EXHIBIT 1
ASSET PURCHASE AGREEMENT
ASSET PURCHASE AGREEMENT (this "Agreement"), entered into as of the 31st
day of March 1995, by and among ▇▇▇▇▇▇▇ ▇▇▇▇▇, an individual ("Astor"), on
behalf of himself and as nominee for PLAYORENA ACQUISITION COMPANY, a
corporation to be formed under the laws of the State of New York (hereinafter,
the "Buyer"); and PLAYORENA, INC., a New York corporation (hereinafter the
"Seller").
WITNESSETH:
WHEREAS, Seller desires to sell to the Buyer all of the "Assets", other
than the "Excluded Assets" (as those terms are hereinafter described) relating
to the business of the Seller as presently conducted (the "Business") as a going
concern, subject to the assumption by the Buyer of all of the "Liabilities",
other than the "Excluded Liabilities" of the Seller (as those terms are
hereinafter described); and
WHEREAS, the Buyer desires to purchase form Seller, all upon the terms and
subject to the conditions set forth in this Agreement, all, and not less than
all of the Assets, and will assume, pay and discharge in accordance with their
respective terms, all of the Liabilities, other than the Excluded Liabilities;
and
WHEREAS, the Board of Directors of the Seller and Astor have authorized
and approved the sale of the Assets to the Buyer, subject to approval of the
transaction by the shareholders of Seller, Buyer's assumption of the
Liabilities, and the consummation of the other transactions contemplated by this
Agreement all on the terms and subject to the conditions set forth in this
Agreement;
NOW, THEREFORE, in consideration of the premises and of the mutual
covenants and agreements herein set forth, the parties hereby covenant and agree
as follows;
1. ACQUISITION OF THE ASSETS AND ASSUMPTION OF LIABILITIES.
1.1 Transfer of Assets. On the Closing Date (as hereinafter defined)
and, solely in exchange for the consideration provided for in Section 3 below,
the Seller shall sell, assign, transfer and convey to the Buyer, and the Buyer
shall purchase and acquire from the Seller, all, and not less than all of the
assets and properties of the Seller, real, personal and mixed (the "Assets"),
and the business of the Seller as presently conducted (the "Business") as a
going concern. Such Assets shall include, without limitation, all copyrights,
trademarks, tradenames, accounts receivable, equipment, inventory and cash,
marketable
securities and other cash equivalents of the Seller as at the Closing Date.
Notwithstanding the foregoing, the Seller shall not sell and the Buyer Shall not
purchase or acquire any of the "Excluded Assets" as described in Section 2.1
below.
1.2 ▇▇▇▇ of Sale. On the Closing Date, Seller shall deliver to the
Buyer, against receipt of the consideration provided for in Section 3 below, a
▇▇▇▇ of sale, deed and such other documents and instruments of conveyance which
shall be necessary to vest in the Buyer good and marketable title to the Assets.
1.3 Books and Records. On the Closing Date, in addition to its
delivery and transfer of the Assets to the Buyer, Seller shall deliver to the
Buyer all financial and accounting books and records of the Seller, and all
referral, client, customer and sales records of the Seller. From and after the
Closing Date, the Buyer shall permit Seller and their representatives to have
access to any and all of such books and records for the purpose of inspecting,
copying and/or making extracts of such books and records for such purposes as
may be required by Seller, such access to be upon reasonable prior notice,
during normal business hours, and in such a manner as to not unduly disrupt the
Business of the Buyer.
1.4 Assumption of Liabilities. On the Closing Date, against receipt
of such ▇▇▇▇ of sale and other conveyancing documents described in Section 1.2
above, the Buyer shall, pursuant to an assignment and assumption agreement (the
"Assumption Agreement") in form and content mutually acceptable to Seller and
Buyer and their legal counsel, assume and pay and discharge, when due, all
debts, accrued liabilities, accrued expenses, accounts payable, obligations,
costs, expenses and contingencies which exist or have been accrued as at the
Closing Date (collectively, the "Liabilities"); provided, that the Buyer shall
not assume any of the Excluded Liabilities set forth in Section 1.5(b) below.
The Liabilities assumed by the Buyer as at the Closing Date shall include,
without limitation.
(a) amounts owed to ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇ in respect of accrued fees
and other compensation up to and not in excess of $2,000.00;
(b) all accounts payable and accrued liabilities of the Seller
(other than the Excluded Liabilities); and
(c) all accrued payroll and other obligations to employees,
consultants and other agents of the Seller, except only for
the Excluded Liabilities.
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2. EXCLUDED ASSETS AND EXCLUDED LIABILITIES.
2.1 Excluded Assets. On the Closing Date, the Seller shall retain
all right and title to, and the Buyer shall not purchase or acquire any interest
in, any of the following assets and properties of the Seller (the "Excluded
Assets"):
(a) any claims for tax refunds, tax loss carryforwards or
carrybacks or tax credits of any kind applicable to the
Business, income (loss) or Assets of the Seller prior to the
Closing Date (collectively, "Tax Benefits"); and
(b) the stock book, minute book, stock records, transfer
sheets and other corporate records of the Seller.
2.2 Excluded Liabilities. On the Closing Date, the Seller shall
retain and be responsible for all obligations and liabilities relating to, and
the Buyer shall not assume or be responsible for, any of the following
liabilities or obligations of the Seller as at the Closing Date (the "Excluded
Assets"):
(a) all liabilities and obligations in respect of accrued fees
and/or compensation to ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇ which shall be in
excess of $2,000 in the aggregate;
(b) all liabilities and obligations owed by Seller to Messrs.
▇▇▇▇▇▇ ▇. ▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ E, ▇▇▇▇▇▇ and other
affiliates of the Seller who have lent funds to the Seller
prior to the Closing Date, whether or not evidenced by notes
or other instruments, all as set forth on Schedule 2.2(b)
hereto (this "Affiliate Debt");
(c) all liabilities and obligations in respect of accrued
professional fees owed to ▇▇▇▇▇▇▇ ▇▇▇▇▇ & ▇▇▇▇▇▇▇▇▇, P.C., and
other professionals who have provided services to Seller prior
to the Closing Date; provided, that such Excluded Liability
shall not include professional fees and/or disbursements owed
to Messrs. ▇▇▇▇▇▇▇ ▇▇▇▇▇ & ▇▇▇▇▇ or other counsel and
associated professionals performing services for the Buyer
and/or the Seller in connection with certain matters described
herein, all of which professional fees and disbursements shall
be borne and paid solely by Astor or the Buyer;
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(d) all other liabilities and obligations of the Seller which
are listed and set forth on Schedule 2.2(d) annexed hereto and
made a part hereof;
(e) all liabilities and obligations in respect of the Seller's
compliance with federal and state securities laws, including
costs associated with compliance with the Securities Exchange
Act of 1934, as amended (the "Exchange Act") and related costs
associated with Seller being a publicly traded company subject
to the reporting requirements under the Exchange Act,
including the Section 14 Proxy Rules thereunder; and
(f) all liabilities and obligations of Seller arising after
the Closing Date.
3. CONSIDERATION AND PAYMENT.
3.1 The consideration. In full consideration for the sale and
transfer of the Assets to the Buyer and in addition to its assumption of the
Liabilities, on the Closing Date, Seller shall receive from ▇▇▇▇▇▇▇ ▇▇▇▇▇ and
▇▇▇▇▇ ▇▇▇▇▇ (the "Buyer Stockholders") all, and not less than all, of the
1,041,800 shares of Common Stock of the Seller owned of record and beneficially
by the Buyer Stockholders (the "Astor Stock"); which Astor Stock shall be
evidenced by stock certificates, duly endorsed in blank for transfer to the
Seller, for cancellation.
3.2 Further Assurances.
From time to time from and after the Closing, the parties hereto
shall execute and deliver, or cause to be executed and delivered, any and all
such further agreements, certificates and other instruments, and shall take or
cause to be taken any and all such further action, as any of the parties may
reasonably deem necessary or desirable in order to carry out the intent and
purposes of this Agreement.
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4. REPRESENTATIONS AND WARRANTIES OF SELLER.
The Buyer and ▇▇▇▇▇▇▇ ▇▇▇▇▇, by their execution of this Agreement,
do hereby acknowledge and agree that ▇▇▇▇▇▇▇ ▇▇▇▇▇ ("Astor") has served as the
Chief Operating Officer of the Seller and is intimately familiar with the
Business and financial condition of the Seller. Accordingly, except as otherwise
expressly set forth in this Section 4, neither the Seller nor any other officer,
director, stockholder or affiliate of the Seller, including any holder of
Affiliated Debt, shall make any representation or warranty to the Buyer, Astor
or any other person firm or corporation, pursuant to this Agreement. Subject to
the foregoing, the Seller hereby represents and warrants to the Buyer, as
follows;
4.1 Title to the Assets. Seller has good, valid and marketable title
to the Assets, free and clear of all pledges, liens, claims, charges, options,
calls, encumbrances, restrictions and assessments whatsoever, except as set
forth on Schedule 4.1 annexed hereto (the "Liens"). Except for Liens created in
connection with the Affiliate Debt (all of which shall be released and
discharged as at the Closing Date), on the Closing Date, the Buyer shall
purchase and acquire all of the Assets subject to all of the Liens.
4.2 Valid and Binding Agreement. Seller has full legal right, power
and authority to execute and deliver this Agreement and, subject to the
requisite vote and approval of the holders of record of sixty-six and 2/3
(66-2/3%) percent of the issued and outstanding shares of capital stock of the
Seller, as hereinafter described, has the full legal right, power and authority
to consummate the transactions contemplated hereby. This Agreement enforceable
against Seller in accordance with its terms, except to the extent limited by
bankruptcy, insolvency, reorganization and other laws affecting creditors'
rights generally, and except that the remedy of specific performance or similar
equitable relief is available only at the discretion of the court before which
enforcement is sought.
4.3 Organization, Good Standing and Qualification. The Seller: (a)
is a corporation duly organized, validly existing and in good standing under the
laws of the State of New York; (b) has all necessary corporate power and
authority to carry on its respective business and to own, lease and operate its
properties; and (c) is not required, by the nature of its properties or
business, to be qualified to do business as a foreign corporation in any foreign
jurisdiction.
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4.4 The Seller does not own, directly or indirectly, any stock or
other equity securities of any corporation or entity, or have any direct or
indirect equity or ownership interest in any person, firm, partnership,
corporation, venture or business (a "Subsidiary").
4.5 Compliance with Laws.
(a) To the best of Seller's knowledge, the Seller is, and has
been at all times during the three (3) year period prior to the date hereof, in
compliance with all domestic, foreign, federal, state, local and municipal laws
and ordinances and governmental rules and regulations and all requirements of
insurance carriers, applicable to its business, affairs, properties or assets.
(b) To the best of Seller's knowledge, neither the Seller nor
any of its respective directors, officers or employees, has received any written
notice of default or violation, nor, to the best of Seller's knowledge, is the
Seller or any of its directors, officers or employees in default or violation,
with respect to any judgement, order, writ, injunction, decree, demand or
assessment issued by any court or any federal, state, local, municipal or other
governmental agency, board, commission, bureau, instrumentality or department,
domestic or foreign, relating to any aspect of the Seller's Business, affairs,
properties or assets. Neither Seller, nor, to the best of Seller's knowledge,
the Seller or any of its directors, officers or employees, has received written
notice of, been charged with, or is under investigation with respect to, any
violation of any provision of any federal, state, local, municipal or other law
or administrative rule or regulation, domestic or foreign, relating to any
aspect of the Seller's Business, affairs, properties or the Assets, which
violation would have a material adverse effect on the Seller, the Business or
any material portion of the Assets.
4.6 Litigation. Except as disclosed on Schedule 4.6 annexed hereto,
or otherwise involving claims of $10,000 or less as to each action or $25,000 in
the aggregate, there is not suit, action, arbitration, or legal, administrative
or other proceeding, or governmental investigation (including, without
limitation, any claim alleging the invalidity, infringement or interference of
any patent, patent application, or rights thereunder owned or licensed by the
Seller) pending, or to the best knowledge of Seller, threatened, by or against
the Seller or any of its assets or properties. Except as set forth on Schedule
4.6 thereto, Seller is not aware of any state of facts, events, conditions or
occurrences which might properly constitute grounds for or the basis of any
suit, action, arbitration, proceeding or investigation against or with respect
to the Seller.
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4.7 Transactions with Affiliates. Except as expressly set forth in
the Seller's most recent Form 10-K and other periodic reports filed with the
Securities and Exchange Commission ("SEC") under the 1934 Act (the "1934 Act
Filings") and in connection with the Affiliate Debt, no asset employed or used
in any of the Business of the Seller is owned by, leased from or leased to
Seller, or any other partnership, corporation or trust formed, owned or operated
for Seller's benefit, or any officer, director or employee of the Seller or any
Affiliate of the Seller.
4.8 No Representations as to Future Events. Nothing contained in
this Agreement shall be deemed to constitute a representation or warranty by
Seller with respect to future profitability or business activities of the
Seller, or the effect of any legislation, or general economic conditions on the
Business of the Seller. To the best knowledge of Seller, it has furnished to the
Buyer all relevant information to enable the Buyer and its representatives to
make an informed investment decision concerning the Business and the Seller.
5. REPRESENTATIONS AND WARRANTIES OF THE BUYER.
In connection with the Buyer's purchase of the Assets from Seller,
the buyer represents and warrants to Seller as follows:
5.1 Valid and Binding Agreement. Astor has full legal right, power
and authority to execute and deliver this Agreement and to consummate the
transactions contemplated hereby. This Agreement constitutes the legal, valid
and binding obligations of Astor, enforceable against the Buyer in accordance
with their respective terms, except to the extent limited by bankruptcy,
insolvency, reorganization and other laws affecting creditors' rights generally,
and except that the remedy of specific performance or similar equitable relief
is available only at the discretion of the court before which enforcement is
sought.
5.2 Organization, Good Standing and Qualification. The Buyer: (a)
will be a corporation validly existing under the laws of the State of New York,
(b) will not be required, by the nature of its properties or business, to be
qualified to do business as a foreign entity or corporation in any foreign
jurisdiction.
6. ADDITIONAL AGREEMENTS OF THE PARTIES.
6.1 Confidentiality. Notwithstanding anything to the contrary
contained in this Agreement, and subject only to any disclosure requirements
which may be imposed upon the Buyer or Seller under applicable state or federal
securities, it is expressly understood and agreed by Seller and the Buyer that
(i) this Agreement and the conversations, negotiations and transactions relating
hereto and/or contemplated hereby, and
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(ii) all financial information, business records and other non-public
information concerning the Seller and the Buyer which the Buyer, seller or their
representatives has received or may hereafter receive, shall be maintained in
the strictest confidence by the parties hereto, and shall not be disclosed to
any person that is not associated or affiliated with the Buyer or the Seller and
involved in the transactions contemplated hereby, without the prior written
approval of Seller, on behalf of itself and the Seller, and Astor on behalf of
the Buyer. The parties hereto shall use their best efforts to avoid disclosure
of any of the foregoing or undue disruption of any of the business operations or
personnel of the Seller or the Buyer.
6.2 Additional Agreements and Instruments. On or before the Closing
Date, the Seller and the Buyer shall execute, deliver and file all exhibits,
agreements, certificates instruments and other documents, not inconsistent with
the provisions of this Agreement, which, in the opinion of counsel to the
parties hereto, shall reasonably be required to be executed, delivered and filed
in order to consummate the transactions contemplated by this Agreement,
including, without limitation, such consents and waivers as may be required by
the holders of the Affiliated Debt.
6.3 Non-Interference. Neither the Buyer nor Seller shall cause to
occur any act, event or condition which would cause any of their respective
representations and warranties made in this Agreement to be or become untrue or
incorrect in any material respect as of the Closing Date, or would interfere
with, frustrate or render unreasonably expensive the satisfaction by the other
party or parties of any of the conditions precedent set forth in Sections 7 and
8 below.
6.4 Access to Information. The Seller shall permit the Buyer and its
counsel, accountants and other representatives, as well as investment bankers
and other financing sources, upon reasonable advance notice to the Seller,
during normal business hours and without undue disruption of the Business of the
Seller, to have reasonable access to all properties, books, accounts, records,
contracts, documents and information relating to each of the Seller, and to all
management and employees of the Seller. the Buyer and its representatives shall
also be permitted to freely consult with the Seller's counsel and accountants
concerning the Business of the Seller.
6.5 Release of Liens in Respect of Affiliated Debt. Prior to the
closing Date, Seller shall have obtained from the holders of the Affiliated
Debt, full releases of all Liens on any of the Assets which are now, or may
hereafter, be held by the holders of such Affiliated Debt. the form and content
of such releases shall be reasonably acceptable to Buyer and its legal counsel.
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6.6 Conduct of Business in Normal Course. The Seller shall carry on
its business activities in substantially the same manner as heretofore
conducted, and shall not make or institute any unusual or novel methods of
service, sale, purchase, lease, management, accounting or operation that will
vary materially from those methods used by the Seller as of the date hereof,
without in each instance obtaining the prior written consent of the Buyer.
6.7 Preservation of Business and Relationships. The Seller shall,
without making or incurring any unusual commitments or expenditures, preserve
its business organization intact, and preserve its present relationships with
employees, customers, suppliers and other having business relationships with it.
6.8 Corporate Matters. The Seller shall not, without the prior
written consent of the Buyer:
(a) amend, cancel or modify any material contract, included
in the Assets, or enter into any material new agreement,
commitment or transaction except in each instance, in
the ordinary course of business;
(b) pay, grant or authorize any salary increases or bonuses
except in the ordinary course of business and consistent
with past practice, or enter into any employment,
consulting or management agreements;
(c) modify in any material respect any material agreement to
which it is a party or by which it may be bound, except
in the ordinary course of business;
(d) make any change in its existing management personnel;
(e) except pursuant to commitments in effect on the date
hereof, make any capital expenditure(s) or
commitment(s), whether by means of purchase, lease or
otherwise, or any operating lease commitment(s), in
excess of $2,000 in the aggregate;
(f) materially change its method of collection of accounts
or notes receivable, accelerate or slow its payment of
accounts payable, or prepay any of its obligations or
liabilities, other than prepayments of accounts payable
to take advantage of trade discounts not otherwise
inconsistent with or in excess of historical prepayment
practices;
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(g) declare, pay, set aside or make any dividend(s) or other
distribution(s) of cash or other property, or redeem any
outstanding shares of the Seller's capital stock;
(h) incur any Liability or other indebtedness except, in
each instance, in the ordinary course of business;
(m) subject any of its Assets to any further Liens or
encumbrances, other than Liens assumed by the Buyer
hereunder;
(n) forgive any liability or indebtedness owed to it; or
(o) agree to do, or take any action in furtherance of, any
of the foregoing.
6.9 No Bankruptcy Filing or Pending Acquisition. the Buyer and Astor
hereby covenant and agree that as at the date hereof and on the Closing Date:
(a) the Buyer has no present intention to effect any assignment for the benefit
of creditors or filing under the federal Bankruptcy Act or any state law
affecting creditors and debtors, whether voluntary or involuntary (a "Bankruptcy
Event"); and (b) there is not pending or contemplated by the Buyer or Astor, the
acquisition of the securities or assets of any person, firm or corporation, or
any joint venture or other material transaction with any such person, firm or
corporation (an "Acquisition") which has not been fully disclosed in writing to
the Seller and the holders of the Affiliated Debt.
6.10 Execution of Agreement by ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇. On or before the
Closing Date, Seller shall have duly executed and entered into an agreement with
▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇ (in form and content satisfactory to such parties), pursuant to
which ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇ shall: (a) sell, at par value per share, an aggregate of
750,000 of his shares of Seller's Common Stock to the holders of the Affiliated
Debt or such other persons as the Seller shall designate; and (b) accept the
aggregate sum of $6,200 in full payment of all accrued fees and other
compensation due to such person by the Seller.
6.11 Change of Name. Within thirty (30) days after the Closing Date,
Seller shall take all steps as shall be necessary to change its corporate name
to a name that does not contain Playorena or any derivation thereof.
7. CONDITIONS PRECEDENT TO BUYER'S PERFORMANCE.
In addition to the fulfillment of the parties' agreements in Section
6 above, the obligations of Buyer to consummate the
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transactions contemplated by this Agreement are further subject to the
satisfaction, at or before the Closing Date of all the following conditions, any
one or more of which may be waived in writing by the Buyer;
7.1 Accuracy of Representations and Warranties. All representations
and warranties made by Seller in this Agreement, in any Schedule(s) hereto,
and/or in any written statement delivered to the Buyer under this Agreement
shall be true and correct in all material respects on and as of the Closing Date
as though such representations and warranties were made on and as of such dates.
7.2 Performance. The Seller shall have performed, satisfied and
complied with all covenants, agreements and conditions required by this
Agreement to be performed, satisfied or complied with by them on or before the
Closing Date.
7.3 Certification. The Buyer shall have received a certificate,
dated as of the Closing Date, signed by Seller, certifying, in such detail as
the Buyer and its counsel may reasonably request, that the conditions specified
in Sections 7.1 and 7.2 above have been fulfilled.
7.4 Resolutions. The Buyer shall have received certified resolutions
of the Board of Directors and Seller in form reasonably satisfactory to counsel
for the Buyer, authorizing the execution, delivery and performance of this
Agreement, and all actions to be taken by the Seller hereunder.
7.5 Proxy Statement and Vote of Seller's Stockholders. The Seller
shall:
(a) have filed with the SEC a Proxy or Information Statement
under the 1934 Act in connection with a special or annual meeting of
the stockholders of the Seller called, in whole or in part, for the
purpose of approving this Agreement and the transactions
contemplated hereby;
(b) such Proxy or Information Statement and all amendments
thereto shall have been received by and declared effective by the
SEC;
(c) no stop order or other administrative or legal action
shall have been instituted enjoining or preventing the holding of a
stockholders' meeting of the stockholders of the Seller (the
"Stockholders' Meeting") called, pursuant to the applicable
provisions of the federal securities laws, and the New York Business
Corporation Law, for the purpose of voting for the approval and
ratification of this Agreement and all transactions contemplated
hereby and pursuant to the Proxy Statement;
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(d) such Stockholders' Meeting shall have been duly held; and
(e) the record owners (as at the record date specified in such
Proxy or Information Statement declared effective by the SEC) of not
less than 66-2/3% of the issued and outstanding shares of capital
stock of the Seller as at such record date shall have validly
approved, adopted and ratified this Agreement and all transactions
contemplated hereby.
The legal counsel to the Buyer shall be solely responsible for the
preparation and filing of the Proxy or Information Statement and all other
documents required to be filed with the SEC and for the conduct of the
Stockholders' Meeting. The Buyer shall be solely responsible to pay all of the
legal fees of its cousel in connection therewith, as well as other services
provided by Buyer's counsel in connection with this Agreement and consummation
of the transactions contemplated hereby.
7.6 Absence of Litigation. No action, suit or proceeding by or
before any court or any governmental body or authority, against the Seller or
pertaining to the transactions contemplated by this Agreement or their
consummation, shall have been instituted on or before the Closing Date, which
action, suit or proceeding would, if determined adversely (a) have a material
adverse effect on the Seller, its Business or any material portion of its
assets, (b) impair the ability of the Seller to deliver all of the Assets to the
Buyer in accordance with the terms of this Agreement, or (c) impair the ability
of Buyer to consummate its acquisition of the Assets.
7.7 Consents. All necessary disclosures to and agreements and
consents of (a) the holders of Affiliated Debt, (b) any parties to any material
contracts and/or licensing authorities which are material to the Seller's
Business, and (c) any governmental authorities or agencies to the extent
required in connection with the transactions contemplated by this Agreement,
shall have been obtained and true and complete copies thereof delivered to the
Buyer.
7.8 Resignations. The Buyer shall have delivered to the Seller the
written resignations, dated and effective on the Closing Date, of all the
members of the Board of Directors of the Seller.
7.9 Proceedings and Instruments Satisfactory. All proceedings,
corporate or other, to be taken in connection with the transactions contemplated
by this Agreement, and all documents incidental thereto, shall be reasonably
satisfactory in form and substance to the Buyer and its counsel.
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7.10 Satisfaction of Agreements. All of the obligations and
agreements of Seller specified in Section 6 shall have been satisfied by Seller
to the reasonable satisfaction of the Buyer.
7.11 Bulk Transfer Compliance. Not less than twenty days prior to
the Closing Date, Seller shall provide Buyer with a list of Buyer's existing
creditors, including addresses, signed and sworn to by an authorized officer of
seller for the purpose of enabling Buyer to comply with the applicable
provisions of Article 6 of the Uniform Commercial Code - Bulk Transfer law as in
effect in the State of New York.
8. CONDITIONS PRECEDENT TO SELLER'S PERFORMANCE.
In addition to the fulfillment of the parties' agreements in Section
6 above, the obligations of Seller to consummate the transactions contemplated
by this Agreement are further subject to the satisfaction, at or before the
Closing Date of all of the following conditions, any one or more of which may be
waived in writing by Seller:
8.1 Accuracy of Representations and Warranties. All representations
and warranties made by the Buyer in this Agreement and/or in the written
statement delivered by the Buyer or Buyer under this Agreement shall be true and
correct in all material respects on and as of each of the Closing Date as though
such representations and warranties were made on and as of such dates.
8.2 Performance. The Buyer shall have performed, satisfied and
complied with all covenants, agreements and conditions required by this
Agreement to be performed, satisfied or complied with by the Buyer on or before
each of the Closing Date.
8.3 Certification. Seller shall have received a certificate, dated
the each of the Closing Date, signed by the Buyer certifying, in such detail as
Seller and its counsel may reasonably request, that the conditions specified in
Sections 8.1 and 8.2 above have been fulfilled.
8.4 Resolutions. Seller shall have received certified resolutions of
the stockholders of Buyer and of the Board of Directors of the Buyer, in form
reasonably satisfactory to counsel for Seller, authorizing the execution,
delivery and performance of this Agreement and all actions to be taken by the
Buyer hereunder.
8.5 Proceedings and Instruments Satisfactory. All proceedigns to be
taken in connection with the transactions contemplated by this Agreement, and
all documents incidental thereto, shall be reasonably satisfactory in form and
substance to Seller and their counsel.
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8.6 Satisfaction of Agreements. All of the obligations and
agreements of the Buyer specified in Section 6 shall have been satisfied by the
Buyer to the reasonable satisfaction of Seller.
8.7 Approval of Seller's Stockholders. This Agreement and all of the
transactions contemplated hereby and pursuant to the Proxy or Information
Statement shall have been duly approved, adopted and ratified by the
stockholders of the Seller, all as contemplated by Section 7.5 of this
Agreement.
9. CLOSING.
9.1 Unless this Agreement shall be terminated pursuant to Section 10
below, the payment of the consideration and the delivery of all other documents
and instruments required pursuant to this Agreement to be executed and delivered
on the Closing Date (the "Closing"), shall take place at the offices of ▇▇▇▇▇▇▇,
▇▇▇▇▇ & ▇▇▇▇▇, ▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇▇▇▇, legal counsel to the
Buyer, or such other location in New York, New York or elsewhere as agreed to
between the parties, on such date as shall be ten (10) days following the
requisite approval of this Agreement and the transactions contemplated hereby by
the stockholders of the Seller; provided, that in no event shall the Closing
Date be later than September 30, 1995 without the written consent of all parties
hereto (the date of the Closing being referred to in this Agreement as the
"Closing Date").
10. TERMINATION OF AGREEMENT.
10.1 Termination. This Agreement may be terminated and the
transactions contemplated hereby may be abandoned at any time prior to the
Closing Date:
(a) by the mutual written consent of Seller and the Buyer;
(b) by the Buyer or by Seller, if: (i) a material breach shall
exist with respect to the written representations and warranties made by the
other party or parties, as the case may be, (ii) the other party or parties, as
the case may be, shall fail to perform any covenant or agreement on their part
to be performed hereunder, or shall take any action prohibited by this
Agreement, if such actions shall or may have a material adverse effect on the
Seller and/or the transactions contemplated hereby, (iii) the other party or
parties, as the case may be, shall not have furnished, upon reasonable notice
therefor, such certificates and documents required in connection with the
transactions contemplated hereby and matters incidental thereto as it or they
shall have agreed to and matters incidental thereto as it or they shall have
agreed to furnish, and it is reasonably unlikely that the other party or parties
will be able to furnish such item(s) prior to September 30, 1995, or (iv) any
consent of any third party to the transactions contemplated hereby (whether or
not the necessity of which is
14
disclosed herein or in any Schedule hereto) is reasonably necessary to prevent a
default under any outstanding material obligation of Seller or the Buyer, and
such consent is not obtainable without material cost or penalty (unless the
party or parties not seeking to terminate this Agreement agree or agrees to pay
such cost or penalty); or
(c) by the Buyer or by Seller, at any time on or after
September 30, 1995, if the transactions contemplated to be consummated at the
Closing shall not have been consummated prior thereto, and the party or parties
directing termination shall not then be in breach or default of any obligations
imposed upon such party by this Agreement.
10.2 Effect of Termination of Agreement.
In the event of termination of this Agreement pursuant to Section
10.1, no party to this Agreement shall have any further liability to the other.
In the event of termination by any party as provided in this Section 10.2,
prompt written notice shall be given to the other party.
11. INDEMNIFICATION.
11.1 General.
(a) Seller. Seller hereby agrees to defend, indemnify and hold
harmless the Buyer and/or Astor from, against and in respect of any and all
claims, losses, costs, expenses, obligations, liabilities, damages, recoveries
and deficiencies, including interest, penalties and reasonable attorneys' fees
(collectively "Losses"), that the Buyer and/or Astor may incur, sustain or
suffer as a result of:
(i) a breach of any of the representations, and
warranties of Seller, which are contained in Article 4
of this Agreement (hereinafter referred to as "Seller
Breach of Warranty Losses"); or
(ii) the failure of Seller to perform any of the
covenants and agreements of Seller in respect of the
Excluded Liabilites or which is contained in Articles 6
and 7 this Agreement on the Closing Date or thereafter,
(hereinafter referred to as "Seller Covenant Losses").
(b) The Buyer and Astor. The Buyer and Astor. The Buyer and
Astor do hereby jointly and severally agree to defend, indemnify and hold
15
harmless Seller from, against and in respect of any and all Losses that Seller
many incur, sustain or suffer as a result of:
(i) a breach of any of the representations, and
warranties of the Buyer which are contained in Article 5
of this Agreement (hereinafter referred to as "Buyer
Breach of Warranty Losses"); or
(ii) the failure of the Buyer or Astor to perform any of
the covenants and agreements of Buyer in respect of the
Liabilities or which is contained in Articles 6 and 7 of
this Agreement on the Closing Date or thereafter
(hereinafter referred to as "Buyer Covenant Losses").
11.2 Limitations on Breach of Warranty Losses.
(a) Anything elsewhere contained in this Agreement to the
contrary notwithstanding, except for any Losses involving a finding by any court
of competent jurisdiction (from which no appeal can or has been taken) that
statutory or common law fraud has been committed by Seller, Seller shall not be
liable with respect to any Seller Breach of Warranty Losses unless and until the
aggregate amount of all such Seller Breach of Warranty Losses incurred by the
Buyer shall exceed the sum of $5,000 (the "Basket"), and Seller shall thereafter
only be liable for Seller Breach of Warranty Losses in excess of the Basket up
to an aggregate indemnification liability hereunder equal to the aggregate
amount of the Excluded Liabilities.
(b) Anything elsewhere contained in this Agreement to the
contrary notwithstanding, except for any Losses involving a finding by any court
of competent jurisdiction (from which no appeal can or has been taken) that
statutory or common law fraud has been committed by the Buyer or any affiliate
of the Buyer, the Buyer shall not be liable with respect to any Buyer Breach of
Warranty Losses unless and until the aggregate amount of all such Buyer Breach
of Warranty Losses incurred by Seller shall exceed the sum of $5,000 (the
"Basket"), and the Buyer shall thereafter only be liable for Buyer Breach of
Warranty Losses in excess of the Basket up to an aggregate indemnification
liability hereunder equal to the aggregate amount of the Liabilities assumed by
the Buyer hereunder.
(c) The Seller and the Buyer shall be entitled to
indemnification for Breach of Warranty Losses only in respect of claims for
which notice of claim shall have been given to Seller or Buyer (as the case may
be) on or before a date which shall be two (2) years following the Closing Date;
provided, however, that neither the Seller nor the Buyer shall be entitled to
16
indemnification in the event that the subject claim for indemnification relates
to a third-party claim and the Seller or the Buyer (as the case may be) delayed
giving notice thereof to the indemnitor(s) to such an extent as to cause
material prejudice to the defense of such third-party claim.
(d) The provisions of this Section 11.2 shall apply only to
Seller Breach of Warranty Losses or Buyer Breach of Warranty Losses. In the
event that any Seller Covenant Losses or Buyer Covenant Losses shall occur and
shall be continuing at any time from and after the Closing Date, the injured
party or parties shall have all applicable remedies at law or in equity
available to it, as are provided in this Agreement, without regard to any Basket
or expiration of the right to assert claims.
11.3 Claims for Indemnity. Whenever a claim shall arise for which
any party shall be entitled to indemnification hereunder, the indemnified party
shall notify the indemnifying party in writing within sixty (60) days of the
indemnified party's first receipt of notice of, or the indemnified party's
obtaining actual knowledge of, such claim, and in any event within such shorter
period as may be necessary for the indemnifying party or parties to take
appropriate action to resist such claim. Such notice shall specify all facts
known to the indemnified party giving rise to such indemnity rights and shall
estimate (to the extent reasonably possible) the amount of potential liability
arising therefrom. If the indemnifying party shall be duly notified of such
dispute, the parties shall attempt to settle and compromise the same or may
agree to submit the same to arbitration or, if unable or unwilling to do any of
the foregoing, such dispute shall be settled by appropriate litigation, and any
rights of indemnification established by reason of such settlement compromise,
arbitration or litigation shall promptly thereafter be paid and satisfied by
those indemnifying parties obligated to make indemnification hereunder.
11.4 Right to Defend. If the facts giving rise to any claim for
indemnification shall involve any actual or threatened action or demand by any
third party against the indemnified party or any of its Affiliates, the
indemnifying party or parties shall be entitled (without prejudice to the
indemnified party's right to participate at its own expense through counsel of
its own choosing), at their expense and through a single counsel of their own
choosing, to defend or prosecute such claim in the name of the indemnifying
party or parties, or any of them, or if necessary, in the name of the
indemnified party. In any event, the indemnified party shall give the
indemnifying party advance written notice of any proposed compromise or
settlement of any such claim. If the remedy sought in any such action or demand
is solely money damages, the indemnifying party shall have fifteen (15) days
after receipt of such notice of settlement to object to the proposed compromise
or settlement, and if it does so object, the indemnifying party
17
shall be required to undertake, conduct and control, through counsel of its own
choosing and at its sole expense, the settlement or defense thereof, and the
indemnified party shall cooperate with the indemnifying party in connection
therewith.
11.5 Resolution of Disputes.
(a) Any dispute involving the interpretation or application of this
Agreement which cannot be resolved by the parties hereto shall be resolved by
final and binding arbitration under the auspices of the American Arbitration
Association in New York, New York. The decision and award of any arbitrator
selected by the American Arbitration Association, or by the parties hereto from
a list supplied by the American Arbitration Association, shall be final and
binding upon all parties hereto, and may be enforced by the prevailing party or
parties in any court of competent jurisdiction. The costs of the arbitration
shall be borne by the losing party or parties; provided, that such costs shall
be appropriately pro-rated to the extent of any settlement prior to such
arbitration award, or compromised amount contained in any such award.
(b) Notwithstanding Section 11.5(a) above, in the event that any
actual or anticipatory breach of any covenant and agreement contained herein by
any one or more party may cause irreparable damage to any other parties hereto
for such actually or potentially damaged party would have no adequate remedy at
law, the aggrieved party or parties may immediately apply to any Court of
competent jurisdiction for a temporary restraining order or such other
preliminary or permanent injunctive or interim relief as may be deemed
appropriate by such court.
12. COSTS.
12.1 Finder's or Broker's Fees. Each of the Buyer and Seller
represents and warrants that neither they nor any of their respective Affiliates
have dealt with any broker or finder in connection with any of the transactions
contemplated by this Agreement, and no broker or other person is entitled to any
commission or finder's fee in connection with any of these transactions.
12.2 Expenses. The Buyer and Seller shall each pay all costs and
expenses incurred or to be incurred by them, respectively, in negotiating and
preparing this Agreement and in closing and carrying out the transactions
contemplated by this Agreement.
18
13. FORM OP AGREEMENT.
13.1 Effect of Headings. The Section headings used in this Agreement
and the titles of the Schedules hereto are included for purposes of convenience
0nly, and shall not affect the construction or interpretation of any of the
provisions hereof or of the information set forth in such Schedules.
13.2 Entire Agreement; Waivers. This Agreement constitutes the
entire agreement between the parties pertaining to the subject matter hereof,
and supersedes all prior agreements or understandings as to such subject matter.
No party hereto has made any representation or warranty or given any covenant to
the other except as set forth in this Agreement. No waiver of any of the
provisions of this Agreement shall be deemed, or shall constitute, a waiver of
any other provisions, whether or not similar, nor shall any waiver constitute a
continuing waiver. No waiver shall be binding unless executed in writing by the
party making the waiver.
13.3 Counterparts. This Agreement may be executed simultaneously in
any number of counterparts; each of which shall be deemed an original, but all
of which together shall constitute one and the same instrument.
14. PARTIES.
14.1 Parties in Interest. Nothing in this Agreement, whether
expressed 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 heirs, executors, administrators, personal representatives,
successors and permitted assigns, nor is anything in this Agreement intended to
relieve or discharge the obligations or liability of any third persons to any
party to this Agreement.
14.2 Notices. All notices, requests, demands and other
communications under this Agreement shall be in writing and shall be deemed to
have been duly given (i) on the date of service if served personally on the
party to whom notice is to be given, or if given by facsimile transmission to
the number indicated below, or (ii) 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:
(a) If to the Buyer:
c/o ▇▇▇▇▇▇▇ ▇▇▇▇▇
▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
facsimile no. (▇▇▇) ▇▇▇-▇▇▇▇
19
(b) If to Seller:
Playorena Corporation
▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Attention: Vice-President, Finance
or to such other address as either party shall have specified by notice in
writing given to the other party.
15. MISCELLANEOUS.
15.1 Amendments and Modifications. No amendment or modification of
this Agreement shall be valid unless made in writing and signed by the party to
be charged therewith.
15.2 Binding Effect. This Agreement shall be binding upon and shall
inure to the benefit of the parties hereto and their respective heirs,
executors, administrators, personal representatives, successors and permitted
assigns.
15.3 Governing Law; Jurisdiction. This Agreement shall be construed
and interpreted and the rights granted herein governed in accordance with the
laws of the State of New York applicable to contracts made and to be performed
wholly within such State.
15.4 Right of Assignment. Notwithstanding anything to the contrary
contained herein, Astor shal1 have the right, at any time subsequent to
execution of this Agreement, to assign all of his rights arising under this
Agreement to a corporation of which he is a shareholder by written notice of
such assignment to Seller, provided, that, unless otherwise agreed in writing by
the Seller, Astor shall remain fully liable for all for all representations,
warrants, covenants and agreements of the Buyer hereunder, including, without
limitation, liability which may have accrued or arisen from the date of this
Agreement through the date of such assignment.
IN WITNESS WHEREOF, the parties have executed this Agreement on and as of
the date first set forth above.
______________________________________
▇▇▇▇▇▇▇ ▇▇▇▇▇
PLAYORENA INC.
By: __________________________________
_________________, Vice President
20
Schedule 2.2b
"Affiliate Debt" includes any and all liabilities and obligations,
whatsoever and however arising, whether contingent or otherwise, to the
following:
1. ▇▇▇▇▇▇ ▇▇▇▇▇
2. ▇▇▇▇▇▇▇ ▇▇▇▇▇▇
3. ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
4. ▇▇▇▇ ▇▇▇▇▇▇▇▇
5. Universal Partners L.P. (▇▇▇▇ ▇▇▇▇▇▇)
6. ▇▇. ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇
7. ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇ (Mercury L.P.)
8. ▇▇▇▇▇▇ and ▇▇▇▇ ▇▇▇▇▇▇
9. ▇▇▇▇▇ ▇. ▇▇▇▇▇▇
10. ▇▇▇▇▇ ▇▇▇▇
11. ▇▇▇▇▇▇ ▇'▇▇▇▇▇▇▇
12. ▇▇▇▇▇▇▇ ▇▇▇▇▇▇
13. ▇▇▇▇ ▇▇▇▇▇
Schedule 2.2d
1. Expenses related to preparation and filing of the Form 10Q of
February 28, 1995 and all future SEC filings.
2. Amounts due to American Stock Transfer and Standard and Poors.
3. Claims made against Seller after the Closing Date by shareholders of
Seller, whether or not such claims are a result of actions or events
occurring before or after the Closing Date.
Schedule 4.1
With the exception of liens arising with respect to liabilities and
obligations owing to the persons and entities listed in Schedule 2.2b,
there are no liens.