ASSET PURCHASE AGREEMENT
BY AND AMONG
HIREL HOLDINGS, INC., A DELAWARE CORPORATION,
JERRY'S MARINE SERVICE, INC., A SOUTH CAROLINA CORPORATION
JERRY'S MARINE SERVICE OF FORT LAUDERDALE, INC.,
A FLORIDA CORPORATION
AND
▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇ ▇▇ ▇▇▇▇▇ AND ▇▇▇▇▇▇▇ ▇▇▇▇▇
JULY 8, 1997
ASSET PURCHASE AGREEMENT
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THIS ASSET PURCHASE AGREEMENT (the "Agreement") is made and entered into
as of the 8th day of July, 1997, by and among HIREL HOLDINGS, INC., a Delaware
corporation ("Purchaser"), and JERRY'S MARINE SERVICE, INC., a South Carolina
corporation ("Jerry's, Inc."), JERRY'S MARINE SERVICE OF FORT LAUDERDALE, INC.,
a Florida corporation ("Jerry's Fort Lauderdale") (Jerry's, Inc. and Jerry's
Fort Lauderdale are sometimes hereinafter referred to collectively as
"Sellers"), and ▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇ ▇▇ ▇▇▇▇▇ and ▇▇▇▇▇▇▇ ▇▇▇▇▇
(hereinafter referred to individually as "Shareholder" and collectively as
"Shareholders"). The Sellers and Shareholders shall be jointly and severally
liable hereunder.
W I T N E S S E T H:
WHEREAS, Sellers are each engaged in the business of distributing and
selling marine parts, components and accessories (their respective businesses
and operations are hereinafter referred to collectively as the "Business"); and
WHEREAS, subject to the terms and conditions hereinafter set forth,
Purchaser desires to acquire from Sellers and Sellers desire to transfer to
Purchaser, all the Purchased Assets (as hereinafter defined), which constitute
substantially all of the assets of Sellers, in exchange for Purchase Price (as
hereinafter defined); and
WHEREAS, the Shareholders constitute all of the shareholders of Sellers,
and will materially benefit from the transactions contemplated hereby.
NOW, THEREFORE, in consideration of the premises and the mutual covenants
of the parties hereinafter expressed, it is hereby agreed as follows:
ARTICLE I
RECITALS, EXHIBITS, SCHEDULES
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The foregoing recitals are true and correct and, together with the
schedules and exhibits referred to hereafter, are hereby incorporated into this
Agreement by this reference. Certain capitalized terms used herein are defined
in EXHIBIT A hereof.
ARTICLE II
TRANSFER OF ASSETS
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2.1 PURCHASE AND SALE. At Closing, in exchange for the payment of the
Purchase Price and the assumption of the Assumed Liabilities, and subject to the
terms and conditions hereof, Sellers hereby agrees to sell, transfer, convey and
deliver to Purchaser, and Purchaser hereby agrees to purchase from Sellers all
of the Purchased Assets, free and clear of all Encumbrances, except for the
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Assumed Liabilities (as hereinafter defined). Sellers further agree that, in
consideration of the Purchase Price, it shall cause all Contracts included in
the Purchased Assets to be assigned to Purchaser free and clear of all
Encumbrances, except for the Assumed Liabilities, effective as of the Closing
Date, on the same terms and conditions as stated therein, with all consents
required for their assignment, and without further consideration on the part of
Purchaser. The term "Purchased Assets" shall mean all Assets that are owned or
leased by either of Sellers or used in connection with the Business excluding
only the Excluded Assets. Without limiting the generality of the foregoing, the
Purchased Assets shall include, but are not limited to, the following property
of Sellers:
(a) All Cash and cash equivalents of Seller as of the Closing
Date;
(b) All Equipment;
(c) All Accounts receivable;
(d) All Inventory;
(e) The Business as a going concern;
(f) All goodwill and going concern value of Sellers;
(g) All customer lists, price lists, business surveys and other
valuable business information and business records;
(h) All Intangibles, including, but not limited to, all rights of
Sellers to the name "Jerry's Marine Service" and any other names and marks used
by Sellers and any derivatives thereof;
(i) All Motor vehicles;
(j) All prepaid and deferred items of Sellers including, but not
limited to, prepaid rentals, insurance, unbilled charges and deposits relating
to the operations of Sellers;
(k) All Contracts and Contract Rights;
(l) All Permits;
(m) All telephone and facsimile numbers, yellow page
advertisements, and white pages listings; and
(n) That certain real property and personal property referenced in
that certain Agreement of Sale and Purchase executed on even date herewith
between Jerry's Fort Lauderdale and Purchaser.
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2.2 EXCLUDED ASSETS. The Purchased Assets exclude, and Purchaser shall
not purchase, the following "Excluded Assets" of Seller:
(a) Seller's rights under this Agreement;
(b) Warehouse and property described on Schedule 2.2 attached
hereto;
(c) Life Insurance Policy described on Schedule 2.2 attached
hereto;
(d) The vehicle described on Schedule 2.2 attached hereto;
(e) Any shares of capital stock of Seller which are owned and held
by Seller as treasury shares; and
(f) The corporate minutes books and stock records of Seller and
any other corporate records which pertain to the corporate organization and
capitalization of Seller;
2.3 ASSUMPTION OF LIABILITIES. Effective as of the Closing, Purchaser
shall only assume Sellers' Obligations to the extent expressly identified on
Schedule 2.3 hereof (collectively, the "Assumed Liabilities"). The term Assumed
Liabilities excludes, and Purchaser does not and will not assume nor shall
Purchaser be deemed to have any Obligation for, to cure, or to otherwise remedy,
any breach, any other Obligations of Sellers, any Obligations as to which any
representation or warranty made pursuant to this Agreement (whether made as of
the date hereof or as of the Closing Date) is untrue, inaccurate or misleading
in any respect, or any Obligation for any sum due prior to Closing or arising
from any breach of or default under any Contract that arises from facts or
circumstances occurring prior to closing . At Closing, Purchaser shall indemnify
Sellers from and against any and all liability, costs or damages for the Assumed
Liabilities.
2.4 PURCHASE PRICE. The purchase price ("Purchase Price") to be paid by
Purchaser to Seller for the Purchased Assets shall be Eight Million Dollars
($8,000,000.00), subject to adjustment as hereinafter provided. Except as
provided below, the Purchase Price shall be payable Five Million Dollars
($5,000,000.00) in cash at Closing ("Closing Cash") and the balance in three
annual installments commencing on the first anniversary of the Closing Date
pursuant to a promissory note in the form of Exhibit B annexed hereto and made a
part hereof ("Promissory Note").
The Promissory Note shall be secured by a security interest in the
Purchased Assets (other than the real property referenced in Section 2.1(n)
hereof) pursuant to a security agreement in form reasonably satisfactory to
Sellers, which security interest shall be subject and subordinated to any
financing obtained by Purchaser solely for the continuing operations and
expansion of the Jerry's Marine Service Business exclusively. Purchaser
covenants that any and all proceeds from the sale of the real property
referenced in Section 2.1(n) hereof, together with the proceeds from any
financings secured by any assets of the Business, shall be used solely and
exclusively for the continuing operations and expansion of the Business. The
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Purchaser shall covenant that until the Promissory Note is paid in full to (i)
continue to use the name "Jerry's Marine Service" in the operation of the
Business, (ii) continue to operate out of locations in Broward County, Florida
and Charlston, South Carolina, and (iii) operate the Business as an independent
division or subsidiary. The security agreement shall further provide that Seller
shall have the right to conduct a quarterly audit of the inventory of the
Business at Seller's sole and exclusive expense and without disruption to the
business operations of the Business. Any overtime expense of employees of
Purchaser (including benefits) incurred in connection with such audit shall be
borne by Seller. Purchaser shall provide to Seller without expense the results
from an annual audit to be conducted by Purchaser.
To the extent of any shareholder loans assumed by Purchaser pursuant to
Section 2.3 hereof, the Promissory Note shall be increased by the amount of the
shareholder loans, with the repayment of the principal of the loans to be made
in equal annual installments.
Purchaser shall engage a firm of certified public accountants reasonably
acceptable to Sellers to complete an audit of the Sellers for the five (5)month
period ended May 31, 1997, which will include an audited balance sheet, prepared
in accordance with GAAP, of Sellers at May 31, 1997 ("May 1997 Balance Sheets").
If the aggregate amount of Sellers' total assets minus total liabilities
computed in accordance with GAAP ("Net Asset Amount"), determined based upon the
May 1997 Balance Sheets ("Audited Net Asset Amount") is less than Four Million
Five Hundred Thousand Dollars ($4,500,000.00), Purchaser shall have the option
to rescind this Agreement in its entirety and shall have no obligation to
Sellers whatsoever, by delivering written notice to Sellers of recision within
thirty (30) days following the receipt by Purchaser of written notice of the
Audited Net Asset Amount.
2.5 ADJUSTMENT OF PURCHASE PRICE. The Purchase Price shall be adjusted
as follows: If the Audited Net Asset Amount exceeds Four Million Five Hundred
Thousand Dollars ($4,500,000), the Purchase Price shall be increased by the
amount of such excess, not to exceed an increase of Two Million Dollars
($2,000,000.00), which amount shall be paid in cash to Sellers at closing.
2.6 ALLOCATION OF PURCHASE PRICE. For federal income tax purposes, the
parties agree that Purchase Price shall be allocated as set forth on Schedule
2.6 hereof.
2.7 CLOSING DATE. The closing of the transactions provided for herein
("Closing") shall take place at the offices of the law firm of ▇▇▇▇▇, McClosky,
Smith, ▇▇▇▇▇▇▇▇ & ▇▇▇▇▇▇▇, P.A., ▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇,
▇▇▇▇▇▇▇ ▇▇▇▇▇, at such date and time as may be mutually agreed upon in writing
by Purchaser and Sellers, but in all events not later than 60 days following the
completion of the audit described in Section 2.4 hereof ("Closing Date").
ARTICLE III
REPRESENTATIONS AND WARRANTIES OF SELLERS AND SHAREHOLDERS
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The Sellers and Shareholders hereby make the following representations and
warranties to Purchaser, each of which Sellers and Shareholders represent to be
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true and correct on the date hereof and (except as the Sellers and Shareholders
may notify the Purchaser in writing prior to Closing) shall be deemed made again
as of the Closing Date and represented by the Sellers and Shareholders to be
true and correct on the Closing Date:
3.1 ORGANIZATION. Jerry's, Inc. is a corporation duly organized, validly
existing and in good standing under the Laws of the State of South Carolina.
Jerry's Fort Lauderdale is a corporation duly organized, validly existing and in
good standing under the Laws of the State of Florida. Sellers have no
subsidiaries or interest in any other Person, and are not required to be
qualified or licensed as a foreign corporation in any jurisdiction in which the
failure to be so qualified or licensed would have a materially adverse effect on
the Business. Each Seller has the full power and authority to own all its Assets
and to conduct the Business as and where the Business is conducted. Accurate,
current, and complete copies of the Articles of Incorporation and Bylaws of each
Seller and, if any, all fictitious name registrations of each Seller have been,
delivered to the Purchaser at or prior to the execution of this Agreement. The
Shareholders constitute all the shareholders of Sellers.
3.2 AUTHORITY AND APPROVAL OF AGREEMENT.
(a) The execution and delivery of this Agreement by each Seller
and the performance of all their respective obligations hereunder have been duly
authorized and approved by all requisite corporate action on the part of the
Sellers pursuant to applicable Law, which included unanimous approval by its
Board of Directors and all its shareholders, and said authorization and approval
has not been altered, amended or revoked. Pursuant to said authorization and
approval, each Seller has the power and authority to execute and deliver this
Agreement and to perform all its obligations hereunder.
(b) This Agreement and each of the other documents, instruments
and agreements executed by the Sellers or Shareholders in connection herewith
constitute the valid and legally binding agreements of such Person enforceable
against such Person in accordance with its terms, except that: (i)
enforceability may be limited by applicable bankruptcy, insolvency,
reorganization, moratorium or similar laws of general application affecting the
enforcement of the rights and remedies of creditors; and (ii) the availability
of equitable remedies may be limited by equitable principles.
3.3 NO VIOLATIONS. The execution, delivery or performance of this
Agreement or any other documents, instruments or agreements executed by the
Sellers or Shareholders in connection herewith, and the consummation of the
transactions contemplated hereby and thereby, do not and will not: (i)
constitute a violation of or default under (either immediately, upon notice or
upon lapse of time) the Articles of Incorporation or Bylaws of either Seller,
any provision of any Contract to which either Seller or the Purchased Assets may
be bound, any Judgment or any Law; or (ii) result in the creation or imposition
of any Encumbrance upon, or give to any third person any interest in or right
to, any of the Purchased Assets; or (iii) result in the loss or adverse
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modification of, or the imposition of any fine or penalty with respect to, any
Permit or franchise granted or issued to, or otherwise held by or for the use
of, either Seller.
3.4 FINANCIAL STATEMENTS. Attached hereto as Schedule 3.4 are financial
statements of each Seller ("Financial Statements"), including compiled balance
sheets and statements of operations for the fiscal years ended December 31, 1995
and December 31, 1996 and Balance Sheets of Sellers at March 31, 1997 ("Latest
Balance Sheets"). The Financial Statements are true, correct and complete, were
prepared in accordance with the accrual method of accounting, but not in
accordance with GAAP, and accurately reflect each Seller's financial condition
and the results of its operations for the periods and as of the dates which they
purport to cover. Sellers agree that Purchaser, at Purchaser's expense, shall
engage a firm of certified public accountants reasonably acceptable to Sellers
to complete an audit of Sellers for the fiscal years ended December 31, 1995 and
1996 which will include audited balance sheets, prepared in accordance with
GAAP, of Sellers at December 31, 1995 and 1996.
3.5 CONDUCT SINCE DATE OF UNAUDITED STATEMENTS. Except as disclosed in
Schedule 3.5 hereto, none of the following have occurred since March 31, 1997:
(a) Any change in the Purchased Assets, Obligations, Business,
financial condition, prospects or operations of either Seller which individually
or in the aggregate have had or may have any material adverse effect on the
Purchased Assets, the Assumed Liabilities, or the Businesses, financial
condition, prospects or operations of Sellers, nor are there any circumstances
known to Sellers which might result in such change or such an effect;
(b) Any damage, destruction or loss, whether or not covered by
insurance, adversely affecting the Purchased Assets or Businesses;
(c) Any disposition, lease or Encumbrance of the Businesses, the
Purchased Assets, or increase of indebtedness of or guaranteed by either Seller,
other than in the ordinary course of business consistent with past practices;
provided, however, that no such disposition, lease or Encumbrance, regardless of
the consideration therefor, has been made between each Seller, and any of its
shareholders, directors, officers, agents, contractors or employees (or any
member of their respective families);
(d) Any transaction entered into by each Seller other than in the
ordinary course of business consistent with past practices;
(e) Any notice received by each Seller of any actual or threatened
labor dispute or any event or condition of any character which has had or can
reasonably be expected to have a material adverse effect on the Businesses, the
Purchased Assets or the financial condition, operations or prospects of the
Sellers;
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(f) Any change in the accounting principles followed by each
Seller or the methods of applying such principles; or
(g) Any Contract binding each Seller to do or take any of the
actions referred to in this Section 3.5.
3.6 TITLE TO ASSETS. Except as set forth in Schedule 3.6 hereto, the
Sellers are the sole and unconditional owner of and has good, valid and
marketable title to all the Purchased Assets, free and clear of all
Encumbrances, except for the Assumed Liabilities, and there exists no
restriction on the transfer or use of the Purchased Assets. Schedule 3.6 hereto
also includes an accurate, current and complete list of each lease or sublease
of Equipment to which each Seller is a party or by which each Seller may be
bound and a description of all Equipment leased under each such lease or
sublease. All Equipment included in the Purchased Assets or leased by each
Seller, is in good working order and is free of any defects which might impair
its usefulness, and is adequate and sufficient for all current operations of
Sellers. There are no materially dangerous conditions with respect to any
Purchased Asset. Upon the execution hereof, legal and beneficial ownership of
the Purchased Assets will be vested in Purchaser free and clear of all
Encumbrances except as set forth in Schedule 3.6 hereto.
3.7 LEASE OF REAL PROPERTY. Schedule 3.7 hereto is an accurate,
complete, current, and complete list of each lease or sublease of Real Property
to which either Seller is a party or by which either Seller may be bound and a
description of the Real Property leased thereunder. With respect to each lease
or sublease of a Seller described on Schedule 3.7 hereto: (i) the Seller has
been in peaceful possession of the property leased thereunder and neither the
Sellers nor the landlord (to the knowledge of such Seller) is in default
thereunder; (ii) no waiver, indulgence or postponement of any of the Obligations
thereunder has been granted by the lessee or lessor thereunder; and (iii) there
exists no event, occurrence, condition, or act known to such Seller which upon
notice or lapse of time would be or become a default thereunder. No Seller has
violated or breached any provision of any such lease or sublease, and all
Obligations required to be performed by each Seller under any such lease or
sublease have been fully and properly performed. Except as set forth on Schedule
3.7 hereto, no Consent of any Person is required under any such lease or
sublease in order for such lease or sublease to continue to be valid and
subsisting and entitle Purchaser to come into and remain in possession of the
premises demised thereunder after the consummation of the transactions
contemplated by this Agreement.
3.8 ENVIRONMENTAL MATTERS.
(a) Each Seller has obtained all Permits which are required in
connection with the conduct of the Businesses under applicable Laws, and is in
full compliance with all Laws, relating to pollution or protection of the
environment including, but not limited to, Laws relating to emissions,
discharges, releases or threatened releases of pollutants, contaminants,
chemicals, or industrial, toxic or hazardous substances or wastes into the
environment (including without limitation ambient air, space water, groundwater,
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or land), or otherwise relating to the manufacture, processing, distribution,
use, treatment, storage, disposal, transport, or handling of pollutants,
contaminants, chemicals, or industrial, toxic or hazardous substances or wastes
("Environmental Matters").
(b) Each Seller is in full compliance in the conduct of the
Businesses with all terms and conditions of the required Permits and is also in
full compliance with all other limitations, restrictions, conditions, standards,
prohibitions, requirements, obligations, schedules and timetables contained in
those Laws or contained in any Judgment, notice or demand letter issued,
entered, promulgated or approved thereunder.
(c) Neither Seller is aware of, nor has either Seller received
notice of, any past, present or future events, conditions, circumstances,
activities, practices, incidents, actions or plans which may interfere with or
prevent compliance or continued compliance with those Laws or any Judgment,
notice or demand letter issued, entered, promulgated or approved thereunder, or
which may give rise to any common law or legal liability, or otherwise form the
basis of any Proceeding, based on or related to the manufacture, processing,
distribution, use, treatment, storage, disposal, transport, or handling, or the
emission, discharge, release or threatened release into the environment, of any
pollutant, contaminant, chemical, or industrial, toxic or hazardous substance or
waste.
(d) There is no civil, criminal or administrative Proceeding
pending or threatened against either Seller in connection with the conduct of
the Businesses relating in any way to those laws, or injunctions, notice or
demand letter issued, entered, promulgated or approved thereunder.
3.9 ASSETS REQUIRED FOR OPERATION. The Purchased Assets comprise all of
the Assets used in or required for the operation of the Businesses in the manner
and to the extent currently conducted. No Excluded Asset constitutes property or
rights material to the Businesses. All of the Purchased Assets are located at
one of the Premises.
3.10 CUSTOMERS. Attached as Schedule 3.10 is a accurate, current and
complete list of the names of each of the Seller's material customers as of date
hereof, their addresses and telephone numbers. Schedule 3.10 also includes a
copy of all Contracts with customers. Neither Seller has been notified nor has
any reason to believe, that any of its customers will not continue to do
business with Purchaser after the consummation of the transaction contemplated
hereby as and to the extent such customer is currently doing business with such
Seller.
3.11 OTHER CONTRACTS. Schedule 3.11 hereto is an accurate, current and
complete list and description of each of the Contracts to which either Seller is
a party or by which either Seller or any of their Assets are bound, excluding
any Contracts which are Excluded Assets. Each such Contract is a valid and
binding obligation of the parties thereto in accordance with the terms and
conditions thereof. No party to any such Contract is in default with respect to
any term or condition thereof, nor has any event occurred which, through the
passage of time or the giving of notice, or both, would constitute a default
thereunder or would cause the acceleration of any obligation of any party
thereto. Except as set forth on Schedule 3.11 hereto, no Contract described on
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Schedule 3.11 hereto: (a) is in excess of the normal, ordinary, usual, and
current requirements of the Businesses, or provides for expenditures by either
Seller in excess of the current reasonable market price for the particular goods
or services; (b) is a Contract: (i) that either Seller knows or has reason to
believe is likely to result in a loss to either Seller; (ii) that is pursuant to
terms or conditions which either Seller cannot reasonably expect to satisfy or
fulfill in their entirety; or (iii) that will not continue to be effective in
accordance with its terms subsequent to the transaction contemplated hereby
without additional consideration to or the consent or authorization of any third
party to this Agreement; or (c) is not cancelable by either Seller giving thirty
(30) days notice or less, without liability, penalty or premium. Except as
identified in Schedule 3.11 hereto, there are no outstanding offers, bids,
proposals or quotations made by either Seller which, if accepted, would create a
Contract with such Seller.
3.12 BOOKS AND RECORDS. Each Seller's books and records accurately
reflect all of such Seller's Assets, Obligations and accruals, and all
transactions (normally reflected in books and records in accordance with the
accrual method of accounting) to which such Seller is or was a party or by which
each Seller or any of its Assets are or were affected.
3.13 TAX RETURNS. Each Seller has duly and timely filed with the
appropriate governmental agencies all tax and other returns and reports required
by any Law to be filed by it and all such returns and reports have been
accurately prepared and properly completed. All such Tax Returns properly
reflect all material liabilities of such Seller for Taxes for the periods,
property or events covered thereby. Accurate and complete copies of all such
returns and reports filed by each Seller during the past three (3) years have
been delivered to Purchaser.
3.14 TAXES. All Taxes due, owing and payable by each Seller have been
fully paid. No claim for any Tax due from or assessed against any Seller is
being contested. Except as set forth on Schedule 3.14 hereto, none of either
Seller's Tax returns or reports have been audited by the Internal Revenue
Service or any state or local Tax authority, and neither Seller has received any
notice of deficiency or other adjustment from the Internal Revenue Service or
any state or local Tax authority. There are no agreements, waivers, or other
arrangements providing an extension of time with respect to the assessment of
any Tax against either Seller, nor are there any Tax Proceedings now pending or
threatened against either Seller. Each Seller has made all deposits required by
Law, to be made with respect to employees' withholding and other employment
taxes. No state of facts exists or has existed, nor has any event occurred,
which would constitute grounds for the assessment of any further Tax against
either Seller.
3.15 PROCEEDINGS. Neither Seller is a party to, the subject of, or
threatened with any Proceeding nor, to the best of each Seller's knowledge, is
there any basis for any Proceeding. Neither Sellers is contemplating the
institution of any Proceeding.
3.16 OTHER LIABILITIES. No claim of breach of Contract, tort, product
liability or other claim (whether arising from either Seller's Businesses or
otherwise), contingent or otherwise, has been asserted or threatened against
either Seller nor, to the best of either Seller's knowledge, is capable of being
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asserted by any employee, creditor, claimant or other Person against either
Seller, except for claims for warranty arising in the ordinary course of the
business of either Seller. No state of facts exists or has existed, nor has any
event occurred, which could give rise to the assertion of any such claim by any
Person.
3.17 PERMITS. Schedule 3.17 lists all Permits obtained by either Seller
to operate the Businesses. Each Seller has obtained and presently hold all
Permits which are required under applicable Law to conduct the Businesses as and
where currently conducted. All such Permits are in effect, are included in the
Purchased Assets and are transferable to Purchaser, and no Consent of any Person
is required in connection with any such Permit for the transactions contemplated
by this Agreement. Neither Seller is in default under, nor has it received any
notice of any claim of default or any other notice with respect to, any such
Permit.
3.18 CONSENTS. The execution, delivery and performance by each Seller of
this Agreement and the consummation by each Seller of the transactions
contemplated hereby do not require any Consent that has not been received prior
to the date hereof.
3.19 JUDGMENTS. There is no outstanding Judgment against either Seller or
against or affecting any of the Purchased Assets or the Businesses. There is no
health or safety problem involving or affecting either Seller or the Purchased
Assets. There are no open workmen's compensation claims against either Seller,
or any contingent liability of either Seller, or any other Obligation, fact or
circumstance which would give rise to any right of indemnification on the part
of any current or former shareholder, director, officer, employee or agent of
either Seller, or any heir or personal representative thereof, against either
Seller or any successor to the businesses of either Seller.
3.20 BROKERAGE FEES. There is no Person acting on behalf of either Seller
who is entitled to or has any claim for any brokerage or finder's fee or
commission in connection with the execution of this Agreement or the
consummation of the transactions contemplated hereby.
3.21 COMPLIANCE WITH LAWS. Each Seller, and the Businesses are in full
compliance with all Laws.
3.22 LABOR AGREEMENTS, EMPLOYEE BENEFIT PLANS AND EMPLOYMENT AGREEMENTS.
Except as reflected in Schedule 3.22 attached hereto, neither Seller is a party
to: (i) any union collective bargaining or similar agreement; (ii) any profit
sharing, pension, retirement, deferred compensation, bonus, stock option, stock
purchase, retainer, consulting, health, welfare or incentive plan or agreement
or other Employee Benefit Plan, whether legally binding or not; (iii) any plan
providing for "fringe benefits" to its employees, including, but not limited to,
vacation, disability, sick leave, medical, hospitalization and life insurance
and other insurance plans, or related benefits; or (iv) any employment
agreement, severance agreement, noncompete agreement or other Contract with any
of its employees.
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3.23 LABOR DISPUTES; UNFAIR LABOR PRACTICES. There is no pending or
threatened labor dispute, strike or work stoppage which affects or which may
affect the Businesses or which may interfere with the continued operation of the
Businesses. Neither of the Sellers nor any agent, representative or management
employee of either Seller has committed any unfair labor practice as defined in
the National Labor Relations Act of 1947, as amended. There is not now pending
or threatened any charge or complaint against the Sellers by the National Labor
Relations Board or any representative thereof.
3.24 OVERTIME, BACK WAGES, VACATION AND MINIMUM WAGES. No present or
former employee of either Seller has any claim (whether under federal or state
Law, any employment agreement or otherwise) on account of or for: (i) overtime
pay, other than overtime pay for the current payroll period; (ii) wages or
salary for any period other than the current payroll period; (iii) vacation,
time off or pay in lieu of vacation or time off, other than that earned in
respect of the current Calendar Year, or (iv) any violation of any statute
ordinance or regulation relating to minimum wages or maximum hours of work.
3.25 DISCRIMINATION AND OCCUPATIONAL SAFETY STATUTES AND REGULATIONS. No
Person or party (including, but not limited to, governmental agencies of any
kind) has any claim or basis for any Proceeding against either Seller arising
out of any Law relating to discrimination in employment or to employment
practices or occupation safety and health standards.
3.26 EMPLOYEES, CONTRACTORS AND AGENTS. Set forth on Schedule 3.26
annexed hereto is a complete list of each Seller's employees, contractors and
agents, their respective positions with the Sellers, and the compensation and
all vacation and other benefits they are entitled to receive from the Sellers.
Except as set forth on Schedule 3.26, neither Seller has any reason to believe
that any of its employees, contractors or agents will not continue their
employment/service with Purchaser following the consummation of the transactions
contemplated herein.
3.27 INSURANCE. The Assets, Businesses and operations of each Seller are
insured under various policies of general liability and other forms of
insurance, all of which are listed on Schedule 3.27. All such policies are in
full force and effect in accordance with their terms, no notice of cancellation
has been received, and there is no existing default or event which with the
giving of notice or lapse of time, or both, would constitute a default
thereunder. All premiums to date have been paid in full. No Seller has been
refused any insurance, nor has its coverage been limited, beyond the normal
scope of policy limitations, by any insurance carrier to which they have applied
for insurance or with which they have carried insurance during the past five (5)
years.
3.28 RELATED PARTIES TRANSACTIONS. Schedule 3.28 sets forth a complete
list of all contracts and business transactions between a Seller and any
shareholder, officer, director or employee or the spouse of any officer,
director or employee or shareholder of either Seller.
3.29 SUPPLIERS. Schedule 3.29 sets forth a true, correct and complete
list of the names and addresses of all of the material suppliers of each Seller.
11
None of such suppliers has notified either Seller that it intends to discontinue
its relationship with Sellers or that it will not continue that relationship
with Purchaser following the consummation of the transactions contemplated
herein.
3.30 INTANGIBLES. Schedule 3.30 lists all patents, copyrights, trademarks
and other Intangibles owned or used by either Seller (specifying, as to each,
whether owned or licensed and, if the latter, the licensor). There are no
Proceedings pending or threatened with respect to any Intangible owned or used
by either Seller. Neither Seller has granted any license to any other Person
with respect to any Intangible. Neither Seller infringes upon or unlawfully or
wrongfully use any Intangible owned or claimed by any other Person. Except as
reflected in Schedule 3.30, no present or former employee of either Seller or
any other Person owns or has any proprietary, financial or other interest,
direct or indirect, in whole or in part, in any Intangible which either Seller
owns, possesses or uses in the Businesses. Neither Seller is a party to a
noncompetition, confidentiality or nondisclosure agreement, nor is any present
or former employee of either Seller a party to any such agreement, except for
such agreements between each Seller and its employees set forth in Schedule
3.26.
3.31 ACCOUNTS. Set forth on Schedule 3.31 attached hereto is an accurate
and complete list showing (a) the name and address of each bank and brokerage
firm in which either Seller has an account or safe deposit box, the number of
any such account or any such box and the names of all persons authorized to draw
thereon or to have access thereto; and (b) the names of all persons, if any,
holding powers of attorney from either Seller with respect to such bank or
brokerage account and a summary statement of the terms thereof.
3.32 ACCOUNTS RECEIVABLE. Schedule 3.32 contains a true and accurate
aging schedule of all Accounts Receivable of each Seller as of March 31, 1997.
Except as disclosed on Schedule 3.32, (a) each Account Receivable represents a
sale made in the ordinary course of business by a Seller which arose pursuant to
an enforceable written Contract for a bona fide sale of goods or for services
performed and such Seller has performed all its obligations to produce the goods
or perform the services to which such Account Receivable relates, and (b) to the
best of each Seller's knowledge and belief, no Account Receivable is subject to
any claim for reduction, counterclaim, setoff, recoupment or other claim for
credit, allowances or adjustments by the obligor thereof. Except as reserved
against in the Balance Sheet or as set forth on Schedule 3.32, all Accounts
Receivable are collectible in full within the terms under which such Accounts
Receivable arose.
3.33 ACCOUNTS PAYABLE. Schedule 3.33 hereto contains a true and accurate
aging schedule of all accounts payable of each Seller as of March 31, 1997.
Except as disclosed on Schedule 3.33, (a) each account payable represents an
obligation of each Seller incurred in the ordinary course of the Businesses for
goods sold to, or for bona fide services performed for, each Seller; and (b) no
claim for reduction, counterclaim, setoff, recoupment or other claim for credit,
allowances or adjustments has been made by each Seller with respect to any such
accounts payable.
3.34 IMPROPER PAYMENTS. Neither of Seller's, nor any of their current
shareholders, directors, officers, or employees or agents, nor any Person acting
12
on behalf of either Seller, has directly or indirectly, made any bribe, kickback
or other payment of a similar or comparable nature, whether lawful or not, to
any person, public or private, regardless of form, whether in money, property or
services, to obtain favorable treatment for business secured or special
concessions already obtained for the benefit of either Seller. No funds or
Assets of either Seller were donated, loaned or made available directly or
indirectly for the benefit of, or for the purpose of supporting or opposing, any
government or subdivision thereof, political party, candidate or committee,
either domestic or foreign. Neither Seller has maintained and does not maintain
a bank account, or any other account of any kind, whether domestic or foreign,
or which account was not listed, titled or identified in the name of such
Seller.
3.35 NET ASSET AMOUNT AT CLOSING. The aggregate Net Asset Amount of
Sellers as of the date of Closing shall not be less than the Sellers' aggregate
Audited Net Asset Amount.
ARTICLE IV
PURCHASER'S REPRESENTATIONS AND WARRANTIES
------------------------------------------
Purchaser hereby makes the following representations and warranties to the
Sellers, each of which Purchaser represents to be true and correct on the date
hereof, and (except as the Purchaser may notify the Sellers in writing prior to
Closing) shall be deemed made again as of the Closing Date and represented by
the Purchaser to be true and correct on the Closing Date.
4.1 ORGANIZATION. Purchaser is a corporation. Purchaser has been duly
organized, is validly existing and in good standing under the laws of the State
of Delaware and has the full power and authority to own all its Assets and to
conduct its business as and where its business is presently conducted.
4.2 AUTHORITY AND APPROVAL OF AGREEMENT.
(a) The execution and delivery of this Agreement by Purchaser and
the performance of all Purchaser obligations hereunder have been duly authorized
and approved by all requisite corporate action on the part of Purchaser pursuant
to applicable Law. Purchaser has the power and authority to execute and deliver
this Agreement and to perform all its obligations hereunder.
(b) This Agreement and each of the other documents, instruments
and agreements executed by Purchaser in connection herewith constitute the valid
and legally binding agreements of Purchaser, enforceable against Purchaser in
accordance with their terms, except that: (i) enforceability may be limited by
applicable bankruptcy, insolvency, reorganization, moratorium or similar laws of
general application affecting the enforcement of the rights and remedies of
creditors; and (ii) the availability of equitable remedies may be limited by
equitable principles.
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4.3 NO VIOLATIONS. The execution, delivery or performance of this
Agreement or any other documents, instruments or agreements executed by the
Purchaser in connection herewith, and the consummation of the transactions
contemplated hereby, do not and will not constitute a violation of or default
under (either immediately, upon notice or upon lapse of time) the Articles of
Incorporation or Bylaws of the Purchaser, any provision of any Contract to which
the Purchaser may be bound, any Judgment or any Law.
4.4 BROKERAGE FEES. There is no Person acting on behalf of the Purchaser
who is entitled to or has any claim for any brokerage or finder's fee or
commission in connection with the execution of this Agreement or the
consummation of the transactions contemplated hereby.
4.5 CONSENTS. The execution, delivery, and performance by Purchaser of
this Agreement and the consummation by Purchaser of the transactions
contemplated hereby do not require any Consent that has not been received prior
to the date hereof.
4.6 FULL DISCLOSURE. All the representations and warranties made by
Purchaser herein or in any schedule hereto, and all of the statements, documents
or other information pertaining to the transaction contemplated herein made or
given by Purchaser, its agents or representatives are true and complete, and do
not omit any information required to make the statements or information
provided, in light of the transactions contemplated herein, true, complete and
non-misleading.
ARTICLE V
INTERPRETATION AND SURVIVAL OF
------------------------------
REPRESENTATIONS AND WARRANTIES
------------------------------
5.1 INTERPRETATION. Each warranty and representation made by a party in
this Agreement or pursuant hereto is independent of all other warranties and
representations made by the same party in this Agreement or pursuant hereto
(whether or not covering identical, related or similar matters) and must be
independently and separately satisfied. Exceptions or qualifications to any such
warranty or representation shall not be construed as exceptions or
qualifications to any other warranty or representation.
5.2 RELIANCE BY PURCHASER. Notwithstanding the right of Purchaser to
investigate the Sellers, its Business and the Purchased Assets, and
notwithstanding any knowledge of facts determined or determinable by them as a
result of such investigation or right of investigation, Purchaser has the
unqualified right to rely upon the representations and warranties made by the
Sellers in this Agreement and in the Schedules attached hereto or pursuant
hereto.
5.3 SURVIVAL. All representations and warranties made in this Agreement
or pursuant hereto shall survive the date hereof, the consummation of the
transactions contemplated hereby, and any investigation.
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ARTICLE VI
OBLIGATIONS PRIOR TO CLOSING
----------------------------
6.1 CONDUCT OF THE CORPORATION PENDING CLOSING. During the period from
the date hereof until the Closing Date, except with the express prior written
consent of the Purchaser, each Seller shall:
(a) maintain its existence in good standing in its state of
domicile and each other jurisdiction where it is required to be licensed or
qualified as a foreign corporation;
(b) duly and timely file all returns and reports it is required by
Law to file, promptly pay when due all Taxes assessed against it or any of its
Assets, and conform to and fully comply with all the Laws pertaining to the
Businesses;
(c) conduct the Businesses in a good and diligent manner
consistent with past practices, not make any change in its business practices
and in good faith use its best efforts to preserve the Business intact, keeping
available the services of its current officers, employees, salesmen, agents, and
representatives, and maintain the goodwill of its suppliers, customers and other
Persons having business relations with the Sellers;
(d) maintain all its tangible Assets in good working order and
repair and conform to and fully comply with all terms and conditions pursuant to
which any such Assets are held;
(e) maintain in full force and effect all insurance policies and,
if any of the Purchased Assets are damaged or destroyed by fire or other
casualty, whether or not insured, it shall promptly proceed with the repair,
restoration or replacement thereof;
(f) not alter or amend its Articles of Incorporation or Bylaws;
(g) not increase the compensation or rate of compensation or
extraordinary benefits payable or to become payable to, any of the its
directors, officers, employees, salesmen, agents, or representatives or pay any
of the foregoing Persons any bonus and not hire any new employees, agents or
representatives, except to replace positions existing as of the date hereof at
compensation comparable to that of the position being replaced, or otherwise
make any material changes in any of its employment arrangements;
(h) keep the Purchaser advised of all material aspects of the
operation of the Businesses;
(i) not adopt or enter into an Employee Benefit Plan or alter any
existing Employee Benefit Plan, if any;
15
(j) not create any Obligation for borrowed money and not make any
loans or advances to, or assume, guarantee, endorse, or otherwise become liable
with respect to any Obligation of, any Person, or commit for any capital
expenditure whatsoever, or abandon or sell any of its Assets other than
Inventory sold in the ordinary course of Business;
(k) not perform or omit to perform any act which will cause a
breach of or default under any Contract to which it is a party or by which it or
its Assets may be bound and to take all action necessary to maintain the use and
value of all Permits and Intangibles;
(l) not waive any right of material value; and
(m) not take any action, or enter into any Contract which requires
or commits the Sellers to take any action, which would be inconsistent with any
of the foregoing provisions of this Section 6.1.
6.2 CONSENTS. Sellers shall obtain, on or before the Closing Date, all
Consents required to consummate the transactions contemplated hereby, without
causing any breach or failure of any warranty or representation made by the
Sellers in this Agreement or pursuant hereto, and without causing any breach or
default of any term or condition of this Agreement to be satisfied or performed
by the Sellers.
6.3 INVESTIGATION. From the date of this Agreement until Closing, unless
this Agreement is terminated in accordance with Article X hereof, each Seller
shall permit the Purchaser, their attorneys, accountants, and its other
advisors, authorized representatives and agents full access to each Seller and
its business and properties during normal business hours to observe and
investigate the Businesses and the Assets and Obligations of Seller, and to meet
with each Seller's officers, agents and contractors, and to audit, examine and
copy all each Seller's files, books and records, and other documents and papers.
Each Seller shall furnish the Purchaser, Parent and their authorized attorneys,
underwriters, representatives and agents with all information concerning each
Seller's Business, its Assets and Obligations, which they reasonably request.
6.4 COOPERATION. During the period from the date hereof until the
Closing Date, each Seller shall fully cooperate with the Purchaser and his
authorized representatives and agents, and shall promptly execute and deliver
all agreements, certificates, instruments, and documents and take such other
actions as are reasonably requested by the Purchaser. During the period from the
date hereof until the Closing Date, and from time to time thereafter as
Purchaser may reasonably request. each Seller shall cooperate with Purchaser in
connection with Purchaser's application for the transfer, renewal or issuance of
any Permits or its satisfaction of any regulatory requirements involving the
Businesses. The Parent intends to initiate and complete, subsequent to the date
hereof and prior to Closing, an underwritten public offering of its common stock
pursuant to an effective registration statement under the Securities Act
("Secondary Offering"). One of the purposes of the Secondary Offering is to
provide Purchaser with the amount of the Purchase Price. Seller shall promptly
provide, in written format, all information concerning Sellers and the
16
Businesses as Parent or Purchaser may request in connection with the preparation
of the registration statement for the Secondary Offering ("Sellers'
Disclosures"). Sellers agree that all Sellers' Disclosures shall be true and
complete and shall not omit any information required to make the statements or
information provided, in light of the circumstances, true, complete and the not
misleading. Sellers shall provide all other cooperation reasonably requested in
connection with the Secondary Offering by Parent, Purchaser, their underwriters
or attorneys, including, but not limited to, the execution of appropriate
cross-indemnities and other documents and instruments.
6.5 NOTICE OF DEVELOPMENTS. Each Seller shall give Purchaser prompt
written notice of any material adverse development with respect to each Seller
that could cause any of Sellers' representations made in Article III hereof to
be untrue or misleading. No disclosure made pursuant to this Section 6.5,
however, shall be deemed to prevent or cure any misrepresentation, breach of
warranty or breach of contract so as to preclude Purchaser from exercising his
right to terminate this Agreement pursuant to Article X hereof.
6.6 EXCLUSIVITY. Neither Seller nor any Shareholder shall: (a) solicit,
initiate or encourage the submission of any proposal or offer from any Person
relating to the acquisition of the capital stock or other voting securities or
any substantial proportion of the Assets of either Seller including any
acquisitions structured as a merger, consolidation or share exchange; and (b)
participate in any discussions or negotiations regarding any information with
respect to, assist or participate in or facilitate in any other manner, any
effort or attempt by any Person to do or seek any of the foregoing. Sellers
shall notify Purchaser in writing if any Person makes any proposal, offer,
inquiry, or contact with respect to any of the foregoing.
6.7 CONFIDENTIALITY. The parties each agree not to disclose or use for
their own benefit or for the benefit of others, any confidential information of
a special and unique nature and value affecting and relating to either Seller,
the Purchaser, or the Businesses that are disclosed to or otherwise acquired by
either party in connection with this transaction, except for the purpose of
Purchaser's and its representatives' and agents' evaluation of the transactions
contemplated hereby or as may be required by Law, or in connection with any
Proceeding arising in connection with this Agreement. In the event of any breach
or threatened breach by either party of this provision, the parties recognize
that such breach could result in irreparable harm to the nonbreaching party and,
accordingly, in such event the same remedies as are available to Purchaser
pursuant to Section 12.2 hereof shall be available to the harmed party.
Notwithstanding the foregoing, Purchaser's parent corporation shall have the
right to issue a public statement that this Agreement has been executed with
respect to the acquisition of Purchased Assets, and to otherwise comply with its
disclosure obligations under the Securities Laws, and to use the Seller's
Disclosures in connection with the Secondary Offering.
17
ARTICLE VII
CONDITIONS PRECEDENT TO PURCHASER'S OBLIGATIONS
-----------------------------------------------
Notwithstanding the execution and delivery of this Agreement or the
performance of any part hereof, Purchaser's obligations to consummate the
transactions contemplated by this Agreement shall be subject to the satisfaction
of each of the conditions set forth in this Article VII, except to the extent
that such satisfaction is waived in writing by Purchaser.
7.1 REPRESENTATIONS AND WARRANTIES OF THE SELLERS. All representations
and warranties made by the Sellers in this Agreement and the Schedules hereto
shall have been true and correct in all respects on the date of this Agreement,
and shall be true and correct in all respects on the Closing Date as though such
representations and warranties were again made, without exception or deviation,
on the Closing Date.
7.2 PERFORMANCE OF THIS AGREEMENT. Sellers and Shareholders shall have
duly performed or complied with all of their covenants and obligations under
this Agreement that are to be performed or complied with by the Sellers and
Shareholders on or prior to the Closing Date.
7.3 ABSENCE OF PROCEEDINGS. No Proceeding shall have been instituted or
threatened on or before the Closing Date by any Person, the result of which did
or could prevent or make illegal the consummation of all or any of the
transactions contemplated by this Agreement, or which had or could have a
material adverse effect on the Business or the Purchased Assets.
7.4 CONSENTS. Each Seller shall deliver to Purchaser, all Consents, in
form and substance reasonably acceptable to Purchaser, as the Purchaser
reasonably deems required under any of the Sellers's Contracts or Permits as a
result of the sale of the Purchased Assets to Purchaser and the other
transactions contemplated under this Agreement. Sellers shall be responsible to
pay for all costs and expenses incurred in obtaining all such Consents. Included
specifically in the foregoing shall be consents from all lessors of Real
Property to Sellers, if any, together with estoppel letters from such lessors,
in form reasonably acceptable to Purchaser, acknowledging that each applicable
lease is in full force and effect, all rent and other payments due thereunder
have been paid and no event of default has occurred.
7.5 MATERIAL ADVERSE CHANGE. There shall have not occurred any material
adverse change, actual or threatened, for whatever reason, in any of the
Purchased Assets, the Businesses or its financial condition or otherwise, or in
the results of operations of the Sellers, including, but not limited to, any
casualty loss, whether or not covered by insurance.
7.6 COMPLETION OF SECONDARY OFFERING. Hirel Holdings, Inc. shall have
successfully completed the Secondary Offering, resulting in net proceeds
therefrom to Purchaser in the amount of not less than Five Million Dollars
($5,000,000).
18
7.7 DELIVERIES BY SELLERS. In addition to all other deliveries to be
made by Sellers hereunder, Sellers shall have delivered to Purchaser at Closing:
(a) Certificates signed by the President of each Seller, dated the
Closing Date, certifying that (a) all of the terms and conditions of this
Agreement to be satisfied or performed by it on or before the Closing Date have
been satisfied or performed; (b) all the representations and warranties of each
Seller made herein are true, correct and complete in all respects; (c) no
Proceedings have been instituted or, to the best of such President's knowledge,
threatened on or before the Closing Date by any Person, the result of which did
or could prevent or make illegal the consummation of all or any of the
transactions contemplated by this Agreement, or which had or could have a
material adverse effect on its business; and (d) there has not been any material
adverse change in or affecting it between the date of this Agreement and the
Closing Date; and
(b) An opinion of counsel rendered to Purchaser, in form,
substance, and by a law firm reasonably acceptable to Purchaser, and its
counsel, as to the matters set forth in EXHIBIT C attached hereto.
7.8 AUDIT NET ASSET AMOUNT REQUIREMENT. The Audited Net Asset Amount
shall be equal to an amount which is not less than Four Million Five Hundred
Thousand Dollars ($4,500,000.00).
ARTICLE VIII
CONDITIONS PRECEDENT TO THE SELLERS' OBLIGATIONS
------------------------------------------------
Notwithstanding the execution and delivery of this Agreement or the
performance of any part hereof, the Sellers' obligations to consummate the
transactions contemplated by this Agreement shall be subject to the satisfaction
of each of the conditions set forth in this Article VIII, except to the extent
that such satisfaction is waived by Sellers in writing.
8.1 REPRESENTATIONS AND WARRANTIES OF PURCHASER. All representations and
warranties of Purchaser contained in this Agreement and any Schedules hereto
shall have been true and correct in all respects on the date of this Agreement,
and shall be true and correct in all respects on the Closing Date as though such
representations and warranties were again made, without exception or deviation,
on the Closing Date.
8.2 PERFORMANCE OF THIS AGREEMENT. Purchaser shall have duly performed
or complied with all of the covenants and obligations under this Agreement to be
performed or complied with by him on or prior to the Closing Date.
8.3 ABSENCE OF PROCEEDINGS. No Proceeding shall have been instituted or
threatened on or before the Closing Date by any Person against Purchaser the
result of which did or could prevent or make illegal the consummation of all or
any of the transactions contemplated by this Agreement.
19
8.4 DELIVERIES BY PURCHASER. In addition to all other deliveries to be
made by Purchaser hereunder, Purchaser shall have delivered to Sellers at
Closing:
(a) Certificates signed by the President of Purchaser, dated the
Closing Date, certifying that (a) all of the terms and conditions of this
Agreement to be satisfied or performed by it on or before the Closing Date have
been satisfied or performed; (b) all the representations and warranties of
Purchaser made herein are true, correct and complete in all respects; (c) no
Proceedings have been instituted or, to the best of such President's knowledge,
threatened on or before the Closing Date by any Person, the result of which did
or could prevent or make illegal the consummation of all or any of the
transactions contemplated by this Agreement, or which had or could have a
material adverse effect on its business; and (d) there has not been any material
adverse change in or affecting it between the date of this Agreement and the
Closing Date; and
(b) An opinion of counsel rendered to Sellers, in form, substance,
and by a law firm reasonably acceptable to Sellers, and Sellers' counsel, as to
the matters set forth in EXHIBIT C attached hereto.
ARTICLE IX
OBLIGATIONS AT CLOSING
----------------------
9.1 OBLIGATIONS OF THE SELLERS AND SHAREHOLDERS TO PURCHASER AT CLOSING.
In addition to the other deliveries to be made by Seller and the Shareholders as
set forth herein, the Sellers and Shareholders hereby covenant and agree to
deliver or cause to be delivered to Purchaser, at Closing, the following:
(a) The Purchased Assets;
(b) A duly executed ▇▇▇▇ of Sale in the form of EXHIBIT D attached
hereto;
(c) All Consents referred to in Section 7.4 of this Agreement;
(d) Sellers shall deliver to Purchaser a Good Standing
Certificate, certifying that the Sellers are duly qualified and are currently in
good standing under the laws of the states of South Carolina or Florida, as the
case may be, dated no earlier than five (5) days before the Closing Date.
(e) The Employment Agreements of ▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇
▇▇▇▇▇▇▇ and ▇▇▇▇▇▇▇ ▇▇▇▇▇ with Purchaser in the form of composite EXHIBIT E
("Employment Agreements") duly executed and delivered by the "Employees"
identified therein.
(f) Such other documents and instruments as counsel to Purchaser
may reasonably request including, without limitation, such documents as
necessary to convey to Purchaser all rights to the Purchased Assets.
20
9.2 OBLIGATIONS OF THE PURCHASER AT CLOSING. In addition to the other
deliveries to be made by Purchaser as set forth herein, the Purchaser hereby
covenants and agrees to deliver or cause to be delivered to Seller, at Closing,
the following:
(a) The Cash Amount and the Note, as provided in Article II
hereof; and
(b) The Employment Agreements, executed by Purchaser.
ARTICLE X
TERMINATION AND REMEDIES
------------------------
10.1 TERMINATION ON DEFAULT. If, prior to the Closing Date, a party
hereto shall materially breach or default in the full and timely performance and
satisfaction of any of his representations and warranties or obligations under
this Agreement, and such breach or default is not cured on or before the fifth
(5th) day after the date notice is given by the nondefaulting party to the
defaulting party specifying the nature of such breach or default (or on or
before the Closing Date if sooner), then the nondefaulting party may terminate
this Agreement immediately upon notice to the defaulting party.
10.2 TERMINATION AT CLOSING. If any of the conditions set forth in
Article VII hereof are not satisfied as of the Closing Date, then Purchaser may
terminate this Agreement by notifying the Sellers in writing on the Closing
Date. If any of the conditions set forth in Article VIII hereof are not
satisfied as of the Closing Date, then the Sellers may terminate this Agreement
by notifying Purchaser in writing on the Closing Date.
10.3 REMEDIES NOT EXCLUSIVE. The rights and remedies of the parties
pursuant to this Article X are not exclusive, and are in addition to all other
rights and remedies which they may have at law or in equity, and may be
exercised in any manner, order or combination.
ARTICLE XI
INDEMNIFICATION
11.1 OBLIGATION TO INDEMNIFY.
(a) In addition to, and not in lieu of, any right or remedy
available to Purchaser at law or in equity, each Seller and Shareholder hereby
indemnifies and holds harmless Purchaser, from and against any and all
Proceedings, Judgments, Obligations, losses, damages, deficiencies, settlements,
assessments, charges, costs and expenses (including without limitation
reasonable attorneys' fees, paralegals' fees, investigation expenses, court
costs, interest and penalties) arising out of or in connection with, or caused
by, directly or indirectly, any or all of the following:
(i) Any misrepresentation, breach or failure of any warranty
or representation made by any Seller or Shareholder in this Agreement or
21
pursuant hereto, including, but not limited to, the failure of Sellers'
aggregate Net Asset Amount as of date of Closing to be equal to or greater than
the Sellers' aggregate Audited Net Asset Amount;
(ii) Any failure or refusal by any Seller to satisfy or
perform any covenant or agreement in this Agreement; and
(iii) Any claim, Obligation of or Judgment against Sellers or
affecting the Purchased Assets arising, or arising from facts or circumstances
occurring, prior to the date hereof including, but not limited to, any Taxes or
Environmental Matters, excluding only the Assumed Liabilities.
(b) For the remaining provisions of this Article XI, the Purchaser
shall be referred to as the "Indemnified Party," and each party against whom
such indemnity is sought is referred to as an "Indemnifying Party."
11.2 DEFENSE OF ACTIONS. The Indemnifying Party shall be solely
responsible, at its expense, for litigating, defending or otherwise attempting
to resolve any Proceeding against which the Indemnified Party is indemnified
under this Article XI, except that: (i) the Indemnified Party shall have the
right to participate in the defense of any such Proceeding at the Indemnified
Party's expense and through counsel of the Indemnified Party's choice; (ii) the
Indemnified Party may at its option, defend or otherwise attempt to resolve, or
cause the Indemnifying Party to defend or otherwise attempt to resolve, any
Proceeding against which the Indemnified Party is indemnified under this Article
XI if the Indemnifying Party does not promptly and diligently defend or
otherwise attempt to resolve any such Proceeding or if the Indemnified Party, in
good faith, believes that the defense or resolution of such proceeding might
adversely affect its relations with a customer or supplier, in which event the
Indemnifying Party shall continue to be obligated to indemnify the Indemnified
Party hereunder in connection with such Proceedings; and (iii) the Indemnifying
Party shall not agree to any settlement without the Indemnified Party's express
prior written consent which shall not be unreasonably withheld.
11.3 NOTICES AND PAYMENTS. With respect to each separate matter or series
of matters against which the Indemnified Party is indemnified under this Article
XI:
(a) Upon the Indemnified Party's receipt of written documents
pertaining to the Proceeding underlying such matter or series of matters, or, if
such matter or series of matters does not involve a third party claim, after the
Indemnified Party first learning of such matter or series of matters and the
amount demanded or claimed in connection therewith, the Indemnified Party shall
give notice to the Indemnifying Party of such documents and information as it
shall have so received.
(b) After a final agreement is reached or a final Judgment is
rendered with respect to such matter or series of matters or the amount owing by
the Indemnifying Party pursuant to this Article XI as a result of such matter or
22
series of matters is otherwise determinable in whole or in part, the Indemnified
Party shall give notice to the Indemnifying Party of the amount owing by the
Indemnifying Party ("Indemnification Amount") with respect to such matter or
series of matters ("Indemnification Payment Notice").
(c) The Indemnifying Party shall pay the Indemnified Party the
Indemnification Amount within ten (10) days of the date the Indemnification
Notice is given.
11.4 OTHER RIGHTS AND REMEDIES NOT AFFECTED. The indemnification rights
of the Indemnified Party under this Article XI are independent of and in
addition to such rights and remedies as the Indemnified Party may have at law or
in equity or otherwise for any misrepresentations breach of warranty or failure
to fulfill any agreement or covenant hereunder on the part of any party hereto.
11.5 OFFSET. Purchaser shall be entitled to offset in full against all
payments of the Purchase Price, including, but not limited to, offset against
the Promissory Note, all amounts for which Purchaser is entitled to be
indemnified pursuant to this Article XI.
ARTICLE XII
CONFIDENTIALITY AND COMPETITION
-------------------------------
12.1 CONFIDENTIAL INFORMATION AND COMPETITION.
(a) CONFIDENTIAL INFORMATION. Sellers and Shareholders, jointly
and severally, (collectively, the "Covenantors") hereby acknowledge that they
possess confidential information of a special and unique nature and value
affecting and relating to the Businesses, the Purchased Assets and Sellers'
operations all of which information is included in the Purchased Assets,
including, but not limited to the identity of Sellers' customers and suppliers,
prices paid by Sellers for inventory, their business practices, marketing
strategies, expansion plans, Sellers' Contracts, business records and other
records, trade secrets, inventions, techniques used in Sellers' business,
know-how and technologies, whether or not patentable, and other similar
information relating to the Businesses (all the foregoing regardless of whether
same is or becomes known to third parties is hereinafter referred to
collectively as "Confidential Information"). The Covenantors further recognize
and acknowledge that, upon Closing, all Confidential Information is the
exclusive property of Purchaser, is material and confidential, and greatly
affects the legitimate business interests, goodwill and effective and successful
conduct of the Businesses and Purchaser. Accordingly, the Covenantors hereby
covenant and agree that they will use the Confidential Information only for the
benefit of the Businesses and shall not at any time, directly or indirectly,
divulge, reveal or communicate any Confidential Information to any person, firm,
corporation or entity whatsoever other than Purchaser, Parent or as otherwise
contemplated herein, or use any Confidential Information for their own benefit
or for the benefit of others.
23
(b) NON-COMPETITION. The parties hereto hereby acknowledge and
agree that the Purchaser would suffer irreparable injury if the Covenantors
compete with the Purchaser. As a material inducement to the Purchaser to enter
into this Agreement, the Covenantors hereby covenant and agree that the
Covenantors shall not:
(i) during the period beginning on the Closing Date and
continuing until five (5) years following the Closing Date hereof, directly or
indirectly, operate, organize, maintain, establish, manage, own, participate in,
or in any manner whatsoever, individually or through any corporation, firm or
organization of which the Covenantors shall be affiliated in any manner
whatsoever, have any interest in, whether as owner, operator, partner,
stockholder, director, trustee, officer, lender, employee, principal, agent,
consultant or otherwise, any business or venture other than purchaser in any
county or city anywhere in the world where the Purchaser does business, which
engages in the business or is otherwise in competition with the Purchaser or any
assigns of the Purchaser, unless such activity shall have been previously agreed
to in writing by the Purchaser and its successors and assigns;
(ii) during the period beginning on the Closing Date and
continuing until five (5) years following the Closing Date, directly or
indirectly, divert business from the Purchaser or its successors or assigns, or
solicit business from, divert the business of, or attempt to convert to other
methods of using the same or similar services as are provided by the Purchaser,
any client or account of the Purchaser; or
(iii) during the period beginning on the Closing Date hereof
and continuing until five (5) years following the Closing Date hereof, directly
or indirectly, solicit for employment, employ or otherwise engage the services
of, any employees or consultants of the Purchaser or its successors or assigns.
The covenants set forth in this Section 12.1 are in addition to and
not in lieu of any other non-competition agreement to which the Purchaser and
the Covenantors are parties.
12.2 INJUNCTION AND ATTORNEYS' FEES. In view of the irreparable injury to
the Purchaser that would result from a breach or threatened breach by the
Covenantors of the covenants or agreements under Sections 12.1 hereof, and
because there is not an adequate remedy at law to protect the Purchaser from the
ongoing breach of those covenants, the Purchaser shall have the right to
receive, and the Covenantors hereby consent to the issuance of, a permanent
injunction enjoining the Covenantors from any violation of the covenants set
forth in Section 12.1 hereof. The Covenantors acknowledge that a permanent
injunction is an appropriate remedy for such a breach or threatened breach.
These remedies shall be in addition to and not in limitation of any other rights
or remedies to which the Purchaser is or may be entitled at law or in equity
under this Agreement. The Covenantors further agree that in the event the
Purchaser incurs any fees or costs in order to enforce the provisions of Section
12.1 hereof and the Purchaser prevails in such enforcement, the Covenantors
shall pay all fees and costs so incurred by the Purchaser, including, but not
limited to, reasonable attorneys' and paralegals' fees.
24
12.3 REASONABLENESS OF RESTRICTIONS. The Covenantors have carefully read
and considered the provisions of Sections 12.1 and 12.2 hereof and, having done
so, agree that the covenants set forth in those sections are fair and reasonable
and are reasonably required to protect the legitimate business interests of the
Purchaser, including, but not limited to, protection of the goodwill included in
the Purchased Assets. The Covenantors agree that the covenants set forth in
Sections 12.1 and 12.2 hereof do not unreasonably impair the ability of the
Covenantors to conduct any unrelated business or to find gainful work in their
respective fields. The parties hereto agree that if a court of competent
jurisdiction holds any of the covenants set forth in Sections 12.1
unenforceable, the court shall substitute an enforceable covenant that
preserves, to the maximum lawful extent, the scope, duration and all other
aspects of the covenant deemed unenforceable, and that the covenant substituted
by the court shall be immediately enforceable against the Covenantors. The
foregoing shall not be deemed to affect the right of the parties hereto to
appeal any decision by a court concerning this Agreement. The provisions of
Sections 12.1, 12.2 and 12.3 hereof shall survive the execution of this
Agreement and the consummation of the transactions contemplated hereby.
ARTICLE XIII
MISCELLANEOUS
-------------
13.1 NOTICES. All notices, demands and other communications given
hereunder shall be in writing and shall be deemed to have been duly given: (a)
upon hand delivery thereof, (b) upon telefax and written confirmation of
receipt, (c) upon receipt of any overnight deliveries, or (d) on the third (3rd)
business day after mailing United States registered or certified mail, return
receipt requested, postage prepaid, addressed as set forth below, or at such
other address, or to such other person and at such address for that person, as
any party shall designate in writing to the other parties for such purpose in
the manner hereinabove set forth:
If to Purchaser: Hirel Holdings, Inc.
▇▇▇ ▇.▇. ▇▇▇▇ ▇▇▇▇▇▇▇
▇▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇
Attn: ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇, President
With a copy to: ▇▇▇▇▇, McClosky, Smith, ▇▇▇▇▇▇▇▇ & ▇▇▇▇▇▇▇, P.A.
▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇
▇▇▇▇ ▇▇▇▇▇
▇▇. ▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇
Attn: ▇▇▇▇▇▇ ▇. ▇▇▇▇, Esq.
If to Seller : Jerry's Marine Service, Inc.
Jerry's Marine Service of Fort Lauderdale, Inc.
▇▇▇ ▇.▇. ▇▇▇▇ ▇▇▇▇▇▇
▇▇. ▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇
25
If to Shareholders: ▇▇▇▇▇ ▇▇▇▇▇
▇▇▇ ▇▇▇▇▇
▇▇▇▇▇ ▇▇▇▇▇▇▇
▇▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇ ▇.▇. ▇▇▇▇ ▇▇▇▇▇▇
▇▇. ▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇
With a copy to: B. ▇▇▇▇ ▇▇▇▇▇▇▇ III, Esq.
Niles, ▇▇▇▇▇▇▇ and ▇▇▇▇▇
▇.▇. ▇▇▇ ▇▇▇▇▇
▇▇. ▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇
13.2 ENTIRE AGREEMENT. This Agreement, including the Exhibits and
Schedules attached hereto and the documents delivered pursuant hereto, sets
forth all the promises, covenants, agreements, conditions and understandings
between the parties hereto with respect to the subject matter hereof, and
supersedes all prior and contemporaneous agreements, understandings, inducements
or conditions, expressed or implied, oral or written, except as herein
contained. No changes of or modifications or additions to this Agreement shall
be valid unless the same shall be in writing and signed by the parties hereto.
13.3 BINDING EFFECT; ASSIGNMENT. This Agreement shall be binding upon the
parties hereto, their beneficiaries, heirs and administrators. No party may
assign or transfer its interests herein, or delegate its duties hereunder,
without the written consent of the other parties; provided, however, that
Purchaser may assign its rights hereunder to any subsidiary or affiliated
entity, provided that Purchaser shall remain liable hereunder unless Sellers
otherwise agree in writing.
13.4 AMENDMENT. The parties hereby irrevocably agree that no attempted
amendment, modification, or change (collectively, "Amendment") of this Agreement
shall be valid and effective, unless the parties shall unanimously agree in
writing to such Amendment.
13.5 NO WAIVER. No waiver of any provision of this Agreement shall be
effective, unless it is in writing and signed by the party against whom it is
asserted, and any such written waiver shall only be applicable to the specific
instance to which it relates and shall not be deemed to be a continuing or
future waiver.
13.6 GENDER AND USE OF SINGULAR AND PLURAL. All pronouns shall be deemed
to refer to the masculine, feminine, neuter, singular or plural, as the identity
of the party or parties or their personal representatives, successors and
assigns may require.
13.7 COUNTERPARTS. This Agreement and any amendments may be executed in
one or more counterparts, each of which shall be deemed an original and all of
which together will constitute one and the same instrument.
26
13.8 HEADINGS. The article and section headings contained in this
Agreement are inserted for convenience only and shall not affect in any way the
meaning or interpretation of the Agreement.
13.9 GOVERNING LAW. This Agreement shall be construed in accordance with
the laws of the State of Florida and any proceeding arising between the parties
in any manner pertaining or related to this Agreement shall, to the extent
permitted by law, be held in Broward County, Florida.
13.10 FURTHER ASSURANCES. The parties hereto will execute and deliver such
further instruments and do such further acts and things as may be reasonably
required to carry out the intent and purposes of this Agreement.
13.11 LITIGATION. If any party hereto is required to engage in litigation
or arbitration against any other party hereto, either as plaintiff or as
defendant, in order to enforce or defend any of its or his rights under this
Agreement, and such litigation results in a final judgment in favor of such
party ("Prevailing Party"), then the party or parties against whom said final
judgment is obtained shall reimburse the Prevailing Party for all direct,
indirect or incidental expenses incurred by the Prevailing Party in so enforcing
or defending its or his rights hereunder, including, but not limited to, all
attorneys' fees, paralegals' fees and all sales tax thereon, and all court costs
and other expenses incurred throughout all negotiations, trials or appeals
undertaken in order to enforce the Prevailing Party's rights hereunder.
13.12 CONSTRUCTION. Should any provision of this Agreement require
judicial interpretation, the parties hereto agree that the court interpreting or
construing the same shall not apply a presumption that the terms hereof shall be
more strictly construed against one party by reason of the rule of construction
that a document is to be more strictly construed against the party that itself
or through its agent prepared the same, it being agreed that the parties hereto
and their respective agents and legal counsel have participated in the
preparation hereto.
THIS SPACE INTENTIONALLY BLANK
27
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
executed as of the date and year set forth above.
PURCHASER:
HIREL HOLDINGS, INC., a Delaware
corporation
____________________________ By: /S/ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇
------------------------------------
▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇, Vice-President
____________________________
JERRY'S, INC.:
JERRY'S MARINE SERVICE, INC, a
South Carolina corporation
____________________________ By
---------------------------------------
____________________________
JERRY'S FORT LAUDERDALE:
JERRY'S MARINE SERVICE OF FORT
LAUDERDALE, INC., a Florida corporation
____________________________ By:
---------------------------------------
____________________________
28
SHAREHOLDERS:
____________________________ /S/ ▇▇▇▇▇ ▇▇▇▇▇
----------------------------------------
▇▇▇▇▇ ▇▇▇▇▇
____________________________
____________________________ /S/ ▇▇▇ ▇▇▇▇▇
----------------------------------------
▇▇▇ ▇▇▇▇▇
____________________________
____________________________ /S/ ▇▇▇▇▇ ▇▇▇▇▇▇▇
----------------------------------------
▇▇▇▇▇ ▇▇▇▇▇▇▇
____________________________
____________________________ /S/ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇
----------------------------------------
▇▇▇▇▇▇▇ ▇▇▇▇▇
____________________________
29
SCHEDULES
Schedule 2.2 Excluded Assets
Schedule 2.3 Assumed Liabilities
Schedule 2.6 Allocation of Purchase Price
Schedule 3.4 Financial Statements
Schedule 3.5 Conduct since date of Financial Statements
Schedule 3.6 Encumbrances on Purchased Assets
Schedule 3.7 Leases and Subleases of Real Property
Schedule 3.10 Customers
Schedule 3.11 Other Contracts
Schedule 3.14 Taxes
Schedule 3.17 Permits
Schedule 3.22 Labor Agreements
Schedule 3.26 Employees, Contractors & Agents
Schedule 3.27 Insurance
Schedule 3.28 Transactions with Related Parties
Schedule 3.29 Suppliers
Schedule 3.30 Intangibles
Schedule 3.31 Accounts
Schedule 3.32 Accounts Receivable
Schedule 3.33 Accounts Payable
Any Schedules not attached hereto as of the date of execution of this Agreement
are agreed to be supplied as soon as reasonably practicable, but in no event
later than 90 days prior to Closing.
30
EXHIBIT A
DEFINED TERMS
-------------
All defined terms used in this Agreement and not specifically defined in
context are as defined in this EXHIBIT A.
"ACCOUNTS RECEIVABLE" means any right to payment for goods sold, leased or
licensed or for services rendered whether or not it has been earned by
performance, any note receivable, and any other receivable or right to payment
of any nature whatsoever.
"PURCHASED ASSETS" shall have the meaning set forth in Section 2.1 of this
Agreement.
"ASSET" means any real, personal, mixed, tangible or intangible property
of any nature whatsoever, including, without limitation, Real Property, Leases,
Equipment, Accounts Receivable, Inventory, Permits, Intangibles and Contract
Rights.
"ASSUMED LIABILITIES" shall have the meaning set forth in Section 2.3 of
this Agreement.
"BALANCE SHEET" shall have the meaning set forth in Section 3.4 of this
Agreement.
"BUSINESS"shall have the meaning set forth in the recitals to this
Agreement.
"CLOSING" shall have the meaning set forth in Section 2.7 of this
Agreement.
"CONSENT" means any consent, approval, order or authorization of, or any
declaration, filing or registration with, or any application or report to, or
any waiver by, or any other action (whether similar or dissimilar to any of the
foregoing) of, by or with, any person, which is necessary in order to take a
specified action or actions, in a specified manner and/or to achieve a specific
result.
"CONTRACT" means any written or oral contract, agreement, order or
commitment of any nature whatsoever, including, without limitation, any sales
order, purchase order, lease, sublease, license agreement, loan agreement,
mortgage, security agreement, guarantee, management contract, employment
agreement, consulting agreement, partnership agreement, buy-sell agreement,
option, warrant, subscription, call or put.
"CONTRACT RIGHT" means any right, power or remedy under any Contract,
including, without limitation, any right to receive goods or services or
otherwise derive benefit from the payment, satisfaction or performance of
another party's Obligations, and right to demand that another party accept goods
or services or take any other action, and any right to pursue or exercise any
remedy or option.
Exhibit ▇- ▇
"DOCUMENTS" shall mean notes, bills of lading, date contracts, warehouse
receipts or order for delivery of goods and also any other documents which in
the regular course of business or financing is treated as adequately evidencing
that the person in possession of it is entitled to receive, hold and dispose of
the document and the goods its covers.
"EMPLOYEE BENEFIT PLAN" means any bonus, severance, hospitalization,
vacation, deferred compensation, pension, profit sharing, retirement, payroll
savings, stock option, group insurance, death benefit or welfare plan, or any
other employee benefit plan or fringe benefit arrangement of any nature
whatsoever, including, but not limited to, "employee benefit plans" within the
meaning of Section 3(3) of the Employee Retirement Income Security Act of 1974,
as amended from time to time, and the rules and regulations promulgated
thereunder.
"ENCUMBRANCE" means any lien, security interest, pledge, mortgage,
easement, leasehold, assessment, covenant, restriction, reservation, conditional
sale, prior assignment, or any other encumbrance, claim, burden or charge of any
nature whatsoever.
"EQUIPMENT" means any equipment, machinery, fixtures, furniture, leasehold
improvements, vehicles, vessels, office equipment, office supplies or other
tangible personal property of any nature whatsoever, but not any such item which
constitutes Inventory.
"EXCLUDED ASSETS" shall have the meaning set forth in Section 2.2 of this
Agreement.
"FINANCIAL STATEMENTS" shall have the meaning set forth in Section 3.4 of
this Agreement.
"FISCAL YEAR" shall mean the fiscal year for the applicable entity ended
December 31.
"INTANGIBLE" means any name, corporate name, partnership name, fictitious
name, trademark, trademark application, trade name, brand name, slogan, trade
secret, know-how, patent, patent application, copyright, copyright application,
design, formula, invention, blueprint, product right, software right, license,
franchise, authorization or any other intangible property of any nature
whatsoever.
"INVENTORY" means any raw materials, supplies, work in process, finished
goods, or any other inventory of any nature whatsoever, and other items held for
sale or lease in the ordinary course of business and all computer software and
data systems held for sale or license in the ordinary course of business.
"JUDGMENT" means any order, writ, injunction, fine, citation, award,
decree, or any other judgment of any nature whatsoever of any foreign, federal,
state or local court, any governmental, administrative or regulatory authority,
or any arbitration tribunal.
Exhibit A- 2
"LAW" means any provision of any law, statute, ordinance, constitution,
charter, treaty, rule or regulation of any foreign, federal, state or local
governmental, administrative or regulatory authority.
"LEASES" means all leases for real or personal property.
"OBLIGATION" means any debt, liability or obligation of any nature
whatsoever, whether secured, unsecured, recourse, nonrecourse, liquidated,
unliquidated, accrued, absolute, fixed, contingent, ascertained, unascertained,
known, unknown or obligations under executory Contracts.
"PERMIT" means any license, permit, approval, waiver, order,
authorization, right or privilege of any nature whatsoever, granted, issued,
approved or allowed by any foreign, federal, state or local governmental,
administrative or regulatory authority.
"PERSON" means any individual, sole proprietorship, joint venture,
partnership, corporation, association, cooperation, trust, estate, government
(or any branch, subdivision or agency thereof), governmental, administrative or
regulatory authority, or any other entity of any nature whatsoever.
"PROCEEDING" means any demand, claim, suit, action, litigation,
investigation, study, arbitration, administrative hearing, or any other
proceeding of any nature whatsoever.
"REAL PROPERTY" means any real estate, land, building, structure,
improvement, fixture or other real property of any nature whatsoever, including,
but not limited to fee and leasehold interests.
"SECONDARY OFFERING" shall have the meaning as set forth in Section 7.6.
"SECURITIES ACT" means the Securities Act of 1933, as amended, and all
rules and regulations promulgated thereunder.
"SECURITIES LAWS" Means the Securities Act, the Securities Exchange Act of
1934, as amended, the Investment Parent Act of 1940, as amended, and all state
or other applicable securities laws, and all rules and regulations promulgated
under each of these laws, collectively.
"SELLERS' DISCLOSURES" shall have the meaning as set forth in Section 6.4.
"STOCK ISSUANCE AGREEMENTS" means any contracts which relate to the
issuance, sale, right to purchase, redemption, pledge or other disposition of
any capital stock of Sellers or any other securities or Obligations of Sellers.
"TAX" means (a) any foreign, federal, state or local income, profits,
gross receipts, franchise, sales, use, occupancy, general property, real
property, personal property, intangible property, transfer, fuel, excise,
accumulated earnings, personal holding Parent, unemployment compensation, social
security, withholding taxes, payroll taxes, or any other tax of any nature
Exhibit ▇- ▇
▇▇▇▇▇▇▇▇▇▇, (▇) any foreign, federal, state or local organization fee,
qualification fee, annual report fee, filing fee, occupation fee, assessment,
rent, or any other fee or charge of any nature whatsoever, or (c) any
deficiency, interest or penalty imposed with respect to any of the foregoing.
Exhibit A- 4
EXHIBIT B
FORM OF PROMISSORY NOTE
$3,000,000 ____________, 1997
FOR VALUE RECEIVED, HIREL TECHNOLOGIES, INC., a Florida corporation
("Maker") promises to pay to JERRY'S MARINE SERVICE OF FT. LAUDERDALE, INC., a
Florida corporation ("Payee") having a mailing address of
_______________________________, Fort Lauderdale, Florida __________ the
principal sum of THREE MILLION DOLLARS ($3,000,000), with interest accruing
against the "Principal Balance" (as hereinafter defined) at the rate of nine
percent (9%) per annum, payable as follows:
(a) Interest shall be payable on _______________, 1997 and at the end of
each calendar quarter thereafter until the Principal Balance is paid
in full; and
(b) The Principal Balance on this Promissory Note ("Note") shall be paid
in three installments of ONE MILLION DOLLARS ($1,000,000) each on
___________, 1998, ______________, 1999, and ___________________,
2000.
The term "Principal Balance" for purposes of this Note shall mean the
amount that, at any given time, is equal to the principal amount set forth above
less all principal payments (whether by prepayment or otherwise) theretofore
paid pursuant to this Note.
All sums due hereunder shall be paid in lawful money of the United States
of America to the Payee at the address set forth above or at such other address
as the Payee may designate to Maker in writing. This Note may be prepaid in
whole or in part without premium or penalty.
The Payee may at its option declare the entire principal balance of this
Note to be immediately due and payable without presentment, demand, notice, or
protest (each of which is hereby waived) upon the occurrence of any one or more
of the following events ("Default"): (I) if Maker shall fail to pay any sum due
hereunder when due, provided that Payee shall provide Maker of five (5) days
written notice of such failure during which time Maker shall have the
opportunity to cure such failure to pay; or (ii) Maker shall fail, after ten
(10) days written notice, to perform, comply with or abide by any of the
stipulations, agreements, conditions and or covenants contained in this Note; or
(iii) the filing of a petition by Maker for relief under the United States
Bankruptcy Code, or other insolvency law; or (iv) the filing of a petition
against Maker, which remains unstayed for a period of at least ninety (90) days,
for adjudication of Maker as a bankrupt under the United States Bankruptcy Code,
or other insolvency law; or (v) the appointment of a receiver for all or any of
the assets of Maker and such receiver shall not have been dismissed within sixty
(60) days; or (vi) the making by Maker of a general assignment or similar
Exhibit B- 1
arrangement for the benefit of its creditors; or (vii) Maker admitting in
writing its inability to pay its debts as they mature; or (viii) the
liquidation, dissolution, or winding up of Maker or the taking by Maker of any
action of furtherance of liquidation, dissolution or winding up.
Maker (i) severally waives presentment for payment, demand, notice of
non-payment or dishonor, protest and notice of protest of this Note, and all
other notices in connection with the delivery, acceptance, performance, default
or enforcement of the payment of this Note; (ii) expressly consents to all
extensions of time, renewals, postponements of time of payment of this Note or
other modifications hereof from time to time prior to or after the maturity of
this Note without notice, consent or further consideration to any of the
foregoing; (iii) expressly agrees that the holder hereof shall have the right,
without notice, to deal in any way at any time with any party hereto; and (iv)
expressly agrees that, notwithstanding the occurrence of any of the foregoing
(except the express written release by Payee of any such person), Maker shall be
and remain, directly and primarily liable for all sums due under this Note.
Maker further agrees to pay all costs of collection, including reasonable
attorneys' and paralegals' fees (inclusive of any appellate and administrative
proceedings), regardless of whether or not suit is brought, in the event that
any sum to be paid hereunder is not paid when due.
Time is of the essence hereof and if any payment of principal, interest or
any other sum payable hereunder is not paid when due, the amount thereof shall
thereafter bear interest at the highest nonusurious rate of interest permitted
under Florida law until paid.
The remedies of Payee as provided herein shall be cumulative and
concurrent and may be pursued singly, successively or together, at the sole
discretion of Payee, and may be exercised as often as occasion therefor shall
occur and the failure to exercise any such right or remedy shall in no event be
construed as a waiver or release thereof.
This Note has been made, executed and delivered by Maker in the State of
Florida. This Note shall be governed as to validity, interpretation,
construction, effect and all other respects by the laws and decisions of the
State of Florida. In the event Payee determines it necessary to institute suit
to collect on this Note, the action may be maintained by Payee in Broward
County, Florida, and Maker hereby consents to the institution of an action in
that jurisdiction and waive any and all defenses it may have to the maintenance
of the suit in Broward County, Florida.
Payee shall not be deemed by any act or omission to have waived any of its
rights or remedies hereunder, unless such waiver is in writing and signed by
Payee, and then only to the extent specifically set forth in the writing. A
waiver in one instance shall not be construed as continuing or as a bar to or
waiver of any right or remedy in any other instance.
This Note shall be subject to offset pursuant to and as set forth in that
certain Asset Purchase Agreement between Maker, Payee, Jerry's Marine Service,
Exhibit B- 2
Inc., a South Carolina corporation, ▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇▇▇ and
▇▇▇▇▇▇▇ ▇▇▇▇▇, dated ___________, 1997. This Promissory Note may not be
negotiated or assigned without the prior written consent of Maker.
The provisions of this Note may be changed only by a written agreement
executed by Maker and Payee. This Note shall be binding upon Maker and the
successors and assigns of Maker and shall inure to the benefit of Payee and the
successors and assigns of Payee.
MAKER:
HIREL TECHNOLOGIES, INC., a Florida corporation
By:
-----------------------------------------------
, President
Exhibit B- 3
EXHIBIT C
FORM OF OPINION OF COUNSEL
1. _____________________ are corporations duly organized, validly
existing and in good standing under the laws of the States of _________,
respectively, and are not required to be qualified or licensed as a foreign
corporation in any other jurisdiction. Each Seller has the full power and
authority to own all its Assets and to conduct the business of developing and
marketing software. To the best of such counsel's knowledge, neither Seller has
any subsidiary.
2. AUTHORITY AND APPROVAL.
(a) The execution and delivery of the Agreement by each Seller and
Shareholder and the performance of all of each Seller's obligations thereunder,
have been duly authorized and approved by all requisite corporate action on the
part of each Seller and Shareholder pursuant to applicable Law. Each Seller and
Shareholder has the power and authority to execute and deliver the Agreement and
to perform all its obligations thereunder.
(b) The Agreement and each of the other documents, instruments and
agreements executed by each Seller and Shareholder in connection with the
Agreement constitute the valid and legally binding agreements of each Seller and
Shareholder, enforceable against each Seller and Shareholder in accordance with
their respective terms, except that: (i) enforceability may be limited by
applicable bankruptcy, insolvency, reorganization, moratorium or similar laws of
general application affecting the enforcement of the rights and remedies of
creditors; and (ii) the availability of equitable remedies may be limited by
equitable principles.
3. NO VIOLATIONS. Neither the execution, delivery nor performance of
the Agreement nor any other documents, instruments or agreements executed by any
Seller or Shareholder in connection herewith or therewith, nor the performance
or consummation or occurrence of the transactions or other matters contemplated
by any of the foregoing constitutes a violation of or default under (either
immediately, upon notice or upon lapse of time) the Articles of Incorporation or
Bylaws of either Seller, any Judgment or any Law.
4. PROCEEDINGS. To the best of such counsel's knowledge after
investigation, neither Seller is a party to, the subject of, or threatened with
any Proceeding.
5. CONSENTS. To the best of such counsel's knowledge after
investigation, the execution, delivery and performance by each Seller of the
Agreement and the consummation by each Seller of the transactions contemplated
thereby do not require any Consent that has not been received prior to the date
hereof.
Exhibit C- 1
EXHIBIT D
---------
FORM OF ▇▇▇▇ OF SALE
KNOW ALL MEN BY THESE PRESENTS, that JERRY'S MARINE SERVICE OF FORT
LAUDERDALE, INC., a Florida corporation with its principal place of business in
the City of Fort Lauderdale, in the County of Broward and State of Florida,
party of the first part, for and in consideration of the sum of TEN DOLLARS
($10.00) lawful money of the United States, to it paid by HIREL HOLDINGS, INC.,
a Delaware corporation, party of the second part, the receipt whereof is hereby
acknowledged, has granted, bargained, sold, transferred and delivered, and by
these presents does grant, bargain, sell, transfer and deliver unto the said
party of the second part, its successors and assigns, the following goods and
chattels:
The "Purchased Assets" as defined in that certain Asset
Purchase Agreement dated as of June __, 1997 by and between
the party of the first part and JERRY'S MARINE SERVICE OF FT.
LAUDERDALE, INC., a Florida corporation, and the party of the
second part, including but not limited to the assets
identified in EXHIBIT A attached hereto.
TO HAVE AND TO HOLD the same unto the said party of the second part, its
successors and assigns forever.
AND the party of the first part does, for itself and its successors and
assigns, covenants to and with the said party of the second part, its successors
and assigns, that it is the lawful owner of the said assets; that they are free
from all encumbrances; that it has good right to sell the same aforesaid, and
that it will warrant and defend the sale of the said property, goods and
chattels hereby made, unto the said party of the second part and its successors
and assigns against the lawful claims and demands of all persons whomsoever.
Exhibit D- 1
IN WITNESS WHEREOF, the party of the first part, by and through its
undersigned authorized representative, has hereunto set its hand and seal this
day of ____________, one thousand nine hundred and ninety-seven.
Signed, sealed and delivered in presence of:
JERRY'S MARINE SERVICE OF FT.
LAUDERDALE, INC., a Florida corporation
__________________________________ By: ___________________________________
Witness
Its: President
__________________________________
Printed Name
__________________________________
Witness
__________________________________
Printed Name
STATE OF ______________ )
) SS:
COUNTY OF _____________ )
I HEREBY CERTIFY that on this day, before me, an officer duly authorized
in the State aforesaid and in the County aforesaid to take acknowledgments, the
foregoing instrument was acknowledged before me by ________________, who is
personally known to me or who has produced as identification.
WITNESS my hand and official seal in the County and State last aforesaid
this _____ day of ___________, 199__.
____________________________________________
Notary Public
State of ____________
____________________________________________
Typed, printed or stamped name
of Notary Public
My Commission Expires:
Exhibit D- 2
EXHIBIT E
---------
FORM OF EMPLOYMENT AGREEMENT
THIS EMPLOYMENT AGREEMENT ("Agreement") is made and entered into this____
day of January, 1997 by and between HIREL HOLDINGS, INC., a Florida corporation
("Company"), and ________________________ ("Employee").
WITNESSETH:
-----------
WHEREAS, the Company is engaged in the business of distributing and
selling marine parts, components and accessories ("Company's Business"); and
WHEREAS, subject to the terms and conditions hereinafter set forth, the
Company desires to employ Employee, and Employee desires to be employed by the
Company.
NOW, THEREFORE, in consideration of the mutual promises set forth herein,
and other good and valuable consideration, the receipt and sufficiency of which
is hereby acknowledged, the parties hereto hereby agree as follows:
1. RECITALS AND EXHIBITS. The foregoing recitals and any exhibits
referred to herein and attached hereto are true and correct and are incorporated
herein by this reference.
2. EMPLOYMENT. In exchange for the Compensation (as hereinafter
defined) and subject to the other terms and conditions hereinafter set forth,
the Company hereby employs Employee to render the Employee Duties (described in
Section 3 hereof) as an employee of the Company, and Employee hereby accepts
such employment.
3. EMPLOYEE DUTIES. For purposes of this Agreement, "Employee Duties"
shall mean ______________________________________ faithfully and diligently
under the supervision and direction of the Board of Directors of the Company.
Employee shall be required to devote all his business efforts, skill and
abilities to the business and affairs of the Company, and shall be a full-time
employee of the Company.
4. COMPENSATION. In exchange for the performance of Employee's duties
hereunder, the Company hereby agrees to pay Employee the following Compensation:
(a) BASE SALARY. The Company shall pay Employee a gross annual
base salary ("Salary") of ____________________ Thousand Dollars ($____________).
Salary shall be paid by the Company in accordance with the Company's regular
payroll practices, but not less often than once every two (2) weeks.
Exhibit ▇- ▇
(b) WITHHOLDING. The Company shall be entitled to deduct or
withhold from all Compensation payable hereunder all amounts required to be
deducted or withheld from Compensation pursuant to state or federal law.
(c) OTHER BENEFITS.
(i) FRINGE BENEFITS. Employee shall be eligible to
participate, on the same basis and subject to the same qualifications as the
other Employees of the Company, in all other employee benefits made available to
Employees of the Company, including any pension, profit-sharing plan, life,
health, medical, dental, hospitalization or surgical insurance plan or policy,
and any vacation or fringe benefit plans or programs, whether now existing or
hereafter established.
(ii) EXPENSE REIMBURSEMENT. It is contemplated that, in
connection with his employment hereunder, Employee may incur business,
entertainment and travel expenses. The Company agrees to reimburse Employee in
full for all reasonable, ordinary and necessary business, entertainment and
other related expenses, including travel expenses, incurred or expended by him
incident to the performance of his duties hereunder, and incurred or expended in
accordance with the Company's policies with respect to such expenses, upon
submission by Employee to the Company of such vouchers or expense statements
satisfactorily evidencing such expenses as may be reasonably required by the
Company or its independent certified public accountants.
(iii) VACATION. It is understood and agreed by the parties
hereto that during the term of Employee's employment hereunder he shall be
entitled to three weeks of paid annual vacation (taken consecutively or in
segments). Unused vacation time in any year shall not be carried over to any
subsequent year.
5. TERM. This Agreement shall commence on the date hereof and shall
continue to be in effect until December 31, 1997 ("Term"), unless terminated
prior to the end of the Term in accordance with Section 6 of this Agreement.
6. TERMINATION BY COMPANY.
(a) The Company shall have the right to terminate the employment
of Employee for cause immediately upon written notice to Employee. For purposes
of this Agreement, "cause" shall mean the occurrence of any of the following,
each of which shall be deemed a breach of this Agreement:
(i) Employee's failure (other than as a result of illness or
mental or physical disability), within fifteen (15) days after written notice
from the Company, to cure any material breach of the Employee Duties or his
other obligations under this Agreement;
(ii) Employee's death;
Exhibit ▇- ▇
(iii) Employee's negligence in the performance of the Employee
Duties or otherwise that has resulted in a material loss to the Company;
(iv) Employee's commission of any act of corporate theft,
misappropriation of funds, breach of duty as an officer of the Company or other
willful misconduct, act of dishonesty or intentional harm against or to the
Company;
(v) Employee's conviction of or pleading nolo contendere to
any felony;
(vi) Employee's failure to perform his duties hereunder on
account of an incapacitating physical or mental condition for one hundred twenty
(120) or more work days in any six (6) month period ("Permanent Disability"). If
there is any dispute as to whether the Employee has suffered a permanent
disability, the Employee shall submit to an examination by a physician whose
selection shall be agreed upon by both the Employee and the Company, and whose
determination shall be determinative of the issue; or
(vii) Employee's failure to abide by the Company's written
policies or procedures, including, but not limited to, the Company's policy
against sexual harassment and discrimination.
In the event the Company elects to terminate Employee's employment
hereunder as set forth above, the Company shall give written notice to such
effect to Employee, which notice shall describe in reasonable detail the actions
of Employee constituting cause.
(b) In the event that the Company shall terminate Employee for any
reason other than for cause as set forth in Section 6(a) above, Employee shall
be entitled to the compensation set forth in Section 4 hereof through the
remainder of the Term, notwithstanding that Employee shall no longer be employed
by the Company.
7. CONFIDENTIAL INFORMATION AND COMPETITION.
(a) CONFIDENTIAL INFORMATION. Employee hereby acknowledges that he
will or may be making use of, acquiring and adding to confidential information
of a special and unique nature and value affecting and relating to the Company
and its operations, including, but not limited to, the Company's Business, the
identity of the Company's customers and suppliers, prices paid by the Company
for inventory, its business practices, marketing strategies, expansion plans,
the Company's contracts, business records and other records, the Company's trade
secrets, inventions, techniques used in the Company's Business, know-how and
technologies, whether or not patentable, and other similar information relating
to the Company and the Company's Business (all the foregoing regardless of
whether same was known to Employee prior to the date hereof or is or becomes
known to third parties is hereinafter referred to collectively as "Confidential
Information"). Employee further recognizes and acknowledges that all
Confidential Information is the exclusive property of the Company, is material
and confidential, and greatly affects the legitimate business interests,
goodwill and effective and successful conduct of the business of the Company.
Exhibit ▇- ▇
Accordingly, Employee hereby covenants and agrees that he will use the
Confidential Information only for the benefit of the Company and shall not at
any time, directly or indirectly, either during the Term of this Agreement or
afterward, divulge, reveal or communicate any Confidential Information to any
person, firm, corporation or entity whatsoever, or use any Confidential
Information for his own benefit or for the benefit of others.
(b) COMPETITION. Employee hereby acknowledges and agrees that the
Company would suffer irreparable injury if Employee competes with the Company.
As a material inducement to the Company to enter into this Agreement, Employee
hereby covenants and agrees that, unless the Company and its successors and
assigns shall cease to engage in the Company's Business, he shall not:
(i) during the period beginning on the date hereof and
continuing until one (1) year following the date of the termination of
Employee's employment hereunder, directly or indirectly, operate, organize,
maintain, establish, manage, own, participate in, or in any manner whatsoever,
individually or through any corporation, firm or organization of which he shall
be affiliated in any manner whatsoever, have any interest in, whether as owner,
operator, partner, stockholder, director, trustee, officer, lender, employee,
principal, agent, consultant or otherwise, any other business or venture in any
county or city anywhere in the world where the Company does business at the time
of termination of employment, which engages in the Business or is otherwise in
competition with the Company or any assigns of the Company, unless such activity
shall have been previously agreed to in writing by the Company and its
successors and assigns;
(ii) during the period beginning on the date hereof and
continuing until three (3) years following the date of the termination of
Employee's employment hereunder, directly or indirectly, divert business from
the Company or its successors or assigns, or solicit business from, divert the
business of, or attempt to convert to other methods of using the same or similar
services as are provided by the Company, any client or account of the Company;
or
(iii) during the period beginning on the date hereof and
continuing until three (3) years following the date of the termination of
Employee's employment hereunder, directly or indirectly, solicit for employment,
employ or otherwise engage the services of, any employees or consultants of the
Company or its successors or assigns.
(c) INJUNCTION AND ATTORNEY'S FEES. In view of the irreparable
injury of the Company that would result from a breach or threatened breach of
Employee of the covenants or agreements under Sections 7 (a) or (b) hereof, and
because there is not an adequate remedy at law to protect the Company from the
ongoing breach of those covenants, Employee acknowledges that a permanent
injunction is an appropriate remedy for such a breach or threatened breach.
These remedies shall be in addition to and not in limitation of any other rights
or remedies to which the Company is or may be entitled at law or in equity under
this Agreement. Employee further agrees that in the event the Company incurs any
fees or costs in order to enforce the provisions of Sections 7 (a) and (b)
hereof and the Company prevails in such enforcement, Employee shall pay all fees
Exhibit ▇- ▇
and costs so incurred by the Company, including, but not limited to, reasonable
attorneys' and paralegals' fees at all trial and appellate levels.
(d) REASONABLENESS OF RESTRICTIONS. Employee has carefully read and
considered the provisions of Sections 7 (a), (b) and (c) hereof and, having done
so, agrees that the covenants set forth in those Sections are fair and
reasonable and are reasonably required to protect the legitimate business
interests of the Company. Employee agrees that the covenants set forth in
Sections 7 (a), (b) and (c) hereof do not unreasonably impair the ability of
Employee to conduct any unrelated business or to find gainful work in his field.
The parties hereto agree that if a court of competent jurisdiction holds any of
the covenants set forth in Sections 7 (a) or (b) unenforceable, the court shall
substitute an enforceable covenant that preserves, to the maximum lawful extent,
the scope, duration and all other aspects of the covenants deemed unenforceable,
and that the covenant substituted by the court shall be immediately enforceable
against Employee. The foregoing shall not be deemed to affect the right of the
parties hereto to appeal any decision by a court concerning this Agreement.
(e) SURVIVAL. This Section 7 shall survive the termination of this
Agreement and Employee's employment hereunder.
8. RIGHTS TO INVENTIONS, PATENTS AND COPYRIGHTS.
(a) Employee shall promptly disclose in writing to the Company:
all ideas, inventions, discoveries, devices, machines, apparatus, methods,
compositions, know-how, works, processes and improvements to any thereof,
whether or not patentable or copyrightable, that he may conceive, make, develop,
invent, reduce-to-practice, author or discover, whether solely or jointly or
commonly with others, during his employment with the Company, or within one
calendar year following the termination of his employment with the Company,
which relates to the business of the Company at the time of termination (the
items specified in this Section 8(a) are hereinafter collectively referred to as
"Inventions"). All Inventions are the sole and exclusive property of the
Company.
(b) Employee shall promptly assign, transfer and set over unto the
Company, its successors and assigns, all of his rights, title and interest in
and to all Inventions, all applications for Letters Patent or Copyrights,
foreign and domestic, which have or may be filed on such Inventions, all
divisionals, continuations, continuations-in-part, stream-line continuations,
substitutions, refiles, derivatives, and extensions thereof, all Copyrights, all
Letters Patent of the United States and its territorial possessions and all
Letters Patent of foreign countries which may be granted therefor, and all
reexaminations and reissues of said Letters Patent, including the subject matter
of any and all claims which may be obtained in every such domestic and foreign
patent, the same to be held and enjoyed by the Company for its own and exclusive
use and advantage, and for the exclusive use and advantage of its successors,
assigns and other legal representatives, to the full end of the term or terms
for which said Copyrights and Letters Patent of the United States, territories
and foreign countries are or may be granted, reexamined or reissued, as fully
and entirely as the same would have been held and enjoyed by Employee, if the
assignment had not been made.
Exhibit ▇- ▇
(c) During and subsequent to the Term hereof, Employee authorizes
and requests the Commissioner of Patents to issue to the Company all Letters
Patent of the United States on all Inventions and on all divisionals,
continuations, continuations-in-part, stream-line continuations, substitutions,
refiles, derivatives, extensions, reexaminations and reissues thereof, and
hereby covenants that he has not executed and will not execute any agreement in
conflict therewith.
(d) Employee further covenants and agrees that he will, during and
subsequent to the Term hereof, without demanding any further consideration
therefor, at any time, upon request, execute, or cause to be executed, and
deliver any and all papers that may be necessary or desirable to perfect the
title to any Invention and to such Letters Patent and Copyrights as may be
granted therefor, in the Company, its successors, assigns or other legal
representatives, and that if the Company, its successors, assigns, or other
legal representatives shall desire to file any divisional, continuation,
continuation-in-part, stream-line continuation, substitute, refile, extension,
reexamination, reissue, or derivative application, or to secure a reissue or
reexamine of such Letters Patent, or to file a disclaimer relating thereto,
Employee will upon request, sign, or cause to be signed, all papers, make or
cause to be made all rightful oaths, and do all lawful acts requisite for the
filing for reissue and procuring thereof, and for filing of such disclaimer.
(e) Employee does further covenant and agree, that he will, at any
time during and subsequent to the Term hereof, upon request, communicate to the
Company, its successors, assigns, or other legal representatives, such facts
relating to the Inventions, Letters Patent and Copyrights or to the history
thereof, as may be known to him, and testify, at the Company's expense, as to
the same in any interference or other litigation or proceeding in which Employee
is not a party and does not have an interest when requested to do so.
9. RESTRICTIONS ON CONFLICTS. Employee hereby agrees that except as set
forth herein or agreed to in writing by the Board of Directors of the Company,
the Company shall not transact any business with any entity in which either the
Employee, any relative of Employee or any spouse of such relative is a
shareholder, partner, officer, director or employee.
10. MISCELLANEOUS.
(a) NOTICES. All notices, demands or other communications given
hereunder shall be in writing and shall be deemed to have been duly given only
upon hand delivery thereof or upon the first business day after mailing by
United States registered or certified mail, return receipt requested, postage
prepaid, addressed as follows:
Exhibit ▇- ▇
To Company: Hirel Holdings, Inc.
▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇▇
▇▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇ ▇▇▇▇▇
To Employee: ____________________________
____________________________
____________________________
or to such other address or such other person as any party shall designate, in
writing, to the other for such purposes and in the manner hereinabove set forth.
(b) ENTIRE AGREEMENT. This Agreement sets forth all the promises,
covenants, agreements, conditions and understandings between the parties hereto
with respect to Employee's employment, and supersedes all prior and
contemporaneous agreements, understandings, inducements or conditions, expressed
or implied, oral or written, except as herein contained.
(c) BINDING EFFECT; NO ASSIGNMENT. This Agreement shall be binding
upon the parties hereto, their heirs, administrators, successors and assigns. No
party may assign or transfer its interests herein, or delegate its duties
hereunder, without the written consent of the other party. Any assignment or
delegation of duties in violation of this provision shall be null and void.
(d) AMENDMENT. The parties hereby irrevocably agree that no
attempted amendment, modification, termination, discharge or change
(collectively, "Amendment") of this Agreement shall be valid and effective,
unless the parties shall unanimously agree in writing to such Amendment.
(e) NO WAIVER. No waiver of any provision of this Agreement shall
be effective unless it is in writing and signed by the party against whom it is
asserted, and any such written waiver shall only be applicable to the specific
instance to which it relates and shall not be deemed to be a continuing or
future waiver.
(f) GENDER AND USE OF SINGULAR AND PLURAL. All pronouns shall be
deemed to refer to the masculine, feminine, neuter, singular or plural, as the
identity of the party or parties, or their personal representatives, successors
and assigns may require.
(g) COUNTERPARTS. This Agreement and any amendments may be
executed in one or more counterparts, each of which shall be deemed an original,
but all of which together will constitute one and the same instrument.
(h) HEADINGS. The article and section headings contained in this
Agreement are inserted for convenience only and shall not affect in any way the
meaning or interpretation of the Agreement.
Exhibit ▇- ▇
(i) GOVERNING LAW. This Agreement shall be construed in accordance
with the laws of the State of Florida, and agreed upon venue, to the extent
permitted by law, shall be Broward County, Florida.
(j) FURTHER ASSURANCES. The parties hereto will execute and
deliver such further instruments and do such further acts and things as may be
reasonably required to carry out the intent and purposes of this Agreement.
(k) NO THIRD PARTY BENEFICIARY. This Agreement is made solely and
specifically among and for the benefit of the parties hereto, and their
respective successors and assigns subject to the express provisions hereof
relating to successors and assigns, and no other person shall have any rights,
interest or claims hereunder or be entitled to any benefits under or on account
of this Agreement as a third-party beneficiary or otherwise.
(l) PROVISIONS SEVERABLE. This Agreement is intended to be
performed in accordance with, and only to the extent permitted by, all
applicable laws, ordinances, rules, and regulations of the jurisdiction in which
the parties do business. If any provision of this Agreement, or the application
thereof to any person or circumstances shall, for any reason or to any extent,
be invalid or unenforceable, the remainder of this Agreement and the application
of such provision to other persons or circumstances shall not be affected
thereby, but rather shall be enforced to the greatest extent permitted by law.
(m) LITIGATION. If any party hereto is required to engage in
litigation against any other party hereto, either as plaintiff or as defendant,
in order to enforce or defend any rights under this Agreement, and such
litigation results in a final judgment in favor of such party ("Prevailing
Party"), then the party or parties against whom said final judgment is obtained
shall reimburse the Prevailing Party for all direct, indirect or incidental
expenses incurred, including, but not limited to, all attorneys' fees, court
costs and other expenses incurred throughout all negotiations, trials or appeals
undertaken in order to enforce the Prevailing Party's rights hereunder.
(n) REPRESENTATION BY EMPLOYEE. Employee hereby represents and
warrants that he is not a party to any agreement, contract or understanding,
whether of employment or otherwise, which would in any way restrict or prohibit
him from undertaking or performing employment with the Company in accordance
with the terms and conditions of this Agreement.
Exhibit ▇- ▇
IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of
the date first above written.
WITNESSES: COMPANY:
HIREL HOLDINGS, INC., a
Delaware corporation
_______________________________ By:___________________________________
_______________________________
EMPLOYEE:
_______________________________ ______________________________________
_______________________________
Exhibit ▇- ▇