Exhibit 2.0
AGREEMENT
AND
PLAN OF REORGANIZATION
BY AND AMONG
OUTDOOR RESORTS, INC.,
INTELLIWORXX, INC.,
AND
XXXXX X. XXXXXX, XXXXXXX X. XXXXX, XXXXXX X. XXXXX, XX.
XXXXXXX X. XXXXXXXX, XXX X. XXXXXXXXX,
AND XXXXXXXXXXX X. XXXXX,
THE SHAREHOLDERS OF
INTELLIWORXX, INC.
Date: November 23, 1998
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Agreement and Plan of Reorganization ("Agreement"), dated as of November
23, 1998, by and among Outdoor Resorts, Inc., a Florida corporation ("Outdoor");
Intelliworxx, Inc., a Florida corporation (the "Acquiree"); and the individuals
whose names appear on the signature page hereof, ("Selling Shareholders").
RECITALS
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A. As of the date hereof, there are an aggregate of 50,000,000 shares of
Outdoor's Common Stock, no par value (the "Outdoor Shares") authorized, of which
1,000,000 shares are issued and outstanding. The Board of Directors will no
later than the Effective Date (as defined in Article 4 hereof) duly authorize
the amendment of the Company's Articles of Incorporation so as to increase the
authorized Outdoor Shares to 100,000,000. Upon the Effective Date, 12,000,000
shares are to be issued as herein below more fully described in Section 4 of
this Agreement.
B. Intelliworxx, Inc. is a Florida corporation, whose issued and
outstanding common stock (the "Intelliworxx Stock") is owned, beneficially and
of record, by the individuals whose names appear on the signature page hereof
under the designation "Selling Shareholders", who together own all of the
600,000 issued and outstanding shares of the Intelliworxx Stock, each owning the
number of shares set forth opposite their respective names.
C. The parties hereto intend that the issuance of the Outdoor Shares in
exchange for the Intelliworxx Stock shall be in accordance with the applicable
statutes of the State of Florida and shall qualify as a "tax-free"
reorganization within the meaning of Section 368(a)(2)(D) of the Internal
Revenue Code of 1986, as amended (the "Code").
NOW, THEREFORE, in consideration of the foregoing promises and the mutual
covenants, agreements and representations contained herein, the parties hereto
agree as follows:
OPERATIVE PROVISIONS
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ARTICLE 1
MERGER
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1.1 Transfer of Property and Liabilities. Upon the Effective Date (as defined in
Article 4 hereof) of the merger, the separate existence of Acquiree shall cease;
all of the outstanding shares of stock of Acquiree shall be exchanged for and
converted into the Outdoor Shares; and upon the filing of a Certificate of
Merger with the Secretary of State of the State of Florida, Outdoor shall
possess all the rights, privileges, immunities, powers and purposes, and all
property, causes of action and every other asset of Acquiree and shall assume
and be liable for all the liabilities, obligations and penalties of Acquiree, in
accordance with Florida law.
1.2 Surviving Corporation. Following the merger, the existence of Outdoor shall
continue unaffected and unimpaired by the merger, with all the rights,
privileges, immunities and powers, and subject to all the duties and liabilities
of a corporation organized under the laws of Florida. The Certificate of
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Incorporation and Bylaws of Outdoor, as in effect immediately prior to the
Effective Date, shall continue in full force and effect, and, except as provided
otherwise in this document, shall not be changed in any manner by the merger.
ARTICLE 2
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CONVERSION OF SHARES
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2.1 Conversion Ratio. As a result of the merger contemplated by this Agreement,
the holders of the Intelliworxx Stock will receive twenty (20) restricted
Outdoor shares for each share of Intelliworxx stock that they own on the Closing
Date (as defined herein). In order to effect such conversion, all of the 600,000
shares of Intelliworxx Stock issued and outstanding prior to the Merger will, as
a result of the Merger and with no further action on the part of the holder
thereof, be transformed and converted into the right to receive twelve million
(12,000,000) Outdoor shares, upon surrender of the certificates for the
Intelliworxx Stock.
2.2 Shares of Outdoor. On the date of the Closing, Outdoor represents that
1,000,000 shares of its common stock, no par value per share, are issued and
outstanding. None of the issued and outstanding shares of Outdoor shall be
converted as a result of the merger and all of such shares shall remain issued
and outstanding shares of capital stock of Outdoor.
2.3 Assets of Acquiree. Prior to the Effective Date, Acquiree will retain all
the assets, properties, business and goodwill of Acquiree of every kind and
description, wherever located, including without limitation, all property,
tangible or intangible, real, personal, or mixed, accounts receivable, patent
rights, trademarks, trade names, bank accounts, cash and securities, claims and
rights under contracts of Acquiree, rights to use its corporate name and all
other names or slogans used by Acquiree in connection with its business or
products and all books and records of Acquiree relating to its business
(collectively referred to as the "Assets"), all as the same shall exist at the
date of this Agreement. Such Assets shall, without limitation, include all
Assets of Acquiree shown on the Interim Balance Sheet referenced in Section 5.8
below, and all Assets thereafter acquired by Acquiree prior to the Effective
Date, except such of those Assets of Acquiree as (1) may have been disposed of
prior to the Effective Date in the ordinary course of business, and (2) may have
been otherwise disposed of prior to the Closing Date at the request or with
Outdoor's written consent.
ARTICLE 3
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RELATED TRANSACTIONS
ADDITIONAL AGREEMENTS
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3.1 Change in Corporate Name. The Board of Directors of Outdoor shall authorize
the change of its name to "Intelliworxx, Inc.", or such other name approved by
the Selling Shareholders, on the Effective Date and shall file an amendment to
its Articles of Incorporation to reflect such change.
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3.2 Increase Authorized Shares. The Board of Directors of Outdoor shall cause
its Articles of Incorporation to be amended, as of the Effective Date, to
increase the number of shares of its authorized common stock from 50,000,000 to
100,000,000 shares.
3.3 Change in Board of Directors of Outdoor. At the Closing, the current
director of Outdoor shall elect Xxxxx X. Xxxxxx as Chairman of the Board and
Xxxxxxx X. Xxxxx, Xxxxxx X. Xxxxx, Xx., Xxxxxxx X. Xxxxxxxx, Xxx X. Xxxxxxxxx,
and Xxxxxxxxxxx X. Xxxxx as members of the Board of Directors of Outdoor and
immediately thereafter, Xxxxxx X. Xxxxxxxxxxxx shall resign as Outdoor's sole
officer and director. Such persons shall serve as members of the Board of
Directors of Outdoor until the next annual meeting of the shareholders of
Outdoor, or until their successors are duly elected and seated. Copies of the
Meeting of the Board of Directors of Outdoor and Xx. Xxxxxxxxxxxx'x resignation
are attached hereto as Composite Schedule 3.3.
3.4 Officers. Xxxxxx X. Xxxxxxxxxxxx, as the sole officer of Outdoor, shall
resign as of the Closing Date and the Board of Directors of Outdoor, shall as of
the Closing Date appoint the following officers: Xxxxx X. Xxxxxx (President and
Chief Executive Officer), Xxxxxxx X. Xxxxx (Executive Vice President),
Xxxxxxxxxxx X. Xxxxx (Vice President Finance, Chief Financial Officer and
Treasurer), Xxxxxx X. Xxxxx, Xx. (Vice President Engineering and Secretary),
Xxxxxxx X. Xxxxxxxx (Vice President Software Technology) and Xxx X. Xxxxxxxxx
(Director of Platform Integration). Such persons shall serve at the direction of
the Board of Directors.
3.5 Conversion of Debt to Common Shares. As of the Closing Date, the Board of
Directors of Acquiree and Outdoor have agreed to reserve for issuance up to
190,000 shares of restricted common stock of Outdoor in order that debt of
Acquiree, represented by promissory notes, may be converted. Schedule 3.5
details the amounts to be converted.
3.6 Books and Records. The Selling Shareholders shall have delivered to Outdoor
all of the books and records of Acquiree in their possession.
ARTICLE 4
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CLOSING; CERTIFICATE OF MERGER
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4.1 Closing. The Closing contemplated by Section 1.1 shall be held at the
offices of Intelliworxx, Inc., 0000 Xxxx Xxxxxx, Xxxxx 00, Xxxxxxxx, Xxxxxxx
00000 at 2:00 p.m. on Monday, November 23, 1998, unless another place or date is
agreed upon in writing by the parties (the "Closing Date"). At the Closing, all
documents called for by this Agreement (the "Closing Documents") shall be
executed by the respective parties. The Selling Shareholders shall deliver to
Outdoor the stock certificates representing the shares of Intelliworxx to be
acquired and the books and records of Acquiree. The Outdoor Shares shall be
issued as follows:
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Xxxxx X. Xxxxxx and/or assigns 2,000,000 shares
Xxxxxxx X. Xxxxx and/or assigns 2,000,000 shares
Xxxxxx X. Xxxxx, Xx. and/or assigns 2,000,000 shares
Xxxxxxx X. Xxxxxxxx and/or assigns 2,000,000 shares
Xxx X. Xxxxxxxxx and/or assigns 2,000,000 shares
Xxxxxxxxxxx X. Xxxxx and/or assigns 2,000,000 shares
4.2 Certificate of Merger. After the Closing provided for in Section 4.1 above,
the Certificate of Merger executed by the parties at Closing shall be submitted
for filing with the Secretary of State of Florida. The date of the latter of
such filing, or such other date as the parties may agree upon in writing
pursuant to applicable law, shall be the effective date of the Merger (the
"Effective Date").
ARTICLE 5
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Representations and Warranties of
Acquiree and Selling Shareholders
---------------------------------
Acquiree and the Selling Shareholders represent and warrant to Outdoor as
follows:
5.1 Organization, Power, Standing and Qualification. Acquiree is a corporation
duly organized, validly existing, and in good standing under the laws in the
State of Florida and has full corporate power and authority to carry on its
business as it is now being conducted and to own and operate the properties and
assets now owned and operated by it. Acquiree is duly qualified to do business
and is in good standing in each and every jurisdiction where the failure to
qualify or to be in good standing would have an adverse effect upon its
financial condition, the conduct of its business or the ownership of its assets.
5.2 Authority. Acquiree and the Selling Shareholders have the power and
authority to execute, deliver and perform this Agreement; and this Agreement is
a valid and binding obligation of the Selling Shareholders, enforceable in
accordance with its terms, except as such enforcement may be limited by
applicable bankruptcy, insolvency, moratorium, or similar laws affecting the
enforcement of creditors' rights generally.
5.3 Validity of Contemplated Transactions; Interference. Other than as provided
in Schedule 5.3, the execution, delivery and performance of this Agreement and
the consummation of the transactions contemplated hereby do not and will not (a)
contravene any provision of the Certificate of Incorporation or Bylaws of
Acquiree; (b) violate, be in conflict with, constitute a default under, cause
the acceleration of any payments pursuant to, or otherwise impair the good
standing, validity, or effectiveness of any material agreement, contract,
indenture, lease, or mortgage to which Acquiree is a party; (c) subject the
assets of Acquiree to any indenture, mortgage, contract, commitment, or
agreement, other than this Agreement; (d) reasonably interfere with any other
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agreement to which Acquiree is a party; or (e) violate any material provision of
law, rule, regulation, order, permit, or license to which Acquiree is subject.
5.4 Capitalization of Acquiree. Acquiree's authorized capital stock consists of
2,000,000 shares of common stock, no par value, 600,000 of which shares are
presently outstanding, validly issued, fully paid and non-assessable. There are
no outstanding options, warrants, conversion privileges, subscriptions, calls,
commitments or rights of any character relating to any authorized but unissued
capital stock of Acquiree.
5.5 Subsidiaries. Except as disclosed in Schedule 5.5 hereto, Acquiree owns no
shares of capital stock or other equity interest in any corporation,
partnership, joint venture or other business organization or enterprise.
5.6 Ownership of Shares. The Selling Shareholders hold all legal and beneficial
ownership of and title to the issued and outstanding shares of the capital stock
of Acquiree and have full authority to vote such shares in favor of the
transactions contemplated by this Agreement.
5.7 Title to Properties. Except as set forth in Schedule 5.7 hereto, Acquiree
has good, valid and marketable title to all of its assets, free and clear of all
mortgages, liens, pledges, security interests and other encumbrances, except (a)
mortgages, liens, pledges, security interests, and other encumbrances reflected
in the Interim Financial Statements or the notes thereto [as such term is
defined in Section 5.8 herein], (b) liens for current taxes not delinquent or
being contested in good faith by appropriate proceedings, (c) liens in
connection with workmen's compensation, unemployment insurance or other social
security obligations, (d) deposits or pledges to secure bids, tenders, contracts
(other than contracts for the payment of money), leases, statutory obligations,
surety and appeal bonds and other obligations of like nature arising in the
ordinary course of business, (e) mechanic's, workmen's, materialmen's or other
like liens arising in the ordinary course of business with respect to
obligations which are not due or which are being contested in good faith, and
(f) such imperfections of title, lien, easements and encumbrances, if any, as
are not substantial and do not materially detract from the value, or interfere
with the present use, of any of the properties subject thereto or affected
thereby, or otherwise impair the business, operations or prospects of Acquiree.
5.8 Financial Statements and Operating Information. Acquiree has delivered to
Outdoor its unaudited balance sheet as of October 31, 1998 (the "Interim Balance
Sheet") and its related statements of income and changes in financial position
for the one month period then ended (collectively the "Interim Financial
Statements"). The financial statements are, to the best knowledge of Acquiree
and the Selling Shareholders consistent with the books and records of Acquiree
and present fairly the financial condition and results of operations as of the
respective dates thereof and the respective periods then ended, and there has
been no material change in such financial condition of Acquiree since October
31, 1998, other than as set forth in Schedule 5.8.
5.9 Absence of Undisclosed Liabilities. Except as provided in Schedule 5.9,
Acquiree has no material liabilities or obligations except for those (i)
reflected on the Interim Balance Sheet; (ii) reflecting contractual liabilities
or obligations incurred in the ordinary course of business that are not required
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by generally accepted accounting principles to be reflected in a balance sheet;
(iii) incurred in the ordinary course of business subsequent to the date of the
Interim Balance Sheet and not required to be disclosed pursuant to the terms of
this Agreement; and (iv) specifically disclosed in a schedule to this Agreement.
Except as otherwise provided in this Agreement, the term "liabilities or
obligations" as used in this Agreement shall include any direct or indirect
indebtedness, claim, loss, damage, deficiency (including deferred income tax and
other net tax deficiencies), cost, expense, obligation, guarantee, or
responsibility, whether accrued, absolute, or contingent, known or unknown,
fixed or unfixed, liquidated or unliquidated, secured or unsecured.
5.10 Certain Tax Matters. Acquiree has duly filed all federal, state, and local
tax returns and reports required to be filed by Acquiree for all periods ending
on or prior to October 31, 1998 and all taxes, including income, gross receipts,
and other taxes and any penalties with respect thereto, shown thereon to be due
and payable, have been paid, withheld, or reserved for or are reflected as a
liability in the Interim Balance Sheet. Except as provided in Schedule 5.10,
Acquiree has not entered into any agreements for the extension of time for the
assessment of any tax or tax delinquency, has received no outstanding or
unresolved notices from the Internal Revenue Service or any taxing body of any
proposed examination or of any proposed deficiency or assessment, and has
properly withheld all amounts required by law to be withheld for income taxes
and unemployment taxes, including without limitation social security and
unemployment compensation, relating to its employees, and remitted such withheld
amounts to the appropriate taxing authority as required by law. Acquiree has no
permanent establishment located in any tax jurisdiction other than in the United
States and is not liable for the payment of any taxes levied by any foreign tax
jurisdiction.
5.11 Litigation; Compliance with Laws. Except as set forth in Schedule 5.11
attached hereto, there is no suit, action, claim, arbitration, administrative or
legal or other proceeding, or governmental investigation pending or, to the
knowledge of the Selling Shareholders, threatened against or related to
Acquiree. Except as set forth in Schedule 5.11 attached hereto, there has been
no failure to comply with, nor any default under, any law, ordinance,
requirement, regulation, or order applicable to Acquiree or its business
operations, nor any violation of or default with respect to any order, writ,
injunction, judgment, or decree of any court or federal, state or local
department, official, commission, authority, board, bureau, agency, or other
instrumentality issued or pending against Acquiree which in any such case would
reasonably be expected to have a material adverse effect on the financial
condition, business, results of operations, properties or assets of Acquiree.
Except as set forth in Schedule 5.11 attached hereto, Acquiree has obtained all
permits, licenses, zoning variances, approvals, and other authorization for
which the failure to so obtain would have a material adverse effect on
Acquiree's operations. All such material permits, licenses, approvals and
authorizations are currently valid and in full force and no revocation,
cancellation or withdrawal thereof has been effected or threatened. The
execution of this Agreement and the performance of the transactions contemplated
hereby have not and will not change in any respect, or result in the termination
of, any such material permits, licenses, certificates, zoning variances and
authorizations. There have been no illegal kickbacks, bribes or political
contributions made by Acquiree.
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5.12 ERISA Matters. Schedule 5.12 attached hereto contains a complete and
accurate list of all Benefit Plans (as defined in Section 3 of the Employee
Retirement Income Security Act of 1974, as amended) and insurance policies
relating thereto sponsored by Acquiree or to which Acquiree is making
contributions as of the date hereof with respect to employees of Acquiree.
Acquiree has timely paid, or will timely pay as soon as practicable, all
employee benefits due and owing under the Benefit Plans sponsored by Acquiree in
accordance with the terms of each such Benefit Plan.
5.13 Insurance. All inventories, machinery, equipment, buildings, improvements,
and other tangible assets owned or leased by Acquiree are insured against fire
and casualty under the policies and in the amounts and types of coverage set
forth in Schedule 5.13 attached hereto (the "Policies") and between the date
hereof and the Effective Date, Acquiree shall use commercially reasonable
efforts to maintain all of the Policies, or policies which are substantially
equivalent to the Policies. The Policies are outstanding and duly in force and
the premiums thereon fully paid when and as the same are due and payable.
Schedule 5.13 is a true and correct schedule of all policies of fire, liability,
and other forms of insurance, excluding the Benefit Plans listed in Schedule
5.12 pursuant to which the assets of Acquiree are insured (whether or not held
by Acquiree) or with respect to which Acquiree pays all or part of the premium.
5.14 Proprietary Information. Acquiree owns, possesses or lawfully uses all
patents, patent applications, trademarks, trademark applications, service marks,
service xxxx applications, trade names, trade dress, franchises, copyrights,
copyright applications and similar intangible rights used in its business and
trade secrets or other proprietary information similarly used (collectively, the
"Patents and Trademarks"), each item of which is listed in Schedule 5.14
attached hereto, and those Patents and Trademarks designated on Schedule 5.14
are owned exclusively by Acquiree, are valid and enforceable, and none infringe
(nor has any claim been made that there is any such infringement) the patents,
trademarks, service marks, trade names, copyrights or similar intangible rights
of others. After due inquiry, to the best of Acquiree's knowledge, there is no
claim against Acquiree or any Shareholder that either is or may be infringing on
or otherwise acting adversely to the rights of any person under or in respect of
any patent, trademark, service xxxx, trade name, trade dress, copyright,
license, franchise, permission, or other intangible right. Acquiree is not
obligated or under any liability to make any payments by way of royalties, fees,
or otherwise to any owner or licensee of, or other claimant to, any patent,
trademark, trade name, trade dress, copyright, or other intangible asset with
respect to the use thereof, in connection with the conduct of its business or
otherwise.
5.15 Labor Disputes. Except as set forth in Schedule 5.15, Acquiree is not a
party to any contract or other agreement with any labor union nor is Acquiree
experiencing or the subject of or, to Acquiree's knowledge, threatened by, any
union organization campaign or any strike, slowdown, picketing, work stoppage,
or other labor disturbance by any labor union or group of employees.
5.16 Contracts. Except as set forth in Schedule 5.16 or in another Schedule to
this Agreement, Acquiree is not a party to any material contract, agreement,
commitment, lease, indenture, fringe benefit or other plan. For purposes of this
Section 5.16 "material" shall mean any contract, agreement, commitment, lease,
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indenture, fringe benefit or other plan entered into which is not in the
ordinary course of business or, if entered into in the ordinary course of
business, which involves a payment, commitment or entitlement in excess of
$40,000. True and correct copies of all of the contracts, agreements,
commitments, leases, indentures, fringe benefits or other plans, documents and
instruments identified in Schedule 5.16, have been supplied to Outdoor.
5.17 Other Transactions. Acquiree has not, since inception, (a) operated its
business except in the ordinary course of business, (b) incurred any debts,
liabilities or obligations except in the ordinary course of business, (c)
discharged or satisfied any liens or encumbrances, or paid any liens or
encumbrances, or paid any material debts, liabilities or obligations, except in
the ordinary course of business, (d) mortgaged, pledged or subjected to lien or
other encumbrance any of its assets, tangible or intangible, except in the
ordinary course of business and except those permitted by Section 5.7 hereof,
(e) sold or transferred any of its tangible assets having a book value of
$25,000 or more, or canceled any debts or claims, except, in each case, in the
ordinary course of business, or (f) suffered any extraordinary losses or waived
any rights of substantial value.
5.18 Product Liability Insurance Claims. Acquiree is identified as an insured
party under all policies of insurance relating to product liability listed on
Schedule 5.18 for and against any claim for product liability on an occurrence
basis for events occurring prior to the Closing Date.
5.19 Bank Accounts. Schedule 5.19 attached hereto lists the names and addresses
of every bank and other financial institution in which Acquiree maintains an
account (whether checking, savings or otherwise), lock box or safe deposit box,
and the account numbers and names of persons having signing authority or other
access thereto.
5.20 No Changes. Except as provided in Schedule 5.20, since October 31, 1998
there has not been:
a. Any change in the financial or other condition, assets, liabilities
or business of Acquiree, except changes described in Schedule 5.20 hereto, none
of which individually or in the aggregate has been materially adverse to
Acquiree;
b. Any damage, destruction or loss (whether or not covered by
insurance) or any condemnation by governmental authorities which has or would
reasonably have an adverse affect on the business or assets of Acquiree to a
material degree;
c. Any strike, lockout, labor trouble or any similar event or
condition of any character adversely affecting the business of Acquiree;
d. Except as disclosed in writing to Outdoor from time to time, any
declaration, setting aside or payment of any dividend or other distribution in
respect of any of the shares of capital stock of Acquiree or any direct or
indirect redemption, purchase or other acquisition of the shares of capital
stock of Acquiree or any direct or indirect payment or incurring of management
fees or other transactions between the Selling Shareholders and Acquiree; or
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e. Any increase in the compensation payable or to become payable by
Acquiree to any of its officers, employees or agents, or any known payment or
arrangement made to or with any thereof, except in the ordinary course of
business as disclosed to Outdoor.
5.21 Veracity of Statements. To the knowledge of Acquiree and the Selling
Shareholders, no representation or warranty by Acquiree or the Selling
Shareholders contained in this Agreement and no statement contained in any
certificate, schedule or other instrument furnished to Outdoor pursuant hereto
or in connection with the transactions contemplated hereby contains any untrue
statement of a material fact or omits to state a material fact necessary to make
it not misleading.
5.22 Copies of Articles and Bylaws and Stock Records. A copy of Acquiree's
Certificate of Incorporation (certified by the Secretary of State of Florida),
Bylaws and stock records (certified by the Secretary of Acquiree) has been
delivered to Outdoor and each is correct and in effect as at the date of this
Agreement. Such books and records have been regularly and properly kept and are
complete, accurate and legally sufficient under applicable law.
5.23 Condition of Tangible Assets. All material tangible portions of Acquiree's
assets are in a condition sufficient for Acquiree's operations.
5.24 Directors and Officers. Acquiree has delivered to Outdoor a true and
complete list as of the date of this Agreement showing the names of Acquiree's
directors and officers, each of whom has been duly elected and/or appointed.
5.25 Accounts Receivable. The accounts receivable of Acquiree reflected on the
Interim Balance Sheet and those acquired and accrued thereafter through the date
of this Agreement are valid and bona fide accounts receivable, created in the
ordinary course of business, and, except as provided in Schedule 5.25, the
allowance for doubtful accounts with respect thereto has been prepared in
accordance with generally accepted accounting principles. No part of such
accounts receivable is contingent upon performance by Acquiree of any
obligation, other than any warranty obligation, and no agreements for deductions
or discounts have been made with respect to any part of such receivables.
5.26 Inventories. All material portions of the inventories of Acquiree are fit
for their intended use and the net finished goods portion thereof is saleable in
the ordinary course of business, and the provision for slow and obsolete
inventories has been made in accordance with generally accepted accounting
principles.
5.27 Environmental Matters.
a. Schedule 5.27 attached hereto sets forth:
(1) all facts regarding hazardous substances, hazardous wastes
and constituents used, handled, stored or disposed of on the
Premises (as herein defined) by Acquiree, and to the
knowledge of Acquiree of all predecessors in interest and
all prior occupants of the Premises, where such use,
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handling, storage or disposal may reasonably be expected to
cause an adverse effect on the business, assets, or the
financial condition of Acquiree;
(2) all reports, studies or documents regarding releases of
hazardous substances and hazardous wastes and constituents
in, on, under or above the Premises filed with any
governmental agency by Acquiree, and to the knowledge of
Acquiree by all predecessors in interest and all prior
occupants of the Premises; and
(3) all studies or reports authorized by Acquiree, and to the
knowledge of Acquiree by all predecessors in interest and
all prior occupants of the Premises regarding environmental
conditions of the Premises.
b. Except as set forth in Schedule 5.27 attached hereto, Acquiree is
not aware of, nor has received notice of any past or present events, conditions,
circumstances, activities, practices, incidents, actions or plans which may
reasonably be expected to interfere with or adversely affect its business, its
assets or the financial condition of Acquiree or prevent compliance or continued
compliance with Environmental Laws (as herein defined), or may reasonably be
expected to give rise to any liability, or otherwise form the basis of any
claim, action, demand, suit, proceeding, hearing, study or investigation, based
on or related to the manufacture, processing, distribution, use, treatment,
storage, disposal, transport, or handling, or the emission, discharge, release
or threatened release into the environment, of any hazardous substance or
hazardous wastes or constituents by Acquiree, all predecessors in interest and
all prior occupants of the Premises.
c. Acquiree has used due diligence to discover the existence of the
information to be disclosed as itemized in Paragraphs (a) and (b).
d. (1) Outdoor reserves the right prior to closing, but is not
hereby obligated, to undertake an investigation of the
Premises and Acquiree shall cooperate in providing
reasonable access to the Premises and any documents deemed
by Outdoor necessary for such investigation; provided,
however, that such investigation shall not interfere with or
cause any damage to the business or the assets of Acquiree.
All fees, costs and expenses in connection with such
investigation shall be paid by Outdoor.
(2) If Outdoor discovers that any of the representations or
warranties of Acquiree or the Selling Shareholders contained
in Section 5.28(a) of this Agreement are inaccurate in any
material respect and that, except as previously disclosed by
Acquiree to Outdoor, hazardous wastes, hazardous substances
or constituents, are present in, on, under or above the
Premises, the presence of which has or may reasonably be
expected to have a material adverse effect on the business,
the assets or the financial condition of Acquiree, upon
notice to Acquiree to that effect Outdoor may terminate this
Agreement and shall have no further obligations under this
Agreement.
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e. For purposes of Section 5.27 of this Agreement:
(1) The term "hazardous substance" has the definition set forth
in 42 USC ss.9601(1);
(2) The term "hazardous wastes and/or constituents" has the
definition set forth in 42 USCss.6903(5) and 40 CFR part
261;
(3) The term "Environmental Laws" means the collective federal,
state, and local statutes, rules, regulations, ordinances
and laws relating to environmental conditions or hazardous
substances as currently in effect, including but not limited
to the Solid Waste Disposal Act, 42 USC ss.ss.6901-6991i;
the Comprehensive Environmental Response, Compensation and
Liability Act of 1980 ("CERCLA"), 42 USC xx.xx. 9601-9675,
as amended by the Superfund Amendments and Reauthorization
Act of 1986 ("XXXX"); the Hazardous Materials Transportation
Act, 49 USC ss.6901 et seq.; the Federal Water Pollution
Control Act, 33 USC ss.1251 et seq.; the Clean Air Act, 42
USC ss.7401 et seq.; the Toxic Substance Control Act, 15 USC
xx.xx. 2601-2629; the Safe Drinking Water Act, 42 USC
ss.ss.300f-300j, all as amended; all similar state statutes
and local ordinances; and the regulations, orders, judicial
and administrative decisions presently in effect thereunder;
and
(4) The term "Premises" shall mean all of the leasehold
interests held by or property owned by Acquiree, together
with any improvements thereon located at or any other
property where the business is or had been operated (the
"Premises").
5.28 Acquisition of Outdoor Shares for Investment. The Selling
Shareholders are acquiring the Outdoor Shares for investment purposes, for their
own account and not with a view to the resale or distribution thereof in
violation of any state or federal securities laws. The Selling Shareholders
shall not sell, transfer, pledge or hypothecate any of the Outdoor Shares in the
absence of registration under or pursuant to an applicable exception from,
federal and all applicable security law. The Selling Shareholders further
acknowledge and agree that the certificates representing the Outdoor Shares
shall bear a restrictive legend, in substantially the following form:
"THE SHARES REPRESENTED BY THIS CERTIFICATE WERE ISSUED
WITHOUT REGISTRATION UNDER THE SECURITIES ACT OF 1933 AS
AMENDED (THE "ACT"), ARE RESTRICTED SECURITIES, AND MAY NOT
BE SOLD, TRANSFERRED OR ASSIGNED EXCEPT PURSUANT TO AN
EFFECTIVE REGISTRATION STATEMENT UNDER THE ACT OR IN A
TRANSACTION WHICH, IN THE OPINION OF COUNSEL SATISFACTORY TO
THE COMPANY, IS NOT REQUIRED TO BE REGISTERED UNDER THE
ACT."
13
ARTICLE 6
---------
Representations and Warranties of Outdoor
-----------------------------------------
Outdoor represents and warrants to Acquiree and the Selling
Shareholders as follows:
6.1 Organization, Power, Standing and Qualification. Outdoor is a corporation
duly organized, validly existing and in good standing under the laws in the
State of Florida and has full corporate power and authority to carry on its
business as it is now being conducted and to own and operate the properties and
assets now owned and operated by it. Outdoor is duly qualified to do business
and is in good standing in each and every jurisdiction where the failure to
qualify or to be in good standing would have an adverse effect upon its
financial condition, the conduct of its business or the ownership of its assets.
6.2 Authority. Outdoor has the power and authority to execute, deliver and
perform this Agreement; and this Agreement is a valid and binding obligation of
Outdoor, enforceable in accordance with its terms, except as such enforcement
may be limited by applicable bankruptcy, insolvency, moratorium, or similar laws
affecting the enforcement of creditors' rights generally.
6.3 Validity of Contemplated Transactions; Interference. The execution, delivery
and performance of this Agreement and the consummation of the transactions
contemplated hereby do not and will not (a) contravene any provision of the
Certificate of Incorporation or Bylaws of Outdoor; (b) violate, be in conflict
with, constitute a default under, cause the acceleration of any payments
pursuant to, or otherwise impair the good standing, validity, or effectiveness
of any material agreement, contract, indenture, lease, or mortgage to which
Outdoor is a party; (c) subject the assets of Outdoor to any indenture,
mortgage, contract, commitment, or agreement, other than this Agreement; (d)
reasonably interfere with any other agreement to which Outdoor is a party; or
(e) violate any material provision of law, rule, regulation, order, permit, or
license to which Outdoor is subject.
6.4 Capitalization of Outdoor Resorts, Inc. Outdoor's authorized capital stock
consists of 50,000,000 shares of common stock, no par value, 1,000,000 of which
shares are presently outstanding, validly issued, fully paid and non-assessable.
As of the Effective Date, the Board of Directors and a majority of shareholders
will have duly authorized an amendment of Outdoor's Articles of Incorporation so
as to increase the number of authorized Common Shares from 50,000,000 to
100,000,000. Said amendment to the Articles of Incorporation will be duly and
properly filed as soon after the Effective Date as is feasible possible. The
Outdoor Shares to be issued and sold to each Selling Shareholder pursuant to
this Agreement, when issued and delivered as provided herein will be duly
authorized, validly issued, fully paid and non-assessable and free of preemptive
or similar rights. There currently are no rights, agreements, commitments,
option or warrants of any character obligating Outdoor, contingently or
otherwise, to issue any additional shares of Outdoor stock or to register any
shares of its capital stock under any applicable federal or state securities
laws.
14
6.5 Subsidiaries. Except as disclosed in Schedule 6.5 hereto, Outdoor owns no
shares of capital stock or other equity interest in any corporation,
partnership, joint venture or other business organization or enterprise.
6.6 Financial Statements. Outdoor has delivered to Acquiree and the Selling
Shareholders its balance sheets for each of the last two full fiscal years
ending before the date of this Agreement as well as its statement of income and
loss for the same periods. In addition, Outdoor has delivered to Acquiree and
the Selling Shareholders its audited financial statements for period ending
August 31, 1998 and unaudited balance sheet and income statement for the period
ending November 22, 1998 (the "Outdoor Interim Balance Sheet") which has been
prepared in accordance with the applicable books and records of Outdoor and
presents fairly the financial condition of Outdoor as of November 22, 1998, and
represents there has been no material change in such financial condition of
Outdoor since November 22, 1998.
6.7 Absence of Undisclosed Liabilities. Outdoor has no liabilities or
obligations except for those (i) reflected on the Outdoor Interim Balance Sheet;
(ii) reflecting contractual liabilities or obligations incurred in the ordinary
course of business that are not required by generally accepted accounting
principles to be reflected in a balance sheet; (iii) incurred in the ordinary
course of business subsequent to the date of the Outdoor Interim Balance Sheet
and not required to be disclosed pursuant to the terms of this Agreement; and
(iv) specifically disclosed in Schedule 6.7 attached hereto. Except as otherwise
provided in this Agreement, the term "liabilities or obligations" as used in
this Agreement shall include any direct or indirect indebtedness, claim, loss,
damage, deficiency (including deferred income tax and other net tax
deficiencies), cost, expense, obligation, guarantee, or responsibility, whether
accrued, absolute, or contingent, known or unknown, fixed or unfixed, liquidated
or unliquidated, secured or unsecured.
6.8 Certain Tax Matters. Outdoor has duly filed all federal, state, and local
tax returns and reports required to be filed by Outdoor for all periods ending
on or prior to October 31, 1998 and all taxes, including income, gross receipts,
and other taxes and any penalties with respect thereto, shown thereon to be due
and payable, have been paid, withheld, or reserved for or are reflected as a
liability in the Outdoor Interim Balance Sheet. The returns and reports are, to
the best knowledge of Outdoor, correct and complete. Outdoor has not entered
into any agreements for the extension of time for the assessment of any tax or
tax delinquency, has received no outstanding or unresolved notices from the
Internal Revenue Service or any taxing body of any proposed examination or of
any proposed deficiency or assessment, and has properly withheld all amounts
required by law to be withheld for income taxes and unemployment taxes,
including without limitation social security and unemployment compensation,
relating to its employees, and remitted such withheld amounts to the appropriate
taxing authority as required by law. Outdoor does not have a permanent
establishment located in any tax jurisdiction other than in the United States
and is not liable for the payment of any taxes levied by any foreign tax
jurisdiction.
6.9 Litigation; Compliance with Laws. There is no suit, action, claim,
arbitration, administrative or legal or other proceeding, or governmental
investigation pending or, to the knowledge of Outdoor threatened against or
related to Outdoor. There has been no failure to comply with, nor any default
15
under, any law, ordinance, requirement, regulation, or order applicable to
Outdoor or its business operations, nor any violation of or default with respect
to any order, writ, injunction, judgment, or decree of any court or federal,
state or local department, official, commission, authority, board, bureau,
agency, or other instrumentality issued or pending against Outdoor which might
have a material adverse effect on the financial condition, its business, results
of operations, properties or assets of Outdoor. There have been no illegal
kickbacks, bribes or political contributions made by Outdoor.
6.10 No Changes. Since October 31, 1998 there has not been:
a. Any change in the financial or other condition, assets, liabilities
or business of Outdoor, except changes described in Schedule 6.10 hereto, none
of which individually or in the aggregate has been materially adverse to
Outdoor;
b. Any damage, destruction or loss (whether or not covered by
insurance) or any condemnation by governmental authorities which has or may
adversely affect the business or assets of Outdoor to a material degree;
c. Any strike, lockout, labor trouble or any similar event or
condition of any character adversely affecting the business of Outdoor;
d. Except as disclosed in writing to the Selling Shareholders from
time to time, any declaration, setting aside or payment of any dividend or other
distribution in respect of any of Outdoor's shares or any direct or indirect
redemption, purchase or other acquisition of Outdoor's shares or any direct or
indirect payment or incurring of management fees or other transactions between
the shareholders of Outdoor; or
e. Any increase in the compensation payable or to become payable by
Outdoor to any of its officers, employees or agents, or any known payment or
arrangement made to or with any thereof, except in the ordinary course of
business as disclosed to the Selling Shareholders.
6.11 Veracity of Statements. No representation or warranty by Outdoor contained
in this Agreement and no statement contained in any certificate, schedule or
other instrument furnished to the Selling Shareholders pursuant hereto or in
connection with the transactions contemplated hereby contains any untrue
statement of a material fact or omits to state a material fact necessary to make
it not misleading.
6.12 Copies of Articles of Incorporation, Bylaws and Stock Records. A copy of
Outdoor's Certificate of Incorporation, Bylaws and stock records (certified by
the Secretary of Outdoor) has been delivered to the Selling Shareholders and
each is correct and in effect as at the date of this Agreement. Such books and
records have been regularly and properly kept and are complete, accurate and
legally sufficient under applicable law.
16
6.13 Directors and Officers. Schedule 6.13 attached hereto is a true and
complete list as of the date of this Agreement showing the names of Outdoor's
directors and officers, each of whom has been duly elected.
6.14 ERISA Matters. Outdoor has no Benefit Plans (as defined in Section 3 of the
Employee Retirement Income Security Act of 1974, as amended).
6.15 OTS - Bulletin Board. Outdoor has filed a Form 15c-211 with the National
Association of Securities Dealers ("NASD") and has received clearance to be
listed on the OTC-Bulletin Board under the symbol "OUDR". The filing with the
NASD was true and complete and contained no misleading or false information. On
the Effective Date, the common stock of Outdoor will be listed on the
OTC-Bulletin Board with at last one market maker publishing a quotation for the
Outdoor Common Stock.
ARTICLE 7
---------
ACTIVITIES PRIOR TO THE CLOSING DATE BY ACQUIREE
------------------------------------------------
AND THE SELLING SHAREHOLDERS
----------------------------
7.1 Operation of Business. Acquiree and the Selling Shareholders hereby agree
that from and after the date hereof to the Effective Date, except as otherwise
contemplated by this Agreement or with Outdoor's express written consent,
Acquiree and the Selling Shareholders shall conduct its business solely in the
ordinary course and Acquiree shall:
a. Not amend Acquiree's Certificate of Incorporation or Bylaws except
as may be necessary to carry out this Agreement or as required by law;
b. Not change Acquiree's corporate name or consent to the use thereof
by any other corporation;
c. Not pay or agree to pay to any employee, officer, or director of
Acquiree, without the consent of Outdoor, compensation that is in excess of the
current compensation level of such employee, officer, or director except in the
ordinary course of business as disclosed from time to time to Outdoor;
d. Not make any changes in Acquiree's management without the consent
of Outdoor;
e. Not merge or consolidate Acquiree with any other corporation or
allow it to acquire or agree to acquire or be acquired by any corporation,
association, partnership, joint venture, or other entity;
f. Not sell, transfer, or otherwise dispose of any material assets
without the prior written consent of Outdoor, except in the ordinary course of
business;
17
g. Not create, incur, assume, or guarantee any indebtedness for money
borrowed except in the ordinary course of business; create or suffer to exist
any mortgage, lien, or other encumbrance on any of its properties or assets,
real or personal, except those in existence on the date hereof or permitted by
Section 5.7; or increase the amount of any indebtedness outstanding under any
loan agreement, mortgage, or other borrowing arrangement in existence on the
date hereof;
h. Cause Acquiree to pay when due in accordance with historical
practice all accounts payable and trade obligations of Acquiree;
i. Maintain all material tangible portions of the assets of Acquiree
in good operating repair, order, and condition, reasonable wear and tear
excepted, and notify Outdoor immediately upon any loss of, damage to, or
destruction of any material tangible portion of the assets;
j. Use their best efforts to maintain in full force and effect
insurance coverage of the types and in the amounts set forth in Schedule 5.13
attached hereto and apply the proceeds received under any insurance policy or as
a result of any loss or destruction of or damage to any assets to the repair or
replacement of such assets;
k. Use its best efforts to maintain in full force and effect all
material agreements, contracts, leases, licenses, permits, authorizations, and
approvals necessary for or related to the operation of the business of Acquiree
in all respects and in all places as the business is now conducted;
l. Use its best efforts to preserve Acquiree's business organization
intact, to keep available the services of its present employees and to preserve
the good will of its customers and others having business relations with it;
m. Timely pay in accordance with the terms of each Benefit Plan all
bona fide claims for Benefits thereunder; and
n. Promptly advise Outdoor in writing of the commencement of, and of
any known threat to commence any, suit, claim, action, arbitration, legal or
administrative proceeding, governmental investigation, or tax audit against
Acquiree.
7.2 Access to Information. Acquiree shall provide Outdoor and its accountants,
counsel and other representatives, during normal business hours and upon
reasonable notice, access to the properties of Acquiree, including books,
records, equipment, real estate, contracts, and other assets, and upon
reasonable notice shall provide an opportunity to discuss the business and
assets with its officers, employees, and independent accountants, customers,
suppliers and sales representatives and furnish to Outdoor and its
representatives copies of such documents, records, and information with respect
to the affairs of Acquiree as Outdoor or its representatives may reasonably
request and Outdoor shall afford such information confidential treatment.
18
7.3 Labor Disputes. Between the date hereof and the Effective Date, Acquiree
shall promptly advise Outdoor of any actual or threatened union organization
campaign, strike, slowdown, work stoppage, or other labor disturbance ("Labor
Dispute") by any labor union or group of employees against Acquiree, and
Acquiree shall use its best efforts to resolve any and all Labor Disputes to the
mutual satisfaction of Outdoor and Acquiree.
7.4 Best Efforts. Subject to the other provisions of this Agreement, Acquiree
shall use its best efforts to cause the conditions listed in Article 9.1 hereof
to be satisfied on the Effective Date.
ARTICLE 8
---------
ACTIVITIES PRIOR TO CLOSING DATE BY OUTDOOR
-------------------------------------------
8.1 Operation of Business. Outdoor hereby agrees that from and after the date
hereof to the Effective Date, except as otherwise contemplated by this Agreement
or with Acquiree's express written consent, Outdoor shall conduct its business
solely in the ordinary course and Outdoor shall:
a. Not amend Outdoor's Certificate of Incorporation or Bylaws except
as may be necessary to carry out this Agreement or as required by law;
b. Not merge or consolidate Outdoor, or any subsidiary, with another
entity, acquire another entity or agree to be acquired by any other entity;
c. Not sell, transfer, or otherwise dispose of any material assets
without the prior written consent of Acquiree, except in the ordinary course of
business; and
d. Maintain in full force and effect all material agreements,
contracts, leases, licenses, permits, authorizations, and approvals necessary
for or related to the operation of the business of Outdoor in all respects and
in all places as the business is now conducted.
8.2 Best Efforts. Subject to the other conditions of this Agreement, Outdoor
shall use its best efforts to cause the conditions listed in Article 9.2 hereof
to be satisfied on the Closing Date.
ARTICLE 9
---------
CONDITIONS PRECEDENT TO THE CLOSING
-----------------------------------
9.1 Obligation of Outdoor to Close. The obligation of Outdoor to consummate the
merger on the Effective Date shall be subject to the satisfaction or the waiver
by Outdoor of the following conditions on or prior to the Closing Date:
a. Representations and Warranties; Compliance with Agreement. The
representations and warranties of Acquiree and the Selling Shareholders set
forth in this Agreement shall be true and correct in all material respects as of
19
the date of this Agreement and as of the Effective Date as though made on and as
of the Effective Date, and Acquiree and the Selling Shareholders shall have
performed all covenants and agreements to be performed by either of them under
this Agreement on or prior to the Effective Date, and Acquiree and the Selling
Shareholders shall have delivered to Outdoor certificates to such effect dated
the Effective Date signed by the Selling Shareholders and by Acquiree, which
certificates shall be in the form attached hereto as Schedule 9.1(a);
b. Litigation Affecting Closing. On the Effective Date, no proceeding
shall be pending or threatened before any court or governmental agency in which
it is sought to restrain or prohibit or to obtain damages or other relief in
connection with this Agreement or the consummation of the transactions
contemplated hereby, and no investigation that might eventuate in any such suit,
action or proceeding shall be pending or threatened;
c. Required Consents. The holders of any single debt obligation of
Acquiree exceeding $250,000, the lessors of any material real or property or
assets leased by Acquiree, the parties (other than Acquiree) to any other
material contract, commitment or agreement to which Acquiree is a party, any
governmental agency or body or any other individual or entity which owns or has
authority to grant any franchise, license, permit, easement, right or other
authorization necessary for the business of Acquiree and any governmental body
or regulatory agency having jurisdiction over Acquiree, to the extent that their
consent or approval is required under the pertinent debt, lease, contract,
commitment or agreement or other document or instrument or under applicable
laws, rules or regulations for the consummation of the merger contemplated
hereby in the manner herein provided, shall have granted such consent or
approval;
d. No Material Damage to Business. The assets shall not have been and
shall not be threatened to be materially adversely affected in any way as a
result of fire, explosion, earthquake, disaster, accident, labor dispute, any
action by any governmental authority, flood, drought, embargo, riot, civil
disturbance, uprising, activity of armed forces or act of God or public enemy.
9.2 Obligation of Acquiree and the Selling Shareholders to Close. The obligation
of Acquiree and the Selling Shareholders to consummate the merger on the
Effective Date shall be subject to the satisfaction of the following conditions
on or prior to the Effective Date:
a. Representations and Warranties; Compliance with Agreement. The
representations and warranties of Outdoor set forth in this Agreement shall be
true and correct in all material respects as of the date of this Agreement and
as of the Effective Date as though made on and as of the Effective Date, and
Outdoor shall have performed all covenants and agreements to be performed by
either of them under this Agreement on or prior to the Effective Date, and
Outdoor shall have delivered to Acquiree certificates to such effect dated the
Effective Date and signed by Outdoor, which certificates shall be in the form
attached hereto as Schedule 9.2(a); or
b. Litigation Affecting Closing. On the Effective Date, no proceeding
shall be pending or threatened before any court or governmental agency in which
it is sought to restrain or prohibit or to obtain damages or other relief in
connection with this Agreement or the consummation of the transaction
contemplated hereby, and no investigation that might eventuate in any such suit,
action or proceeding shall be pending or threatened.
20
c. No Material Damage to Business. The assets of Outdoor shall not
have been and shall not be threatened to be materially adversely affected in any
way as a result of fire, explosion, earthquake, disaster, accident, labor
dispute, any action by any governmental authority, flood, drought, embargo,
riot, civil disturbance, uprising, activity of armed forces or act of God or
public enemy.
ARTICLE 10
----------
INDEMNIFICATION
---------------
10.1 By Acquiree and the Selling Shareholders. From and after the Effective
Date, Acquiree and the Selling Shareholders, jointly and severally, shall
indemnify and hold harmless Outdoor from and against (i) any and all damages,
losses, obligations, deficiencies, liabilities, claims, encumbrances, penalties,
costs, and expenses, including reasonable attorneys' fees (together, a "Loss"),
and which Outdoor may suffer or incur, resulting from, related to, or arising
out of any misrepresentation, breach of warranty, or nonfulfillment of any of
the covenants or agreements of Acquiree or the Selling Shareholders in this
Agreement or from any misrepresentation in or omission from any schedule to this
Agreement, and (ii) any and all actions, suits, investigations, proceedings,
demands, assessments, audits, judgments and claims (including employment-related
claims) arising out of any of the foregoing; provided, however, that before
Outdoor may assert a claim for indemnity under this Article, Outdoor must give
or cause to be given written notice of such claim to the Selling Shareholders
and Acquiree as provided in Section 10.4.
10.2 By Outdoor. From and after the Effective Date, Outdoor shall indemnify and
hold harmless the Selling Shareholders from and against (i) any and all Loss
which the Selling Shareholders may suffer or incur, resulting from, related to,
or arising out of any misrepresentation, breach of warranty, or nonfulfillment
of any of the covenants or agreements of Outdoor in this Agreement or from any
misrepresentation in or omission from any certificate or document furnished or
to be furnished to the Selling Shareholders hereunder and (ii) any and all
actions, suits, investigations, proceedings, demands, assessments, audits,
judgments, and claims (including employment-related claims) arising out of any
of the foregoing; provided, however, that before the Selling Shareholders may
assert a claim for indemnity under this Section, the Selling Shareholders must
give or cause to be given written notice of such claim to Outdoor as provided in
Article 10.4.
10.3 Limitation of Indemnity. Notwithstanding any provisions herein to the
contrary:
a. Neither party shall be liable to the other party for any
misrepresentation, the breach of any warranty or the failure to fulfill any
covenant or agreement herein if such other party shall have had "actual
knowledge" of the facts upon which such misrepresentation, breach or failure to
fulfill is based at or prior to the Effective Date. For purposes of this Section
10.3(a) "actual knowledge" on the part of Outdoor or Acquiree, respectively,
shall mean the actual knowledge of one or more of its executive employees; and
21
b. The liability of either party computed otherwise in accordance with
this Article 10 shall be limited to the after-tax consequence to the indemnified
party (or the affiliated group of which such indemnified party is a member) of
any such damage, loss, liability, deficiency cost or expense suffered or
incurred by such indemnified party and shall be computed after giving effect to
the recovery, if any, by the indemnified party of any applicable insurance
proceeds, the pursuit of which shall be mandatory by the indemnified party.
10.4 Notice. Promptly after acquiring knowledge of any Loss or action, suit,
investigation, proceeding, demand, assessment, audit, judgment, or claim against
which the Selling Shareholders have indemnified Outdoor against which Outdoor
have indemnified the Selling Shareholders, or as to which any party may be
liable, the Selling Shareholders, Acquiree, Outdoor, as the case may be, shall
give to the other party written notice thereof. Each indemnifying party shall,
at its own expense, promptly defend, contest or otherwise protect against any
Loss or action, suit, investigation, proceeding, demand, assessment, audit,
judgment, or claim against which it or he has indemnified an indemnified party,
and each indemnified party shall receive from the other party all necessary and
reasonable cooperation in said defense including, but not limited to, the
services of employees of the other party who are familiar with the transactions
out of which any such Loss or action, suit, investigation, proceeding, demand,
assessment, audit, judgment, or claim may have arisen. The indemnifying party
shall have the right to control the defense of any such proceeding unless
relieved of its or his liability hereunder with respect to such defense by the
indemnified party. The indemnifying party shall have the right, at its or his
option, and, unless so relieved, to compromise or defend, at its or his own
expense by its or his own counsel, any such matter involving the asserted
liability of the indemnified party. In the event that the indemnifying party
shall undertake to compromise or defend any such asserted liability, it or he
shall promptly notify the indemnified party of its or his intention to do so. In
the event that an indemnifying party, after written notice from an indemnified
party, fails to take timely action to defend the same, the indemnified party
shall have the right to defend the same by counsel of its or his own choosing,
but at the cost and expense of the indemnifying party.
10.5 Money Damages. If the Losses indemnified against pursuant to the provisions
of Articles 10.1 and 10.2 hereof can be compensated by the payment of money to
the other party, the indemnifying party shall, within 21 days after receipt of a
written notice of a claim pursuant to Article 10.4 deliver to the other party
either: (i) the amount of such claim by check or by wire transfer to the bank
account of that party's choosing, or (ii) a written notice stating that it or he
objects to the validity of such claim and setting forth in reasonable detail the
grounds on which it or he is contesting the validity of the claim.
ARTICLE 11
----------
SURVIVAL OF REPRESENTATIONS,
WARRANTIES, GUARANTEES, AND COVENANTS
-------------------------------------
11.1 Date Certain for Survival. All representations and warranties made by the
Selling Shareholders, Outdoor or Acquiree in this Agreement or pursuant hereto
shall survive the closing hereunder for a period ending on the first anniversary
of the Effective Date.
22
ARTICLE 12
----------
CONDUCT OF ACQUIREE, THE SELLING SHAREHOLDERS, AND OUTDOOR AFTER THE MERGER
---------------------------------------------------------------------------
12.1 Additional Actions and Cooperation. After the Effective Date, at the
request of either party and at the requesting party's expense, but without
additional consideration, the other party shall execute and deliver from time to
time such further instruments of assignment, conveyance and transfer, shall
cooperate in the conduct of litigation and the processing and collection of
insurance claims, and shall take such other actions as may reasonably be
required to convey and deliver more effectively to Outdoor the assets of
Acquiree Shares or to confirm and perfect the shareholder interest in the common
stock of Outdoor, and otherwise to accomplish the orderly transfer to Outdoor of
the assets and business of Acquiree as contemplated by this Agreement.
12.2 Audit Access. Outdoor will preserve the books, records, reports, documents
and lists obtained by it pursuant to this Agreement for a period of at least
seven years from the Effective Date, will not thereafter destroy or otherwise
dispose of such records without giving the Selling Shareholders notice and the
opportunity to take possession thereof, and, while in possession of such
records, will permit representatives of the Selling Shareholders to have access
at reasonable times to such books, records, reports, documents and files, to
make such copies therefrom as such representatives reasonably request. Outdoor
shall, subject to applicable law and regulation, and the terms of any
confidentiality agreement, hold in confidence any nonpublic information
concerning Acquiree obtained hereunder.
12.3 Insurance. On and after the Effective Date Outdoor shall cause Acquiree to
maintain liability insurance coverage customary for the business engaged in by
Acquiree and Outdoor shall use its best efforts for a period of three years from
the Effective Date to cause the Selling Shareholders to be named as an
additional insured thereon. On the Effective Date, Outdoor shall inform Acquiree
as to the name of the insurer and terms of the policy providing such coverage,
including the amount of any deductible, and shall inform the Selling
Shareholders promptly upon any change in the insurer or the terms of such
policy.
ARTICLE 13
----------
BROKERAGE; EXPENSES
-------------------
13.1 None of the parties have employed or will employ any broker, agent, finder,
or consultant (collectively, "Broker") or has incurred or will incur any
liability for any brokerage fees, commissions, finders' fees, or other fees, in
connection with the negotiation or consummation of the transactions contemplated
by this Agreement, except as herein set forth on Schedule 13.1 hereto. The
Selling Shareholders are responsible for and hereby indemnify and hold Outdoor
harmless against and in respect of any claim for brokerage fees, commissions, or
other finders' fees or commissions of any such Broker employed by the Selling
Shareholders or Acquiree and any additional such claims incurred by the Selling
23
Shareholders or Acquiree relative to this Agreement and the transactions
contemplated hereby and any attorney fees incurred by any of these parties in
relation to any such claim by a Broker. Similarly, Outdoor is responsible for
and hereby indemnify and hold the Selling Shareholders harmless against and in
respect of any claim for brokerage fees, commissions, or other finders' fees or
commissions of any such Broker employed by Outdoor and any additional such
claims incurred by Outdoor relative to this Agreement and the transactions
contemplated hereby and any attorney fees incurred by Outdoor in relation to any
such claim by a Broker. Except as otherwise expressly provided in this
Agreement, Acquiree shall bear the expenses of Acquiree and the Selling
Shareholders in connection with this Agreement or the transactions contemplated
hereby, including without limitation, any brokerage commission. Outdoor shall
bear their respective expenses incurred in connection with this Agreement or the
transactions contemplated hereby.
ARTICLE 14
----------
TERMINATION
-----------
14.1 Events of Termination. Anything herein or elsewhere to the contrary
notwithstanding, this Agreement may be terminated by written notice of
termination at any time before the Effective Date only as follows:
a. By mutual consent of Acquiree and Outdoor within 3 days of the date
of this Agreement;
b. Provided that Outdoor is not in material default hereunder, by
Outdoor upon three days' written notice to Acquiree and the Selling
Shareholders, if all of the conditions precedent set forth in Article 9.1 hereof
have not been met; or
c. Provided that Acquiree and the Selling Shareholders are not in
material default hereunder, by Acquiree or the Selling Shareholders upon three
days' written notice to Outdoor if all of the conditions precedent set forth in
Article 9.2 hereof have not been met.
ARTICLE 15
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CORPORATE NAME
--------------
15.1 Outdoor shall have the exclusive right to use the corporate name
"Intelliworxx, Inc." after the Effective Date and the Selling Shareholders shall
retain no rights therein.
ARTICLE 16
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GENERAL
-------
16.1 Conflicts between Documents. In the event of any conflict between the terms
of this Agreement and the terms of any other documents or instrument, the terms
of this Agreement shall control and such documents and instruments shall be
deemed amended and reformed to the extent required to eliminate any such
conflict or inconsistency.
24
16.2 Entire Agreement; Amendments. This Agreement constitutes the entire
understanding among the parties with respect to the subject matter contained
herein and supersedes any prior understandings and agreements among them
respecting such subject matter. This Agreement may be amended, supplemented, and
terminated only by a written instrument duly executed by all of the parties.
16.3 Headings. The headings in this Agreement are for convenience of reference
only and shall not affect its interpretation.
16.4 Gender; Number. Words of gender may be read as masculine, feminine, or
neuter, as required by context. Words of number may be read as singular or
plural, as required by context.
16.5 Exhibits and Schedules. Each Exhibit and Schedule referred to herein is
incorporated into this Agreement by such reference.
16.6 Severability. If any provision of this Agreement is held illegal, invalid,
or unenforceable, such illegality, invalidity, or unenforceability will not
affect any other provision hereof. This Agreement shall, in such circumstances,
be deemed modified to the extent necessary to render enforceable the provisions
hereof.
16.7 Notices. All notices and other communications hereunder shall be in writing
and shall be given to the person by sending a copy thereof by certified mail or
by telecopy. Notice shall be deemed to have been given to the person entitled
thereto when deposited in the United States mail or when transmitted by
telecopy.
If to Outdoor to:
Xx. Xxxxxx X. Xxxxxxxxxxxx, President
Outdoor Resorts, Inc.
0000 Xxxxx Xxxxxxx Xxxxxx, Xxxxx 0
Xxxxxxxx, XX 00000
(000) 000-0000 (fax)
If to Acquiree:
Mr. Xxxxx Xxxxxx, President
Intelliworxx, Inc.
0000 Xxxx Xxxxxx, Xxxxx 0000
Xxxxxxxx, XX 00000
(000) 000-0000 (fax)
With a copy to:
Xxxx Xxxxxxxxx, Esq.
Xxxxxx & Xxxxxxxxx, P.A.
000 Xxx Xxxxxxx Xx., Xxxxx 000
Xxxxxx Xxxx, XX 00000
(000) 000-0000 (fax)
25
Notice of any change in any such address shall also be given in the manner set
forth above. Whenever the giving of notice is required, the giving of such
notice may be waived by the party entitled to receive such notice.
16.8 Waiver. The failure of any party to insist upon strict performance of any
of the terms or conditions of this Agreement will not constitute a waiver of any
of its rights hereunder.
16.9 Assignment. No party may assign any of its rights or delegate any of its
obligations hereunder without the prior written consent of the other parties.
16.10 Successors and Assigns. This Agreement binds, inures to the benefit of,
and is enforceable by the successors and assigns of the parties, and does not
confer any rights on any other persons or entities.
16.11 Governing Law; Jurisdiction. The parties agree that, irrespective of any
wording that might be construed to be in conflict with this paragraph, this
Agreement is one for performance in Florida. The parties to this Agreement agree
that they waive any objection, constitutional, statutory or otherwise, to a
Florida court taking jurisdiction of any dispute between them. By entering into
this agreement, the parties, and each of them understand that they might be
called upon to answer a claim asserted in a Florida court. This Agreement shall
be construed and enforced in accordance with law of the State of Florida. Venue
for any such action shall be deemed proper in Hillsborough County, Florida.
16.12 No Benefit to Others. The representations, warranties, covenants and
agreements contained in this Agreement are for the sole benefit of the parties
hereto and their successors and assigns, and they shall not be construed as
conferring and are not intended to confer any rights on any other persons.
16.13 Publicity. Prior to the Effective Date, all notices to third parties and
all other publicity relating to the transactions contemplated by this Agreement
shall be jointly planned, coordinated and agreed to by the Acquiree, the Selling
Shareholders and Outdoor. Except as may be required by law, prior to the
Effective Date none of the parties hereto shall act unilaterally in this regard
without the prior approval of the Acquiree, the Selling Shareholders and
Outdoor; provided, however, that such approval shall not be unreasonably
withheld.
16.14 Counterparts. This Agreement may be executed in any number of counterparts
and any party hereto may execute any such counterpart, each of which when
executed and delivered shall be deemed to be an original and all of which
counterparts taken together shall constitute but one and the same instrument.
The execution of this Agreement by any party hereto will not become effective
until counterparts hereof have been executed by all the parties hereto. It shall
not be necessary in making proof of this Agreement or any counterpart hereof to
produce or account for any of the other counterparts.
26
16.15 Limitations Upon Consent: Whenever, under the terms of this Agreement, the
parties hereto are called upon to give their written consent, such written
consent will not be unreasonably withheld.
16.16 Form of Consent: All consents of any kind required under this Agreement
shall be in writing. Whenever, under the terms of this Agreement, Outdoor,
and/or Acquiree are authorized to give consent, such consent may be given and
shall be conclusively evidenced by the Chairman of the Board of Directors or the
president of each respective corporation giving such consent.
16.17 Attorneys' Fees and Court Actions: If a legal action is initiated by any
party to this Agreement against another, arising out of or relating to the
alleged performance or non-performance of any right or obligation established
hereunder, or any dispute concerning the same, any and all fees, costs and
expenses reasonably incurred by each successful party or his or its legal
counsel in investigating, preparing for, prosecuting, defending against, or
providing evidence, producing documents or taking any other action in respect of
such action, shall be the joint and several obligation of and shall be paid or
reimbursed by the unsuccessful party.
16.18 Binding Effect: This Agreement shall inure to the benefit of and be
binding upon Outdoor, Acquiree and the Selling Shareholders, and their
successors or assigns, including but not limited to any corporation or other
business entity which may acquire all or substantially all of Outdoor's and/or
Acquiree's assets and business, or with, or into which Acquiree and/or any
Acquiree subsidiary may be consolidated or merged, and upon the executors,
administrators and legal representatives thereof.
IN WITNESS WHEREOF, the parties have executed this Agreement on the
date first above written.
OUTDOOR RESORTS, INC.
By: /s/ Xxxxxx X. Xxxxxxxxxxxx
-------------------------------------
Xxxxxx X. Xxxxxxxxxxxx, President
INTELLIWORXX, INC.
By: /s/ Xxxxx X. Xxxxxx
-------------------------------------
Xxxxx Xxxxxx, President
27
THE SELLING SHAREHOLDERS
Amount of Shares of
Intelliworxx Stock Owned
------------------------
/s/ Xxxxx X. Xxxxxx 100,000
-------------------------------------
Xxxxx X. Xxxxxx, an individual
/s/ Xxxxxxx X. Xxxxx 100,000
-------------------------------------
Xxxxxxx X. Xxxxx, an individual
/s/ Xxxxxx X. Xxxxx, Xx. 100,000
-------------------------------------
Xxxxxx X. Xxxxx, Xx., an individual
/s/ Xxxxxxx X. Xxxxxxxx 100,000
-------------------------------------
Xxxxxxx X. Xxxxxxxx, an individual
/s/ Xxx X. Xxxxxxxxx 100,000
-------------------------------------
Xxx X. Xxxxxxxxx, an individual
/s/ Xxxxxxxxxxx X. Xxxxx 100,000
------------------------------------- -------
Xxxxxxxxxxx X. Xxxxx, an individual
Total Shares 600,000