EXHIBIT 1
SHARE SALE AND PURCHASE AGREEMENT
Dated as of June 17, 1999
By and Among
ATLAS RECREATIONAL HOLDINGS, INC.
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▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇,
TABLE OF CONTENTS
ARTICLE I
DEFINITIONS....................................................................1
1. Definitions.........................................1
ARTICLE II
TRANSFER AND ISSUANCE OF STOCK.................................................4
2.1 Sale By Selling Shareholders........................4
2.2 Transfer of Funds...................................4
2.3 Closing.............................................4
2.4 Equity Participation at Closing.....................4
ARTICLE III
REPRESENTATIONS OF THE CONTROLLING SHAREHOLDERS................................5
3. Representations of the Selling Shareholders.........5
3.1 Existence and Good Standing................5
3.2 Capital Stock..............................5
3.3 Due Authorization; Enforceability..........6
3.4 Subsidiaries...............................6
3.5 Financial Statements and No Material
Changes. ...............................6
3.6 Books and Records..........................7
3.7 Title to Properties........................7
3.8 Status of the Company......................8
3.9 Owned Real Property; Leases................8
3.10 Material Contracts.........................8
3.11 Consents and Approvals; No Violations......8
3.12 Litigation.................................9
3.13 Taxes.....................................10
3.14 Liabilities...............................10
3.15 Insurance.................................10
3.16 Intellectual Properties...................11
3.17 Compliance with Laws......................11
3.18 No Changes Since Balance Sheet Date. ....11
3.19 Disclosure................................12
3.20 Brokers'or Finders' Fees..................12
3.21 SEC Filings...............................13
3.22 Consents of Distributors, Suppliers
and Manufacturers......................13
(i)
ARTICLE IV
REPRESENTATIONS OF ATLAS......................................................13
4. Representations of Atlas...........................13
4.1 Existence and Good Standing of Atlas; Power
and Authority.............................13
4.2 Consents and Approvals; No Violations.....13
4.3 Purchase for Investment...................14
4.4 Brokers' or Finders' Fees.................14
ARTICLE V
SPECIAL PROVISIONS............................................................14
5.1 Voting Trust..............................14
5.2 ..........................................14
5.3 Consulting Services.......................15
ARTICLE VI
CONDITIONS TO ATLAS'S OBLIGATIONS.............................................15
6. Conditions to Atlas's Obligations..................15
6.1 Truth of Representations and Warranties...15
6.2 Performance of Agreements.................15
6.3 Opinions of the Selling Shareholders......15
6.4 No Material Adverse Change................16
6.5 No Litigation Threatened..................16
6.6 Governmental Approvals....................16
6.7 Resignation of Directors and Officers.....16
6.8 Proceedings...............................16
ARTICLE VII
CONDITIONS TO THE SELLING SHAREHOLDERS........................................16
7. Conditions to the Selling Shareholders'
Obligations.....................................16
7.1 Truth of Representations and Warranties...16
7.2 Performance of Agreements.................17
7.3 Governmental Approvals....................17
7.4 Proceedings...............................17
ARTICLE VIII
SURVIVAL OF REPRESENTATIONS; INDEMNIFICATION..................................17
8. ...................................................17
8.1 Indemnification...........................17
8.2 Third Party Claims........................18
(ii)
ARTICLE IX
TERMINATION AND ABANDONMENT...................................................18
9.1 Termination........................................19
9.2 Effect of Termination..............................19
ARTICLE X
ARBITRATION...................................................................19
10.1 Nature of the Dispute..............................19
10.2 Rules of Arbitration...............................19
10.3 Arbitration Procedure..............................19
10.4 Location; Language.................................20
10.5 Binding Decision and Award.........................20
ARTICLE XI
MISCELLANEOUS.................................................................20
11.1 Expenses...........................................20
11.2 Governing Law......................................20
11.3 Publicity..........................................20
11.4 Notices............................................21
11.5 Parties in Interest................................22
11.6 Counterparts.......................................22
11.7 Entire Agreement...................................22
11.8 Amendments.........................................22
11.9 Severability.......................................22
11.10 Third Party Beneficiaries..........................22
LIST OF SCHEDULES
Schedule 3.4 List of Subsidiaries
Schedule 3.11 Required Consents and Approvals
Schedule 3.15 List of Insurance Coverages
Schedule 3.16 List of Intellectual Property
Consulting Agreements (Proposed)
(iii)
SHARE SALE AND PURCHASE AGREEMENT
SHARE SALE AND PURCHASE AGREEMENT ("this Agreement") dated as of June 10,
1999, by and among:
(a) Atlas Recreational Holdings, Inc., a Florida corporation, organized
under the laws of the State of Florida ("Atlas"),
(b) ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇ and ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇ (the "Selling Shareholders"
or "Sellers").
W I T N E S S E T H:
WHEREAS, the Selling Shareholders collectively and beneficially own
4,405,192 ordinary shares, par value $.01 per share of the Company (2,202,596 by
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Persons), comprising approximately 61.5% of the issued and outstanding share
capital of Holiday RV Superstores, Inc. (the "Company");
WHEREAS, Atlas wishes to acquire from the Selling Shareholders 4,158,244,
shares of common stock of the Company (the "Shares"); and
WHEREAS, it is the intention of the parties that, upon the consummation of
the transactions contemplated by this Agreement, (i) Atlas shall, hold
approximately 58% of the total capital stock of the Company and (ii) the Selling
Shareholders shall own approximately 3.5% of the capital stock of the Company.
NOW, THEREFORE, IT IS AGREED:
ARTICLE I
DEFINITIONS
1. DEFINITIONS. When used in this Agreement, the following terms shall have
the respective meanings specified therefor below (such meanings to be equally
applicable to both the singular and plural forms of the terms defined).
"AFFILIATE" shall mean, with respect to any person, (i) any other Person
directly or indirectly controlling, controlled by, or under common control with
such specified Person, and (ii) the spouse, siblings, parent, child or other
immediate family member of such specified Person. For the purposes of this
definition, "control" (including, with correlative meanings, the terms
"controlled by" and "under common control with"), as used with respect to any
Person, shall mean the possession, directly or indirectly, of the power to
direct or cause the direction of the management
and policies of such Person, whether through the ownership of voting securities
or partnership interests, by agreement or otherwise.
"ATLAS" shall have the meaning ascribed to it in the preamble of this
Agreement.
"BALANCE SHEET" shall have the meaning assigned to such term in Section
3.5.
"BALANCE SHEET DATE" shall have the meaning assigned to such term in
Section 3.5.
"CASH PURCHASE OF SHARES" shall have the meaning assigned to such term in
Section 2.1.
"CLOSING shall have the meaning assigned to such term in Section 2.3.
"CLOSING DATE" shall have the meaning assigned to such term in Section 2.3.
"CODE" shall mean the Internal Revenue Code of 1986, as amended from time
to time and the regulations promulgated and the rulings issued thereunder.
Section references to the Code are to the Code, as in effect at the date of this
Agreement and any subsequent provisions of the Code, amendatory thereof,
supplemental thereto or substituted therefor.
"COMPANY" shall have the meaning assigned to such term in the preamble to
this Agreement.
"COMPANY OPTIONS" shall have the meaning assigned to such term in Section
3.2.
"COMPANY ORDINARY SHARES" shall mean the Company's common shares, with .01
par value.
"COMPANY PROPERTY" shall mean any real property and improvements owned
(directly, indirectly, or beneficially), leased, used, operated or occupied by
the Company and its subsidiaries.
"CONDITION" of any Person shall mean the business, properties, assets,
liabilities, operations, results of operations, condition (financial or
otherwise) or prospects of such Person.
"DISPUTE" shall have the meaning assigned to such term in Section 10.1.
"ERISA" shall mean the Employee Retirement Income Security Act of 1974, as
amended from time to time, and the regulations promulgated and rulings issued
thereunder. Section references to ERISA are to ERISA, as in effect at the date
of this Agreement and any subsequent provisions of ERISA, amendatory thereof,
supplemental thereto or substituted therefor.
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"ERISA AFFILIATE" shall mean each person (as defined in Section 3(9) of
ERISA) which together with the Company or a subsidiary of the Company would be
deemed to be a "single employer" (i) within the meaning of Section 414(b),(c),
(m) or (o) of the Code or (ii) as a result of the Company or a subsidiary of the
Company being or having been a general partner of such person.
"INDEMNIFIED PARTY" shall have the meaning assigned to such term in Section
8.3.
"INDEMNIFYING PARTY" shall have the meaning assigned to such term in
Section 8.3.
"INFORMATION STATEMENT" means the Information Statement provided by the
Company to shareholders in connection with the Notice of Annual Meeting of
Shareholders dated April 8, 1999 for the meeting to be held on May 17, 1999.
"INTELLECTUAL PROPERTY" shall mean domestic and foreign patents, patent
applications, registered and unregistered trademarks, trade names, internet
domain names and service marks, registered and unregistered copyrights, computer
software programs, data bases, inventions, trade secrets and proprietary
information of any type, whether or not written.
"LIENS" shall mean liens, security interests, options, rights of first
refusal, easements, mortgages, charges, indentures, deeds of trust, rights of
way, restrictions on the use of real property, encroachments, licenses to third
parties, leases to third parties, security agreements, or any other encumbrances
and other restrictions or limitations on use of real or personal property or
irregularities in title thereto.
"LOSS" shall have the meaning assigned to such term in Section 8.1.
"PERMITTED LIENS" shall mean (i) Liens reflected in the Balance Sheet, (ii)
Liens consisting of zoning or planning restrictions or regulations, easements,
Permits, restrictive covenants, encroachments and other restrictions or
limitations on the use of real property or irregularities in, or exceptions to,
title thereto which do not materially detract from the value of, or impair the
use of, such property by the Company or such subsidiary.
"PERSON" shall mean and include an individual, a partnership, a joint
venture, a corporation, a limited liability company, a limited liability
partnership, a trust, an incorporated organization and a government or any
department or agency thereof.
"PLAN" shall mean any "employee benefit plan" as defined in Section 3(3) of
ERISA subject to Title I of ERISA or any "plan" subject to Section 4975 of the
Code."
"PURCHASER INDEMNIFIED PARTY" shall have the meaning assigned to such term
in Section 8.2.
"RETURNS" shall have the meaning assigned to such term in Section 3.13(a).
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"SEC FILINGS" means all documents, including 10K's, 10Q's, 8K's, and
Information Statements filed by the Company with the Securities Exchange.
"SELLING SHAREHOLDERS" shall have the meaning assigned to such term in the
preamble to this Agreement.
"SHARES" shall have the meaning assigned to such term in Section 2.1.
"SUBSIDIARIES" means those wholly-owned subsidiary corporations of the
Company as set forth in Schedule 3.4 attached hereto.
"TAXES" means all taxes, assessments, charges, duties, fees, levies or
other governmental charges, including, without limitation, all income,
franchise, profits, capital gains, capital stock, transfer, sales, use,
occupation, property, excise, severance, windfall profits, stamp, license,
payroll, value added, withholding and other taxes, assessments, charges, duties,
import, export or other custom duties, fees, levies or other governmental
charges of any kind whatsoever (whether payable directly or by withholding and
whether or not requiring the filing of a Return), all estimated taxes,
deficiency assessments, additions to tax, penalties and interest and shall
include any liability for such amounts as a result either of being a member of a
combined, consolidated, unitary or affiliated group or of a contractual
obligation to indemnify any person or other entity.
"VOTING TRUST" shall have the meaning assigned to such term in Section 5.1.
ARTICLE II
TRANSFER AND ISSUANCE OF STOCK
2.1 SALE BY SELLING SHAREHOLDERS. Upon the terms and subject to the
conditions set forth in this Agreement the Selling Shareholders agrees to sell
to Atlas, and Atlas, agrees to purchase, on the Closing Date, 4,158,224 Shares
for a purchase price of US$14,000,000 ("Cash Purchase of Shares").
2.2 TRANSFER OF FUNDS. On the Closing Date, the amounts payable pursuant to
the Cash Purchase of Shares shall be transferred by wire transfer of immediately
available funds to the account or accounts identified by the Selling
Shareholders on or before 2:00 pm June 22, 1999.
2.3 CLOSING. The transfers, exchanges and issuance of stock referred to in
Sections 2.1 (the "Closing") shall take place at 2:00 P.M. at the offices of the
Company in Orlando, Florida on June 30th, 1999. Such date is herein referred to
as the "Closing Date."
2.4 EQUITY PARTICIPATION AT CLOSING. Upon the consummation of the
transactions agreed to by the parties in Sections 2.1 above, the Share ownership
of Atlas and the Selling Shareholders
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in the Company shall be 4,158,244 Shares for Atlas (the "Shares") and 246,948
shares for the Selling Shareholders (the "Returned Shares").
ARTICLE III
REPRESENTATIONS OF THE CONTROLLING SHAREHOLDERS
3. REPRESENTATIONS OF THE SELLING SHAREHOLDERS. Each of the Selling
Shareholders, the Selling Shareholders, jointly and severally, represents and
warrants as follows:
3.1 EXISTENCE AND GOOD STANDING. To the best of the Selling Shareholders
knowledge and belief, the Company is a corporation duly organized, validly
existing and in good standing under the laws of the State of Florida. The
Company has the power to own its property and to carry on its business as now
being conducted. The Company is duly qualified to do business and is in good
standing in each jurisdiction in which the character or location of the
properties owned, leased or operated by the Company or the nature of the
business conducted by the Company makes such qualification necessary, except for
such jurisdictions where the failure to be so qualified or licensed and in good
standing would not have a material adverse effect on the Condition of the
Company.
3.2 CAPITAL STOCK. To the best of the Selling Shareholders knowledge and
belief, the Company has an authorized capitalization consisting of 10,000,000
ordinary shares, with .01 par value, of which 7,186,500 shares are issued and
are outstanding (excluding treasury stock that has been redeemed by the
Company). The Company does not have any other class of capital stock. Prior to
Closing, all of the issued and outstanding Shares are owned beneficially and of
record by the Persons and in the proportions set forth of SCHEDULE 3.2 attached
hereto, free and clear of all Liens. All outstanding Company shares of capital
stock of the Company have been duly authorized and validly issued and are fully
paid and nonassessable and are not subject to, nor were they issued in violation
of, any preemptive rights. Except as described above and except for options
described in the Company's Information Statement, no shares of capital stock of
the Company are authorized, issued or outstanding and there are no outstanding
or authorized options, warrants, rights, subscriptions, claims of any character,
agreements, obligations, convertible or exchangeable securities, or other
commitments contingent or otherwise, relating to the capital stock of the
Company, pursuant to which the Company is or may become obligated to issue or
purchase shares of the capital stock of the Company or any securities
convertible into, exchanged for, or evidencing the right to subscribe for, any
shares of the capital stock of the Company (the "Company Options"). The Company
has no authorized or outstanding bonds, debentures, notes or other indebtedness
the holders of which have the right to vote (or convertible or exchangeable into
or exercisable for securities having the right to vote) with the stockholders of
the Company or any of its subsidiaries on any matter.
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3.3 DUE AUTHORIZATION; ENFORCEABILITY.
(a) Each of the Selling Shareholders has the requisite corporate power and
authority to execute and deliver this Agreement and to perform their obligations
hereunder. The execution and delivery of this Agreement by each of the Selling
Shareholders and the performance of their obligation hereunder have been duly
authorized and approved by them and no other corporate or shareholder action on
the part of each of the Selling Shareholders is necessary to authorize the
execution delivery and performance of this Agreement by each of the Selling
Shareholders. This Agreement has been duly executed and delivered by each of the
Selling Shareholders and, assuming due execution of this Agreement and such
other Transaction Document by each other party thereto, is a valid and binding
obligation of each of the Selling Shareholders enforceable against each of them
in accordance with its terms, except to the extent that its enforceability may
be subject to applicable bankruptcy, insolvency, reorganization, moratorium, and
similar laws affecting the enforceability of creditors' rights generally and by
general equitable principles.
(b) The transfer and issuance, as appropriate, of the Shares pursuant to
Sections 2.1 will vest in Atlas, valid title thereto, free and clear of any and
all Liens or other adverse claims. The Shares, upon transfer to and issuance and
delivery to Atlas, will be duly authorized and validly issued, fully paid and
nonassessable and shall not be subject to or issued in violation of any
preemptive rights.
3.4 SUBSIDIARIES. To the best of the Selling Shareholders knowledge and
belief, the Company owns 100% of the outstanding capital stock if those
companies disclosed on Schedule 3.4 attached hereto (the "Subsidiaries") or as
outlined in 1998 10K.
3.5 FINANCIAL STATEMENTS AND NO MATERIAL CHANGES.
(a) The Selling Shareholders have heretofore furnished Atlas with the
balance sheets of the Company as of October 31, 1998, 1997 and 1996,
respectively, and the related consolidated statements of income, and cash flows
for the years then ended, the most recent statement certified by as set forth
therein, and the unaudited balance sheet of the Company as at April 30, 1999 and
the related unaudited draft consolidated statements of income, and cash flows
for the 6-months then ended (the consolidated balance sheet of the Company as at
April 30, 1999 (the "Balance Sheet Date") is hereinafter referred to as the
"Balance Sheet"). To the best of the Selling Shareholders knowledge and belief,
such financial statements, including the footnotes thereto, except as indicated
therein, have been prepared in accordance with generally accepted accounting
principles consistently followed throughout the periods indicated.
(b) To the best of the Selling Shareholders knowledge and belief, the
Balance Sheet fairly presents, in all material respects, the financial condition
of the Company and its subsidiaries at the date thereof and, except as indicated
therein, reflects all claims against and all
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debts and liabilities of the Company and its subsidiaries, fixed or contingent,
as at the date thereof and the related statements of income, and cash flows
fairly present, the results of the operations of the Company and its
subsidiaries and the changes in their financial position for the period
indicated.
(c) To the best of the Selling Shareholders knowledge and belief, subject
to normal year-end adjustments and the absence of footnotes thereto, the Balance
Sheet fairly presents the financial position of the Company and its subsidiaries
as of the date thereof and reflects all material claims and all material debts
and liabilities of the Company and its subsidiaries, fixed or contingent, as of
the date thereof and the related statements of income, and cash flows fairly
present the results of operations and cash flows of the Company and its
subsidiaries and the changes in their financial position for the periods
indicated. Such other balance sheets of the Company referred to in (a) above
fairly present the financial condition of the Company and its subsidiaries at
the respective dates thereof and, except as indicated therein, reflect all
claims against and all debts and liabilities of the Company and its
subsidiaries, fixed or contingent, as at the respective dates thereof, and the
related statements of income, and cash flows fairly present the results of the
operations of the Company and its subsidiaries and the changes in their
financial position for the periods indicated. Since the Balance Sheet Date there
has been (x) no material adverse change in the Condition, of the Company or its
subsidiaries and (y) no change in the Condition of the Company or its
subsidiaries except in the ordinary course of business; and, to the best
knowledge of each of the Selling Shareholders, no fact or condition exists or is
contemplated or threatened which might cause such a change in the future.
3.6 BOOKS AND RECORDS. To the best of the Selling Shareholders knowledge
and belief, the respective minute books of the Company and the Subsidiaries, as
previously made available to Atlas and its representatives, contain accurate
records of all meetings of, and corporate action taken by (including action
taken by written consent) the respective shareholders and Boards of Directors of
the Company and the subsidiaries. The Company nor its subsidiaries have any of
its records, systems, controls, data or information recorded, stored,
maintained, operated or otherwise wholly or partly dependent upon or held by any
means (including any electronic, mechanical or photographic process, whether
computerized or not) which (including all means of access thereto and therefrom)
are not under the exclusive ownership and direct control of the Company.
3.7 TITLE TO PROPERTIES. To the best of the Selling Shareholders knowledge
and belief, except for properties and assets reflected in the Balance Sheet, or
acquired since the Balance Sheet Date, which have been sold or otherwise
disposed of in the ordinary course of business, the Company and/or its
subsidiary has good, valid and marketable title to (a) all of its properties and
assets (real and personal, tangible and intangible), including, without
limitation, all of the properties and assets reflected in the Balance Sheet,
except as indicated in the notes thereto, and (b) all of the properties and
assets purchased or otherwise acquired by the Company or any subsidiary of the
Company since the Balance Sheet Date, in each case free and clear of all Liens
except Permitted Liens. All of the tangible personal property owned by the
Company (and/or its Subsidiaries) and used in its business is in good operating
condition and repair, ordinary wear and tear excepted, and, in the aggregate, is
adequate and suitable for the purposes for which it is presently being used.
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3.8 STATUS OF THE COMPANY To the best of the Selling Shareholders knowledge
and belief, the Company has not conducted any business, incurred any
indebtedness, liability or obligation, entered into any contract or arrangement,
made any commitment or engaged in any activity prior to the Closing Date other
than in the ordinary course of business.
3.9 OWNED REAL PROPERTY; LEASES. To the best of the Selling Shareholders
knowledge and belief, the SEC Filings reflect an accurate and complete list of
all Company owned and leased real estate, together with any other material
leases of personal property (including those of the Subsidiaries). Each lease as
described therein is in full force and effect; all rents and additional rents
due to date on each such lease have been paid; subject to applicable adjustments
for taxes and insurances, in each case, the lessee has been in peaceable
possession since the commencement of the original term of such lease and is not
in default thereunder and no waiver, indulgence or postponement of the lessee's
obligations thereunder has been granted by the lessor; and there exists no event
of default or event, occurrence, condition or act (including the transfer and
issuance of the Shares hereunder) which, with the giving of notice, the lapse of
time or the happening of any further event or condition, would become a default
under such lease. The Company has not violated any of the terms or conditions
under any such lease in any material respect, and, to the best knowledge of the
Selling Shareholders, all of the covenants to be performed by any other party
under any such lease have been fully performed. The property owned and leased by
the Company and each subsidiary of the Company is in a state of good maintenance
and repair and is adequate and suitable for the purposes for which it is
presently being used.
3.10 MATERIAL CONTRACTS. To the best of the Selling Shareholders knowledge
and belief, all material contracts affecting the Company and/or its Subsidiaries
are described in the SEC Filings.
Except as disclosed therein, each contract or agreement is in full force
and effect and there exists no material default or event of default or event,
occurrence, condition or act (including the transfer and issuance of the Shares
hereunder) which, with the giving of notice, the lapse of time or the happening
of any other event or condition, would become a material default or event of
default thereunder. Neither the Company nor any subsidiary of the Company has
violated any of the terms or conditions of any contract or agreement in any
material respect, and, to the best knowledge of each of the Selling Shareholders
all of the covenants to be performed by any other party thereto have been fully
performed in all material respects.
3.11 CONSENTS AND APPROVALS; NO VIOLATIONS.
(a) Other than as set forth on SCHEDULE 3.11 attached hereto, the execution
and delivery of this Agreement by each of the Selling Shareholders and the
consummation by each of the Selling Shareholders of the transactions
contemplated hereby will not: (1) violate any provision of the certificate of
incorporation or by-laws (or other similar organizational document) of the
Company or any of the Company's subsidiaries; (2) violate any statute,
ordinance, rule, regulation, order or decree of any court or of any governmental
or regulatory body, agency or
8
authority applicable to any of the Selling Shareholders, the Company or any of
the Company's subsidiaries or by which any of their respective properties or
assets may be bound; (3) require any of the Selling Shareholders, to make or
obtain any filing with or permit, consent or approval of or give any notice to,
any governmental or regulatory body, agency or authority; or (4) result in a
violation or breach of, conflict with, constitute (with or without due notice or
lapse of time or both) a default (or give rise to any right of termination,
cancellation, payment or acceleration) under, or result in the creation of any
Lien upon any of the properties or assets of the Company under, any of the
terms, conditions or provisions of any note, bond, mortgage, indenture, license,
franchise, permit, agreement, lease, franchise agreement or other instrument or
obligation to which any of the Selling Shareholders, or the Company is a party,
or by which it or any of their respective properties or assets is bound except
in the case of clauses (3) and (4) above, for such filings, permits, consents,
approvals, notices, breaches or conflicts which would not have a material
adverse effect on (i) the Condition of the Company and its subsidiaries, taken
as a whole, or (ii) the ability of each of the Selling Shareholders to
consummate the transactions contemplated hereby or to perform his obligations
hereunder.
(b) Other than as set forth on SCHEDULE 3.11 attached hereto, the execution
and delivery of this Agreement by the Company and the consummation by the
Company of the transactions contemplated hereby will not: (1) violate any
provision of the certificate of incorporation or by-laws (or other similar
organizational documents) of the Company or any of the Company's subsidiaries;
(2) violate any statute, ordinance, rule, regulation, order or decree of any
court or of any governmental or regulatory body, agency or authority applicable
to the Company or any of the Company's subsidiaries or by which any of their
respective properties or assets may be bound; (3) require the Company or any of
the Company's subsidiaries to make or obtain any filing with or permit, consent
or approval of or give any notice to, any governmental or regulatory body,
agency or authority; or (4) result in a violation or breach of, conflict with,
constitute (with or without due notice or lapse of time or both) a default (or
give rise to any right of termination, cancellation, payment or acceleration)
under, or result in the creation of any Lien upon any of the properties or
assets of the Company or any of the Company's subsidiaries under, any of the
terms, conditions or provisions of any note, bond, mortgage, indenture, license,
franchise, permit, agreement, lease, franchise agreement or other instrument or
obligation to which the Company or any of the Company' subsidiaries is a party,
or by which the Company or any of the Company's subsidiaries or any of their
respective properties or assets is bound except in the case of clauses (3) and
(4) above, for such violations, filings, permits, consents, approvals, notices,
breaches or conflicts which would not have a material adverse effect on (i) the
Condition of the Company and its subsidiaries, taken as a whole, or (ii) the
ability of the Company to consummate the transactions contemplated hereby or to
perform its obligations hereunder.
3.12 LITIGATION. To the best of the Selling Shareholders knowledge and
belief, there is no action, suit, proceeding at law or in equity, arbitration or
administrative or other proceeding by or before (or to the best knowledge of any
of the Selling Shareholders) any governmental or other instrumentality or
agency, pending, or, to the best knowledge of any of the Selling Shareholders,
threatened, against or affecting the Company or the Subsidiaries, or any of
9
their properties or rights which would materially adversely affect the right or
ability of the Company or any of its Subsidiaries to carry on their respective
business as now conducted, or to own their respective assets, or which would
materially adversely affect the Condition of the Company and its subsidiaries,
taken as a whole; and none of the Selling Shareholders know of any valid basis
for any such action, proceeding or investigation. Neither the Company is subject
to any judgment, order or decree entered in any lawsuit or proceeding which
would have a material adverse effect on the Condition of the Company.
3.13 TAXES.
(a) TAX RETURNS. To the best of the Selling Shareholders knowledge and
belief, the Company has timely filed or caused to be timely filed with the
appropriate taxing authorities all returns, statements, forms and reports for
Taxes ("Returns") that are required to be filed by, or with respect to the
Company on or prior to the Closing Date. Such Returns have accurately reflected
and will accurately reflect all liabilities for Taxes of the Company and of each
of the Company for the periods covered thereby.
(b) PAYMENT OF TAXES. To the best of the Selling Shareholders knowledge and
belief, all Taxes and Tax liabilities of the Company and of each of the
Company's subsidiaries for all taxable years or periods that end on or before
the Closing Date and, with respect to any taxable year or period beginning
before and ending after the Closing Date, the portion of such taxable year or
period ending on and including the Closing Date ("Pre-Closing Period") have been
timely paid or accrued and adequately disclosed and fully provided for on the
books and records of the Company and of each of the Subsidiaries.
(c) To the best of the Selling Shareholders knowledge and belief, all Taxes
which any of the Company or any of the Company's subsidiaries is (or was)
required by law to withhold or collect have been duly withheld or collected, and
have been timely paid over to the proper authorities to the extent due and
payable.
3.14 LIABILITIES. To the best of the Selling Shareholders knowledge and
belief, neither the Company nor any of its subsidiaries has any outstanding
claims, liabilities or indebtedness, contingent or otherwise, except as set
forth in the Balance Sheet or referred to in the footnotes thereto, other than
liabilities to trade creditors incurred subsequent to the Balance Sheet Date in
the ordinary course of business not involving borrowings by the Company or any
subsidiary of the Company. Neither the Company nor any of its subsidiaries is in
default in respect of the terms or conditions of any indebtedness.
3.15 INSURANCE. To the best of the Selling Shareholders knowledge and
belief, set forth on SCHEDULE 3.15 attached hereto is a complete list of
insurance policies which the Company and its subsidiaries maintain with respect
to their businesses, properties or employees. Such policies are in full force
and effect and are free from any right of termination on the part of the
insurance carriers. Such policies, with respect to their amounts and types of
coverage, are adequate to insure
10
fully against risks to which the Company, its subsidiaries and their property
and assets are normally exposed in the operation of their respective businesses.
Since December 31, 1998, there has not been any material adverse change in the
Company's or any subsidiary's relationship with its insurers or in the premiums
payable pursuant to such policies.
3.16 INTELLECTUAL PROPERTIES. To the best of the Selling Shareholders
knowledge and belief, the operation of the business of the Company and its
subsidiaries requires no rights under Intellectual Property other than rights
under Intellectual Property listed on SCHEDULE 3.16 attached hereto and rights
granted to the Company and its subsidiaries pursuant to agreements listed on
SCHEDULE 3.16. Within the six year period immediately prior to the date of this
Agreement, the business of the Company and its subsidiaries made use of no
Intellectual Property rights other than rights under Intellectual Property
listed on SCHEDULE 3.16 and rights granted to the Company and its subsidiaries
pursuant to agreements listed on SCHEDULE 3.16. Except as otherwise set forth on
SCHEDULE 3.16, the Company and its subsidiaries own all right, title and
interest in and full legal, equitable and beneficial ownership of the
Intellectual Property listed on SCHEDULE 3.16 including, without limitation,
exclusive rights to use, sell, transfer, assign and license the same. Each item
of Intellectual Property listed on SCHEDULE 3.16 has been duly registered with,
filed in, or issued by the appropriate domestic or foreign governmental agency,
to the extent required, and each such registration, filing and issuance remains
in full force and effect. Except as set forth on SCHEDULE 3.16, no claim adverse
to the interests of the Company and its subsidiaries in the Intellectual
Property or agreements listed in SCHEDULE 3.16 has been made or threatened in
litigation or otherwise and no basis exists for such claim. To the best
knowledge of each of the Selling Shareholders, no Person has infringed or
otherwise violated the Company's or any of its subsidiaries' right in any of the
Intellectual Property or agreements listed on SCHEDULE 3.16. Except as set forth
on SCHEDULE 3.16, no litigation is pending wherein the Company or any of its
subsidiaries is accused of infringing or otherwise violating the Intellectual
Property right of another, or of breaching a contract conveying rights under
Intellectual Property. No such claim has been asserted or threatened against the
Company, nor, to the best knowledge of each of the Selling Shareholders, are
there any facts that would give rise to such a claim.
3.17 COMPLIANCE WITH LAWS. To the best of the Selling Shareholders
knowledge and belief, the Company is in compliance in all material respects with
all applicable laws, statutes, ordinances, regulations, orders, judgments and
decrees of any government or political subdivision thereof, whether domestic or
foreign, or any agency or instrumentality thereof, or any court or arbitrator,
and has not received any notice that any violation of the foregoing is being or
may be alleged, including but not limited to any environmental laws and
regulations, except for the property owned by the Company in Hillsborough,
Florida, which property has been properly included in the applicable State of
Florida superfund program.
3.18 NO CHANGES SINCE BALANCE SHEET DATE. To the best of the Selling
Shareholders knowledge and belief, since the Balance Sheet Date, except as
expressly permitted or required by this Agreement, neither the Company nor any
of its subsidiaries has (a) incurred any liability or obligation of any nature
(whether accrued, absolute, contingent or otherwise), except in
11
the ordinary course of business consistent with past practice, (b) permitted any
of its assets to be subjected to any Lien (other than Permitted Liens), (c)
sold, transferred or otherwise disposed of any assets except in the ordinary
course of business consistent with past practice, or made any acquisition of all
or any part of the properties, capital stock or business of any other Person,
(d) made any capital expenditure or commitment therefor, (e) declared or paid
any dividend or made any distribution on any shares of its capital stock, (f)
redeemed, purchased or otherwise acquired any shares of its capital stock, (g)
granted or issued any Option, with respect to any shares of its capital stock,
(h) made any bonus or profit sharing distribution or payment of any kind, (i)
increased its indebtedness for borrowed money, except current borrowings from
banks in the ordinary course of business, or made any loan to any Person, (j)
written off as uncollectible any notes or accounts receivable, except write-offs
in the ordinary course of business charged to applicable reserves, none of which
individually or in the aggregate is material to the Company and its
subsidiaries, (k) granted any increase in the rate of wages, salaries, bonuses
or other remuneration of any director or executive employee or for any other
employees, except in the ordinary course of business, consistent with past
practice with the exception of certain stock options that have been granted to
Board members, (l) canceled or waived any claims or rights of substantial value,
(m) made any change in any method of accounting or auditing practice, (n)
otherwise conducted its business or entered into any transaction, except in the
usual and ordinary manner and in the ordinary course of business, or (o) agreed,
whether or not in writing, to do any of the foregoing. To the best knowledge of
the Selling Shareholders, no fact or condition exists or is contemplated or
threatened which might cause any change described in clauses (a) through (n)
above in the future.
3.19 DISCLOSURE. To the best of the Selling Shareholders knowledge and
belief, none of this Agreement, the financial statements (including the
footnotes thereto) referred to in Section 3.5(a) of this Agreement, any Schedule
or certificate attached hereto or delivered pursuant to this Agreement or any
document or statement in writing which has been supplied by or on behalf of the
Selling Shareholders, or by any of the Company's directors or officers in
connection with the transactions contemplated by this Agreement contains any
untrue statement of a material fact, or omits any statement of a material fact
necessary in order to make the statements contained herein or therein not
misleading. There is no fact known to the Selling Shareholders, which would
materially adversely affect the Condition of the Company or any of its
subsidiaries which has not been set forth in this Agreement, the Balance Sheet
and the related consolidated statements of income, and cash flows (including the
footnotes thereto), any Schedule or certificate attached hereto or delivered
pursuant to this Agreement or any document or statement in writing which has
been supplied by or on behalf of the Selling Shareholders, or by any of the
Company's directors or officers in connection with the transactions contemplated
by this Agreement.
3.20 BROKERS' OR FINDERS' FEES. No agent, broker, person or firm acting on
behalf of either the Selling Shareholders, is, or will be, entitled to any
commission or brokers' or finders' fees from any of the parties hereto, or from
any Affiliate of any of the parties hereto, in connection with any of the
transactions contemplated by this Agreement, except for World Business Brokers,
whose commission shall be paid for by Atlas pursuant to a separate agreement.
12
3.21 SEC FILINGS. To the best of the Selling Shareholders knowledge and
belief, all SEC Filings are accurate, complete and in compliance with applicable
federal regulations.
3.22 CONSENTS OF DISTRIBUTORS, SUPPLIERS AND MANUFACTURERS. Under the terms
of certain dealer sales and service agreements involving the Company and/or its
Subsidiaries (the "Dealer Agreements"), the Company is obligated to obtain the
consent of the manufacturer or distributor (herein referred to as the
"Manufacturers") to a transaction including the change of the controlling
interest in the Company. In connection therewith, the Selling Shareholders
warrant and represent that they shall within six (6) months from the Closing
Date obtain the consent of Manufacturers under Dealer Agreements including at
least seventy-five percent (75%) of the dollar volume of the Company and its
Subsidiaries, or to the extent that the Selling Shareholders are unable to
obtain a suitable number of consents, then the Selling Shareholders shall be
obligated to substitute those Manufacturers that terminate their agreements with
the Company as a result of the change in control with manufacturers distributing
products of a similar nature and under terms and conditions comparable to the
Dealer Agreements that were terminated.
ARTICLE IV
REPRESENTATIONS OF ATLAS
4. REPRESENTATIONS OF ATLAS. Atlas represents, warrants and agrees as
follows:
4.1 EXISTENCE AND GOOD STANDING OF ATLAS; POWER AND AUTHORITY. Atlas is a
corporation duly organized, validly existing and in good standing under the laws
of the State of Florida. Atlas has the power and authority to enter into,
execute and deliver this Agreement and perform its obligations hereunder. This
Agreement has been duly authorized and approved by all required corporate action
of Atlas. This Agreement has been duly executed and delivered by Atlas and,
assuming the due execution and delivery hereof, this Agreement constitutes a
valid and binding obligation of Atlas, enforceable against Atlas in accordance
with its terms, except to the extent that its enforceability may be subject to
applicable bankruptcy, insolvency, reorganization, moratorium or similar laws
effecting the enforcement of creditors' rights generally and to general
equitable principles.
4.2 CONSENTS AND APPROVALS; NO VIOLATIONS. The execution and delivery of
this Agreement by Atlas and the consummation by Atlas of the transactions
contemplated hereby will not: (1) violate any provision of its articles or
bylaws; (2) violate any statute, ordinance, rule, regulation, order or decree of
any court or of any governmental or regulatory body, agency or authority
applicable to Atlas or by which any of its properties or assets may be bound;
(3) require Atlas to make or obtain any filing with or permit, consent or
approval of or give any notice to, any governmental or regulatory body, agency
or authority; (4) result in a violation or breach of, conflict with, constitute
(with or without due notice or lapse of time or both) a default (or give rise to
any right of termination, cancellation, payment or acceleration) under, any of
the terms, conditions or provisions of any note, bond, mortgage, indenture,
license, franchise, permit, agreement, lease,
13
franchise agreement or other instrument or obligation to which Atlas is a party,
or by which any of its properties or assets is bound except in the case of
clauses (3) and (4) above for such violations, filings, permits, consents,
approvals, notices, breaches or conflicts which could not have a material
adverse effect on the ability of Atlas to consummate the transactions
contemplated hereby or to perform its obligations hereunder.
4.3 PURCHASE FOR INVESTMENT. Atlas will acquire the Shares for its own
account for investment purposes only and not with a view toward any resale or
distribution thereof; provided, however, that the disposition of the Shares by
Atlas shall at all times remain within the sole control of Atlas.
4.4 BROKERS' OR FINDERS' FEES. No agent, broker, person or firm acting on
behalf of Atlas is, or will be, entitled to any commission or brokers' or
finders' fees from any of the parties hereto, or from any Affiliate of the
parties hereto, in connection with any of the transactions contemplated by this
Agreement, exclude World Business Brokers, whose commission shall be paid by
Atlas.
4.5 Atlas represents to Selling Shareholders that it has secured Directors
and Officers Insurance coverage for this transaction.
4.6 Atlas hereby agrees to produce at its expense a Shareholder Information
Statement sent out to all Shareholders of record as of June 30, 1999, outlining
the Company's strategy for an industry wide "roll up". The shareholders of the
Company will also be given an opportunity to consider tendering their shares at
no less than the identical price paid by Atlas to the Selling shareholders in
this transaction within approximately 1 one year (1) after date of Closing.
ARTICLE V
SPECIAL PROVISIONS
5.1 VOTING TRUST. The selling shareholders are retaining 246,948 shares of
common stock of the Company ("Retained Shares"). In connection therewith, at the
closing, the Shareholders agree to grant to Atlas/or its designee an irrevocable
proxy for the Retained Shares providing the right of Atlas to vote the shares on
behalf of Selling Shareholders for a period of six (6) months after the Closing
Date.
5.2 Selling Shareholders agree that the Retained Shares shall be subject
to a lock out whereby they shall not be entitled to sell the Retained Shares for
a period of six (6) months after the Closing Date.
14
5.3 CONSULTING SERVICES. Atlas shall cause the Company to enter into
consulting agreements (the "Consulting Agreement") with ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ and
▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ that will provide as follows:
(a) ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇ shall receive compensation payable on a monthly
basis, equal to $65,000 per year, and ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇ shall be entitled to
receive compensation of $65,000 per year, plus a reimbursement of applicable
travel expenses and other Company related expenses, together with health
insurance consistent with past practices.
(b) The term of the Consulting Agreement shall be for two years from
the date of closing.
(c) The Consulting Agreements shall provide for standard non-compete,
non-disclosure and confidentiality provisions that will restrict consultants
from competing in any business that is similar to that of the Company for a
period of 2 years after the termination of the Consulting Agreement.
At the closing, Atlas as the majority shareholder of the Company, shall
cause the Company to enter into Consulting Agreements as set forth above and
Kindlunds agree to execute such Consulting Agreements at the closing.
ARTICLE VI
CONDITIONS TO ATLAS'S OBLIGATIONS
6. CONDITIONS TO ATLAS'S OBLIGATIONS. Atlas's obligation to or purchase the
pursuant to Sections 2.1 and 2.2 on the Closing Date is conditioned upon
satisfaction, at or prior to the Closing, of the following conditions:
6.1 TRUTH OF REPRESENTATIONS AND WARRANTIES. The representations and
warranties of the Selling Shareholders, contained in this Agreement or in any
Schedule attached hereto shall be true and correct in all respects on and as of
the Closing Date, and each of the Selling Shareholders, the Selling Shareholders
and the Company shall have delivered to Atlas a certificate, dated the Closing
Date, to such effect.
6.2 PERFORMANCE OF AGREEMENTS. All of the agreements of each of the
Selling Shareholders to be performed prior to the Closing pursuant to the terms
of this Agreement shall have been duly performed in all material respects, and
each of the Selling Shareholders, the Selling Shareholders and the Company shall
have delivered to Atlas a certificate, dated the Closing Date, to such effect.
6.3 OPINIONS OF THE SELLING SHAREHOLDERS. The Selling Shareholders, have
furnished Atlas with a favorable opinion of counsel, dated the Closing Date, in
form and substance
15
reasonably satisfactory to Atlas and its counsel, providing that the Selling
Shareholders are the owners of the Shares free and clear of any claim, lien,
restriction or encumbrance, legend or securities restrictions as to the sale of
same to Atlas and that the Selling Shareholders have the full right and
authority to transfer the Shares to Atlas.
6.4 NO MATERIAL ADVERSE CHANGE. Prior to the Closing Date there shall have
been no material adverse change in the Condition of the Company and the Selling
Shareholders shall have delivered to Atlas a certificate, dated the Closing
Date, to such effect.
6.5 NO LITIGATION THREATENED. No material action or proceedings shall have
been instituted or threatened before a court or other government body or by any
public authority to restrain or prohibit any of the transactions contemplated
hereby, and the Selling Shareholders shall have delivered to Atlas a
certificate, dated the Closing Date, to such effect.
6.6 GOVERNMENTAL APPROVALS. All other governmental and third party
consents, waivers and approvals, if any, disclosed on any Schedule attached
hereto or necessary to permit the consummation of the transactions contemplated
by this Agreement shall have been received.
6.7 RESIGNATION OF DIRECTORS AND OFFICERS. Each of the existing Directors
and Officers of the Company shall have resigned from his or her position as a
member of the Board of Directors and as an officer of the Company effective on
the Closing Date, except for ▇. ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇.
6.8 PROCEEDINGS. All proceedings to be taken in connection with the
transactions contemplated by this Agreement and all documents incident thereto
shall be satisfactory in form and substance to Atlas and its counsel, and Atlas
shall have received copies of all such documents and other evidences as they or
their counsel may reasonably request in order to establish the consummation of
such transactions and the taking of all proceedings in connection therewith.
ARTICLE VII
CONDITIONS TO THE SELLING SHAREHOLDERS
7. CONDITIONS TO THE SELLING SHAREHOLDERS OBLIGATIONS. The transfer of the
Shares by the Selling Shareholders pursuant to Section 2.1 on the Closing Date
is conditioned upon satisfaction, at or prior to such date, of the following
conditions:
7.1 TRUTH OF REPRESENTATIONS AND WARRANTIES. The representations and
warranties of Atlas contained in this Agreement shall be true and correct in all
respects on and as of the Closing Date, and Atlas shall have delivered to the
Selling Shareholders, dated the Closing Date, to such effect.
16
7.2 PERFORMANCE OF AGREEMENTS. All of the agreements of Atlas to be
performed prior to the Closing pursuant to the terms of this Agreement shall
have been duly performed in all material respects, and Atlas shall have
delivered to the Selling Shareholders a certificate, dated the Closing Date, to
such effect.
7.3 GOVERNMENTAL APPROVALS. All other governmental consents and approvals,
if any, necessary to permit the consummation of the transactions contemplated by
this Agreement shall have been received.
7.4 PROCEEDINGS. All proceedings to be taken in connection with the
transactions contemplated by this Agreement and all documents incident thereto
shall be reasonably satisfactory in form and substance to the Selling
Shareholders, and their counsel, and the Selling Shareholders shall have
received copies of all such documents and other evidences as they or their
counsel may reasonably request in order to establish the consummation of such
transactions and the taking of all proceedings in connection therewith.
ARTICLE VIII
SURVIVAL OF REPRESENTATIONS; INDEMNIFICATION
8. The representation and the warranties of the Selling Shareholders, on
the one hand, and Atlas, on the other hand, contained in this Agreement or in
any Schedule attached hereto shall survive the closing for a period of six (6)
months, except that the representations of the Selling Shareholders contained in
Paragraphs 3.3 and 3.22 shall survive the closing for the applicable statute of
limitations.
8.1 INDEMNIFICATION.
(a) The Selling Shareholders agree, jointly and severally, to
indemnify and hold Atlas and its Affiliates and their respective officers,
directors, employees, agents and Affiliates and their respective successors and
assigns (each a "Purchaser Indemnified Party") harmless from damages, losses,
liabilities, obligations, claims of any kind, interest or expenses (including,
without limitation, reasonable attorneys' fees and expenses) ("Loss") suffered
or paid, directly or indirectly, as a result of, in connection with or arising
out of (i) the failure of any representation or warranty made by each of the
Selling Shareholders, in this Agreement (whether or not contained in Article
III) or in any Schedule attached hereto to be true and correct in all respects
as of the date of this Agreement and as of the Closing Date (without giving
effect to any "materiality," "material adverse effect" or similar qualification,
or, (ii) any breach or alleged breach by any of the Selling Shareholders, of any
of their covenants or agreements contained herein.
(b) Atlas agrees to indemnify, defend and hold the Selling
Shareholders, (each a "Stockholder Indemnitee") harmless from Losses, suffered
or paid, directly or indirectly, as a result of, in connection with or arising
out of (i) the failure of any representation or warranty made
17
by Atlas in this Agreement (whether or not contained in Article IV) to be true
and correct in all respects as of the date of this Agreement and as of the
Closing Date and (ii) any breach or alleged breach by Atlas of any of the
covenants or agreement contained herein.
(c) The obligations to indemnify and hold harmless pursuant to this
Section 8.1 shall survive the consummation of the transactions contemplated by
this Agreement for a period of six (6) months period, subject to claims for
indemnification filed prior to the end of the six (6) months period being
finally resolved after the resolve of this period. However, no claim for
indemnification shall be made for any specific item unless the claim exceeds the
sum of $25,000 (a "Qualified Claim"), except that once the aggregate amount of
Qualified Claims exceeds the sum of $250,000.
8.2 THIRD PARTY CLAIMS. If a claim by a third party is made against any
Person entitled to indemnification pursuant to Section 8.1 hereof (an
"Indemnified Party"), and if such party intends to seek indemnity with respect
thereto under this Article VIII, such Indemnified Party shall promptly notify
the party obligated to indemnify such Indemnified Party (the "Indemnifying
Party") of such claims; PROVIDED, that the failure to so notify shall not
relieve the Indemnifying Party of its obligations hereunder, except to the
extent that the Indemnifying Party is actually and materially prejudiced
thereby. The Indemnifying Party shall have thirty days (30) after receipt of
such notice to assume the conduct and control, through counsel reasonably
acceptable to the Indemnified Party at the expense of the Indemnifying Party, of
the settlement or defense thereof; PROVIDED that (i) the Indemnifying Party
shall permit the Indemnified Party to participate in such settlement or defense
through counsel chosen by such Indemnified Party, provided that the fees and
expenses of such counsel shall be borne by such Indemnified Party and (ii) the
Indemnifying Party shall promptly assume and hold such Indemnified Party
harmless from and against the full amount of any Loss resulting therefrom. So
long as the Indemnifying Party is reasonably contesting any such claim in good
faith, the Indemnified Party shall not pay or settle any such claim.
Notwithstanding the foregoing, the Indemnified Party shall have the right to pay
or settle any such claim, provided that in such event it shall waive any right
to indemnity therefor by the Indemnifying Party for such claim unless the
Indemnifying Party shall have consented to such payment or settlement. If the
Indemnifying Party does not notify the Indemnified Party within 30 days after
the receipt of the Indemnified Party's notice of a claim of indemnity hereunder
that it elects to undertake the defense thereof, the Indemnified Party shall
have the right to contest, settle or compromise the claim but shall not thereby
waive any right to indemnity therefor pursuant to this Agreement. The
Indemnifying Party shall not, except with the consent of the Indemnified Party,
enter into any settlement that does not include as an unconditional term thereof
the giving by the Person or Persons asserting such claim to all Indemnified
Parties of an unconditional release from all liability with respect to such
claim or consent to entry of any judgment.
ARTICLE IX
TERMINATION AND ABANDONMENT
18
9.1 TERMINATION. This Agreement may be terminated and the transactions
contemplated hereby may be abandoned, at any time prior to the Closing:
(a) by mutual consent of the Selling Shareholders, on the one hand, and
of Atlas, on the other hand;
(b) by Atlas, if the Closing shall not have occurred by June 30, 1999
at 9:30 am; PROVIDED, that the right to terminate this Agreement under this
Section 9.1(b) shall not be available to Atlas if their failure to fulfill any
of their obligation under this Agreement shall be the cause of the failure of
the Closing to occur on or before such date;
(c) by either the Selling Shareholders, on the one hand, or Atlas, on
the other hand, if there has been a material breach of any covenant or a
material breach of any representation or warranty of Atlas, the Selling
Shareholders, Atlas, respectively; or
(d) if full funding of the transaction does not occur before June 30,
1999 at 2:00 pm.
9.2 EFFECT OF TERMINATION. In the event of the termination of this
Agreement pursuant to Section 9.1 by Atlas, on the one hand, or by the Selling
Shareholders, on the other hand, written notice thereof shall forthwith be given
to the other parties specifying the provision hereof pursuant to which such
termination is made, and this Agreement shall be terminated and there shall be
no liability hereunder on the part of any Party hereto. Nothing in this Section
9.2 shall relieve any party of liability for any willful breach of this
Agreement.
ARTICLE X
ARBITRATION
10.1 NATURE OF THE DISPUTE. Any dispute arising out of or relating to this
Agreement, including without limitation, the interpretation of any provision of
this Agreement or the breach, termination or invalidity of this Agreement (a
"Dispute") shall be settled exclusively and finally by arbitration. It is
specifically understood and agreed that any Dispute may be submitted to
arbitration irrespective of the magnitude thereof, the amount in controversy or
whether such Dispute would otherwise be considered justifiable or ripe for
resolution by a court.
10.2 RULES OF ARBITRATION. The Arbitration shall be conducted in accordance
with the Rules of Arbitration of the American Arbitration Association ("AAA") as
in effect on the date of this Agreement (the "AAA Rules"), except to the extent
that the AAA Rules conflict with the provisions of this Section 10.2, in which
event the provisions of this Section 10.2 shall control.
10.3 ARBITRATION PROCEDURE. The arbitral tribunal shall consist of three
(3) arbitrators. The parties agree that the choice of arbitrators shall be as
follows: (i) if there are only two sides to a
19
Dispute, one arbitrator shall be appointed by each side and the third shall be
selected by the two party-appointed arbitrators or, failing agreement, by the
AAA, in accordance with the AAA Rules, or (ii) if there are more than two sides
to a Dispute, then the three arbitrators shall be appointed by the parties to
the Dispute in accordance with the AAA Rules established for the appointment of
a sole arbitrator. If the parties are not able to agree on all three arbitrators
then the AAA shall appoint the remaining one, two or three arbitrators.
10.4 LOCATION; LANGUAGE. The arbitration shall be conducted in Orlando,
Florida, or such other place in the United States of America as mutually agreed
by the parties to the arbitration proceeding.
10.5 BINDING DECISION AND AWARD. Any decision or award of the arbitral
tribunal shall be final and binding upon the parties to the arbitration
proceeding. The parties hereby waive to the extent permitted by law any rights
to appeal or to review of such award by any court or tribunal. The parties agree
that the arbitral award may be enforced against the parties to the arbitration
proceeding or their assets wherever they may be found and that a judgment upon
the arbitral, and that the arbitrator(s) may award attorneys' fees and costs to
the prevailing party.
ARTICLE XI
MISCELLANEOUS
11.1 EXPENSES. The parties hereto shall pay all of their own expenses
relating to the transactions contemplated by this Agreement, including, without
limitation, the fees and expenses of their respective counsel and financial
advisers.
11.2 GOVERNING LAW. The interpretation and construction of this Agreement,
and all matters relating hereto, shall be governed by the laws of the State of
Florida applicable to agreements executed and to be performed solely within such
State.
11.3 PUBLICITY. Except as otherwise required by law, none of the parties
hereto shall issue any press release or make any other public statement, in each
case relating to, connected with or arising out of this Agreement or the matters
contained herein, without obtaining the prior approval of Atlas on the one hand
and of the Selling Shareholders on the other hand, to the contents and the
manner of presentation and publication thereof.
20
11.4 NOTICES. Any notice or other communication required or permitted under
this Agreement shall be sufficiently given if delivered in person or sent by
telecopy or by registered or certified mail, postage prepaid, addressed as
follows:
If to the Selling Shareholders:
▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
Holiday RV Superstores, Inc
▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇
Telephone No. (▇▇▇) ▇▇▇-▇▇▇▇
Telecopier No. (▇▇▇) ▇▇▇-▇▇▇▇
with copies to:
▇▇▇▇▇ ▇▇▇▇
▇▇▇ ▇. ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇, #▇▇▇
▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇
Telephone No. (▇▇▇) ▇▇▇-▇▇▇▇
Telecopier No. (▇▇▇) ▇▇▇-▇▇▇▇
If to Atlas to:
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c/o Atlas Recreation Holdings, Inc.
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Telephone No. (▇▇▇) ▇▇▇-▇▇▇▇
Telecopier No. (▇▇▇) ▇▇▇-▇▇▇▇
With a copy to:
Fieldstone ▇▇▇▇▇▇ ▇▇▇▇▇ & ▇▇▇▇▇▇▇
First Union Financial Center
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Telephone No. (▇▇▇) ▇▇▇-▇▇▇▇
Telecopier No. (▇▇▇) ▇▇▇-▇▇▇▇
Attention: ▇▇▇▇▇▇ ▇. Fieldstone
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Wiring Funds:
▇▇▇▇▇ ▇▇▇▇
Prudential Securities
One Orlando Center
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Telephone No. (▇▇▇) ▇▇▇-▇▇▇▇
Telecopier No. (▇▇▇) ▇▇▇-▇▇▇▇
11.5 PARTIES IN INTEREST. This Agreement may not be transferred, assigned,
pledged or hypothecated by any party hereto, other than by operation of law.
This Agreement shall be binding upon and shall inure to the benefit of the
parties hereto and their respective heirs, executors, administrators, successors
and permitted assigns.
11.6 COUNTERPARTS. This Agreement may be executed in two or more
counterparts, all of which taken together shall constitute one instrument.
11.7 ENTIRE AGREEMENT. This Agreement, including the other documents
referred to herein which form a part hereof, contains the entire understanding
of the parties hereto with respect to the subject matter contained herein and
therein. This Agreement supersedes all prior agreements and understandings
between the parties with respect to such subject matter.
11.8 AMENDMENTS. This Agreement may not be changed orally, but only by an
agreement in writing signed by each party hereto.
11.9 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.
11.10 THIRD PARTY BENEFICIARIES. Each party hereto intends that this
Agreement shall not benefit or create any right or cause of action in or on
behalf of any Person other than the parties hereto.
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IN WITNESS WHEREOF, each of Atlas, the Selling Shareholders and the
Company has caused its corporate name to be hereunto subscribed by its officer
thereunto duly authorized, and each of the Selling Shareholders have signed this
Agreement, all as of the day and year first above written.
ATLAS RECREATION HOLDINGS, INC.
By: /s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇
-------------------------------------
▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇
SELLING SHAREHOLDERS:
By: /s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
-------------------------------------
▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
By: /s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
--------------------------------------
▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇,
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