutually by the Parties.
1.5 CLOSING DELIVERIES.
1.5.1 SELLERS' DOCUMENTS. At the Closing, Sellers will
deliver to Escrow Agent:
(a) original certificates representing the Corporate
Shares duly endorsed (or accompanied by duly executed stock powers);
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(b) Global Escrow Agreement, executed by Sellers, Buyer
and the Escrow Agent; and
(c) A separate employment agreement for both Martin and
Peterman, executed by each ("Employment Agreements").
1.5.2 BUYER'S DOCUMENTS. At the Closing, Buyer will deliver to
Escrow Agent:
(a) cash in the amount of U.S. $50,000.00; and
(b) the Employment Agreements, executed by Buyer.
2. REPRESENTATIONS AND WARRANTIES OF SELLER
To the best of their individual and collective knowledge and belief,
Sellers represent and warrant to Buyer as follows:
2.1 ORGANIZATION AND GOOD STANDING. (a) the Company is a
corporation duly organized, validly existing, and in good standing under the
laws of the British Columbia, with full corporate power and authority to
conduct its business as it is now being conducted, to own or use the
properties and assets that it purports to own or use, and to perform all its
obligations under applicable contracts. The Company is duly qualified to do
business as a foreign corporation and is in good standing under the laws of
each state or other jurisdiction in which either the ownership or use of the
properties owned or used by it, or the nature of the activities conducted by
it, requires such qualification.
2.2 AUTHORITY. This Agreement constitutes the legal, valid, and
binding obligation of Sellers, enforceable against Sellers in accordance with
its terms. Upon the execution and delivery by Sellers of the Global Escrow
Agreement and the Employment Agreements (collectively, the "Sellers' Closing
Documents"), the Sellers' Closing Documents will constitute the legal, valid,
and binding obligations of Sellers, enforceable against Sellers in accordance
with their respective terms. Sellers have the absolute and unrestricted
right, power, authority, and capacity to execute and deliver this Agreement
and the Sellers' Closing Documents and to perform their obligations under
this Agreement and the Sellers' Closing Documents.
2.3 NO CONFLICT. Neither the execution and delivery of this
Agreement nor the consummation or performance of any of the contemplated
transactions by Sellers will violate or constitute a default under any
mortgage, indenture, deed of trust, lease, contract, agreement, license or
other instrument or any order, judgement or ruling of any governmental
authority to which either Seller is subject, or to the best knowledge of
Sellers, any of the property of the Company is bound, or result in the
creation of any mortgage, pledge, lien, charge or encumbrance upon any of the
assets of the Company or the loss of any license or other contractual right
with respect thereto, except in
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each case for any of the foregoing which is not, individually or in the
aggregate, material to the Company.
Except as may be set forth in Exhibit A, no Seller or the Company is or
will be required to give any notice to or obtain any consent from any person
in connection with the execution and delivery of this Agreement or the
consummation or performance of the transaction contemplated hereby.
2.4 CAPITALIZATION. The authorized capital stock of 593693 B.C,
LTD. consists of 5,000 shares of common stock, no par value per share, of
which 100 shares are issued and outstanding and constitute the Shares.
Sellers are and will be on the Closing Date the record and beneficial owners
and holders of the Shares, free and clear of all Encumbrances. ALL FOURS
DISTRIBUTING, INC. owns 51 of the Shares and JASON DUPUIS owns 49 of the
Shares. No legend or other reference to any purported Encumbrance appears
upon any certificate representing equity securities of the Company. All of
the outstanding equity securities of the Company have been duly authorized
and validly issued and are fully paid and nonassessable. There are no
Contracts relating to the issuance, sale, or transfer of any equity
securities or other securities of the Company. None of the outstanding equity
securities or other securities of the Company was issued in violation of the
Securities Act or any state law regulating the sale and issuance of
securities. The Company does not own, nor does it have any Contract to
acquire, any equity securities or other securities of any other business or
any direct or indirect equity or ownership interest in any other business.
2.5 FINANCIAL STATEMENTS. Sellers have delivered to Buyer an
unaudited balance sheet of the Company as of July 31, 1999 (the "Balance
Sheet"), and the related unaudited statements of income, changes in
stockholders' equity, and cash flow. Such financial statements and notes
were prepared in accordance with GAAP, subject, in the case of interim
financial statements, to normal recurring year-end adjustments (the effect of
which will not, individually or in the aggregate, be materially adverse) and
the absence of notes (that, if presented, would not differ materially from
those included in the balance sheet); the financial statements referred to in
this Section reflect the consistent application of such accounting principles
throughout the periods involved, except as disclosed in the notes to such
financial statements. No financial statements of any person or entity other
than the Company are required by GAAP to be included in the consolidated
financial statements of the Company. Also attached as Exhibit J are an
unaudited Balance Sheet and Income Statement for the Company for the period
ending October 17, 1999.
2.6 BOOKS AND RECORDS. The books of account, minute books, stock
record books, and other records of the Company, all of which have been made
available to Buyer, are complete and correct and have been maintained in
accordance with sound business practices. The minute books of the Company
contain accurate and complete records of all meetings held of, and corporate
action taken by, the stockholders, the Boards of Directors, and committees of
the Boards of Directors of the Company. At the Closing, all of those books
and records will be in the possession of the Company.
2.7 TITLE TO PROPERTIES; ENCUMBRANCES. Sellers have delivered to
Buyer a complete and accurate list of all inventory and personal property
interests owned by the Company. The "Inventory" is itemized in Exhibit A,
pages 1-4. The "Fixed Assets" are itemized in Exhibit A-1, pages 6-10. The
Company
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owns all the properties and assets that have been disclosed to Buyer. All
material properties disclosed as being owned by the Company are owned free
and clear of all liens and encumbrances except as previously disclosed in
writing to Buyer.
2.8 CONDITION AND SUFFICIENCY OF ASSETS. To the best of Sellers'
knowledge, except as set forth in Exhibit B, the Company's property and
assets are in good operating condition and repair, and are adequate for the
uses to which they are being put, and none of such property and assets are in
need of maintenance or repairs except for ordinary, routine maintenance and
repairs that are not material in nature or cost. The property and assets of
the Company are sufficient for the continued conduct of the Company's
business after the Closing in substantially the same manner as conducted
prior to the Closing.
2.9 ACCOUNTS RECEIVABLE. All accounts receivable of the Company
that are reflected in the accounting records of the Company as of the Closing
Date (collectively, the "Accounts Receivable") represent valid obligations
arising from sales actually made or services actually performed in the
ordinary course of business. To the best of Sellers' knowledge, unless paid
prior to the Closing Date, the Accounts Receivable are or will be as of the
Closing Date current and collectible. Absent any unforeseen events, each of
the Accounts Receivable historically has been collected in full within ninety
days after the day on which it first becomes due and payable. Except as may
be set forth on Exhibit C referred to below, there is not any pending, or to
Sellers' knowledge threatened, contest or claim challenging the validity of
any of the Accounts Receivable.
2.10 NO UNDISCLOSED LIABILITIES. Except as may be set forth in
Exhibit D, the Company has no liabilities or obligations of any nature
(whether known or unknown and whether absolute, accrued, contingent, or
otherwise) except for liabilities or obligations reflected or reserved
against in the Balance Sheet and current liabilities incurred in the ordinary
course of business.
2.11 TAXES. To the best of Sellers' knowledge the Company has
filed or caused to be filed within the past five (5) years all tax returns
that are or were required to be filed by or with respect to the Company,
pursuant to applicable laws and regulations (except use tax returns). To
the best of Sellers' knowledge, all tax returns filed by the Company are
true, correct, and complete.
2.12 NO MATERIAL ADVERSE CHANGE. To the best of Sellers'
knowledge, since the date of the Balance Sheet, there has not been any
material adverse change in the business, operations, properties, prospects,
assets, or condition of the Company, and no event has occurred or
circumstance exists that may result in such a material adverse change.
2.13 CONTRACTS AND EMPLOYEE BENEFITS. Except as may be set forth
in Exhibit E, the Company is not a party to any contract or agreement that
involves annual payments by the Company in excess of $25,000, other than in
the ordinary course of business. The consummation of the transaction
contemplated herein will not result in the termination of any material
agreement or contract to which the Company is a party, nor give any party
thereto the right to cancel or terminate any such contract or agreement.
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2.14 [Intentionally Omitted]
2.15 COMPLIANCE WITH LEGAL REQUIREMENTS. Except as may be set
forth on Exhibit G, the Company has not received any notice of any violation
of any laws or regulations that are or were applicable to it or to the
conduct or operation of its business or the ownership or use of any of its
assets, which violation has not been cured as of the Closing Date, and to the
best knowledge of Sellers, the Company is in full compliance with all such
laws or regulations.
2.16 GOVERNMENTAL AUTHORIZATIONS. The Company has obtained all
governmental authorizations and permits that are necessary to permit the
Company to lawfully conduct and operate its business in the manner currently
conducted.
2.17 LEGAL PROCEEDINGS. Except as disclosed in Exhibit H, there is
no material lawsuit or legal or administrative or regulatory proceeding or
investigation pending against the Company or, to the best knowledge of
Sellers, threatened against the Company
2.18 ABSENCE OF CERTAIN CHANGES AND EVENTS. Except as may be set
forth in Exhibit I, since the date of the Balance Sheet, the Company has
conducted its business only in the ordinary course of business and there has
not been any:
(a) change in the Company's authorized or issued capital stock;
grant of any stock option or right to purchase shares of capital stock of
the Company; issuance of any security convertible into such capital stock;
grant of any registration rights; purchase, redemption, retirement, or other
acquisition by the Company of any shares of any such capital stock; or
declaration or payment of any dividend or other distribution or payment in
respect of shares of capital stock;
(b) amendment to the organizational documents of the Company;
(c) payment or increase by the Company of any extraordinary
bonuses, salaries, or other compensation to any stockholder, director,
officer, or (except in the ordinary course of business) employee or entry
into any employment, severance, or similar contract with any director,
officer, or employee;
(d) adoption of, or increase in the payments to or benefits
under, any profit sharing, bonus, deferred compensation, savings, insurance,
pension, retirement, or other employee benefit plan for or with any
employees of the Company;
(e) material damage to or destruction or loss of any asset or
property of the Company, whether or not covered by insurance, materially and
adversely affecting the properties, assets, business, financial condition,
or prospects of the Company taken as a whole;
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(f) entry into, termination of, or receipt of notice of
termination of (i) any license, distributorship, dealer, sales
representative, joint venture, credit, or similar agreement, or (ii) any
contract or transaction involving a total remaining commitment by or to the
Company of at least $25,000;
(g) sale (other than sales of inventory in the ordinary course
of business), lease, or other disposition of any asset or property of the
Company or mortgage, pledge, or imposition of any lien or other encumbrance
on any material asset or property of the Company;
(h) cancellation or waiver of any claims or rights with a value
to the Company in excess of $25,000; or
(i) material change in the accounting methods used by the
Company.
2.19 INSURANCE. The Company maintains policies of insurance in
such amounts, with such deductibles and against such risks and losses as are,
in its judgment, reasonable for the business and assets of the Company, and
Sellers will deliver to Buyer on the Closing Date certificates of insurance
setting forth the name of the insurance company, policy number and type of
coverage of all insurance policies maintained as of the date hereof with
respect to the Company's business operations, property, plant and equipment.
2.20 ENVIRONMENTAL MATTERS. There are no pending or, to the
knowledge of Sellers and the Company, threatened claims, encumbrances, or
other restrictions of any nature, resulting from any environmental, health,
and safety liabilities or arising under or pursuant to any environmental law,
with respect to or affecting any of the operations, properties and assets
(whether real, personal, or mixed) in which Sellers or the Company has or had
an interest.
2.21 DISCLOSURE. No representation or warranty of Sellers in this
Agreement and no statement in the Exhibits attached to this Agreement omits
to state a material fact necessary to make the statements herein or therein,
in light of the circumstances in which they were made, not misleading. There
is no fact known to either Seller that has specific application to either
Seller or the Company (other than general economic or industry conditions)
and that materially adversely affects or, as far as either Seller can
reasonably foresee, materially threatens, the assets, business, prospects,
financial condition, or results of operations of the Company (on a
consolidated basis) that has not been set forth in this Agreement or the
Exhibits attached hereto.
2.22 BROKERS OR FINDERS. Sellers and Sellers' agents have incurred
no obligation or liability, contingent or otherwise, for brokerage or
finders' fees or agents' commissions or other similar payment in connection
with this Agreement.
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3. REPRESENTATIONS AND WARRANTIES OF BUYER
Buyer represents and warrants to Sellers as follows:
3.1 ORGANIZATION AND GOOD STANDING. Buyer is a corporation duly
organized, validly existing, and in good standing under the laws of the State
of Nevada.
3.2 AUTHORITY; NO CONFLICT. This Agreement constitutes the legal,
valid, and binding obligation of Buyer, enforceable against Buyer in
accordance with its terms. Upon the execution and delivery by Buyer of the
Employment Agreements, and the Promissory Notes (collectively, the "Buyer's
Closing Documents"), the Buyer's Closing Documents will constitute the legal,
valid, and binding obligations of Buyer, enforceable against Buyer in
accordance with their respective terms. Buyer has the absolute and
unrestricted right, power, and authority to execute and deliver this
Agreement and the Buyer's Closing Documents and to perform its obligations
under this Agreement and the Buyer's Closing Documents. Except as set forth
in Exhibit G, neither the execution and delivery of this Agreement nor the
consummation or performance of any of the transactions contemplated hereby
will give any person the right to prevent, delay, or otherwise interfere with
any of the transactions contemplated hereby pursuant to:
(i) any provision of Buyer's Organizational Documents;
(ii) any resolution adopted by the board of directors or the
stockholders of Buyer;
(iii) any legal requirement or order to which Buyer may be
subject; or
(iv) any contract to which Buyer is a party or by which Buyer
may be bound.
Except as set forth in Exhibit G, Buyer is not and will not be required to
obtain any Consent from any person in connection with the execution and
delivery of this Agreement or the consummation or performance of any of the
transactions contemplated hereby.
3.3 INVESTMENT INTENT. Buyer is acquiring the Shares for its own
account and not with a view to their distribution within the meaning of
Section 2(11) of the Securities Act.
3.4 CERTAIN PROCEEDINGS. There is no pending legal proceeding
that has been commenced against Buyer and that challenges, or may have the
effect of preventing, delaying, making illegal, or otherwise interfering
with, any of the Contemplated Transactions. To Buyer's knowledge, there exist
no grounds for such proceeding, nor has any such proceeding been threatened.
3.5 BROKERS OR FINDERS. Buyer and its officers and agents have
incurred no obligation or liability, contingent or otherwise, for brokerage
or finders' fees or agents' commissions or other similar payment in
connection with this Agreement and will indemnify and hold Sellers harmless
from
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any such payment alleged to be due by or through Buyer as a result of the
action of Buyer or its officers or agents.
4. COVENANTS OF SELLERS PRIOR TO CLOSING DATE
4.1 ACCESS AND INVESTIGATION. Between the date of this Agreement
and the Closing Date, Sellers will, and will cause the Company and its
representatives to, (a) afford Buyer and its representatives and prospective
lenders and their representatives (collectively, "Buyer's Advisors") full and
free access to the Company's personnel, properties, contracts, books and
records, and other documents and data, (b) furnish Buyer and Buyer's Advisors
with copies of all such contracts, books and records, and other existing
documents and data as Buyer may reasonably request, and (c) furnish Buyer and
Buyer's Advisors with such additional financial, operating, and other data
and information as Buyer may reasonably request.
4.2 OPERATION OF THE BUSINESSES OF THE ACQUIRED COMPANIES.
Between the date of this Agreement and the Closing Date, Sellers will, and
will cause the Company to:
(a) conduct the business of the Company only in the ordinary
course of business;
(b) use their best efforts to preserve intact the current
business organization of the Company, keep available the services of the
current officers, employees, and agents of the Company, and maintain the
relations and good will with suppliers, customers, landlords, creditors,
employees, agents, and others having business relationships with the
Company;
(c) confer with Buyer concerning operational matters of a
material nature; and
(d) otherwise report periodically to Buyer concerning the
status of the business, operations, and finances of the Company.
4.3 NEGATIVE COVENANT. Except as otherwise expressly permitted by
this Agreement, between the date of this Agreement and the Closing Date,
Sellers will not, and will cause the Company not to, without the prior
consent of Buyer, take any affirmative action, or fail to take any reasonable
action within their or its control, as a result of which any material change
in the business of the Company is likely to occur.
4.4 REQUIRED APPROVALS. As promptly as practicable after the date
of this Agreement, Sellers will, and will cause the Company to, make all
reports and filings required by applicable laws and regulations to be made by
them in order to consummate the transactions contemplated hereby. Between
the date of this Agreement and the Closing Date, Sellers will, and will cause
the Company to, (a) cooperate with Buyer with respect to all filings that
Buyer elects to make or is required by
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applicable laws and regulations to make in connection with the transactions
contemplated hereby, and (b) cooperate with Buyer in obtaining all consents
necessary or appropriate to consummate the transactions contemplated hereby.
4.5 NOTIFICATION. Between the date of this Agreement and the
Closing Date, each Seller will promptly notify Buyer in writing if such
Seller or the Company becomes aware of any fact or condition that causes or
constitutes a Breach of any of Sellers' representations and warranties as of
the date of this Agreement, or if such Seller or the Company becomes aware of
the occurrence after the date of this Agreement of any fact or condition that
would (except as expressly contemplated by this Agreement) cause or
constitute a Breach of any such representation or warranty had such
representation or warranty been made as of the time of occurrence or
discovery of such fact or condition. Should any such fact or condition
require any change in this Agreement or the Exhibits attached to this
Agreement, Sellers will promptly deliver to Buyer a supplement to this
Agreement or the Exhibits attached hereto specifying such change. During the
same period, each Seller will promptly notify Buyer of the occurrence of any
Breach of any covenant of Sellers in this Section or of the occurrence of any
event that may make the satisfaction of the conditions to closing set forth
in this Agreement impossible or unlikely.
4.6 PAYMENT OF INDEBTEDNESS BY RELATED PERSONS. Except as
expressly provided in this Agreement, Sellers will cause all indebtedness
owed to the Company by either Seller or any related person of either Seller
to be paid in full prior to Closing.
4.7 NO NEGOTIATION. Until such time, if any, as this Agreement is
terminated, Sellers will not, and will cause the Company and each of their
representatives not to, directly or indirectly solicit, initiate, or
encourage any inquiries or proposals from, discuss or negotiate with, provide
any non-public information to, or consider the merits of any unsolicited
inquiries or proposals from, any person (other than Buyer) relating to any
transaction involving the sale of the business or assets (other than in the
ordinary course of business) of the Company, or any of the capital stock of
the Company, or any merger, consolidation, business combination, or similar
transaction involving the Company.
4.8 BEST EFFORTS. Between the date of this Agreement and the
Closing Date, Sellers will use their best efforts to cause the conditions to
closing set forth in this Agreement to be satisfied.
5. COVENANTS OF BUYER PRIOR TO CLOSING DATE
5.1 APPROVALS OF GOVERNMENTAL AUTHORITIES. As promptly as
practicable after the date of this Agreement, Buyer will make all filings and
obtain all consents required by applicable laws and regulations in order to
consummate the transactions contemplated hereby.
5.2 BEST EFFORTS. Between the date of this Agreement and the
Closing Date, Buyer will use its best efforts to cause the conditions in
Sections 6 and 7 to be satisfied.
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6. CONDITIONS PRECEDENT TO BUYER'S OBLIGATION TO CLOSE
Buyer's obligation to purchase the Shares and to take the other actions
required to be taken by Buyer at the Closing is subject to the satisfaction,
at or prior to the Closing, of each of the following conditions (any of which
may be waived by Buyer, in whole or in part):
6.1 ACCURACY OF REPRESENTATIONS. All of Sellers' representations
and warranties in this Agreement (considered collectively), and each of these
representations and warranties (considered individually), must have been
accurate in all material respects as of the date of this Agreement, and must
be accurate in all material respects as of the Closing Date as if made on the
Closing Date.
6.2 SELLERS' PERFORMANCE. All of the covenants and obligations
that Sellers is required to perform or to comply with pursuant to this
Agreement at or prior to the Closing (considered collectively), and each of
these covenants and obligations (considered individually), must have been
duly performed and complied with in all material respects. Sellers must have
delivered each of the documents required to be delivered by Sellers pursuant
to Section 1.5.1.
6.3 CONSENTS. Each of the consents required to consummate the
transactions contemplated hereby must have been obtained and must be in full
force and effect.
6.4 NO PROCEEDINGS. Since the date of this Agreement, there must
not have been commenced or threatened against Buyer, or against any person
affiliated with Buyer, any proceeding (a) involving any challenge to, or
seeking damages or other relief in connection with, any of the transactions
contemplated hereby, or (b) that may have the effect of preventing, delaying,
making illegal, or otherwise interfering with any of the transactions
contemplated hereby.
6.5 NO CLAIM REGARDING STOCK OWNERSHIP OR SALE PROCEEDS. There
must not have been made or threatened by any person any claim asserting that
such person (a) is the holder or the beneficial owner of, or has the right to
acquire or to obtain beneficial ownership of, any stock of, or any other
voting, equity, or ownership interest in the Company, or (b) is entitled to
all or any portion of the purchase price payable for the Shares.
6.6 NO PROHIBITION. Neither the consummation nor the performance
of any of the transactions contemplated hereby will, directly or indirectly
(with or without notice or lapse of time), materially contravene, or conflict
with, or result in a material violation of, or cause Buyer or any person
affiliated with Buyer to suffer any material adverse consequence under, any
applicable laws or regulations.
7. CONDITIONS PRECEDENT TO SELLERS' OBLIGATION TO CLOSE
Sellers' obligation to sell the Shares and to take the other actions
required to be taken by Sellers at the Closing is subject to the
satisfaction, at or prior to the Closing, of each of the following conditions
(any of which may be waived by Sellers, in whole or in part):
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7.1 ACCURACY OF REPRESENTATIONS. All of Buyer's representations
and warranties in this Agreement (considered collectively), and each of these
representations and warranties (considered individually), must have been
accurate in all material respects as of the date of this Agreement and must
be accurate in all material respects as of the Closing Date as if made on the
Closing Date.
7.2 BUYER'S PERFORMANCE. All 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 (considered collectively), and each of
these covenants and obligations (considered individually), must have been
performed and complied with in all material respects. Buyer must have
delivered each of the documents required to be delivered by Buyer pursuant to
Section 1.5.2 and must have made the cash payments required to be made by
Buyer pursuant to Section 1.5.2.
7.3 CONSENTS. All of the consents required to be obtained from
Buyer must have been obtained and must be in full force and effect.
7.4 NO PROHIBITION. Neither the consummation nor the performance
of any of the transactions contemplated hereby will, directly or indirectly
(with or without notice or lapse of time), materially contravene, or conflict
with, or result in a material violation of, or cause Sellers or any person
affiliated with Sellers to suffer any material adverse consequence under, any
applicable laws or regulations.
8. TERMINATION
8.1 TERMINATION EVENTS. This Agreement may, by notice given prior
to or at the Closing, be terminated:
(a) by either Buyer or Sellers if a material breach of any
provision of this Agreement has been committed by the other party and such
breach has not been waived;
(b) (i) by Buyer if any of the conditions in Section 6 has not
been satisfied as of the Closing Date or if satisfaction of such a condition
is or becomes impossible (other than through the failure of Buyer to comply
with its obligations under this Agreement) and Buyer has not waived such
condition on or before the Closing Date; or (ii) by Sellers, if any of the
conditions in Section 7 has not been satisfied as of the Closing Date or if
satisfaction of such a condition is or becomes impossible (other than
through the failure of Sellers to comply with their obligations under this
Agreement) and Sellers has not waived such condition on or before the
Closing Date; or
(c) by mutual consent of Buyer and Sellers.
8.2 EFFECT OF TERMINATION. Each party's right of termination under
Section 8.1 is in addition to any other rights it may have under this Agreement
or otherwise, and the exercise of a right
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of termination will not be an election of remedies. If this Agreement is
terminated pursuant to Section 8.1, all further obligations of the parties
under this Agreement will terminate, except that the obligations in Sections
10.1 and 10.3 will survive; provided, however, that if this Agreement is
terminated by a party because of the breach of the Agreement by the other
party or because one or more of the conditions to the terminating party's
obligations under this Agreement is not satisfied as a result of the other
party's failure to comply with its obligations under this Agreement, the
terminating party's right to pursue all legal remedies will survive such
termination unimpaired.
9. INDEMNIFICATION; REMEDIES
9.1 SURVIVAL; RIGHT TO INDEMNIFICATION NOT AFFECTED BY KNOWLEDGE.
All representations, warranties, covenants, and obligations in this Agreement
and the Exhibits attached hereto, will survive the Closing. The right to
indemnification, payment of damages or other remedy based on such
representations, warranties, covenants, and obligations will not be affected
by any investigation conducted with respect to, or any knowledge acquired (or
capable of being acquired) at any time, whether before or after the execution
and delivery of this Agreement or the Closing Date, with respect to the
accuracy or inaccuracy of or compliance with, any such representation,
warranty, covenant, or obligation. The waiver of any condition based on the
accuracy of any representation or warranty, or on the performance of or
compliance with any covenant or obligation, will not affect the right to
indemnification, payment of damages, or other remedy based on such
representations, warranties, covenants, and obligations.
9.2 INDEMNIFICATION AND PAYMENT OF DAMAGES BY SELLERS. Sellers,
jointly and severally, will indemnify and hold harmless Buyer, the Company,
and their respective representatives, stockholders, controlling persons, and
affiliates (collectively, the "Indemnified Persons") for, and will pay to the
Indemnified Persons the amount of, any loss, liability, claim, damage
(including incidental and consequential damages), expense (including costs of
investigation and defense and reasonable attorneys' fees) or diminution of
value, whether or not involving a third-party claim (collectively,
"Damages"), arising, directly or indirectly, from or in connection with:
(a) any and all loss, liability or damage suffered or incurred by
Buyer in respect of any debt, obligation or liability of the Company or of
Seller not disclosed in this Agreement, any of the Exhibits attached hereto,
or in writing to Buyer prior to the Closing Date;
(b) any breach of any representation or warranty made by Sellers in
this Agreement, the Exhibits attached hereto, or any other certificate or
document delivered by Sellers pursuant to this Agreement;
(c) any breach of any representation or warranty made by Sellers in
this Agreement as if such representation or warranty were made on and as of
the Closing Date;
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(d) any Breach by either Seller of any covenant or obligation of such
Seller in this Agreement;
(e) any claim by any Person for brokerage or finder's fees or
commissions or similar payments based upon any agreement or understanding
alleged to have been made by any such Person with either Seller or the
Company (or any person acting on their behalf) in connection with any of the
transactions contemplated hereby.
The remedies provided in this Section 9.2 will not be exclusive of or limit
any other remedies that may be available to Buyer or the other Indemnified
Persons.
9.3 INDEMNIFICATION AND PAYMENT OF DAMAGES BY BUYER. Buyer will
indemnify and hold harmless Sellers, and will pay to Sellers the amount of
any damages arising, directly or indirectly, from or in connection with (a)
any breach of any representation or warranty made by Buyer in this Agreement
or in any certificate delivered by Buyer pursuant to this Agreement, (b) any
breach by Buyer of any covenant or obligation of Buyer in this Agreement, or
(c) any claim by any person for brokerage or finder's fees or commissions or
similar payments based upon any agreement or understanding alleged to have
been made by such person with Buyer (or any person acting on its behalf) in
connection with any of the transactions contemplated hereby.
10. GENERAL PROVISIONS
10.1 EXPENSES. Except as otherwise expressly provided in this
Agreement, each party to this Agreement will bear its respective expenses
incurred in connection with the preparation, execution, and performance of
this Agreement and the transactions contemplated hereby, including all fees
and expenses of agents, representatives, counsel, and accountants. In the
event of termination of this Agreement, the obligation of each party to pay
its own expenses will be subject to any rights of such party arising from a
breach of this Agreement by another party.
10.2 PUBLIC ANNOUNCEMENTS. Any public announcement or similar
publicity with respect to this Agreement or the Contemplated Transactions
will be issued, if at all, at such time and in such manner as the parties
mutually agree. Sellers and Buyer will consult with each other concerning the
means by which the Company's employees, customers, and suppliers and others
having dealings with the Company will be informed of the transactions
contemplated hereby.
10.3 CONFIDENTIALITY. Between the date of this Agreement and the
Closing Date, Buyer and Sellers will maintain in confidence, and will cause
the directors, officers, employees, agents, and advisors of Buyer and the
Company to maintain in confidence, any written, oral, or other information
obtained in confidence from another party or the Company in connection with
this Agreement or the transactions contemplated hereby, unless (a) such
information is already known to such party or to others not bound by a duty
of confidentiality or such information becomes publicly available through no
fault of such party, (b) the use of such information is necessary or
appropriate in making any filing or obtaining any consent or approval
required for the consummation of the transactions contemplated
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hereby, or (c) the furnishing or use of such information is required by or
necessary or appropriate in connection with legal proceedings. If the
transactions contemplated hereby are not consummated, each party will return
or destroy as much of such written information as the other party may
reasonably request.
10.4 NOTICES. All notices, consents, waivers, and other
communications under this Agreement must be in writing and will be deemed to
have been duly given when (a) delivered by hand (with written confirmation of
receipt), (b) sent by telecopier (with written confirmation of receipt),
provided that a copy is mailed by registered mail, return receipt requested,
or (c) when received by the addressee, if sent by a nationally recognized
overnight delivery service (receipt requested), in each case to the
appropriate addresses and telecopier numbers set forth below (or to such
other addresses and telecopier numbers as a party may designate by notice to
the other parties):
Sellers:
Mitchell J. Martin
P.O. Box 16423
Denver, Colorado 80216-0423
Phone: (303)
Fax: (303)
Lloyd E. Peterman
P.O. Box 16423
Denver, Colorado 80216-0423
Phone: (303)
Fax: (303)
with a copy to:
Fenton A. Bain, P.C.
3100 Arapahoe Avenue, Suite 400
Boulder, CO 80303
Phone: (303) 443-5083
Fax: (303) 443-5479
Buyer:
Venturi Technologies, Inc.
763 North 530 East
Orem, Utah 84097
Attn: Gaylord M. Karren, Chairman and CEO
Phone: (801) 235-9552
Fax: (801) 235-1731
(With a copy to Randy K. Johnson, Chief Counsel)
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10.5 JURISDICTION; SERVICE OF PROCESS. Any action or proceeding
seeking to enforce any provision of, or based on any right arising out of,
this Agreement may be brought against any of the parties in the courts of the
State of Utah, County of Salt Lake, or, if it has or can acquire
jurisdiction, in the United States District Court for the Central District of
Utah, and each of the parties consents to the jurisdiction of such courts
(and of the appropriate appellate courts) in any such action or proceeding
and waives any objection to venue laid therein. Process in any action or
proceeding referred to in the preceding sentence may be served on any party
anywhere in the world.
10.6 FURTHER ASSURANCES. The parties agree (a) to furnish upon
request to each other such further information, (b) to execute and deliver to
each other such other documents, and (c) to do such other acts and things,
all as the other party may reasonably request for the purpose of carrying out
the intent of this Agreement and the documents referred to in this Agreement.
10.7 WAIVER. The rights and remedies of the parties to this
Agreement are cumulative and not alternative. Neither the failure nor any
delay by any party in exercising any right, power, or privilege under this
Agreement or the documents referred to in this Agreement will operate as a
waiver of such right, power, or privilege, and no single or partial exercise
of any such right, power, or privilege will preclude any other or further
exercise of such right, power, or privilege or the exercise of any other
right, power, or privilege. To the maximum extent permitted by applicable
law, (a) no claim or right arising out of this Agreement or the documents
referred to in this Agreement can be discharged by one party, in whole or in
part, by a waiver or renunciation of the claim or right unless in writing
signed by the other party; (b) no waiver that may be given by a party will be
applicable except in the specific instance for which it is given; and (c) no
notice to or demand on one party will be deemed to be a waiver of any
obligation of such party or of the right of the party giving such notice or
demand to take further action without notice or demand as provided in this
Agreement or the documents referred to in this Agreement.
10.8 ENTIRE AGREEMENT AND MODIFICATION. This Agreement supersedes
all prior agreements between the parties with respect to its subject matter
(including the Letter of Intent between Buyer and Sellers dated August 4,
1999) and constitutes (along with the documents referred to in 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 except by a written agreement executed by the party to be
charged with the amendment.
10.9 ASSIGNMENTS, SUCCESSORS, AND NO THIRD-PARTY RIGHTS. Neither
party may assign any of its rights under this Agreement without the prior
consent of the other parties, except that Buyer may assign any of its rights
under this Agreement to any Subsidiary of Buyer. Subject to the preceding
sentence, this Agreement will apply to, be binding in all respects 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. This Agreement and all of its provisions and
conditions are for the sole and exclusive benefit of the parties to this
Agreement and their successors and assigns.
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10.10 SEVERABILITY. 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.
10.11 SECTION HEADINGS, CONSTRUCTION. The headings of Sections in
this Agreement are provided for convenience only and will not affect its
construction or interpretation. All references to "Section" or "Sections"
refer to the corresponding Section or Sections of this Agreement. All words
used in this Agreement will be construed to be of such gender or number as
the circumstances require. Unless otherwise expressly provided, the word
"including" does not limit the preceding words or terms.
10.12 TIME OF ESSENCE. With regard to all dates and time periods
set forth or referred to in this Agreement, time is of the essence.
10.13 GOVERNING LAW. This Agreement will be governed by the laws of
the State of Utah without regard to conflicts of laws principles.
10.14 TAX ELECTIONS. Sellers acknowledge that the Buyer may, in its
sole discretion, make certain tax elections with respect to this transaction,
including, but not necessarily limited to, an election under Section 338 of
the Internal Revenue Code of 1986, as amended, to treat this transaction for
tax purposes as though it were a purchase and sale of assets rather than
stock.
10.15 COUNTERPARTS. 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.
10.16 The Parties agree that with each disbursement or release from
Escrow that upon instructions all payments on the Note may be made directly
to the constituent parties comprising the Seller Entities. VTI further
agrees to forward a photocopy of all checks or wire transfer debits made to
the Escrow Agent.
IN WITNESS WHEREOF, the parties have executed and delivered this Agreement
as of the date first written above.
BUYER:
VENTURI TECHNOLOGIES, INC.
a Nevada corporation
By: /s/ Gaylord Karren
-------------------------
Its: CEO
---------------------
16
<PAGE>
STATE OF )
) ss.
COUNTY OF )
The foregoing instrument was acknowledged before me this 25th day of
October, 1999, by Gaylord Karren of VENTURI TECHNOLOGIES, INC., a Nevada
corporation.
Witness my hand and official seal.
My commission expires: 5-15-2001.
/s/ Vickie F. Johnson
[SEAL] -------------------------
Notary Public
17
<PAGE>
SELLERS:
ALL FOURS DISTRIBUTING, INC.,
a Colorado corporation
By: /s/ Mitchell Martin, V.P.
-------------------------------
Mitchell Martin, Vice President
By: /s/ Lloyd E. Peterman
-------------------------------
Lloyd E. Peterman, President
----------------------------------
JASON DUPUIS
STATE OF COLORADO )
) ss.
COUNTY OF ADAMS )
The foregoing instrument was acknowledged before me this 19th day of
October, 1999, by Lloyd R. Peterman, President, and Mitchell J. Martin, Vice
President of ALL FOURS DISTRIBUTING, INC., a Colorado corporation, general
partner of MPI OF NEVADA, a Colorado general partnership.
Witness my hand and official seal.
My commission expires: 3/20/2003.
/s/ Lisa M. Huber
[SEAL] -------------------------
Notary Public
18
<PAGE>
STATE OF )
) ss.
COUNTY OF )
The foregoing instrument was acknowledged before me this _____ day of
October, 1999, by JASON DUPUIS.
Witness my hand and official seal.
My commission expires: ___________________________.
-------------------------
Notary Public
19
