EXHIBIT 10(B)
AGREEMENT FOR PURCHASE AND SALE OF ASSETS
This Agreement is made as of March 28, 2000, at 0000 Xxxxxxxx Xxxx., Xxx Xxxxxx,
Xxxxxxxxxx 00000, among EssxSport Corporation, (ESSXSPORT), a Nevada corporation
and PACIFIC MAT, INC. (Pacific Mat), a California corporation having its
principal office at 0000 Xxxxxxxx Xxxx., Xxx Xxxxxx, Xxxxxxxxxx 00000; Uli Gag,
(Shareholder), residing at 00000 Xxxxxxxxx Xx, Xxxxxx, Xxxxxxxxxx 00000; and
PACIFIC MAT are collectively referred to Agreement for the Purchase and Sale of
Assets (Agreement) as Selling Parties.
ESSXSPORT shall purchase from PACIFIC MAT and PACIFIC MAT shall sell to
ESSXSPORT, on the terms and subject to the conditions as set forth in this
Agreement all the business and properties of PACIFIC MAT, set forth in the
attached Schedule of Assets in exchange for shares of restricted stock in
ESSXSPORT. It is the agreed by the Selling Parties and ESSXSPORT that this
transaction be consummated, consistent with the proposed conditions as set forth
in this Agreement as follows:
#1 TAX FREE REORGANIZATION
To the extent permissible under the applicable laws, PACIFIC MAT and ESSXSPORT
intend to enter into an Agreement qualifying as a plan of reorganization under
Internal Revenue Code section 368(a)(1)(C). In the event this Agreement does not
qualify as a tax free reorganization under the applicable Internal Revenue Code
sections, said non-qualification shall not void the Agreement.
#2. TO SELL AND TRANSFER ASSETS
Subject to the terms and conditions set forth in this Agreement, PACIFIC MAT
will sell, convey, transfer, assign, and deliver to ESSXSPORT, and ESSXSPORT
will purchase from PACIFIC MAT, the assets, properties, and business of PACIFIC
MAT (all of which are sometimes collectively referred to as the Assets),
including, the following:
(1) All property and other rights listed as assets of PACIFIC MAT in the
Schedule of Assets attached to this Agreement, other than property and rights
specifically excluded;
Schedule A consists of all assets of Pacific Mat, Inc. including but not
limited to, furniture, equipment, patterns, drawings, all other supplies,
materials, work in process, finished goods, equipment, machinery, fixtures,
claims and rights under leases, contracts, notes, evidences of indebtedness,
purchase and sales orders, title to assets, customer lists, employment
contracts, employee benefit plans, insurance policies relating to the conduct of
the business, copyrights, service marks, trademarks, trade names, trade secrets,
patents, patent applications, licenses, and royalty rights.
NOTE: Schedule A does not include Pacific Mat Inc. Logo
#3 ACCURACY OF FINANCIAL STATEMENTS
The terms set forth in this Agreement are based on the parties' assumption that
PACIFIC MAT's Schedule of Accounts Payable and Receivable, balance sheet as of
April 15, 2000, and its profit and loss statement for the 12 month period then
ended have been prepared in accordance with generally accepted accounting
principles consistently applied and that the balance sheet fairly represents
PACIFIC MAT's financial condition at that time and the results of its operations
for that period.
#4 CONSIDERATION AT CLOSING
As full payment for the transfer of the Assets to ESSXSPORT, ESSXSPORT shall
deliver as soon after the Closing is concluded, 50,000 shares of ESSXSPORT's
common stock,__[having a par value of $_ _$.050_ _ per share,]__ which must be
issued as follows: _ Pacific Mat, Inc _. ESSXSPORT and PACIFIC MAT intend the
stock to be characterized as Section 144 restricted shares under the provisions
of the applicable Internal Revenue Code.
#5 ACCOUNTS RECEIVABLE
Selling Parties will deliver to ESSXSPORT on the closing date a schedule of all
accounts receivable and their amounts, together with a correct and complete
aging of these accounts, and a schedule of all inventories of raw materials,
work in process, finished goods, and supplies of PACIFIC MAT and Subsidiary, and
the cost of each of these items, as of the last business day before the closing
date.
#6 ASSIGNMENT OF ACCOUNTS RECEIVABLE PRIOR TO CLOSING
Prior to the Closing, Pacific Mat shall present and assign to EssxSport an
accurate and verifiable Schedule of Accounts Receivable. Pacific Mat will
authorize and approve the factoring of said Schedule of Accounts Receivable
presented and assigned to EssxSport. Directly from the funds received from the
factored Schedule of Accounts Receivable, EssxSport shall, on behalf of Pacific
Mat pay vendors as designated and listed on a Schedule of Vendors and Accounts
Payable. Both the Schedule of Accounts Receivable and the Schedule of Vendors
and Accounts Payable are attached hereto and by this reference incorporated
herein.
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#8 FACILITIES LEASE
PACIFIC MAT until the Closing, shall continue to lease the manufacturing
building located at 0000 Xxxxxxxx Xxxx., Xxx Xxxxxx, XX 00000 in its name, and
shall be responsible for the payment of the lease, until June 30, 2000.
ESSXSPORT shall reimburse PACIFIC MAT for the facility lease payments for May
and June 2000.
#9 PURCHASE PRICE
The purchase price of the Assets will be as follows: _ $13,000.00 for equipment
and furniture, $12,000.00 for patterns and designs. Each of the parties must
report this transaction for federal tax purposes in accordance with this
allocation of the purchase price.
#10 SHAREHOLDER PAYMENT
In addition to the foregoing payment for the Assets, the parties acknowledge
that Shareholder is also entitled to the payment of $10,000 for the
Shareholder's execution of a non-competition covenant, a copy of which is
attached hereto and made a copy hereof. This Agreement initiates a $5,000.00
payment at signing, and a $5,000.00 payment within 6 months.
#11. EXCISE AND USE TAXES
PACIFIC MAT will pay all sales and use taxes arising from the transfer of the
Assets and will pay its portion, prorated as of the closing date, of state and
local real and personal property taxes of the business. ESSXSPORT will not be
responsible for any business, workmen's compensation, employee benefit expenses,
occupation, withholding, or similar tax, or any taxes of any kind related to any
period before the closing date.
#12. WARRANTIES OF SELLING PARTIES
Selling Parties, jointly and severally, warrant that: PACIFIC MAT is a
corporation duly organized, validly existing, and in good standing under the
laws of California and has all necessary corporate powers, right, title and
interest to sell and/or transfer its properties and operate its business as now
owned and operated by it; that its operations do not infringe on any trademark,
service xxxx, trademark registration or application, trade name, copyright,
patent, or patent application belonging to any other party. Neither the
ownership of its properties nor the nature of its business requires PACIFIC MAT
to be qualified in any jurisdiction other than the state of its incorporation.
#13. CONFIDENTIALITY
ESSXSPORT and PACIFIC MAT will keep in strict confidence any confidential or
proprietary matters (except publicly available or freely usable material as
otherwise obtained from another source) respecting either party.
#14. PUBLICITY
Neither party will issue any public announcement about the transaction without
the approval of the other party, except as required by law (it being noted that
the parties have mutually approved a public announcement to be issued
simultaneously with this Agreement).
#15. FEES AND EXPENSES
Each party will pay the legal and other fees and expenses incurred by it with
respect to the transaction, whether or not closing occurs
#16. BROKER'S FEES
At the Closing, there are no other brokerage or finder's fees payable by the
parties to this Agreement.
#17 NO NEGOTIATIONS WITH OTHER PARTIES
PACIFIC MAT represents that it is not negotiating with any other party for the
sale of its business and has not entered into any understanding about a sale,
whether binding or not, and, unless its negotiations with EssxSport terminate
earlier, it will not negotiate for the sale of or offer to sell its business to
any other party without ESSXSPORT's consent for ninety (90) days.
#18 EXPENSES
Each party will pay all costs and expenses incurred or to be incurred by it in
negotiating and preparing this agreement and in closing and carrying out the
transactions contemplated in this agreement.
#19 EFFECT OF HEADINGS
The subject headings of the paragraphs and subparagraphs of this agreement are
included for convenience only and will not affect the construction or
interpretation of any of its provisions.
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#20. WORD USAGE
Unless the context clearly requires otherwise:
1. Plural and singular numbers will each be considered to include the
other;
2. The masculine, feminine, and neuter genders will each be considered to
include the others;
3. "Shall," "will," "must," "agree," and "covenants" are each mandatory;
4. "May" is permissive;
5. "Or" is not exclusive;
#21. ENTIRE AGREEMENT
This agreement constitutes the entire agreement between the parties pertaining
to the subject matter contained in it and supersedes all prior and
contemporaneous agreements, representations, and understandings of the parties.
No supplement, modification, or amendment of this agreement will be binding
unless executed in writing by all the parties. No waiver of any of the
provisions of this agreement will be considered, or will constitute, a waiver of
any other provision, and no waiver will constitute a continuing waiver. No
waiver will be binding unless executed in writing by the party making the
waiver.
#22. COUNTERPARTS
This agreement may be executed simultaneously in one or more counterparts, each
of which will be considered an original, but all of which together will
constitute one and the same instrument.
#23 PARTIES IN INTEREST
Nothing in this agreement, whether express or implied, is intended to confer any
rights or remedies under or by reason of this agreement on any persons other
than the parties to it and their respective successors and assigns; nothing in
this agreement is intended to relieve or discharge the obligation or liability
of any third persons to any party to this agreement; and no provision will give
any third persons any right of subrogation or action against any party to this
agreement.
#24. ASSIGNMENT
This agreement will be binding on, and will inure to the benefit of, the parties
to it and their respective heirs, legal representatives, successors, and
assigns, provided that Buyer may not assign any of its rights under this
agreement except to a wholly owned subsidiary corporation of Buyer. No such
assignment by Buyer to its wholly owned subsidiary will relieve Buyer of any of
its obligations or duties under this agreement.
#25 SPECIFIC PERFORMANCE
Each party's obligation under this agreement is unique. If any party should
default in its obligations under this agreement, the parties each acknowledge
that it would be extremely impracticable to measure the resulting damages;
accordingly, the nondefaulting party or parties, in addition to any other
available rights or remedies, may xxx in equity for specific performance, and
the parties each expressly waive the defense that a remedy in damages will be
adequate. Despite any breach or default by any of the parties of any of their
respective representations, warranties, covenants, or agreements under this
agreement, if the purchase and sale contemplated by it will be consummated at
the Closing, each of the parties waives any rights that they may have to rescind
this agreement or the transaction consummated by it provided that this waiver
will not affect any other rights or remedies available to the parties under this
agreement or under the law.
#26 LITIGATION EXPENSES
If any legal action, arbitration, or other proceeding is brought for the
enforcement of this agreement, or because of an alleged dispute, breach,
default, or misrepresentation in connection with any of the provisions of this
agreement, the successful or prevailing party or parties will be entitled to
recover reasonable attorney fees and other costs incurred in that action or
proceeding, in addition to any other relief to which they may be entitled.
#27 TERMINATION
Subject to the provisions of paragraph 33 relating to the postponement of the
closing date, any party may on the closing date terminate this agreement,
without liability to any other:
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(1) If any bona fide action or proceeding is pending against any party on
the closing date that could result in an unfavorable judgment, decree, or order
that would prevent or make unlawful the performance of this agreement or if any
agency of the federal or any state government has objected at or before the
closing date to this acquisition or to any other action required by or in
connection with this agreement.
2) If the legality and sufficiency of all steps taken and to be taken by
the parties and their shareholders in carrying out this agreement have not been
approved by counsel as required by this agreement; or
#28 DEFAULTS PERMITTING TERMINATION
If either Buyer or Selling Parties materially default in the due and timely
performance of any of their warranties, covenants, or agreements under this
agreement, the nondefaulting party or parties may on the closing date give
notice of termination of this agreement, in the manner provided in paragraph 27.
The notice will specify with particularity the default or defaults on which the
notice is based. The termination will be effective seven days after the closing
date, unless the specified default or defaults have been cured on or before this
effective date for termination.
#29 WARRANTIES
The warranties made by the parties to this agreement, and their respective
obligations to be performed under its terms at or before the closing date, will
expire with, and be terminated and extinguished by, the Closing, and
consummation of the closing will be conclusive evidence that each party is fully
satisfied with the facts constituting the basis of the warranties of the other
parties and with the performance of their obligations. This paragraph will not
affect any obligation of any party under this agreement that is permitted to be
performed, in whole or in part, after the Closing.
#30. SURVIVABILITY
All representations, warranties, covenants, and agreements of the parties will
survive the closing, except that the warranties made in this agreement by
Selling Parties regarding the following matters will terminate two years after
the closing date, and they will have no liability to Buyer for any breaches or
defaults on these matters, unless Buyer makes a claim for the breach or default
within this two year period:
This limitation period for the survival of the above-specified warranties of
Selling Parties will not apply to any fraudulent breach, representation, or
warranty, or to any breach or inaccuracy in any representation or warranty known
to Selling Parties on or before the closing date.
#31. NOTICES
All notices, requests, demands, and other communications under this agreement
must be in writing and will be considered to have been duly given on the date of
service if served personally on the party to whom notice is to be given, or on
the third day after mailing if mailed to the party to whom notice is to be
given, by first class mail, registered or certified, postage prepaid, and
properly addressed as follows:
Essxsport Corp.
0000 Xxxxxxxx Xxxx.
Xxxxxx, XX 00000
Xxxxxx Gag
00000 Xxxxxxxxx Xxxxxx
Xxxxxx, XX 00000
Any party may change its address for purposes of this paragraph by giving the
other parties written notice of the new address in the manner set forth above.
#32. GOVERNING LAW
This agreement will be construed in accordance with, and governed by, the laws
of the State of California as applied to contracts that are executed and
performed entirely in California.
#33. CLOSING
The transfer of assets by PACIFIC MAT to ESSXSPORT shall take place from time to
time prior to the Closing, with the final transfer of assets taking place at the
offices of PACIFIC MAT on May 15, 2000 at 10:00am,or at such other time and
place the parties may in writing prior to the Closing date.
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#34 ENTIRETY
If any provision of this agreement is held invalid or unenforceable by any court
of final jurisdiction, it is the intent of the parties that all other provisions
of this agreement be construed to remain fully valid, enforceable, and binding
on the parties.
SIGNATURES: DATE: MARCH 28, 2000
EssxSport Corporation
By /s/ Xxxxx Xxxxxxxx
Xxxxx Xxxxxxxx, President
By /s/ Xxxxx Xxxxxx
Xxxxx Xxxxxx, CFO
The foregoing Agreement is confirmed:
PACIFIC MAT
By /s/ Xxxxxx Gag
Uli Gag, President
By /s/ Xxxxxx Gag
Uli Gag, Shareholder
DOCUMENTS TO BE INCORPORATED:
SCHEDULE OF ASSETS
LETTER OF ACCEPTANCE OF ASSETS
NON-COMPETITION AGREEMENT WITH ULI GAG
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