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EXHIBIT 10.32
AGREEMENT FOR SALE AND PURCHASE OF COMMON STOCK
▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇ (the "Seller"), being the owners of all of the issued and
outstanding capital stock of Phoenix Tank Car Corp., a corporation organized
and existing under the laws of the State of Connecticut with an office at c/o
Mezan, ▇▇▇▇▇▇▇▇▇ & ▇▇▇▇▇▇▇▇▇▇▇, P.C. ▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇ (the
"Corporation") and JLM Marketing, Inc., a corporation organized under the laws
of Delaware, with principal offices at ▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇, ▇▇▇▇▇,
▇▇▇▇▇▇▇ ▇▇▇▇▇ ("Purchaser") hereby agree as follows concerning the sale and
purchase of all of the issued and outstanding common shares of the Corporation
effective as of June 1, 1997.
1.
2. RECITALS.
a. Ownership of Shares. Seller is the owner of one hundred (100)
shares of the issued and outstanding common stock of the Corporation, being one
hundred percent (100%) of such capital stock (the "Shares").
b. Purchase and Sale of Shares. Subject to the satisfaction of
all contingencies set forth in this Agreement, Seller wishes to sell and
Purchaser wishes to purchase the Shares on the terms and conditions set forth
in this Agreement.
3. SALE AND PURCHASE OF SHARES.
Subject to and upon the terms and conditions of this Agreement, at the
Closing as hereinafter set forth Seller agrees to sell, assign, transfer and
deliver the Shares to Purchaser and Purchaser agrees to purchase the Shares
from Seller. The Shares shall be sold to Purchaser in a transaction which is
exempt from the registration provisions of applicable state and federal
securities laws, in accordance with the representations of Purchaser
hereinafter set forth.
4. PURCHASE PRICE AND PAYMENT OF PURCHASE PRICE.
a. Purchase Price. The Purchase Price for the Shares shall be
Five Hundred Thousand ($500,000.00) dollars.
b. Payment of the Purchase Price. The Purchase Price shall be
paid at the Closing as follows:
(1) $250,000 in cash in immediately available funds
payable to Seller.
(2) $250,000 by a negotiable promissory note which shall
bear interest at ten (10%) percent per annum,
substantially in the form of Exhibit A, which shall
be delivered to ▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇.
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5. CLOSING.
The Closing shall take place on the day on June 2, 1997 at the offices
of Seller's attorneys, Mezan, ▇▇▇▇▇▇▇▇▇ & ▇▇▇▇▇▇▇▇▇▇▇, P.C., ▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇,
▇▇▇ ▇▇▇▇, ▇▇. (the "Closing" or the "Closing Date"). Prior to the Closing the
parties shall make the following deliveries, in escrow to ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇:
a. Deliveries by Seller.
i. Share Certificates. A certificate or certificates
representing the Shares duly endorsed in blank, or accompanied by stock powers
duly executed in blank, by Seller transferring the Shares, with all necessary
transfer tax and other revenue stamps, acquired at Seller's expense, affixed
and canceled. Seller agrees to cure any deficiencies with respect to the
endorsement of the certificates representing the Shares owned by Seller or with
respect to the stock power(s) accompanying any such certificate.
ii. Resignations. Resignations, effective as of the Closing
Date, of the Officers and Directors of the Corporation set forth in EXHIBIT B
attached hereto and made a part hereof.
iii. Books and Records. The corporate minute book, stock
transfer records and corporate seal of the Corporation, together with all
records of the Corporation, including those records not then located on the
business premises of the Corporation. Sellers shall have the right of access
for a period of six (6) years following the Closing to all of the books and
records of the Corporation in the possession or under the control of Purchaser
in connection with tax examinations, governmental audits, disputes or any other
relevant matter for which Seller has any claim or potential liability. Seller
shall pay all reasonable costs of copying such books and records.
iv. Articles of Incorporation; Bylaws, etc. Copies of:
(1) The Articles of Incorporation of the Corporation
and all amendments thereto, certified by the Secretary of State of the State of
Connecticut.
(2) The Bylaws of the Corporation, certified by its
Secretary.
(3) A certificate from the Secretary of State of
the State of Connecticut to the effect that the Corporation is in good standing
or subsisting in such jurisdiction.
(4) A certificate as to the tax status of the
Corporation from the appropriate official in the State of Connecticut and each
state in which the Corporation is qualified to do business.
v. Consents and Authorizations. Copies of all consents
and authorizations to the transactions set forth in this Agreement, if any,
required to be obtained by Seller.
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vi. Seller's Certificate. A certificate signed by each
individual Seller that, as of the Closing, Seller and the Corporation have
substantially complied with all of the warranties, representations and
covenants made by Seller in this Agreement and that such warranties,
representations and covenants are and will be true, valid and correct in all
material respects as of the Closing, with the same force and effect as if the
same had been made as of the Closing, and that the Shareholders' Equity of the
Corporation as of the Closing equals such Shareholders' Equity as of the close
of business on December 31, 1996.
vi. Other Documents. Such other documents and instruments as
are reasonably necessary to effectuate the transactions provided for in this
Agreement.
b. Deliveries by Purchaser.
i. The Purchase Price. The Purchase Price as provided in
Section 3 of this Agreement by check in the amount of $250,000 drawn on a state
or national bank the accounts of which are insured by the FDIC and a note in
the amount of $750,000 substantially in the form of Exhibit A payable to the
order of ▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇.
ii. Purchaser's Certificate. A Certificate signed by
Purchaser to the effect that, as of the Closing, Purchaser has substantially
complied with all of the warranties, representations and covenants made by
Purchaser in this Agreement, and that such warranties, representations and
covenants are true, valid and correct in all material respects as of the
Closing, with the same force and effect as if the same had been made at the
Closing.
iii. Other Documents. Such other documents and instruments
as, in the opinion of counsel for Seller, are reasonably necessary to
effectuate the transactions provided for in this Agreement.
6. REPRESENTATIONS AND WARRANTIES OF SELLER.
Seller represents and warrants to Purchaser on the date hereof and on
the Closing as follows:
a. Schedules. Attached hereto are the following Schedules, each of
which is complete and accurate in all material respects.
i. Financial Statements. Balance sheets, statements of
operations and net worth, and statements of changes in financial position for
the Corporation for the fiscal years ended December 31, 1993, December 31,
1994, December 31, 1995 and December 31, 1996 (the "Financial Statements").
ii. Other Property. A list and description of all property,
real or personal, owned by the Corporation of a value equal to or greater than
$10,000.00. (Schedule i)
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iii. Liens. A complete and accurate list of all material
liens, encumbrances, easements, security interests and other similar interests
in or on any material asset of the Corporation. (Schedule ii)
iv. Operating Licenses. A complete and accurate list of all
operating licenses required for the operation of the business of the
Corporation. (Schedule iii)
v. Written Agreements. A list of each lease, contract,
promissory note, mortgage, license or other written agreement to which the
Corporation or Seller is a party or is bound relating to the business or
properties of the Corporation which involves or can reasonably be expected to
involve aggregate future payments or receipts by the Corporation (whether by
the terms of such lease, contract, promissory note, mortgage, license, or other
written agreement or as a result of a guarantee of the payment of or indemnity
against the failure to pay the same) of $10,000.00 or more annually during the
twelve (12) month period ending December 31, 1996 setting forth in reasonable
detail the parties, terms and any special provisions thereof. (Schedule iv).
vi. Consents Required. A list of all material agreements to
which Seller or the Corporation is a party or is bound under the terms of which
consent to the transactions set forth in this Agreement may be required to
avoid a default thereunder or pursuant to which notice of such transaction is
required, stating the nature of such consent or notice and the parties from
whom consent must be obtained or to whom notice must be given. (Schedule v)
vii. Accounts Receivable. A list of all of material accounts
receivable of the Corporation as of three (3) days prior to the date of this
Agreement - with each customer of the Corporation deemed collectible by the
Corporation (the "Accounts Receivable") showing the name and address of the
account debtor, the amount, status and the terms of the account and the
collateral, if any, held by the Corporation and the location thereof.
(Schedule vi)
viii. Uncollectible Accounts. A list of all material
accounts receivable of the Corporation deemed uncollectible by the Corporation,
stating the name and address of the account debtor, the amount unpaid and the
reason for uncollectability and the amount, if any, reserved in respect thereof
on the Financial Statements for 1996. (Schedule vii)
ix. Articles of Incorporation and Bylaws. Copies of the
current Articles of Incorporation and Bylaws of the Corporation, together with
all amendments thereto to the date hereof. (Schedule viii)
x. Officers and Directors. A list of all officers and
directors of the Corporation. (Schedule ix)
xi. Salary Schedule. A list of the names and the current
salary rate for each present employee of the Corporation who received
$25,000.00 or more in aggregate compensation from the Corporation, by way of
salary, commission, bonus or otherwise during the year ended December 31,
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1995, or who during the year ending December 31, 1996 is presently scheduled to
receive from the Corporation aggregate compensation in excess of $25,000.00 if
such employee remained employed for the full year 1996. (Schedule x)
xii. Litigation. A list of all written civil, criminal,
administrative, regulatory, arbitration or other such proceedings or
investigations pending or threatened to the knowledge of Seller which may
materially and adversely affect the business of the Corporation setting forth
for each matter the case name, file number, jurisdiction in which pending,
amount in controversy, and a brief summary of the history. (Schedule xi)
xiii. Employee Benefit Plans. A list of all stock option,
bonus, incentive compensation, deferred compensation, profit sharing,
retirement, pension, group insurance, disability, death benefit or other
benefit plans, trust agreements or arrangements of the Corporation in effect on
the date hereof, to which the Corporation has contributed or has been obliged
to contribute in any of their last preceding three (3) fiscal years, or which
will become effective after the date hereof. (Schedule xii)
xiv. Insurance. A list and description of all material
insurance policies naming the Corporation as an insured or beneficiary or as a
loss payee or for which the Corporation has paid all or part of the premium in
force on the date hereof, specifying any notice or other information known to
Seller regarding cancellation thereof or premium increases thereon. (Schedule
xiii)
xv. Banks. A list showing:
(1) The name of each bank in which the Corporation
has an account or safe deposit box;
(2) The names of all persons authorized to sign
checks thereon or make withdrawals therefrom; and
(3) The names and addresses of all persons holding
powers of attorney from the Corporation and a copy or statement of such power
of attorney. (Schedule xiv)
xvi. Intellectual Property Rights. A list of all material
Intellectual Property Rights (hereinafter defined) owned or licensed by the
Corporation, or used in the business thereof, together with an identification
of any license agreement to which the Corporation is party or is bound,
including true and accurate copies of all registrations and such licenses.
(Schedule xvii)
xvii. Tax Returns and Tax Information; Reconciliation. (a) A
list setting forth all federal, state, local and foreign income tax returns
filed with respect to the Corporation for taxable periods ended on or after
December 31, 1993 and indicating those returns that have been audited by the
relevant tax authority, and those returns that currently are the subject of
audit. (b) A copy of the federal income tax return for the Company for the
year ended December 31, 1996, together with a
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reconciliation of such return(s) to the Financial Statement of the Company for
such fiscal year. (Schedule xvi)
b. Organization, Qualification, Power and Standing. The
Corporation is a corporation duly organized, validly existing and in good
standing under the laws of Connecticut with all requisite corporate power to
own or lease its property and to carry on its business as now being conducted.
The Corporation is duly qualified and in good standing to do business in every
jurisdiction in which the Corporation believes that such qualification is
necessary to conduct its business as such business is now being conducted,
except where a failure to so qualify would not have a material adverse effect
on the business or properties thereof.
c. Capitalization. The Corporation has issued and outstanding One
Hundred (100) shares of common and no other capital stock or securities of any
kind. All such shares are duly authorized and validly issued and are fully
paid and nonassessable, to the extent provided by law. There are no
outstanding options, warrants, rights, cause, commitments, conversion rights,
rights of exchange, plans or other agreements of any character providing for
the purchase, issuance or sale of any shares of the capital stock of the
Corporation, other than as contemplated by this Agreement.
d. Ownership, Power to Sell Shares. Seller is the owner of the Shares
free and clear of all encumbrances, liens, security interests, voting
restrictions, agreements or similar arrangements, or other equitable claims or
interests whatsoever, and has the full legal right, power and authority to
enter into this Agreement and to sell, assign, transfer and convey the Shares
to Purchaser as provided herein. Upon transfer and delivery to Purchaser of
certificates evidencing the Shares pursuant to this Agreement duly endorsed for
transfer, Purchaser will acquire full right, title and interest in and to such
Shares, free of any claims, security interests, encumbrances, security
interests, liens or rights in any other party.
e. Authority. This Agreement is the valid and binding obligation of
Seller, enforceable against Seller in accordance with its terms, except as may
be limited by insolvency, bankruptcy or other laws of general application
respecting the enforcement of creditor's rights generally, or by general equity
principles. Other than as set forth in Schedule v, neither the execution and
delivery of this Agreement or consummation of the transactions contemplated
herein or hereby will: (i) constitute or result in a default (or give rise to
any right of cancellation, termination or acceleration) under the terms of any
material note, bond, mortgage, indenture, license, agreement, or other
instrument or obligation to which Seller or the Corporation is a party or by
which any of the same may be bound; or (ii) violate any order, writ,
injunction, decree, statute, rule or regulation applicable to any one of them.
Except as provided in Schedule vi, Seller shall obtain the appropriate written
consents and authorizations from all parties listed in Schedule v and shall
deliver copies of the same to Purchaser prior to or at Closing.
f. Customers. Seller has no knowledge of any material termination,
cancellation, limitation, modification or change in the business relationship
between the Corporation and any customer of the Corporation which does a
material amount of business with the Corporation.
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g. Operating Licenses. The Corporation, as required by law, has
obtained and paid for all licenses listed in Schedule iii. No material license
or operating authority listed in Schedule iv shall be subject to revocation as
a result of the consummation of this transaction, except as may be provided in
such Schedule.
h. Additional Representations and Warranties. Seller makes the
additional representations and warranties set forth in Rider A attached hereto,
as if they were set forth in full in this Section.
i. Full Disclosure. Each of this Agreement, any Rider, Schedule,
Exhibit or Certificate attached thereto ("Deliveries") is true, complete and
accurate in all material respects and contains all material information as
required thereby. No Delivery contains or will contain any untrue statement of
a material fact or omit to state any material fact required to be stated
therein or necessary in order to make the statements not misleading. There is
no fact known to any individual Seller which materially and adversely affects
the business or financial condition of the Corporation or its properties or
assets, which has not been set forth in this Agreement, the Financial
Statements (hereinafter defined) (including the footnotes thereto), any
Schedule, Exhibit or certificate attached hereto or delivered in accordance
with the terms hereof. Seller or the Corporation shall promptly advise
Purchaser in writing of any matter arising or discovered by either of them
after the date of this Agreement up to the Closing Date which is required to
have been set forth or described herein or disclosed to Purchaser at or prior
to the time of execution hereof which was not so set forth herein or disclosed
or be required to be so set forth, described or disclosed as if such matter
arose prior to the date hereof. Subject to Article 5.j, such notification
shall be deemed to modify the applicable schedules and representations
previously made.
j. Truth at Closing. In addition to being true as covenants,
warranties, and representations as of the date of this Agreement, all
covenants, warranties, and representations of Seller set forth in this
Agreement or any Schedule or Exhibit hereto shall be true and correct as of the
Closing and shall be of the same force and effect as though made on said date
and shall be deemed to have been made at the Closing.
k. Survival. All of the representations, warranties, covenants and
Indemnities of the Seller contained in this Agreement and the schedules, riders
and exhibits annexed hereto shall survive the Closing hereunder (unless
Purchaser had actual knowledge of any misrepresentation of breach of warranty,
representation or covenant at the time of Closing) and continue in full force
and effect until December 31, 1997.
7. REPRESENTATIONS AND WARRANTIES OF PURCHASER.
Purchaser represents, warrants and covenants to and with Seller on the
date hereof and on the Closing as follows:
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a. Organization, Qualification, Power and Standing. Purchaser is a
corporation validly organized and in good standing under the laws of the State
of Delaware with all requisite corporate power to own or lease its properties
and to carry on its business as now being conducted.
b. Purchase for Investment. The Shares are being purchased by
Purchaser for Purchaser's own account for investment and not for the purpose of
or the view towards the resale or distribution thereof within the meaning of
the Securities Act of 1933.
c. Due Execution, The execution and delivery of this Agreement by
Purchaser and the performance by Purchaser of all Purchaser's duties and
obligations hereunder, and the consummation of the transactions contemplated
hereby have been duly authority by Purchaser's Board of Directors. No further
action will be or is necessary on the part of Purchaser in order to authorize
the execution and delivery of this Agreement by Purchaser and the performance
of Purchaser's duties and obligations hereunder. This Agreement constitutes
the legal, valid and binding obligation of Purchaser and is enforceable against
Purchaser in accordance with its terms, except as the same may be limited by
insolvency, bankruptcy or other laws of general application affecting
enforcement of creditors rights and by general equity principles.
d. Non Contravention. Neither the execution and the delivery of this
Agreement, nor the consummation of the transactions contemplated hereby, will
(A) violate any constitution, statute, regulation, rule, injunction, judgment,
order, decree, ruling, charge or other restriction of any government, agency or
court to which the Purchaser is subject or any provision of its charter or
by-laws, or (B) conflict with, result in a breach of, constitute a default
under, result in the acceleration of, create in any party the right to the
accelerate, terminate, modify or cancel, or require any notice under any
agreement, contract, lease, license, instrument, or other arrangement to which
the Purchaser is a party or by which it is bound or to which any of its assets
is subject.
e. No Financing. The transactions contemplated by this Agreement are
not subject to any financing contingency on the part of the Purchaser.
f. No Material Adverse Events. To the knowledge of Purchaser, there
are no material adverse events which will effect the business and prospects of
the Purchaser and its affiliates prior to the closing.
g. Filings. There are no filings required for this transaction under
the ▇▇▇▇-▇▇▇▇▇-▇▇▇▇▇▇ statute or similar acts.
8. BROKERS, ETC.
The parties mutually represent and warrant to each other that the
warranting party has not employed or used the services of any broker or finder
in connection with the transactions contemplated by this Agreement. A party
retaining a finder or broker shall indemnify, hold harmless
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and defend the other party from and against all claims or finder's fees,
broker's commissions or other similar compensation made by any such broker or
finder.
9. DISCLOSURE; CONFIDENTIALITY.
Seller and Purchaser agree to use their best efforts to keep this
Agreement and the execution and terms hereof confidential until Closing.
Either party may, however, disclose such matters to its directors, officers,
executive employees and professional advisors and those of prospective lenders
to such extent as may be reasonable for the negotiation, execution and
consummation of this Agreement, or to the extent reasonably required by law.
Each party shall keep confidential all information concerning the other
obtained pursuant to this Agreement and shall not use such information except
in connection with the transactions set forth herein. The foregoing
obligations of confidentiality shall continue for a period of there (3) years
following the Closing and do not pertain to the disclosure of information which
is available publicly or which is required to be disclosed by any or order of
any court. If for any reason this transaction shall not be consummated, each
party will return all such information (including all copies thereof) regarding
the other, to the other party and neither party shall make use of any such
information, directly or indirectly, for its own purposes or for that of any
affiliate, including in the solicitation of any customer of such party.
10. MISCELLANEOUS.
a. Notices. Whenever any party desires to give any notice to any
other party such notice shall be in writing and it shall be deemed to have been
properly given if (a) served in person, (b) mailed, by United States registered
or certified mail, full postage prepaid, return receipt requested (c) sent by
special courier service (e.g. Federal Express) or (d) sent by telecopy,
provided that in confirmation thereof, an executed original of such notice is
concurrently given by means of any other mode of delivery permitted hereunder,
addressed as follows:
Seller: ▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇
▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Copy to: Mezan, ▇▇▇▇▇▇▇▇▇ & ▇▇▇▇▇▇▇▇▇▇▇ P.C.
▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇ ▇▇ ▇▇▇▇▇
Attn: ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇, Esq.
Purchaser: JLM Marketing, Inc.
▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇
▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Attn: ▇▇▇▇▇▇▇ ▇▇▇▇▇▇
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Any notice, request, demand or other communication served as provided in
Section (a) shall be deemed to have been given and received on the date of
actual receipt of such notice, request, demand or other communication. Any
notice, request, demand or other communication mailed as provided in Section
(b) or sent as provided in Section (c) shall be deemed to have been given and
received on the earlier of the date of actual receipt of such notice,
regardless of mode of delivery, or the fifth business day next following the
date of mailing by U.S. registered or certified mail or the second business day
following the date of delivery to such special courier service of such notice,
request, demand or other communication, or in the case of delivery as provided
in Section (d), the date the confirmation thereof is deemed received. A
failure to send the requisite copies does not invalidate an otherwise properly
sent notice to a party.
DATED: , 1997
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SELLER
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▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇
PURCHASER
JLM Marketing, Inc.
By By
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▇▇▇▇▇▇▇ ▇▇▇▇▇▇ Its:Secy ▇▇▇ ▇▇▇▇▇, Vice President
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Rider A
Additional Provisions
This Rider A is attached to and made a part of that certain Agreement
for Sale and Purchase of Common Stock dated as of June 1, 1997 between ▇▇▇▇ ▇.
▇▇▇▇▇▇▇▇▇ and JLM Marketing, Inc. relating to the sale and purchase of one
hundred (100) shares of the issued and outstanding common stock of Aurora
Chemicals, Inc. and contains additional provisions of such Agreement. Such
provisions are a part of the Agreement as if they had been set forth in full in
the body thereof.
R-1. ACTIONS PENDING CLOSING. Subsequent to the execution of this Agreement
and prior to Closing, Seller agrees as follows:
a. Operation of Business. The Corporation shall in all material
respects operate its business substantially as presently operated and in the
ordinary course and, consistent with such operation, Seller shall use Seller's
best efforts to preserve intact the business organizations and relationships
with all persons having business and dealings with the Corporation to keep the
services of the officers and other employees available and to maintain
favorable relations and good will with the Corporation's customers, licensors,
suppliers, distributors, clients and others with whom the Corporation do
business. Without the prior written consent of Purchaser, the Corporation
shall not:
i. Amend its Articles of Incorporation or Bylaws or cause
to be amended; or
ii. Issue or contract to issue any share of capital stock or
security exchangeable for or convertible into capital stock of the
Corporation;
iii. (a) Enter into or perform any agreement for the merger,
consolidation, or reorganization of the Corporation or any other
transaction that will effect any change in the structure or control of
the Corporation or (b) enter into or assume any contract or obligation
except for contracts or obligations in the ordinary course of
business; (c) guarantee any obligation; or (d) cancel or forgive any
indebtedness owed to the Corporation or waive any claim that the
Corporation may possess.
b. Access to Records. Purchaser and its respective agents,
representatives, attorneys and auditors shall, at all reasonable times during
normal business hours upon giving reasonable prior notice, have complete access
to all of the premises, personnel, books, records, files, agreements and
financial statements of the Corporation, provided that such access shall not
unduly interfere with the normal business operations of the Corporation.
Without limitation of the foregoing, Seller agrees to make available to
Purchaser all written reports, operating data and other information relating to
the Corporation or its business and properties, and to answer all inquiries
pertinent to the subject matter of this Agreement which Purchaser or any of its
representatives tiny make prior to the Closing. During the period from the
date of this Agreement to the Closing, Seller shall cause representatives of
the Corporation to confer on a regular and frequent basis with one or more
designated
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representatives of Purchaser to report material operational matters and to
report the general status of ongoing operations. The foregoing review shall
not affect the representations and warranties made by Seller hereunder or the
remedies of the Purchaser for breaches of those representations and warranties,
except that Purchaser shall give prompt notice to Seller of any claim for
breach of any such representation or warranty or for indemnification. In such
event, either party shall have the right to terminate this Agreement by written
notice to the other sent within ten (10) days of the sending of Purchaser's
such notice, without cost or liability. No such termination, however, shall
abrogate the duty of confidentiality placed upon the parties by the terms of
this Agreement.
c. Advice of Change. Seller will promptly upon discovery thereof
advise Purchaser of any material adverse change in the financial condition,
operating results or business prospects of the Corporation, and any other
material adverse matter respecting the business and operations of the
Corporation, or any legal action (or any threat of the same) relating to the
Corporation and/or to the transactions contemplated hereby. Seller shall cause
the Corporation to notify Purchaser of any unexpected emergency and of any
governmental complaints, investigations or hearings (or communications
indicating that the same may be contemplated), adjudicatory proceedings, budget
meetings or submissions involving any material property of the Corporation, and
to keep Purchaser fully informed of such events and Purchaser's representatives
prompt access to all materials prepared in connection therewith. All such
notifications shall be deemed to be supplements to the representations,
warranties and schedules contained in or attached to this Agreement.
d. Exclusive Dealing. During the period from the date of this
Agreement to the Closing, Seller shall not take, and shall cause the
Corporation to refrain from taking, any action to, directly or indirectly,
encourage, initiate or engage in discussions or negotiations with, or provide
any information to, any person or entity, other than Purchaser, concerning any
purchase of the Shares or any merger, sale of substantial assets or similar
transaction involving the Corporation.
R-2. CONDITIONS PRECEDENT TO CLOSING. The obligations of the parties pursuant
to this Agreement are specifically contingent upon satisfaction of all of the
following:
a. Conditions Precedent to Seller's Obligations.
i. Deliveries. All deliveries by Purchaser pursuant to
Section 4.b of this Agreement shall have been made in a complete and
timely manner;
ii. Truth of Warranties. All warranties of Purchaser set
forth in this Agreement shall be true when made and as of the Closing;
iii. Substantial Compliance. Purchaser shall have
substantially and materially complied with all provisions of this
Agreement;
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If the foregoing contingencies shall not have been satisfied on or
before the Closing, or such other later date as the parties may in
writing agree, Seller may terminate this Agreement by written notice
to Purchaser.
b. Conditions Precedent to Purchaser's Obligations.
i. Deliveries. All deliveries by Seller as provided in
Section 4.a of this Agreement shall have been made in a substantially
complete and timely manner;
ii. Percentage of Shares Delivered. Seller shall deliver to
Purchaser at Closing certificates aggregating not less than one
hundred percent (100%) of the voting common stock of the Corporation;
iii. Truth of Warranties. All warranties of Seller set forth
in this Agreement shall, in all material respects, be true when made
and as of the Closing;
iv. No Material Adverse Change. Prior to the Closing Date,
there shall be no material adverse change in the assets or
liabilities, the business or condition, financial or otherwise, or the
results of operations of the Corporation, whether as a result of any
legislative or regulatory change, revocation or any license or rights
to do business, fire, explosion, accident, casualty, labor trouble,
flood, drought, riot, storm, condemnation, or act of God or other
public force or otherwise.
v. Consents and Other Approvals. All material consents and
other approvals, if any, necessary to permit the consummation of the
transactions contemplated by this Agreement shall have been received.
vi. Substantial Compliance. Seller shall have substantially
and materially complied with all provisions of this Agreement.
If the foregoing contingencies shall not have been satisfied on or before the
Closing, or such other later date as the parties may in writing agree,
Purchaser may terminate this Agreement by written notice to Seller.
c. Abandonment. Notwithstanding any of the other provisions of
this Agreement, this Agreement may be canceled and abandoned at any time prior
to the Closing by the mutual written agreement of the parties.
R3. ADDITIONAL DOCUMENTS; COOPERATION. Each party agrees that such party
will at all times do, execute, acknowledge and deliver or will cause to be
done, executed, acknowledged and delivered, all such other acts, deeds,
assignments, transfers, advances and assurances as may be reasonably required
by the other party hereto or by any regulatory authority having jurisdiction in
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order to fully carry out and to effectuate the transactions
contemplated by this Agreement. The parties agree that they will
cooperate reasonably with each other in all matters required for the
reasonable consummation of such transactions.
R-4. RESOLUTION OF DISPUTES. All disputes regarding to this Agreement and
the interpretation thereof and the performance of the parties hereunder shall
be resolved by mediation and/or arbitration according to the provisions of this
Section R-5.
a. Initiation. A party wishing to initiate the dispute
resolution procedures of this Section, shall send to the other parties to this
Agreement a written demand setting forth with particularly the dispute giving
rise to the demand. If the parties do not agree unanimously upon the
resolution of such dispute within thirty (30) days after the sending of such
notice, the matter may be referred by any party to the American Arbitration
Association or other professional dispute resolution organization (the
"Arbitrator") for resolution.
b. Procedure. All disputes not resolved pursuant to subsection
R-4.a above shall be settled utilizing the procedures of the Arbitrator in
Tampa, Florida.
i. Mediation. All disputes shall be first subject to
non-binding mediation through the mediation service of the Arbitrator.
"Mediation" means to engage in good faith discussions, aimed at
resolving the dispute with a neutral intermediary (the "Mediator") and
the other party or parties to the dispute. The mediation shall last
no longer than one (1) day. The Mediator will have no authority to
impose a decision, but only to assist the parties in reaching
agreement. All statements made and information provided in the
mediation shall be confidential and privileged from discovery as
settlement discussions. Mediation shall begin within fourteen (14)
days of receipt by all parties and the Mediator of the request for
mediation.
If the parties shall not accept the resolution suggested by the
Mediator (the "Mediation Award"), any party may, within ten (10) days after the
mediation hearing, initiate arbitration according to paragraph R-4bii below.
No procedure to arbitrate the dispute may be commenced or prosecuted by any
party who has not first participated, or offered in good faith to participate,
in mediation.
ii. Arbitration. Except as specifically set forth in
this Agreement, all disputes shall be decided pursuant to the rules of
the Arbitrator governing commercial arbitrations. The arbitrator(s)
shall hear the evidence and render their award within ninety (90) days
after they have been selected, unless the parties shall unanimously
extend such time in writing. The award (a) shall be in writing; (b)
shall be set forth with specificity the reasons supporting decision,
including findings of fact and conclusions of law in support of the
decision; (c) may order a party to undertake affirmative actions; and
(d) shall allocate the costs of the arbitration m a reasonable manner.
If either party shall fail or refuse to appear or to abide by any
order of the arbitrator(s), the arbitrator(s) may base their decision
on the evidence
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presented by the other party. A decision of the arbitrator(s), once
final, shall not be subject to being opened except by unanimous
agreement of the parties, or a provided by law.
c. Discovery. The arbitrator(s) may, upon the written request of
either party upon good cause shown, allow such discovery as the arbitrator(s)
deem necessary, including discovery by deposition or other appropriate method.
d. Interest. Interest will accrue on any award at the legal rate
for judgements from the date of the filing of the demand for arbitration until
payment in full.
e. Costs. The costs of proceeding pursuant to paragraphs R-4.a
and R-4-b-i shall be divided between the parties as determined by the
arbitrator(s), and each party shall bear such party's legal fees.
f. Enforcement. The Courts of the State of Florida and the
federal courts within such State shall have jurisdiction with respect to the
enforcement of any arbitral award and all other matters relating to any
arbitration hereunder and judgment of such court shall be entered upon any such
award. The parties submit themselves to the jurisdiction of the courts within
such State for all purposes related to arbitrations arising under this Article
and agree to service of process by certified mail to the addresses listed in
the notices provision.
R-5. MISCELLANEOUS.
a. Waiver. Any term or provision of this Agreement may be waived
in writing at any time by the party entitled to the benefit thereof. Any
failure to enforce any provision hereof shall not constitute a waiver of such
provision or of any subsequent failure to perform any obligation hereunder.
b. Captions. Descriptive headings are for convenience only and
shall not control or affect the meaning or construction of any provision of
this Agreement.
c. Purchaser's Review. The review by Purchaser of the records of
the Corporation shall not relieve Seller of any duty, obligation, ability,
warranty or representation set forth in this Agreement. Purchaser shall give
prompt notice to Seller of any claim for breach of any representation or
warranty of Seller contained in this Agreement or in any Schedule or Exhibit
hereto. In such event, either party shall have the right to terminate this
Agreement without cost or liability by written notice to the other sent within
ten (10) days of the sending of Purchaser's such notice. No such termination,
however, shall abrogate the duty of confidentiality placed upon the parties by
the terms of this Agreement.
d. Counterparts. This Agreement may be executed in two or more
counterparts, all of which taken together shall constitute one instrument.
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e. Entire Agreement. This Agreement contains the entire
agreement of the parties with respect to the subject matter hereof, and may be
altered or amended only by written instrument executed by the party sought to
be bound. This Agreement supersedes all prior agreements and understandings
between the parties with respect to such subject matter. Any provision of this
Agreement can be waived, amended, supplemented or modified by agreement of the
parties.
f. Severability. In case any provision in this Agreement shall
be held invalid, illegal or unenforceable, the validity, legality and
enforceability of the remaining provisions hereof will not in any way be
affected or impaired thereby.
g. No Assignment. Neither this Agreement nor any rights
hereunder may be assigned either party without the prior written consent of the
other.
h. Jurisdiction. Subject to the provisions of Section R-4,
Seller agrees irrevocably that, subject to Purchaser's sole and absolute
election, all actions to enforce this Agreement or other actions, suits or
other proceedings arising out or in respect of this Assignment ("Actions")
shall be brought in a court of competent jurisdiction sitting in Tampa,
Florida. Seller irrevocably consents to the jurisdiction of such courts.
Seller further (a) agrees that in any such Action, service of process may be in
the same manner as notices are delivered hereunder and that Seller consent to
and shall accept service made in such manner and (b) irrevocably waives any
right Seller or Seller's Shareholders may have to transfer or change the venue
of, or to claim that any such Action has been brought in an inconvenient forum.
j. Governing Law. This Agreement shall be governed by and
interpreted in accordance with the laws of Florida.
k. Representations made on the Knowledge of a Party. Where any
representation or warranty contained in this Agreement is expressly qualified
by reference to the knowledge, information and belief of the party or
individual making such statement, such party or individual in making the
statement confirms that he, she or it has made reasonably diligent inquiry as
to the matters that are the subject of such representations and warranties.
l. Joint and Several Obligations. The warranties,
representations, covenants and agreements of the individual Sellers contained
in this Agreement are joint and several.
m. Expenses. Each party shall pay all of such party's own
expenses relating to the transactions contemplated by this Agreement,
including, without limitation the fees and expenses of their respective counsel
and financial advisers.
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EXHIBIT A
PROMISSORY NOTE
$250,000 Fairfield, Ct.
June 23, 1997
FOR VALUE RECEIVED, JLM MARKETING, INC., promises to pay to the order
of ▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇, at its principal place of business or at such other place
as the holder hereof may specify from time to time, the principal sum of TWO
HUNDRED FIFTY THOUSAND dollars ($250,000), together with interest then due, on
June 1, 2002. Interest on the unpaid balance shall be payable quarterly at the
rate of ten percent (10%) per annum.
All payments on this Note shall be applied first to accrued but unpaid
interest and, thereafter, to unpaid principal. JLM Marketing, Inc. has the
right to make early principal payments without penalty.
Payment of principal and interest on this Note shall be made in such
coin and currency of the United States of America as at the time of payment is
legal tender for the payment of public and private debts and shall be free and
clear of, and paid without deduction for, any and all present and future taxes,
levies, deductions, charges, set-offs, withholdings or any other amount.
The holder hereof may, without notice and without releasing the
liability of any party hereto, grant extensions or renewals hereof from time to
time and for any terms. The holder hereof shall not be liable for or
prejudiced by failure to collect or for lack of diligence in bringing suit on
this Note or any renewal or extension hereof.
The provisions of this Note are to be governed by and construed in
accordance with the laws of the State of Florida without regard to the
principles of conflicts of laws.
The undersigned and all endorsers hereof, jointly and severally, waive
presentment, notice of dishonor, notice of protest, and protest, and all other
notices and demands, other than demand for payment, in connection with the
delivery, acceptance, performance, default, or endorsement of this Note.
JLM MARKETING, INC.
Attest:
By
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▇▇▇ ▇▇▇▇▇, Vice President
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▇▇▇▇▇▇▇ ▇▇▇▇▇▇, Secy
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