STOCK PURCHASE AGREEMENT
By and Among
Watermark Investments Limited, LLC, as Buyer,
and
▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇,
▇▇▇▇▇ ▇▇▇▇▇▇ and ▇▇▇▇▇▇▇ ▇▇▇▇▇▇, as Sellers
and
Hospitality Worldwide Services, Inc.
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Dated as of March 30, 1999
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TABLE OF CONTENTS
Page
ARTICLE I
SALE OF SHARES
1.1 Delivery of Shares...........................................-2-
1.2 Purchase Consideration.......................................-3-
1.3 Transfer Taxes...............................................-3-
ARTICLE II
CLOSING
2.1 Closing Date.................................................-3-
ARTICLE III
REPRESENTATIONS AND WARRANTIES OF THE SELLERS
3.1 Ownership...................................................-4-
3.2 Authority Relative to and Validity of this Agreement........-4-
3.3 Required Filings and Consents; No Conflict..................-4-
3.4 Broker......................................................-4-
ARTICLE IV
REPRESENTATIONS AND WARRANTIES OF BUYER
4.1 Corporate Organization; Requisite Authority to
Conduct Business..........................................-5-
4.2 Execution and Delivery......................................-5-
4.3 Required Filings and Consents; No Conflict.............. ...-5-
4.4 Broker......................................................-5-
4.5 Purchase Entirely for Own Account...........................-5-
4.6 Access to Information, Experience, Etc......................-6-
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Page
ARTICLE V
COVENANTS OF THE SELLERS AND BUYER
5.1 Covenants of the Sellers Pending the Closing................-6-
5.2 No Other Negotiations.......................................-7-
5.3 Additional Covenants........................................-7-
ARTICLE VI
CONDITIONS PRECEDENT TO OBLIGATIONS OF THE SELLERS
6.1 Conditions to Obligations of the Sellers....................-8-
ARTICLE VII
CONDITIONS PRECEDENT TO OBLIGATIONS OF BUYER
7.1 Conditions to Obligations of Buyer..........................-9-
ARTICLE VIII
INDEMNIFICATION
8.1 Survival of Representations, Warranties and Agreements.....-10-
8.2 Indemnification............................................-10-
8.3 Procedure for Indemnification with
Respect to Third Party Claims...........................-11-
ARTICLE IX
TERMINATION, AMENDMENT AND WAIVER
9.1 Termination...............................................-12-
9.2 Effect of Termination.....................................-12-
ARTICLE X
MISCELLANEOUS
10.1 Expenses...................................................-13-
10.2 Notices....................................................-13-
10.3 Specific Performance.......................................-14-
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Page
10.5 Standstill.................................................-15-
10.6 Entire Agreement...........................................-15-
10.7 Binding Effect, Benefits, Assignments......................-15-
10.8 Applicable Law.............................................-16-
10.9 Jurisdiction...............................................-16-
10.10 Further Assurances.........................................-16-
10.11 Severability...............................................-16-
10.12 Headings...................................................-16-
10.13 Counterparts...............................................-16-
Exhibits
1 Schedule of Shares
2 Director Resignation Letters of the Sellers
3(a) ▇▇▇▇▇▇▇ ▇▇▇▇▇▇ Employment Agreement
3(b) Amendment to ▇▇▇▇▇▇▇ ▇▇▇▇▇▇ Employment Agreement
4 Escrow Agreement
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STOCK PURCHASE AGREEMENT
STOCK PURCHASE AGREEMENT (the "Agreement"), dated as of March ___,
1999, by and among WATERMARK INVESTMENTS LIMITED, LLC, a Delaware limited
liability company, as Buyer (the "Buyer"), each of the parties listed on the
signature pages hereto, as Sellers (each a "Seller" and collectively the
"Sellers") and Hospitality Worldwide Services, Inc. (the "Company"), solely with
respect to Section 10.4.
W I T N E S S E T H
WHEREAS, each Seller owns such number of shares of common stock of the
Company, $.01 par value per share ("Common Stock"), and such number of shares of
preferred stock of Hospitality Worldwide Services, Inc., $.01 par value per
share ("Preferred Stock") as set forth on Exhibit 1 attached hereto (the
"Shares"); and
WHEREAS, the Sellers desire to sell, and Buyer desires to purchase, the
Shares on the Closing Date (as defined herein);
WHEREAS, the Shares shall be delivered to ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ Frome
▇▇▇▇▇▇▇▇▇▇ & Wolosky LLP, as escrow agent ("Escrow Agent") by the Sellers to be
held until the Closing Date and a $250,000 deposit shall be delivered to the
Escrow Agent by the Buyer to be held until the Closing Date, each on the terms
and subject to the conditions set forth in this Agreement;
NOW, THEREFORE, in consideration of the premises and the
representations, warranties and agreements herein contained, the parties hereto
intending to be legally bound, hereby agree as follows:
ARTICLE I
SALE OF SHARES
Section 1.1 Delivery of Shares.
(a) To the Escrow Agent. On the date hereof, each Seller will deliver
to the Escrow Agent a certificate or certificates representing the Shares owned
by such Seller. Each of the certificates shall be duly endorsed for transfer or
accompanied by appropriate stock powers duly executed, in either case in favor
of Buyer, and each certificate shall have all necessary stock transfer tax
stamps affixed thereto at the expense of the Sellers (together, the "Escrow
Shares").
(b) To the Buyer. On the terms and subject to the conditions set forth
in this Agreement, on the Closing Date, the Escrow Shares shall be released by
the Escrow Agent to the Buyer against payment in full therefor.
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Section 1.2 Purchase Consideration. The aggregate consideration to be
paid for the Shares (the "Purchase Price") shall consist of:
(i) $250,000 (the "Deposit") to be paid by Buyer to the Escrow
Agent on the date hereof to hold in escrow until the Closing
(as defined herein), at which time the Deposit shall be paid
by the Escrow Agent to the Sellers as set forth on Exhibit 1,
in accordance with the terms of this Agreement and the escrow
agreement dated as of the date hereof among the Sellers, Buyer
and the Escrow Agent in the form attached hereto as Exhibit 4
(the "Escrow Agreement"), plus
(ii) the amounts set forth on Exhibit 1 to be paid by Buyer to the
Sellers at the Closing, by certified check or wire transfer of
immediately available funds to accounts designated by each
Seller.
Section 1.3 Transfer Taxes. Sellers shall pay all stock transfer taxes,
recording fees and other sales, use, purchase or similar taxes resulting from
the transactions contemplated hereby.
ARTICLE II
CLOSING
Section 2.1 Closing Date. The closing (the "Closing") of the
transactions contemplated by this Agreement shall take place as soon as
practicable after satisfaction or waiver of all conditions set forth herein and
no later than 30 days following the date hereof, at the offices of ▇▇▇▇▇▇
▇▇▇▇▇▇▇▇ Frome ▇▇▇▇▇▇▇▇▇▇ & Wolosky LLP, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇
▇▇▇▇▇, or at such other time and place as Buyer and the Sellers shall agree (the
date on which such closing occurs being herein referred to as the "Closing
Date").
ARTICLE III
REPRESENTATIONS AND WARRANTIES OF THE SELLERS
Each Seller, severally as to the Shares being sold by such Seller, for
good and valuable consideration, hereby represents and warrants to Buyer as of
the date hereof and as of the Closing Date, as follows:
Section 3.1 Ownership. Each Seller owns such number of Shares indicated
across from his name on Exhibit 1 free and clear of all liens, claims or
encumbrances of any nature. The Shares listed across from such Seller's name
constitute all shares of Common Stock and Preferred Stock owned by such Seller
(other than (i) with respect to ▇▇▇▇▇▇ ▇▇▇▇▇▇ an additional 21,200 shares of
Common Stock (ii) with respect to ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇ an additional 1,178 shares of
Common Stock, and (iii) with respect to ▇▇▇▇▇▇▇ ▇▇▇▇▇▇ an additional 29,300 of
Common Stock). Each Seller has full right, power, legal capacity and authority
to
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transfer and deliver the Shares indicated across from his name on Exhibit 1
pursuant to this Agreement.
Section 3.2 Authority Relative to and Validity of this Agreement. Each
Seller has all requisite power and authority to enter into this Agreement, to
perform all of his respective obligations hereunder and to consummate the
transactions contemplated hereby without the approval of any third party. All
necessary action has been taken by each Seller with respect to the execution,
delivery and performance by him of this Agreement and the consummation of the
transactions contemplated hereby and no further authorization will be necessary
to authorize the execution and delivery by him hereof, and the performance of
his respective obligations hereunder. There are no contractual, statutory or
other restrictions of any kind upon the power and authority of each Seller to
execute and deliver this Agreement, and to consummate the transactions
contemplated hereunder and no action, waiver or consent by any federal, state,
municipal or other governmental department, commission or agency ("Governmental
Authority") is necessary to make this Agreement a valid instrument binding upon
each Seller in accordance with its terms. This Agreement has been duly executed
and delivered by each Seller and constitutes, legal, valid and binding
obligations of each Seller, enforceable against each such party in accordance
with its terms, except (i) as such enforceability may be limited by or subject
to any bankruptcy, insolvency, reorganization, moratorium or other similar laws
affecting creditors' rights generally, (ii) as such obligations are subject to
general principles of equity and (iii) as rights to indemnity may be limited by
federal or state securities laws or by public policy.
Section 3.3 Required Filings and Consents; No Conflict. No Seller is
required to submit any notice, report or other filing with any Governmental
Authority in connection with the execution, delivery or performance of this
Agreement, other than notices, reports or other filings required by the
Securities Exchange Act of 1934, as amended (the "Exchange Act").
Section 3.4 Broker. No broker, finder or investment banker is entitled
to any brokerage or finder's fee or other commission in connection with the
transactions contemplated hereby based on the arrangements made by or on behalf
of any of the Sellers.
ARTICLE IV
REPRESENTATIONS AND WARRANTIES OF BUYER
Buyer hereby represents and warrants to the Sellers as follows:
Section 4.1 Corporate Organization; Requisite Authority to Conduct
Business. Buyer is a limited liability company duly organized, validly existing
and in good standing under the
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laws of the State of Delaware. Buyer has full corporate power and authority to
enter into this Agreement, to perform its obligations hereunder and to
consummate the transactions contemplated hereby. This Agreement has been duly
authorized and approved by Buyer and no further action on the part of Buyer or
its members will be necessary to authorize the execution and delivery by it of,
and the performance of its obligations under, this Agreement. There are no
contractual, statutory or other restrictions of any kind upon the power and
authority of Buyer to execute and deliver this Agreement and to consummate the
transactions contemplated hereunder, and no action, waiver or consent by any
Governmental Authority is necessary to make this Agreement a valid instrument
binding upon Buyer in accordance with its terms.
Section 4.2 Execution and Delivery. This Agreement has been duly
executed and delivered by Buyer and constitutes its legal, valid and binding
obligations, enforceable against it in accordance with its terms, except (i) as
such enforceability may be limited by or subject to any bankruptcy, insolvency,
reorganization, moratorium or other similar laws affecting creditors' rights
generally, (ii) as such obligations are subject to general principles of equity
and (iii) as rights to indemnity may be limited by federal or state securities
laws or by public policy.
Section 4.3 Required Filings and Consents; No Conflict. Buyer is not
required to submit any notice, report or other filing with any Governmental
Authority in connection with the execution, delivery or performance of this
Agreement, other than notices, reports or other filings required by the Exchange
Act.
Section 4.4 Broker. No broker, finder or investment banker is entitled
to any brokerage or finder's fee or other commission in connection with the
transactions contemplated hereby based on the arrangements made by or on behalf
of Buyer.
Section 4.5 Purchase Entirely for Own Account. The Shares to be
purchased by Buyer pursuant to the terms hereof will be acquired for investment
for Buyer's own account, not as a nominee or agent, and not with a view to the
resale or distribution of any part thereof. Buyer has no present intention of
selling, granting any participation in, or otherwise distributing the Shares
acquired by Buyer. Buyer has no contract, undertaking, agreement or arrangement
with any person to sell or transfer, or grant any participation to such person
or to any third person, with respect to any Shares to be acquired by Buyer.
Section 4.6 Access to Information, Experience, Etc.
(a) Buyer has received and read and is familiar with this
Agreement. Buyer has had an opportunity to ask questions of and receive answers
from the Sellers and the Company concerning the terms and conditions of this
investment. Buyer has substantial experience in evaluating non-liquid
investments such as the Shares and is capable of evaluating the merits and risks
of an investment in the Company. Buyer is an "accredited investor" as that term
is defined in Rule 501 of Regulation D promulgated under the Securities Act of
1933, as amended. Buyer is an affiliate of the Chairman of the Board and Chief
Executive Officer of the Company.
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(b) Buyer has been furnished access to such information and
documents as Buyer has requested and Buyer has been afforded an opportunity to
ask questions of, and receive answers from, the Sellers and the Company
concerning the terms and conditions of this Agreement and the purchase of the
Shares and all other matters deemed relevant to Buyer.
Buyer acknowledges that it has had an opportunity to evaluate
all information regarding purchase of the Shares as it has deemed necessary or
desirable in connection with the transactions contemplated by this Agreement,
has independently evaluated the transactions contemplated by this Agreement and
has reached its own decision to enter into this Agreement.
Buyer is capable of bearing the economic risk of an investment
in the Shares and acknowledges that the Shares will not be transferable without
registration under the Securities Act of 1933 or an exemption therefrom.
ARTICLE V
COVENANTS OF THE SELLERS AND BUYER
Section 5.1 Covenants of the Sellers Pending the Closing. Each Seller
covenants and agrees that between the date of this Agreement and the Closing
Date, directly or indirectly, to not do any of the following without the prior
written consent of Buyer:
(a) sell, pledge, dispose of, encumber, authorize, or propose the sale,
pledge, disposition, encumbrance or authorization of any Shares or any options,
warrants, convertible securities or other rights of any kind to acquire any
Shares; or
(b) acquire, directly or indirectly, any additional shares of Common
Stock or Preferred Stock; or
(c) take, or agree in writing or otherwise to take any action which
would make any of its representations or warranties contained in this Agreement
untrue or incorrect in any material respect as of the date when made or as of a
future date.
Section 5.2 No Other Negotiations. Each Seller agrees that, between the
date hereof and the Closing Date, that he will not nor will he permit any of his
affiliates (including any officers, directors, employees, financial advisors,
brokers, stockholders or any other person acting on their behalf) to, (i) enter
into any agreement with a third party with respect to the acquisition, directly
or indirectly, of the Shares, or (ii) enter into negotiations with a third party
regarding such an agreement.
Section 5.3 Additional Covenants. Each Seller and Buyer covenants and
agrees:
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(a) Best Efforts. To proceed diligently and use its best efforts to
take or cause to be taken all actions and to do or cause to be done all things
necessary, proper and advisable to consummate the transactions contemplated by
this Agreement.
(b) Compliance. To comply in all material respects with all applicable
rules and regulations of any Governmental Authority in connection with the
execution, delivery and performance of this Agreement and the transactions
contemplated hereby.
(c) Notice. To give prompt notice to the other party of (i) the
occurrence, or failure to occur, of any event whose occurrence or failure to
occur, would be likely to cause any representation or warranty contained in this
Agreement to be untrue or incorrect in any material respect at any time from the
date hereof to the Closing Date and (ii) any material failure on its part, or on
the part of any of its officers, directors, employees or agents, to comply with
or satisfy any covenant, condition or agreement to be complied with or satisfied
by it hereunder; provided, however, that the delivery of any such notice shall
not limit or otherwise affect the remedies available hereunder to the party
receiving such notice.
(d) Announcements. That all public announcements, statements and press
releases concerning the transactions contemplated by this Agreement shall be
mutually agreed to by Buyer and the Sellers before the issuance or the making
thereof and, subject to the advice of counsel, no party shall issue any such
press releases or make any such public statement prior to such mutual agreement,
except as may be required by law.
ARTICLE VI
CONDITIONS PRECEDENT TO OBLIGATIONS OF THE SELLERS
Section 6.1 Conditions to Obligations of the Sellers. The obligations
of the Sellers under this Agreement are subject to the satisfaction, on or prior
to the Closing Date, unless waived in writing by the Sellers, of each of the
following conditions:
(a) Representations and Warranties. Buyer's
representations and warranties set forth in Article IV of this
Agreement shall have been true and correct in all material
respects when made and shall be true and correct in all material
respects at and as of the Closing as if such representations and
warranties were made as of the Closing.
(b) Performance of Agreement. All covenants,
conditions and other obligations under this Agreement which are
to be performed or complied with by Buyer shall have been
performed and complied with in all material respects on or prior
to the Closing including the delivery of funds and the fully
executed instruments and documents in accordance with this
Agreement.
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(c) No Adverse Proceeding. There shall be no
pending or threatened claim, action, litigation or proceeding,
judicial or administrative, or governmental investigation against
Buyer or any Seller by a third party for the purpose of enjoining
or preventing the consummation of this Agreement, or otherwise
claiming that this Agreement or the consummation hereof is
illegal.
(d) Certificates. Buyer shall have delivered to the
Sellers a certificate, dated the Closing Date, executed by an
officer of Buyer to the effect that the conditions set forth in
subsections (a), (b) and (c) of this Section 6.1 have been
satisfied.
(e) Escrow Instruction. Buyer shall have delivered
to the Escrow Agent its executed counterpart of the Notice of
Release attached to the Escrow Agreement.
(f) Consents and Approvals. All filings and
registrations with, and notifications to, all federal, state,
local and foreign authorities required for consummation of the
transactions contemplated by this Agreement shall have been made,
and all consents, approvals and authorizations of all federal,
state, local and foreign authorities required for consummation of
the transactions contemplated by this Agreement shall have been
received and shall be in full force and effect.
ARTICLE VII
CONDITIONS PRECEDENT TO OBLIGATIONS OF BUYER
Section 7.1 Conditions to Obligations of Buyer. The obligations of
Buyer under this Agreement are subject to the satisfaction, on or prior to the
Closing Date, unless waived in writing by Buyer, of each of the following
conditions:
(a) Representations and Warranties. The
representations and warranties of the Sellers set forth in
Article III of this Agreement shall have been true and correct in
all material respects when made and shall be true and correct in
all material respects at and as of the Closing as if such
representations and warranties were made as of the Closing.
(b) Performance of Agreement. All covenants,
conditions and other obligations under this Agreement which are
to be performed or complied with by the Sellers shall have been
performed and complied with in all material respects on or prior
to the Closing including, without limitation, the delivery of (i)
the certificates of the Shares pursuant to the terms of, and as
more fully set forth in, Section 1.1 and (ii) fully executed
instruments and documents in accordance with this Agreement.
(c) No Adverse Proceeding. There shall be no
pending or threatened claim, action, litigation or proceeding,
judicial or administrative, or governmental investigation against
Buyer or the Sellers by any third party for the purpose of
enjoining or preventing
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the consummation of this Agreement, or otherwise claiming that
this Agreement or the consummation hereof is illegal.
(d) Certificates. Each Seller shall have delivered
to Buyer a certificate, dated the Closing Date to the effect that
the conditions set forth in subsections (a), (b) and (c) of this
Section 7.1 have been satisfied.
(e) Resignation Letters. The Resignation Letters
attached hereto as Exhibit 2 shall be executed on the date hereof
by ▇▇▇▇▇▇▇ ▇▇▇▇▇▇ and ▇▇▇▇▇▇▇ ▇▇▇▇▇▇ and shall be in full force
and effect on the Closing Date.
(f) Employment Agreement. The ▇▇▇▇▇▇▇ ▇▇▇▇▇▇
Employment Agreement attached hereto as Exhibit 3(a), as amended
by the Amendment attached hereto as Exhibit 3(b) and executed on
the date hereof, shall be in full force and effect on the Closing
Date.
(g) Financing Condition. Buyer shall have obtained
sufficient financing to purchase the Shares on such terms and
conditions satisfactory to Buyer, in its sole discretion.
(h) Escrow Instruction. Each Seller shall have
delivered to the Escrow Agent an executed counterpart of the
Notice of Release attached to the Escrow Agreement.
(i) Consents and Approvals. All filings and
registrations with, and notifications to, all federal, state,
local and foreign authorities required for consummation of the
transactions contemplated by this Agreement shall have been made,
and all consents, approvals and authorizations of all federal,
state, local and foreign authorities required for consummation of
the transactions contemplated by this Agreement shall have been
received and shall be in full force and effect.
ARTICLE VIII
INDEMNIFICATION
Section 8.1 Survival of Representations, Warranties and Agreements.
Subject to the limitations set forth in this Article VIII and notwithstanding
any investigation conducted at any time with regard thereto by or on behalf of
Buyer or the Sellers, all representations, warranties, covenants and agreements
of Buyer and the Sellers in this Agreement shall survive the execution, delivery
and performance of this Agreement and shall be deemed to have been made again by
Buyer and the Sellers at and as of the Closing. The obligation of indemnity
provided herein shall survive the Closing. All statements contained in any
Exhibit, Schedule, statement, certificate or other writing pursuant to this
Agreement or in connection with the transactions contemplated hereby shall be
deemed representations and warranties of Buyer or Sellers, as the case may be,
set forth in this Agreement within the meaning of this Article.
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Section 8.2 Indemnification.
(a) Subject to the limitations set forth in this Article VIII, each
Seller severally and not jointly, shall indemnify and hold harmless Buyer from
and against any and all losses, liabilities, damages, demands, claims, suits,
actions, judgments or causes of action, assessments, costs and expenses
including, without limitation, interest, penalties, reasonable attorneys' fees,
any and all reasonable expenses incurred in investigating, preparing or
defending against any litigation, commenced or threatened, or any claim
whatsoever, and any and all amounts paid in settlement of any claim or
litigation (collectively, "Damages"), asserted against, resulting to, imposed
upon, or incurred or suffered by Buyer, directly or indirectly, as a result of
or arising from any inaccuracy in or breach of any of the representations,
warranties or agreements made in this Agreement by that Seller or the
non-performance of any covenant or obligation to be performed by that Seller
under this Agreement (individually an "Indemnifiable Claim" and collectively
"Indemnifiable Claims" when used in the context of Buyer as the Indemnified
Party (as defined below)).
(b) Subject to the limitations set forth in this Article VIII, Buyer
shall indemnify and hold the Sellers harmless from and against any and all
Damages asserted against, resulting to, imposed upon, or incurred or suffered by
any Seller, directly or indirectly, as a result of or arising from any
inaccuracy in or breach of any of the representations, warranties or agreements
made in this Agreement by Buyer or the non-performance of any covenant or
obligation to be performed by Buyer under this Agreement (individually an
"Indemnifiable Claim" and collectively "Indemnifiable Claims" when used in the
context of Seller as the Indemnified Party).
(c) Without duplication of Damages, Buyer shall be deemed to have
suffered Damages arising out of or resulting from the matters referred to in
subsection (a) above if the same shall be suffered by any parent, subsidiary or
affiliate of Buyer.
Section 8.3 Procedure for Indemnification with Respect to Third Party
Claims. The Indemnified Party shall give the Indemnifying Party prompt written
notice of any third party claim, demand, assessment, suit or proceeding to which
the indemnity set forth in this Article VIII applies which notice shall describe
said claim in reasonable detail (the "Indemnification Notice"). Notwithstanding
the foregoing, the Indemnified Party shall not have any obligation to give any
notice of any assertion of liability by a third party unless such assertion is
in writing, and the rights of the Indemnified Party to be indemnified hereunder
in respect of any third party claim shall not be adversely affected by its
failure to give notice pursuant to the foregoing unless and, if so, only to the
extent that, the Indemnifying Party is materially prejudiced thereby. The
Indemnifying Party shall have the right to control the defense or settlement of
any such action subject to the provisions set forth below in the event such
claim solely involves an action for monetary damages and could not affect the
Indemnified Party's business going forward, but the Indemnified Party may, at
its election, participate in the defense of any action or proceeding at its sole
cost and expense. Notwithstanding the foregoing, if there exists a conflict of
interest that
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would make it inappropriate for the same counsel to represent both the
Indemnified Party, on the one hand, and the Indemnifying Party, on the other
hand, in connection with any Indemnifiable Claim, then the Indemnified Party
shall be entitled to retain its own counsel as is reasonably satisfactory to the
Indemnifying Party at the Indemnifying Party's expense. In the event that such
Indemnified Party shall seek indemnification as provided herein, such
Indemnified Party shall make available to the Indemnifying Party, at its
expense, all witnesses, pertinent records, materials and information in the
Indemnified Party's possession or under the Indemnified Party's control relating
thereto as is reasonably required by the Indemnifying Party. Should the
Indemnifying Party fail to defend any such Indemnifiable Claim (except for
failure resulting from the Indemnified Party's failure to timely give notice of
such Indemnifiable claim), then, in addition to any other remedy, the
Indemnified Party may settle or defend such action or proceeding through counsel
of its own choosing and may recover from the Indemnifying Party the amount of
such settlement, demand, or any judgment or decree and all of its costs and
expenses, including reasonable fees and disbursements of counsel. Except as
permitted in the preceding sentence, the Indemnifying Party shall not be liable
for any settlement effected without its written consent, which consent shall not
be unreasonably withheld; provided, however, if such approval is unreasonably
withheld, the liability of the Indemnifying Party shall be limited to the amount
of the proposed compromise or settlement and the amount of the Indemnified
Party's reasonable counsel fees incurred in defending such claim, as permitted
by the preceding sentence, at the time such consent is unreasonably withheld.
Notwithstanding the preceding sentence, the right of the Indemnified Party to
compromise or settle any claim without the prior written consent of the
Indemnifying Party shall only be available if a complete release of the
Indemnifying Party is contemplated to be part of the proposed compromise or
settlement of such third party claim.
ARTICLE IX
TERMINATION, AMENDMENT AND WAIVER
Section 9.1 Termination. This Agreement may be terminated and the
transactions contemplated by this Agreement abandoned at any time prior to the
Closing:
(a) By mutual written consent of Buyer and all
Sellers;
(b) By either Buyer or any Seller if the
transactions contemplated by this Agreement shall not have been
consummated on or before thirty days following the date hereof;
provided, however, neither Buyer nor any Seller, as the case may
be, may terminate this Agreement pursuant to this Section 9.1(b)
if any condition specified in Article VI or Article VII,
respectively, is not satisfied or waived or any such condition
can no longer be satisfied;
(c) By any Seller if any condition specified in
Article VI hereto has not been met, or waived by the Sellers, at
such time as such condition can no longer be satisfied; or
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(d) By Buyer if any condition specified in Article
VII of this Agreement has not been met, or waived by Buyer, at
such time as such condition can no longer be satisfied.
Section 9.2 Effect of Termination; Release of Deposit.
(a) In the event of any termination of this
Agreement in accordance with Section 9.1(a) hereof, this
Agreement shall forthwith become void and there shall be no
liability under this Agreement on the part of any party hereto or
their respective affiliates, officers, directors, employees or
agents by virtue of such termination and the Escrow Shares shall
be delivered by the Escrow Agent to the Sellers and the Deposit
shall be delivered to the Buyer, each in accordance with the
terms of the Escrow Agreement.
(b) In the event of any termination of this
Agreement in accordance with Section 9.1(d) (other than resulting
from a failure to satisfy Section 7.1(g)) on or prior to 30 days
following the date hereof, Buyer reserves its right to take any
action permitted by law, including as provided in Section 10.3
hereof. In the case of such termination, Buyer shall notify the
Sellers and the Escrow Agent, pursuant to Section 4(c) of the
Escrow Agreement.
(c) Except as specifically provided above, thirty
days following the date hereof, the Deposit and the Escrow Shares
shall be delivered by the Escrow Agent to the Sellers and this
Agreement shall forthwith become void and there shall be no
liability under this Agreement on the part of any party hereto or
their respective affiliates, officers, directors, employees or
agents by virtue of such termination. In addition, in the event
of any termination by any Seller pursuant to Section 9.1(c) based
on the failure of Buyer to satisfy the conditions set forth in
Section 6.1(a) or 6.1(b), Sellers reserve the right to take any
action permitted by law, including as provided in Section 10.3
hereof.
ARTICLE X
MISCELLANEOUS
Section 10.1 Expenses. All costs and expenses incurred in connection
with this Agreement and the transactions contemplated hereby shall be paid by
the party incurring such costs and expenses; provided, however, in the event of
the breach of this Agreement by a party, such party shall pay all costs and
expenses incurred in connection with this Agreement and the transactions
contemplated hereby by the other party.
Section 10.2 Notices. All notices, requests, demands and other
communications which are required or may be given under this Agreement shall be
in writing and shall be deemed to have been duly given when delivered personally
or by facsimile transmission, in either case with receipt acknowledged, or three
days after being sent by registered or certified mail, return receipt requested,
postage prepaid:
-13-
(a) If to Buyer to:
Watermark Investments Limited, LLC
▇▇ ▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
with a copy (which shall not constitute notice) to:
▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ Frome ▇▇▇▇▇▇▇▇▇▇ & ▇▇▇▇▇▇▇ LLP
▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇, Esq.
(b) If to the Sellers to:
▇▇▇▇▇▇▇ ▇▇▇▇▇▇, as agent
▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
with a copy (which shall not constitute notice) to:
▇▇▇▇▇▇▇▇▇ Traurig
▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇ ▇▇▇▇▇▇▇
(c) If to the Company
Hospitality Worldwide Services, Inc.
▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
with a copy (which shall not constitute notice) to:
▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ Frome ▇▇▇▇▇▇▇▇▇▇ & ▇▇▇▇▇▇▇ LLP
▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇, Esq.
or to such other address as any party shall have specified by notice in writing
to the other in compliance with this Section 10.2.
-13-
Section 10.3 Specific Performance. The parties hereto recognize that,
because of the nature of the subject matter of this Agreement, it would be
impractical and extremely difficult to determine actual damages in the event of
a breach of this Agreement. Accordingly, if either party commits a breach of any
of the provisions of hereof, as applicable, of this Agreement, the other party
shall have the right to seek and receive a temporary restraining order,
injunction or other equitable remedy relating to the prevention or cessation of
such breach, including, without limitation, the right to have the provisions of
this Agreement specifically enforced by any court having equity jurisdiction, it
being acknowledged and agreed that any such breach or threatened breach will
cause irreparable injury and that money damages will not provide an adequate
remedy.
Section 10.4 Releases
(a) Release by Each Seller of the Company and Buyer. Effective upon the
Closing, each Seller, on behalf of himself and his affiliates, successors and
assigns, hereby release and discharge the Company and Buyer, their subsidiaries
and affiliates, and their directors, officers, employees, agents, consultants
and their successors and assigns (together, the "Company Releasees") from all
actions, causes of action, suits, debts, dues, sums of money, accounts,
reckonings, bonds, bills, specialties, covenants, contracts, controversies,
agreements, promises, variances, trespasses, damages, judgments, executions,
claims, and demands whatsoever, in law or equity, which against the Company
Releasees, each Seller and his affiliates, successors and assigns ever had, now
have or hereafter can, shall or may have, for, upon, or by reason of any matter,
cause or thing whatsoever from the beginning of the world to the date of this
Agreement. The foregoing release shall not extend to (i) the obligations of the
Company and its affiliates to perform their obligations under existing
employment agreements from the date of this Agreement and shall not affect the
provisions of those agreements, as amended, which shall remain in full force and
effect or (ii) to any actions, causes of action, demands, etc. arising from the
breach or the claimed breach of this Agreement. In addition, the foregoing shall
not release the Company or its affiliates from obligations of indemnity under
the Company's Certificate of Incorporation or By-Laws, the New York Business
Corporation Law or by contract.
(b) Release by the Company and Buyer of the Sellers. Effective upon the
Closing, the Company and Buyer, on behalf of themselves and their affiliates,
successors and assigns, hereby release and discharge each Seller, and his
successors and assigns (together, the "▇▇▇▇▇▇ Releasees") from all actions,
causes of action, suits, debts, dues, sums of money, accounts, reckonings,
bonds, bills, specialties, covenants, contracts, controversies, agreements,
promises, variances, trespasses, damages, judgments, executions, claims, and
demands whatsoever, in law or equity, which against the ▇▇▇▇▇▇ Releasees, the
Company and Buyer and their affiliates, successors and assigns ever had, now
have or hereafter can, shall or may have, for, upon, or by reason of any matter,
cause or thing whatsoever from the beginning of the world to the date of this
Agreement. The foregoing release shall not extend to any actions, causes of
action, demands, etc. arising from the breach or the claimed breach (i) of this
Agreement by any Seller or (ii) of any employment agreement between a Seller
(other than ▇▇▇▇▇▇▇ ▇▇▇▇▇▇) and the Company by such Seller.
-14-
Section 10.5 Standstill. No Seller shall, for a period of two years
following the Closing, (a) make any public announcement with respect to, or
submit any proposal for, a transaction involving the acquisition of assets of
the Company by such Seller, whether directly or indirectly, nor (b) directly or
indirectly, by purchase or otherwise, by himself or along with others, acquire,
offer to acquire, or agree to acquire, ownership or options to acquire such
ownership of any voting securities of the Company (or otherwise act in concert
with any person which so acquires, offers to acquire, or agrees to acquire), or
otherwise seek to influence or control the management or policies of the Company
without the Company's prior written consent. The foregoing shall not, however,
prohibit the ownership by any Seller of an interest in a mutual fund or other
similar investment vehicle which fund or vehicle has an ownership interest in
the Company as one of many investments.
Section 10.6 Entire Agreement. This Agreement constitutes the entire
agreement among the parties hereto with respect to the subject matter hereof and
supersedes all prior agreements, representations and understandings among the
parties hereto.
Section 10.7 Binding Effect, Benefits, Assignments. This Agreement
shall inure to the benefit of and be binding upon the parties hereto and their
respective successors and assigns; nothing in this Agreement, expressed or
implied, is intended to confer on any other person, other than the parties
hereto or their respective successors and assigns, any rights, remedies,
obligations or liabilities under or by reason of this Agreement. This Agreement
may not be assigned without the prior written consent of the other parties
hereto; provided, however, that Buyer may assign its rights and obligations
under this Agreement without the consent of the other parties so long as Buyer
remains obligated hereunder.
Section 10.8 Applicable Law. This Agreement and the legal relations
between the parties hereto shall be governed by and construed in accordance with
the laws of the State of New York, without regard to conflicts of law rules of
such state.
Section 10.9 Jurisdiction. Each of the parties hereto hereby
irrevocably submits to the exclusive jurisdiction of any Florida state court or
Federal court sitting in the State of Florida over any action or proceeding
arising out of or relating to this Agreement and the transactions contemplated
hereby and each of the parties hereto hereby irrevocably agrees that all claims
in respect of such action or proceeding shall be heard and determined in such
Florida state or Federal court. Each of the parties hereto hereby irrevocably
waives, to the fullest extent legally possible, the defense of an inconvenient
forum to the maintenance of such action or proceeding.
Section 10.10 Further Assurances. At, and from time to time after the
Closing Date, at the request and expense of Buyer but without further
consideration, the Sellers will execute and deliver such other instruments of
conveyance, assignment, transfer, and delivery and take such other action as
Buyer reasonably may request in order more effectively to convey, transfer,
assign and deliver to Buyer, and to place Buyer in possession and control of the
Shares, or to enable Buyer to exercise and enjoy all rights and benefits of the
Sellers with respect to the Shares.
-15-
Section 10.11 Severability. With respect to any provision of this
Agreement finally determined by a court of competent jurisdiction to be
unenforceable, such court shall have jurisdiction to reform such provision so
that it is enforceable to the maximum extent permitted by law, and all the
parties hereto shall abide by such court's determination. In the event that any
provision of this Agreement cannot be reformed, such provision shall be deemed
to be severed from this Agreement, but every other provision of this Agreement
shall remain in full force and effect.
Section 10.12 Headings. The headings and captions in this Agreement are
included for purposes of convenience only and shall not affect the construction
or interpretation of any of its provisions.
Section 10.13 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.
-16-
IN WITNESS WHEREOF, the parties hereto have executed this Agreement as
of the day and year hereinabove first set forth.
WATERMARK INVESTMENTS LIMITED, LLC
By: /s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇
---------------------------------------
Name: ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇
Title:
SELLERS
/s/ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇ /s/ ▇▇▇▇▇▇ ▇▇▇▇▇▇
------------------------------ ------------------------------------------
▇▇▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇
/s/ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇ /s/ ▇▇▇▇▇ ▇▇▇▇▇▇
------------------------------ ------------------------------------------
▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇
/s/ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇ /s/ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇
------------------------------ ------------------------------------------
▇▇▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇
Solely with respect to Sections 10.4 & 10.5
HOSPITALITY WORLDWIDE SERVICES, INC.
By: /s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
---------------------------------------
Name: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
Title: Chairman and CEO
-17-
EXHIBIT 1
SHARES
Shares of Preferred
Seller Shares of Common Stock Stock
------ ---------------------- -----
▇▇▇▇▇▇▇ ▇▇▇▇▇▇ 271,435 0
▇▇▇▇▇▇▇ ▇▇▇▇▇▇ 401,200 0
▇▇▇▇▇▇ ▇▇▇▇▇▇ 375,000 0
▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇ 175,000 40,000
▇▇▇▇▇ ▇▇▇▇▇▇ 175,000 40,000
▇▇▇▇▇▇▇ ▇▇▇▇▇▇ 0 40,000
------- -------
1,397,635 120,000
PURCHASE PRICE
Aggregate
Escrow Closing Purchase
Seller Payment Payment Price
------ ------- ------- -----
▇▇▇▇▇▇▇ ▇▇▇▇▇▇ 33,441 1,252,875.25 $1,289,316.25
▇▇▇▇▇▇▇ ▇▇▇▇▇▇ 49,428 1,856,272 1,905,700
▇▇▇▇▇▇ ▇▇▇▇▇▇ 46,200 1,735,050 1,781,250
▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇ 47,497 1,783,753 1,831,250
▇▇▇▇▇ ▇▇▇▇▇▇ 47,497 1,783,753 1,831,250
▇▇▇▇▇▇▇ ▇▇▇▇▇▇ 25,937 974,063 1,000,000
-------- ---------- -----------
250,000 9,388,766.25 $9,638,766.25
-18-
EXHIBIT 2
[Form of Resignation for ▇▇▇▇▇▇▇ ▇▇▇▇▇▇ and ▇▇▇▇▇▇▇ ▇▇▇▇▇▇]
March 30, 1999
Board of Directors of Hospitality Worldwide Services, Inc.
Hospitality Worldwide Services, Inc.
▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇
To the Board of Directors of Hospitality Worldwide Services, Inc.:
Reference is hereby made to the Stock Purchase Agreement dated as of March 30,
1999 by and among Watermark Investments Limited, LLC and each of the parties
listed on the signature pages thereto (the "Stock Purchase Agreement").
Effective upon the Closing (as defined in the Stock Purchase Agreement) of the
Stock Purchase Agreement, I hereby resign as a Director of Hospitality Worldwide
Services, Inc.
Very truly yours,