Exhibit 2.1
ASSET PURCHASE AGREEMENT
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THIS ASSET PURCHASE AGREEMENT ("Agreement"), effective as of this 30th
day of October, 1996, by and between CHRISTIE ENTERPRISES, INC. ("Seller"), a
corporation organized under the laws of the State of New Jersey, with a
principal business in Kenilworth, New Jersey, and CHRISTIE PRODUCTS, INC.
("Buyer"), a corporation organized under the laws of the State of Delaware,
with a principal place of business in Waterbury, Connecticut.
W I T N E S S E T H:
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WHEREAS, Seller is in the business of molding and manufacturing
plastic and plastic based products, such business being conducted at a
manufacturing facility located at 80 Market Street, Kenilworth, New Jersey (the
"Facility"); and
WHEREAS, Buyer desires to purchase from Seller and Seller desires to
sell to Buyer, upon the terms and subject to the conditions contained herein,
all of Seller's right, title and interest in and to the business and
substantially all of the operating assets of Seller, including, without
limitation, those listed or described in Section 1.1 of this Agreement.
NOW, THEREFORE, in consideration of the mutual promises hereinafter
set forth and other good and valuable consideration had and received, the
parties hereto, upon the terms and subject to the conditions contained herein,
hereby agree as follows:
ARTICLE I
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PURCHASE AND SALE OF ASSETS
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1.1 Assets to be Purchased. Upon the terms and subject to the
conditions contained herein, Seller shall sell, transfer and deliver (or cause
to be sold, transferred and delivered) to Buyer,
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and Buyer shall purchase and acquire from Seller, at the Closing (as defined in
Section 5.1 hereof) for the consideration hereinafter set forth in Section
2.01(A), the business of Seller and all of Seller's right, title and interest
in and to the following assets, wherever situated, by Warranty Bill of Sale, in
the form of Exhibit 1.1 attached hereto, except the assets described as
Retained Assets in Section 1.2 hereof (such business and assets to be acquired
are hereinafter sometimes collectively referred to as the "Acquired Assets")
and subject to no liabilities of any nature:
(a) All machinery, equipment, molds and furniture including those
items shown on Exhibit 1.1(a), attached hereto;
(b) All corporate and business records, customer lists, supplier
lists, promotional material and technical data;
(c) 1985 Ford Series Model R802 with 26' aluminum van body (VIN.
1FDXR8OUOFVZ12260);
(d) Any trademarks, trade names, logos, copyrights, patents and
applications for any of the foregoing and rights therein and all inventions,
discoveries, business methods, and trade secrets pertaining to Seller's
Business, including those items shown on Exhibit 1.1(d), attached hereto;
(e) All of the rights under contracts, agreements, options,
commitments, understandings, and undertakings, whether oral or written,
inclusive of all employment agreements and other such agreements related to the
internal affairs of Seller, and all orders, requests, inquiries, and
expressions of interest made by or to Seller for the sale or furnishing of
inventory, products, goods, services, materials, or supplies ("Contracts"), to
which Seller is a party;
(f) All licenses, permits, approvals, and the like issued to Seller by
any governmental
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entity;
(g) All leasehold improvements to the Facility; and
(h) All of the other assets of Seller, including, but not limited to,
the business and goodwill as a going concern of Seller, the right to use the
corporate name "Christie Enterprises, Inc." and telephone numbers.
1.2 Retained Assets. Notwithstanding anything contained in Section 1.1
hereof to the contrary, Seller shall not sell, transfer, or deliver, and Buyer
shall not purchase or acquire from Seller Finished Good Inventory, Raw Material
Inventory, cash or accounts receivable. At the time of closing, Seller shall
submit to Buyer a list of its outstanding and uncollected accounts receivable,
to be attached hereto as Exhibit 1.2. Buyer shall assume no responsibility to
collect Seller's accounts receivable. The parties agree to consult with each
other with respect to any accounts receivable as to which there is any customer
dispute. After closing, in the event that Buyer receives payment for or on
account of any obligation owed to Seller prior to the closing of title, the
funds so received shall be accepted in trust for the benefit of Seller and
shall be remitted in kind to Seller within twenty-four (24) hours of the
receipt of same. This representation shall expressly survive the closing.
1.3 No Liabilities to be Assumed. Buyer shall not assume any
liabilities of Seller, except that it shall be the responsibility of Seller to
pay for outstanding trade debt owed by Seller from the proceeds of this sale,
in the sum of approximately ONE HUNDRED TWENTY-FIVE THOUSAND DOLLARS
($125,000.00).
ARTICLE II
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PURCHASE PRICE AND RELATED MATTERS
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2.1 Purchase Price for Acquired Assets. In full consideration for the
Acquired Assets,
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and upon the terms and subject to the conditions set forth in this Agreement,
Buyer shall pay to Seller ONE MILLION FIVE HUNDRED THOUSAND DOLLARS
($1,500,000.00) plus or minus any adjustments pursuant to Section 2.3 of this
Agreement (the "Purchase Price").
2.2 Payment of Purchase Price/Security. The Purchase Price shall be
payable to Seller as follows:
(a) FIVE HUNDRED THOUSAND DOLLARS ($500,000.00), minus any amounts
then owed by Seller to DISCAS, INC. for sixty (60) or more days at the time of
closing, in cash, certified or good and sufficient check at the time of
closing; and
(b) ONE MILLION DOLLARS ($1,000,000.00) by Buyer's and Discas, Inc.'s
Convertible Promissory Note in the form of Exhibit 2.2.1, attached hereto,
which Note shall be secured by: (i) a first position security interest in the
molds of Seller being purchased by Buyer; and by (ii) a second position
security interest in the machinery and equipment of Seller being purchased by
Buyer (Exhibit 1.1(a)). The Security Agreement shall be in the form of Exhibit
2.2.2, attached hereto.
2.3 Adjustments. Personal property taxes, deposits as agreed, and
prepaid items as agreed shall be adjusted and paid at the closing.
2.4 Allocation of Purchase Price. The Purchase Price shall be
allocated among the Acquired Assets in accordance with their relative fair
market value as described in a Exhibit to be prepared by the accountants for
the parties and attached hereto as Exhibit 2.4.
Seller and Buyer agree that each will report the purchase and sale of
the Acquired Assets in accordance with the allocations set forth in Exhibit 2.4
for all federal, state and local tax purposes. Seller and Buyer also agree to
indemnify and hold harmless the other party from and against any and
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all losses, liabilities, and expenses, including, without limitation,
additional income taxes and fees and disbursements of counsel incurred by the
indemnified party as a result of the failure of the indemnifying party to so
report the purchase and sale of the Acquired Assets.
ARTICLE III
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REPRESENTATIONS AND WARRANTIES OF SELLER
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Seller and Frank Criscitiello represent and warrant to Buyer and its
Stockholders, that:
3.1 Organization, Standing, Power and Authority. Seller is a
corporation duly organized, validly existing, and in good standing under the
laws of the State of New Jersey. Seller has all requisite power and authority
to own, lease, and operate the Acquired Assets and to conduct its business as
it has been and is now conducted
3.2 Capital of Seller. Frank Criscitiello, Ann Criscitiello, Gary
Criscitiello and Gregory Criscitiello are the sole owners of all of the issued
and outstanding capital stock of Seller, all of which stock has been duly
authorized and validly issued and is fully paid and non-assessable. Seller has
no other equity securities, of any class, issued, reserved for issuance, or
outstanding. There are no outstanding options, warrants, agreements, or rights
to subscribe for or to purchase, or commitments to issue, equity securities of
Seller.
3.3 Authorization, Execution and Delivery of Agreements. Seller has
all requisite power and authority to enter into this Agreement and to perform
the obligations to be performed by it hereunder. This Agreement has been duly
authorized, executed and delivered by and constitutes the valid and legally
binding obligation of Seller. Upon delivery of the assets to Buyer at the
Closing as herein contemplated, Buyer shall have lawful record and good and
marketable title to all of the Acquired Assets, free and clear of any material
liens, charges, encumbrances, restrictions, or adverse
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claims.
3.4 Non-Violation of Laws, Orders and Agreements. The execution and
delivery of this Agreement by Seller and the performance of all of its
obligations hereunder are not in violation or breach of, do not conflict with
or constitute a default under, and will not accelerate or permit the
acceleration of the performance required by any of the terms or provisions of
the Articles of Incorporation or By-Laws of Seller or of any note, debt
instrument, security agreement, or mortgage, or any other contract or
agreement, written or oral, to which Seller is a party or by which Seller is
bound, and will not be an event which, after notice or lapse of time or both,
will result in any such violation, breach, conflict, default, or acceleration.
The execution and delivery of this Agreement by Seller and the performance of
its obligations hereunder will not, to the best of its knowledge, violate any
law, judgment, decree, order, rule, or regulation of any governmental authority
or court, whether federal, state, or local, at law or in equity, applicable to
Seller and will not result in the creation or imposition of any material lien,
possibility of a material lien, encumbrance, equity, restriction, or claim in
favor of any third person upon any of the Acquired Assets.
3.5 Consent and Approvals. To the best of the knowledge of Seller
there is no requirement for any consent, approval, or authorization of or
filing with any court, governmental authority, or regulatory agency, except the
New Jersey Department of Environmental Protection, for the validity of the
execution and delivery of this Agreement and the performance by Seller hereof
which has not been fulfilled.
3.6 Absence of Default. Seller is not in default (i) under any of the
terms or provisions of any note, debt instrument, security agreement, or
mortgage or under any other commitment, contract, agreement, license, lease, or
other instrument, whether written or oral, to which Seller is
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a party or by which Seller or any of its properties or assets is bound or (ii)
with the exception of matters contested in good faith by Seller of which Seller
has advised Buyer in writing, in the payment of any of its monetary obligations
or debts, and there exists no condition or event which, after notice or lapse
of time or both, would constitute a default in connection with any of the
foregoing.
3.7 Actions by Seller. Except as disclosed on Exhibit 3.7, attached
hereto, since December 31, 1995, Seller has not:
(a) issued any stocks, bonds, notes, or other corporate securities;
(b) incurred any liability or obligation other than in the ordinary
and normal course of its business;
(c) discharged or satisfied any lien or encumbrance or paid any
obligation or liability (absolute or contingent) other than current liabilities
in the ordinary and normal course of its business;
(d) declared or made any payment or distribution to shareholders
(including, without limitation, stock splits and stock dividends) or purchased
or redeemed any shares;
(e) mortgaged, pledged, or subjected to lien, charge, or any other
encumbrance (except for the lien for current taxes not delinquent) any of its
assets, tangible or intangible;
(f) sold, transferred, assigned, or licensed any of its intangible
assets;
(g) canceled any debts or claims or waived any rights of substantial
value;
(h) entered into any transaction other than in the ordinary and normal
course of business except for a reorganization under 368(a)(1)(F) of the
Internal Revenue Code of 1986, as amended; or
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(i) suffered any material changes in its condition (financial or
other), business, net worth, assets, properties, obligations, or liabilities,
which in the aggregate or severally have had or may have a material and adverse
effect on the business, properties, financial condition, or operations of
Seller or suffered any occurrence, circumstance, or combination thereof which
might reasonably be expected to result in any material and adverse effect
before or after the Closing.
3.8 Taxes. Seller has accurately prepared in good faith and duly filed
with the appropriate federal, state, county and local governmental agencies all
income, payroll, sales and use and other tax returns and reports required to be
filed by it and paid all taxes as shown to be due thereon and any interest or
penalty relative to same.
3.9 Title to Assets; Qualifications Needed. The Acquired Assets
constitute all the personal property, tangible and intangible (other than
finished goods inventory, raw material inventory, cash and accounts
receivable), necessary for the conduct by Seller of its business. To the best
of the knowledge of Seller, all of the Acquired Assets in regular use by Seller
are in good operational condition, free from any material defects. Seller has
lawful record and good and marketable title to all of the Acquired Assets, free
and clear of any material liens, charges, encumbrances, restrictions, or
adverse claims.
3.10 Intellectual Property. Seller uses no patents, trademarks, trade
names, trade secrets, logos, or copyrights, except as set forth on Exhibit
1.1(d). Seller owns or possesses adequate rights to use all proprietary
information used in its business, and the same are sufficient to conduct its
business as now conducted. Seller is not required to pay any royalty, license
fee, or similar type of compensation in connection with the conduct of its
business as it is now or heretofore has been conducted. No one has asserted
that Seller's operations infringe, and to the best of the knowledge
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of Seller, Seller's operations do not infringe, on the patents, patent
applications, trademarks, trade secrets, formulae, or other rights of anyone.
3.11 Real Estate. To the best of the knowledge of Seller, none of the
operations of Seller at the Facility violates (i) any applicable zoning
classifications or pollution control ordinances or statutes relating to the
particular property or to such operation, except as disclosed in Exhibit 3.11,
attached hereto, or (ii) any other laws, regulations, or orders applicable to
the operation of the business of Seller.
3.12 Employee Benefit Plans. Except for those listed in Exhibit 3.12,
attached hereto ("Plans"), Seller does not have an employee benefit plan, as
defined in the Employee Retirement Income Security Act of 1974 ("ERISA"), nor
does it have any other welfare or deferred compensation plan or arrangement,
formal or informal, covering any employee or former employee.
3.13 Contracts. Seller has no Contracts or Purchase Orders which have
been made other than in the ordinary course of business and which are
cancelable by Seller in thirty (30) days or less or which involve a
consideration of FIVE THOUSAND AND NO/100 DOLLARS ($5,000.00) or more, except
as shown on Exhibit 3.13, attached hereto.
3.14 Certificate of Incorporation and By-Laws. Buyer has received a
Certificate of Good Standing issued by the State of New Jersey and has examined
the By-Laws and Certificate of Incorporation of Seller and is satisfied
therewith.
3.15 Litigation; Product Liability. There is no litigation, suit,
proceeding, action, claim, or investigation, at law or in equity, pending, or,
to the best of the knowledge of Seller, threatened, against or affecting Seller
or involving any of its properties, assets, or capital stock before any court,
agency, or authority, and there are no facts known to Seller that might result
in such litigation, suit,
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proceeding, claim or investigation. Seller is not subject to nor in default
with respect to any notice, order, writ, injunction, or decree of any court,
agency or authority.
3.16 Compliance with Laws, Regulations and Orders. To the best of the
knowledge of Seller, Seller is not in default under and has complied (and
presently is in compliance) with all laws, regulations, rules, orders,
judgments, decrees, and other requirements imposed by any governmental
authority or court applicable to Seller or any of its operations, properties,
or assets, including, without limitation, laws, regulations and orders relating
to health, deferred compensation benefits, equal employment or safety of
employees or to pollution of the atmosphere and rivers, streams and lakes, and
Seller has received no notice of any alleged violation thereof.
3.17 Insurance Policies. Seller has in full force and effect, with all
premiums due thereon paid or accrued, the policies of insurance, or renewals
thereof, in the amounts set forth in Exhibit 3.17 attached hereto, which
Exhibit constitutes a full and complete list of all policies of insurance to
which Seller is a party. Seller has delivered to Buyer true, correct and
complete copies of each such insurance policy.
3.18 Licenses. Except for licenses by Seller in connection with its
motor vehicle, there are no registrations, licenses, permits, approvals,
qualifications, or the like issued or to be issued to Seller by any government
or any governmental unit, agency, body, or instrumentality whether federal,
state, local or other. To the best of the knowledge of Seller, no other
registrations, licenses, permits, approvals, qualifications, or the like are
necessary to conduct the business of Seller as it is now being conducted. No
registration with, approval by, clearance from, or pre-notification to any
governmental agency is required in connection with the execution and
performance of this Agreement by Seller, except for a continuation of the
existing Certificate of Occupancy and
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compliance with NJSA ss.13:1K-6, et seq.
3.19 Broker, Finder or Agent. Seller have not expressly or implied,
engage any broker, finder, or agent with respect to any transactions
contemplated by this Agreement.
ARTICLE IV
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REPRESENTATIONS AND WARRANTIES OF BUYER
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Buyer represents and warrants to Seller that:
4.1 Organization and Standing of Buyer. Buyer is a corporation duly
organized, validly existing and in good standing under the laws of the State of
Delaware.
4.2 Power and Authority of Buyer; Execution of Agreement. Buyer has
all requisite corporate power and authority to enter into this Agreement and to
perform the obligations to be performed by it hereunder. This Agreement has
been duly authorized, executed and delivered by and constitutes the valid and
legally binding obligation of Buyer.
4.3 Broker, Finder or Agent. Buyer has not expressly or implied
engaged any broker, finder, or agent with respect to any transaction
contemplated by this Agreement.
4.4 Litigation. There is no litigation, action, suit, investigation,
claim or proceeding at law or in equity before any federal, state, local or
other governmental authority or any arbitration panel pending or to the best of
its knowledge, threatened against Buyer which, if adversely decided, would
affect the ability of Buyer to carry out its obligations under this Agreement.
4.5 Buyer's Solvency. Buyer warrants that it has paid fair
consideration for the assets purchased, that after the purchase of the assets
and delivery of the Note and Security Agreement, Buyer will be solvent and able
to pay its debts as they mature.
ARTICLE V
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CONTINGENCIES TO CLOSING
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5.1 Contingencies. The following are contingencies to the closing of
the transactions contemplated by this Agreement:
(a) CONDITION PRECEDENT. Prior to closing, the Buyer shall conduct due
diligence. The Buyer shall satisfy itself that the Seller's business conforms
in material respects with the presentations and representation previously made
by the Seller.
(b) REPRESENTATIONS AND WARRANTIES: The Seller's and Buyer's
representations and warranties set forth in Articles III and IV shall be and
remain true, accurate and complete.
(c) PURCHASE PRICE ALLOCATION: The Buyer and the Seller shall agree to
the allocation of the purchase price;
(d) FINANCING: The Buyer shall negotiate and secure appropriate
financing commitments on terms satisfactory to Buyer. The proposed transactions
are conditioned, however, on the Buyer obtaining financing on terms
satisfactory to the Buyer;
(e) ENVIRONMENT: The Buyer and Seller agree that prior to closing,
Seller shall comply with NJSA ss.13:1K-6, et seq.;
(f) APPROVALS: All necessary governmental approvals shall be obtained.
(g) TITLE: the Seller shall have good and marketable title to all of
the Acquired Assets;
(h) CORPORATE AUTHORITY: That all corporate authorities necessary to
sell and purchase the Seller's assets have been obtained;
(i) CONTRACTS: All material contracts to which the Seller is a party
are in full force and effect and may be properly enforced;
(j) CONDITION OF ACQUIRED ASSETS: All Acquired Assets are in
conditions suitable for
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their intended use;
(k) COMPLIANCE: The Seller is in compliance with all governmental
requirements and environmental regulations; and
(l) MATERIAL ADVERSE CHANGE: No material adverse change in the
business or financial condition of the Seller exists at the time of closing.
5.2 Closing Defined. The "Closing" means the time at which Seller
consummates the sale of the Acquired Assets to Buyer by delivery of the
documents referred to in Section 5.2 below, against delivery by Buyer at the
Closing as provided for in Section 2.1. The Closing shall take place in the
offices of Seller at 10:00 a.m. on October 30, 1996 (the "Closing Date"), or at
such other time or location as shall be mutually agreed upon in writing by the
parties hereto.
5.3 Actions by Seller at Closing. At the Closing, in addition to any
other documents specifically required to be delivered to Buyer by this
Agreement, Seller shall deliver or cause to be delivered to Buyer, in form and
substance satisfactory to Buyer and its counsel:
(a) Certified copies of the resolutions of the Directors and
Stockholders of Seller authorizing and approving this Agreement and the
transactions contemplated hereby;
(b) Good standing certificates for Seller from the Secretary of State
of the State of New Jersey, dated not more than fifteen (15) days prior to the
Closing;
(c) Tax clearance certificate for Seller from the appropriate tax
authority of the State of New Jersey, dated not more than fifteen (15) days
prior to the Closing;
(d) Lease Agreement by and between Plaza Realty Partnership and Buyer
for the Facility in the form attached hereto as Exhibit 5.2(d);
(e) Bill of Sale for the conveyance of all personal property and such
other good and
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sufficient instruments of transfer and conveyance (the "Transfer Documents") as
shall be required to vest effectively in Buyer all Seller's right, title and
interest in and to the Acquired Assets. As of the Closing Date or immediately
thereafter, Seller and Buyer shall have made arrangements to file for record
such of the foregoing Transfer Documents as requested by Buyer; and
(f) All corporate and other proceedings to be taken in connection with
this Agreement and the transactions contemplated hereby and all documents
incident thereto.
5.4 Actions by Buyer at Closing. At the Closing, in addition to any
other documents specifically required to be delivered pursuant to this
Agreement, Buyer shall deliver or cause to be delivered to Seller, in form and
substance satisfactory to Seller and its counsel:
(a) Payment of the Purchase Price in accordance with Section 2.2; and
(b) All corporate and other proceedings to be taken in connection with
the transactions contemplated by this Agreement, and all documents incident
thereto.
ARTICLE VI
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INDEMNIFICATION AND CERTAIN AGREEMENTS
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AFTER CLOSING
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6.1 Indemnification. (a) In accordance with the procedures set forth
in Section 6.2 (if applicable), Seller shall indemnify Buyer against and hold
it harmless from any loss, claim, damage or liability and any and all costs and
expenses (including reasonable legal and accounting fees) related thereto
resulting from or arising out of any inaccuracy in or breach of any
representation or warranty made by Seller in this Agreement or pursuant hereto,
or from any non-fulfillment or breach or breach or default in the performance
by Seller of any of the covenants or agreements made by Seller herein.
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(b) In accordance with the procedures set forth in Section 6.2 (if
applicable), Buyer shall indemnify Seller against and hold it harmless from any
loss, claim, damage or inability and any and all costs and expenses (including
reasonable legal and accounting fees) relating thereto resulting from or
arising out of: (i) any inaccuracy in or breach of any representation or
warranty made by Buyer in this Agreement or pursuant hereto, or from any
non-fulfillment or breach or default in the performance by Buyer of any of the
covenants or agreements made by Buyer herein; and (ii) the ownership of the
Acquired Assets or conduct of Buyer's business after the Closing Date, except
as and to the extent responsibility therefor is otherwise allocated to Seller
pursuant to the terms of this Agreement.
6.2 Notice of Claim; Defense of Action. Each party agrees to give the
other prompt written notice of any event, or any claim or assertion by a third
party, of which it obtains knowledge, which could give rise to any damage,
liability, loss, cost or expense as to which it may request indemnification
under this Agreement, and, in the case of such third-party claims or
assertions, each party will cooperate with the other in determining the
validity of any such claim or assertion. The indemnifying party hereunder
shall, upon written acknowledgment, given to the other party, of its full
obligation to indemnify the other party (unless released from its indemnity
obligation with respect thereto by the indemnified party) have the right to
choose counsel (which must be reasonably satisfactory to the indemnified party)
and to control and defend (and compromise or settle) any third-party suits or
proceedings arising from claims or assertions for which indemnification will be
had, and the party seeking indemnification (having the right, at its own
expense, to employ additional counsel to assist counsel for the indemnifying
party in the defense) shall cooperate fully in all respects with the party from
whom indemnification will be forthcoming in any such defense,
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compromise or settlement, including, without limitation, by making available to
the party from whom such indemnification is sought all pertinent information
under the control of the party seeking indemnification. The party seeking
indemnification will not compromise or settle any claim or assertion, or any
action, suit or proceeding arising therefrom without prior written notice of
such proposed settlement given to the party from whom indemnification is
sought.
6.3 Access to Properties and Records. Seller shall afford to the
officers, attorneys, accountants, or other authorized representatives of Buyer
free and full access to all of the assets, properties, books, and records of
Seller in order to afford Buyer full opportunity of such review, examination,
and investigation as Buyer shall desire to make of the affairs of Seller, and
Buyer shall be permitted to make extracts from, or take copies of, such books,
records (including the stock record and minute books), or other documentation
or to obtain temporary possession of any thereof as may be reasonably
necessary; and Seller shall furnish or cause to be furnished to Buyer such
reasonable financial and operating data and other information as to its
business, properties, and assets as Buyer or any of its directors, officers,
attorneys, accountants, or other authorized representatives may request.
6.4 Cooperation. Seller and Buyer each will cooperate and will use all
reasonable efforts to have their agents and employees cooperate with each
other, at Seller's or Buyer's reasonable request, as the case may be, on and
after the Closing Date, in furnishing information, evidence, testimony and
other assistance in connection with any actions, proceedings, arrangements, or
disputes involving the business of Seller or based upon contracts,
understandings or acts of Seller which were in effect or occurred on, after, or
prior to the Closing Date. Buyer will cooperate in good faith with Seller (at
Seller's expense) in connection with the defense of any lawsuit or claim
arising
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from liabilities not assumed by Buyer hereunder.
6.5 Remediation. Seller shall complete any remediation requirements
and provide a negative declaration or a no further action letter in accordance
with NJSA ss.13:1K-6, et seq.
ARTICLE VII
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SURVIVAL OF REPRESENTATIONS,
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WARRANTIES AND COVENANTS AND MISCELLANEOUS
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7.1 Survival of Representations, Warranties and Covenants. All
representations and warranties made by Seller in Article III hereof and by
Buyer in Article IV hereof and the covenants contained in Articles II and VII
hereof shall survive the Closing for three (3) years.
7.2 Severability of Agreement. Each Article, section, subsection and
lesser section of this Agreement constitutes a separate and distinct
undertaking, covenants and/or provision hereof. In the event that any provision
of this Agreement shall be determined to be unlawful, such provision shall be
severed from this Agreement, but every other provision of this Agreement shall
remain in full force and effect.
7.3 Notices. Service of all notices under this Agreement must be in
writing and shall be sufficient if given personally or mailed via First Class
Certified or Registered Mail, Return Receipt Requested, Postage Prepaid, or if
given by commercial overnight courier delivery service, charges prepaid to the
party involved at its respective address hereinafter set forth, or at such
other address as such party may provide in writing from time to time in
accordance with the provisions hereof. Any such notice mailed to such address
shall be effective (1) if by mail, when deposited in the United States mail,
duly addressed, provided the postmark thereon is applied by the United States
Postal Service, otherwise upon receipt, or (2) if by overnight courier, one (1)
day after being delivered to a commercial overnight delivery service, for the
next day delivery, or the first business
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day after delivery to the commercial overnight delivery service, whichever is
later, or (3) in all other cases, upon receipt.
If to Seller: 80 Market Street
Kenilworth, New Jersey 07033
Attention: Frank Criscitiello
If to Buyer: 567-1 South Leonard Street
Waterbury, Connecticut 06708
Attention: Patrick A. DePaolo, Sr.
7.4 Limitation of Rights and Remedies Under the Agreement. Nothing
expressed or implied in this Agreement is intended, or shall be construed, to
confer upon or give any person, firm, or corporation, other than Buyer and
Seller, any rights or remedies under or by reason of this Agreement.
7.5 Change of Name. At the time of Closing, Seller shall amend its
Articles of Incorporation to change its name to a name dissimilar to "Christie
Enterprises, Inc." and shall provide a fully executed Amendment for filing with
the Secretary of State of Connecticut together with the filing fees.
7.6 Non-Competition. Frank Criscitiello agrees that he will not,
during the above term of his employment and for a period of three (3) years
thereafter, within the United States of America, Canada, Mexico or Puerto Rico,
directly or indirectly, individually or as an officer, director, partner,
stockholder, proprietor, consultant or in any other capacity, engage in any
business in competition with the business of Buyer or solicit the customers of
Buyer for any purpose other than on behalf of Buyer. Frank Criscitiello further
acknowledges, without limiting the right of Buyer to monetary damages for
breach of this paragraph, that any such monetary damages would be inadequate
and that Buyer shall in any proceeding be entitled to equitable relief,
including an injunction. In
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consideration for such covenant, Buyer agrees to pay Frank Criscitiello the sum
of TEN THOUSAND DOLLARS ($10,000.00) payable in two (2) consecutive equal
monthly payments of FIVE THOUSAND DOLLARS ($5,000.00) each commencing six (6)
months from the date of closing until fully paid.
7.7 Consulting. Buyer agrees to engage the services of Frank
Criscitiello as a self-engaged business consultant, pursuant to the terms and
provisions of the Consulting Agreement attached hereto as Exhibit 7.7.
7.8 Lease of Premises. The obligations of Buyer hereunder are
contingent upon the execution of the Lease set forth as Exhibit 5.3(d), hereto
by and between Buyer and the owner of the premises described therein. Buyer
hereby agrees that Seller may store finished goods inventory and raw material
inventory on the leased premises for a period of three (3) months after the
effective date of the Lease without charge.
7.9 Accrued Holiday and Vacation Pay. Seller agrees to pay accruals of
holiday and vacation pay.
7.10 Consolidated Federal Income Tax Return/Issuance of Share. Discas,
Inc. and Buyer agree to file consolidated federal income tax returns so long as
the Promissory Note to Seller remains unpaid or unsatisfied. Discas, Inc.
represents and warrants to Seller that it is authorized to issue twelve million
(12,000,000) shares of voting common stock of a par value of $.0001, of which
one million six hundred seventy thousand (1,670,000) shares are presently
issued and outstanding together with warrants to purchase another one hundred
thousand (100,000) of such shares. Discas, Inc. covenants and agrees that until
the Promissory Note is paid or satisfied in full, that it will not issue
additional shares of its common stock to the present holders thereof, except
pursuant to the
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outstanding warrants, without fair and adequate consideration being paid
therefor.
7.11 Headings. The headings in this Agreement are intended solely for
convenience of reference and shall be given no effect in the construction or
interpretation of this Agreement.
7.12 Counterparts. This Agreement may be executed in two or more
counterparts, each of which shall be deemed an original but all of which shall
constitute the same agreement.
7.13 Entire Agreement. Except as herein expressly set forth or in an
instrument in writing signed by the party to be bound thereby which makes
reference to this Agreement, this Agreement and the Exhibits attached hereto
embody the entire agreement in relation to the subject matter hereof, and no
other representations, warranties, covenants, understandings, or agreements, or
otherwise, in relation thereto exist between the parties hereto.
7.14 Governing Law. This Agreement shall be construed and enforced in
accordance with and governed by the internal substantive laws of the State of
New Jersey and of the United States of America.
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7.15 Exhibits. The Exhibits attached hereto and referred to in this
Agreement are a part of this Agreement for all purposes.
IN WITNESS WHEREOF, the parties have caused this Agreement to be
executed by their duly authorized officers as of the day and year first above
written.
SELLER: CHRISTIE ENTERPRISES, INC.
By /s/ Frank Criscitiello
----------------------
Frank Criscitiello
Its President
Duly Authorized
BUYER: CHRISTIE PRODUCTS, INC..
By /s/ Patrick A. DePaolo, Sr.
---------------------------
Patrick A. DePaolo, Sr.
Its President
Duly Authorized
Read and Agreed:
/s/ Frank Criscitiello
- ----------------------
Frank Criscitiello
Dated: 10/30/96
--------
Read and Agreed:
DISCAS, INC.
By /s/ Patrick A. DePaolo, Sr.
---------------------------
Patrick A. DePaolo, Sr.
Its President
Duly Authorized
Dated: 10/30/96
--------
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