AGREEMENT OF PURCHASE AND SALE
THIS AGREEMENT OF PURCHASE AND SALE (the "Agreement") is made as of this 1st day
of July, 1997 by and between Xxxxx X. Xxxxxxxxx, ("Seller") and Xxxxxxx
Xxxxxx Inc., a Virginia corporation (the "Purchaser").
WHEREAS, the Seller owns and operates certain Xxxxxxx Xxxxxx Tax Service
("Xxxxxxx Xxxxxx") franchises in the State of New York, as set forth in Exhibit
A (the "Franchise Territories"); and
WHEREAS, the Seller desires to sell, and Purchaser desires to purchase, all of
the tangible and intangible assets associated with Seller's operation of the
Franchise Territories.
NOW, THEREFORE, in consideration of the mutual covenants and agreements herein
contained, the parties hereto mutually agree as follows:
1. Sale of Assets; Nonassumption of Liabilities. Upon the terms and
subject to the conditions contained in this Agreement, at the Closing (as
defined in Section 3), the Seller shall sell, assign, transfer and deliver to
the Purchaser, and the Purchaser shall purchase and accept from the Seller, all
of the assets and rights of every nature, kind and description, tangible and
intangible, wherever located, that are owned, used or held for use by the Seller
in or for the Franchise Territories, as the same shall exist on the Closing Date
(as defined in Section 3) (the "Assets"), free and clear of any and all liens
and encumbrances including without limitation the following:
a. All furniture, fixtures, equipment, supplies and other
tangible property of a similar nature, including without limitation the items
set forth in Exhibit B;
b. Electronically provided customer information;
c. any accounts receivable, notes receivable, drafts or other
similar instruments;
d. all inventory;
e. all of Seller's right, title and interest under (i) any
equipment leases relating to equipment commonly utilized by Purchaser's business
partners as identified in Exhibit B, (ii) Seller's Amherst office lease (number
10063), and (iii) those other contracts of Seller specifically identified on
Exhibit B.
f. all customer and supplier lists, mailing lists,
catalogs, brochures and handbooks relating to the Franchise Territories;
g. all business licenses and permits, and manufacturer
warranties, to the extent transferable;
h. all trademarks, service marks, trade names and other
goodwill or intellectual property associated with the Franchise Territories; and
i. originals, or if not available, copies, of all other
books, records, files, contracts, plans, notebooks, production and sales
data and other data of Seller relating to the Franchise Territories.
Notwithstanding anything in the foregoing to the contrary, all Xxxxxxx Xxxxxx
rebates payable to Seller will be paid in the same manner as are paid other
business partners of the Purchaser. Except as expressly set forth in this
Agreement to the contrary, Purchaser shall not assume or otherwise become
obligated for any of Seller's liabilities, whether known or unknown, absolute or
contingent, of any nature whatsoever, whether related to the Franchise
Territories or otherwise.
2. Purchase Price.
a. The purchase price for the Assets ("Purchase Price") shall
equal (a) the lesser of (x) six times the cash flow (defined as earnings before
interest, taxes, depreciation and amortization as determined in accordance with
generally accepted accounting principles ("GAAP"))of the Franchise Territories
for the one year period ending April 30, 1997 or (y) 120% of the gross revenues
(as determined in accordance with GAAP, provided that such term shall be deemed
to include off season and tax season income tax preparation revenues, bank fees,
tax school income, accrued rebates, and other sources of income commonly
accruing to business partners of the Purchaser) of the Franchise Territories for
the one year period ending April 30, 1997, plus (b) $40,000, representing
$20,000 for each of the unopened territories that Seller currently possesses the
right to, minus (c) $88,253.00, representing all of the outstanding liabilities
and debts of Seller owed to the Purchaser as of the date of this Agreement, with
such amount to be adjusted through the Closing Date. Purchaser shall have the
right, at its own cost and expense, to conduct an audit of Seller's books and
records for the one year period ended April 30, 1997 for the purpose of
determining the Purchase Price (the "Audit").
For purposes of this Agreement, the formula identified in a
(a)(x) above was the lesser amount. The purchase price is computed as follows:
Cash Flow of $48,254.00 x 6 = $289,542.00 + $40,000.00 (representing the 2
unopened territories) = $329,542.00 (the "Purchase Price") less amounts due and
owing of: $88,253.00 to equal a cash payment to Seller of $241,289.00.
b. Seller will be entitled to defer until the Closing all
principal and interest payments owed by them to the Purchaser that were due and
payable on February 28, 1997, together with accrued interest on such debt
through the Closing, with such amounts to be subtracted from the Purchase Price
payable to Seller at Closing pursuant to Section 2.a.(c) above.
c. At the Closing, Seller and Purchaser shall agree to an
allocation of the Purchase Price among the Assets. Each of the parties hereto
agrees to report the sale and purchase of the Assets for state and federal
income tax purposes in accordance with such allocation of the Purchase Price.
3. Closing Date.
a. The closing ("Closing") of the transactions contemplated by
this Agreement shall take place at such location as is mutually agreeable to
Seller and Purchaser. The Closing shall occur ("Closing Date") within 15 days
after the completion of the Audit by Purchaser for the purpose of making the
Purchase Price calculation as contemplated by Section 2.a. above, or, if the
parties agree on the Purchase Price and the Audit is not undertaken by
Purchaser, then within 15 days after the date on which the Purchase Price is
agreed upon; provided, however, that in no event may the Closing occur later
than July 15, 1997 without the mutual written agreement of both Seller and
Purchaser.
b. At the Closing, Seller shall deliver to Purchaser (w) a
Xxxx of Sale with respect to the Assets, (x) Assignment and Assumption
Agreements with respect to the leases and contracts contemplated by Section 1.e,
(y) such agreements and certificates as are contemplated by Section 6, and (z)
such other instruments of sale, transfer and conveyance as are reasonably
requested by Purchaser and its counsel, all in such forms as are acceptable to
Purchaser and its counsel. At the Closing, Purchaser shall pay to Seller in cash
an amount, if any, equal to the Purchase Price as determined pursuant to Section
2.a. above. In addition, at the Closing, Purchaser, Seller shall enter into the
Release Agreement in the form attached hereto as Exhibit C ("Release
Agreement").
4. Representations and Warranties of Seller. Seller jointly and
severally, represent and warrant to Purchaser that the statements contained in
this Section 4 are correct and complete as of the date of this Agreement and
will be correct and complete as of the Closing Date (as though made then and as
though the Closing Date were substituted for the date of this Agreement
throughout this Section 4).
a. Seller has good and marketable title to the Assets and the
absolute and unqualified right to sell, assign, and transfer the Assets to the
Purchaser, free and clear of all liens, pledges, and encumbrances of any kind,
including without limitation pledges or liens on the Xxxxxxx Xxxxxx name or
other intellectual property of Seller.
b. The Seller is a sole proprietorship duly organized, validly
existing and in good standing under the laws of the State of New York. The
Seller is qualified to do business in the State of New York.
c. All of the Assets that constitute furniture, fixtures,
equipment and other tangible personal property of Seller are in good working
order and are fit for the purposes for which they are intended to be used.
d. The Seller is not a party to any contract, written or oral,
unless specifically identified in this Agreement or attached as a Schedule
hereto, that is not terminable by its terms on thirty (30) days or less notice,
including without limitation employment agreements, labor contracts, or
distributor or dealer sales or purchase contracts pertaining to the Seller's
operation of the Franchise Territories. The Seller has performed all obligations
required to be performed by it to date under any contracts, agreements, leases,
or other documents to which it is a party, and is not in default with respect
thereto, including without limitation the Franchise Agreements between the
parties for the Franchise Territories ("Franchise Agreements").
e. There are no actions, suits or proceedings of law or in
equity pending or threatened against, or filed by, the Seller before or by any
federal, state, municipal, or other governmental department, commission, board,
agency or instrumentality, that involve any claim which would adversely affect
the business, affairs or prospects of the Franchise Territories or the Assets
being transferred hereunder. The Seller is not in default with respect to any
order, writ, injunction, or decree of any court or any federal, state,
municipal, or other governmental department, commission, board, agency or
instrumentality which would adversely affect the business, affairs or prospects
of the Franchise Territories or the Assets being transferred hereunder.
f. The Seller has filed in correct form all income tax returns
required by law for all years and/or periods and all amounts due thereunder have
been paid, and Seller has made provision for filing such returns for the 1996
tax year. All franchise, social security, withholding, real and personal
property tax, sales and use tax and all other returns that are currently due
have been filed, and the amounts due thereunder have been paid. All income,
franchise, social security, withholding, real and personal property tax, sales
and use tax and all other returns that are not currently due will be filed
timely, and the amounts owed thereunder will be paid when due by the Seller.
There are no audits or other investigations threatened or pending with respect
to any tax returns of the Seller or the operation of the Franchise Territories.
Seller has complied with all applicable laws relating to the reporting, payment,
collection and withholding of taxes. There are no tax liens on the Assets.
Seller has provided Purchaser a true and correct copy of Seller's profit and
loss statement as of April 30, 1997, and the related income statement
("Financial Statements"). The Financial Statements are consistent with the books
and records of the Seller and fairly present the financial position and the
results of operations of the Seller as of the dates thereof and for the periods
covered thereby in accordance with GAAP consistently applied. The books and
financial records of the Seller made available to the Purchaser constitute a
complete record of its financial affairs and accurately set forth all revenues,
expenses, assets and liabilities.
g. All financial information, including the Financial
Statements and Gross Volume Reports, presented to the Purchaser fully disclose,
present, and accurately and fairly represent the financial condition of the
Seller as of the date thereof and the results of operations for the periods
covered thereby and are not misleading, and all the aforementioned documents
have been prepared in accordance with GAAP applied on a consistent basis
throughout the periods involved.
h. Neither the execution and delivery of this Agreement, nor
the consummation of the transactions contemplated hereby, will conflict with or
result in a breach (i) of any of the terms, conditions or provisions of any
regulation, order, writ, injunction or decree of any court or government
instrumentality to which Seller is subject or (ii) of any agreement or other
instrument to which the Seller is a party or by which they are bound or
constitute (with the giving of notice or the passage of time or both) a default
thereunder, or result in any lien or encumbrance on any of the Assets.
i. The execution of this Agreement and all documents
contemplated hereby have been duly and validly authorized by all requisite
action, and no other proceedings on the part of Seller are necessary to
authorize this Agreement or to consummate the transactions contemplated hereby.
This Agreement constitutes the duly binding and legal obligations of the Seller
enforceable against them in accordance with its terms.
j. The Seller hereby relinquish all rights granted pursuant to
the Franchise Agreements and acknowledge that all post-term covenants of such
Franchise Agreements will be adhered to upon execution of this Agreement and
thereafter.
k. The Seller shall use their best efforts to insure the
Purchaser's success in the Franchise Territories and shall take no actions to
hinder or compromise the Purchaser's success.
l. Seller does not have any subsidiaries.
m. Seller has provided Purchaser with correct and complete
copies of all equipment and real property leases to which Seller is a party and
relating to the operation of the Franchise Territories ("Leases"). Each Lease is
valid and enforceable in accordance with its terms, is in full force and effect
and has not been canceled, terminated or modified in any way. To the best of
Seller's knowledge, upon reasonable investigation and inquiry, no lessor is in
default under any of the Leases.
n. The Seller has, and on the Closing Date will have, complied
with all applicable laws, regulations and orders, including without limitation
laws related to the protection of the environment, and laws related to employees
and employee benefits. The Seller has not received any notice of any violation
of any law, regulation or order. No license from or consent of any governmental
authority is required by any applicable law, statute, rule, regulation or
ordinance for the Seller to conduct its business as presently conducted.
o. No representation, warranty or statement by the Seller
contained in this Agreement, or in any other document or agreement furnished or
to be furnished to the Purchaser in connection herewith, contains or will
contain any untrue statement of a material fact or omits or will omit to state
any fact necessary in order to make the statements contained or to be contained
therein not misleading.
5. Survival of Representations and Warranties. The representations and
warranties set forth in Section 4 shall survive the Closing and remain in effect
forever thereafter (subject only to applicable statutes of limitations), and
shall not be affected by any investigation, verification, or approval by any
party hereto or by anyone on behalf of any of such parties.
6. Conditions to Obligations of Purchaser. The obligation of the
Purchaser to consummate the transactions contemplated hereby is subject to the
condition that at or prior to the Closing (or within such shorter time as may be
specifically provided) all of the following shall have occurred:
a. The Seller shall have delivered to the Purchaser
evidence of approval of this transaction by all necessary corporate action.
b. All of the terms, covenants and conditions of this
Agreement to be complied with or performed by the Seller at or before the
Closing shall have been duly complied with and performed. Seller shall certify
the foregoing in writing to the Purchaser at Closing.
c. The representations and warranties of the Seller set forth
in Section 4 shall be true and correct on the date hereof and on and as of the
Closing with the same force and effect as if such representations and warranties
had been made on and as of the Closing, and the Seller will at Closing certify
in writing that all such representations and warranties are true on and as of
the Closing.
d. From the date hereof until the Closing, there shall not
have been any material adverse change in the Seller's financial condition,
assets, liabilities, business or prospects. The Assets being transferred to the
Purchaser shall not have been materially and adversely affected as a result of
any fire, accident, or other casualty or any act of God or the public enemy, and
shall be in substantially the same condition as represented in this Agreement.
Seller shall certify the foregoing in writing to Purchaser at Closing.
e. The Purchaser shall have received written evidence, in
form and substance satisfactory to the Purchaser and its counsel, to the effect
that:
i. The Seller is authorized to do business in each
jurisdiction where the Seller has been doing business.
ii. The Seller has good and marketable title to
the Assets being sold hereunder and has full power and authority to sell and
transfer them to the Purchaser, and upon transfer, the Purchaser will have good,
marketable and indefeasible title to such Assets, free and clear of all liens,
charges and encumbrances of any kind.
f. Purchaser shall be satisfied that the books and records
of Seller support the representations and warranties made by Seller hereunder.
g. At the Purchaser's request, the Seller shall seek the
lessor's or landlord's consent to the assignment of any or all leases used in
Seller's operations and the obtainment of any or all of such consents shall, at
the sole and absolute discretion of Purchaser, be a condition to Purchaser's
obligations hereunder. Purchaser and the Seller will comply with any normal and
customary condition placed on any assignment by any lessor or landlord. The
Seller's obligations hereunder will survive Closing.
h. No action, suit or proceeding shall be pending or
threatened that would prevent consummation of the transactions contemplated by
this Agreement or affect adversely the rights of Purchaser to own the Assets or
conduct business operations in the Franchise Territories as currently conducted
by Seller.
i. This Agreement and the transactions contemplated hereby
shall have been ratified and approved by the Board of Directors of the
Purchaser.
7. Pre-Closing Covenants.
a. The Seller will conduct its business only in the ordinary
course from the date hereof to the Closing, will use its best efforts to
maintain a good relationship and its goodwill with its customers and suppliers
and will make no payment or distribution of any of the Assets to any person or
entity.
b. If requested by Purchaser, Seller will sign a joint letter
notifying the Seller's employees of the change in ownership of the Franchise
Territories and advising such employees that the Purchaser may, but is not
obligated to, offer them employment, and that employment by the Purchaser will
be separate and distinct from their employment by the Seller, with no carry over
of benefits or obligations.
c. Seller will afford to the officers, attorneys, accountants
and other representatives authorized by the Purchaser free and full access to
the offices, properties, books and records of the Seller in order that the
Purchaser may have full opportunity to make whatever investigation it shall
desire of the affairs, business and prospects of the Seller, provided that such
investigation shall not unreasonably interfere with the operations of Seller.
d. Seller shall give prompt written notice to Purchaser prior
to Closing of any development causing a breach of any statement, representation
or warranty made by Seller in this Agreement; provided however that no such
notice shall be deemed to amend, supplement, modify or cure any misstatement or
breach of a representation or warranty by Seller.
8. Covenant Not to Compete. Seller acknowledges that in the course
of her ownership of Xxxxxxx Xxxxxx franchises, she acquired and compiled
confidential information regarding the franchises. Accordingly:
a. Seller agrees as of the closing date, she will not, directly or
indirectly, compete with Purchaser within a ten mile radius of the franchise
territories set forth on Exhibit A within which Seller performed services or met
with customers during the past year, for a period of five (5) years following
the Closing.
b. It is the specific intent of the parties that Seller shall be
restricted from competing directly or indirectly with any segment of Purchaser's
acquired business in which Seller engaged prior to the sale of her franchises to
Purchaser, and from any segment of the Purchaser's business about which Seller
acquired proprietary or confidential information during the time she owned and
operated the franchises. This business shall include, but not be limited to,
advertising and marketing directed to those individuals, corporations or other
entities required to file tax returns with the Internal Revenue Service or other
relevant state tax collection agencies; providing advice and counselling to
entities regarding tax planning, completing and filing tax returns for
customers, representing or providing testimony or evidentiary support in the
event of customer tax filings and/or challenges to customer's tax filings. These
operations include a mechanism for providing customers, upon the electronic
filing of their tax returns, with refund anticipation loans, in anticipation of
their actual tax refunds and accelerated refunds.
c. Seller agrees that competition shall include, but not be limited to,
engaging in competitive activity, either as an individual, as a partner, as a
joint venturer with any other person or entity, or otherwise associated in a
competitive activity with any business entity which directly or indirectly
competes with Purchaser.
d. Seller and Purchaser have examined in detail this covenant not to
compete and agree that the restraint imposed upon Seller is reasonable in light
of the legitimate interests of Purchaser, and it is not unduly harsh upon
Seller's ability to earn a livelihood.
9. Nondisclosure of Confidential Information.
a. Seller agrees to uphold and safeguard any information about
Purchaser or the franchises sold to Purchaser gained by Seller during the course
of their ownership and operation of the franchises. Seller shall not, without
prior written consent of Purchaser, misappropriate, disclose, or make available
to anyone for use outside the Purchaser's organization at any time, any
information about the Purchaser, or Purchaser's customer's, whether or not
developed by Seller.
b. Seller understands and agrees that any information about
the Purchaser or the Purchaser's customers is the property of the Purchaser and
is essential to the Purchaser's goodwill and to the maintenance of the
Purchaser's competitive position and accordingly should be kept secret. Such
information shall include, but is not limited to, the Purchaser's confidential
information, data, technical data, customer lists, personnel information,
products, special hardware, software, software under development, manuals,
formulae, processes, methods, advertising techniques, or other confidential or
proprietary information belonging to the Purchaser or related to Purchaser's
business affairs.
10. Injunctive Relief.
a. Seller acknowledges that the remedies at law for any breach
of the restrictive covenants contained herein will be inadequate, and that the
Purchaser shall be entitled to injunctive relief against the Seller in addition
to any other remedy and damages available. The Seller acknowledges that the
restrictions contained herein are reasonable, but agrees that if any court of
competent jurisdiction shall hold such restrictions unreasonable as to time,
geographic area, activities or otherwise, such restrictions shall be deemed to
the reduced to the extent necessary in the opinion of such court to make them
reasonable.
b. The Seller agrees that the non-competitive obligation
contained herein shall be extended for the length of time which Seller shall
have been in breach of that provision. Seller recognizes that the time periods
included in this restrictive covenant shall begin on the date a court of
competent jurisdiction enters an order enjoining her from violating such
provisions unless good cause can be shown as to why the periods should not begin
at that time.
11. Non-solicitation. Seller shall not, and they shall cause its and
their shareholders, immediate family members, officers, directors, successors
and assigns (the "Affiliates") to not, directly or indirectly engage in, nor
have an interest in any business, firm, person, partnership, or corporation that
engages in the operation of a business under any name which performs services
similar to those performed by a Xxxxxxx Xxxxxx franchisee within a ten (10) mile
radius of the Franchise Territories set forth in Exhibit A within which the
Seller performed services or met with customers during the past year, for a
period of five (5) years following the Closing. The Seller and its Affiliates
shall not solicit the Seller's former customers, nor shall they divulge,
communicate, use to the detriment of the Purchaser, or for the benefit of any
other business, firm, person, partnership or corporation, or otherwise misuse
any of the Seller's confidential information, data, technical data, customer
lists, or personnel information. In the event of breach of this covenant by the
Seller and/or Affiliates, the Purchaser shall be entitled to injunctive relief
as well as to damages sustained and the recovery of court costs and reasonable
attorney's fees.
12. Indemnification.
a. Seller shall jointly and severally indemnify and defend the
Purchaser and each of Purchaser's officers, directors, employees, stockholders,
agents, advisors or representatives (collectively the "Indemnified Party")
against, and hold each of them harmless from, any loss, liability, obligation,
damage or expense, including without limitation attorneys' fees and
disbursements (collectively "Damages") that the Indemnified Party may suffer or
incur incidental to any claim or any proceeding against the Indemnified Party
based on or resulting from: (i) the failure of any representation or warranty
made by the Seller to be true and correct on the date hereof and on the Closing
Date; (ii) Seller's failure to perform or to comply with any covenant or
condition required to be performed or complied with by the Seller hereunder;
(iii) any liability of the Seller related to the Assets or the Franchise
Territories, except to the extent that Purchaser specifically assumes any
liability of Seller under any leases pursuant to the terms of this Agreement and
any Assignment and Assumption Agreements delivered at Closing; or (iv) the
ownership or operation of the Franchise Territories or Assets prior to the
Closing Date.
b. If any third party shall notify any Indemnified Party with
respect to any matter (a "Third Party Claim") which may give rise to a claim for
indemnification against Seller (the "Indemnifying Party") under this Section 12,
then the Indemnified Party shall promptly notify the Indemnifying Party thereof;
provided, however, that no delay on the part of the Indemnified Party in
notifying the Indemnifying Party shall relieve the Indemnifying Party from any
obligation hereunder unless (and then solely to the extent) the Indemnifying
Party thereby is materially prejudiced. Any Indemnifying Party will have the
right to defend the Indemnified Party against the Third Party Claim with counsel
of its choice satisfactory to the Indemnified Party so long as (A) the
Indemnifying Party notifies the Indemnified Party in writing within 15 days
after the Indemnified Party has given notice of the Third Party Claim that the
Indemnifying Party will indemnify the Indemnified Party from and against the
entirety of any Damages the Indemnified Party may suffer resulting from, arising
out of, or relating to the Third Party Claim, (B) the Indemnifying Party
provides the Indemnified Party with evidence acceptable to the Indemnified Party
that the Indemnifying Party will have the financial resources to defend against
the Third Party Claim and fulfill its obligations hereunder, (C) the Third Party
Claim involves only money damages and does not seek an injunction or other
equitable relief, (D) settlement of, or an adverse judgment with respect to, the
Third Party Claim is not, in the judgment of the Indemnified Party, likely to
establish a precedential custom or practice adverse to the continuing business
interests of the Indemnified Party, and (E) the Indemnifying Party conducts the
defense of the Third Party Claim actively and diligently.
c. So long as the Indemnifying Party is conducting the defense
of the Third Party Claim in accordance with Section 9.b. above, (A) the
Indemnified Party may retain separate co-counsel at its sole cost and expense
and participate in the defense of the Third Party Claim, (B) the Indemnified
Party will not consent to the entry of any judgment or enter into any settlement
with respect to the Third Party Claim without the prior written consent of the
Indemnifying Party not to be withheld unreasonably, and (C) the Indemnifying
Party will not consent to the entry of any judgment or enter into any settlement
with respect to the Third Party Claim without the prior written consent of the
Indemnified Party not to be withheld unreasonably.
d. In the event any of the conditions in Section 9.b. above is
or becomes unsatisfied, however, (A) the Indemnified Party may defend against,
and consent to the entry of any judgment or enter into any settlement with
respect to, the Third Party Claim in any manner it may deem appropriate and the
Indemnified Party need not consult with, or obtain any consent from, any
Indemnifying Party in connection therewith, (B) the Indemnifying Party will
reimburse the Indemnified Party promptly and periodically for the cost of
defending against the Third Party Claim, and (C) the Indemnifying Party will
remain responsible for any Damages the Indemnified Party may suffer resulting
from, arising out of, or relating to the Third Party Claim to the fullest extent
provided in this Section 9.
13. Termination.
a. This Agreement may be terminated at any time prior to the
Closing (i) by the mutual agreement of the Purchaser and the Seller; (ii) by the
Purchaser or the Seller (if such party is not in breach of or default under this
Agreement) giving written notice to such affect to the other party if the
Closing shall not have occurred on or before July 15, 1997, or such later date
as the parties shall have agreed upon in writing prior to the giving of such
notice; or (iii) by the Purchaser in the event of a material breach by or
default of Seller of any provision of this Agreement.
b. Upon termination of this Agreement pursuant to Section
10.a., all obligations of the parties shall terminate except those under Section
12 related to indemnification, provided, however, that no such termination shall
relieve the Seller of any liability to the Purchaser by reason of any breach of
or default under this Agreement.
14. Further Offers. Until Closing, the Seller will (i) not provide any
information about the Franchise Territories, with the intent to sell or solicit
an offer to purchase the Assets of the Seller or the Franchise Territories, or a
material interest therein to anyone other than the Purchaser, (ii) not negotiate
or discuss with any other potential buyer other than the Purchaser the sale or
possible sale of Assets of the Seller or the Franchise Territories, or any
material interest therein, (iii) not sell or agree to sell the Assets of the
Seller or the Franchise Territories, or any interest therein and not solicit any
offer or indication of interest concerning the possible sale of the Assets of
the Seller or the Franchise Territories, or any interest therein, and (iv)
advise the Purchaser immediately of the receipt of any written offer or written
proposal for any material interest in the Assets of the Seller or the Franchise
Territories, including the terms of such an offer. The Seller agree that the
Purchaser has and will expend considerable time and money in negotiating the
purchase of the Assets and the preparation of this Agreement. The Seller
therefore agrees to pay the sum of $7,000.00_ to the Purchaser as liquidated
damages if the Seller breach the provisions of this Section 14.
15. Counterparts. This Agreement may be executed in any number of
counterparts, each of which when so executed and delivered shall be deemed an
original, but such counterparts together shall constitute one and the same
instrument.
16. Miscellaneous Provisions.
a. This Agreement and the Release Agreement constitute the
entire understanding of the parties and supersede all prior negotiations,
commitments, representations and undertakings of the parties with respect to the
subject matter hereto, except that this Agreement and the Release Agreement do
not extinguish any covenants in the Franchise Agreements, which by their terms
are applicable after the termination of the Franchise Agreements or the sale of
the Franchise Territories, and provided further that the Mutual Release
Agreement to which Purchaser are parties dated December 31, 1996, shall remain
in full force and effect in accordance with its terms.
b. The failure of any party to exercise any right, power or
option given it in this Agreement or any subsequently executed agreements, or to
insist upon strict compliance with the terms of any of them by the other shall
not constitute a waiver of the terms and conditions of any of such agreements
with respect to any other or subsequent breach thereof, nor a waiver of its
rights at any time thereafter to require exact and strict compliance with all of
the terms of such agreements. The rights or remedies hereunder, including
without limitation the rights of Purchaser under Section 10, 12, 14 are
cumulative to, and not in lieu of, any other rights or remedies which may be
granted by law.
c. This Agreement shall be governed and construed under and in
accordance with the laws of the Commonwealth of Virginia without reference to
the conflict of laws principles thereof.
d. All of the parties hereto submit to the jurisdiction of any
state or federal court sitting in Norfolk, Virginia in any action or proceeding
arising out of or relating to this Agreement and each of them agrees that all
claims in respect of any such action or proceeding may be heard and determined
in any such court. The parties also agree not to bring any action or proceeding
arising out of or relating to this Agreement in any other court. Each of the
parties waives any defense of inconvenient forum to the maintenance of any
action or proceeding so brought and waives any bond, surety, or other security
that might be required of the other party with respect thereto. Each party may
make service on the other party by sending or delivering a copy of the process
to the party to be served at the address and in the manner provided for the
giving of notices in Section 16.e. below; provided, however, that nothing herein
shall affect the right of the parties to serve legal process in any other manner
permitted by law or in equity. Each of the parties agrees that a final judgment
in any action or proceeding so brought shall be conclusive and may be enforced
by suit on the judgment or in any manner provided by law or in equity.
e. All notices, requests, demands, claims and other
communications hereunder will be in writing. Any notice, request, demand, claim
or other communication hereunder shall be deemed duly given if (and five
business days after) it is sent by registered or certified mail, return receipt
requested, postage prepaid, and addressed to the intended recipient as set forth
below:
If to the Purchaser: Xxxxxxx Xxxxxx, Inc.
Attn: Xxxxx X. Xxxxxx
0000 Xxxxxx Xxxx
Xxxxxxxx Xxxxx, XX 00000
With a copy to: Xxxx X. Paris, Jr., Esq.
Xxxxxxx & Xxxxxxx
NationsBank Center
Xxx Xxxxxxxxxx Xxxxx, 00xx Xxxxx
Xxxxxxx, XX 00000
If to the Seller:
Xxxxx X. Xxxxxxxxx
0000 Xxxx Xxxxx
Xxxxxxx Xxxxx, XX 00000
With a copy to: Xxxxx Xxxxxxxx
000 Xxxx Xxxxxx
Xxxxxxx Xxxxx, XX 00000
Each party may send any notice, request,
demand, claim or other communication hereunder to the intended recipient at the
address set forth above using any other means (including personal delivery,
expedited courier, messenger service, telecopy, telex, ordinary mail, or
electronic mail) but no such notice, request, demand, claim or other
communication shall be deemed to have been duly given unless and until it
actually is received by the intended recipient. Each of parties may change the
address to which notices and other communications hereunder are to be delivered
by giving the other party written notice in the manner herein set forth.
f. The parties have participated jointly in the negotiation
and drafting of this Agreement. In the event an ambiguity or question of intent
or interpretation arises, this Agreement shall be construed as if drafted
jointly by the parties and no presumption or burden of proof shall arise
favoring or disfavoring one of the parties by virtue of the authorship of any of
the provisions of this Agreement.
g. This Agreement shall not confer any rights or remedies upon
any person other than the parties hereto and their respective successors and
permitted assigns. This Agreement shall be binding upon and inure to the benefit
of the parties named herein and their respective successors and permitted
assigns. No party may assign this Agreement or any of its rights, interests, or
obligations hereunder without the prior written approval of the other party.
h. Each of the parties acknowledges and agrees that the other
parties hereto would be damaged irreparably in the event any of the provisions
of this Agreement are not performed in accordance with their specific terms or
otherwise are breached. Accordingly, each of the parties agrees that the other
party shall be entitled to an injunction or injunctions to prevent breaches of
the provisions of this Agreement and to enforce specifically this Agreement and
the terms and provisions hereof in any action instituted in any court of the
United States or any state thereof having jurisdiction over the parties in the
matter, subject to the provisions set forth in Section 13.d. above, in addition
to any other remedy to which it may be entitled at law or in equity.
i. Should any part of this Agreement, for any reason, be
declared invalid by a court of competent jurisdiction, such decision or
determination shall not affect the validity of any remaining portion and such
remaining portion shall remain in force and effect as if this Agreement had been
executed with the invalid portion eliminated; provided, however, that in the
event of a declaration of invalidity, the provision declared invalid shall not
be invalidated in its entirety, but shall be observed and performed by the
parties to the extent such provision is valid and enforceable. The parties
hereby agree that any such provision shall be deemed to be altered and amended
to the extent necessary to effect such validity and enforceability.
j. The parties waive compliance with the provisions of any
bulk sales law that may be applicable to the transactions contemplated hereby.
IN WITNESS THEREOF, the parties have hereunto set their hands and seals on the
date first above written.
SELLER:
/S/ XXXXX X. XXXXXXXXX
----------------------------
Xxxxx X. Xxxxxxxxx
----------------------------
Seller's Address
----------------------------
City and State and Zip
----------------------------
Telephone Number
----------------------------
Seller's TIN/EIN/SS #
PURCHASER:
XXXXXXX XXXXXX INC.
By: /S/ XXXXX X. XXXXXX
---------------------------------
Xxxxx X. Xxxxxx, President/CEO
EXHIBIT A
Franchisee's Xxxxxxx Xxxxxx Inc. granted franchise territories consist of the
following:
NY021 with zips: 14301, 14092, 14305, 14174
NY019 with zips: 14132, 14120, 14131
NY201 with zips: 14150, 14217 West of excluding Elmwood Avenue and N of
including Xxxxxxxx Xxxxx
XX000 with zips: 14226, 14223
NY550 with zips: 14304, 14303, 14072
NY202 with zips: 14216, 14217 E of including Elmwood Ave. and S. of excluding
Sheridan Drive, 14207
EXHIBIT B
ASSETS
Client Files, all copies on hard disk drive or floppy disk drive, all paper
copies and all related databases, Bank Products documents or applications, 8453s
All rights to telephone numbers: 000-0000, 000-0000, 000-0000, 000-0000, Seller
to retain all deposits.
Goodwill
Any and all rights to the lease dated June 14, 1995 for the premises known as:
0000 Xxxxxxxx Xxxxx, Store 10 in Amherst, NY with lessor Northtown, Inc.
The following equipment:
16 Xxxxx Desks (with extra center pieces)
4 X'Xxxxxxxx desks (one of which owned by Xxxxxxx Xxxxxx)
83 Black Customer Chairs
5 Grey Tax Prep Chairs
18 Red Tax Prep Chairs
3 Filing Cabinets
3 6 foot folding tables
1 4x10 overhead sign
1 channel letter sign (TAX SERVICE)
1 3x14 foot sign (with 2 3x3 logo faces and 1 2x8 Tax Service Face)
6 Illuminated interior window signs with interchangeable faces
4 coffee stands
3 coffee tables
1 Konica copier (1015) and stand
10 386 computers, with keyboards (1 of which owned by Xxxxxxx Xxxxxx)
14 Dividers (some belong to Xxxxxxx Xxxxxx)
3 overhead projectors
8 2-line phones
1 HP 4+ printer
1 486 Computer, color monitor and keyboard
Front office printing devices
The attached leased equipment to the extent not included above, which are on an
Aloha Lease.
All offices have:
Miscellaneous Supplies
Trash Cans
Wall signs
Crates
Radios
Employee boxes
Banners
Xxxx of Sale
Seller, Xxxxx X. Xxxxxxxxx, conveyed the following assets to Purchaser, Xxxxxxx
Xxxxxx Inc. on , 1997
Electronically provided customer information
Goodwill
The following items of equipment:
16 Xxxxx Desks (with extra center pieces)
4 X'Xxxxxxxx desks (one of which owned by Xxxxxxx Xxxxxx)
83 Black Customer Chairs
5 Grey Tax Prep Chairs
18 Red Tax Prep Chairs
3 Filing Cabinets
3 6 foot folding tables
1 4x10 overhead sign
1 channel letter sign (TAX SERVICE)
1 3x14 foot sign (with 2 3x3 logo faces and 1 2x8 Tax Service Face)
6 Illuminated interior window signs with interchangeable faces
4 coffee stands
3 coffee tables
1 Konica copier (1015) and stand
10 386 computers, with keyboards (1 of which owned by Xxxxxxx Xxxxxx)
14 Dividers (come belong to Xxxxxxx Xxxxxx)
3 overhead projectors
8 2-line phones
1 HP 4+ printer
1 486 Computer, color monitor and keyboard
Front office printing devices
The attached leased equipment to the extent not included above, which are on an
Aloha Lease.
All offices have:
Miscellaneous Supplies
Trash Cans
Wall signs
Crates
Radios
Employee boxes
Banners
All rights to any the leased for the premises and dated June 14, 1995 for the
premises known as: 0000 Xxxxxxxx Xxxxx, Store 10 in Amherst, NY with lessor
Northtown, Inc.
All rights to telephone numbers: 000-0000, 832-7628, 284-0002, 297-0007, Seller
to retain all deposits.
All rights contained in any Aloha Lease for equipment leased to Seller and used
in the franchised business.
Total Purchase Price: $329,542.00
/s/ XXXXX XXXXXXXXX
------------------------------
Xxxxx Xxxxxxxxx, Seller
RELEASE AGREEMENT - Exhibit C
This Release Agreement (the "Agreement") is made and entered into as of
this ____ day of ____________, 1997, by and between Xxxxxxx Xxxxxx Inc., a
Virginia corporation ("Franchiser"), and Xxxxx Xxxxxxxxx the ("Franchisee").
WHEREAS, Franchiser and Franchisee have entered into an agreement for
Franchiser to purchase the territories listed on Exhibit A attached hereto and
made a part hereof by reference, for the operation of Xxxxxxx Xxxxxx Tax Service
offices in the State of New York ("Agreement of Purchase and Sale"); and
WHEREAS, Franchiser and Franchisee are parties to certain Franchise
Agreements related to such territories ("Franchise Agreements").
NOW, THEREFORE, in consideration of the mutual promises and covenants
set forth herein, the parties hereby agree as follows:
1. Franchisee and each of its agents, servants, successors, officers,
directors, guarantors, heirs and assigns, fully and finally release, acquit, and
forever discharge Franchiser, its present and former agents, servants,
successors, officers, directors, shareholders, employees, assigns and
affiliates, and all other persons, firms, corporations, associations, or
partnerships of and from any and all claims, actions, causes of action, demands,
damages, costs, loss of services, expenses, and compensation which Franchisee
now has, known or unknown, foreseen and unforeseen, arising under or relating to
any Franchise Agreement, any laws affecting the sale of a franchise including
without limitation to any state and/or federal franchise registration and/or
disclosure laws or regulations, up to and including the date hereof, and any and
all manner of other claims, accounts, debts, demands, damages, losses, causes of
action, actions, liabilities, or suits, whether at law or in equity, whether
known or hereafter discovered, which Franchisee or its agents, servants,
successors, officers, directors, guarantors, and assigns individually or
collectively has against Franchiser or its agents, servants, successors, heirs,
assigns, or affiliates. Franchisee hereby acknowledges that Franchiser is in
good standing pursuant to the terms of the Franchise Agreements, and that
Franchiser has performed all of its obligations thereunder.
2. Franchisee shall be responsible for any claims made by any third
party relating to or arising out of Franchisee's performance under the Franchise
Agreements including, without limitation, any tort claims brought by any third
party. Franchisee shall indemnify and hold Franchiser harmless against any and
all such claims. Nothing contained herein shall be construed to release,
satisfy, discharge or in any way hinder, delay or affect a recovery by
Franchiser against Franchisee with respect to any cost, damage, expense, claim,
or other liability imposed upon or suffered by Franchiser as a result of any
claim or claims which are brought by any third party against franchiser because
of any act or omission of Franchisee.
3. Notwithstanding anything contained herein to the contrary, any
rights or obligations which may arise between or among any of the parties hereto
as a result of the execution of this Agreement, any future business dealings, or
transactions between or among any of the parties hereto shall survive the
execution of this Agreement.
4. Should any part of this Agreement for any reason be declared invalid
by a court of competent jurisdiction, such decision or determination shall not
affect the validity of any remaining portion, and such remaining portion shall
remain in force and effect as if this Agreement had been executed with the
invalid portion eliminated; provided, that in the event of a declaration of
invalidity the provision declared invalid shall not be invalidated in its
entirety, but shall be observed and performed by the parties to the extent such
provision is valid and enforceable.
5. This Agreement may be executed in any number of counterparts, each
of which when so executed and delivered shall be deemed an original, but such
counterparts together shall constitute one and the same instrument.
6. This Agreement and the Agreement of Purchase and Sale shall
constitute the entire agreement between the parties hereto with respect to the
subject matter hereof and shall supersede all previous negotiations,
commitments, and writings except that this Agreement shall not apply to any
post-term covenants contained in the Franchise Agreements, and provided further
that the Mutual Release Agreement to which Purchaser and Xxxxxxxxx are parties
dated December 31, 1996, shall remain in full force and effect in accordance
with its terms. This Agreement may not be released, discharged, abandoned,
changed, or modified in any manner except by an instrument in writing signed on
behalf of each of the parties hereto.
7. This Agreement shall be governed and construed under and in
accordance with the laws of the Commonwealth of Virginia without reference to
the conflict of laws principles thereof.
8. The provisions of Section 16.d. and e. of the Agreement and
Purchase of Sale, related to submission to jurisdiction and notices,
respectively, are incorporated into this Agreement by reference and made a
part hereof.
IN WITNESS WHEREOF, the parties have executed, sealed, and delivered
this Agreement the day and year set forth above.
FRANCHISER:
XXXXXXX XXXXXX INC.
---------------------------
Xxxxx X. Xxxxxx
Chairman, President and CEO
FRANCHISEE:
---------------------------
Xxxxx Xxxxxxxxx
EXHIBIT A
Franchisee's Xxxxxxx Xxxxxx Inc. granted franchise territories consist of the
following:
NY021 with zips: 14301, 14092, 14305, 14174
NY019 with zips: 14132, 14120, 14131
NY201 with zips: 14150, 14217 West of excluding Elmwood Avenue and N of
including Xxxxxxxx Xxxxx
0
XX000 with zips: 14216, 14217 E of including Elmwood Ave. and S. of excluding
Sheridan Drive, 14207
ALLOCATION OF PURCHASE PRICE
Purchaser, Xxxxxxx Xxxxxx Inc. and Seller, Xxxxx X. Xxxxxxxxx, having entered
into an Agreement of Purchase and Sale dated July 1, 1997 hereby agree to
allocate the purchase price of: $329,542.00, as follows:
Electronically provided customer information: $290,000.00.
Furniture and Equipment: $10,000.00.
Goodwill: $9,542.00
Seller has purchased a Covenant Not to Compete from Seller for $20,000.00.
PURHCASER: SELLER
XXXXXXX XXXXXX INC.
By: /s/ XXXXX X. XXXXXX /s/ XXXXX X. XXXXXXXXX
----------------------------------------- ----------------------------
Xxxxx X. Xxxxxx, Chairman, President, CEO Xxxxx X. Xxxxxxxxx
