1
EXHIBIT 10.13
CONTRIBUTION AND ACQUISITION AGREEMENT
This CONTRIBUTION AND ACQUISITION AGREEMENT (the "Agreement"), is made
as of this 3rd day of February 1999 by and between COLLECTORS UNIVERSE, INC., a
Delaware corporation ("CUI"), and ▇▇ ▇▇▇▇▇▇ ("▇▇▇▇▇▇"), with reference to the
following facts and circumstances:
R E C I T A L S
▇. ▇▇▇▇▇▇ is the record and beneficial owner of one percent (1%) of the
outstanding membership interests of Internet Universe, LLC ("IU"), which is a
California limited liability company that was formerly named "Collectors
Universe, LLC."
▇. ▇▇▇ has been formed, organized and capitalized under the laws of the
State of Delaware for the purposes of effecting the transactions contemplated in
this Agreement and the other agreements listed on Exhibit A hereto (the "Other
Contribution Agreements") and to conduct such other business and affairs as the
Board of Directors of CUI may from time to time find to be in the best interests
of CUI.
C. Each of the corporations or other business entities whose shares,
ownership interests or assets are being contributed to CUI pursuant to this
Agreement and or the Other Contribution Agreements (hereinafter sometimes
referred to collectively as the "Founding Companies") is engaged in the business
of marketing and selling, or providing services to, businesses that market and
sell, Collectibles (as hereinafter defined) at retail establishments, by mail
order, at trade shows or auctions or over the internet or by other means of
electronic commerce. CUI intends to integrate the products and services offered
by each of the Founding Companies in order to expand the sale of their products,
increase their efficiencies and reduce their operating costs and increase their
presence and expand their sales over the Internet.
▇. ▇▇▇ desires to acquire the Membership Interest in IU owned by ▇▇▇▇▇▇
(the "▇▇▇▇▇▇ Membership Interest") and ▇▇▇▇▇▇ desires to contribute and transfer
and convey the ▇▇▇▇▇▇ Membership Interest to CUI, in exchange for which CUI
would issue shares of CUI Common Stock to ▇▇▇▇▇▇, all on the terms and
conditions set forth herein, at or about the same time as and in conjunction
with the consummation of the similar transactions contemplated by the Other
Contribution Agreements.
E. This Agreement is being entered into by the parties, and the Other
Contribution Agreements are being or have been entered into by CUI and the other
parties thereto, as part of a unified plan of contribution and exchange of stock
(the "Plan") that is intended by the parties to qualify for non-recognition
treatment under Section 351 of the Internal Revenue Code of 1986, as amended
(the "Code"). However, none of the parties to this Agreement nor any of the
parties to the Other Contribution Agreements has made or is making any
representations or warranties with respect to whether the transactions being
consummated pursuant to and as part of such Plan will comply with the
requirements of Code Section 351 or as to the consequences, under applicable
federal, state or other tax laws, of such transactions to the parties to this
Agreement.
NOW, THEREFORE, in consideration of the foregoing and the respective
covenants and promises of each of CUI and ▇▇▇▇▇▇ to the other that are
hereinafter set forth, the parties agree as follows:
1. EXCHANGE OF SECURITIES.
1.1 SALE AND TRANSFER OF MEMBERSHIP INTEREST. On the terms and
subject to the conditions contained in this Agreement, at the Closing (as
hereinafter defined) ▇▇▇▇▇▇ shall contribute, assign, transfer, ▇▇▇▇▇ and
deliver the ▇▇▇▇▇▇ Membership Interest to CUI, free and clear of any and all
liens, claims, encumbrances, pledges, security interests, options, rights of
first refusal, community
2
property interests, restrictions and any other adverse interests of any kind or
nature whatsoever, and CUI shall acquire and accept the ▇▇▇▇▇▇ Membership
Interest from ▇▇▇▇▇▇.
1.2 ACQUISITION CONSIDERATION. As the consideration for the
sale and transfer to CUI of the ▇▇▇▇▇▇ Membership Interest, at the Closing CUI
shall issue a total of twenty-one thousand five hundred eighty five (21,585)
shares of common stock of CUI (the "CUI Shares" or the "Acquisition
Consideration") to ▇▇▇▇▇▇, provided that ▇▇▇▇▇▇ executes and delivers a
stockholders agreement in the form of Exhibit B hereto (the "Stockholders
Agreement").
1.3 CLOSING. Subject to the satisfaction or waiver of the
conditions set forth in Section 5 hereof, consummation of the transactions
contemplated hereby (the "Closing") shall take place at the offices of ▇▇▇▇▇▇▇▇▇
▇▇▇▇▇ ▇▇▇▇▇▇▇ & ▇▇▇▇▇, ▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇,
▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇, on the third (3rd) business day after satisfaction or waiver
of such conditions precedent, provided, however, that, if the Closing occurs on
or before ________ __, 1999, the transactions contemplated hereby shall be
effective for accounting purposes as of February 5, 1999 (the "Effective Date").
At the Closing, ▇▇▇▇▇▇ shall execute and deliver to CUI (i) such documents or
instruments of assignment as CUI or its counsel may reasonably request to
evidence and effectuate the transfer of the ▇▇▇▇▇▇ Membership Interest to CUI in
accordance with the terms of this Agreement, (ii) the Stockholders Agreement and
(iii) and the other Closing Documents listed on Exhibit C hereto (the "Closing
Documents"), and CUI shall execute and deliver to ▇▇▇▇▇▇ a stock certificate
evidencing her ownership of the CUI Shares.
1.4 WAIVER OF RIGHT OF PURCHASE OPTION. The parties hereto
agree to cooperate with each other in connection with efforts to have IU waive
its right of first refusal and purchase option with respect to ▇▇▇▇▇▇'
Membership Interest under Section 8 of IU's Operating Agreement.
2. REPRESENTATIONS AND WARRANTIES OF ▇▇▇▇▇▇. ▇▇▇▇▇▇ represents and
warrants to CUI as follows:
2.1 AUTHORITY AND CAPACITY. ▇▇▇▇▇▇ has the full legal right
and capacity to execute and deliver, and to perform her obligations under this
Agreement and the Stockholders Agreement, and has duly executed and delivered
this Agreement with the intent to be legally bound hereby. This Agreement
constitutes, and upon its execution and delivery the Stockholders Agreement
shall constitute, a valid and legally binding obligation of ▇▇▇▇▇▇ that is
enforceable against her in accordance with its respective terms, except as such
enforceability may be limited by bankruptcy, insolvency, moratorium or other
similar laws affecting creditors' rights and by general principles of equity
relating to the availability of equitable remedies (regardless of whether any
such agreements are sought to be enforced in a proceeding at law or in equity).
2.2 NO CONFLICTS. The execution and delivery and the
performance by ▇▇▇▇▇▇ of this Agreement and the Stockholders Agreement do not
and will not require any consent or approval of any third party (governmental or
other) that has not been obtained and will not result in any of the following:
(i) a termination, or a default or breach, or an event that, with notice or
lapse of time, or both, would be a default or breach, of any contract, lease,
license, promissory note, security or pledge agreement, or any other agreement,
instrument or commitment to which ▇▇▇▇▇▇ is a party or is subject; (ii)
acceleration of any indebtedness owed by ▇▇▇▇▇▇ or the creation or imposition of
any liens, charges or encumbrances on the ▇▇▇▇▇▇ Membership Interest or any of
▇▇▇▇▇▇' assets; or (iv) a violation or breach of any writ, injunction or decree
of any court or governmental instrumentality or any laws to which ▇▇▇▇▇▇ is a
party or to which she or the Searls Membership Interest is subject.
2
3
2.3 THE ▇▇▇▇▇▇ MEMBERSHIP INTEREST. ▇▇▇▇▇▇ has good and
marketable title to the ▇▇▇▇▇▇ Membership Interest, free and clear of any and
all liens, claims, encumbrances, pledges, security interests, options, rights of
first refusal, community property interests, restrictions and any other adverse
interests of any kind or nature whatsoever, other than restrictions on the
transferability and rights of first refusal that are imposed on the ▇▇▇▇▇▇
Membership Interest by IU's Operating Agreement. ▇▇▇▇▇▇ has not sold,
transferred, conveyed, assigned, hypothecated, or granted any security interest
in or pledged, or granted any option or right entitling anyone to acquire, the
▇▇▇▇▇▇ Membership Interest, and has not entered into nor is it bound by any
agreement, commitment or understanding (written or oral) to do any of the
foregoing. The ▇▇▇▇▇▇ Membership Interest is not subject to any liabilities,
other than those expressly provided for in the IU Operating Agreement, and no
liabilities will arise as a result of or in connection with the consummation of
the sale and transfer of the ▇▇▇▇▇▇ Membership Interest by ▇▇▇▇▇▇ to CUI.
2.4 SECURITIES LAW COMPLIANCE. ▇▇▇▇▇▇ represents and warrants
that:
(a) She has been advised and understands and agrees
that the CUI Shares will not be registered under the Securities Act of 1933, as
amended (the "1933 Act"), nor qualified under any state securities laws, on the
ground (among others) that no distribution or public offering of the CUI Shares
is to be effected in connection with the transactions contemplated herein or by
▇▇▇▇▇▇ and in issuing the CUI Shares to ▇▇▇▇▇▇, ▇▇▇ is relying on the accuracy
and completeness of the representations and warranties of ▇▇▇▇▇▇ in this Section
2.4.
(b) ▇▇▇▇▇▇ is acquiring the CUI Shares for her own
account, and not as an nominee or agent for any other persons or entities, and
for investment and not with a view to distribution or resale thereof.
(c) ▇▇▇▇▇▇ acknowledges that she has been informed
and understands that no public market for the CUI Shares exists and that there
can be no assurance that any such market may develop or exist in the future and,
even if a public market does develop, that the CUI Shares may not be sold or
transferred except in compliance with the 1933 Act or any exemption thereunder
and there is no assurance that any exemption from registration, including Rule
144, under the 1933 Act will become available to permit resales of the CUI
Shares.
(d) ▇▇▇▇▇▇ has been furnished with such information
regarding CUI and the CUI Shares as she has requested of CUI and has had an
opportunity to ask questions of the officers of CUI regarding, and to become
informed about, CUI and its business and its consolidated financial condition
and results of operations.
(e) ▇▇▇▇▇▇ is an "Accredited Investor" as such term
is defined in Regulation D under the 1933 Act.
(f) ▇▇▇▇▇▇ acknowledges and agrees that (i) until the
CUI Shares become eligible for resale under Rule 144(k) under the 1933 Act, any
proposed sale or other transfer or disposition of any of the CUI Shares, other
than pursuant to an effective registration statement under the 1933 Act, may not
be made unless and until ▇▇▇▇▇▇ has furnished to CUI an opinion of counsel,
reasonably acceptable to CUI and its counsel, to the effect that the proposed
sale or other transfer or disposition is exempt from registration under the 1933
Act, and (ii) the CUI Shares will be subject to the Stockholders Agreement
referred to in Section 1.2 hereof and, until the Stockholders Agreement has been
terminated (A) no sale or other disposition of the CUI Shares may be made except
in compliance therewith and (B) the CUI Shares may be required to be sold in one
or more transactions involving sales of shares of CUI initiated by certain other
of the CUI Stockholders, all as more fully provided in the Stockholders
Agreement. ▇▇▇▇▇▇ has read and understands the Stockholders Agreement.
3
4
(g) ▇▇▇▇▇▇ acknowledges and agrees that the
certificate representing the CUI Shares shall contain restrictive legends in the
forms set forth in the form of Stockholders Agreement attached hereto as Exhibit
B or restrictive legends that are substantially similar thereto.
2.5 ACKNOWLEDGEMENTS AND AGREEMENTS REGARDING CUI
REPRESENTATIONS. ▇▇▇▇▇▇ acknowledges and agrees that (a) CUI has not made, and
is not making, any representations or warranties to ▇▇▇▇▇▇ with respect to (i)
the federal, state or local income or other tax consequences to ▇▇▇▇▇▇ of her
consummation of the transactions contemplated hereby, or (ii) the future
performance of CUI; and (b) in entering into this Agreement and the Stockholders
Agreement, she is not relying on any statements or representations or warranties
of CUI, or any representations or warranties made or purported to have been made
by any officer, director, stockholder, employee or agent of CUI, other than the
express representations and warranties of CUI contained in this Agreement.
3. REPRESENTATIONS AND WARRANTIES OF CUI. CUI makes the following
representations and warranties to ▇▇▇▇▇▇ as of the date of this Agreement:
3.1 ORGANIZATION. CUI is a corporation duly organized, validly
existing and in good standing under the laws of the State of Delaware.
3.2 CORPORATE POWER. CUI possesses the requisite corporate
power and authority to enter into and perform its obligations under this
Agreement. CUI has taken all corporate action and obtained all consents
necessary to authorize its execution and delivery of and its performance under
this Agreement. This Agreement constitutes, and upon its execution and delivery
by CUI the Stockholders Agreement will constitute, valid obligations of CUI that
are legally binding on and enforceable against CUI in accordance with their
respective terms, except (in each case) as such enforceability may be limited by
bankruptcy, insolvency, moratorium or other similar laws affecting creditors'
rights, and by general principles of equity relating to the availability of
equitable remedies (regardless of whether such agreements are sought to be
enforced in a proceeding at law or in equity).
3.3 NO CONFLICTS. The execution and delivery and the
performance by CUI of this Agreement and the Stockholders Agreement will not
result in any of the following: (i) the termination, or a default or an event
that, with notice or lapse of time, or both, would constitute a default, breach
or violation, of the Certificate of Incorporation or Bylaws of CUI, any
contract, lease, license, promissory note, security or pledge agreement, or
other agreement, instrument or commitment to which CUI is a party or is subject
and which is material to CUI and its subsidiaries considered as a whole; (ii)
the acceleration of the maturity of any indebtedness of CUI that is material to
CUI and its subsidiaries considered as a whole; or (iii) a violation or breach
of any writ, injunction or decree of any court or governmental instrumentality
to which CUI is a party or by which any of its properties is bound or any laws
or regulations applicable to CUI, where the violation would have a material
adverse effect on CUI and its subsidiaries, considered as a whole.
3.4 CERTIFICATE OF INCORPORATION AND BY-LAWS. CUI has
heretofore furnished to ▇▇▇▇▇▇, a complete and correct copy of its Certificate
of Incorporation and By-Laws, as amended to date. Such Certificate of
Incorporation and By-Laws are in full force and effect. CUI is not in violation
of any of the provisions of its Certificate of Incorporation or By-Laws.
3.5 CAPITALIZATION. As of the date hereof, the authorized
capital stock of CUI consists of 30,000,000 shares of Common Stock, par value
$.001 per share. On consummation of the transactions contemplated by this
Agreement and the Other Contributions Agreements, there will be (i) a total of
19,000,000 fully paid and nonassessable shares of Common Stock that will be
issued and outstanding, which will include the CUI Shares being issued under
this Agreement; and (ii) ___ shares of
4
5
Common Stock reserved for issuance on the exercise of stock options (either
granted or to be granted in the future).
3.6 FINANCIAL STATEMENTS. CUI has furnished to ▇▇▇▇▇▇
unaudited consolidated financial statements of Professional Coin Grading
Service, Inc. ("PCGS") which, on consummation of the transactions contemplated
hereby and by the Other Contribution Agreements, will be CUI's predecessor and
principal subsidiary, consisting of a balance sheet of PCGS as of June 30,1998
and a related statement of income for the year then ended, and an unaudited
balance sheet as of, and related unaudited statement of income of PCGS for the
six months ended, December 31, 1998, all of which have been prepared by PCGS
(collectively, the "PCGS Financial Statements"). Except as otherwise set forth
in Schedule 3.6 of the CUI Disclosure Schedules or in the footnotes contained in
the PCGS Financial Statements, such Financial Statements fairly present, in all
material respects, the financial position of PCGS as at, and the respective
results of operations of PCGS for the year ended June 30, 1998 and the six
months ended December 31, 1998, respectively. Except as set forth in Schedule
3.6 hereto, since December 31, 1998, there has not been a material adverse
change in the financial condition or results of operations of PCGS.
3.7 THE CUI SHARES. The CUI Shares to be issued by CUI to
▇▇▇▇▇▇ pursuant to Section 1.2 of this Agreement shall be, at the time of such
issuance, duly authorized, validly issued, fully paid and non-assessable and
free of preemptive rights under the charter documents or other agreements of CUI
to which the shares of capital stock of CUI are subject, except for any
preemptive rights and rights of first refusal under the Stockholders Agreement.
4. ACTIONS TO BE TAKEN PENDING AND AFTER THE CLOSING
4.1 PROHIBITED ACTIONS. Between the date hereof and the
earlier of the consumation of the Closing or termination of this Agreement,
▇▇▇▇▇▇ agrees not to take any action which she knows, or reasonably should know,
would (i) make any of her respective representations or warranties contained in
this Agreement untrue or incorrect, or (ii) prevent or interfere with the
performance by ▇▇▇▇▇▇ of any of her covenants contained in this Agreement.
▇▇▇▇▇▇ also covenants and agrees that she will not grant any options or rights
to acquire, or pledge or permit the imposition of any liens or encumbrances on
or hypothecate, the ▇▇▇▇▇▇ Membership Interest either in whole or in part, and
she will not enter into any agreement or understanding, written or oral, that
provides therefor.
4.2 ACCESS TO INFORMATION. During the period from the date
hereof and continuing until the earlier of the completion of the Closing or
termination of this Agreement, CUI, upon reasonable notice, and subject to the
provisions of Section 4.6 hereof, shall (i) furnish ▇▇▇▇▇▇ and her accountants,
counsel and other representatives, reasonable access, during the period between
the date hereof and continuing until the earlier of the Closing or termination
of this Agreement, to all of CUI's and PCGS' properties, books, contracts,
commitments and records (ii) promptly furnish to ▇▇▇▇▇▇ such other information
concerning the business, properties and personnel of CUI and PCGS as ▇▇▇▇▇▇ may
reasonably request, and (iii) make available to ▇▇▇▇▇▇ the appropriate
individuals (including attorneys, accountants and other professionals) at CUI
for a discussion of the business, properties and personnel of CUI and PCGS as
▇▇▇▇▇▇ may reasonably request.
4.3 CONSENTS; APPROVALS. ▇▇▇▇▇▇ and CUI shall each use her or
its (as the case may be) best reasonable efforts to obtain all consents,
waivers, approvals, authorizations or orders (including, without limitation, all
governmental and regulatory rulings and approvals), and ▇▇▇▇▇▇ and CUI shall
make all filings (including, without limitation, all filings with governmental
or regulatory agencies) required in connection with the authorization, execution
and delivery of this Agreement by and the consummation of the transactions
contemplated hereby. ▇▇▇▇▇▇ and CUI shall furnish all information
5
6
required to be included in any applications or other filings to be made pursuant
to the rules and regulations of any governmental body in connection with the
transactions contemplated by this Agreement.
4.4 NOTIFICATION OF CERTAIN MATTERS. ▇▇▇▇▇▇ shall give prompt
notice to CUI, and CUI shall give prompt notice to ▇▇▇▇▇▇ of (i) the occurrence
or nonoccurrence of any event which would be likely to cause any representation
or warranty made by such party in this Agreement to be materially untrue or
inaccurate, or (ii) any failure of ▇▇▇▇▇▇ or CUI materially to comply with or
satisfy any covenant, condition or agreement to be complied with or satisfied by
her or it hereunder; provided, however, that the delivery of any notice pursuant
to this Section shall not limit or otherwise affect the remedies available
hereunder to the party receiving such notice.
4.5 FURTHER ACTION. On the terms and subject to the conditions
hereof, each of the parties hereto shall use all reasonable efforts to take, or
cause to be taken, all actions, and to do, or cause to be done, all other things
necessary, proper or advisable to consummate and make effective as promptly as
practicable the transactions contemplated by this Agreement, to obtain in a
timely manner all necessary waivers, consents and approvals and to effect all
necessary registrations and filings, and otherwise to satisfy or cause to be
satisfied all conditions precedent to its obligations under this Agreement. From
and after the Closing, each party shall take such actions and execute such
documents and instruments as any other party may reasonably request to better
evidence or effectuate the transactions contemplated by this Agreement or the
Exhibits hereto.
4.6 CONFIDENTIAL INFORMATION. ▇▇▇▇▇▇ acknowledges that she or
any of her agents or advisors ("Representatives") may be given, by CUI or PCGS
(each, a "disclosing party") or any of such disclosing party's Representatives,
access to various items of proprietary and confidential information of the
disclosing party in the course of investigations and negotiations prior to
Closing. ▇▇▇▇▇▇ agrees that such confidential information shall be kept strictly
confidential by her and her Representatives and shall not be used for any
purpose other than to facilitate the consummation of the transactions
contemplated herein. Confidential information shall include any proprietary
business or other information which is delivered (orally or in writing) or to
which access is given by a disclosing party or any of its Representatives to
▇▇▇▇▇▇ or any of her Representatives, and any such information that is included
in or incorporated into any notes, analyses, memoranda, projections or other
documents that are prepared by ▇▇▇▇▇▇ or any of her Representatives, unless such
information (a) is already of public knowledge, or (b) becomes of public
knowledge through no fault, action or inaction of the receiving party or its
Representatives, or (c) is demonstrated convincingly by ▇▇▇▇▇▇ to have been
known by her or any of her Representatives prior to the disclosure of such
information by the disclosing party to her or her Representatives, unless such
knowledge was acquired from a person who ▇▇▇▇▇▇ or her Representatives knew or
reasonably should have known was subject, at the time of such disclosure, to a
fiduciary or other duty of non-disclosure to the disclosing party. Except as
permitted by Section 4.6, neither ▇▇▇▇▇▇ nor her Representatives shall
intentionally disclose any confidential information of CUI or PCGS to any third
person; provided, however, that such information may be disclosed (i) with the
written consent of CUI, (ii) in applications or requests required to be made to
obtain licenses, permits, approvals or consents needed to consummate the
transactions contemplated herein, (iii) to ▇▇▇▇▇▇' professional advisors who
need to know such information in connection with the consummation of the
transactions contemplated hereby, or (iv) pursuant to court order or subpoena,
provided, however, that if ▇▇▇▇▇▇ or any of her Representatives is served with a
court order or subpoena that would require the disclosure of any of the
confidential information of a disclosing party, ▇▇▇▇▇▇ or such Representative so
served (as the case may be) shall promptly, but in any event within three (3)
days thereafter, notify CUI thereof and shall provide reasonable cooperation, at
CUI's expense, with any efforts that CUI may undertake to quash such court order
or subpoena or obtain a protective order with respect to the
6
7
disclosure and use of such confidential information. The restrictions and
obligations contained in this Section 4.6 shall survive the consummation of the
transactions contemplated hereby and any termination of this Agreement.
5. CONDITIONS PRECEDENT
5.1 CONDITIONS TO OBLIGATIONS OF EACH PARTY TO CONSUMMATE
TRANSACTIONS. The performance by each party of its respective obligations under
this Agreement shall be subject to the satisfaction, at or prior to the Closing
Date, of each of the following conditions unless waived in writing by such
party:
(a) Absence of Injunctions or Restraints; Illegality.
No temporary restraining order, preliminary or permanent injunction or other
order issued by any court of competent jurisdiction or other legal restraint or
prohibition preventing the consummation of the transactions contemplated hereby
shall be in effect, nor shall any proceeding brought by any administrative
agency or commission or other governmental authority or instrumentality,
domestic or foreign, seeking any of the foregoing be pending; and there shall
not be any action taken, or any statute, rule, regulation or order enacted,
entered, enforced or deemed applicable to the transactions contemplated hereby
which makes their consummation illegal.
(b) Governmental Actions. There shall not have been
instituted, pending or threatened, in writing, any action or proceeding (or any
investigation or other inquiry that might result in such an action or
proceeding) by any governmental authority or administrative agency before any
governmental authority, administrative agency or court of competent
jurisdiction, nor shall there be in effect any judgment, decree or order of any
governmental authority, administrative agency or court of competent
jurisdiction, in either case, seeking to prohibit or limit CUI, following the
Closing, from exercising any of the material rights and privileges pertaining to
its ownership of the ▇▇▇▇▇▇ Membership Interest.
(c) Consents Obtained. All material consents,
waivers, approvals, authorizations or orders required to be obtained by CUI,
▇▇▇▇▇▇ or IU for the authorization, execution and delivery of this Agreement and
the consummation by each such party of the transactions contemplated hereby
shall have been obtained by CUI, IU or ▇▇▇▇▇▇ (as the case may be).
5.2 ADDITIONAL CONDITIONS TO OBLIGATIONS OF CUI. The
obligations of CUI to consummate its acquisition of the ▇▇▇▇▇▇ Membership
Interest and to perform its other obligations under this Agreement also are
subject to the following conditions:
(a) Accuracy of Representations and Warranties. The
representations and warranties of ▇▇▇▇▇▇ contained in this Agreement shall be
true and correct in all material respects on and as of the Closing Date, with
the same force and effect as if made on and as of the Closing Date, except for
(i) changes contemplated by this Agreement, and (ii) those representations and
warranties which address matters only as of a particular date (which shall have
been true and correct as of such date, and CUI shall have received a certificate
to such effect signed by ▇▇▇▇▇▇.
(b) Performance of Covenants. ▇▇▇▇▇▇ shall have
performed or complied in all material respects with all agreements and covenants
required by this Agreement to be performed or complied with by her on or prior
to the Closing Date, including the execution and delivery of the Stockholders
Agreement, and CUI shall have received a certificate to such effect signed by
▇▇▇▇▇▇.
7
8
(c) Consummation of Other Transactions. The
transactions contemplated by the Other Contribution Agreements shall have been
consummated at or about the same time as the Closing hereunder.
(d) Additional Instruments. CUI shall have received
the Closing Documents listed on Exhibit C hereto and such other instruments and
documents as CUI or its counsel reasonably deems to be necessary.
5.3 ADDITIONAL CONDITIONS TO OBLIGATIONS OF ▇▇▇▇▇▇. The
obligation of ▇▇▇▇▇▇ to consummate her obligations under this Agreement is also
subject to the following conditions:
(a) Accuracy of Representations and Warranties. The
representations and warranties of CUI contained in this Agreement shall be true
and correct in all material respects on and as of the Closing Date, with the
same force and effect as if made on and as of the Closing Date, except for (i)
changes contemplated by this Agreement or in the CUI Disclosure Schedules, and
(ii) those representations and warranties which address matters only as of a
particular date (which shall have been true and correct as of such date, and
▇▇▇▇▇▇ shall have received a certificate to such effect signed by the President
of CUI.
(b) Agreements and Covenants. CUI shall have
performed or complied in all material respects with all agreements and covenants
required by this Agreement to be performed or complied with by it on or prior to
the Closing Date, and Sealers shall have received a certificate to such effect
signed by the President of CUI.
(c) Additional Instruments. ▇▇▇▇▇▇ shall have
received the additional Closing Documents listed on Exhibit C hereto and such
other instruments and documents as ▇▇▇▇▇▇ or her counsel reasonably deems to be
necessary.
6. TERMINATION
6.1 Termination. This Agreement may be terminated and the
transactions herein contemplated may be abandoned at any time prior to the
Closing:
(a) By mutual written consent of CUI and ▇▇▇▇▇▇; or
(b) By CUI, if any of the conditions to its
obligations set forth in Section 5 of this Agreement shall not have been
satisfied, or waived by CUI in writing, prior to March __, 1999;
(c) By ▇▇▇▇▇▇ if any of the conditions set forth in
Section 5 of this Agreement to her obligations shall not have been satisfied, or
waived in writing by ▇▇▇▇▇▇, prior to March __, 1999;
Provided, that in each of the foregoing cases the party so terminating
is not in breach of any of its material obligations or representations or
warranties under this Agreement.
6.2 Procedure Upon Termination. Any termination and
abandonment by CUI or ▇▇▇▇▇▇, or both, pursuant to Section 6.1 hereof, shall be
effective on written notice thereof from the terminating party to the other
parties and upon any such termination:
8
9
(a) Each party will redeliver all documents,
workpapers and other material of any other party relating to the transactions
contemplated hereby, whether so obtained before or after the execution hereof,
to the party furnishing the same;
(b) The obligations of confidentiality set forth in
Section 4.6 hereof shall continue despite such termination; and
(c) The parties shall be relieved of any obligation
to consummate the transactions contemplated hereby, but none of the parties
shall be relieved of any liability for its breach or default under this
Agreement.
7. SURVIVAL OF REPRESENTATIONS AND WARRANTIES
Regardless of any due diligence or other investigation, either prior to
or after the Closing, or any verification or approval by any party hereto or by
anyone or on behalf of any party hereto, all of the representations and
warranties set forth in this Agreement or in any certificates delivered pursuant
hereto shall remain in full force and effect and shall survive the Closing until
the expiration of three (3) years from the Closing Date, except that (i) ▇▇▇▇▇▇'
representations and warranties contained in Sections 2.1 and 2.3, and the
representations and warranties of CUI contained in Sections 3.1, 3.5 and 3.7,
shall survive for a period of seven (7) years following the Closing. All
covenants which by their terms require performance or compliance following the
Closing shall remain in full force and effect and shall survive the Closing
until they have been fully performed and discharged.
8. MISCELLANEOUS.
8.1 ASSIGNMENT. No party may assign this Agreement, or assign
its rights or delegate its duties hereunder, without the prior written consent
of the other party.
8.2 SEVERABILITY. Any provision of this Agreement which is
illegal, invalid or unenforceable shall be ineffective to the extent of such
illegality, invalidity or unenforceability, without affecting in any way the
remaining provisions hereof.
8.3 GOVERNING LAW. This Agreement is deemed to have been made
in the State of California, and its interpretation, its construction and the
remedies for its enforcement or breach are to be applied pursuant to, and in
accordance with, the laws of the State of California for contracts made and to
be performed in that state. In the event any party hereto is required to
initiate any legal action or proceeding to enforce its rights hereunder, such
action or proceeding shall be brought and maintained exclusively in the Superior
Court for the County of Orange, in California and each party agrees to accept,
and not to challenge, the jurisdiction of such court over the parties and the
subject matter of such action or proceeding or the convenience of the forum and
to accept and not to challenge the adequacy of service by certified or
registered mail. The prevailing party in any such action or proceeding shall be
entitled to recover its reasonable attorneys fees and disbursements, expert
witness fees and disbursements and other costs of suit from the non-prevailing
party. TO THE FULLEST EXTENT PERMITTED BY APPLICABLE LAW, EACH PARTY HEREBY
EXPRESSLY WAIVES ITS RIGHT TO A JURY TRIAL IN ANY SUCH ACTION OR PROCEEDING,
IRRESPECTIVE OF WHICHEVER PARTY MAY BRING ANY SUCH ACTION OR PROCEEDING.
8.4 ENTIRE AGREEMENT; AMENDMENT. This Agreement, and the
Exhibits and Schedules hereto, constitute all of the agreements of the parties
with respect to, and supersede all prior agreements and understandings relating
to the subject matter of, this Agreement or the transactions
9
10
contemplated by this Agreement. This Agreement may not be modified or amended
except by a written instrument specifically referring to this Agreement signed
by the parties hereto.
8.5 WAIVER. No waiver by one party of the other party's
obligations, or of any breach or default hereunder by any other party, shall be
valid or effective, unless such waiver is set forth in writing and is signed by
the party giving such waiver; and no such waiver shall be deemed a waiver of any
subsequent breach or default of the same or similar nature or any breach or
default by such other party of any of the other provisions of this Agreement.
8.6 INTERPRETATION; HEADINGS. This Agreement is the result of
arms'-length negotiations between the parties hereto and no provision hereof,
because of any ambiguity found to be contained therein or otherwise, shall be
construed against a party by reason of the fact that such party or its legal
counsel was the draftsman of that provision. The section, subsection and any
paragraph headings contained herein are for the purpose of convenience only and
are not intended to define, limit or affect, and shall not be considered in
connection with, the interpretation of any of the terms or provisions of this
Agreement.
8.7 NOTICES. All notices and other communications given or
made pursuant hereto shall be in writing and shall be deemed to have been duly
given or made if and when delivered personally or by overnight courier to the
parties at the addresses set forth on Exhibit D hereto or sent by electronic
transmission, with confirmation received, to the telecopy numbers specified on
that Exhibit (or at such other address or telecopy number for a party as shall
be specified by like notice).
8.8 COUNTERPARTS. This Agreement may be executed in separate
counterparts, each of which shall be deemed an original, but all of which
together shall constitute one and the same instrument.
IN WITNESS WHEREOF, the undersigned have executed this Agreement on the
date first above stated.
▇▇▇▇▇▇: CUI:
COLLECTORS UNIVERSE, INC.
/s/ ▇▇ ▇▇▇▇▇▇ By: /s/ ▇▇▇▇▇ ▇▇▇▇
----------------------------- -------------------------------------
▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇, Chairman
10
