FOR PURCHASE OF STOCK OF
HOME REALTY AND INVESTMENT CORP., INC.
BY AND BETWEEN
▇▇▇▇ ▇. ▇▇▇▇▇ AND ▇▇▇▇▇ ▇▇▇▇
SELLER
AND
▇-▇▇▇▇.▇▇▇, INC.
BUYER
DATED: AS OF APRIL 17, 2000
TABLE OF CONTENTS
Page
ARTICLE I: DEFINITIONS AND RULES OF CONSTRUCTION...............................1
ARTICLE II: SALE AND PURCHASE..................................................5
ARTICLE III: REPRESENTATIONS AND WARRANTIES....................................7
ARTICLE IV: COVENANTS.........................................................16
ARTICLE V : TAXES.............................................................20
ARTICLE VI: INDEMNITY.........................................................20
ARTICLE VII: CONDITIONS PRECEDENT.............................................22
ARTICLE VIII: MISCELLANEOUS...................................................24
EXHIBITS:
EXHIBIT A: EMPLOYMENT AGREEMENTS FOR SELLER
EX. A-1 ▇▇▇▇▇ ▇▇▇▇; EX. A-2 ▇▇▇▇ ▇. ▇▇▇▇▇
EXHIBIT B: SCHEDULE OF DISCHARGED LIABILITIES
EXHIBIT C: SCHEDULE OF TARGET ACCOUNTS
EXHIBIT D: DISCLOSURE SCHEDULE
EXHIBIT E: OPINION OF COUNSEL FOR SELLER ADDRESSED TO BUYER
EXHIBIT F: OPINION OF COUNSEL FOR BUYER ADDRESSED TO SELLER
EXHIBIT G: FINANCIAL STATEMENTS
PURCHASE AND SALE AGREEMENT
entered into by and between ▇▇▇▇ ▇. ▇▇▇▇▇ and ▇▇▇▇▇ ▇▇▇▇ of Fort Lauderdale,
Florida (jointly referred to as "Seller"), and ▇-▇▇▇▇.▇▇▇, Inc., a Nevada
corporation, having an office at ▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇ ▇▇., ▇▇▇▇▇ ▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇▇▇,
▇▇▇▇▇▇▇ ▇▇▇▇▇ ("Buyer").
This Agreement contemplates a transaction in which the Buyer will
purchase from the Seller, and the Seller will sell to the Buyer, 80% of the
outstanding capital stock ("Target Shares") of Home Realty & Investment Corp.,
Inc. ("Target"), in return for the consideration set forth herein, including
$115,000.00 in cash and 250,000 shares or more of Buyer's common stock, par
value $.001 per share ("Buyer Common Stock") at Closing and $50,000.00 cash and
250,000 shares of Buyer Common Stock on the first anniversary of the Closing
date.
NOW, THEREFORE, in consideration of the premises and the mutual
promises herein made, and in consideration of the representations, warranties,
and covenants herein contained, the Parties agree as follows:
ARTICLE I
DEFINITIONS AND RULES OF CONSTRUCTION
1.1 DEFINITIONS. For purposes of this Agreement, except as otherwise
expressly provided or unless the context otherwise requires, the terms defined
in this section have the meanings herein assigned to them and the capitalized
terms defined elsewhere in this Agreement, by inclusion in quotation marks and
parentheses, shall have the meanings so ascribed to them.
1.1.1 "ACCOUNTS" means the accounts payable of Target
identified on Exhibit C of this Agreement, which are all of the
accounts payable of Target owed to Persons related to the use or
operation of the Target that are, or as of the Closing Date will be,
past due.
1.1.2 "AFFILIATE" means, with respect to any specified Person,
a Person directly or indirectly controlling or controlled by or under
direct or indirect common control with such specified Person. For the
purposes of this definition, "control" means the power to direct the
management and policies of such Person, directly or indirectly, whether
through the ownership of voting securities, by contract or otherwise,
and the terms "controlling" and "controlled" have meanings correlative
to the foregoing. With respect to a corporation, control shall mean a
direct or indirect ownership of more than 50 percent of the voting
stock.
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1.1.3 "AGREED RATE" means a rate per annum calculated on a
360-day basis which is equal to the lesser of:
(a) a rate which is two percent above the prime rate
of interest as published by THE WALL STREET JOURNAL under the
heading "Money Rates" or another similar heading in its first
issue of each calendar month (adjusted each month to reflect
any changes in the rate), or
(b) the maximum rate from time to time permitted by
applicable law.
1.1.4 "AGREEMENT" means this Purchase and Sale Agreement,
including the Exhibits.
1.1.5 "BUSINESS DAY" means any day when commercial banks are
generally open for regular business in the City of Fort Lauderdale,
Florida.
1.1.6 "CLOSING" means the closing of the transactions
contemplated by this Agreement at 10:00 a.m., local time, at Seller's
offices in Fort Lauderdale, Florida, on the Closing Date.
1.1.7 "CLOSING DATE" means on or before April 17, 2000;
provided, however, that the Parties by mutual agreement may extend the
Closing Date until a Business Day on or before August 31, 2000.
1.1.8 "CODE" means the United States Internal Revenue Code of
1986, as amended.
1.1.9 "CORPORATE DOCUMENTS" means a corporation's articles of
incorporation (or charter or certificate of incorporation), by-laws,
minutes, resolutions, or the equivalent documents.
1.1.10 "DISCHARGED LIABILITIES" means all liabilities and
obligations of the Target owed to the Seller, and all other liabilities
and obligations of the Target set forth in Exhibit B; provided,
however, that the Discharged Liabilities shall not include any
liability or obligation of the Seller or Target under this Agreement.
1.1.11 "DISCLOSURE SCHEDULE" means Exhibit D on which is
scheduled any exceptions to the representations and warranties of the
Seller and the Target and all items required by Sections 3.1.6, 3.1.8,
3.3.2, 3.3.8, 3.3.9, 3.3.10, and 3.3.13.
1.1.12 "EFFECTIVE DATE" shall mean 12:01 a.m., April 17,
2000, Eastern Time.
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1.1.13 "EMPLOYEE BENEFIT PLAN" means any (a) nonqualified
deferred compensation or retirement plan or arrangement which is an
Employee Pension Benefit Plan, (b) qualified contribution retirement
plan or arrangement which is an Employee Pension Benefit Plan, (c)
qualified defined benefit retirement plan or arrangement which is an
Employee Pension Benefit Plan (including any Multiemployer Plan),
or (d) Employee Welfare Benefit Plan or material fringe benefit plan or
program.
1.1.14 "ENVIRONMENTAL CLAIMS" means actions, claims, or
proceedings by Third Persons associated with Target's assets and based
on Environmental Conditions or Environmental Law.
1.1.15 "ENVIRONMENTAL CONDITION" means a condition that exists
prior to the Effective Date, and only to the extent in existence on the
Effective Date, with respect to the air, land, soil, surface,
subsurface strata, surface water, ground water, or sediments which
causes Target to be not in compliance with an Environmental Law.
1.1.16 "ENVIRONMENTAL LAW" means any Law relating to
pollution, the protection of the environment, or the release or
disposal of waste materials.
1.1.17 "ENVIRONMENTAL MATTER" means an Environmental
Condition or an Environmental Claim.
1.1.18 "ERISA" means the Employee Retirement Income Security
Act of 1974, as amended.
1.1.19 "GAAP" means United States generally accepted
accounting principles as in effect from time to time.
1.1.20 "GOVERNMENTAL BODY" means any federal, state, republic,
territorial, national, tribal, county, municipal, or other federal,
state or local governmental authority or judicial or regulatory agency,
board, body, department, bureau, inspectorate, ministry, commission,
instrumentality, court, tribunal or quasi-governmental authority in any
jurisdiction (domestic or foreign) having jurisdiction over any Party
to this transaction, or any of the transactions or matters contemplated
by this Agreement.
1.1.21 "KNOWLEDGE" means the actual knowledge of a Party's
corporate officers and their direct reports, after reasonable inquiry.
1.1.22 "LIABILITY" means any liability (whether known or
unknown, whether asserted or unasserted, whether absolute or
contingent, whether accrued or unaccrued, whether liquidated or un
liquidated, and whether due or to become due), including any liability
for Taxes.
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1.1.23 "LOSSES" means any and all losses, costs, expenses,
liabilities, claims, demands, penalties, fines, assessments,
settlements, damages and any related expenses of whatever kind or
nature, including, without limitation, legal, accounting, consulting
and investigation expenses and litigation costs, but excluding
consequential damages of a Party.
1.1.24 "PARTY" means either Buyer or Seller.
1.1.25 "PERSON" means any individual, corporation,
partnership, limited liability company, joint venture, association,
joint stock company, trust, estate, unincorporated organization, other
business entity or Governmental Body.
1.1.26 "TAX" means any and all fees (including, without
limitation, documentation, license, recording, filing and registration
fees), taxes (including without limitation, gross receipts, ad valorem,
value added, environmental tax, turnover, sales, use, property
(tangible and intangible), stamp, leasing, lease, user, leasing use,
excise, franchise, transfer, fuel, excess profits, occupational,
interest equalization, and other taxes), levies, imposts, duties,
charges or withholdings of any nature whatsoever, imposed by any
Governmental Body or taxing authority thereof, domestic or foreign,
together with any and all penalties, fines, additions to Tax and
interest thereon, whether or not such Tax shall be existing or
hereafter adopted.
1.1.27 "THIRD PERSON" means a Person other than a Party or an
Affiliate of a Party.
1.1.28 OTHER DEFINITIONS IN THIS AGREEMENT. The following
terms shall have the respective meanings ascribed to them as found on
the pages of this Agreement set forth below opposite such terms:
TERM
PAGE
AAA Rules..............................................................28
Buyer...................................................................1
Claim Notice...........................................................20
Disputed Claim.........................................................22
4
Indemnified Party......................................................20
Laws....................................................................8
Notice Period..........................................................21
Purchase Consideration..................................................6
Seller..................................................................1
Target..................................................................1
Target Shares...........................................................1
1.2 RULES OF CONSTRUCTION. For purposes of this Agreement:
1.2.1 GENERAL. Unless the context otherwise requires
(a) "or" is not exclusive;
(b) an accounting term not otherwise defined has the
meaning assigned to it in accordance with GAAP;
(c) words in the singular include the plural and
words in the plural include the singular;
(d) words in the masculine include the feminine and
words in the feminine include the masculine;
(e) any date specified for any action that is not a
Business Day shall be deemed to mean the first Business Day
after such date; and
(f) a reference to a Person includes its successors
and assigns.
1.2.2 ARTICLES AND SECTIONS. References to Articles and
Sections are, unless otherwise specified, to Articles and Sections of
this Agreement. Neither the captions to Articles or Sections hereof nor
the Table of Contents shall be deemed to be a part of this Agreement.
1.2.3 EXHIBITS. The Exhibits form a part of this Agreement and
shall have the same force and effect as if set out in the body of this
Agreement.
1.2.4 OTHER AGREEMENTS. References herein to any agreement or
other instrument shall, unless the context otherwise requires (or the
definition thereof otherwise specifies), be deemed references to that
agreement or instrument as it may from time to time be changed, amended
or extended.
5
ARTICLE II
SALE AND PURCHASE
2.1 BASIC TRANSACTION. On and subject to the terms and conditions of
this Agreement, the Buyer agrees to purchase from the Seller, and the Seller
agrees to sell to the Buyer, the Target Shares for the consideration specified
in this Article II. The Target Shares constitute ____ shares of common stock,
par value ___ per share, of Target.
2.2 PURCHASE CONSIDERATION. The Buyer agrees (i) to pay to Seller
$115,000 in cash in immediately available funds at Closing and $50,000 cash in
immediately available funds on the first anniversary of the Closing Date, and
(ii) to issue and deliver at Closing 250,000 shares of Buyer Common Stock and
all dividends and other rights which attach to or flow from the 250,000 shares
of Buyer's Common Stock as of and following the Effective Date, including,
without limitation, the right to receive the stock dividend of shares in Ubuy
▇▇▇▇▇▇▇.▇▇▇ to be paid to all holders of Buyer Common Stock of record on April
17, 2000, and (iii) to issue and deliver to Seller 250,000 shares of Buyer's
Common Stock on the first anniversary of the Closing Date (the "Purchase
Consideration").
2.3 DELIVERIES AT THE CLOSING. At the Closing, (i) the Seller will
deliver to the Buyer the various certificates, instruments, and documents
referred to in Section 2.3.1, below, (ii) the Buyer will deliver to the Seller
the various certificates, instruments, and documents referred to in Section
2.3.2, below, (iii) the Seller will deliver to the Buyer stock certificates
representing the Target Shares, endorsed in blank or accompanied by duly
executed assignment documents, and (iv) the Buyer will deliver to the Seller the
Purchase Consideration required for Closing specified in Section 2.2, above.
2.3.1 SELLER RESPONSIBILITY.
(a) the Seller shall have delivered to the Buyer a certificate
to the effect that each of the conditions specified in this Agreement
to be satisfied by Seller has been satisfied in all respects including
a release of all Discharged Liabilities including but not limited to
those listed on Exhibit B;
(b) the Buyer shall have received from counsel to the Seller an
opinion in form and substance as set forth in Exhibit E attached
hereto, addressed to the Buyer, and dated as of the Closing Date;
(c) the Buyer shall have received the resignations, effective
as of the Closing, of each director and officer of the Target other
than those whom the Buyer shall have specified in writing at least one
business day prior to the Closing; and
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(d) all actions to be taken by the Seller in connection
with consummation of the transactions contemplated hereby and all
certificates, opinions, instruments, and other documents required to
effect the transactions contemplated hereby will be reasonably
satisfactory in form and substance to the Buyer.
2.3.2 BUYER'S RESPONSIBILITY.
(a) the Buyer shall have delivered to the Seller a certificate
to the effect that each of the conditions specified in this Agreement
to be satisfied by Buyer has been satisfied in all respects;
(b)the Seller shall have received from counsel to the Buyer an
opinion in form and substance as set forth in Exhibit F attached
hereto, addressed to the Seller, and dated as of the Closing Date; and
(c) all actions to be taken by the Buyer in connection
with consummation of the transactions contemplated hereby and all
certificates, opinions, instruments, and other documents required to
effect the transactions contemplated hereby will be reasonably
satisfactory in form and substance to the Seller.
ARTICLE III
REPRESENTATIONS AND WARRANTIES
3.1 SELLER. Seller represents and warrants to Buyer that:
3.1.1 AUTHORITY. Seller has the power and authority to enter
into and perform this Agreement and to consummate the transactions
contemplated hereby. The execution, delivery and performance by Seller
of this Agreement and the consummation of the transactions contemplated
hereby have been duly authorized and this Agreement has been duly
executed and delivered by Seller.
3.1.2. VALIDITY OF AGREEMENT. This Agreement is a legal, valid
and binding obligation of Seller enforceable against Seller in
accordance with the terms of this Agreement, except as enforcement may
be limited by bankruptcy, insolvency or other similar Laws affecting
the enforcement of creditors' rights in general. The enforceability of
this Agreement against Seller is further subject to general principles
of equity (regardless of whether such enforceability is considered in a
proceeding in equity or at law).
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3.1.3 NO VIOLATION. To the best of Seller's knowledge and
belief, the execution and delivery of this Agreement and the
performance by the Seller of the terms of this Agreement do not
conflict with or result in a violation of any agreement, instrument,
order, writ, judgment or decree to which Seller is a party or is
subject.
3.1.4 LEGAL PROCEEDINGS. As of the date of this Agreement,
there are no pending suits, actions, arbitrations, mediations or
proceedings as to which Seller has been served process or received
notice before any court or Governmental Body which would adversely
affect the Target, or hinder, impede or prevent Seller from
consummating the transactions contemplated by this Agreement. To
Seller's Knowledge, there are no pending suits, actions, arbitrations,
mediations or proceedings as to which Seller has not been served
process or received notice, or that are threatened before any court or
Governmental Body which would adversely affect the Target, or hinder,
impede or prevent Seller from consummating the transactions
contemplated by this Agreement.
3.1.5 COMPLIANCE WITH APPLICABLE LAWS. To the best of
Seller's knowledge and belief, Target is in all material respects in
compliance with any applicable laws, orders, rules, regulations,
judgments or decrees of any Governmental Bodies relating to the
business of Target and its assets, including the common or civil law,
and including, but not limited to, those relating to occupational
safety and health, consumer product safety, employee benefits,
environmental laws, zoning laws or regulations or other applicable
laws or regulations ("Laws"), except insofar as non-compliance with
Laws would not diminish Buyer's ownership of the Target or interfere
with Buyer's operation of the Target.
3.1.6 TARGET SHARES. The Seller holds of record and has
authority to transfer the number of Target Shares set forth next to
his name on the Disclosure Schedule, free and clear of any
restrictions on transfer (other than any restrictions under the
Securities Act and state securities laws), Taxes, Security Interests,
options, warrants, purchase rights, contracts, commitments, equities,
claims, and demands. The Seller is not a party to any option, warrant,
purchase right, or other contract or commitment that could require the
Seller to sell, transfer, or otherwise dispose of any capital stock of
the Target (other than this Agreement). The Seller is not a party to
any voting trust, proxy, or other agreement or understanding with
respect to the voting Target Shares.
3.1.7 NO CONSENTS REQUIRED. No preferential purchase rights,
consents, approvals or other action by, or filing with any Person or
Governmental Body is required in connection with the execution,
delivery and performance by Seller of this Agreement, except for
ministerial acts of Governmental Bodies in connection with filing
instruments of transfer of title and except for Consents that will be
delivered to Buyer by Seller at Closing.
8
3.1.8 PAYMENTS. To the best of Seller's knowledge and belief,
except only for Taxes and those matters listed on the Disclosure
Schedule, no payments of any kind are required to be made by Seller to
Third Persons or an Affiliate of Seller under any contract or
otherwise with respect to the Target.
3.1.9 DISCLOSURE. To Seller's Knowledge, there are no facts
or circumstances affecting or relating to the Target that might result
in Losses to Seller or Buyer for any Environmental Matter or for any
violation of ERISA or under any Employee Benefit Plan.
3.1.10 ADVERSE CLAIMS. To Seller's Knowledge, no Person has
asserted or has threatened to assert any claim, fact, liability,
interest, condition, or event that, if true and valid, would violate
any representation or warranty of Seller.
3.2 BUYER. Buyer represents and warrants to Seller that:
3.2.1 ORGANIZATION AND STANDING. Buyer is a corporation
duly organized, validly existing and in good standing under the laws of
the State of Nevada, its jurisdiction of incorporation. Buyer has all
corporate powers to own its properties and to operate its business as
now owned and operated by it.
3.2.2 AUTHORITY. Buyer has the corporate power and authority
to enter into and perform this Agreement and to consummate the
transactions contemplated hereby. The execution, delivery and
performance by Buyer of this Agreement and the consummation of the
transactions contemplated hereby have been duly authorized by all
requisite corporate action and this Agreement has been duly executed
and delivered by Buyer.
3.2.3..VALIDITY OF AGREEMENT. This Agreement is a legal, valid
and binding obligation of Buyer enforceable against Buyer in accordance
with the terms of this Agreement, except as enforcement may be limited
by bankruptcy, insolvency or other similar Laws affecting the
enforcement of creditors' rights in general. The enforceability of this
Agreement against Buyer is further subject to general principles of
equity (regardless of whether enforceability is considered in a
proceeding in equity or at law).
3.2.4 NO VIOLATION. The execution and delivery of this
Agreement and the performance by Buyer of the terms of this Agreement
do not conflict with or result in a violation of the Corporate
Documents of Buyer or of any agreement, instrument, order, writ,
judgment or decree to which Buyer is a party or is subject.
9
3.2.5 ADVERSE CLAIMS. To Buyer's Knowledge, no Person has
asserted or has threatened to assert any claim, fact, liability,
interest, condition, or event that, if true and valid, would violate
any representation or warranty of Buyer.
3.2.6 NO CONSENT REQUIRED. No preferential purchase rights,
consents, approvals or other action by, or filing with any Person or
Governmental Body is required in connection with the execution,
delivery and performance by Buyer of this Agreement, except for
ministerial acts of Governmental Bodies in connection with filing
instruments of transfer of title and except for Consents that will be
delivered to Seller by Buyer at Closing.
3.2.7 LEGAL PROCEEDINGS. As of the date of this Agreement,
there are no pending suits, actions, arbitrations, mediations or
proceedings as to which Buyer has been served process or received
notice before any court or Governmental Body which would hinder, impede
or prevent Buyer from consummating the transactions contemplated by
this Agreement. To Buyer's Knowledge, there are no pending suits,
actions, arbitrations, mediations or proceedings as to which Buyer
has not been served process or received notice, or that are threatened
before any court or Governmental Body which would hinder, impede or
prevent Buyer from consummating the transactions contemplated by this
Agreement.
3.2.8 BUYER COMMON STOCK. All shares of Buyer Common Stock
issuable to Seller pursuant to this Agreement upon issuance will be
duly authorized, validly issued, fully paid and nonassessable. Seller
shall receive valid title to all such shares, free and clear of all
liens, encumbrances, and security agreements. Such shares will not be
subject to any options, warrants, rights, encumbrances or the like and
will not be subject to or in violation of any preemptive rights, rights
of first refusal or the like.
3.2.9 INVESTMENT. Buyer is an "accredited investor" within the
meaning of Regulation D promulgated under the Securities Act. Buyer
acknowledges that the Target Shares are restricted securities under
applicable law. Buyer is acquiring the Target Shares for its own
account and not with a view to distribution. Buyer agrees not to sell,
transfer, assign, hypothecate, pledge or otherwise dispose of any of
the Target Shares unless (a) such transaction has been registered under
the Securities Act and applicable state or other law, or (b) pursuant
to an exemption therefrom. Buyer has been afforded full access to all
books, records, financial statements and other documents related to
Target and the opportunity to ask questions and to obtain any
additional information relative to Target.
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3.2.10 REPORTS AND FINANCIAL STATEMENTS. Since April 18 2000,
Buyer has filed all required forms, reports and documents with the
Securities and Exchange Commission (the "SEC") required to be filed by
it pursuant to the Securities Act and Securities Exchange Act of 1934,
as amended (the "Exchange Act"), all of which complied at the time of
filing in all material respects with all then applicable requirements
of the Securities Act and the Exchange Act. None of such forms, reports
or documents, at the time filed, contained any untrue statement of a
material fact or omitted to state a material fact required to be stated
therein or necessary in order to make the statements therein, in light
of the circumstances under which they were made, not misleading.
The consolidated financial statements (including the related notes
thereto) of Buyer contained in such forms, reports and documents
present fairly the financial position of Buyer as of their respective
dates, and the results of its operations and changes in its financial
position for the periods presented therein, all in conformity with
GAAP applied on a consistent basis, except as otherwise noted therein,
and subject in the case of quarterly financial statements to normal
year- end audit adjustments and except that the quarterly financial
statements do not contain all of the footnote disclosures required by
GAAP.
3.2.11 CAPITALIZATION. As of the date of this Agreement, the
total authorized capital stock of Buyer consists of 500,000,000 shares
of Buyer Common Stock (of which 148,433,820 shares are issued and
outstanding) and 10,000,000 shares of preferred stock (of which no
shares are issued and outstanding) , and 100,000,000 shares of Class A
Preferred Stock (of which 100,000,000 shares are issued and
outstanding).
3.2.12 FINANCIAL STATEMENTS. Exhibit "H" attached to this
Agreement and made a part hereof by reference is comprised of the
audited balance sheets of the Corporation for the fiscal years ended as
of May 31, 1999 and 1998 and the related statements of income and
retained earnings for the years ending on those dates. The financial
states in Exhibit "H" have been prepared by the Corporation's certified
public accountants in accordance with GAAP, and they are complete and
correct and fairly present the financial position of the Corporation
for the respective periods indicated.
3.2.13 PERMITS AND LICENSES. Buyer presently has all licenses,
permits and other authorizations from federal, state, and local
authorities necessary for the conduct of the business presently
conducted by Buyer, and Buyer has not received any notice to the
contrary. Buyer is in compliance with all applicable federal, states
and local laws, rules and regulations relating to the conduct of its
business and operations and assets and has not received any notice to
the contrary.
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3.2.14 LEGAL COMPLIANCE. The conduct of the Buyer's business
does not violate or infringe any federal, state, local or other laws,
statutes, ordinances, or regulations, the enforcement of which could
materially and adversely affect the business or operations of Buyer or
the value of its properties and assets.
3.3 REPRESENTATIONS AND WARRANTIES CONCERNING THE TARGET. The Seller
represents and warrants to the Buyer that the statements contained in this
Section 3.3 are correct and complete in all material respects as of the date of
this Agreement and will be correct and complete in all material respects as of
the Closing Date (as though made then and as though the Closing Date were
substituted for the date of this Agreement throughout this Section 3.3).
3.3.1 ORGANIZATION, QUALIFICATION, AND CORPORATE POWER. The
Target is a corporation duly organized, validly existing, and in good
standing under the laws of the jurisdiction of its incorporation.
Target is duly authorized to conduct business and is in good standing
under the laws of each jurisdiction where such qualification is
required, except where the failure to so qualify would not cause a
material adverse effect on the Seller. Target has full corporate power
and authority and all licenses, permits, and authorizations necessary
to carry on the businesses in which it is engaged (and in which it
presently proposes to engage) and to own and use the properties owned
and used by it. The Seller has delivered to the Buyer correct and
complete in all material respects copies of the charter and bylaws of
Target (as amended to date). The minute books (containing the records
of meetings of the stockholders, the board of directors, and any
committees of the board of directors), the stock certificate books,
and the stock record books of Target are correct and complete in all
material respects. Target is not in default under or in violation of
any provision of its charter or bylaws.
3.3.2 CAPITALIZATION. As of the date of this Agreement the
total authorized capital stock of Target consists of ______ shares of
common stock and no shares of preferred stock, of which _______shares
of common stock are issued and outstanding. All of the issued and
outstanding Target Shares have been duly authorized, are validly
issued, fully paid, and non-assessable, and are held of record by the
Seller. There are no outstanding or authorized preferred stock,
options, warrants, purchase rights, subscription rights, conversion
rights, exchange rights, or other contracts or commitments that could
require the Target to issue, sell, or otherwise cause to become
outstanding any of its capital stock. There are no outstanding or
authorized stock appreciation, phantom stock, profit participation, or
similar rights with respect to the Target. There are no voting trusts,
proxies, or other agreements or understandings with respect to the
voting of the capital stock of the Target.
3.3.3 NONCONTRAVENTION. Neither the execution and the delivery
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of this Agreement, nor the consummation of the transactions
contemplated hereby, will (i) violate any constitution, statute,
regulation, rule, injunction, judgment, order, decree, ruling, charge,
or other restriction of any government, governmental agency, or court
to which Target is subject or any provision of the charter or bylaws of
Target or (ii) conflict with, result in a breach of, constitute a
default under, result in the acceleration of, create in any party the
right to accelerate, terminate, modify, or cancel, or require any
notice under any agreement, contract, lease, license, instrument, or
other arrangement to which Target is a party or by which it is bound or
to which any of its assets is subject (or result in the imposition of
any Security Interest upon any of its assets). Target does not need to
give any notice to, make any filing with, or obtain any authorization,
consent, or approval of any government or governmental agency in order
for the Parties to consummate the transactions contemplated by this
Agreement.
3.3.4 FINANCIAL STATEMENTS. Attached hereto as Exhibit G are
the following financial statements of Target (collectively the
"Financial Statements"): (i) unaudited balance sheets and statements of
income as of and for the twelve months ended December 31, 1997 and
1998; and (ii) unaudited balance sheets and statements of income (the
"Most Recent Financial Statements") as of and for the twelve months
ended December 31, 1999 (the "Most Recent Fiscal Year End") for the
Target. Also attached as part of Exhibit G are the Federal Income Tax
Returns for 1998 and 1999 for the Target. The Financial Statements
(including the notes thereto) have been prepared in accordance with
GAAP applied on a consistent basis throughout the periods covered
thereby, present fairly the financial condition of Target as of such
dates and the results of operations of Target for such periods, are
correct and complete in all material respects, and are consistent
with the books and records of Target (which books and records are
correct and complete in all material respects).
3.3.5 UNDISCLOSED LIABILITIES. To the best of Seller's
knowledge and belief, Target has no Liability (and there is no basis
for any present or future action, suit, proceeding, hearing,
investigation, charge, complaint, claim, or demand against it giving
rise to any Liability), except for (i) Liabilities set forth on the
face of the Most Recent Financial Statements (rather than in any notes
thereto) and (ii) Liabilities which have arisen after the Most Recent
Fiscal Year End in the Ordinary Course of Business (none of which
results from, arises out of, relates to, is in the nature of, or was
caused by any breach of contract, breach of warranty, tort,
infringement, or violation of law), and any Liabilities not required by
GAAP to be set forth on the face of the Most Recent Financial
Statements.
3.3.6 LEGAL COMPLIANCE. To the best of Seller's knowledge and
belief, Target has complied in all material respects with all
applicable laws (including rules, regulations, codes, plans,
injunctions, judgments, orders, decrees, rulings, and charges
-▇▇-
▇▇▇▇▇▇▇▇▇▇) ▇▇ ▇▇▇▇▇▇▇, ▇▇▇▇▇, local, and foreign governments (and all
agencies thereof), and no action, suit, proceeding, hearing,
investigation, charge, complaint, claim, demand, or notice has been
filed or commenced against Target alleging any failure so to comply.
(A) TAX MATTERS.
(i) Target has filed all Tax Returns that it was required to
file except for any Tax Returns which the failure to file would not
cause a material adverse effect on Target. All such Tax Returns were
correct and complete in all material respects. All Taxes owed by Target
(whether or not shown on any Tax Return) have been paid. Target
currently is not the beneficiary of any extension of time within which
to file any Tax Return. No claim has ever been made by an authority in
a jurisdiction where Target does not file Tax Returns that it is or may
be subject to taxation by that jurisdiction. There are no Security
Interests on any of the assets of Target that arose in connection with
any failure (or alleged failure) to pay any Tax.
(ii) Target has withheld and paid all Taxes required to have
been withheld and paid in connection with amounts paid or owing to any
employee, independent contractor, creditor, stockholder, or other third
party.
(B) TITLE TO ASSETS. Target has good and marketable title to,
or a valid leasehold interest in, the properties and assets used by
Target, located on its premises, or shown on the Most Recent Financial
Statements or acquired after the date thereof, free and clear of all
Security Interests, except for properties and
assets disposed of in the Ordinary Course of Business since the date of
the Most Recent Financial Statements.
3.3.7 INTELLECTUAL PROPERTY.
(a) To Seller's Knowledge, Target has not interfered with,
infringed upon, misappropriated, or otherwise come into conflict with
any Intellectual Property rights of third parties, and none of the
Seller and the directors and officers (and employees with
responsibility for Intellectual Property matters) of Target has ever
received any charge, complaint, claim, demand, or notice alleging any
such interference, infringement, misappropriation, or violation
(including any claim that Target must license or refrain from using any
Intellectual Property rights of any third party). To the Knowledge of
Seller and the directors and officers (and employees with
responsibility for Intellectual Property matters) of Target, no third
party has interfered with, infringed upon, misappropriated, or
otherwise come into conflict with any Intellectual Property rights of
Target.
-14-
3.3.8 CONTRACTS. The Disclosure Schedule lists the following
contracts and other agreements to which Target is a party:
(a) any agreement (or group of related agreements) for the
lease of personal property to or from any Person providing for lease
payments in excess of $5,000 per annum;
(b) any agreement (or group of related agreements) for the
purchase or sale of raw materials, commodities, supplies, products, or
other personal property, or for the furnishing or receipt of services,
the performance of which will extend over a period of more than one
year, result in a material loss to Target, or involve consideration in
excess of $25,000;
(c) any agreement concerning a partnership or joint venture;
(d) any agreement (or group of related agreements) under which
it has created, incurred, assumed, or guaranteed any indebtedness for
borrowed money, or any capitalized lease obligation, in excess of
$50,000.00 or under which it has imposed a Security Interest on any of
its assets, tangible or intangible;
(e) any agreement concerning confidentiality or noncompetition;
(f) any agreement with the Seller and their respective
Affiliates;
(g) any profit sharing, stock option, stock purchase, stock
appreciation, deferred compensation, severance, or other material plan
or arrangement for the benefit of its current or former directors,
officers, and employees;
(h) any collective bargaining agreement;
(i) any agreement for the employment of any individual on a
full- time, part-time, consulting, or other basis providing annual
compensation in excess of $50,000.00 or providing severance benefits;
(j) any agreement under which it has advanced or loaned any
amount to any of its directors, officers, and employees outside the
Ordinary Course of Business;
(k) any agreement under which the consequences of a default or
termination could have a material adverse effect on the business,
financial condition, operations, results of operations, or future
prospects of Target; or
(L) any other agreement (or group of related agreements) the
performance of which involves consideration in excess of $25,000.00 per
annum.
-15-
The Seller has delivered to Buyer a correct and complete in all
material respects copy of each written agreement listed in the Disclosure
Schedule (as amended to date) and a written summary setting forth the terms and
conditions of each oral agreement referred to in the Disclosure Schedule. With
respect to each such agreement, to the best of Seller's knowledge and belief:
(A) the agreement is legal, valid, binding, enforceable, and in full force and
effect; (B) the agreement will continue to be legal, valid, binding,
enforceable, and in full force and effect on identical terms following the
consummation of the transactions contemplated hereby; (C) no party is in breach
or default, and to Seller's Knowledge no event has occurred which with notice or
lapse of time would constitute a breach or default, or permit termination,
modification, or acceleration, under the agreement; and (D) no party has
repudiated any provision of the agreement.
3.3.9 NOTES AND ACCOUNTS RECEIVABLE. Except as disclosed in
Section 3.3.9 of the Disclosure Schedule, all notes and accounts
receivable of Target are reflected properly on Target's books and
records, are valid receivables subject to no setoffs or counterclaims,
are current and collectible, and will be collected in accordance with
their terms at their recorded amounts, subject only to the reserve for
bad debts, if any, set forth on the face of the Most Recent Financial
Statements (rather than in any notes thereto) as adjusted for the
passage of time through the Closing Date in accordance with the past
custom and practice of Target.
3.3.10 INSURANCE. The Disclosure Schedule sets forth the
material information with respect to each insurance policy (including
policies providing property, casualty, liability, and workers'
compensation coverage and bond and surety arrangements) to which Target
has been a party, a named insured, or otherwise the beneficiary of
coverage at any time within the past five years.
3.3.11 PRODUCT LIABILITY. To the best of Seller's knowledge
and belief, Target has no Liability (and there is no basis for any
present or future action, suit, proceeding, hearing, investigation,
charge, complaint, claim, or demand against it giving rise to any
Liability) arising out of any injury to individuals or property as a
result of the ownership, possession, or use of any product
manufactured, sold, leased, or delivered by Target.
3.3.12 EMPLOYEE BENEFITS. With respect to any Employee Benefit
Plan that Target maintains or ever has maintained or to which Target
contributes, ever has contributed, or ever has been required to
contribute, the Seller has delivered to the Buyer correct and complete
in all material respects copies of the plan documents and summary plan
descriptions, the most recent determination letter received from the
Internal Revenue Service, the most recent Form 5500 Annual Report, and
all related trust agreements, insurance contracts, and other funding
16
agreements which implement each such Employee Benefit Plan. Target does
not maintain and has never maintained or contributed, or has never been
required to contribute to any Employee Welfare Plan providing medical,
health, or life insurance or other welfare-type benefits for current or
future employed or terminated employees, their spouses, or their
dependents (other than in accordance with Code Sec. 4980B).
3.3.13 CERTAIN BUSINESS RELATIONSHIPS WITH TARGET. Except as
described on the Disclosure Schedule, the Seller has not been involved
in any business arrangement or relationship with Target within the past
12 months, and the Seller does not own any asset, tangible or
intangible, which is used in the business of Target.
3.3.14 DISCLOSURE. The representations and warranties
contained in this Section 3.3 do not contain any untrue statement of a
material fact or omit to state any material fact necessary in order to
make the statements and information contained in this Section 3.3 not
misleading.
ARTICLE IV
COVENANTS
4.1 SELLER'S COVENANTS. Seller covenants with Buyer as follows:
4.1.1 ACCESS. Except as set forth in Articles V and VI, from
the date hereof to the Closing Date, Seller shall afford and shall
cause to be afforded to Buyer and Buyer's representatives full and
reasonable access to the Target, to all books and records in the
possession or control of Target regarding its assets, and to the
charter, by-laws, minutes, and corporate resolutions of the Target.
-17-
4.1.2 EXCLUSIVE DEALING. From and after the date of this
Agreement until Closing, except as otherwise consented to by Buyer in
writing, and except for the termination of dealings with other parties
with whom Seller had previously communicated regarding the purchase of
the Target Shares, Seller shall not either directly or indirectly
through a representative:
(a) provide information to any Person or representative of
such Person, which would assist such Person in evaluating the prospects
of purchasing the Target or its assets;
(b) initiate, encourage, solicit, analyze or respond to any
inquiries, offers, proposals, bids, or other investigations by any
Person to acquire all or any of the Target Shares (other than to
indicate that the Target Shares are not for sale);
(c) enter into or agree to enter into any transaction, the
result of which would interfere, hinder, delay or materially change
the effect of the transaction contemplated by this Agreement; or
(d) negotiate with any Person with respect to any such
transaction.
4.1.3 CONDUCT OF BUSINESS.
(a) Prior to Closing, Seller shall:
(i) maintain, repair and operate the Target in
accordance with standard practices and the practices historically
employed with respect to the business of Target and comply in all
material respects with Laws and perform in all material respects the
obligations under the Contracts;
(ii) provide Buyer, as soon as reasonably practicable
following receipt by Seller, with written notice of all proposals
regarding the business and assets of Target;
(iii) maintain the Target in its present customary
offices, except to the extent that the assets are moved for use at work
locations and returned to their present customary locations after the
work is complete; and
(iv) promptly notify Buyer of any loss, damage, or
injury to, relating to, or wholly or partly caused by, any of the
assets of Target.
(b) Without the consent of Buyer, prior to Closing Seller
shall not permit Target to:
-18-
(i) incur obligations with respect to, or undertake
any transactions relating to, the Target, other than transactions (1)
in the normal, usual and customary manner, (2) of a nature and in an
amount consistent with prior practice, and (3) in the ordinary course
of business and operating the Target;
(ii) enter into any new material agreements or
commitments with respect to the business of the Target;
(iii) abandon or scrap any material part of the
assets of Target; or
(iv)sell, lease, rent, encumber, hypothecate, or
otherwise dispose of any part of, or interest in, any of the assets of
Target other than in the ordinary course of business.
4.2 COVENANTS OF SELLER AND BUYER. Seller and Buyer covenant to each
other as follows:
4.2.1 COMPLIANCE WITH CONDITIONS PRECEDENT. Each Party shall
use its best efforts to cause the conditions precedent set forth in
Article VII, applicable to such Party, to be fulfilled and satisfied as
soon as practicable but in any event prior to Closing.
4.2.2 PREPARATION OF CLOSING DOCUMENTS. With respect to
Closing Documents, each Party shall deliver proposed forms of all other
documents to be delivered at Closing pursuant to this Agreement for
which such Party is responsible no later than one day prior to Closing.
4.2.3 PRESS RELEASE. Prior to and following Closing, neither
Party shall make any press release or other announcement in connection
with this Agreement or the transactions contemplated hereby without
first consulting with the other Party and accommodating all reasonable
requests to the other Party regarding the statements made in such press
release or announcement. Following such consultation and good faith
attempt to make reasonable accommodations, either Party may make any
announcement or press release that upon advice of counsel is either
required by applicable Law or the rules of any stock exchange.
4.2.4 BROKERS. The Parties represent to each other that no
broker, finder, financial advisor, investment banker, or similar person
has been retained by a Party in connection with this Agreement, other
than ▇▇▇▇▇▇▇, ▇▇▇▇ & Bara, Inc. of Coral Springs, Florida.
-19-
4.2.5 POST-CLOSING ACCESS. Except as otherwise expressly
provided herein, from and after the Closing Date, Buyer and Seller
shall reasonably cooperate and afford each other or cause to be
afforded to their respective officers, employees, accountants and other
representatives access, upon reasonable notice, during business hours
with respect to the facility to which access has been requested, to
review and copy the books, documents, databases, or other records
relating to the Target and its assets (which books, documents,
databases, records, or employees files or other information the Parties
shall cooperate and assist one another in identifying and locating),
interview, depose or seek testimony of employees, provide assistance
in proceedings with employees as witnesses or advisors, investigate
the physical premises, take photographs or videotapes, identify
employees and contractors with knowledge of any matter which is the
subject of a claim for which a Party has responsibility and make such
employees available to such Party and provide reasonable office space
to do any of the foregoing in connection with any matter affecting or
alleged to affect the Party requesting such access.
4.2.6 FURTHER ASSURANCES. Each Party shall, from time to time
at the request of the other, and without further consideration, execute
and deliver such other instruments of sale, transfer, conveyance,
assignment, clarification and termination and take such other action as
the Party making the request may require to effect the intentions of
the Parties, including those required to sell, transfer, convey and
assign to, and vest in Buyer, and to place Buyer in possession of the
Target Shares and the assets and business of Target, and to give Buyer
full and unencumbered rights of ownership, operation, use, possession,
and enjoyment of the Target Shares. Seller intends to convey 80% of the
capital stock of Target at Closing.
4.2.7 FILES TRANSFER. Seller shall deliver to Buyer at the
offices of Target the originals of all the files and records relating
to the Target. Seller shall have the right to make copies of all
originals. For five years after Closing, Seller shall have the right,
during regular business hours, and at her expense, to inspect and copy
the files and records relating to the Target.
4.2.8 POST-CLOSING COVENANTS. The Parties agree as follows
with respect to the period following the Closing:
(A) GENERAL. In case at any time after the Closing any further
action is necessary or desirable to carry out the purposes of this
Agreement, each of the Parties will take such further action (including
the execution and delivery of such further instruments and documents)
as any other Party reasonably may request, all at the sole cost and
expense of the requesting Party (except to the extent the requesting
Party is entitled to indemnification thereof under Article VI below).
20
(B) BUY OUT OPTION. Buyer shall have the exclusive option to
purchase the remaining 20% of the shares of Target held by Seller at
any time after three years from the Closing Date and before the
expiration of five years from the Closing Date by payment of five times
the earnings per share of the Target before provision for federal
income tax for the twelve months preceding the exercise of the option.
ARTICLE V
TAXES
5.1 TAX PROCEEDINGS. If Buyer or any of Buyer's Affiliates receives
notice of any examination, claim, adjustment or other proceeding relating to the
liability for Taxes of or with respect to Seller for any period Seller is or may
be liable under this Agreement, Buyer shall notify Seller in writing within 10
days of receiving notice thereof. As to any such Taxes for which Seller is or
may be liable under this Agreement, Seller shall at Seller's expense control or
settle the contest of such examination, claim, adjustment or other proceeding,
and shall indemnify Buyer against all Losses in connection therewith. The
Parties shall cooperate with each other and with their respective Affiliates in
the negotiation and settlement of any proceeding described in this Article.
Buyer shall provide, or cause to be provided, to Seller necessary
authorizations, including powers of attorney, to control any proceeding which
Seller is entitled to control pursuant to this Article.
ARTICLE VI
INDEMNITY
6.1 INDEMNIFICATION BY SELLER. Seller shall indemnify, defend and hold
harmless Buyer from and against all Losses based upon, arising out of, in
connection with, or relating to any breach of any representation, warranty,
covenant or agreement of Seller contained in this Agreement.
6.2 INDEMNIFICATION BY BUYER. Buyer shall indemnify, defend and hold
harmless Seller from and against all Losses based upon, arising out of, in
connection with, or relating to any breach of any representation, warranty,
covenant or agreement of Buyer contained in this Agreement.
6.3 SURVIVAL OF REPRESENTATIONS AND WARRANTIES. All representations,
covenants, and warranties and agreements made by the Seller in this Agreement
and in any document delivered or to be delivered pursuant hereto or in
connection with the closing hereunder shall survive the closing.
6.4 METHOD OF ASSERTING CLAIMS. All claims for indemnification under
this Agreement shall be asserted and resolved as follows:
21
6.4.1 THIRD PERSON CLAIMS. If any claim for which a Party
providing indemnification (the "Indemnifying Party") would be liable to
a Party or any of its officers, directors, employees, agents or
representatives entitled to indemnification hereunder (the "Indemnified
Party") is asserted against or sought to be collected by a Third
Person, the Indemnified Party shall promptly notify the Indemnifying
Party of such claim, specifying the nature of such claim and the amount
or the estimated amount thereof to the extent then feasible (which
estimate shall not be conclusive of the final amount of such claim)
(the "Claim Notice"). The Indemnifying Party shall have 30 days from
its receipt of the Claim Notice (the "Notice Period") to notify the
Indemnified Party
(a) whether or not it disputes its liability to the
Indemnified Party hereunder with respect to such claim, and
(b) if it does not dispute such liability, whether or not it
desires, at its sole cost and expense, to defend the Indemnified Party
against such claim; provided, however, that the Indemnified Party is
hereby authorized prior to and during the Notice Period (up to the
receipt of the notice from the Indemnifying Party) to file any motion,
answer or other pleading, submission or document which it shall deem
necessary or appropriate to protect its interests. If the Indemnifying
Party notifies the Indemnified Party within the Notice Period that it
does not dispute such liability and desires to defend against such
claim or demand, then, except as hereinafter provided, the Indemnifying
Party shall have the right to defend such claim or demand by
appropriate proceedings, which proceedings shall be promptly settled or
prosecuted to a final conclusion, in such a manner as to avoid any risk
of the Indemnified Party becoming subject to liability. If the
Indemnified Party desires to participate in, but not control, any such
defense or settlement, it may do so at its own cost and expense. If the
Indemnifying Party disputes its liability with respect to such claim,
or elects not to defend against such claim, whether by not giving
timely notice as provided above or otherwise, the Indemnified Party
shall have the right but not the obligation to defend against such
claim, and the amount of any such claim, or if the same be contested by
the Indemnifying Party or by the Indemnified Party, then that portion
thereof as to which such defense is unsuccessful, shall be conclusively
deemed to be a liability of the Indemnifying Party hereunder (subject,
if it has timely disputed liability, to a determination in accordance
with this Agreement that the disputed liability is covered by this
Article).
6.4.2 OTHER CLAIMS. In the event that the Indemnified Party
shall have a claim against the Indemnifying Party hereunder which does
not involve a claim or demand being asserted against or sought to be
collected from it by a Third Person, the Indemnified Party shall
promptly send a Claim Notice with respect to such claim to the
22
Indemnifying Party. If the Indemnifying Party does not notify the
Indemnified Party within the Notice Period that it disputes such claim,
the amount of such claim shall be conclusively deemed a liability of
the Indemnifying Party hereunder.
6.5 PAYMENT. Payments in regard to Third Person claims under this
Agreement shall be made as follows:
6.5.1 PAYMENT OF UNDISPUTED AMOUNT. If the Indemnifying Party
is required to make any payment, the Indemnifying Party shall promptly
pay the Indemnified Party the amount so determined. If there should be
a dispute as to the amount or manner of determination of any indemnity
obligation owed, the Indemnifying Party shall nevertheless pay when due
such portion, if any, of the obligation as shall not be subject to
dispute. Upon the payment in full of any claim, the Indemnifying Party
shall be subrogated to the rights of the Indemnified Party against any
Person or other entity with respect to the subject matter of such
claim.
6.5.2 INTEREST. If all or part of any indemnification
obligation under this Agreement is disputed or is otherwise not paid
when due, then upon resolution of the claim the Indemnifying Party
shall pay on demand to the Indemnified Party interest at the Agreed
Rate on that part of the obligation for each day from the date the
amount became due until payment in full.
6.5.3 DISPUTED CLAIMS. If the Indemnifying Party shall notify
the Indemnified Party during the Notice Period that it disputes any
claim for indemnification (the "Disputed Claim"), the Disputed Claim
shall be subject to the dispute resolution procedures provided in this
Agreement.
ARTICLE VII
CONDITIONS PRECEDENT
7.1 CONDITIONS PRECEDENT OF BUYER. The obligations of Buyer to
consummate the transactions contemplated by this Agreement are subject to
the following conditions:
7.1.1 REPRESENTATIONS AND WARRANTIES TRUE AT CLOSING. The
representations and warranties of Seller contained in this Agreement or
in any certificate or document delivered pursuant to the provisions
hereof, or in connection with the transactions contemplated hereby,
were true and complete when made, and shall be true and complete on and
as of the Closing Date as though such representations and warranties
were made in all material respects at and as of such date except as
otherwise expressly provided herein.
23
7.1.2 COMPLIANCE WITH AGREEMENT. On and as of the Closing
Date, Seller and Target shall have performed and complied in all
material respects with all agreements, covenants, and conditions
required by this Agreement to be performed and complied with by them
prior to or on the Closing Date.
7.1.3 APPROVAL OF PROCEEDINGS. All actions, proceedings,
instruments and documents required of Seller to carry out this
Agreement, or incidental thereto, and all other related legal matters
shall have been approved by ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇, as counsel for
Buyer, which approval shall not be unreasonably withheld.
24
7.1.4 OPINION OF COUNSEL. There shall have been delivered to
Buyer the opinion of counsel for Seller, dated the Closing Date and in
the form set forth on Exhibit E.
7.1.5 CONVEYANCE. Seller shall execute, acknowledge and
deliver to Buyer such other documents as may be necessary to carry out
the purposes of this Agreement.
7.1.6 NO MATERIAL ADVERSE CHANGE. There shall not have
occurred with respect to Target any material adverse change in the
condition or value thereof since the execution of this Agreement other
than changes in the ordinary course of business.
7.2 CONDITIONS PRECEDENT OF SELLER. The obligations of Seller to
consummate the transactions contemplated by this Agreement are subject
to the following conditions:
7.2.1 REPRESENTATIONS AND WARRANTIES TRUE AT CLOSING. The
representations and warranties of Buyer contained in this Agreement or
in any certificate or document delivered pursuant to the provisions
hereof, or in connection with the transactions contemplated hereby,
were true and complete when made, and shall be true and complete on and
as of the Closing Date as though such representations and warranties
were made at and as of such date except as otherwise expressly provided
herein.
7.2.2 COMPLIANCE WITH AGREEMENT. On and as of the Closing
Date, Buyer shall have performed and complied with all agreements,
covenants, and conditions required by this Agreement to be performed
and complied with by it prior to or on the Closing Date.
7.2.3 CERTIFIED RESOLUTIONS AND OFFICERS' CERTIFICATE. Buyer
shall have delivered to Seller
(a) a certificate dated the Closing Date signed by the
Secretary of Buyer with respect to the action of Buyer's Board of
Directors authorizing the transactions contemplated by this Agreement
in accordance with Buyer's Corporate Documents, and
(b) a certificate dated the Closing Date and signed by the
President of Buyer certifying in such detail as Seller may reasonably
request to the fulfillment of the conditions specified in Sections
7.2.1 and 7.2.2.
7.2.4 APPROVAL OF PROCEEDINGS. All actions, proceedings,
25
instruments and documents required for Buyer to carry out this
Agreement, or incidental thereto, and all other related legal matters
shall have been approved by counsel for Seller, which approval shall
not be unreasonably withheld.
7.2.5 OPINION OF COUNSEL. There shall have been delivered to
Seller an opinion of ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇, dated the Closing Date and
in the form set forth on Exhibit F.
7.2.6 EMPLOYMENT AGREEMENTS. Target shall have executed
Employment Agreements with ▇▇▇▇▇ ▇▇▇▇ and ▇▇▇▇ ▇. ▇▇▇▇▇ dated the
Closing Date and in the forms set forth on Exhibits A-1 and A-2,
respectively.
7.2.7 FUTURE FUNDING. Buyer shall have arranged for a
minimum of $250,000.00 of additional working capital for the Target to
be employed under a business and marketing plan be acceptable to Buyer.
7.2.8 INJUNCTION. On the Closing Date, there shall be no
injunction, writ, or preliminary restraining order or any order of any
nature issued by a court or other Governmental Body of competent
jurisdiction directing that the transactions provided for herein or any
of them not be consummated as herein provided or imposing any
conditions on the consummation of the transactions contemplated hereby
and no material proceeding or lawsuit shall have been commenced or
threatened by any Governmental Body or other Person with respect to any
of the transactions contemplated by this Agreement.
7.2.9 CONVEYANCE. Buyer shall execute, acknowledge and deliver
to Seller such documents as may be necessary to carry out the purposes
of this Agreement.
ARTICLE VIII
MISCELLANEOUS
8.1 NOTICES. All notices, consents, requests, demands, and other
communications hereunder shall be in writing and shall be deemed to have been
duly given or delivered if
8.1.1 delivered by hand,
8.1.2 delivered by a recognized overnight commercial courier
(receipt requested), or
8.1.3 sent by telecopier (with receipt confirmed), provided
26
that a copy is promptly thereafter mailed in the United States by
first-class postage prepaid mail,
to the Party as follows (or to such other address as any Party shall have last
designated by 15 days' notice to the other Party).
If to Seller:
▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇ ▇▇▇.
▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇
Attn: ▇▇▇▇▇ ▇▇▇▇
Telecopier: (▇▇▇) ▇▇▇-▇▇▇▇
If to Buyer:
▇-▇▇▇▇.▇▇▇, Inc.
▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇
▇▇▇▇▇ ▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇
Attn: ▇▇▇▇▇ Bazsuly
Telecopier: (▇▇▇) ▇▇▇-▇▇▇▇
A notice shall also be deemed given if an original, photocopy or facsimile is
actually received by the Persons designated to receive notice, regardless of the
manner of transmission.
8.2 GOVERNING LAW. This Agreement shall be governed by and construed
and enforced in accordance with the Laws of the State of Florida without
reference to principles of conflicts of laws, with venue established in the
State Courts of Broward County, Florida, and the United States District Court
for the Southern District of Florida.
8.3 ASSIGNMENT. This Agreement and the rights and obligations created
hereunder shall not be assigned prior to Closing by either Party except that
Buyer may assign its rights to a single Affiliate of Buyer provided Buyer
remains primarily liable for the performance of all obligations hereunder.
Subsequent to Closing either Party may assign their obligations hereunder to an
Affiliate provided the Party remains primarily liable for the performance of the
Party's obligations hereunder. Subsequent to Closing neither Party may assign
its rights or interests under this Agreement except in connection with a sale of
all or substantially all of Target Shares or in connection with a merger or
similar transaction. Any party into which Buyer is merged or to which Buyer
sells all or substantially all of its assets shall agree to assume all of
Buyer's obligations hereunder as a condition to any such transaction.
8.4 COUNTERPARTS. This Agreement may be executed 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.
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8.5 INVALIDITY. If any of the provisions of this Agreement including
the Exhibits is held invalid or unenforceable, such invalidity or
unenforceability shall not affect in any way the validity or enforceability of
any other provision of this Agreement. In the event any provision is held
invalid or unenforceable, the Parties shall attempt to agree on a valid or
enforceable provision which shall be a reasonable substitute for such invalid or
unenforceable provision in light of the tenor of this Agreement and, on so
agreeing, shall incorporate such substitute provision in this Agreement.
8.6 ENTIRE AGREEMENT AND CONSTRUCTION. This Agreement contains the
entire agreement between the Parties with respect to the transactions
contemplated hereby and all prior understandings and agreements shall merge
herein. There are no additional terms, whether consistent or inconsistent, oral
or written, which are intended to be part of the Parties' understandings which
have not been incorporated into this Agreement and the Exhibits which have been
incorporated herein by reference. The Parties agree that they have jointly
participated in the drafting and preparation of this Agreement and that the
language of this Agreement shall be construed as a whole according to its fair
meaning and not strictly for or against any of the Parties hereto.
8.7 EXPENSES. Except as otherwise expressly provided herein, each Party
shall bear its own fees, costs and expenses in connection with the transactions
contemplated herein, including, without limitation, all legal and accounting
fees and disbursements and fees and expenses of other advisors retained by such
Party.
8.8 WAIVERS AND AMENDMENTS. All amendments and other modifications
hereof shall be in writing and signed by each of the Parties. Either Party may
by written instrument:
8.8.1 waive any inaccuracies in any of the representations or
warranties made to it by any other Party contained in this Agreement or
in any instruments and documents delivered to it pursuant to this
Agreement;
8.8.2 waive compliance or performance by the other Party with
or of any of the covenants or agreements made to it by the other Party
contained in this Agreement; or
8.8.3 waive any of its conditions precedent to Closing;
The delay or failure on the part of a Party hereto to insist,
in any one instance or more, upon strict performance of any of the
terms or conditions of this Agreement, or to exercise any right or
privilege herein conferred shall not be construed as a wavier of any
such terms, conditions, rights or privileges but the same shall
continue and remain in full force and effect. All rights and remedies
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are cumulative. The waiver of a condition to Closing by a Party
regarding a warranty, representation or covenant shall not constitute a
waiver of a breach of such warranty, representation or covenant;
provided, however, that the Parties shall attempt in good faith to
agree prior to Closing upon the resolution of a breach of a
representation, warranty or covenant that arises after the date of this
Agreement which could result in liability to the breaching Party and of
which the other Party has actual Knowledge, and if the Parties cannot
agree upon a resolution, the breach shall be deemed waived if the
Closing occurs.
8.9 SURVIVAL OF WARRANTIES, REPRESENTATIONS AND COVENANTS. All
representations and warranties contained in this Agreement shall survive the
Closing and continue with respect to claims made on or before one year following
the Closing Date, except Environmental Claims which shall survive for two years.
8.10 SECTION HEADINGS. The section headings in this Agreement are for
convenience of reference only and shall not be deemed to alter or affect the
interpretation of any provision thereof.
8.11 TERMINATION. This Agreement may be terminated
8.11.1 by mutual written consent of the Parties at any time
prior to the Closing;
8.11.2 by Buyer by notice to Seller given on or before the
Closing Date, if Buyer shall discover any material fact or condition
existing that is at variance with any of the representations and
warranties of Seller contained in this Agreement;
8.11.3 by Seller by notice to Buyer given on or before the
Closing Date, if Seller shall discover any material fact or condition
existing that is at variance with any of the representations and
warranties of Buyer contained in this Agreement; or
8.11.4 by Seller or Buyer if the Closing shall not have
occurred on or before August 15, 2000 other than through the fault of
the terminating Party.
Upon any termination the Parties shall have no further obligations
under this Agreement, except that the provisions of Sections 8.1 through 8.8,
8.10, and 8.12 shall remain in full force and effect.
8.12 DISPUTE RESOLUTION. Except as expressly provided to the
contrary in this Agreement, the parties shall submit every dispute relating to
this Agreement to binding arbitration as follows:
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8.12.1 SELECTION OF ARBITRATOR. The Parties shall use
reasonable efforts to select a mutually acceptable arbitrator. If the
Parties fail to agree on an arbitrator within 15 days, either Party may
request the judge of the United States District Court for the Southern
District of Florida having greatest tenure, but not yet on retired or
senior status, to appoint an arbitrator. If that judge fails to do so
within 30 days, either Party may request the judge of that court next
senior to name the arbitrator, and if that judge fails to do so after
10 days, either Party may make the request of the judge of that court
next senior, and so on, until the arbitrator is appointed.
8.12.2 QUALIFICATIONS OF ARBITRATOR. Each arbitrator shall be
knowledgeable about matters affecting the issue(s) for which such
arbitrator is appointed (and where applicable, shall be a professional
in the matter of dispute) or shall be a former member of the Florida or
federal judiciary, and shall be required to meet the qualification
requirements of the Commercial Arbitration Rules of the American
Arbitration Association (the "AAA Rules"). If prior to rendering a
decision an arbitrator resigns or becomes unable to serve, the
arbitrator will be replaced using the mechanism set forth herein.
8.12.3 SUIT PROHIBITED. No Party will commence or prosecute
any suit or action against another Party other than as may be necessary
to compel arbitration or to enforce the award of an arbitrator.
8.12.4 DAMAGES. The arbitrator shall not have any authority to
award consequential, exemplary or punitive damages. Any liability of
Seller under this Agreement shall not exceed the value of the Final
Purchase Consideration received by the Seller hereunder. The sole forum
for the arbitration shall be Fort Lauderdale, Florida, and all hearings
shall be conducted in Fort Lauderdale, Florida.
8.12.5 DECISION. The decision of the arbitrator shall be
rendered in writing and shall be final and binding upon the Parties.
Any Party shall have the right to entry of judgment, by any court of
competent jurisdiction, upon the decision of the arbitrator. Unless
declared otherwise by the arbitrator:
(a) the expenses of arbitration, including compensation to the
aribtrator, shall be borne equally by the Parties;
(b) each Party shall bear the compensation and expenses of its
own counsel, witnesses and employees; and
(c) if the testimony of a witness is obtained by both Parties,
the costs associated with obtaining such testimony shall be borne
equally between the Parties.
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8.12.6 AAA RULES. Matters not specifically provided for herein
shall be governed by the AAA Rules on procedure matters and by laws of
the State of Florida and United States of America on substantive law
matters.
In Witness Whereof, the Parties hereto have entered into this Agreement
as of the date first herein above written.
BUYER:
▇-▇▇▇▇.▇▇▇, INC.
By:
SELLER:
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