CONTRIBUTION AGREEMENT by and between Beauty & Pinups, Inc. and Beauty and Pin Ups, LLC DATED APRIL 13TH, 2015
Exhibit
7.1
by and
between
Beauty
& Pinups, Inc.
and
Beauty
and ▇▇▇ ▇▇▇, LLC
DATED
APRIL 13TH, 2015
This
CONTRIBUTION AGREEMENT (this “Agreement”) is entered
into by and between Beauty & Pinups, Inc., a New York
corporation (“BPU”), Priel Maman (“Maman”)
(BPU and Maman, collectively, the “Contributor”), and
Beauty and ▇▇▇ ▇▇▇, LLC, a North Carolina limited liability company
(the “Company”), as of date first referenced above (the
“Contribution Date”).
RECITALS
1. BPU
conducts a business that produces, markets and sells various beauty
related products (the “Business”).
2.
Contributor wishes to contribute the Business and certain
intellectual property to the Company in exchange for a 12%
membership interest in the Company to Maman, a 10% membership
interest in the Company to Sigan Industries Group and a cash
payment of $150,000 to the Contributor.
3. In
order to accomplish the foregoing, simultaneously with the
execution of this Agreement, Contributor and the Company shall
enter into the agreements identified in Article III hereof
(collectively, the “Other Agreements”).
4. The
foregoing contribution of assets by Contributor and assumption of
liabilities by the Company are all subject to the terms and
conditions of this Agreement and the Other Agreements.
In
consideration of the foregoing and the mutual representations,
warranties, covenants, and agreements herein contained, Contributor
and the Company agree as follows:
ARTICLE
I
CONTRIBUTION OF
ASSETS BY CONTRIBUTOR
SECTION
1.1 Contribution
of the Assets.
(a) Subject
to the terms and conditions of this Agreement, on the Contribution
Date, Contributor hereby assigns, transfers, and delivers to the
Company, as a contribution, free and clear of all title defects,
objections, liens, pledges, claims, rights of first refusal,
options, charges, security interests, mortgages, or other
encumbrances of any nature whatsoever (collectively,
“Encumbrances”) other than “Permitted
Encumbrances” (as defined in Section 1.1(b) of this
Agreement), all of the assets, properties, and business of every
kind and description; wherever located; real, personal, or mixed;
tangible or intangible; owned or held; or used primarily in the
conduct of the Business by Contributor as the same shall exist on
the Contribution Date including all assets and property shown on
the financial statements of the Contributor and all assets and
property thereafter acquired by Contributor in respect of or used
in the Business immediately prior to the Contribution Date
(collectively, the “Assets”), and including, without
limitation, all right, title, and interest of Contributor in, to,
and under:
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(i) The
machinery, equipment, furniture, vehicles, and other tangible
property (including, without limitation, maintenance and operating
supplies, fuel, and spare parts for such machinery and equipment)
used in connection with the Business (collectively, the
“Equipment”);
(ii) The
raw materials, finished goods, work-in-process, supplies, and
inventories, with respect to the Business carried on by Contributor
(collectively, the “Inventory”);
(iii) Those
patents, copyrights, trademarks, trade names, technology, know-how,
processes, trade secrets, inventions, proprietary data, formulae,
research and development data, computer software programs, and
other intangible property, and any applications for the same, used
primarily in the portion of the Business carried on by Contributor,
and all goodwill associated with such intangible property
(collectively, the “Intangible Property”);
(iv) All
of Contributor’s rights, claims, credits, causes of action,
or right of setoff against third parties relating to the Assets,
including, without limitation, unliquidated rights under
manufacturers’ and vendors’ warranties (collectively,
“Claims”);
(v) The
contracts, agreements, leases, licenses, and other instruments,
arrangements, and commitments being assumed by the Company with
respect to the Assets pursuant to Section 1.4 of this Agreement
(collectively, “Rights”);
(vi) All
transferable licenses, permits, registrations, authorizations, use
agreements, orders, or approvals of governmental or
quasi-governmental agencies and authorities (whether federal,
state, local, municipal, or foreign) or private parties relating to
the construction, use, operation, or enjoyment of the Assets
(collectively, “Permits”);
(vii) All
accounts receivable arising out of sales of Inventory or otherwise
in the ordinary and usual course of the operation of the Business
prior to the close of business on the Contribution Date
(collectively, “Receivables”);
(viii) Originals
or copies of all books, records, files, and papers, whether in hard
copy or computer format, used in the Business, including without
limitation, engineering information, manuals and data, sales and
advertising materials, sales and purchase correspondence, lists of
present and former suppliers, and personnel and employment records
(collectively, “Files and Records”);
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(ix) All
lists of present and, to the extent available, future customers and
goodwill associated with the Assets.
(b) For
purposes of this Agreement, “Permitted Encumbrances”
shall mean (i) the “Assumed Liabilities,” as defined in
Section 1.3 of this Agreement, (ii) liens for current taxes not yet
due and payable, and (iii) Encumbrances that, individually or in
the aggregate, do not or would not have a material adverse effect
on the business or financial condition of the Business taken as a
whole or materially interfere with the present use of any Assets
subject thereto.
SECTION
1.2 Conveyance Instruments. In order to
effectuate the contribution of the Assets as contemplated by this
Article I, Contributor has, or will hereafter, execute and deliver,
or cause to be executed and delivered, all such documents or
instruments of assignment, transfer, or conveyance, in each case
dated the Contribution Date (collectively, the “Conveyance
Instruments”), as the parties and their respective counsel
shall reasonably deem necessary or appropriate to vest in or
confirm title to the Assets to the Company, including without
limitation, the Assignment of Servicemarks and Trademarks and
Assignment of Patents between the parties dated even date
herewith.
SECTION
1.3 Assumed Liabilities. Subject to the
terms and conditions of this Agreement, and in reliance on the
representations, warranties, covenants, and agreements of the
parties contained herein, the Company hereby assumes and agrees to
pay, discharge, or fulfill the following liabilities and
obligations relating to the Business: all of the liabilities and
obligations in respect of the contracts, agreements, licenses, and
other instruments, arrangements, and commitments with Sigan
Industries Group and it’s affilitates with respect to the
production of the product (collectively, the “Assumed
Liabilities”).
SECTION
1.4 Excluded Liabilities. Notwithstanding
any provision of this Agreement or any Conveyance Instrument to the
contrary, the Company is assuming only the Assumed Liabilities and
is not assuming any other liability or obligation of Contributor
(or any predecessor owner of all or part of its business and
assets) of whatever nature whether presently in existence or
arising hereafter, and all such other liabilities and obligations
shall be retained by and remain liabilities of Contributor (all of
such liabilities and obligations not being assumed hereinafter
referred to as the “Excluded Liabilities”) and,
notwithstanding anything to the contrary in this Section 1.4, none
of the following shall be “Assumed Liabilities” for
purposes of this Agreement:
(a) Any
liability for any taxes, fees or assessments by any federal, state
or local governmental authority (“Taxes”) arising from
or with respect to the Assets or the operations of the Business
incurred or attributable to any period prior to the Contribution
Date (the “Excluded Tax Liabilities”);
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(b) Any
liabilities or obligations relating to employee benefits or
compensation, including, without limitation, any liabilities or
obligations under any of Contributor’s employee benefit
agreements, plans, or other arrangements; or
(c) Any
liabilities relating to the Excluded Assets (it being understood
that any Tax Liability relating to the Excluded Assets shall be an
Excluded Tax Liability for purposes of this
Agreement).
ARTICLE
II
RELATED
TRANSACTIONS
SECTION
2.1 Other Agreements. Contemporaneously with
the execution of this Agreement, the applicable parties shall enter
into the following Other Agreements:
(a) Redemption
Agreements, in form and substance reasonably satisfactory to the
Company, pursuant to which BPU will redeem all the capital stock of
Contributor from Amnon Ashtar in exchange for $100,000 and Miri Ben
Ari in exchange for $50,000;
(b) An
Assignment of Servicemarks and Trademarks for the trademarks used
in connection with the Business between Maman and the Company;
and
(c) An
Assignment of Patents for the patents used in connection with the
Business between Maman and the Company.
ARTICLE
III
REPRESENTATIONS AND
WARRANTIES OF CONTRIBUTOR
Contributor hereby
represents and warrants that as of the date hereof:
SECTION
3.1 Capitalization and Ownership. There are
200 shares of BPU’s Common Shares (“Contributor Common
Stock”) issued and outstanding. All such Contributor Common
Stock are owned legally and beneficially by the following persons
in the following amounts: (a) Maman owns 70 shares; Amnon Ashtar
owns 70 shares; ▇▇▇▇ ▇▇▇▇▇▇▇ owns 40 shares; and Miri Ben Ari owns
20 shares. The Contributor Common Stock has been duly authorized
and validly issued and is fully paid and nonassessable. There are
no outstanding rights, options, warrants, conversion rights,
preemptive rights, or agreements for the purchase or acquisition
from the Contributor with respect to any shares of the Contributor
Common Stock.
SECTION
3.2 Organization.
(a) BPU
is a corporation that is duly organized, validly existing, and in
good standing under the laws of its state (or jurisdiction) of
incorporation, with the corporate power and authority to own,
lease, and operate its properties and to carry on its business as
now being conducted.
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(b) The
copies of the Certificate of Incorporation and all amendments
thereto of BPU, as certified by the Secretary of State (or
equivalent official) of the state (or jurisdiction) of its
incorporation, and the Bylaws, as amended to date.
SECTION
3.3 Authority. Contributor has the corporate
and personal, as applicable, power and authority to execute and
deliver this Agreement and the Other Agreements and to consummate
the transactions contemplated hereby and thereby. The execution and
delivery by Contributor of this Agreement and the Other Agreements,
as the case may be, and the consummation of the transactions
contemplated hereby and thereby, have been duly authorized by the
Board of Directors of Contributor; no other corporate proceedings
on the part of Contributor or any other person or entity, whether
pursuant to the Certificate of Incorporation or Bylaws of
Contributor or by law or otherwise, are necessary to authorize
Contributor to enter into this Agreement and the Other Agreements,
as the case may be, or to consummate the transactions contemplated
hereby and thereby; and this Agreement is the legal, valid, and
binding obligation of Contributor; and each Other Agreement will be
the legal, valid, and binding obligation of
Contributor.
SECTION
3.4 No Violations. Neither the execution or
delivery of this Agreement or the Other Agreements, nor the
consummation of the transactions contemplated hereby or
thereby
(a) Requires
any filing or registration with, or consent, authorization,
approval, or Permit of, any governmental or regulatory authority on
the part of Contributor; or
(b) (i)
violates or breaches or constitutes a default (or an event which,
with notice or lapse of time or both, would constitute a default)
under, or give rise to a right to terminate, any mortgage,
contract, agreement, deed of trust, license, lease, or other
instrument, arrangement, commitment, obligation, understanding, or
restriction of any kind to which Contributor is a party or by which
its properties may be bound, or (ii) will cause, or give any person
grounds to cause, to be accelerated (with notice or lapse of time
or both) the maturity of, or will increase, any liability or
obligation of Contributor.
SECTION
3.5 Certain Tax Matters. The
Contributor:
(a) Has
filed or will file or furnish when due in accordance with all
applicable laws all Tax returns, statements, reports, and forms
(including information returns and reports) required to be filed or
furnished with respect to any Pre-Contribution Tax Period
(collectively, the “Returns”);
(b) Has
correctly reflected in all material respects on the Returns (and,
as to any Returns not filed as of the date hereof, will correctly
reflect) the facts regarding its income, business, assets,
operations, activities, and status of any other information
required to be shown therein;
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(c) Has
timely paid, withheld, or made adequate provision for all Taxes
shown as due and payable on the Returns that have been
filed;
(d) Is
not subject to any liens for Taxes on its assets;
(e) Is
not subject to any (A) claims, audits, actions, suits, proceedings,
or investigations with respect to any Tax or assessment, and (B)
requests for rulings in respect of any Tax or any proposed
transaction pending before any Taxing Authority.
SECTION
3.6 Patents,
Trademarks, and Similar Rights.
(i) Contributor
has the sole and exclusive right to use the Intangible Property,
and the consummation of the transactions contemplated by this
Agreement and the Other Agreements will not alter or impair any
such rights and will result in the Company having the sole and
exclusive right to use all such Intangible Property used primarily
in the Business and, with respect to Intangible Property subject to
the Assignment of Servicemarks and Trademarks and Assignment of
Patents between the Contributor and the Company dated even date
herewith, the right to use such Intangible Property to the same
extent it is currently used in the Business;
(ii) No
claims have been asserted by any person or entity for the use of
any such Intangible Property or challenging or questioning the
validity or effectiveness of any such license or agreement, and
Contributor have no knowledge of any valid basis for any such
claim; and
(iii) To
the knowledge of Contributor, the use of such Intangible Property
by Contributor does not infringe on the rights of any person or
entity.
SECTION
3.7 Litigation. There are no lawsuits,
litigation or claims pending or threatened by or against, or
involving Contributor or any directors, officers, or employees
thereof in their capacity as such that are connected to the
Business.
ARTICLE
IV
MISCELLANEOUS
PROVISIONS
SECTION
4.1 Release by Contributor. Contributor, for
themselves, and their affiliates, assigns, heirs and executors,
does hereby forever and unconditionally release the Company and
each other shareholder of the Company, together with their
affiliates and each of their respective past or present officers,
directors, managers, equity holders, employees, agents and
attorneys, from any and all claims, actions, causes of action,
suits, claims, counterclaims, charges, complaints, demands,
liabilities or obligations of any kind whatsoever, whether known or
unknown, arising out of any matter, cause or thing occurring before
the date hereof, including without limitation all claims relating
to or arising out of their interest as a shareholder or creditor of
the Company or any interest in any intellectual property rights
which are owned or used by the Company. Such released claims shall
include, but not limited to, all claims which Contributor has had
or now has and which could have been asserted under state or
federal statute or law, including specifically, but not limited to
(i) any and all claims and rights for additional compensation,
payments or benefits of whatever nature, and (ii) any and all
claims for breach of fiduciary duty, breach of contract, fraud,
negligent misrepresentation, negligence, impairment of economic
opportunity, any tort (whether intentional or negligent), violation
of federal or state unfair trade practices law, violation of state
or federal securities law, and violation of any and all other
federal, state and local laws and regulations. This release covers
any injuries not now known by Contributor that arise in any way out
of events occurring prior to the date of the execution of this
Agreement. This release shall not apply to any rights or duties
arising under this Agreement. Contributor agrees that the Company
and their affiliates may plead this release as a complete bar to
any action or suit before any court or administrative body with
respect to any claim released herein.
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SECTION
4.2 Amendment and Modification. This
Agreement may be amended, modified, or supplemented only by written
agreement of the parties hereto.
SECTION
4.3 Waiver of Compliance; Consents. Any
failure of a party to comply with any obligation, covenant,
agreement, or condition herein may be waived by the other party;
provided, however,
that any such waiver may be made only by a written Instrument
signed by the party granting such waiver, but such waiver or
failure to insist upon strict compliance with such obligation,
covenant, agreement, or condition shall not operate as a waiver of,
or estoppel with respect to, any subsequent or other
failure.
SECTION
4.4 Assignment. This Agreement and all of
the provisions hereof shall be binding upon and inure to the
benefit of the parties hereto and their respective successors and
permitted assigns. Any party may assign any of its rights
hereunder, but no such assignment shall relieve it of its
obligations hereunder. Nothing in this Agreement, expressed or
implied, is intended or shall be construed to confer upon any
person other than the parties, any successors and permitted
assigns, any rights, remedy, or claim under or by reason of this
Agreement or any provisions herein contained.
SECTION
4.5 Further Assurances. From time to time,
at the request of Contributor or the Company and without further
consideration, each party, at its own expense, will execute and
deliver such other documents, and take such other action, as
Contributor or the Company may reasonably request in order to
consummate more effectively the transactions contemplated hereby
and to vest in the Company good and marketable title to the Assets.
Contributor hereby constitutes and appoints, effective as of the
Contribution Date, the Company and its successors and permitted
assigns as the true and lawful attorney of Contributor with full
power of substitution in the name of the Company or in the name of
Contributor, but for the benefit of the Company, to collect for the
account of the Company any items of Assets and to institute and
prosecute all proceedings which the Company may in its reasonable
discretion deem proper in order to assert or enforce any right,
title, or interest in, to, or under the Assets, and to defend or
compromise any and all action, suits, or proceedings in respect of
the Assets. The Company shall be entitled to retain for its own
account any amounts collected pursuant to the foregoing powers,
including any amounts payable as interest in respect
thereof.
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SECTION
4.6 Governing Law. This Agreement shall be
governed by and construed in accordance with the Laws of the State
of North Carolina (without regard to its conflicts of law
doctrines).
SECTION
4.7 Counterparts. This Agreement may be
executed in two or more counterparts, each of which shall be deemed
an original, but all of which together shall constitute one and the
same instrument and shall become a binding Agreement when one or
more of the counterparts have been signed by each of the parties
and delivered to the other party.
SECTION
4.8 Headings. The article and section
headings contained in this Agreement are for reference purposes
only and shall not affect in any way the meaning or interpretation
of this Agreement.
SECTION
4.9 Entire Agreement. This Agreement and
other documents and instruments referred to herein and the Other
Agreements, embodies the entire agreement and understanding of the
parties hereto in respect of the subject matter contained herein.
This Agreement supersedes all prior agreements and understandings
between the parties with respect to such subject
matter.
SECTION
4.10 Severability. If any one or more
provisions contained in this Agreement shall, for any reason, be
held to be invalid, illegal, or unenforceable in any respect, such
invalidity, illegality, or unenforceability shall not affect any
other provision of this Agreement, but this Agreement shall be
construed as if such invalid, illegal, or unenforceable provision
had never been contained herein.
IN
WITNESS WHEREOF, the parties hereto have duly executed this
Agreement as of the day and year first above written.
/s/ Priel Maman
Priel
Maman
Beauty & Pinups, Inc.
By: /s/
Priel Maman
Name:
Title:
Beauty and ▇▇▇ ▇▇▇, LLC
By: /s/
▇▇▇▇▇▇▇ ▇▇▇▇
Name:
▇▇▇▇▇▇▇
▇▇▇▇
Title:
Chief Executive
Officer
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