Asset Purchase and Sale Agreement - Parlux Fragrances Inc. and Genesis International Marketing Corp.
ASSET PURCHASE AND SALE AGREEMENT
THIS AGREEMENT, made and entered into as of the 4th day of
November, 2002, by and between Parlux Fragrances Inc., a Delaware corporation,
having a principal place of business at 3725 SW 30th Avenue, Ft. Lauderdale,
Florida 33312 (hereinafter "Seller") and Genesis International Marketing
Corporation, a Florida corporation, having a place of business at 1221 NW 165th
Street, Miami, FL 33169 (hereinafter " Buyer").
WITNESSETH
WHEREAS, Seller presently owns certain trademarks, trade names,
registrations and/ or applications for the Trademarks (as that term is defined
below), as well as certain Know-How (as that term is defined below) and product
information relating to products which have been sold under or associated with
the Trademarks;
WHEREAS, Buyer and Seller entered into a License Agreement (hereinafter
"License Agreement") on June 9th, 1998 which agreement is currently in force;
and
WHEREAS, Buyer wishes to purchase from Seller and Seller wishes to sell
to Buyer the Trademarks and Know-How and to assume the Seller's rights and
obligations under the License Agreement now in existence between them.
NOW THEREFORE, in consideration of the premises and mutual covenants
and agreements hereinafter set forth, the parties hereby covenant and agree as
follows:
1. DEFINITIONS
1.1 "Closing Date" shall mean the date on which the transactions
contemplated by this Agreement are consummated.
1.2 "Conveyed Assets" shall mean the Know-How and Trademarks as those terms
are defined below. The conveyed assets shall also include the License
Agreement.
1.3 "Know-How" shall mean all technical information procedures, processes,
trade secrets, formulae for the perfume oil and applicable production
methods, practices, techniques, parts, diagrams, drawings, specifications,
blue prints, lists of materials, production manuals and data relating to
the design, manufacture, production, inspection and testing of the Products
known by, available to or used or owned by Seller. "Products" shall mean
all products on which Seller or its licensees have used the Trademarks.
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1.4 "Trade Marks" shall refer to those U.S. and foreign trade marks,
services marks, imprints, logos, trade dress and trade names whether or not
registered and all issued registrations, pending applications as set forth
on Schedule A relating to various names, including, but not limited to,
"Bal a Versailles" and "Jean Desprez", and all other names, designs, logos,
trademarks, trade names, and the like, used on or in connection with
Products bearing the names as set forth on that Schedule.
1.5 "Territory" shall mean worldwide without exclusion.
2 PURCHASE AND SALE
2.1 Upon the terms and subject to the conditions of this Agreement, and in
reliance on the representations, warranties and covenants set forth in this
Agreement, Buyer agrees to purchase for the purchase price set forth below
on the Closing Date the Conveyed Assets and Seller will sell, convey,
transfer, deliver and assign to Buyer, all rights, title and interest in
and to the Conveyed Assets. The sale, assignment, conveyance, transfer, and
delivery by Seller of the Conveyed Assets shall be made at the Closing by a
duly executed Assignment for the Trademarks and Know-How, and a Bill of
Sale for all tangible forms or embodiments of the Trademarks and Know-How,
such Assignment of Trademarks and Bill of Sale shall be in the form annexed
as Exhibits A and B, respectively (the "Bill of Sale" and "Assignment") as
well as any other assignments, conveyances and bills of sale sufficient to
convey to Buyer good and marketable title to all the Conveyed Assets free
and clear of all mortgages, pledges, liens, licenses, rights of possession,
security interest, restrictions, encumbrances, charges, title retention
conditionals sale or other security arrangements and all claims or
agreements of any nature whatsoever, except for the lien of GMAC Commercial
Credit Corp., which shall be released upon satisfaction of all amounts due
hereunder (as well as such other instruments of conveyance as Buyer may
reasonably deem necessary or desirable both at and after the Closing Date
to effect or evidence the transfers contemplated hereby).
2.2 The execution and delivery of this Agreement shall not be deemed to
confer any rights upon any person or entity other than the parties hereto,
or make any person or entity other than the parties hereto, or make any
person or entity a third party beneficiary of this Agreement, or to
obligate the parties to any person or entity other than the parties to this
Agreement. This Agreement is intended by the parties to be an agreement for
the sale and purchase of Conveyed Assets; and none of the provisions hereof
shall be deemed to create any obligation or liability on the part of Buyer
to any person or entity that is not a party to this Agreement, whether
under a third party beneficiary theory, successor liability theory, or
otherwise.
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3. CLOSING
The Closing Date shall be as of the close of business on November 4,
2002 or such other date as the parties may agree (the "Closing Date").
Conveyed Assets, all of which shall be transferred to Buyer, as provided
for herein. In no event shall Buyer be required to proceed in accordance
with the Agreement unless and until each and every condition precedent as
set forth in the Agreement shall have been satisfied, waived or made a
condition subsequent. If on November 30, 2002 the parties have not
satisfied all conditions precedent, then Seller may terminate this
Agreement in the manner provided in Paragraph 14.
4. DELIVERIES AT THE CLOSING
4.1. At the Closing, Buyer shall deliver the following:
(a) One hundred thousand dollars ($100,000.00) in immediately
available funds by wire transfer or cashier's check, which includes
all monies due under the License Agreement;
(b) Promissory Note in the amount of Two hundred seventy-five thousand
dollars ($275,000.00) duly executed by Buyer in the form set forth in
Exhibit "C" (the "Note");
(c) Certified copies of resolutions duly adopted by Buyer constituting
all necessary corporate authorization for the consummation by Buyer of
the transactions contemplated by this Agreement; and
4.2 At the Closing, Seller shall deliver the following:
(a) certified copies of resolutions duly adopted by Seller
constituting all necessary corporate authorization for the
consummation by Seller of the transactions contemplated by this
Agreement;
(b) the Bill of Sale, duly executed by Seller in the form set forth in
Exhibit A transferring title to the Conveyed Assets, duly executed by
Seller, and whatever additional documents of title, such as invoices,
endorsements, or other documents as Buyer may reasonably request;
(c) an assignment of any warranties for the Conveyed Assets being
transferred hereunder;
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(d) executed copies of the Assignment of Trademarks and Know-How as
set forth in Exhibit B;
(e) executed release of liens on the Trademarks;
(f) any other records, lists, or reports required hereunder or
reasonably requested by Buyer which pertain to the Conveyed Assets
being purchased hereunder; and
(g) documents, in a form reasonably satisfactory to Buyer confirming
release of any and all liens, security interest, restrictions, claims
and encumbrances of the Conveyed Assets as of the Closing Date.
5 PURCHASE PRICE
The purchase price (hereinafter " Purchase Price") to be paid for the
conveyed Assets shall be U.S. $300,000.00, and shall be paid by Buyer as
outlined in paragraph 4.1 (b).
6. TAXES AND TRANSFER COSTS
6.1 Any sales, transfer, documentary, or excise taxes applicable to the
transfer of any Assets from Seller to Buyer shall be paid by Seller
whenever due or assessed. Seller shall also prepare and file whatever
returns as may be required in connection with any of the foregoing taxes.
Seller shall also make payment of all personal property, real property, ad
valorum, franchise, and similar taxes which are due and owing on the
Conveyed Assets up until the Closing Date.
6.2 Buyer shall pay all fees incurred in transferring any Trademark or
other forms of intellectual property registrations and or applications on
the Conveyed Assets.
7. BROKERS AND FINDERS
Each of the parties hereby represents and warrants to the other that
it has not employed or dealt with any broker or finder in connection with
this Agreement or the transactions contemplated hereby, and agrees to
indemnify the other and hold it harmless from any and all liabilities
(including, without limitation, reasonable attorneys' fees and
disbursements paid or incurred in connection with any such liabilities) for
any brokerage commissions or finders' fees in connection with this
Agreement or the transactions contemplated hereby, insofar as such
liabilities shall be based on the arrangements or agreements made by or on
its behalf.
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8. SELLER'S OBLIGATIONS
8.1 Upon satisfaction of the Note, Seller shall obtain whatever releases
are required to transfer the Conveyed Assets free and clear of any and all
liens, security interests, restrictions, claims and encumbrances which all
may subsist on the Conveyed Assets so that the Conveyed Assets may be
transferred to Buyer free and clear of all of the foregoing.
8.2 Prior to the Closing Date, Seller shall afford Buyer, at reasonable times
and on reasonable notice, the opportunity to make such inspections of
Seller's records pertaining to the Conveyed Assets being transferred, as
Buyer shall deem reasonably necessary.
8.3 Following the Closing Date, Seller will discontinue any use of the
Trademarks or the Know-How and shall not authorize any other person to so
use the Trademarks or Know-How.
8.4 From and after the Closing Date, Seller shall take such actions and
promptly execute and deliver to Buyer any and all such further assignments,
licenses, endorsements or other documents as Buyer my request from time to
time for purposes of carrying out the transfer of the Conveyed Assets.
9. SELLER'S INDEMNIFICATION
Seller hereby agrees to indemnify and hold Buyer, its officers,
directors, employees and agents harmless from and against all claims,
demands, losses, costs, damages, liabilities, judgments (including
penalties and interest), suits, causes of action and expenses, including
reasonable attorney's fees and cost of investigation arising from the
violation, breach, or failure of any of its covenants or obligations
hereunder or any representation or warranty made by Seller in this
Agreement or which arise out of or are in any way related to the Conveyed
Assets or the transfer thereof by Seller to Buyer. Buyer shall give prompt
notice to Seller of any of the foregoing; and at Seller's election, Seller
may defend any such action through counsel reasonably satisfactory to
Buyer.
10. BUYER'S INDEMNIFICATION
Buyer hereby agrees to indemnify and hold Seller, its officers,
directors, employees and agents harmless from and against all claims,
demands, losses, costs, expenses, judgments, penalties, interest, damages,
liabilities, suits, causes of action and expenses, including reasonable
attorney's fees and cost of investigation and experts arising from the
violation of any representation or warranty made by Buyer in this Agreement
or failure of Buyer to perform its obligations hereunder or Buyer's use of
the Conveyed Assets following the Closing Date, provided that the facts and
circumstances which gave rise to the action did not occur prior to the
Closing Date or result from Seller's acts or prior ownership of the
Conveyed Assets. Seller shall give prompt notice to Buyer of any of the
foregoing, and at Buyer's election will defend such action through counsel
reasonably acceptable to Seller.
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11. SELLER'S REPRESENTATIONS
Seller hereby makes the following representations and warranties:
(a) Seller is a duly organized, validly existing corporation and in good
standing under the law of its state of incorporation with full power and
authority to own the Conveyed Assets being transferred hereunder, to
execute and deliver this Agreement, and to carry out the transactions
contemplated hereby.
(b) All necessary action, corporate or otherwise, has been taken by Seller
to authorize the execution, delivery and performance of this Agreement and
the Agreements set forth in the Exhibits hereto, and the same are valid and
binding obligations of Seller in accordance with its terms.
(c ) Seller has good and valid title to all of the Conveyed Assets to be
transferred hereunder; that upon receipt of the final installment due under
the Note, all said Conveyed Assets will be free and clear of any and all
mortgages, security interests, liens and encumbrances, that there are and
to the best of Seller's knowledge will be no legal, administrative or other
proceedings, investigations, inquiries, claims, judgments, injunctions or
restrictions either threatened, pending or outstanding against or related
to Seller with respect to said Conveyed Assets, or which would have the
tendency to interfere with Seller's performance hereunder, and that Seller
does not know or have reasonable grounds to know of any basis for any such
proceedings, investigations, inquiries, claims, judgments, injunctions or
restrictions.
(d) All issued registrations for the Trademarks and Know How as presented
on their respective schedules are current and valid and that Seller has
made timely application for such and has timely filed all renewals and or
extensions and to the best of Seller's knowledge there is no basis for
challenging the validity of any of such registrations.
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(e) Other than the License Agreement, Seller has not entered into any
contract, agreement, understanding or commitment that in any way relates to
or cover the Conveyed Assets.
(f) All representations and warranties made by Seller in this Agreement and
in the Exhibits and schedules there to and the statements, lists and other
information required to be submitted in connection with this transaction
shall be true and complete as of the date when made and as of the Closing
Date as though such representations and warranties were made as of the
Closing Date.
(g) No representation or warranty made by Seller contains any untrue
statement of a material fact or omits to state a material fact necessary to
make the statements made, in light of the circumstances under which they
were made, false or misleading.
(h) Seller is not engaged in or a party to or to the best of Seller's
knowledge threatened with any legal action, suit, investigation or other
proceeding related to or arising in connection with the Conveyed Assets and
Seller knows of no sustainable basis for any such action, investigation or
proceeding; and there are no outstanding orders, rulings, decrees,
judgments or stipulations related to or arising in connection with the
Conveyed Assets to which Seller is a part or by which Seller or the
Conveyed Assets are bound by or with any court, arbitrator or
administrative agency. Seller is not in default in the payment of any
taxes, including without limitation property, sales, franchise, use and
other similar taxes that are due and payable and any assessments received
in respect thereof, in each case which could result in the imposition of
any material lien or charge upon any of the Conveyed Assets, provided
however that for the purposes of the Seller's indemnification obligations
under Paragraph 9 hereof with respect to a breach of the representations
contained in this Section such representations shall be deemed to be made
without the references to "materially" contained herein.
(i) Seller has the right and authority and has obtained all approvals
required to convey the Conveyed Assets in accordance with the terms of this
Agreement.
(j) Seller shall never (in any trademark class) use or file to use the name
"Bal a Versailles by Jean Desprez", or any variation thereof, including any
existing or abandoned mark associated at any time with the Bal a Versailles
brand.
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12. BUYER'S REPRESENTATIONS
Buyer hereby makes the following representations and warranties:
(a) Buyer is a Florida corporation authorized to own or lease its
properties and to conduct its business in the manner and in the places
where such properties are owned or leased or such business is conducted by
it.
(b) All necessary action has been taken by Buyer to authorize the
execution, delivery and performance of this Agreement, and this Agreement
is a valid and binding obligation of Buyer in accordance with its terms.
(c) All representations and warranties made by Buyer shall be true and
complete as of the date when made and as of the Closing Date as though such
representations and warranties were made as of the Closing Date.
13. CONDITIONS PRECEDENT
The obligations of Buyer and Seller to consummate this Agreement and
the transactions contemplated hereby are subject to the fulfillment prior
to or at the Closing Date of the following conditions precedent:
A. All of the duties and covenants to be performed by Seller and Buyer,
respectively, at or prior to the Closing Date shall have been duly and
timely performed.
B. There shall not have been received by either party hereto any notice of
the commencement of any legal or administrative proceeding questioning the
validity of this Agreement or seeking to enjoin, prohibit or delay or
otherwise necessarily having the effect of preventing, the consummation of
the transactions contemplated by this Agreement or the realization of the
benefits intended thereby or there shall otherwise be lodged against Seller
any investigation, inquiry, claim, injunction, action, cause, or
restriction of any nature or sort, which may impede this transaction.
C. That each and every representation, acknowledgment and warranty made in
this Agreement by Seller or Buyer shall be true and correct on the Closing
Date.
D. That if third party approval is requested for Seller's performance, this
shall be a condition precedent.
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14. TERMINATION
A. At any time prior to the Closing Date, this Agreement may be terminated
(i) by mutual consent of Buyer and Seller with the approval of their
respective Boards of Directors, or (ii) by either Buyer or Seller if there
has been a material misrepresentation, breach of any obligation or
representation or warranty or breach of covenant by the other party in its
representations, warranties, obligations, and covenants set forth herein.
If this Agreement shall be terminated as provided in the preceding
sentence, all obligations of either Buyer or Seller, as the case may be, to
proceed as provided in this Agreement shall terminate without liability of
the non-breaching party to the other solely by reason of such termination,
and the License Agreement shall remain in full force and effect.
B. The right of either Buyer or Seller to terminate this Agreement as
provided above is not an exclusive remedy, but is in addition to and may be
exercised in addition to and in combination with all other rights and
remedies available to Buyer and Seller under law or equity in the event of
breach or default of this Agreement.
15. EXPENSES
A. Except as indicated otherwise herein, Buyer and Seller shall bear their
own fees and expenses regarding the completion of the transaction as
contemplated herein.
B. In the event either Buyer or Seller institutes suit or is required to
defend an action instituted by the other party, based upon or arising out
of a breach of this Agreement or a representation or warranty made by the
other party or misrepresentation, the prevailing party in such lawsuit
shall be entitled to reasonable attorney's fees and costs as may be fixed
by a court of proper jurisdiction.
16. CONSTRUCTION
This Agreement shall be governed and construed in accordance with the
laws of the State of Florida applicable to agreements made in such state
between residents thereof and to be wholly performed therein. The parties
hereto hereby irrevocably submit to the exclusive jurisdiction of any
Federal or State Court sitting in the State of Florida in any action or
proceeding arising out of or relating to this Agreement. The parties hereby
waive any defenses, which they may have in respect to the selection of the
forum.
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17. WAIVER
Seller and Buyer shall have the right to waive in writing any
requirement or undertaking of the other party contained herein. Any waiver
or a breach of any term or condition of this Agreement shall not operate as
a waiver of any other breach of such term or condition or of any other term
or condition, nor shall any failure to enforce any provision hereof operate
as a waiver of such provisions or of any other provision hereof.
18. SURVIVAL OF REPRESENTATIONS AND WARRANTIES AND INDEMNITIES
The representations and warranties made by Buyer and Seller shall
survive the Closing Date.
19. COUNTERPARTS
This Agreement may be executed simultaneously 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. This Agreement and
the agreements appended hereto or executed in connection with this
Agreement may be signed and transmitted by facsimile, and any copy with a
facsimile signature will be deemed a valid signature hereto or thereto and
shall be deemed binding on the parties as if it were an original signature.
20. ENTIRE AGREEMENT
This Agreement, including the lists, schedules, and other Agreements
and assignments required to be entered hereunder, and all other agreements
entered into by the parties simultaneously herewith sets forth the entire
agreement and understanding of the parties hereto in respect of the subject
matter contained herein, and supersedes all prior agreements, covenants,
arrangements, communications, representations or warranties, whether oral
or written, by any officer, employee or representative of either party
hereto. There are no restrictions, representations, warranties, covenants
or undertakings other than those expressly set forth or referred to herein.
In the event of a conflict of the terms of this Agreement and any other
agreement between the parties or in the License Agreement, the term of this
Agreement shall prevail.
21. AMENDMENT
This Agreement may not be altered, amended or modified in any respect,
except by written instrument executed by and between the parties hereto and
there shall be no waiver of any term, condition, obligation, or undertaking
provided herein, except in writing signed by the party granting the waiver.
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22. NOTICES
Any and all notices, requests, consents and other communications
required hereunder shall be in writing sent by registered or certified
mail, return receipt requested or by overnight courier, addressed as
follows or at such other address as either party may designate to the other
from time to time in writing:
TO THE SELLER:
Mr. Ilia Lekach
Chairman & Chief Executive Officer
3725 S.W. 30th Avenue
Fort Lauderdale, FL 33312
Facsimile: 954-316-8155
TO THE BUYER:
Mr. Luis Quintero, President
1221 NW 165th Street
Miami, FL 33169
Facsimile: 305-594-7641
23. FURTHER ASSURANCES
From time to time, at the Buyer's request, whether at or after the
Closing and without further consideration, the Seller at its expense will
execute and deliver such further instruments of conveyance and transfer and
take such other action as the Buyer reasonably may require more effectively
to convey and transfer to the Buyer title to any of the Conveyed Assets,
and will assist the Buyer in the collection or reduction to possession of
such property.
24. CONSTRUCTION
The Article and Section headings of this Agreement are for the
convenience of the parties and shall not govern the construction or
interpretation of this Agreement or any of its counterparts.
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IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of
the date and year first above written.
SELLER:
PARLUX FRAGRANCES, INC.
By: /s/ Ilia Lekach
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Ilia Lekach
Chairman and Chief Executive Officer
BUYER:
GENESIS INTERNATIONAL MARKETING CORPORATION
By: /s/ Luis Quintero
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Luis Quintero
President