ASSET PURCHASE AGREEMENT among DropCar, Inc. and DropCar Operating Company, Inc. and and Spencer Richardson and David Newman dated as of December 19, 2019
Exhibit 2.5
among
and
DropCar Operating Company, Inc.
and
DC Partners Acquisition, LLC
and
▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇
and
▇▇▇▇▇ ▇▇▇▇▇▇
dated
as of
December 19, 2019
TABLE OF CONTENTS
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ARTICLE I DEFINITIONS
|
1
|
|
ARTICLE II PURCHASE AND SALE
|
6
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|
Section
2.01 Purchase and Sale of Assets
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6
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|
Section
2.02 Excluded Assets
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6
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|
Section
2.03 Assumed Liabilities
|
7
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|
Section
2.04 Excluded Liabilities
|
7
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|
Section
2.05 Purchase Price
|
7
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|
Section
2.06 Allocation of Purchase Price
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8
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Section
2.07 Non-assignable Assets
|
8
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ARTICLE III CLOSING
|
9
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Section
3.01 Closing
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9
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Section
3.02 Closing Deliverables
|
9
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ARTICLE IV REPRESENTATIONS AND WARRANTIES OF SELLER
|
10
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Section
4.01 Organization and Qualification of Seller
|
10
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Section
4.02 Authority of Seller
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10
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Section
4.03 No Conflicts; Consents
|
11
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Section
4.04 No Other Representations and Warranties
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11
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ARTICLE V REPRESENTATIONS AND WARRANTIES OF BUYER
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12
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Section
5.01 Organization and Authority of Buyer
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12
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Section
5.02 Authority of Buyer
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12
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|
Section
5.03 No Conflicts; Consents
|
13
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Section
5.04 Brokers
|
13
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|
Section
5.05 Solvency
|
13
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|
Section
5.06 Legal Proceedings
|
13
|
|
Section
5.07 Independent Investigation
|
13
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ARTICLE VI COVENANTS
|
14
|
|
Section
6.01 Conduct of Business Prior to the Closing
|
14
|
|
Section
6.02 Supplement to Disclosure Schedules
|
14
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|
Section
6.03 Employees and Employee Benefits
|
14
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|
Section
6.04 Confidentiality
|
14
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|
Section
6.05 Governmental Approvals and Consents
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14
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|
Section
6.06 Books and Records
|
17
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Section
6.07 Closing Conditions
|
16
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Section
6.08 Public Announcements
|
16
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|
Section
6.09 Bulk Sales Laws
|
16
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Section
6.10 Transfer Taxes
|
16
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Section
6.11 Release of Claims
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17
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Section
6.12 Funding of the Business
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17
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Section
6.13 Further Assurances
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17
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ARTICLE VII CONDITIONS TO CLOSING
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17
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Section
7.01 Conditions to Obligations of All Parties
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17
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Section
7.02 Conditions to Obligations of Buyer
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17
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Section
7.03 Conditions to Obligations of Seller
|
18
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ARTICLE VIII TERMINATION
|
19
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Section
8.01 Termination
|
19
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|
Section
8.02 Effect of Termination
|
20
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ARTICLE IX MISCELLANEOUS
|
20
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|
Section
9.01 Expenses
|
20
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|
Section
9.02 Notices
|
21
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Section
9.03 Interpretation
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22
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Section
9.04 Headings
|
22
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|
Section
9.05 Severability
|
22
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Section
9.06 Entire Agreement
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22
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Section
9.07 Successors and Assigns
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22
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|
Section
9.08 No Third-Party Beneficiaries
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22
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|
Section
9.09 Amendment and Modification; Waiver
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22
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|
Section
9.10 Governing Law; Submission to Jurisdiction; Waiver of Jury
Trial
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22
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Section
9.11 Specific Performance
|
23
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|
Section
9.12 Counterparts
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23
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Section
9.13 Non-recourse
|
23
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This
Asset Purchase Agreement (this “Agreement”), dated as of December
19, 2019, is entered into between DropCar, Inc., a Delaware
corporation (“Parent”), DropCar Operating
Company, Inc., a Delaware corporation (“Seller”), DC Partners Acquisition,
LLC, a New York limited liability company (“Buyer”), ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇, an
individual (“▇▇▇▇▇▇▇▇▇▇”), and ▇▇▇▇▇ ▇▇▇▇▇▇, an
individual (“▇▇▇▇▇▇”).
RECITALS
WHEREAS, Seller is
engaged in the business of providing automotive vehicle support,
fleet logistics, and concierge services for both consumers and the
automotive industry (the “Business”); and
WHEREAS, Seller
wishes to sell and assign to Buyer, and Buyer wishes to purchase
and assume from Seller, substantially all the assets and specified
liabilities (with all other liabilities retained by the Seller) of
the Business, subject to the terms and conditions set forth
herein;
NOW,
THEREFORE, in consideration of the mutual covenants and agreements
hereinafter set forth and for other good and valuable
consideration, the receipt and sufficiency of which are hereby
acknowledged, the parties hereto agree as follows:
ARTICLE
I
DEFINITIONS
The
following terms have the meanings specified or referred to in this
ARTICLE I:
“Affiliate” of a Person means any
other Person that directly or indirectly, through one or more
intermediaries, controls, is controlled by, or is under common
control with, such Person. The term “control”
(including the terms “controlled by” and “under
common control with”) means the possession, directly or
indirectly, of the power to direct or cause the direction of the
management and policies of a Person, whether through the ownership
of voting securities, by contract or otherwise.
“Agreement” has the meaning set
forth in the preamble.
“Allocation Schedule” has the
meaning set forth in Section 2.06.
“Assigned Contracts” has the
meaning set forth in Section 2.01(b).
“Assignment and Assumption
Agreement” has the meaning set forth in Section
3.02(a)(ii).
“Assumed Liabilities” has the
meaning set forth in Section 2.03.
“▇▇▇▇ of Sale” has the meaning set
forth in Section 3.02(a)(i).
“Books and Records” means
originals, or where not available, copies, of all books and
records, including books of account, ledgers and general, financial
and accounting records, machinery and equipment maintenance files,
customer lists, customer purchasing histories, price lists,
distribution lists, supplier lists, production data, quality
control records and procedures, customer complaints and inquiry
files, research and development files, records and data (including
all correspondence with any Governmental Authority), sales material
and records, strategic plans, internal financial statements and
marketing and promotional surveys, material and research, that
relate to the Business or the Purchased Assets.
“Business” has the meaning set
forth in the recitals.
“Business Day” means any day except
Saturday, Sunday or any other day on which commercial banks located
in New York are authorized or required by Law to be closed for
business.
“Buyer” has the meaning set forth
in the preamble.
“Buyer Closing Certificate” has the
meaning set forth in Section 7.03(d).
“Change in Control” means, with
respect to Parent, the occurrence of any of the
following:
(a)
a tender offer (or
series of related offers) shall be made and consummated for the
ownership of 50% or more of the outstanding voting securities of
Parent, unless as a result of such tender offer more than 50% of
the outstanding voting securities of the surviving or resulting
corporation shall be owned in the aggregate by the stockholders of
Parent (as of the time immediately prior to the commencement of
such offer), any employee benefit plan of Parent or its
subsidiaries, and their Affiliates;
(b)
Parent shall be
merged or consolidated with another entity, unless as a result of
such merger or consolidation more than 50% of the outstanding
voting securities of the surviving or resulting entity shall be
owned in the aggregate by the stockholders of Parent (as of the
time immediately prior to such transaction), any employee benefit
plan of Parent or its subsidiaries, and their
Affiliates;
(c)
Parent shall sell
substantially all of its assets to another entity that is not
wholly owned by Parent, unless as a result of such sale more than
50% of such assets shall be owned in the aggregate by the
stockholders of Parent (as of the time immediately prior to such
transaction), any employee benefit plan of Parent or its
subsidiaries, and their Affiliates; or
(d)
any change in
ownership of more than 50% of the voting securities of Parent in
one or more related transactions.
2
For
purposes of this definition, ownership of voting securities shall
take into account and shall include ownership as determined by
applying the provisions of Rule 13d-3(d)(I)(i) (as in effect on the
date hereof) under the Securities Exchange Act of 1934, as
amended.
“Closing” has the meaning set forth
in Section 3.01.
“Closing Date” has the meaning set
forth in Section 3.01.
“Code” means the Internal Revenue
Code of 1986, as amended.
“Contracts” means all legally
binding written contracts, leases, mortgages, licenses,
instruments, notes, commitments, undertakings, indentures and other
agreements.
“Disclosure Schedules” means the
Disclosure Schedules delivered by Seller and Buyer concurrently
with the execution and delivery of this Agreement.
“Dollars or $” means the lawful
currency of the United States.
“Drop Dead Date” has the meaning
set forth in Section 8.01(b)(i).
“Employees” means those Persons
employed by Parent or Seller who worked for the Business
immediately prior to the Closing.
“Excluded Assets” has the meaning
set forth in Section 2.02.
“Excluded Liabilities” has the
meaning set forth in Section 2.04.
“GAAP” means United States
generally accepted accounting principles in effect from time to
time.
“Governmental Authority” means any
federal, state, local or foreign government or political
subdivision thereof, or any agency or instrumentality of such
government or political subdivision, or any self-regulated
organization or other non-governmental regulatory authority or
quasi-governmental authority (to the extent that the rules,
regulations or orders of such organization or authority have the
force of Law), or any arbitrator, court or tribunal of competent
jurisdiction.
“Governmental Order” means any
order, writ, judgment, injunction, decree, stipulation,
determination or award entered by or with any Governmental
Authority.
“Intellectual Property” means any
and all of the following arising pursuant to the Laws of any
jurisdiction throughout the world: (a) trademarks, service marks,
trade names, and similar indicia of source of origin, all
registrations and applications for registration thereof, and the
goodwill connected with the use of and symbolized by the foregoing;
(b) copyrights and all registrations and applications for
registration thereof; (c) trade secrets and know-how; (d) patents
and patent applications; (e) internet domain name registrations;
and (f) other intellectual property and related proprietary
rights.
3
“Intellectual Property Agreements”
means all licenses, sublicenses and other agreements by or through
which other Persons grant Seller or Seller grants any other Persons
any exclusive or non-exclusive rights or interests in or to any
Intellectual Property that is used in the Business.
“Intellectual Property Assets”
means all Intellectual Property that is owned by Seller and used in
connection with the Business, including the Intellectual Property
Registrations set forth on Section 2.01(b) of the Disclosure
Schedules.
“Intellectual Property
Registrations” means all Intellectual Property Assets
that are subject to any issuance, registration, application or
other filing by, to or with any Governmental Authority or
authorized private registrar in any jurisdiction, including
registered trademarks, domain names, and copyrights, issued and
reissued patents and pending applications for any of the
foregoing.
“Law” means any statute, law,
ordinance, regulation, rule, code, order, constitution, treaty,
common law, judgment, decree, other requirement or rule of law of
any Governmental Authority.
“Leased Real Property” means any
real property leased by Seller used in connection with the
Business.
“Leases” means lease for Leased
Real Property.
“Material Adverse Effect” means any
event, occurrence, fact, condition or change that is materially
adverse to (a) the business, results of operations, financial
condition or assets of the Business, taken as a whole, or (b) the
ability of Seller to consummate the transactions contemplated
hereby; provided, however, that "Material Adverse Effect" shall not
include any event, occurrence, fact, condition or change, directly
or indirectly, arising out of or attributable to: (i) general
economic or political conditions; (ii) conditions generally
affecting the industries in which the Business operates; (iii) any
changes in financial, banking or securities markets in general,
including any disruption thereof and any decline in the price of
any security or any market index or any change in prevailing
interest rates; (iv) acts of war (whether or not declared), armed
hostilities or terrorism, or the escalation or worsening thereof;
(v) any action required or permitted by this Agreement or any
action taken (or omitted to be taken) with the written consent of
or at the written request of Buyer; (vi) any matter of which Buyer
is aware on the date hereof; (vii) any changes in applicable Laws
or accounting rules (including GAAP) or the enforcement,
implementation or interpretation thereof; (viii) the announcement,
pendency or completion of the transactions contemplated by this
Agreement, including losses or threatened losses of employees,
customers, suppliers, distributors or others having relationships
with Parent, the Seller and the Business; (ix) any natural or
man-made disaster or acts of God; or (x) any failure by the
Business to meet any internal or published projections, forecasts
or revenue or earnings predictions (provided that the underlying
causes of such failures (subject to the other provisions of this
definition) shall not be excluded).
“Owned Real Property” means real
property owned by Seller.
4
“Permits” means all permits,
licenses, franchises, approvals, authorizations and consents
required to be obtained from Governmental Authorities.
“Person” means an individual,
corporation, partnership, joint venture, limited liability company,
Governmental Authority, unincorporated organization, trust,
association or other entity.
“Purchase Price” has the meaning
set forth in Section 2.05.
“Purchased Assets” has the meaning
set forth in Section 2.01.
“Real Property” means,
collectively, the Owned Real Property and the Leased Real
Property.
“Repayment Shortfall” has the
meaning set forth in Section 6.10.
“Representative” means, with
respect to any Person, any and all directors, officers, employees,
consultants, financial advisors, counsel, accountants and other
agents of such Person.
“Required Stockholder Vote” means
the affirmative vote of the holders of a majority of the shares of
capital stock of Parent entitled to vote on the matters
contemplated by this Agreement.
“Restricted Party” means
individually each of ▇▇▇▇▇▇▇▇▇▇ and ▇▇▇▇▇▇.
“Seller”
has the meaning set forth in the preamble.
“Seller Closing Certificate” has
the meaning set forth in Section 7.02(d).
“Tangible Personal Property” has
the meaning set forth in Section 2.01(c).
“Taxes” means all federal, state,
local, foreign and other income, gross receipts, sales, use,
production, ad valorem, transfer, franchise, registration, profits,
license, lease, service, service use, withholding, payroll,
employment, unemployment, estimated, excise, severance,
environmental, stamp, occupation, premium, property (real or
personal), real property gains, windfall profits, customs, duties
or other taxes, fees, assessments or charges of any kind
whatsoever, together with any interest, additions or penalties with
respect thereto and any interest in respect of such additions or
penalties.
“Tax Return” means any return,
declaration, report, claim for refund, information return or
statement or other document required to be filed with respect to
Taxes, including any schedule or attachment thereto, and including
any amendment thereof.
“Termination and Release Agreement”
has the meaning set forth in Section 3.02(a)(iii).
5
“Transaction Documents” means this
Agreement, the ▇▇▇▇ of Sale, the Assignment and Assumption
Agreement, the Termination and Release Agreements and the other
agreements, instruments and documents required to be delivered at
the Closing.
ARTICLE
II
PURCHASE AND
SALE
Section 2.01 Purchase and Sale of
Assets. Subject to the terms
and conditions set forth herein, at the Closing, Seller shall sell,
assign, transfer, convey and deliver to Buyer, and Buyer shall
purchase from Seller, all of Seller’s right, title and
interest in, to and under the following assets, properties and
rights of Seller (collectively, the “Purchased
Assets”):
(a) all
inventory, finished goods, technology, software and hardware,
branding, names, trademarks, raw materials, work in progress,
packaging, supplies, parts and other inventories of the Business
set forth on Section 2.01(a) of the Disclosure
Schedules;
(b) all
Contracts set forth on Section 2.01(b) of the Disclosure Schedules,
the Leases set forth on Section 2.01(b) of the Disclosure Schedules
and the Intellectual Property Agreements, Intellectual Property
Assets and Intellectual Property Registrations set forth on Section
2.01(b) of the Disclosure Schedules (collectively, the
“Assigned
Contracts”);
(c) all
furniture, fixtures, equipment, supplies and other tangible
personal property of the Business listed on Section 2.01(c) of the
Disclosure Schedules (the “Tangible Personal
Property”);
(d) all
Permits listed on Section 2.01(d) of the Disclosure Schedules, but
only to the extent such Permits may be transferred under applicable
Law;
(e) the
books of account or other records having to do with any
workers’ compensation claims; and
(f) all
goodwill associated with any of the assets described in the
foregoing clauses.
Section 2.02 Excluded
Assets. Other than the
Purchased Assets subject to Section 2.01, Buyer expressly
understands and agrees that it is not purchasing or acquiring, and
neither Seller nor Parent is selling or assigning, any other assets
or properties of Seller or Parent, and all such other assets and
properties shall be excluded from the Purchased Assets (the
“Excluded
Assets”). Excluded Assets
include the following assets and properties of Seller and
Parent:
(a) all
cash and cash equivalents, bank accounts and securities of Parent
or Seller;
(b) all
Contracts that are not Assigned Contracts;
6
(c) all
Intellectual Property other than the Intellectual Property
Agreements set forth on Section 2.01(b) of the Disclosure
Schedules;
(d) the
corporate seals, organizational documents, minute books, stock
books, Tax Returns, books of account or other records having to do
with the corporate organization of Seller or Parent, all
employee-related or employee benefit-related files or
records;
(e) all
insurance policies of Seller and Parent and all rights to
applicable claims and proceeds thereunder, except as otherwise set
forth in the Termination and Release Agreement;
(f) all
Benefit Plans and trusts or other assets attributable
thereto;
(g) all
Tax assets (including duty and Tax refunds and prepayments) of
Seller, Parent or any of their respective Affiliates;
(h) all
rights to any action, suit or claim of any nature available to or
being pursued by Seller or Parent, whether arising by way of
counterclaim or otherwise;
(i) all
assets, properties and rights used by Seller or Parent in their
respective businesses other than the Business; and
(j) the
rights which accrue or will accrue to Seller and Parent under the
Transaction Documents.
Section 2.03 Assumed
Liabilities. Subject to the
terms and conditions set forth herein, Buyer shall assume and agree
to pay, perform and discharge all liabilities or obligations of
Seller (a) relating to or arising out of workers’
compensation claims of any Employee which relate to events
occurring prior to the Closing Date as set forth on Section 2.03 of
the Disclosure Schedules and (b) arising under or relating to the
Assigned Contracts (collectively, the “Assumed
Liabilities”).
Section 2.04 Excluded
Liabilities.
Notwithstanding
the provisions of Section 2.03 or any other provision in this
Agreement to the contrary, Buyer shall not assume and shall not be
responsible to pay, perform or discharge any liabilities of Seller
or any of its Affiliates of any kind or nature whatsoever,
including, but not limited to, the employment, or termination of employment, of
any Employee prior to the Closing, other than the Assumed
Liabilities (the “Excluded
Liabilities”).
Section 2.05 Purchase
Price. The aggregate purchase
price for the Purchased Assets shall consist of (a) the
cancellation of any liabilities (except as otherwise set forth in
the Termination and Release Agreement and/or Section 3(h) of the
Employment Agreements (as defined below)) pursuant to (i) that
certain Employment Agreement, by and between Seller and ▇▇▇▇▇▇▇▇▇▇,
dated as of September 6, 2017 and (ii) that certain Employment
Agreement, by and between Seller and ▇▇▇▇▇▇, dated as of September
6, 2017 (collectively, the “Employment
Agreements”),
plus
(b) the assumption of the Assumed
Liabilities (the “Purchase
Price”).
7
Section 2.06 Allocation of Purchase
Price. Within thirty (30) days
after the Closing Date, Seller shall deliver a schedule allocating
the Purchase Price (including any Assumed Liabilities treated as
consideration for the Purchased Assets for Tax purposes) (the
“Allocation
Schedule”). The
Allocation Schedule shall be prepared in accordance with Section
1060 of the Code. The Allocation Schedule shall be deemed final
unless Buyer notifies Seller in writing that Buyer objects to one
or more items reflected in the Allocation Schedule within thirty
(30) days after delivery of the Allocation Schedule to Buyer. In
the event of any such objection, Seller and Buyer shall negotiate
in good faith to resolve such dispute; provided, however, that if
Seller and Buyer are unable to resolve any dispute with respect to
the Allocation Schedule within thirty (30) days after the delivery
of the Allocation Schedule to Buyer, such dispute shall be resolved
by ▇▇▇▇▇▇▇▇ LLP or, if ▇▇▇▇▇▇▇▇ LLP is unable to serve, another
impartial nationally recognized firm of independent certified
public accountants mutually appointed by Buyer and Seller. The fees
and expenses of such accounting firm shall be borne equally by
Seller and Buyer. Seller and Buyer agree to file their respective
IRS Forms 8594 and all federal, state and local Tax Returns in
accordance with the Allocation Schedule.
Section 2.07 Non-assignable
Assets.
(a) Notwithstanding
anything to the contrary in this Agreement, and subject to the
provisions of this Section 2.07, to the extent that the sale,
assignment, transfer, conveyance or delivery, or attempted sale,
assignment, transfer, conveyance or delivery, to Buyer of any
Purchased Asset would result in a violation of applicable Law, or
would require the consent, authorization, approval or waiver of a
Person who is not a party to this Agreement or an Affiliate of a
party to this Agreement (including any Governmental Authority), and
such consent, authorization, approval or waiver shall not have been
obtained prior to the Closing, this Agreement shall not constitute
a sale, assignment, transfer, conveyance or delivery, or an
attempted sale, assignment, transfer, conveyance or delivery,
thereof; provided,
however, that, subject to the
satisfaction or waiver of the conditions contained in ARTICLE VII,
the Closing shall occur notwithstanding the foregoing without any
adjustment to the Purchase Price on account thereof. Following the
Closing, Seller and Buyer shall use commercially reasonable
efforts, and shall cooperate with each other, to obtain any such
required consent, authorization, approval or waiver, or any
release, substitution or amendment required to novate all
liabilities and obligations under any and all Assigned Contracts or
Assumed Liabilities or to obtain in writing the unconditional
release of all parties to such arrangements, so that, in any case,
Buyer shall be solely responsible for the Assumed Liabilities and
obligations and Seller shall be responsible for the Excluded
Liabilities from and after the Closing Date; provided,
however, that neither Seller
nor Buyer shall be required to pay any consideration therefor. Once
such consent, authorization, approval, waiver, release,
substitution or amendment is obtained, Seller shall sell, assign,
transfer, convey and deliver to Buyer the relevant Purchased Asset
to which such consent, authorization, approval, waiver, release,
substitution or amendment relates for no additional
consideration.
(b) To
the extent that any Purchased Asset and/or Assumed Liability cannot
be transferred to Buyer following the Closing pursuant to this
Section 2.07, Buyer and Seller shall use commercially reasonable
efforts to enter into such arrangements (such as subleasing,
sublicensing or subcontracting) to provide to the parties the
economic and, to the extent permitted under applicable Law,
operational equivalent of the transfer of such Purchased Asset
and/or Assumed Liability to Buyer as of the Closing and the
performance by Buyer of its obligations with respect thereto. Buyer
shall, as agent or subcontractor for Seller pay, perform and
discharge fully the liabilities and obligations of Seller
thereunder from and after the Closing Date. To the extent permitted
under applicable Law, Seller shall, at Buyer’s expense, hold
in trust for and pay to Buyer promptly upon receipt thereof, such
Purchased Asset and all income, proceeds and other monies received
by Seller to the extent related to such Purchased Asset in
connection with the arrangements under this Section 2.07. Seller
shall be permitted to set off against such amounts all direct costs
associated with the retention and maintenance of such Purchased
Assets. Notwithstanding anything herein to the contrary, the
provisions of this Section 2.07 shall not apply to any consent or
approval required under any antitrust, competition or trade
regulation Law, which consent or approval shall be governed by
Section 6.05.
8
ARTICLE
III
CLOSING
Section 3.01 Closing. Subject to the terms and conditions of this
Agreement, the consummation of the transactions contemplated by
this Agreement (the “Closing”) shall take place at the offices of Mintz,
Levin, Cohn, Ferris, Glovsky & Popeo, P.C., located at ▇▇▇
▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇ at 12:00 P.M. Eastern
Standard Time, on the second Business Day after all of the
conditions to Closing set forth in ARTICLE VII are either satisfied
or waived (other than conditions which, by their nature, are to be
satisfied on the Closing Date), or at such other time, date or
place as Seller and Buyer may mutually agree upon in writing. The
date on which the Closing is to occur is herein referred to as the
“Closing Date”.
Section 3.02 Closing
Deliverables.
(a) At
the Closing, Seller shall deliver to Buyer the
following:
(i) a
▇▇▇▇ of sale in the form of Exhibit A
hereto (the “▇▇▇▇ of Sale”) and duly executed by Seller, transferring
the tangible personal property included in the Purchased Assets to
Buyer;
(ii) an
assignment and assumption agreement in the form of
Exhibit
B hereto (the
“Assignment and Assumption
Agreement”) and duly
executed by Seller, effecting the assignment to and assumption by
Buyer of the Purchased Assets and the Assumed
Liabilities;
(iii) with
respect to each of ▇▇▇▇▇▇▇▇▇▇ and ▇▇▇▇▇▇, a termination and release
agreement in the form of Exhibit C
attached hereto (the
“Termination and Release
Agreement”) duly executed
and effective in accordance with its terms by ▇▇▇▇▇▇▇▇▇▇ and
▇▇▇▇▇▇, effecting the respective termination of employment with
Seller and Parent and release of claims against Parent and Seller
by each of ▇▇▇▇▇▇▇▇▇▇ and ▇▇▇▇▇▇; provided, however, that the
Termination and Release Agreement may not be executed prior to the
Closing Date.
9
(iv) the
Seller Closing Certificate; and
(v) the
certificates of the Secretary or Assistant Secretary of Seller
required by Section 7.02(e) and Section 7.02(f).
(b) At
the Closing, Buyer shall deliver to Seller the
following:
(i) the
Assignment and Assumption Agreement duly executed by
Buyer;
(ii) the
Termination and Release Agreements duly executed by each of
▇▇▇▇▇▇▇▇▇▇ and ▇▇▇▇▇▇, each of which will be effective in
accordance with its terms;
(iii) the
Buyer Closing Certificate; and
(iv) the
certificates of the Secretary or Assistant Secretary of Buyer
required by Section 7.03(e) and Section 7.03(f).
ARTICLE
IV
REPRESENTATIONS AND
WARRANTIES OF SELLER
Except
as set forth in the Disclosure Schedules, Seller represents and
warrants to Buyer that the statements contained in this ARTICLE IV
are true and correct as of the date hereof.
Section 4.01 Organization and Qualification
of Seller. Seller is a
corporation duly organized, validly existing and in good standing
under the Laws of the state of Delaware and has all necessary
corporate power and authority to own, operate or lease the
properties and assets now owned, operated or leased by it and to
carry on the Business as currently conducted. Seller is duly
licensed or qualified to do business and is in good standing in
each jurisdiction in which the ownership of the Purchased Assets or
the operation of the Business as currently conducted makes such
licensing or qualification necessary, except where the failure to
be so licensed, qualified or in good standing would not have a
Material Adverse Effect.
Section 4.02 Authority of
Seller. Seller has all
necessary corporate power and authority to enter into this
Agreement and the other Transaction Documents to which Seller is a
party, to carry out its obligations hereunder and thereunder and to
consummate the transactions contemplated hereby and thereby. The
execution and delivery by Seller of this Agreement and any other
Transaction Document to which Seller is a party, the performance by
Seller of its obligations hereunder and thereunder and the
consummation by Seller of the transactions contemplated hereby and
thereby have been duly authorized by all requisite corporate action
on the part of Seller. This Agreement has been duly executed and
delivered by Seller, and (assuming due authorization, execution and
delivery by Buyer) this Agreement constitutes a legal, valid and
binding obligation of Seller, enforceable against Seller in
accordance with its terms, except as such enforceability may be
limited by bankruptcy, insolvency, reorganization, moratorium or
similar Laws affecting creditors’ rights generally and by
general principles of equity (regardless of whether enforcement is
sought in a proceeding at law or in equity). When each other
Transaction Document to which Seller is or will be a party has been
duly executed and delivered by Seller (assuming due authorization,
execution and delivery by each other party thereto), such
Transaction Document will constitute a legal and binding obligation
of Seller enforceable against it in accordance with its terms,
except as such enforceability may be limited by bankruptcy,
insolvency, reorganization, moratorium or similar Laws affecting
creditors’ rights generally and by general principles of
equity (regardless of whether enforcement is sought in a proceeding
at law or in equity).
10
Section 4.03 No Conflicts;
Consents. The execution,
delivery and performance by Seller of this Agreement and the other
Transaction Documents to which it is a party, and the consummation
of the transactions contemplated hereby and thereby, do not and
will not: (a) result in a violation or breach of any provision of
the certificate of incorporation or by-laws of Seller; (b) result
in a violation or breach of any provision of any Law or
Governmental Order applicable to Seller, the Business or the
Purchased Assets; or (c) except as set forth in Section 4.03 of the
Disclosure Schedules, require the consent, notice or other action
by any Person under, conflict with, result in a violation or breach
of, constitute a default under or result in the acceleration of any
Material Contract; except in the cases of clauses (b) and (c),
where the violation, breach, conflict, default, acceleration or
failure to give notice would not have a Material Adverse Effect. No
consent, approval, Permit, Governmental Order, declaration or
filing with, or notice to, any Governmental Authority is required
by or with respect to Seller in connection with the execution and
delivery of this Agreement or any of the other Transaction
Documents and the consummation of the transactions contemplated
hereby and thereby, except as set forth in Section 4.03 of the
Disclosure Schedules and such consents, approvals, Permits,
Governmental Orders, declarations, filings or notices which, in the
aggregate, would not have a Material Adverse
Effect.
Section 4.04 Brokers. No broker, finder or investment banker is
entitled to any brokerage, finder’s or other fee or
commission in connection with the transactions contemplated by this
Agreement or any other Transaction Document based upon arrangements
made by or on behalf of Seller.
Section 4.05 Solvency. Immediately after giving effect to the
transactions contemplated hereby, Seller shall be solvent and
shall: (a) be able to pay its debts as they become due; (b) own
property that has a fair saleable value greater than the amounts
required to pay its debts (including a reasonable estimate of the
amount of all contingent liabilities); and (c) have adequate
capital to carry on its business. No transfer of property is being
made and no obligation is being incurred in connection with the
transactions contemplated hereby with the intent to hinder, delay
or defraud either present or future creditors of Seller. In
connection with the transactions contemplated hereby, Seller has
not incurred, nor plans to incur, debts beyond its ability to pay
as they become absolute and matured.
Section 4.06 Legal
Proceedings. There are no
actions, suits, claims, investigations or other legal proceedings
pending or threatened against or by Buyer or any Affiliate of Buyer
that challenge or seek to prevent, enjoin or otherwise delay the
transactions contemplated by this Agreement.
11
Section 4.07 No Other Representations and
Warranties. Except for the
representations and warranties contained in this ARTICLE IV
(including the related portions of the Disclosure Schedules), none
of Parent, Seller nor any other Person has made or makes any other
express or implied representation or warranty, either written or
oral, on behalf of Parent or Seller, including any representation
or warranty as to the accuracy or completeness of any information
regarding the Business and the Purchased Assets furnished or made
available to Buyer and its Representatives (including any
information, documents or material delivered or made available to
Buyer or in any other form in expectation of the transactions
contemplated hereby) or as to the future revenue, profitability or
success of the Business, or any representation or warranty arising
from statute or otherwise in law.
ARTICLE
V
REPRESENTATIONS AND
WARRANTIES OF BUYER
Buyer
represents and warrants to Seller that the statements contained in
this ARTICLE V are true and correct as of the date
hereof.
Section 5.01 Organization and Authority of
Buyer. Buyer is a limited
liability company duly organized, validly existing and in good
standing under the Laws of the State of New
York.
Section 5.02 Authority of
Buyer. Buyer has all necessary
power and authority to enter into this Agreement and the other
Transaction Documents to which Buyer is a party, to carry out its
obligations hereunder and thereunder and to consummate the
transactions contemplated hereby and thereby. The execution and
delivery by Buyer of this Agreement and any other Transaction
Document to which Buyer is a party, the performance by Buyer of its
obligations hereunder and thereunder and the consummation by Buyer
of the transactions contemplated hereby and thereby have been duly
authorized by all requisite action on the part of Buyer. This
Agreement has been duly executed and delivered by Buyer, and
(assuming due authorization, execution and delivery by Seller) this
Agreement constitutes a legal, valid and binding obligation of
Buyer enforceable against Buyer in accordance with its terms,
except as such enforceability may be limited by bankruptcy,
insolvency, reorganization, moratorium or similar Laws affecting
creditors’ rights generally and by general principles of
equity (regardless of whether enforcement is sought in a proceeding
at law or in equity). When each other Transaction Document to which
Buyer is or will be a party has been duly executed and delivered by
Buyer (assuming due authorization, execution and delivery by each
other party thereto), such Transaction Document will constitute a
legal and binding obligation of Buyer enforceable against it in
accordance with its terms, except as such enforceability may be
limited by bankruptcy, insolvency, reorganization, moratorium or
similar Laws affecting creditors’ rights generally and by
general principles of equity (regardless of whether enforcement is
sought in a proceeding at law or in equity).
12
Section 5.03 No Conflicts;
Consents. The execution,
delivery and performance by Buyer of this Agreement and the other
Transaction Documents to which it is a party, and the consummation
of the transactions contemplated hereby and thereby, do not and
will not: (a) result in a violation or breach of any provision of
the articles of organization or operating agreement of Buyer; (b)
result in a violation or breach of any provision of any Law or
Governmental Order applicable to Buyer; or (c) except as set forth
in Section 5.03 of the Disclosure Schedules, require the consent,
notice or other action by any Person under, conflict with, result
in a violation or breach of, constitute a default under or result
in the acceleration of any agreement to which Buyer is a party,
except in the cases of clauses (b) and (c), where the violation,
breach, conflict, default, acceleration or failure to give notice
would not have a material adverse effect on Buyer’s ability
to consummate the transactions contemplated hereby. No consent,
approval, Permit, Governmental Order, declaration or filing with,
or notice to, any Governmental Authority is required by or with
respect to Buyer in connection with the execution and delivery of
this Agreement and the other Transaction Documents and the
consummation of the transactions contemplated hereby and thereby,
except as set forth in Section 5.03 of the Disclosure Schedules and
such consents, approvals, Permits, Governmental Orders,
declarations, filings or notices which would not have a material
adverse effect on Buyer’s ability to consummate the
transactions contemplated hereby and thereby.
Section 5.04 Brokers. No broker, finder or investment banker is
entitled to any brokerage, finder’s or other fee or
commission in connection with the transactions contemplated by this
Agreement or any other Transaction Document based upon arrangements
made by or on behalf of Buyer.
Section 5.05 Solvency. Immediately after giving effect to the
transactions contemplated hereby, Buyer shall be solvent and shall:
(a) be able to pay its debts as they become due; (b) own property
that has a fair saleable value greater than the amounts required to
pay its debts (including a reasonable estimate of the amount of all
contingent liabilities); and (c) have adequate capital to carry on
its business. No transfer of property is being made and no
obligation is being incurred in connection with the transactions
contemplated hereby with the intent to hinder, delay or defraud
either present or future creditors of Buyer. In connection with the
transactions contemplated hereby, Buyer has not incurred, nor plans
to incur, debts beyond its ability to pay as they become absolute
and matured.
Section 5.06 Legal
Proceedings. There are no
actions, suits, claims, investigations or other legal proceedings
pending or threatened against or by Buyer or any Affiliate of Buyer
that challenge or seek to prevent, enjoin or otherwise delay the
transactions contemplated by this Agreement.
Section 5.07 Independent
Investigation. Buyer has
conducted its own independent investigation, review and analysis of
the Business and the Purchased Assets, and acknowledges that it has
been provided adequate access to the personnel, properties, assets,
premises, books and records, and other documents and data of Seller
for such purpose. Buyer acknowledges and agrees that: (a) in making
its decision to enter into this Agreement and to consummate the
transactions contemplated hereby, Buyer has relied solely upon its
own investigation and the express representations and warranties of
Seller set forth in ARTICLE IV of this Agreement (including related
portions of the Disclosure Schedules); and (b) neither Seller nor
any other Person has made any representation or warranty as to
Parent, Seller, the Business, the Purchased Assets or this
Agreement, except as expressly set forth in ARTICLE IV of this
Agreement (including the related portions of the Disclosure
Schedules).
13
ARTICLE
VI
COVENANTS
Section 6.01 Conduct of Business Prior to
the Closing. From the date
hereof until the Closing, except as otherwise provided in this
Agreement or consented to in writing by Buyer (which consent shall
not be unreasonably withheld or delayed), Seller shall (a) conduct
the Business in the ordinary course of business, including the
continuation of the cash management practices in place between
Parent and Seller, provided, however, that in no event shall Seller
have access to amounts in excess of $240,000 in the aggregate at
any one time; and (b) use commercially reasonable efforts to
maintain and preserve intact its current Business organization,
operations and franchise and to preserve the rights, franchises,
goodwill and relationships of its Employees, customers, lenders,
suppliers, regulators and others having relationships with the
Business.
Section 6.02 Supplement to Disclosure
Schedules. From time to time
prior to the Closing, Seller shall have the right (but not the
obligation) to supplement or amend the Disclosure Schedules hereto
with respect to any matter hereafter arising or of which it becomes
aware after the date hereof (each a “Schedule
Supplement”). Any
disclosure in any such Schedule Supplement shall not be deemed to
have cured any inaccuracy in or breach of any representation or
warranty contained in this Agreement, including for purposes of the
termination rights contained in this Agreement or of determining
whether or not the conditions set forth in Section 7.02(a) have
been satisfied; provided, however, that if Buyer has the right to,
but does not elect to, terminate this Agreement within two (2)
Business Days of its receipt of such Schedule Supplement, then
Buyer shall be deemed to have irrevocably waived any right to
terminate this Agreement with respect to such
matter.
Section 6.03 Confidentiality.
Each of Buyer, ▇▇▇▇▇▇▇▇▇▇ and ▇▇▇▇▇▇ covenants and agrees to keep
confidential any and all information provided to Buyer, ▇▇▇▇▇▇▇▇▇▇
or ▇▇▇▇▇▇ pursuant to this Agreement; provided, that the foregoing
shall not prohibit any disclosure required by any applicable law
(in which case Buyer, ▇▇▇▇▇▇▇▇▇▇ and ▇▇▇▇▇▇ will provide Parent and
Seller with the opportunity to review and comment in advance of
such disclosure).
Section 6.04 Governmental Approvals and
Consents.
(a) Each
party hereto shall, as promptly as possible, use its reasonable
best efforts to obtain, or cause to be obtained, all consents,
authorizations, orders and approvals from all Governmental
Authorities that may be or become necessary for its execution and
delivery of this Agreement and the performance of its obligations
pursuant to this Agreement and the other Transaction Documents.
Each party shall cooperate fully with the other parties and their
respective Affiliates in promptly seeking to obtain all such
consents, authorizations, orders and approvals. The parties hereto
shall not willfully take any action that will have the effect of
delaying, impairing or impeding the receipt of any required
consents, authorizations, orders and approvals.
14
(b) Without
limiting the generality of the Buyer’s undertakings pursuant
to this Section 6.05, Buyer agrees to use its reasonable best
efforts and to take any and all steps necessary to avoid or
eliminate each and every impediment under any antitrust,
competition or trade regulation Law that may be asserted by any
Governmental Authority or any other party so as to enable the
parties hereto to close the transactions contemplated by this
Agreement as promptly as possible, including proposing,
negotiating, committing to and effecting, by consent decree, hold
separate orders, or otherwise, the sale, divestiture or disposition
of any of its assets, properties or businesses or of the assets,
properties or businesses to be acquired by it pursuant to this
Agreement as are required to be divested in order to avoid the
entry of, or to effect the dissolution of, any injunction,
temporary restraining order or other order in any suit or
proceeding, which would otherwise have the effect of materially
delaying or preventing the consummation of the transactions
contemplated by this Agreement. In addition, Buyer shall use its
reasonable best efforts to defend through litigation on the merits
any claim asserted in court by any party in order to avoid entry
of, or to have vacated or terminated, any Governmental Order
(whether temporary, preliminary or permanent) that would prevent
the consummation of the Closing.
(c) All
analyses, appearances, meetings, discussions, presentations,
memoranda, briefs, filings, arguments, and proposals made by or on
behalf of any party before any Governmental Authority or the staff
or regulators of any Governmental Authority, in connection with the
transactions contemplated hereunder (but, for the avoidance of
doubt, not including any interactions between Seller or Buyer with
Governmental Authorities in the ordinary course of business, any
disclosure which is not permitted by Law or any disclosure
containing confidential information) shall be disclosed to the
other party hereunder in advance of any filing, submission or
attendance, it being the intent that the parties will consult and
cooperate with one another, and consider in good faith the views of
one another, in connection with any such analyses, appearances,
meetings, discussions, presentations, memoranda, briefs, filings,
arguments, and proposals. Each party shall give notice to the other
parties with respect to any meeting, discussion, appearance or
contact with any Governmental Authority or the staff or regulators
of any Governmental Authority, with such notice being sufficient to
provide the other parties with the opportunity to attend and
participate in such meeting, discussion, appearance or
contact.
(d) Seller
and Buyer shall use commercially reasonable efforts to give all
notices to, and obtain all consents from, all third parties that
are described in Section 4.03 and Section 5.03 of the Disclosure
Schedules; provided, however, that Seller shall not be obligated to
pay any consideration therefor to any third party from whom consent
or approval is requested.
Section 6.05 Books and
Records.
(a) In
order to facilitate the resolution of any claims made against or
incurred by Seller prior to the Closing, or for any other
reasonable purpose, for a period of six years after the Closing,
Buyer shall:
15
(i) retain
the Books and Records (including personnel files) relating to
periods prior to the Closing in a manner reasonably consistent with
the prior practices of Seller; and
(ii) upon
reasonable notice, afford the Seller reasonable access (including
the right to make, at Seller’s expense, photocopies), during
normal business hours, to such Books and Records.
(b) In
order to facilitate the resolution of any claims made by or against
or incurred by Buyer after the Closing, or for any other reasonable
purpose, for a period of six years after the Closing, Seller
shall:
(i) retain
the books and records (including personnel files) of Seller which
relate to the Business and its operations for periods prior to the
Closing; and
(ii) upon
reasonable notice, afford the Buyer’s Representatives
reasonable access (including the right to make, at Buyer’s
expense, photocopies), during normal business hours, to such books
and records.
(c) Neither
Buyer nor Seller shall be obligated to provide the other party with
access to any books or records (including personnel files) pursuant
to this Section 6.06 where such access would violate any
Law.
Section 6.06 Closing
Conditions. From the date
hereof until the Closing, each party hereto shall use commercially
reasonable efforts to take such actions as are necessary to
expeditiously satisfy the closing conditions set forth in ARTICLE
VII hereof.
Section 6.07 Public
Announcements. Unless otherwise
required by applicable Law or stock exchange requirements (based
upon the reasonable advice of counsel), no party to this Agreement
shall make any public announcements in respect of this Agreement or
the transactions contemplated hereby or otherwise communicate with
any news media without the prior written consent of the other party
(which consent shall not be unreasonably withheld or delayed), and
the parties shall cooperate as to the timing and contents of any
such announcement.
Section 6.08 Bulk Sales
Laws. The parties hereby waive
compliance with the provisions of any bulk sales, bulk transfer or
similar Laws of any jurisdiction that may otherwise be applicable
with respect to the sale of any or all of the Purchased Assets to
Buyer.
Section 6.09 Transfer
Taxes. All transfer,
documentary, sales, use, stamp, registration, value added and other
such Taxes and fees (including any penalties and interest) incurred
in connection with this Agreement and the other Transaction
Documents (including any real property transfer Tax and any other
similar Tax) shall be borne and paid by Seller or Buyer when due as
is customary. Buyer shall, at its own expense, timely file any Tax
Return or other document with respect to such Taxes or fees (and
Seller shall cooperate with respect thereto as
necessary).
16
Section 6.10 Funding of the Business.
From the date hereof through and until
May 31, 2020, on the first Business Day of each month beginning
after the date of this Agreement, the Seller shall continue to fund
the operations of the Business at a rate equal to $60,000 per
month; provided, however, that if during the period between the
date of this Agreement and the Closing Date, the amounts accessed
by Seller from Parent pursuant to Section 6.01 hereof exceeds the
amounts repaid by Seller in such month (a
“Repayment
Shortfall”), Seller shall
only be required to fund the operations of the Business for the
following month in amount equal to (a) $60,000 minus (b) the
Repayment Shortfall. For the avoidance of doubt, the access to
funds set forth in Section 6.01 hereof shall cease immediately upon
the Closing.
Section 6.11 Further
Assurances. Following the
Closing, each of the parties hereto shall, and shall cause their
respective Affiliates to, execute and deliver such additional
documents, instruments, conveyances and assurances and take such
further actions as may be reasonably required to carry out the
provisions hereof and give effect to the transactions contemplated
by this Agreement and the other Transaction
Documents.
ARTICLE
VII
CONDITIONS TO
CLOSING
Section 7.01 Conditions to Obligations of
All Parties. The obligations of
each party to consummate the transactions contemplated by this
Agreement shall be subject to the fulfillment, at or prior to the
Closing, of each of the following conditions:
(a) No
Governmental Authority shall have enacted, issued, promulgated,
enforced or entered any Governmental Order which is in effect and
has the effect of making the transactions contemplated by this
Agreement illegal, otherwise restraining or prohibiting
consummation of such transactions or causing any of the
transactions contemplated hereunder to be rescinded following
completion thereof.
(b) Seller
shall have received all consents, authorizations, orders and
approvals from the Governmental Authorities referred to in Section
4.03 and Buyer shall have received all consents, authorizations,
orders and approvals from the Governmental Authorities referred to
in Section 5.03, in each case, in form and substance reasonably
satisfactory to Buyer and Seller, and no such consent,
authorization, order and approval shall have been
revoked.
(c) A
Change in Control of Parent shall have been
consummated.
(d) Parent
shall have obtained the Required Stockholder Vote with respect to
the matters contemplated by this Agreement.
Section 7.02 Conditions to Obligations of
Buyer. The obligations of Buyer
to consummate the transactions contemplated by this Agreement shall
be subject to the fulfillment or Buyer’s waiver, at or prior
to the Closing, of each of the following
conditions:
(a) The
representations and warranties of Seller contained in ARTICLE IV
shall be true and correct in all respects as of the Closing Date
with the same effect as though made at and as of such date (except
those representations and warranties that address matters only as
of a specified date, which shall be true and correct in all
respects as of that specified date), except where the failure of
such representations and warranties to be true and correct would
not have a Material Adverse Effect.
17
(b) Seller
shall have duly performed and complied in all material respects
with all agreements, covenants and conditions required by this
Agreement and each of the other Transaction Documents to be
performed or complied with by it prior to or on the Closing
Date.
(c) Seller
shall have delivered to Buyer duly executed counterparts to the
Transaction Documents (other than this Agreement) and such other
documents and deliveries set forth in Section 3.02(a).
(d) Buyer
shall have received a certificate, dated the Closing Date and
signed by a duly authorized officer of Seller, that each of the
conditions set forth in Section 7.02(a) and Section 7.02(b) have
been satisfied (the “Seller Closing
Certificate”).
(e) Buyer
shall have received a certificate of the Secretary or an Assistant
Secretary (or equivalent officer) of Seller certifying that
attached thereto are true and complete copies of all resolutions
adopted by the board of directors of Seller authorizing the
execution, delivery and performance of this Agreement and the other
Transaction Documents and the consummation of the transactions
contemplated hereby and thereby, and that all such resolutions are
in full force and effect and are all the resolutions adopted in
connection with the transactions contemplated hereby and
thereby.
(f) Buyer
shall have received a certificate of the Secretary or an Assistant
Secretary (or equivalent officer) of Seller certifying the names
and signatures of the officers of Seller authorized to sign this
Agreement, the Transaction Documents and the other documents to be
delivered hereunder and thereunder.
Section 7.03 Conditions to Obligations of
Seller. The obligations of
Seller to consummate the transactions contemplated by this
Agreement shall be subject to the fulfillment or Seller’s
waiver, at or prior to the Closing, of each of the following
conditions:
(a) The
representations and warranties of Buyer contained in ARTICLE V
shall be true and correct in all respects as of the Closing Date
with the same effect as though made at and as of such date (except
those representations and warranties that address matters only as
of a specified date, which shall be true and correct in all
respects as of that specified date), except where the failure of
such representations and warranties to be true and correct would
not have a material adverse effect on Buyer’s ability to
consummate the transactions contemplated hereby.
(b) Buyer
shall have duly performed and complied in all material respects
with all agreements, covenants and conditions required by this
Agreement and each of the other Transaction Documents to be
performed or complied with by it prior to or on the Closing
Date.
18
(c) Buyer
shall have delivered to Seller the Purchase Price, duly executed
counterparts to the Transaction Documents (other than this
Agreement) and such other documents and deliveries set forth in
Section 3.02(b).
(d) Seller
shall have received a certificate, dated the Closing Date and
signed by a duly authorized officer of Buyer, that each of the
conditions set forth in Section 7.03(a) and Section 7.03(b) have
been satisfied (the “Buyer Closing
Certificate”).
(e) Seller
shall have received a certificate of the Secretary or an Assistant
Secretary (or equivalent officer) of Buyer certifying that attached
thereto are true and complete copies of all resolutions adopted by
the board of directors of Buyer authorizing the execution, delivery
and performance of this Agreement and the other Transaction
Documents and the consummation of the transactions contemplated
hereby and thereby, and that all such resolutions are in full force
and effect and are all the resolutions adopted in connection with
the transactions contemplated hereby and thereby.
(f) Seller
shall have received a certificate of the Secretary or an Assistant
Secretary (or equivalent officer) of Buyer certifying the names and
signatures of the officers of Buyer authorized to sign this
Agreement, the Transaction Documents and the other documents to be
delivered hereunder and thereunder.
ARTICLE
VIII
TERMINATION
Section 8.01 Termination. This Agreement may be terminated at any time
prior to the Closing:
(a) by
the mutual written consent of Seller and Buyer;
(b) by
either Seller or Buyer if the transactions contemplated by this
Agreement shall not have been consummated by June 6, 2020 (subject
to possible extension as provided in this Section 8.01(b), the
“Drop
Dead Date”); provided,
however, that the right to terminate this Agreement under this
Section 8.01(b) shall not be available to Seller, on the one hand,
or to Buyer, on the other hand, if such Party’s action or
failure to act has been a principal cause of the failure of the
transactions contemplated by this Agreement to occur on or before
the Drop Dead Date and such action or failure to act constitutes a
breach of this Agreement, provided, further, however, that, in the
event that the Securities and Exchange Commission has not declared
effective under the Securities Act of 1933, as amended, a
registration statement related to a transaction involving a Change
in Control by the date which is 60 days prior to the Drop Dead
Date, then Parent shall be entitled to extend the Drop Dead Date
for an additional 60 days;
(c) by
Buyer by written notice to Seller if:
(i) Buyer
is not then in material breach of any provision of this Agreement
and there has been a material breach, inaccuracy in or failure to
perform any representation, warranty, covenant or agreement made by
Seller pursuant to this Agreement that would give rise to the
failure of any of the conditions specified in ARTICLE VII and such
breach, inaccuracy or failure cannot be cured by Seller by the Drop
Dead Date; or
19
(ii) any
of the conditions set forth in Section 7.01 or Section 7.02 shall
not have been fulfilled by the Drop Dead Date, unless such failure
shall be due to the failure of Buyer to perform or comply with any
of the covenants, agreements or conditions hereof to be performed
or complied with by it prior to the Closing;
(d) by
Seller by written notice to Buyer if:
(i) Seller
is not then in material breach of any provision of this Agreement
and there has been a material breach, inaccuracy in or failure to
perform any representation, warranty, covenant or agreement made by
Buyer pursuant to this Agreement that would give rise to the
failure of any of the conditions specified in ARTICLE VII and such
breach, inaccuracy or failure cannot be cured by Buyer by the Drop
Dead Date; or
(ii) any
of the conditions set forth in Section 7.01 or Section 7.03 shall
not have been fulfilled by the Drop Dead Date, unless such failure
shall be due to the failure of Seller to perform or comply with any
of the covenants, agreements or conditions hereof to be performed
or complied with by it prior to the Closing; or
(e) by
Buyer or Seller in the event that:
(i) there
shall be any Law that makes consummation of the transactions
contemplated by this Agreement illegal or otherwise prohibited;
or
(ii) any
Governmental Authority shall have issued a Governmental Order
restraining or enjoining the transactions contemplated by this
Agreement, and such Governmental Order shall have become final and
non-appealable.
Section 8.02 Effect of
Termination. In the event of
the termination of this Agreement in accordance with this Article,
this Agreement shall forthwith become void and there shall be no
liability on the part of any party hereto
except:
(a) as
set forth in this ARTICLE VIII, Section 6.04 and ARTICLE IX hereof;
and
(b) that
nothing herein shall relieve any party hereto from liability for
any intentional breach of any provision hereof.
ARTICLE
IX
MISCELLANEOUS
Section 9.01 Expenses. Except as otherwise expressly provided herein
(including Section 6.11 hereof), all costs and expenses, including,
without limitation, fees and disbursements of counsel (except
Buyer’s legal fees up to but not to exceed $25,000 which
shall be paid by Seller), financial advisors and accountants,
incurred in connection with this Agreement and the transactions
contemplated hereby shall be paid by the party incurring such costs
and expenses, whether or not the Closing shall have
occurred.
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Section 9.02 Notices. All notices, requests, consents, claims,
demands, waivers and other communications hereunder shall be in
writing and shall be deemed to have been given (a) when delivered
by hand (with written confirmation of receipt); (b) when received
by the addressee if sent by a nationally recognized overnight
courier (receipt requested); (c) on the date sent by facsimile or
e-mail of a PDF document (with confirmation of transmission) if
sent during normal business hours of the recipient, and on the next
Business Day if sent after normal business hours of the recipient
or (d) on the third day after the date mailed, by certified or
registered mail, return receipt requested, postage prepaid. Such
communications must be sent to the respective parties at the
following addresses (or at such other address for a party as shall
be specified in a notice given in accordance with this Section
9.02):
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If to
Seller:
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▇▇▇▇
▇▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇
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▇▇▇
▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
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E-mail:
▇▇▇▇▇▇▇▇▇▇@▇▇▇▇▇▇▇▇▇▇▇▇▇.▇▇▇
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Attention:
▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇
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with a
copy to:
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Mintz,
Levin, Cohn, Ferris, Glovsky & Popeo, P.C.
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▇▇▇
▇▇▇▇▇ ▇▇▇▇▇▇
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▇▇▇
▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
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E-mail: ▇▇▇▇▇▇@▇▇▇▇▇.▇▇▇;
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▇▇▇▇▇▇▇▇▇▇▇▇@▇▇▇▇▇.▇▇▇
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Attention:
▇▇▇▇▇▇▇ ▇. ▇▇▇▇, Esq.
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▇▇▇▇▇▇
▇▇▇▇▇▇▇▇▇▇, Esq.
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If to
Buyer:
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▇▇▇▇▇
▇▇▇▇▇▇
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▇
▇▇▇▇▇▇▇ ▇▇▇▇
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▇▇▇▇▇▇,
▇▇▇ ▇▇▇▇ ▇▇▇▇▇
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E-mail:
▇▇▇▇▇@▇▇▇▇▇▇▇.▇▇▇
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Attention:
▇▇▇▇▇ ▇▇▇▇▇▇
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▇▇▇▇▇▇▇
▇▇▇▇▇▇▇▇▇▇
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▇▇▇
▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇. ▇▇▇
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▇▇▇
▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
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E-mail:
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E-mail:
▇▇▇▇▇▇▇@▇▇▇▇▇▇▇.▇▇▇
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Attention:
▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇
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with a
copy to:
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Jolie
▇▇▇▇, Esq.
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▇▇ ▇.
▇▇▇▇
▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇
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▇▇▇
▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
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E-mail:
▇▇▇▇▇▇▇▇▇▇▇▇@▇▇▇▇▇▇▇▇▇.▇▇▇
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Attention:
Jolie ▇▇▇▇, Esq.
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Section 9.03 Interpretation.
For purposes of this Agreement, (a) the words
“include,” “includes” and
“including” shall be deemed to be followed by the words
“without limitation”; (b) the word “or” is
not exclusive; and (c) the words “herein,”
“hereof,” “hereby,” “hereto”
and “hereunder” refer to this Agreement as a whole.
Unless the context otherwise requires, references herein: (x) to
Articles, Sections, Disclosure Schedules and Exhibits mean the
Articles and Sections of, and Disclosure Schedules and Exhibits
attached to, this Agreement; (y) to an agreement, instrument or
other document means such agreement, instrument or other document
as amended, supplemented and modified from time to time to the
extent permitted by the provisions thereof and (z) to a statute
means such statute as amended from time to time and includes any
successor legislation thereto and any regulations promulgated
thereunder. This Agreement shall be construed without regard to any
presumption or rule requiring construction or interpretation
against the party drafting an instrument or causing any instrument
to be drafted. The Disclosure Schedules and Exhibits referred to
herein shall be construed with, and as an integral part of, this
Agreement to the same extent as if they were set forth verbatim
herein.
Section 9.04 Headings. The headings in this Agreement are for reference
only and shall not affect the interpretation of this
Agreement.
Section 9.05 Severability. If any term or provision of this Agreement is
invalid, illegal or unenforceable in any jurisdiction, such
invalidity, illegality or unenforceability shall not affect any
other term or provision of this Agreement or invalidate or render
unenforceable such term or provision in any other jurisdiction.
Upon such determination that any term or other provision is
invalid, illegal or unenforceable, the parties hereto shall
negotiate in good faith to modify this Agreement so as to effect
the original intent of the parties as closely as possible in a
mutually acceptable manner in order that the transactions
contemplated hereby be consummated as originally contemplated to
the greatest extent possible.
Section 9.06 Entire
Agreement. This Agreement and
the other Transaction Documents constitute the sole and entire
agreement of the parties to this Agreement with respect to the
subject matter contained herein and therein, and supersede all
prior and contemporaneous representations, warranties,
understandings and agreements, both written and oral, with respect
to such subject matter. In the event of any inconsistency between
the statements in the body of this Agreement and those in the other
Transaction Documents, the Exhibits and Disclosure Schedules (other
than an exception expressly set forth as such in the Disclosure
Schedules), the statements in the body of this Agreement will
control.
Section 9.07 Successors and
Assigns. This Agreement shall
be binding upon and shall inure to the benefit of the parties
hereto and their respective successors and permitted assigns.
Neither party may assign its rights or obligations hereunder
without the prior written consent of the other party, which consent
shall not be unreasonably withheld or delayed. No assignment shall
relieve the assigning party of any of its obligations
hereunder.
Section 9.08 No Third-Party
Beneficiaries. This Agreement
is for the sole benefit of the parties hereto and their respective
successors and permitted assigns and nothing herein, express or
implied, is intended to or shall confer upon any other Person or
entity any legal or equitable right, benefit or remedy of any
nature whatsoever under or by reason of this
Agreement.
Section 9.09 Amendment and Modification;
Waiver. This Agreement may only
be amended, modified or supplemented by an agreement in writing
signed by each party hereto. No waiver by any party of any of the
provisions hereof shall be effective unless explicitly set forth in
writing and signed by the party so waiving. No waiver by any party
shall operate or be construed as a waiver in respect of any
failure, breach or default not expressly identified by such written
waiver, whether of a similar or different character, and whether
occurring before or after that waiver. No failure to exercise, or
delay in exercising, any right, remedy, power or privilege arising
from this Agreement shall operate or be construed as a waiver
thereof; nor shall any single or partial exercise of any right,
remedy, power or privilege hereunder preclude any other or further
exercise thereof or the exercise of any other right, remedy, power
or privilege.
Section 9.10 Governing Law; Submission to
Jurisdiction; Waiver of Jury Trial.
(a) This
Agreement shall be governed by and construed in accordance with the
internal laws of the State of New York without giving effect to any
choice or conflict of law provision or rule (whether of the State
of New York or any other jurisdiction).
(b) ANY
LEGAL SUIT, ACTION OR PROCEEDING ARISING OUT OF OR BASED UPON THIS
AGREEMENT, THE OTHER TRANSACTION DOCUMENTS OR THE TRANSACTIONS
CONTEMPLATED HEREBY OR THEREBY MAY BE INSTITUTED IN THE FEDERAL
COURTS OF THE UNITED STATES OF AMERICA OR ▇▇▇ ▇▇▇▇▇▇ ▇▇ ▇▇▇ ▇▇▇▇▇
▇▇ ▇▇▇ ▇▇▇▇ IN EACH CASE LOCATED IN THE CITY OF NEW YORK AND COUNTY
OF NEW YORK, AND EACH PARTY IRREVOCABLY SUBMITS TO THE EXCLUSIVE
JURISDICTION OF SUCH COURTS IN ANY SUCH SUIT, ACTION OR PROCEEDING.
SERVICE OF PROCESS, SUMMONS, NOTICE OR OTHER DOCUMENT BY MAIL TO
SUCH PARTY’S ADDRESS SET FORTH HEREIN SHALL BE EFFECTIVE
SERVICE OF PROCESS FOR ANY SUIT, ACTION OR OTHER PROCEEDING BROUGHT
IN ANY SUCH COURT. THE PARTIES IRREVOCABLY AND UNCONDITIONALLY
WAIVE ANY OBJECTION TO THE LAYING OF VENUE OF ANY SUIT, ACTION OR
ANY PROCEEDING IN SUCH COURTS AND IRREVOCABLY WAIVE AND AGREE NOT
TO PLEAD OR CLAIM IN ANY SUCH COURT THAT ANY SUCH SUIT, ACTION OR
PROCEEDING BROUGHT IN ANY SUCH COURT HAS BEEN BROUGHT IN AN
INCONVENIENT FORUM.
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(c) EACH
PARTY ACKNOWLEDGES AND AGREES THAT ANY CONTROVERSY WHICH MAY ARISE
UNDER THIS AGREEMENT OR THE OTHER TRANSACTION DOCUMENTS IS LIKELY
TO INVOLVE COMPLICATED AND DIFFICULT ISSUES AND, THEREFORE, EACH
SUCH PARTY IRREVOCABLY AND UNCONDITIONALLY WAIVES ANY RIGHT IT MAY
HAVE TO A TRIAL BY JURY IN RESPECT OF ANY LEGAL ACTION ARISING OUT
OF OR RELATING TO THIS AGREEMENT, THE OTHER TRANSACTION DOCUMENTS
OR THE TRANSACTIONS CONTEMPLATED HEREBY OR THEREBY. EACH PARTY TO
THIS AGREEMENT CERTIFIES AND ACKNOWLEDGES THAT (A) NO
REPRESENTATIVE OF ANY OTHER PARTY HAS REPRESENTED, EXPRESSLY OR
OTHERWISE, THAT SUCH OTHER PARTY WOULD NOT SEEK TO ENFORCE THE
FOREGOING WAIVER IN THE EVENT OF A LEGAL ACTION, (B) SUCH PARTY HAS
CONSIDERED THE IMPLICATIONS OF THIS WAIVER, (C) SUCH PARTY MAKES
THIS WAIVER VOLUNTARILY, AND (D) SUCH PARTY HAS BEEN INDUCED TO
ENTER INTO THIS AGREEMENT BY, AMONG OTHER THINGS, THE MUTUAL
WAIVERS AND CERTIFICATIONS IN THIS SECTION 10.10(c).
Section 9.11 Specific
Performance. The parties agree
that irreparable damage would occur if any provision of this
Agreement were not performed in accordance with the terms hereof
and that the parties shall be entitled to specific performance of
the terms hereof, in addition to any other remedy to which they are
entitled at law or in equity.
Section 9.12 Counterparts. This Agreement may be executed in counterparts,
each of which shall be deemed an original, but all of which
together shall be deemed to be one and the same agreement. A signed
copy of this Agreement delivered by facsimile, e-mail or other
means of electronic transmission shall be deemed to have the same
legal effect as delivery of an original signed copy of this
Agreement.
Section 9.13 Non-recourse. This Agreement may only be enforced against, and
any claim, action, suit or other legal proceeding based upon,
arising out of, or related to this Agreement, or the negotiation,
execution or performance of this Agreement, may only be brought
against the entities that are expressly named as parties hereto,
and not against ▇▇▇▇▇▇▇▇▇▇ and/or ▇▇▇▇▇▇, personally, and then only
with respect to the specific obligations set forth herein with
respect to such party. No past, present or future director,
officer, employee, incorporator, manager, member, partner,
stockholder, Affiliate, agent, attorney or other Representative of
any party hereto or of any Affiliate of any party hereto, or any of
their successors or permitted assigns, shall have any liability for
any obligations or liabilities of any party hereto under this
Agreement or for any claim, action, suit or other legal proceeding
based on, in respect of or by reason of the transactions
contemplated hereby.
[SIGNATURE
PAGE FOLLOWS]
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IN
WITNESS WHEREOF, the parties hereto have caused this Agreement to
be executed as of the date first written above by their respective
officers thereunto duly authorized.
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By:
/s/ ▇▇▇▇▇▇
▇▇▇▇▇▇▇▇▇
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Name:
▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇
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Title:
Chairman of the Board
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DROPCAR OPERATING COMPANY, INC.
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By:
/s/ ▇▇▇▇▇▇
▇▇▇▇▇▇▇▇▇
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Name:
▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇
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Title:
Chairman of the Board
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DC PARTNERS ACQUISITION, LLC
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By:
/s/ ▇▇▇▇▇
▇▇▇▇▇▇
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Name:
▇▇▇▇▇ ▇▇▇▇▇▇
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Title:
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/s/ ▇▇▇▇▇▇▇
▇▇▇▇▇▇▇▇▇▇
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▇▇▇▇▇▇▇
▇▇▇▇▇▇▇▇▇▇
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/s/ ▇▇▇▇▇
▇▇▇▇▇▇
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▇▇▇▇▇▇
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