Exhibit 10.1
ASSET PURCHASE AGREEMENT
THIS ASSET PURCHASE AGREEMENT (the "Agreement") entered into this 4th day
of December, 2002 by and between Surety Holdings Corp. a Delaware corporation
("Purchaser") and Millennium Sports & Entertainment, Inc., a Delaware
corporation ("Purchaser Subsidiary") and Millennium International Sports &
Entertainment LLC, a Limited Liability Company ("Seller")
W I T N E S S E T H T H A T:
WHEREAS, Purchaser desires to purchase and Seller desires to sell and
convey to Purchaser Subsidiary substantially all of the assets of Seller
relating to its business, upon the terms and subject to the conditions set forth
herein; and
WHEREAS, Purchaser is not willing to assume any liabilities of Seller;
NOW, THEREFORE, in consideration of the agreements of the parties hereto,
and intending to be legally bound hereby, the parties hereto agree as follows:
1. PURCHASE AND SALE OF ASSETS.
1.1 ASSETS. Subject to the terms and conditions set forth in this
Agreement, Seller will sell, convey, transfer, assign and deliver to Purchaser
Subsidiary, and Purchaser will purchase from Seller, all the assets, properties
and business of Seller of every kind, character, and description, whether
tangible, intangible, real, personal or mixed, and wherever located (all which
are sometimes collectively referred to as the Assets), including all assets and
property or Seller reflected on its balance sheet as of July 30, 2002 and in
Seller's Disclosure Statement, referred to in Section 5.3, and all assets and
property thereafter acquired by Seller before the Closing Date (as hereinafter
defined), except:
(1) Those assets disposed of in the ordinary course of business or as
permitted by this Agreement;
(2) The cash and accounts receivable, if any, reserved under this
Agreement; and
(3) Amounts paid before the closing date of expenses incurred by
Seller in negotiating this Agreement and in performing obligations and
satisfying conditions under it, including any contemplated dissolution or
liquidation.
Except as set forth in Seller's Disclosure Schedule, Seller will transfer
to Purchaser at the Closing all right, title and interest in and to the Assets
free and clear of all claims, liens, encumbrances, mortgages, charges, security
interests, options, rights, restrictions or any other interests or imperfections
of title whatsoever, unless otherwise agreed to by Purchaser.
1.2 ASSUMPTION OF LIABILITIES. Except as set forth in Seller's
Disclosure Schedule, Purchaser Subsidiary will assume no liabilities, other
obligations, commercial or otherwise, of
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the Seller known or unknown, fixed or contingent, xxxxxx or inchoate, liquidated
or unliquidated, secured or unsecured, or otherwise, regardless of when the same
may arise of may have arisen ("Liabilities").
1.3 ASSIGNMENT OF CERTAIN CONTRACTS. At the Closing, Purchaser shall
succeed to the rights and privileges of Seller, and shall assume the express
obligations of Seller performable after the Closing pursuant to those leases,
insurance policies, contracts, and other agreements, and only those leases,
insurance policies, contracts, and other agreements of Seller that are listed as
"Assigned Contracts" on the Seller's Disclosure Schedule hereto ("Assigned
Contracts") as and in the form of the copies thereof (or, if oral, as and in the
form of the written statements of the terms thereof) furnished or made available
to Purchaser pursuant to Sections 5.8, 5.10, 5.11, 5.12, 5.16 and 5.17) hereto.
Without limiting the generality of the foregoing, Purchaser shall not assume and
shall have no liability with respect to any obligations of Seller under any
Assigned Contract (a) required therein to be performed by Seller at or prior to
the Closing or (b) arising out of any breach thereof not included in the copies
(or written statements of the terms) of such Assigned Contracts delivered or
made available to Purchaser pursuant hereto.
1.4 INSTRUMENTS OF CONVEYANCE, ASSUMPTION, OR ASSIGNMENT. The sale,
conveyance, transfer, assignment, and delivery of the Assets and the Assigned
Contracts, as herein provided, shall be effected by bills of sale, endorsements,
assignments, deeds, drafts, checks, stock powers, or other instruments in such
reasonable and customary form as shall be requested by Purchaser, and Seller
shall at any time and from time to time after the Closing, upon reasonable
request, execute, acknowledge, and deliver such additional bills of sale,
endorsements, assignments, deeds, drafts, checks, stock powers, or other
instruments and take such other actions as may be reasonably required to
effectuate the transactions contemplated by this Agreement.
2. PURCHASE PRICE.
2.1 PURCHASE PRICE. In consideration of the sale, conveyance,
transfer, and delivery of the Assets and the Assigned Contracts and upon the
terms and subject to the conditions set forth in this Agreement, Purchaser shall
pay to Seller the "Purchase Price" by issuing restricted shares of the
Purchaser's common stock upon the attainment of certain revenues by Millennium
Sports & Entertainment, Inc. ("Purchaser Subsidiary") as follows:
(a) 50,000 shares provided that Purchaser Subsidiary attains
total revenues of $2,000,000.00 by March 31, 2003;
(b) an additional 100,000 shares provided that Purchaser
Subsidiary attains total revenues of $4,000,000.00 by June 30, 2003;
(c) an additional 100,000 shares provided that Purchaser
Subsidiary attains total revenues of $6,000,000.00 by September 30, 2003;
(d) an additional 100,000 shares provided that Purchaser
Subsidiary attains total revenues of $8,000,00.00 by December 31, 2003.
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3. CLOSING.
3.1 CLOSING. The closing of the sale and purchase (the "Closing" shall
take place at the offices of Sonnenblick, Xxxxxx & Selvers, PC, 0000 Xxxxx 0
Xxxxx, Xxxxxxxx, Xxx Xxxxxx, xx the date 5 days after all the conditions
established in this Agreement have been satisfied, but in no event later than
November 15, 2002, or at such other time and place as may be mutually agreed
upon (the "Closing Date"). At the Closing, Seller, in exchange for the Purchase
Price, shall deliver to Purchaser such bills of sale, endorsements, assignments,
deeds, drafts, checks, stock powers, or other instruments as shall be effective
to vest in Purchaser good and marketable title to the Assets subject to no
liens, encumbrances, or rights in any other party whatsoever, except as are
described in the Seller's Disclosure Schedule attached hereto.
4. TAXES AND PREPAID ITEMS.
Except as otherwise provided herein, Seller will pay all sales, use,
franchise, and other taxes and charges, which may become payable in connection
with the sale of the Assets pursuant to the terms of this Agreement, and any and
all other taxes and charges accruing out of the operation of Seller's businesses
prior to the Closing Date. Purchaser and Sell shall agree prior to the Closing
Date the tax allocation of the purchase Price to the Assets and Assigned
Contracts.
5. REPRESENTATIONS AND WARRANTIES OF SELLER.
Seller represents and warrants, covenants and agrees that:
5.1 ORGANIZATION AND CORPORATE POWER. Seller is a limited liability
company duly organized, validly existing, and in good standing under the laws of
its jurisdiction of incorporation and is duly qualified and in good standing as
a foreign corporation in each other jurisdiction in which it owns or leases
properties, conducts operations, or maintains a stock of goods, with fully power
and authority (corporate and other) to carry on the business in which it is
engaged (a true and correct list or each such jurisdiction is set forth in
Section 5.1, of the Seller's Disclosure Schedule) and to execute and deliver and
carry out the transactions contemplated by this Agreement.
5.2 DUE AUTHORIZATION; EFFECT OF TRANSACTION. No provisions of the
Certificate of Formation or Operating Agreement of Seller, or of any agreement,
instrument, or understanding, or any judgment, decree, rule, or regulation, to
which Seller is a party or by which Seller is bound, has been or will be
violated by the execution and delivery by Seller of this Agreement or the
performance or satisfaction of any agreement or condition herein contained upon
its part to be performed or satisfied, and all requisite corporate and other
authorizations for such execution, delivery, performance, and satisfaction have
been duly obtained. Upon execution and delivery, this Agreement will be a legal,
valid, and binding obligation of Seller, enforceable in accordance with its
terms. Seller is not in default in the performance, observance, or fulfillment
of any of the terms or conditions of its Certificate of Formation or Operating
Agreement.
5.3 FINANCIAL STATEMENTS. Seller has delivered to Purchaser
consolidated balance sheets of Seller as at September 30, 2002, together with
related consolidated statements of
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operations, consolidated statements of changes in stockholders' equity, and
consolidated statements of cash flows for September 30, 2002.
The financial statements specified above, including in each case the
notes to such financial statements, are hereinafter sometimes collectively
referred to as the "Financial Statements". All of the Financial Statements are
true, correct and complete, and fairly present the financial condition of Seller
and the results of its operations as at the date thereof and throughout the
period covered thereby. The Financial Statements reflect or provide for all
claims against, and all debts and liabilities of Seller, fixed or contingent, as
at the dates thereof, and there has not been any change between the date of the
most recent Financial Statements and the date of this Agreement that has
materially or adversely affected the business or properties or condition or
prospects, financial or other, or results of operations of Seller, and no fact
or condition exists or is contemplated or threatened, which might cause any such
change at any time in the future. In addition, Seller shall set forth in Section
5.3 of the Seller's Disclosure Schedule each and every item of merchandise that
Seller owns as inventory.
5.4 LIABILITIES. Except as set forth in Section 5.4 of the Seller's
Disclosure Schedule, Seller has no liabilities of any nature, whether absolute,
contingent, or otherwise, except as set forth in the most recent balance sheet
included in the Financial Statements, other than liabilities subsequently
incurred in the ordinary course of business. Except as set forth in Section 5.4
of the Seller's Disclosure Schedule, Seller is not in breach or default or in
arrear in respect of the terms or conditions of any such liabilities and no
waiver ore forbearance has been granted by any holder of nay such liability with
respect to any such liability.
5.5 SUBSIDIARIES. Seller does not own, directly or indirectly, any of
the capital stock of any corporation, association, trust or similar entity, any
interest in the equity of any partnership or similar entity, any share in any
joint venture, or any other equity or proprietary interest in any entity or
enterprise, however, organized and however such interest may be denominated or
evidenced.
5.6 LEASES. The leases listed and described in Section 5.6 of the
Seller's Disclosure Schedule constitute all the leases of real or personal
property under which Seller is bound or to which Seller is a party. Except as
set forth in Section 5.6 of the Seller's Disclosure Schedule, each lease listed
is valid, binding, subsisting, and enforceable in accordance with its terms, and
neither Seller nor any landlord or lessor is in default or in arrear in the
performance or satisfaction of any agreement or condition on its part to be
performed or satisfied thereunder, and no waiver or indulgence has been granted
by any of the landlords or lessors under those leases. Seller is not the
landlord or lessor under any leases of real or personal property.
5.7 PERSONAL PROPERTIES. Seller owns and has good and marketable title
to all the tangible and intangible personal property and assets, other than the
leaseholds referred to in Section 5.7 of the Seller's Disclosure Schedule.
reflected upon the most recent balance sheet included in the Financial
Statements or used by Seller in its business if not so reflected, free and clear
of all mortgages, liens, encumbrances, equities, claims and obligations to other
persons, of whatever kind and character, except as set forth in Section 5.7 of
the Seller's Disclosure Schedule. Section 5.7 of the Seller's Disclosure
Schedule contains an identification of certain
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major items of fixed assets and machinery and equipment. None of the fixed
assets and machinery is subject to contracts of sale, and none is held by Seller
as lessee or as conditional sales vendee under any lease or conditional sales
contract and none is subject to any title retention agreement, except as set
forth in Section 5.7 of the Seller's Disclosure Schedule. The fixed assets and
machinery and equipment, taken as a whole, are in a state of good repair and
maintenance and are in good operation condition, but will be transferred "as
is"on the Closing Date. Except as set forth in Section 5.7 of the Seller's
Disclosure Schedule, upon the sale, assignment, transfer, and delivery of the
Capital Stock to Purchaser hereunder, there will be vested in Purchaser good and
marketable title to the tangible and intangible personal property constituting a
part thereof, free and clear of all mortgages, liens, encumbrances, equities,
claims and obligations to other persons, of whatever kind and character, except
for the rights of third persons arising under contracts for the sale of
inventory in the ordinary course of business, each of which is listed in Section
5.7 of the Seller's Disclosure Schedule.
5.8 EMPLOYMENT ARRANGEMENTS. Except as set forth in Section 5.8 of the
Seller's Disclosure Schedule, Seller has no obligation, contingent or otherwise,
under any employment agreement, collective bargaining or other labor agreement,
any agreement containing severance or termination pay arrangements, deferred
compensation agreement, retainer or consulting arrangements, pension or
retirement plan, bonus or profit-sharing plan, stock option or purchase plan, or
other employee contract or non-terminable arrangement (whether or not that
arrangement poses a penalty for termination), group life, health, medical or
hospitalization insurance plan or program, or other employee or fringe benefit
plan, including vacation plans or programs and sick leave plans or programs.
Section 5.8 of the Seller's Disclosure Schedule sets forth the basis funding,
and the current status of, any past service liability with respect to any such
plan or agreement. Except as set forth in Section 5.8 of the Seller's Disclosure
Schedule, Seller or its employees are not now and for the past five years have
not been subject to or involved in or, to the Seller's knowledge, threatened
with any union elections, petitions therefor or other organizational activities.
Seller has performed all obligations required to be performed under all such
agreements, plans, and arrangements and is not in breach of or in default or
arrears under the terms thereof.
5.9 MATERIAL CONTRACTS AND ARRANGEMENTS. Except as set forth in
Section 5.9 of the Seller's Disclosure Schedule, Seller has no contract or
arrangement, including, without limitation, any commitments or obligations,
contingent or otherwise, under any contract or arrangement (i) for the purchase
or sale of inventory in excess of $5,000 in any one instance, (ii) for the
purchase or sale of supplies, services or other items in excess of $5,000 in any
one instance, (iii) for the purchase, sale or lease of any equipment or
machinery, (iv) for the performance of services for others in excess of $5,000
in any one instance, of (v) extending beyond December 31,2002. All contracts of
less than $5,000 do not in the aggregate exceed $25,000. Except as set forth in
Section 5.9 of the Seller's Disclosure Schedule, each of such contracts and
arrangements is valid, binding subsisting, and enforceable in accordance with
its terms and Seller has performed all obligations required to be performed
under any such contract or arrangement and is not in breach or default or in
arrears in any material respect or in any other respect that would permit the
other party to cancel such contract or arrangement under the terms thereof.
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5.10 ORDINARY COURSE OF BUSINESS. Seller, from the date of the balance
sheet contained in the most recent Financial Statements to the date hereof,
(a) has operated its business in the normal, usual, and
customary manner in the ordinary and regular course of business;
(b) has not sold or otherwise disposed of any of its properties
or assets, other than inventory sold in the ordinary course of business;
(c) except in each case in the ordinary course of business,
(i) has not amended or terminated any outstanding lease,
contract, or agreement,
(ii) has not incurred any obligations or liabilities,
(fixed, contingent or other), and
(iii) has not entered any commitments;
(d) has not made any transactions outside the ordinary course
of business in its inventory or any additions to its property or any purchases
of machinery or equipment, except for nor mal maintenance and replacements;
(e) has not discharged or satisfied any lien or encumbrance or
paid any obligation or liability (absolute or contingent) other than current
liabilities or obligations under contracts then existing or thereafter entered
into in the ordinary course of business, and commitments under leases existing
on that date or incurred since that date in the ordinary course of business;
(f) has not mortgaged, pledged, or subjected to lien or any
other encumbrances, any of its assets, tangible or intangible;
(g) has not sold or transferred any tangible asset or cancelled
any debts or claims except in each case in the ordinary course of business;
(h) has not sold, assigned, or transferred any patents,
trademarks, trade names, trade secrets, copyrights, or other intangible assets;
(i) has not increased the compensation payable or to become
payable to any of its officers, employees, or agents;
(j) has not suffered any material damage, destruction, or loss
(whether or not covered by insurance) or any acquisition or taking of property
by any governmental authority;
(k) has not waived any rights that individually or in the
aggregate exceed $5,000;
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(l) has not experienced any organized work stoppage or
industrial action; or
(m) has not entered into any other transaction or transactions
that individually or in the aggregate are material to Seller, other than in the
ordinary course of business.
5.11 LITIGATION AND COMPLIANCE WITH LAWS. Section 5.11 of the Seller's
Disclosure Schedule contains a brief description of all litigation or legal or
other actions, suits, proceedings or investigations, at law or in equity or
admiralty, or before any federal, state, municipal, or other governmental
department (including, without limitation, the National Labor Relations Board),
commission, board, agency, or instrumentality, domestic or foreign, in which
Seller or any of its officers or directors, in such capacity, is engaged, or, to
the knowledge and belief of Seller, with which Seller or any of its officers or
directors is threatened in connection with the business or affairs or properties
or assets of Seller. Seller is and at all times since its inception has been in
compliance with all laws and governmental rules and regulations, domestic and
foreign, and all requirements of insurance carriers, applicable to its business
affairs or properties or assets, including, without limitation, those relating
to environmental protection, water or air pollution and similar matters.
5.12 TAX RETURNS. Except as set forth in Section 5.12 of the Seller's
Disclosure Schedule, Seller has filed in accordance with applicable law, all
federal, state, county, and local income and franchise tax returns and all real
and personal property tax returns that are required to be filed, and the
provision for taxes shown on the most recent balance sheet included in the
Financial Statements is sufficient to satisfy all taxes of any kind of Seller,
including interest and Section 5.12 of the Seller's Disclosure Schedule,
penalties in respect thereof, whether disputed or not, and whether accrued, due,
absolute, deferred, contingent, or other for all periods ended on or prior to
the date of such balance sheet. Except as set forth in Section 5.12 of the
Seller's Disclosure Schedule, as of the date hereof no tax liabilities have been
assessed or proposed that remain unpaid, and Seller has not signed any extension
agreement with the Internal Revenue Service or any state or local taxing
authority. Seller has paid all taxes that have become due pursuant to such
returns and has paid all installments of estimated taxes due. All taxes and
other assessments and levies that Seller is required by law to withhold or to
collect have been duly withheld and collected, and have been paid over to the
proper governmental authorities to the extent due and payable. From the End of
its most recent fiscal year to the date hereof Seller has not made any payment
of or on account of any federal, state, or local income, franchise, or any real
or personal property taxes, except as forth in Section 5.12 of the Seller's
Disclosure Schedule. Seller is not aware of any basis upon which any assessment
for a material amount of additional federal income taxes could be made. The
information shown on the federal income tax returns of Seller heretofore
delivered to Purchaser is true, accurate, and complete and fairly presents the
information purported to be shown.
5.13 TRADEMARKS, LICENSES, ETC. Section 5.14 of the Seller's Disclosure
Schedule, sets forth all of the trademarks, trade names, service marks, patents,
copyrights, registrations, or applications with respect thereto, and licenses or
rights under them owned, used or intended to be acquired or used by Seller, and,
to the extent indicated in Section 5.14 of the Seller's Disclosure Schedule,
they have been duly registered in such offices as are indicated therein. Seller
is the
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sole and exclusive owner of the trademarks, trade names, service marks, and
copyrights, the older of the full record title to the trademark registrations
and the sole owner of the inventions covered by the patents and patent
applications, all as set froth in Section 5.14 of the Seller's Disclosure
Schedule; Seller has the sole and exclusive right, to the extent listed in
Section 5.14 of the Seller's Disclosure Schedule, to use such trademarks, trade
names, service marks, patents and copyrights, and, except to the extent set
forth in Section 5.14 of the Seller's Disclosure Schedule, all of them are free
and clear of any mortgages, liens, encumbrances, equities, licenses, claims, and
obligations to other persons of whatever kind and character.
5.14 INSURANCE POLICIES. The insurance policies listed and described
briefly in Section 5.15 of the Seller's Disclosure Schedule constitute all of
the policies in force and effect in respect of the business, properties and
assets, including, without limitation, insurance on personnel, of Seller. Seller
is not in default under any such policy. The insurance policies so listed and
identified are sufficient in nature, scope, and amounts to insure adequately
(and, in any event, in amounts sufficient to prevent Seller from becoming a
co-insurer within the terms of such policies), the business, properties and
assets of Seller. Seller has not been refused insurance by any insurance carrier
to which it has applied for insurance.
5.15 EXTRAORDINARY EVENTS. From the end of its most recent fiscal year
to the date hereof, neither the business nor properties nor condition, financial
or other, nor results of operations of Seller have been materially and adversely
affected in any way as the result of any fire, explosion, accident, casualty,
labor disturbance, requisition, or taking of property by any governmental body
or agency, flood, embargo, or Act of God or the public enemy, or cessation,
interruption, or diminution of operations, whether or not covered by insurance.
5.16 ADVERSE RESTRICTIONS. The execution and delivery of this Agreement
and the consummation of the transactions contemplated hereby are not events that
of themselves or with the giving of notice or the passage of time or both, could
constitute, on the part of Seller, a violation of or conflict with or result in
any breach of, or default under the terms, conditions, or provisions of, any
judgment, law, or regulation, or of the Certificate of Incorporation or By-Laws
of Seller, any agreement or instrument to which Seller is a party or by which it
is bound, or result in the creation or imposition of any lien, charge, or
encumbrance of any nature whatsoever on the property or assets of Seller and no
such event of itself or with the giving of notice or the passage of time or both
will result in the acceleration of the due date of any obligation of Seller.
5.17 MATERIAL INFORMATION. Neither the Financial Statements nor this
Agreement (including the Schedules and Exhibits hereto) nor any certificate or
other document furnished or to be furnished by Seller to Purchaser contains or
will contain any untrue statement of a material fact or omits or will omit to
state a material fact required to be stated herein or therein or necessary to
make the statements herein or therein not misleading.
5.18 PRODUCTS IN WARRANTY. Attached as part of Section 5.19 of the
Seller's Disclosure Schedule are true and correct copies of Seller's standard
warranty agreements used in connection with the business operations. Seller's
standard warranty agreements apply to each product in warranty except as
otherwise indicated in Section 5.19 of the Seller's Disclosure Schedule. Seller
is not in violation in any material respect of any such warranty agreement.
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5.19 CERTAIN TRANSACTION. Except as set forth in Section 5.20 of the
Seller's Disclosure Schedule, none of the officers, directors, or employees of
Seller is presently a party to any transaction with Seller (other than for
services as officers, directors, and employees), including, without limitation,
any contract, agreement, or other arrangement providing for the furnishing of
services to or by, providing for rental of real or personal property to or from,
or otherwise requiring payments to or from, any officer, director, any such
employee, any member of a family or any officer, director, or such employee or
any corporation, partnership, trust, or other entity in which any officer,
director, or any such employee has a substantial interest or is an officer,
director, trustee, or partner.
5.20 NO GOVERNMENTAL AUTHORIZATIONS OR APPROVALS REQUIRED. No
authorization or approval of, or filing with, any governmental agency,
authority, or other body will be required in connection with the execution and
e=delivery of this Agreement or the consummation of the transactions
contemplated hereby.
5.21 CONTINUING REPRESENTATIONS. The representations and warranties of
Seller herein contained (a) relating to non-tax matters shall survive the
Closing for a period of One (1) year and (b) relating to tax matters shall
survive the Closing for the applicable statute of limitations.
5.22 KNOWLEDGE. The term "Knowledge" means facts that are known by any
of the officers and directors of the Corporation after having made diligent
inquiry of the other officers and directors of the Company with respect to their
knowledge of the relevant facts.
5.23 SELLER'S DISCLOSURE SCHEDULE. As soon as practicable, but in no
event later than twenty (20) days after the date of this Agreement, Seller will
deliver to Purchaser the Seller's Disclosure Schedule containing all information
required in this Article 5 of this Agreement. Each such Section of the Seller's
Disclosure Schedule will have been executed by or on behalf of the Seller and
will be accompanied by a copy of each document referred to in the Seller's
Disclosure Schedule. All schedules will be updated through the Closing Date;
however, the updating of the schedules will not relieve Seller of its
responsibility to indemnify Purchaser, as provided in Article 11, with respect
to an y information not disclosed in the original schedules. Each matter
disclosed in a schedule will be taken as relating only to that specific
schedule.
6. REPRESENTATION, WARRANTIES, AND AGREEMENT OF PURCHASER.
6.1 ORGANIZATION AND CORPORATE POWER. Purchaser is a corporation duly
organized, validly existing, and in good standing under the laws of its
jurisdiction of incorporation and is duly qualified and in good standing as a
foreign corporation in each other jurisdiction in which it owns or leases
properties, conducts operations, or maintains a stock of goods, with fully power
and authority (corporate and other) to carry on the business in which it is
engaged (a true and correct list or each such jurisdiction is set forth in
Section 6.1, of the Purchaser's Disclosure Schedule) and to execute and deliver
and carry out the transactions contemplated by this Agreement.
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6.2 DUE AUTHORIZATION; EFFECT OF TRANSACTION. No provisions of the
Certificate of Incorporation or By-Laws of Purchaser, or of any agreement,
instrument, or understanding, or any judgment, decree, rule, or regulation, to
which Purchaser is a party or by which Purchaser is bound, has been or will be
violated by the execution and delivery by Purchaser of this Agreement or the
performance or satisfaction of any agreement or condition herein contained upon
its part to be performed or satisfied, and all requisite corporate and other
authorizations for such execution, delivery, performance, and satisfaction have
been duly obtained. Upon execution and delivery, this Agreement will be a legal,
valid, and binding obligation of Purchaser, enforceable in accordance with its
terms. Purchaser is not in default in the performance, observance, or
fulfillment of any of the terms or conditions of its Articles of Incorporation
or By-Laws.
6.3 CAPITALIZATION. The authorized capital stock of the Purchaser is
as set forth in Section 6.3 of the Purchaser's Disclosure Schedule. This
Agreement, and the transactions contemplated hereby, will not cause a mandatory
redemption, acceleration or vesting of any other right under any outstanding
subscriptions, options, calls, contracts, voting trust, proxies, rights or
warrants, including any right of conversion or exchange under any outstanding
security, instrument or other agreement. All of the issued and outstanding
shares of common stock of the Purchaser are validly issued, fully paid,
nonassessable and free of preemptive rights or restriction related to any
agreement by or among the Purchaser's stockholders. There are no outstanding
subscriptions, options, calls, contracts, voting trusts, proxies, rights or
warrants, including any right of conversion or exchange under any outstanding
security, instrument or other agreement, obligating the Seller to issue, deliver
or sell, or cause to be issued, delivered or sold, Capital Stock of the Seller,
or obligating the Seller to grant, extend or enter into any such agreement or
commitment.
7. PRE-CLOSING COVENANTS AND AGREEMENTS.
7.1 SELLER'S COVENANTS AND AGREEMENTS PENDING CLOSING. Seller, from
the date hereof to the Closing date,
(a) will operate its business in the normal, usual, and
customary manner in the ordinary and regular course of business;
(b) will not sell or otherwise dispose of any of its properties
or assets, other than inventory of finished goods sold in the ordinary course of
business;
(c) except in each case in the ordinary course of business,
(i) will not amend or terminate any outstanding lease,
contract, or agreement,
(ii) will not incur an y obligations or liabilities
(fixed, contingent, or other), and
(iii) will not enter into any commitments;
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(d) will not make any unusual transactions in its inventory or
any additions to its property or any purchases of machinery or equipment, except
for normal maintenance and replacements;
(e) will not discharged or satisfied any lien or encumbrance or
paid any obligation or liability (absolute or contingent) other than current
liabilities or obligations under contracts then existing or thereafter entered
into in the ordinary course of business, and commitments under leases existing.
(f) will not mortgaged, pledged, or subject to lien or any
other encumbrances, any of its assets, tangible or intangible unless such
mortgage, pledge, lien or encumbrance is discharged before the Closing;
(g) will not sell or transferred any tangible asset or
cancelled any debts or claims except in each case in the ordinary course of
business;
(h) will not sell, assign, or transferred any patents,
trademarks, trade names, trade secrets, copyrights, or other intangible assets;
(i) will not increase the compensation payable or to become
payable to any of its officers, employees, or agents;
(j) will not suffer any material damage, destruction, or loss
(whether or not covered by insurance) or any acquisition or taking of property
by any governmental authority;
(k) will not waive any rights of substantial value; or
(l) will not enter into any other transaction or transactions
that individually or in the aggregate are material to Seller.
8. CONDITIONS OF PURCHASER'S OBLIGATIONS.
The obligations of Purchaser hereunder are subject to the fulfillment to
the reasonable satisfaction of the Purchaser, prior to or at the Closing, of
each of the following conditions:
8.1 NO OPPOSITION. No suit, action, or proceeding shall be pending or
threatened at any time prior to or on the Closing Date before or by any court or
governmental body (a) seeking to restrain or prohibit, or to obtain damages or
other relief in connection with, the execution and delivery of this Agreement or
the consummation of the transactions contemplated hereby; or (b) that might
materially and adversely affect the business or properties or condition,
financial or other, or results of operations of Seller.
8.2 PERMITS, ETC. Seller shall have assigned to Purchaser, or
Purchaser shall have obtained, all such permits, licenses, approvals,
authorizations, variances, agreements, and warranties from federal, state and
local governmental authorities, which Purchaser shall, in
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the exercise of its sole discretion, deem necessary or desirable for the
operation by Purchaser of the businesses of Seller after the Closing.
8.3 INSURANCE. Seller shall have obtained appropriate binders or
consents as to policies of insurance to be assigned to Purchaser hereunder.
8.4 REPRESENTATIONS AND COVENANTS. The representations and warranties
of Seller contained in this Agreement or otherwise made in writing by it or him
or on its or his behalf pursuant hereto or otherwise made in connection with the
transactions contemplated hereby shall be true and correct at and as of the
Closing Date with the same force and effect as though made on or as of such
date; each and all of the covenants, agreements, and conditions to be performed
or satisfied by Seller hereunder at or prior to the Closing Date shall have been
duly performed or satisfied; and Seller shall have furnished Purchaser with such
certificates and other documents evidencing the truth of such representations
and warranties and the performance and satisfaction of such covenants,
agreements, and conditions as Purchaser shall have reasonably requested.
8.5 CERTIFIED RESOLUTIONS. Seller has furnished Purchaser with a copy,
certified by Seller's secretary, of (1) a unanimous resolution or resolutions
duly adopted by all of the members in interest authorizing and approving this
Agreement.
8.6 UNANIMOUS CONSENT OF MEMBERS. All of the owners of the outstanding
interests of Seller have voted for the adoption of this Agreement and the sale
of the assets to Purchaser.
8.7 EMPLOYMENT AGREEMENTS. The employees set forth in Schedule 8.7
have executed employment letters of agreements satisfactory to the Purchaser and
severance agreements satisfactory to the Seller.
8.8 SCHEDULES AND SELLER'S DISCLOSURE SCHEDULE. In its sole and
absolute discretion, Purchaser is satisfied with any matter reflected, listed,
or disclosed in the updated Schedules and Seller's Disclosure Schedule that was
not reflected, listed, or disclosed in the original schedules.
8.9 SATISFACTION OF COUNSEL. The validity of all transactions herein
mentioned, as well as the form and substance of all stock powers, certificates,
documents, and other instruments hereunder, shall be satisfactory in all
reasonable respects to counsel to Purchaser.
8.10 INSTRUMENTS OF TRANSFER. Seller shall have delivered to Purchaser
bills of sale, assignments and other instruments of transfer in accordance with
the provisions hereof, transferring to Purchaser all of Seller's right, title
and interest in and to the Assets and Assigned Contacts to be transferred, sold,
assigned, and conveyed by Seller to Purchaser pursuant to the provisions of this
Agreement.
8.11 DILIGENCE. Purchaser shall have completed its diligence review of
the business, properties, assets, and liabilities of Seller, with results
satisfactory to Purchaser in accordance with Article 10 of this Agreement.
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8.12 OPINION OF COUNSEL. Counsel for the Seller shall provide an
opinion with respect to the transaction for the benefit of Purchaser in a form
satisfactory to Purchaser's counsel.
9. CONDITIONS OF SELLER'S OBLIGATIONS.
The obligations of Seller hereunder are subject to the fulfillment to the
reasonable satisfaction of Seller prior to or at the Closing of each of the
following conditions:
9.1 REPRESENTATIONS AND COVENANTS. The representations and warranties
of Purchaser contained in this Agreement or otherwise made in writing by it or
on its behalf pursuant hereto or otherwise made in connection with the
transactions contemplated hereby shall be true and correct at and as of the
Closing Date with the same force and effect as though made on and as of such
date; each of the covenants, agreements, and conditions to be performed or
satisfied by Purchaser hereunder at or prior to the Closing Date shall have been
duly performed or satisfied; and Purchaser hall have furnished Seller with such
certificates or other documents evidencing the truth of such representations and
warranties and the performance and satisfaction of such covenants, agreements,
and conditions as Seller shall have reasonably requested.
9.2 NO OPPOSITION. No suit, action, or proceeding shall be pending or
threatened on the Closing Date before or by any court or governmental authority
seeking to restrain or prohibit the execution and delivery of this Agreement or
the consummation of the transactions contemplated hereby.
9.3 PURCHASER'S CERTIFIED RESOLUTIONS. Purchaser has furnished Seller
with certified copies of (1) resolutions duly adopted by the board of directors
of Purchaser authorizing and approving the execution and delivery of this
Agreement and authorizing the consummation of the transactions contemplated by
this Agreement, and (2) resolutions duly adopted by the shareholders of
Purchaser, if necessary, adopting this Agreement.
10. PURCHASER'S DUE DILIGENCE;
Before the Closing Date, Purchaser may directly or through its
representatives made such investigation of the assets and business of Seller
(including confirmation of its cash, inventories, accounts, accounts receivable,
and liabilities, and investigation of its titles to and the condition of its
property and equipment) as Purchaser deems necessary or advisable. The
investigation will not affect (1) Seller's warranties contained or provided for
in this Agreement, (2) Purchaser's right to rely on those warranties, or (3)
Purchaser's right to terminate this Agreement as provided in this Article 9.
Seller will allow Purchaser and its representatives full access, at reasonable
times after the date of execution of this Agreement, to the premises and to all
the books, records, and assets of Seller, and Seller's officers will furnish to
Purchaser such financial and operating data and other information with respect
to the business and properties of Seller as Purchaser from time to time
reasonably requests. Purchaser agrees not to disclose any confidential
information obtained in the course of its investigation or use it for any
purposes other than evaluation of Seller with respect to this Agreement.
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As soon as practicable, and in any event within fifteen (15) days after
the receipt of (1) the last schedule required to be delivered to Purchaser by
Seller pursuant to Section 5.27 of this Agreement and (2) any supporting
documentation requested by Purchaser, Purchaser will give Seller notice if
Purchaser has decided that it wishes to terminate this Agreement based on any
information contained in any of the schedules or obtained during the course of
its investigation. The notice will specify the information contained in the
schedules or obtained during the investigation on which Purchaser's decision to
terminate is based. Seller will have ten (10) days after the receipt of the
notice to review that information with Purchaser. If purchaser does not withdraw
its notice within this 10-day period, all further obligations of Purchaser and
Seller under this Agreement will terminate without further liability of
Purchaser to Seller or of Seller to Purchaser, except their respective
obligations to return documents and repayment of the Bridge Note. If Purchaser
does not advise Seller within the fifteen (15) day period specified in the first
sentence above that it wishes to terminate this Agreement, Purchase will be
considered to be satisfied with the information relating to Seller contained in
the schedules or obtained during the course of its investigation, subject .to
Purchaser's rights concerning the continued accuracy of Seller's warranties set
forth in Section 8.4 of this Agreement.
11. POST-CLOSING COVENANTS AND AGREEMENTS
11.1 EMPLOYMENT AGREEMENTS.
Simultaneously with the closing of the Asset Purchase Agreement,
the Purchaser Subsidiary shall enter into Employment Agreements in the form
annexed hereto to employ Messrs. Xxx Xxxxxxxx, Xxxxxxx Xxxxxxxxx and Xxxxxx
Xxxxxxxxx as officer employees of the Subsidiary.
11.2 REGISTRATION OF CERTAIN SHARES.
The Purchaser shall file, upon closing a registration statement
pursuant to Form S-8 to register 5,000 shares each for Messrs. Xxx Xxxxxxxx,
Xxxxxxx Xxxxxxxxx and Xxxxxx Xxxxxxxxx pursuant to their Employment Agreements.
In addition, the Purchaser shall file, as soon as practicable, with due
consideration to minimize the costs and expenses associated therewith, on the
appropriate form to register the shares issued to the Seller as the Purchase
Price pursuant to paragraph 2.1.
11.3 RESCISSION.
In the event that Purchaser Subsidiary does not achieve the gross
revenues as set forth in paragraph 2.1, then Surety Holdings Corp. may, within
thirty (30) days after receipt of the Purchaser Subsidiary's quarterly financial
statements, in Surety's sole discretion, rescind the Asset Purchase Agreement by
notifying Seller in writing. Seller, however, shall not be required to return
any of the previously issued Surety shares for prior quarters where Purchaser
Subsidiary had attained the total revenues mandated.
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12. INDEMNIFICATION.
12.1 INDEMNIFICATION BY SELLER.
(a) Seller hereby agrees to indemnify, defend, and hold
Purchaser harmless from and against the amount of any actual (or potential in
the case of any litigation or claims by any person not a party to this
Agreement) damage, loss, or expense (including reasonable attorneys' fees and
settlement costs( to Purchaser ("Loss") occasioned or caused by, resulting from,
or arising out of:
(i) Any failure by Seller to perform, abide by, or
fulfill any of the agreements, covenants, or obligations set forth in or entered
into, in connection with this Agreement to be so performed or fulfilled by
Seller.
(ii) Any material inaccuracy in or breach of any of the
representations or warranties set forth in this Agreement or any certificate of
Schedule or other writing furnished pursuant hereto.
(iii) Any failure on the part of Purchaser to withhold
from the Purchase Price any amount due by Seller to any governmental authority
or other person that results in a loss to Purchaser.
(iv) Any claim, known or unknown, arising out of or by
virtue of or based upon any liability or obligation of Seller not otherwise
disclosed herein.
(v) Any liability or obligation for any tort or any
breach or violation of any contractual, quasi-contractual, legal fiduciary, or
equitable duty by Seller, whether before, at, or after the closing.
The amount of any Loss shall be the amount of cash reimbursement or
set-off that, when received by the Purchaser, shall place the Purchaser in the
same financial position it would have been in if such Loss has not occurred.
12.2 NOTICE OF CLAIM TO SELLER. Purchaser shall give prompt written
notice to Seller of any claim (actual or threatened) or other event that in the
judgment of Purchaser might result or has resulted in a Loss by Purchaser
hereunder, and Seller shall have the right to assume the defense of such claim
or any litigation resulting therefrom; PROVIDED THAT counsel for the Seller, who
shall conduct the defense of such claim (actual, threatened, or asserted) or
litigation, shall be reasonably satisfactory to the Purchaser, and Purchaser may
participate in such defense at their expense, and PROVIDED, FURTHER, that the
omission by Purchaser to give notice as provided herein shall not relieve Seller
of its obligations hereunder except to the extent that the omission results in a
failure of actual notice to the Seller and Seller is damaged solely as a result
of the failure to give notice. Seller, in the defense of any such claim or
litigation, shall not, except with the consent of Purchaser, consent to the
entry of any judgment or decree or enter into any settlement that does not
include as an unconditional term thereof the giving by the claimant or plaintiff
to Purchaser of a release from all liability in respect to such claim or
litigation, and No Seller shall
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have liability with respect to any payment made by purchaser in connection with
the settlement, satisfaction, or compromise of any claim unless the Seller shall
have approved thereof in advance in writing, which approval shall not
unreasonably be withheld or delayed. If the Purchaser shall not have received
notice that the Seller shall assume the defense of such claim within twenty (20)
days after the notice is sent to the Seller of the existence of such claim, the
Purchaser shall be free to proceed with the defense of such claim. Each such
notice shall be accompanied (or followed as promptly as is reasonably
practicable after the amount of such Loss becomes determinable) by a certificate
signed by the President of Purchaser and setting forth in reasonable detail the
calculation of the amount of such Loss in accordance with the provisions hereof,
and accompanied by copies of all relevant documents and records. The omission to
give such notice or provide such certificate by Purchaser shall not relieve
Seller of its obligation under this Section 11.2 except to the extent such
omission results in a failure of actual notice to the Seller and Seller is
damaged solely by such failure to give notice. No Loss shall be considered to
have occurred with respect to any payment made by Purchaser in settlement,
satisfaction, or compromise of any claim unless the Seller shall have approved
thereof in advance in writing.
12.3 INDEMNIFICATION BY PURCHASER.
(a) Purchaser hereby agrees to indemnify, defend, and hold
Seller harmless from and against the amount of any actual (or potential in the
case of any litigation or claims by any person not a party to this Agreement)
damage, loss, cost, or expense (including reasonable attorneys' fees and
settlement costs) to Seller ("Loss") occasioned or caused by, resulting from, or
arising out of:
(i) Any failure by Purchaser to perform, abide by, or
fulfill any of the Agreements, covenants, or obligations set forth in or entered
into, in connection with this Agreement to be so performed or fulfilled by
Purchaser.
(ii) Any material inaccuracy in or breach of any of the
representations or warranties set forth in this Agreement, or any certificate or
Schedule or other writing furnished pursuant hereto.
(iii) Any failure on the part of Purchaser to withhold
from the Purchase Price any amount due by Purchaser to any governmental
authority or other person that results in a loss to Seller.
(iv) Any claim, known or unknown, arising out of or by
virtue of or based upon any liability or obligation of Purchaser not otherwise
disclosed herein.
(v) Any liability or obligation for any tort or any
breach or violation of any contractual, quasi-contractual, legal, fiduciary, or
equitable duty by Purchaser, whether before, at, or after the Closing.
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The amount of any Loss shall be the amount of cash reimbursement or
set-off that, when received by the Seller, shall place the Seller in the same
financial position it would have been if such Loss has not occurred.
12.4 NOTICE OF CLAIM TO PURCHASER. Seller shall give prompt written
notice to Purchaser of any claim (actual or threatened) or other event that in
the judgment of Seller might result or has resulted in a Loss by Seller
hereunder, and Purchaser shall have the right to assume the defense of such
claim or any litigation resulting therefrom: PROVIDED THAT counsel form the
Purchaser, who shall conduct the defense of such claim (actual, threatened, or
asserted) or litigation, shall be reasonably satisfactory to the Seller, and
Seller may participate in such defense at is expense, and PROVIDED, FURTHER,
that the omission by Seller to give notice as provided herein shall not relieve
Purchaser of its obligations hereunder except to the extent that the omission
results in a failure of actual notice to the Purchaser and Purchaser is damaged
solely as a result of the failure to give notice. Purchaser, in the defense of
any such claim or litigation, shall not, except with the consent of Seller,
consent to the entry of any judgment or decree or enter into any settlement that
does not include as an unconditional term thereof the giving by the claimant or
plaintiff to Seller of a release from all liability in respect to such claim or
litigation, and no Purchaser shall have liability with respect to any payment
made by Seller in connection with the settlement, satisfaction, or compromise of
any claim unless the Purchaser shall have approved thereof in advance in
writing, which approval shall not unreasonably be withheld or delayed. If the
Seller shall not have received notice that the Purchaser shall assume the
defense of such claim within twenty (20) days after the notice is sent to the
Purchaser of the existence of such claim, the Seller shall be free to proceed
with the defense of such claim. Each such notice shall be accompanied (or
followed as promptly as is reasonably practicable after the amount of such Loss
becomes determinable) by a certificate signed by the President of Seller and
setting forth in reasonably detail the calculation of the amount of such Loss in
accordance with the provisions hereof, and accompanied by copies of all relevant
documents and records. The omission to give such notice or provide such
certificate by Seller shall not relieve Purchaser of its obligation under this
Section 11.4 except to the extent such omission results in a failure to actual
notice to the Purchaser and Purchaser is damaged solely by such failure to give
notice. No Loss shall be considered to have occurred with respect to any payment
made by Seller in settlement, satisfaction, or compromise of any claim unless
the Purchaser shall have approved thereof in advance and in writing.
13. TERMINATION.
13.1 TERMINATION RIGHTS. In addition to the termination rights for in
Article 12, this Agreement and the transactions contemplated under this
Agreement may be terminated at any time before the closing date, either before
or after the meeting of Seller's shareholders;
(a) By mutual consent of Purchaser and Seller;
(b) By Purchaser if there has been a material misrepresentation
or a material breach of warranty in Seller's warranties set forth in this
Agreement or in any schedule or certificate delivered pursuant to this
Agreement;
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(c) By Seller if there has been a material misrepresentation or
a material breach of warranty in Purchaser's warranties set forth in this
Agreement;
(d) By Purchaser or Seller if either party will have determined
in its sole discretion that the transactions contemplated by this Agreement have
become inadvisable or impracticable by reason of the institution or threat of
institution, by governmental authorities (local, state, or federal) or by any
other person, of material litigation or proceedings against either or both of
the parties, it being understood and agreed that a written requires by
governmental authorities for information with respect to the proposed
transactions, which could be used in connection with such litigation or
proceedings, may be considered by Purchaser or Seller to be a threat of material
litigation or proceedings, whether such request is received before or after the
date of this Agreement.
13.2 FAILURE TO PROVIDE SCHEDULES. In the event that this Agreement is
terminated pursuant to this Article 12, or because of the failure to satisfy any
of the conditions specified in Article 8 or Article 9, all further obligations
of Purchaser and of Seller under this Agreement will terminate without further
liability of Purchaser to Seller or Seller to Purchaser, // provided, however,
despite anything in this Agreement to the contrary, that if Seller fails to
furnish any of the schedules referred to in Section 5.25 or fails to satisfy any
of the conditions specified in Article 8, Purchaser will nonetheless have the
right in its discretion, to proceed with the transactions contemplated by this
Agreement, and if Purchaser fails to satisfy any of the conditions specified in
Article 9, Seller will nonetheless have the right, in its discretion, to proceed
with the transactions contemplated by this Agreement.
13.3 RETURN OF DOCUMENTS. In the event of the termination of this
Agreement for any reason, Purchaser will return to Seller all documents, work
papers, and other materials (including copies) relating to the transactions
contemplated in this Agreement, whether obtained before or after execution of
this Agreement. Purchaser will not use any information so obtained for any
purpose, and will take all practicable steps to have such information kept
confidential.
13.4 ATTORNEYS' FEES. In the event of the termination of this Agreement
for any reason, each party will bear its own costs and expenses, including
attorney fees.
14. PRESS RELEASES.
Neither Purchaser nor Seller, without the consent of the other, will make
any public announcement or issue any press release with respect to this
Agreement or the transactions contemplated by it, which consent will not be
unreasonably withheld.
15. BROKERAGE FEE.
Seller, Purchaser Subsidiary and Purchaser each represent that no broker
has been involved in this transaction and each party agrees to indemnify and
hold the others harmless from payment of any brokerage fee, finder's fee, or
commission claimed by any party who claims to have been involved because of
association with such party; PROVIDED THAT Purchaser
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shall (pursuant to an agreement between Purchaser and Broker) pay all fees owed
to the Broker in connection with this transaction.
16. AMENDMENTS; WAIVERS.
This Agreement constitutes the entire agreement of the parties related to
the subject matter of this Agreement, supersedes all prior or contemporary
agreement, representations, warranties, covenants, and understandings of the
parties. This Agreement may not be amended, nor shall any waiver, change,
modification, consent, or discharge be effected, except by an instrument in
writing executed by or on behalf of the party against whom enforcement of any
amendment, waiver, change, modification, consent, or discharge is sought.
Any waiver of any term or condition of this Agreement, or of the breach
of any covenant, representation, or warranty contained herein, in any one
instance, shall not cooperate as or be deemed to be or construed as a further or
continuing waiver of such term, condition, or breach of covenant,
representation, or warranty, nor shall any failure at any time or times to
enforce or require performance of any provision hereof operate as a waiver of or
affect in any manner each party's right at a later time to enforce or require
performance of such provision or of any other provision hereof; and no such
written waiver, unless it, by its own terms, explicitly provides to the
contrary, shall be construed to effect a continuing waiver of the provision
being waived and no such waiver in any instance shall constitute a waiver in any
other instance or for any other purpose or impair the right of the party against
whom such waiver is claimed in all other instances or for all other purposes to
require full compliance with such provision.
17. ASSIGNMENT; SUCCESSORS AND ASSIGNS.
This Agreement shall not be assignable by any party without the written
consent of the others. This Agreement shall be binding upon and shall inure to
the benefit of the parties hereto and their respective successors and permitted
assigns.
18. SEVERABILITY.
If any provision or provisions of this Agreement shall be, or shall be
found to be, invalid, inoperative, or unenforceable as applied to any particular
case in any jurisdiction or jurisdictions, or in all jurisdictions or in all
cases, because of the conflict of any provision with any constitution or statute
or rule of public policy or for any other reason, such circumstance shall not
have the effect of rendering the provision or provisions in question invalid,
inoperative, or unenforceable in any other jurisdiction or in any other case or
circumstance or of rendering any other provision or provisions herein contained
invalid, inoperative, or unenforceable to the extent that such other provisions
are not themselves actually in conflict with such constitution, statute, or rule
of public policy, but this Agreement shall be reformed and construed in any such
jurisdiction or case as if such invalid, inoperative, or unenforceable provision
had never been contained herein and such provision reformed so that it would be
valid, operative, and enforceable to the maximum extent permitted in such
jurisdiction or in such case.
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and /or to such other person(s) and address(es) as either party shall have
specified in writing to the other.
23. GENDER.
Whenever used herein, the singular number shall include the plural, the
plural shall include the singular, and the use of any gender shall include all
genders.
24. LAW TO GOVERN.
This Agreement shall be governed by and construed and enforced in
accordance with the law (other than the law governing conflict of law questions)
of New Jersey.
25. COURTS.
Any action to enforce, arising out of, or relating in any way to, any of
the provisions of this Agreement may be brought and prosecuted in such court or
courts located in New Jersey as is provided by law; and the parties consent to
the jurisdiction of the court or courts located in New Jersey and to service of
process by registered mail, return receipt requested, or in any other manner
provided by law.
26. ARBITRATION.
If the parties hereto are unable to resolve any dispute with respect to
claims arising hereunder within 30 days of written notice of such dispute by one
party to the others, such dispute shall be settled by compulsory and binding
arbitration by a panel of three arbitrators in accordance with the Commercial
Arbitration Rules of the American Arbitration Association, and judgment upon the
award rendered by the arbitrator(s) may be entered in any court having
jurisdiction. The parties agree that such arbitration shall be held in New York,
New York.
IN WITNESS WHEREOF, Seller, Purchaser Subsidiary and Purchaser have
caused this Agreement to be executed as of the date first above written:
SURETY HOLDINGS CORP., Purchaser
By: /S/ XXXXXX X. XXXXX
Name: XXXXXX X. XXXXX
Title: Chief Financial Officer, Director
MILLENNIUM INTERNATIONAL SPORTS
& ENTERTAINMENT, LLC, Seller
By: /S/ XXXXXX XXXXXXXXX
Name: XXXXXX XXXXXXXXX
Title: MEMBER
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MILLENNIUM SPORTS & ENTERTAINMENT, INC.
Purchaser Subsidiary
By: /S/ XXXXXX X. XXXXX
Name: XXXXXX X. XXXXX
Title: PRESIDENT
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