Item 2.01 Completion of Acquisition or Disposition of Assets.
On September 30, 2013, Ultra Sun Corp., a Nevada corporation (the “Registrant”), completed the sale of all the assets and business known as “Sahara Sun Tanning” located at 87 E. State Road 73, Saratoga Springs, Utah, to LST Utah, LLC (“LST”), an unrelated third party, for a cash purchase price of $60,000. The Registrant paid a broker’s fee of $10,000 to Coldwell Banker Commercial, which represented the Registrant in connection with the sale of the tanning salon business and the transaction with LST. In connection with the transaction, LST acquired all the assets of the tanning salon business, including inventory and entered into a new lease with the landlord for the premises in which the business is located.
The sale was effected pursuant to an Offer for Purchase and Sale of Business and Assets (the “Sale Agreement”) made by LST on August 18, 2013, as amended by a counteroffer dated August 27, 2013 and Addendum No. 2 to the Sale Agreement dated September 30, 2013. In connection with the transaction the parties entered into a mutual indemnification agreement dated as of September 27, 2013, and the Registrant and its president, David Tobias, entered into a five-year non-competition agreement with LST with respect to the counties of Davis, Salt Lake, Summit and Wasatch, Utah.
The foregoing summary of the Sale Agreement is qualified in its entirety by reference to the Sale Agreement, counter offer and amendments thereto, copies of which are included as an exhibit to this report.
As previously reported in the current report on Form 8-K filed July 18, 2013, the Registrant entered into a consulting agreement dated as of July 12, 2013 with Neil Blosch, its former president, pursuant to which Mr. Blosch agreed to manage the tanning salon operations and assist the Registrant in selling the tanning salon prior to the expiration of the tanning salon lease on September 30, 2013. Among other terms, the consulting agreement provided that upon the sale of the tanning salon, the proceeds from such sale would be applied first to pay Mr. Blosch an incentive bonus in the amount of $50,000; second to hold for the benefit of the Registrant the amount of any net loss incurred by the tanning salon (that is, operating costs the tanning salon was not able to pay from its income in its ordinary course of business) during the period from April 1, 2013 through the date of sale; third to pay the promissory note dated July 12, 2013 to Mr. Blosch and two former stockholders of the Registrant in the principal amount of $7,100 (the “July Note”); and fourth to pay 50% of the remaining sales proceeds (up to a maximum of an additional $25,000) to Mr. Blosch as an additional incentive bonus. The consulting agreement provided that in the event the sales proceeds from the tanning salon were not adequate to pay the amounts listed above, the proceeds would be applied in the order of priority set forth above until they had been exhausted. Pursuant to the terms of the consulting agreement, Mr. Blosch was paid an incentive bonus in the amount of $50,000, the amount of the net proceeds from the sale of the tanning salon, and the July Note was terminated in accordance with its terms and the principal amount of such note was treated as a contribution to capital by the note holders.
Exhibit 10.1
