AGREEMENT FOR PURCHASE AND SALE OF ASSETS
THIS AGREEMENT is made and entered into as of the 7th day of March,
2000, by and among Cutco Acquisition Corp., a Minnesota corporation ("Buyer"),
Cutco Salons, Inc., a New York corporation ("Seller"), and Yellowave
Corporation, a New York corporation, the sole shareholder of Seller
("Shareholder").
RECITALS
A. Seller directly or through a wholly-owned subsidiary owns (i) certain
rights as a franchise agreements, license agreements, development agreements,
sublease agreements, promissory notes and any other agreements with its
franchises (which are collectively referred to herein as the "Franchise
Agreements" and are described further in detail on the attached Exhibit A); (ii)
the rights to use, and license others to use, the service marks and trademarks
set forth on the attached Exhibit B (collectively the "Trademarks"); (iii) the
rights as tenant under the real property lease agreements set forth on the
attached Exhibit C (collectively the "Leases"); and (iv) all issued and
outstanding shares of capital stock of the companies set forth on the attached
Exhibit D (individually, a "Subsidiary" and collectively, the "Subsidiaries");
and (v) all other assets, including inventory, accounts receivable, notes
receivable, unpaid royalties, arbitration awards and supplies, related to or
used in connection with Seller's franchise business. The foregoing assets
described in A(i) through A(v) above are hereinafter referred to as the Assets.
Seller's cash is excluded from the Assets.
B. Seller desires to sell the Assets to Buyer and Buyer desires to purchase
the Assets from Seller, all on the following terms and conditions.
NOW, THEREFORE, in consideration of mutual covenants, agreements and
considerations set forth herein, the parties as follows:
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1. Purchase and Sale.
1.1 Assets. On and subject to the terms and conditions of this Agreement,
Buyer agrees to purchase the Assets from Seller and Seller agrees to sell the
Assets to Buyer on the Closing Date (as hereinafter defined).
1.2 Purchase Price. The purchase price for the Assets shall be $3,600,000
("Purchase Price") payable as follows:
(a) $3,300,00 in cash paid to Seller on Closing Date
(b) $300,000 shall be placed in escrow on the Closing Date (the "Escrow
Fund"), in an interest bearing account with LaSalle National Bank,
Chicago, Illinois (the "Escrow Agent"). This amount, plus all accrued
interest, less any deductions provided for herein, shall be released
to Seller ninety (90) days thereafter.
1.3 Allocation of Purchase Price. Buyer and Seller agree that the purchase
price shall be allocated as follows:
Cash $ 0
Inventory $2,000
Receivables $679,000
Furniture, Fixtures, Leasehold $60,000
Improvements and Equipment
Goodwill and other Intangibles $ 2,859,000
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TOTAL: $ 3,600,000
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1.4 Obligations of Seller. All liabilities of Seller, whether disclosed or
undisclosed, shall be paid by Seller and Seller shall indemnify and hold Buyer
harmless against all such liabilities. Except as otherwise provided herein,
Buyer shall assume no liabilities or obligations of Seller. If Buyer is required
to pay any liabilities of Seller, Buyer shall deduct such amount from the
payments described in Section 1.2.
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1.5 Obligations of Buyer. Buyer agrees to assume, pay and perform each and
every obligation of Seller which accrues on or after the Closing Date, in
connection with the operations of Seller's franchise business and Buyer shall
indemnify and hold Seller harmless against all such liabilities. The parties
agree that Buyer shall not assume any liability for obligations which accrue or
relate to any period of time prior to the Closing Date.
1.6 Prorations. All operating costs relating to Seller's business shall be
allocated between Seller and Buyer based upon the Closing Date, such that Seller
shall pay that portion of the operating costs and receive that portion of the
income (excepting any unpaid receivables, promissory notes, arbitration awards
or delinquent royalty/license fee accounts, all of which shall be the sole
property of Buyer as the Closing Date) pertaining to that period of time up to
and including the day prior to the Closing Date and Buyer shall pay that portion
of the operating costs and receive that portion of the income on and after the
Closing Date. The parties will attempt to make the necessary adjustments within
sixty (60) days after the Closing Date, and make such necessary payments within
the same time period.
2. The Closing. The transaction provided for herein shall be closed on
March 9, 2000, by overnight delivery of documents, or by such necessary payments
within the same time period.
3. Instruments of Transfer; Further Assurances.
a) At the Closing, Seller shall deliver to Buyer:
i. A Bill of Sale and Assignment(s) transferring to Buyer ownership
of the Assets free and clear of all liens, security interests and
other encumbrances;
ii. Certificates of Good Standing for Seller and each Subsidiary from
the Secretary of State offices where each such company is doing
business;
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iii. Certified resolutions of the Boards of Directors and Shareholder
of Seller and each Subsidiary approving this transaction;
iv. The Non-Competition Agreement pursuant to Section 9 herein, duly
executed by Seller and Shareholder; and
v. Such other and further instruments of transfer as shall in the
reasonable opinion of Buyer's counsel be necessary or appropriate
to consummate the purchase and sale.
(b) At the Closing, Buyer shall deliver the amounts to Seller and
Escrow Agent as set forth in Section 1.2 herein.
4. Representations and Warranties of Seller and Shareholder. For all
purposes of this Section 4, each reference to Seller shall also refer to and
include Subsidiary. Seller and Shareholder represent and warrant to Buyer as
follows:
(a) Organization; Good Standing. Seller is a Corporation duly
organized, validly existing and in good standing under the laws of the State of
New York with all requisite power and authority to perform its obligations
hereunder.
(b) Authorization. The execution, delivery and performance of this
Agreement by Seller and has been duly authorized by the Board of Directors of
Seller and the Agreement constitutes the valid and binding obligations of
Seller.
(c) Shareholder Approval. The execution, delivery and performance of
this Agreement by Seller has been duly authorized by the shareholders of Seller.
(d) Financial Statements. Seller has delivered to Buyer copies of the
following financial statements of Seller all of which are attached hereto as
Exhibit E ("Financial Statements "), all of which are true and complete:
i. Balance Sheet of Seller for the period ended December 31, 1999;
ii. Statement of Income for the six months ended December 31, 1999;
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iii. Letter dated February 11, 2000 ("Letter Summary"), summarizing
royalties paid and not paid, Notes paid and not paid and actual
monies received from royalties and notes;
iv. Installment Note Scheduled as of December 31, 1999;
v. Royalty Sales Report for period January 3, 1999 to December 26,
1999 (generated on February 3, 2000);
vi. Royalty Delinquency Report as of December 26, 1999;
vii. Royalty Reports Summary, 1999;
viii. Cutco Industries' projections for 2000; and
ix. Royalties reported for period January 3, 1999 to December 26,
1999.
The Financial Statements fairly present the financial condition
and assets and liabilities of Seller as of the date indicated, and the results
of operations of Seller for the period then ended. The individual Royalty
Delinquencies, Notes Outstanding and Accounts Receivable balances as of the
Closing Date shall equal or exceed the respective individual balances as of
December 31, 1999 as set forth in the Letter Summary.
(e) Absence of Undisclosed Liabilities. Except to the extent
reflected, reserved, or otherwise provided for in the Financial Statements,
Seller does not have any liabilities or obligations of any nature relating to
the operations or business conducted at the Stores, whether accrued, absolute,
contingent or otherwise, and whether due or to become due, other than those
incurred in the ordinary course of business since December 31, 1999. there is no
basis for assertion against Seller of any claim or liability relating to said
operations or business in any amount not fully reflected or provided for in the
Financial Statements or covered by insurance policies of Seller.
(f) No Adverse Changes. Since December 31, 1999, there have not been
(i) any adverse changes in the financial condition or in the operations,
business, prospects, properties or Assets from that shown on the Financial
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Statements, or (ii) any material damage, destruction or loss to any of the
properties or Assets, whether or not covered by insurance, which have adversely
affected or impaired or which does or may reasonably be expected to adversely
affect or impair the ability of Seller to conduct its business, or (iii) any
negotiation, or request for negotiation, for any representation or any labor
contract or any event or condition relating to Seller's business of Seller.
(g) Tax Returns and Payments. Except for returns which are not
yet due (provided they are filed on or prior to their due date), Seller will
have at Closing duly filed all federal, state and local tax returns and reports
required to be filed and now have and will have at Closing fully paid or
established adequate reserves for the proper payment of all taxes (whether or
not shown on any tax return) and other governmental charges upon it or its
properties, assets, licenses or sales (excluding income taxes based on Seller's
net income). There are no tax rulings outstanding, or requested rulings, that
would affect any of Seller's tax liabilities. All monies required to be withheld
by Seller from employees for income taxes, Social Security and unemployment
insurance taxes have been collected or withheld, and either paid to the
respective governmental agencies or set aside in accounts for such purpose, or
accrued, reserved against, and entered upon the books of Seller. Any and all
Internal Revenue Service adjustments to Seller's taxes have been reported to all
applicable states and all states relating to such adjustments have been paid.
(h) Title to property and Assets. Seller has good title to all
its Assets, subject to no mortgage, pledge, lien, security interest, lease,
charge, encumbrance or conditional sale or other title retention agreement.
(i) Franchise Agreements. Except as set forth in Exhibit F,
Seller is not in default an any respect under any Franchise Agreements, nor has
any event occurred which the passage of time or the giving of notice or both
would constitute such a default. The Franchise Agreements are in full force and
affect as of the date hereof and there have been no amendments, modifications,
or alterations to the Franchise Agreements except as previously disclosed in
writing by Seller to Buyer. The continuation, validity and effectiveness of all
such Franchise Agreements will in no way be adversely affected by the
consummation of this Agreement. The Franchise Agreements are freely assignable
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from Seller to Buyer, and such assignment will not be in default with respect to
any of the Franchise Agreements. There are presently no negotiations pending
between the parties to the Franchise Agreements, nor modification of the
Franchise Agreements and Seller has no commitments or understandings, oral or
written, relating to the Franchise Agreements except as contained in the
particular Franchise Agreements. Seller has provided Buyer with a copy of all
Franchise Agreements.
(j) Leases. The Leases are in good standing, valid and effective
in accordance with their respective terms and there are no existing defaults or
events which with notice or lapse of time or both would constitute defaults.
Seller has not received any written notice of any notice of any claim default
with respect to the Leases. Seller has provided Buyer with a copy of all Leases.
(k) Other Leases and Licenses. Excepting the Franchise Agreements
and Leases, a list of all leases of real property and all license agreements to
which Seller is a party, and related to the Assets, is set forth in Exhibit G.
All such leases and licenses are in good standing, valid and effective in
accordance with their respective terms, and there are no existing defaults or
events of default or events which with notice or lapse of time or both would
constitute defaults. Seller has not received any notice of any claimed default
with respect to any leases and licenses. Neither the execution of this Agreement
nor the consummation of the transaction contemplated by this Agreement will
result in a default in, or will be deemed to be an assignment of, Seller's
leases and/or licenses. There are presently pending between Seller and the other
party of such leases and/or licenses for the modification of any such lease or
license except as contemplated herein. Seller has no commitments or
understandings, oral or written, relating to such leases or licenses, except as
contained in the particular leases or licenses, listed on Exhibit G. Seller has
provided Buyer with a copy of all leases, licenses and amendments thereto.
(l) Condition of Property. Seller's property and equipment will
be at Closing, in good operating condition and repair, subject to normal wear
and maintenance, and in conformity with all applicable ordinances and
regulations, and environmental, building, zoning or other laws.
(m) Insurance. All the insurable properties of Seller are insured
for Seller's benefit, in amounts deemed adequate by Seller's management, against
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all risks usually insured against by persons operating similar properties in the
localities where such properties are located, under valid and enforceable
policies issued by insurers of recognized responsibility.
(n) Litigation, etc. Except as set forth in Exhibit H, there in
no suit, action or litigation, or administrative, arbitration or other
proceeding or, any governmental investigation or any change in the
environmental, zoning or building laws, regulations or ordinances affecting the
real property or leasehold property of Seller or its business operations,
pending or to the knowledge of seller or shareholder, threatened, that might,
severally or in the aggregate, adversely affect the financial condition,
business, property, assets or prospects of seller. Seller has complied with and
is not in default under or in violation of any laws, ordinances, requirements,
regulations or orders applicable to its business and seller has not received
notice of any claimed default or violation with respect to any of the foregoing.
(o) Compliance with Other instruments, etc. Neither the execution
nor the delivery of this Agreement nor the consummation of the transaction
contemplated hereby will conflict with or result in any violation of or
constitute a default under any agreements among seller and shareholder, or any
agreement, mortgage, indenture, license, permit or other instrument, judgment,
decree, order, law or regulation by which seller or shareholder is bound.
(p) Environmental Compliance. Seller is not in violation of any
united states federal, state or local law, ordinance or regulation relating to
the environmental conditions ("Environmental law") on, under or about any real
property owned or leased by seller including, but not limited to, soil and
groundwater conditions. To the best of seller and shareholder's knowledge,
seller has not used, generated, manufactured, produced, stored, treated or
disposed of, whether temporarily or permanently, on , under or about any real
property leased by seller or transported to or from any real property owned or
leased by seller any hazardous substance (as defined below) in violation of any
Environmental law, except for hair care products customarily used in Seller's
business. To the best of Seller and Shareholder's knowledge, there is no
proceeding or investigation by any governmental entity with respect to the
presence of such Hazardous Substance on any real property leased by Seller or
the migration thereof from or to other property. Seller has not been required or
ordered by any governmental entity to treat, clean up or otherwise dispose,
remove or neutralize any Hazardous substance from or on any real property leased
by Seller. For purposes of this Agreement, "Hazardous substances" shall mean
(but shall not be limited to) substances defined or listed as "hazardous wastes"
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or "toxic substances", or any variation thereof, in or determined at any time to
be such pursuant to applicable laws, and regulations adopted and publications
set forth in or promulgated pursuant to such laws, including , without
limitation: (i) the Comprehensive Environmental Response, Compensation and
Liability Act of 1980, as amended, 42 U.S.C. Sections 9601 et seq.; Hazardous
Materials Transportation Act, 49 U.S.C. Section 1801 et seq.; and (ii)
pesticides, fungicides, solvents, herbicides, flammable explosives, asbestos,
polychlorinated byphenyls, radioactive materials; and petroleum, and drilling
fluids, produced water and other wastes associated with the exploration,
development, or production of crude oil, natural gas or geothermal energy
(q) Defaults, etc. There is no actual or claimed default to state
of facts that with notice or lapse of time or both would constitute a default on
the part of Shareholder and/or Seller in the performance or payment of any
obligation to be performed or paid by Shareholder and/or Seller under any
contracts, plans or other instruments or arrangements referred to in or to be
submitted as provided herein, and neither Seller nor Shareholder has received or
given notice of any actual or claimed default or state of facts that with notice
or lapse of time or both would constitute a default on the part of Shareholder
and/or Seller under any contracts, plans or other instruments or arrangements
referred to or submitted as provided herein. There are no benefit plans of
Seller subject to the employee Retirement Income Security Act ("ERISA").
(r) Books of Accounts and Records. Seller's books of account
fairly reflect all of the Seller's items of income and expense, assets,
liabilities and accruals, and are prepared, maintained and compiled on a basis
consistent with prior years.
(s) Suppliers. Seller's relationships with its suppliers are
continuing and satisfactory. Shareholder and Seller have no knowledge of any
plans of any supplier to discontinue providing products to Seller and have no
knowledge that a sale of the Assets by Seller might cause any such supplier to
discontinue providing products to Seller.
(t) Inventories. All inventory of Seller held for sale to
customers is of good merchantable quality and saleable in the ordinary course of
business. The merchandise inventory of Seller is valued at Seller's Customary
cost.
(u) Labor Controversies; Collective Bargaining Agreements. There
are no controversies pending or threatened between Seller and (i) any union, or
(ii) any organizational efforts or demands for collective bargaining or any
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union organization. Seller is in substantial compliance with applicable labor
laws. Seller is not a party to any collective bargaining agreement with any
labor union or other representative of any of its employees.
(v) Brokers. No broker or finder has been employed by Seller or
Shareholder in connection with this transaction.
(w) Disclosure. No representation or warranty by the Shareholder
or Seller in this Agreement, nor any statement or certificate furnished or to be
furnished to Buyer pursuant hereto, or in connection with the transaction
contemplated hereby, contains or will contain any untrue statement of a material
fact, or omits or will omit to state a material fact necessary to make the
statements contained herein or therein not misleading.
5. Indemnity.
(a) The parties agree to indemnify each other and hold each other
harmless from any loss or damage from the breach of any warranty or
representation of the respective party set forth herein, including reasonable
legal and accounting fees and expenses incurred by the other party as a result
of such breach or in enforcing this indemnity.
(b) Should Buyer pay any amount to any entity as a result of Seller's
breach or default under this Agreement, in addition to any other remedies
available to Buyer, Buyer may deduct such amount from the payments described in
Section 1.2.
6. Representations and Warranties of Buyer. Buyer represents and warrants
to Seller as follows:
(a) Organization: Good Standing. Buyer is a corporation duly
organized, validly existing and in good standing under the laws of the State of
Minnesota with all requisite power and authority to perform its obligations
hereunder.
(b) Compliance with Other Instruments, etc. Neither the execution nor
the delivery of this Agreement not the consummation of the transaction
contemplated hereby will conflict with or result in any violation of or
constitute a default under any agreements of Buyer, or any agreement, mortgage,
insurance, license, permit or other instrument, judgment, decree, order, law or
regulation by which Buyer is bound.
(c) Brokers. No broker or finder has been employed by Buyer in
connection with this transaction.
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(d) Authorization. The execution, delivery and performance of this
Agreement by Buyer has been duly authorized by the Board of Directors of Buyer
and the Agreement constitutes the valid and binding obligations of Buyer.
(e) Disclosure. No representation or warranty by Buyer in this
Agreement, nor any statement or certificate furnished or to be furnished to
Seller pursuant hereto, or in connection with the transaction contemplated
hereby, contains or will contain any untrue statement of a material fact, or
omits or will omit to state a material fact necessary to make the statements
contained herein or therein not misleading.
7. Covenants of Seller and Shareholder. Seller and Shareholder agree that
prior to the Closing:
(a) Cooperation. Seller, each Subsidiary and Shareholder will cause
the transactions contemplated by this Agreement to be consummated, and, without
limiting the generality of the foregoing, to obtain all consents and
authorizations of third parties and to make all filings with and give all
notices to third parties which may be necessary or reasonably required in order
to effect the transactions contemplated hereby. Seller and Shareholder will use
their best efforts to preserve Seller's business organizations intact and to
keep available the services of its employees and representatives and will
preserve the goodwill of its employees, customers, suppliers, and others having
business relations with Seller.
(b) Landlords' Concerts. Seller shall cooperate with Buyer to obtain
the written consents from the Landlords to assignments of the leases with no
increase in rent, but with such modifications as Buyer, in its sole discretion,
may deem necessary and reasonable, including but not limited to the right to the
modification of any radius restriction clauses so that the scope is reasonable
and the restrictions are limited to the existing trade name only. Seller Shall
pay all fees required by Landlords as consideration for consenting to the Lease
assignments.
(c) Transaction out of Ordinary Course of business. Seller and the
subsidiaries will not, except with the prior written consent of Buyer, enter
into any transaction out of the ordinary course of business, including, but not
limited to, the execution of any new lease or the modification of any existing
lease.
(d) Maintenance of Properties, etc. Seller and the subsidiaries will
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maintain all their properties in a good repair, order a condition, reasonable
wear and use, damage by fire or other casualty excepted, and will maintain
insurance upon all their properties with respect to the conduct of their
business, in such amounts and of such kinds comparable to that in effect on the
date of this Agreement.
(e) Maintenance of books and records. Seller and all subsidiaries will
maintain their books, accounts and records in the usual manner on a basic
consistent with prior years. Seller and each Subsidiary will duly comply all
respect all laws and decrees applicable to them and to the conduct of their
business.
(f) Certain Prohibited Transactions. Except with the prior written
consent of buyer, seller and subsidiaries will not enter into any contract to
merge or consolidate with or sell all or any substantial part of their assets to
any other party or change the character of their business.
Revenue code (the "code"), interest and penalties, costs and expenses
(including, without limitation, disbursements and reasonable legal fees incurred
in connection therewith and in seeking indemnification therefore, and any
amounts or expenses required to be paid or incurred in connection with any
action, suit, proceeding, claim, appeal, demand, assessment or judgment) imposed
upon, incurred by, or assessed against buyer arising by reason of or relating or
relating to any failure by Seller or Subsidiaries to comply with the
continuation health care coverage requirements of section 4980 B of the Code and
section 601 through 608 of ERISA which failure occurred with respect to any
current or prior employee of Seller or Subsidiaries or any qualified beneficiary
of such employee ( as define in section 4980(g)(1) of the code) prior to the
closing Date but only to the extent such action, suit, proceeding, claim,
appeal, demand, assessment or judgment arises by virtue of the fact that such
employee was employed by Seller or Subsidiary prior to the closing date and is
based upon and obligation owed by Seller to such employee. For purposes of this
provision , references to the Code and ERISA shall include references to any
provision of such statutes as they may be amended from time to time.
(i) Agreements Delivered, etc. Prior to the closing date, Seller
will furnish to buyer complete and accurate lists of the following: (i) all
agreements or arrangements of Seller and all subsidiaries that are to be
performed in whole or in part on or after the date hereof, other than leases or
licenses listed in Exhibit G: (ii) all bonus, incentive, death benefit on other
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fringe benefit plans, deferred compensation and post-termination obligations,
trust agreements of Seller and the Subsidiaries in effect or under which any
amounts remain unpaid on the date hereof or are to become effective after the
date hereof, and (iii) all employment and consulting contracts not terminable at
will without to which Seller or any Subsidiary is a party.
8. Covenants of Buyer. Buyer will faithfully perform on a timely basis all
of its obligations required herein.
9. Non-Competition Agreement. At the Closing, seller and Shareholder will
enter into a Non-Competition Agreement in the form set forth an Exhibit I
attached hereto.
10. Conditions Precedent to the Obligations of Seller and Shareholder. All
obligations of Seller and Shareholder sunder this Agreement are subject to the
fulfillment, at the option of Seller and Shareholder, at or prior to the closing
date, of the following condition; The representations and warranties of buyer
herein contained shall be true on and as of the Closing date with the same force
and effect as though made on and as of said date, except as affected by the
transaction contemplated hereby.
11. Conditions Precedent to the Obligations of Buyer. All obligations of
Buyer under this Agreement are subject to the fulfillment, at the option of
Buyer, at or prior to the Closing Date, of the following conditions:
(a) The representations and warranties of the Seller and shareholders
herein contained shall be true on and as of the Closing Date with the same force
and effect as though made on and as of said date, except as affected by the
transaction contemplated hereby.
(b) Shareholder and Seller shall have performed all of their
obligations and agreements and complied with all of its covenants contained in
this Agreement to be performed and complied with all of its covenants contained
in this Agreement to be performed and complied with by Shareholder and Seller
prior to Closing Date.
(c) Buyer shall be satisfied, in its sole discretion, with the results
of its legal, accounting, business, environmental and other due diligence review
of Seller's business and the Assets.
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12. Survival of Representations. All statements by or on behalf of Seller
or Shareholder contained in this Agreement or any certificates or other
instrument delivered by or on behalf of Seller or Shareholder in connection with
the transaction contemplated hereby shall survive the Closing.
13. Entire Agreement. This Agreement supersedes all previous agreements
among the parties and contains the entire understanding and agreement among them
with respect to its subject matter. This Agreement cannot be amended, modified
or supplemented in any respect to its subject matter. This Agreement cannot be
amended, modified or supplemental in any respect except by a subsequent written
agreement entered into by all parties.
14. Waivers and Notices. Any failure by any party to this Agreement to
comply with any of its obligations, agreements or covenants hereunder may be
waived by Seller or Shareholder in a case of a default by Buyer and by Buyer in
case of a default by Seller of Shareholder. The failure of any party to insist
in any instance upon performance of any term or condition of this Agreement
shall not be construed as a waiver of any future performance. All waivers under
this agreement and all notices, consents, demands, requests, approvals and other
communications which are required or may be given hereunder of thereunder shall
be in writing and shall be deemed to have been duly given if delivered or mailed
certified first class mail, postage prepaid:
(a) If to Seller or Shareholder
Yellowave Corporation
11777 San Vicente Boulevard, Suite 505
Los Angeles, CA 90049
(b) If to Buyer:
7201 Metro Boulevard
Minneapolis, MN 55439
Attention: President
With a copy to:
7201 Metro Boulevard
Minneapolis, MN 55439
Attention: Eric A. Bakken
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Or to such other person or persons at such address or addresses as may be
designated by written notice to the other parties hereunder.
15. Benefits. All the terms of this Agreement shall be binding upon and
inure to the benefit of and be enforceable by the parties hereto and their
successors and or assigns.
16. Arbitration. All disputes between the parties relating to this
Agreement or the transaction contemplated thereby or negotiations leading up to
execution of this Agreement shall be resolved by arbitration in Las Vegas,
Nevada, pursuant to the rules of the American Arbitration Association then in
effect. The arbitrators shall have the power to award costs, including
reasonable attorney's fees, as they deem appropriate. This Agreement shall be
construed in accordance with the laws of the State of Minnesota.
17. Expenses. Whether or not the transactions contemplated hereby are
consummated, each of the parties hereto shall pay its or his own expenses
incurred in connection with the authorization, preparation, execution or
performance of this Agreement and all transactions contemplated hereby,
including without limitation, all fees and expenses of agents, representatives,
legal counsel and accountants. Seller shall pay all stamp, documentary, transfer
or similar taxes which may be payable as a result of the sale.
18. Facsimile Signatures; Counterparts. The delivery of an executed copy of
this Agreement or any amendment hereto, made by facsimile transmission by any
party to the other party hereto shall constitute effective delivery of such
document by such transmitting party to such receiving party, and any executed
facsimile copy so delivered shall be deemed equivalent to an executed original.
This Agreement and any amendments thereto may be signed in two or more
counterparts, and all counterpart signatures, taken together, shall constitute
one executed original.
IN WITNESS WHEREOF, the parties have executed this Agreement as of the date
first written above.
CUTCO ACQUISITION CORP.
/s/ Paul D. Finkelstein
By: -------------------------------------
Paul D. Finkelstein, Chief Executive
Officer
CUTCO SALONS, INC.
/s/ Richard Arons
By: -------------------------------------
Richard Arons, President
YELLOWAVE CORPORATION
/s/ Richard Arons
By: -------------------------------------
Richard Arons, President
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