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Exhibit 10.2
ASSET PURCHASE AGREEMENT
This Asset Purchase Agreement is made this 1st day of April, 1997 (this
"Agreement") by and between CORPORATE ACCOMMODATIONS, INC., a Florida
corporation ("Seller"), XXXXX XXXXXX, the sole shareholder of Seller, (the
"Shareholder") and XXXXXXXXX, INC. ("Purchase");
W I T N E S S E T H:
WHEREAS, Seller is in the business of leasing and subleasing commercial
and residential properties (the "Business");
WHEREAS, Purchaser desires to purchase, and Seller desires to sell,
certain assets of the Seller used in the Business upon the terms and conditions
hereinafter set forth;
WHEREAS, the Shareholder is the owner of all of the issued and
outstanding stock of Seller and therefore has a beneficial interest in said
sale/purchase; and
WHEREAS, as a condition to purchasing the assets of Seller, Purchaser
has requested that, for separate consideration, the Shareholder executes a
Non-Competition Covenant and Agreement, and the Shareholder has agreed to do so;
NOW, THEREFORE, in consideration of the mutual promises contained in
this Agreement and other good and valuable consideration, the receipt and
sufficiency of which is hereby acknowledged, the parties hereto hereby agree as
follows:
1. SALE AND PURCHASE OF BUSINESS ASSETS. Upon the terms and conditions
of this Agreement, at Closing (as defined below), Seller shall deliver, transfer
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convey to Purchaser, and Purchaser shall purchase and pay for, the assets
described in Schedule 1.1 (the "Assets") of Seller and the contracts, leases,
purchase orders and related contract rights and leasehold interests described in
Schedule 1.2 (the "Assumed Contracts"). All items of income and expense
attributable to the Assumed Contracts shall be allocated between Purchaser and
Seller pursuant to the terms of Section 1.3 below.
1.1 ASSIGNMENT OF SERVICE CONTRACTS. With respect to the
Assumed Contracts, Seller shall, at the Closing (or as soon thereafter as
practicable), assign to Purchaser all of the related, underlying contracts for
the rental of apartments, furniture, and housewares and all of the related
underlying contracts for the provision of electric usage, cable television
service, water, sewer, telephone service and so on (all such contracts are
referred to hereafter as the "Service Contracts"). Upon such assignment,
Purchaser shall (a) be entitled to all of Seller's rights (including the right
to the return of all security deposits, if any, paid by Seller), (b) assume all
of Seller's obligations, and (c) make all further payments due under the terms
of the Service Contracts, as though the named party to each Service Contract.
1.2 NON-ASSIGNABLE SERVICE CONTRACTS. The parties hereto
recognize that it may be impossible or impractical for Seller to assign all of
the Service Contracts. A Service Contract that is impossible or impractical to
assign shall be referred to hereafter as a "Non-assignable Service Contract".
With respect to each Non-assignable Service Contract, the following shall apply
as of the date of Closing
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and thereafter: (a) Seller shall assign its economic rights and obligations with
respect to such Contracts; (b) Seller shall remain legally obligated under the
terms of such Contracts; (c) Purchaser shall be entitled to all of Seller's
rights (including the right to the return of security deposits, if any, paid by
Seller), and shall assume all of Seller's financial obligations and make all
further payments due by Seller under the terms of the Non-Assignable Service
Contracts which accrue on or after the date of Closing; and (d) Purchaser shall
indemnify and hold Seller harmless for any claim made against Seller due to the
non-payment or non-performance by Purchaser of any financial or other obligation
assumed by Purchaser hereunder with respect to each such Non-assignable Service
Contract. To the extent not otherwise allocated under Section 1.3 below, Seller
shall remain liable for and shall indemnify and hold Purchaser harmless for any
claim made against Purchaser with respect to the non-performance or non-payment
of any financial or other obligation of Seller with respect to a Non-assignable
Service Contract which accrued prior to Closing.
1.3 ACCRUALS AND ALLOCATIONS. Amounts due or payable on Service
Contracts, Non-assignable Service Contracts and all other Assumed Contracts
shall be allocated between the Purchaser and the Seller on an accrual basis. All
accruals shall be based on the number of calendar days in the term of such
Contracts. The Seller's portion shall be equal to that portion of the number of
days in the term occurring prior to the Closing Date in relation to the total
number of days in the term ("Seller's Term"). The Purchaser's portion shall be
equal to that portion of the number of days in the term occurring after the
Closing Date in relation to the total
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number of days in the term ("Purchaser's Term"). All accruals shall be allocated
between Purchaser and Seller as follows:
(a) All prepaid rents and expenses which are properly
reflected as assets on Seller's records as of the Closing Date and which are
allocated to the Purchaser's Term shall be treated additional Assets to be
acquired by Purchaser and shall result in an increase in the Purchase Price
under Section 3. below.
(b) All accrued but unpaid rents and expenses which are
properly reflected as liabilities on Seller's records as of the Closing Date and
which are allocated to the Seller's Term shall be treated as liabilities to be
assumed by Purchaser under Section 2. (b) below and shall result in a decrease
to the Purchase Price under Section 3. below.
(c) All prepaid rents and expenses which are properly
reflected as liabilities on Seller's records as of the Closing Date and which
are allocated to Purchaser's Term shall be treated as a liability to be assumed
by Purchaser under Section 2.(b) below and shall result in a decrease to the
Purchase Price under Section 3. below.
(d) Any security deposit that Seller has placed with regard to
an Assumed Contract, with respect to each of which Purchaser shall have the
right of return, shall be treated as an additional asset to be acquired by
Purchaser and shall result in an increase in the Purchase Price under Section 3.
below Conversely, any security deposit that Seller has received with regard to
an Assumed Contract and with respect to which the Purchaser has assumed the
liability to refund such deposit
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under Paragraph 2. (b) below shall be treated as a liability assumed by
Purchaser and shall result in a decrease in the Purchase Price under Section 3.
below.
(e) Notwithstanding anything to the contrary in the foregoing,
Purchaser shall pay or reimburse Seller for all installation fees and prepaid
items paid by Seller, including utility installations, "hook-up" costs, etc., on
or after March 20, 1997 with respect to an Assumed Contract executed by Seller
on or after such date. Any amount due to Seller under this Section 1.3 (e) shall
result in an increase to the Purchase Price under Section 3. below.
2. EXCLUDED ASSETS; ASSUMPTION OF LIABILITIES.
(a) Seller is not selling to Purchaser and Purchaser is not
purchasing any of Seller's accounts receivable for amounts due to Seller prior
to the Closing or any of the assets listed on Schedule 2 (the "Excluded
Assets").
(b) Purchaser is assuming only those liabilities of Seller
with respect to the Assumed Contracts which have been allocated to Purchaser
under Section 1.3 above, specifically including Seller's obligation to refund
any security deposits paid to Seller with regard to the Assumed Contracts.
Purchaser shall not assume, and Seller shall remain liable for, all of Seller's
other liabilities incurred in the operation of the Business through the date of
Closing (the "Retained Liabilities").
3. PAYMENT AND ALLOCATION OF PURCHASE PRICE; ADJUSTMENTS.
3.1 PAYMENT. The Purchase Price for the Assets is Eight
Hundred Fifty Thousand and no/100 ($850,000.00) Dollars. The Purchase Price
shall be paid in the following manner:
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(a) One Hundred Thousand and no/100 ($100,000.00) Dollars (the
"Escrowed Amount") shall be paid by Purchaser to Seller at Closing by certified
or cashier's check to be held in an interest bearing joint escrow account by
Seller's and Purchaser's counsel, which such Escrowed Amount shall be paid to
Seller sixty (60) days after Closing so long as there has been no breach of this
Agreement, or any of the covenants, representations or warranties contained
herein, by Seller prior to such date, and after taking into account any
adjustments to the Purchase Price pursuant to Section 3.3 below. Any interest
generated by the Escrowed Amount shall be paid to Seller seven (7) days after
the Final Accounting (as defined in and pursuant to Section 3.3 below).
(b) Seven Hundred Fifty Thousand and no/100 ($750,000.00)
Dollars shall be paid by Purchaser to Seller at Closing by certified or
cashier's check.
3.2 ALLOCATIONS. The Purchase Price shall be allocated as
shown on Schedule 3.2; and Purchaser and Seller agree to file all tax returns,
including Federal Form 8594, in a manner which is consistent with such
allocation.
3.3 ADJUSTMENTS. The Purchase Price shall be increased or
decreased in accordance with the terms of Paragraph 1.3 above and the other
provisions of this Agreement. In order to take account of all such increases or
decreases, the Purchaser and Seller agree to perform the following: (i) an
interim accounting of all increases or decreases in the Purchase Price (an
"Interim Accounting") within thirty (30) days of the date of the Closing; and
(ii) a final accounting of all increases or decreases in
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the Purchase Price (a "Final Accounting") within sixty (60) days of the date of
the Closing.
(a) To the extent that the Interim Accounting indicates that
the Purchase Price has increased, then Purchaser shall, within seven (7) days
thereafter, pay to Seller the amount of the increase. To the Extent that the
Interim Accounting indicates that the Purchase Price has decreased, then Seller
shall, within seven (7) days thereafter, pay to the Purchaser the amount of the
decrease.
(b) To the extent that the Final Accounting indicates that the
Purchase Price has increased, then Purchaser shall, within seven (7) days
thereafter, pay to Seller the amount of the increase. To the extent that the
Final Accounting indicates that Purchase Price has decreased, then the amount of
such decrease shall be paid to the Purchaser from the Escrowed Amount held
pursuant to Paragraph 3.1 (a) above. The portion, if any, of the Escrowed Amount
remaining after making payment to Purchaser shall be paid to Seller.
4. CLOSING; DELIVERIES.
(a) The documents to be transferred and the payments to be
made at Closing shall be transferred and made at the offices of Wechsler, Xxxxxx
& Xxxxxxxx, Chartered at 10:00 a.m. on April 1, 1997, or at such other time and
date as shall be mutually agreed upon by the parties. The term "Closing" shall
mean the close of business on such date.
(b) At Closing, Seller and the Shareholder shall deliver to
Purchaser the following:
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(i) All documents necessary to vest clear and good title to
the Assets;
(ii) All documents necessary to properly assign the Assumed
Contracts to Purchaser; (The parties hereby agree that the execution of this
Agreement at Closing shall be deemed to satisfy requirements "i" and "ii" of
this Section 4(b)).
(iii) All documents required to be delivered pursuant to
Section ?; and
(iv) Any consents required to properly assign the Assumed
Contracts to Purchaser.
(c) At Closing, Purchaser shall deliver to Seller and/or the
Shareholder, the following:
(i) The Purchase Price to the extent required in Section ?.,
hereof;
(ii) The Employment Contract as described in Section 7.7; and
(iii) All documents required to be delivered pursuant to
Section ?.
5. REPRESENTATIONS, WARRANTIES, AND COVENANTS OF SELLER AND THE
SHAREHOLDER. Seller and the Shareholder, individually, jointly and severally,
represent, warrant, and covenant as follows, which representations, warranties,
and covenants shall continue in full force and effect to and including Closing,
and shall survive Closing:
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5.1 CORPORATE ORGANIZATION AND GOOD STANDING. Seller is duly
organized, validly existing, and in good standing under the Laws of the State of
Florida. Seller has the power to own all of its properties and Assets and to
carry on the Business as it is now being conducted. Attached hereto as Exhibits
?A and ?B, respectively, are true and correct copies of the Articles of
Incorporation and By-Laws of Seller, and all amendments, if any, thereto.
5.2 AUTHORIZATION, NO CONFLICTS. The Seller and the
Shareholder, as sole shareholder of the Seller, each have the power, capacity
and authority to execute and deliver this Agreement and to consummate the
transactions contemplated herein. The execution, delivery and performance of
this Agreement and any related agreement by Seller have been duly and validly
authorized by the Board of Directors and the Shareholder of Seller and by all
other necessary corporate action on the part of Seller. This Agreement and any
related agreements constitute the legally valid and binding obligations of
Seller and the Shareholder, enforceable against Seller and the Shareholder in
accordance with their respective terms, except as such enforceability may be
limited by bankruptcy, insolvency, reorganization, moratorium and other similar
laws and equitable principles relating to or limiting creditors rights
generally. The execution, delivery and performance of this Agreement by Seller
and the Shareholder and the execution, delivery and performance of any related
agreements and the consummation of the contemplated transactions by Seller
and the Shareholder will not violate or constitute a breach or default, whether
upon lapse of time and/or the occurrence of any act or event or
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otherwise, under the Articles of Incorporation or By-Laws of Seller or any other
contract, commitment or arrangement of Seller or the Shareholder, or result in
the imposition or encumbrance against any of the Assets or the Assumed Contracts
or violate any law. Except as set forth in Schedule 5.2 attached, the execution
and delivery of this Agreement by Seller and the Shareholder and the performance
of this Agreement and any related agreements or transactions thereunder by
Seller or the Shareholder will not require the consent or approval of any third
party.
5.3 FINANCIAL STATEMENTS.
(a) Seller has delivered to Purchaser:
(i) a listing of assets and liabilities relating to
Seller's Business and operations dated __________, which has been prepared in
accordance with generally accepted accounting principles (the "Listing of
Assets"); and
(ii) financial records relating to Seller's Business
and operations for the past two (2) years ending December 31, 1996 (the
"Financial Records") (the Financial Records and the Listing of Assets are
sometimes hereinafter referred to collectively as the "Financial Statements").
True and correct copies of the Financial Statements are attached hereto
as Exhibit ?. All such Financial Statements are true, correct and accurate in
all respects, have been prepared in accordance with generally accepted
accounting principles consistently applied, and fairly present in all respects
the financial position, results
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of operations, and changes in financial position of Seller at and for the
periods specified therein.
(b) Since December 31, 1996, whether or not in the ordinary
course of business, there has not been, occurred or arisen any change in or
event effecting the Business of Seller or the Assets that has had or may
reasonably be expected to have an adverse effect on the Business of Seller or
the Assets; nor has there been any casualty, loss, damage or destruction,
(whether or not covered by insurance) of any of the Assets or that has involved
or may involve a loss to Seller.
5.4 [INTENTIONALLY LEFT BLANK.]
5.5 ABSENCE OF UNDISCLOSED LIABILITIES. Except as disclosed on
Schedule ? hereto, Seller has no obligation or liability (whether accrued,
absolute, contingent, unliquidated or otherwise, whether due or to become due
and whether or not insured), except for (i) liabilities reflected on Seller's
balance sheet as of December 31, 1996, and (ii) liabilities under contracts or
commitments described on Schedule ? hereto which have arisen since December 31,
1996, in the ordinary course of business.
5.6 ASSUMED CONTRACTS.
(a) Schedule ______, contains an accurate and complete list
of all the Assumed Contracts and all agreements or commitments of any kind or
nature (oral or written) to which Seller is a party or bound and/or relating to
its Business. Except as set forth on Schedule ?, Seller is not party to or
bound by any other agreement or commitment of any kind or nature relating to
its Business. Each Assumed Contract
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is valid and in full force and effect; Seller has duly performed all of its
obligations thereunder; and no breach or default, alleged breach or default, or
event which would (with the passage of time, notice or both) constitute a breach
or default thereunder by Seller, as the case may be, or, any other party or
obligor with respect thereto, has occurred or as a result of this Agreement or
performance will occur. Consummation of the transactions contemplated by this
Agreement will not (and will not give any person a right to) terminate or modify
any rights of, or accelerate or augment any obligation of, Seller under any of
such Assumed Contracts.
(b) With respect to any lease which is an Assumed Contract (a
"Lease") and which is not a Non-assignable Service Contract, in addition to the
representations set forth in Section 5.6(a), above, Seller represents itself to
be the absolute owner of each such Lease with the absolute right and title to
assign the Lease and the rents, income and profits due or to become due
thereunder, and all security deposits and prepaid rents held by Seller with
respect thereto. Seller further represents that all Leases are valid and in full
force and have not been modified, amended or terminated, except as stated
herein; that there are no outstanding assignments or pledges thereof or of the
rents, income and profits due or to become due thereunder; that each lessee is
in possession and paying rent and other charges as required under its Lease. Any
rents, income, profits, and expenses payable under a Lease, which have been
prepaid or otherwise paid in advance, by or to Seller, have been disclosed to
Purchaser for allocation pursuant to Section 1.3 above.
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5.7 COLLECTIVE BARGAINING AGREEMENTS. Seller is not a party to
any collective bargaining or other union contracts and its employees are not
represented by any union. There are no currently pending or threatened labor
disputes, disturbances, or elections between Seller and any of its employees, or
between Seller and any union representing or seeking to represent its employees,
nor have there been any such disputes, disturbances, or elections within three
(3) years preceding the date hereof, other than routine grievances of individual
employees, and there is no basis for any such dispute or disturbances.
5.8 TITLE TO ASSETS. Seller has, and will continue to have at
closing, good and marketable and unencumbered title to all the Assets and the
Assumed Contracts, free and clear of mortgages, security interests, liens,
pledges, charges, encumbrances, equities and claims. Except with respect to the
Non-assignable Service Contracts, Seller has the right, power, and authority to
sell, convey, assign, transfer and deliver the Assets and the Assumed Contracts
to Purchaser in accordance with the terms of this Agreement. The Assets, as
applicable, are in a good state of maintenance and repair except for ordinary
wear and tear and are adequate for use in the business of Seller and said Assets
and the uses thereof do not violate any law.
5.9 TRADE NAME. Seller is and will be at Closing the sole and
exclusive owner of the trade name CORPORATE ACCOMMODATIONS, INC. and any and all
other tradenames used in connection with the operation of its business and all
designs, permits, labels, packages, and displays used in connection therewith
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(collectively, the "Trade Name"). Seller and the Shareholder represent and
warrant that no other person or entity including, but not limited to, any
officer, director, shareholder, employee, or consultant of Seller has any right,
title, or interest in and to the Trade Name. There are no asserted claims or
litigation or threatened claims or litigation challenging Seller's right, title,
and interest in and to the Trade Name and Seller has the right, power and
authority to sell, convey and assign to Purchaser the Trade Name. Seller's use
of the Trade Name does not violate any rights of others.
5.10 PERMITS. Schedule _____ sets forth all permits, licenses,
authorizations or certificates of authority or related approvals (collectively,
"the Permits") that are held by Seller, and that are required by any
governmental entity to allow it to conduct the business of Seller, and all such
Permits are valid and in full force and effect and will remain so upon
consummation of the transactions contemplated by this Agreement. All Permits
shall be transferred to Purchaser on or before the Closing Date. No suspension,
cancellation or termination of any of such Permits is threatened or imminent.
5.11 LEGAL MATTERS. There is no suit, action, arbitration,
legal, administrative or other proceeding or governmental investigation pending
or threatened against, or with respect to Seller and its business, operations,
affairs, or its properties, assets or liabilities which might have an adverse
effect on the business, operations, prospects, properties, contracts, or
condition (financial or otherwise) of Seller, or which might effect or restrict
Seller's ability to consummate the
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transactions contemplated at Closing hereby, and, there is no basis for any such
suit, action, arbitration, proceeding, or investigation. There is no judgment,
order, injunction, or award or decree of any court, governmental authority, or
regulatory agency to which Seller is subject, and Seller is not in violation of
any Federal, State, or local law or regulation including, without limitation,
those relating to labor, antitrust, civil rights or equal protection of the law
which effect the operation of the Business of Seller.
5.12 INSURANCE. Schedule 5.12, contains an accurate and
complete list of all insurance policies maintained by the Corporation with
respect to its Assets, properties, and Business. Since December 31, 1996, there
has not been any adverse change in Seller's relationship with insurers or with
the coverage or premiums payable with respect to any of Seller's insurance
policies. Seller has received no notice from its liability insurer that such
insurer may refuse to cover all losses. Seller is insured with reputable
insurers against all risks normally insured against by companies in similar
lines of business, and all the insurance policies and bonds maintained by Seller
with respect to the business of Seller are in full force and effect. Seller is
not in default under any such policy or bond, and there is no such claims
threatened or outstanding against such insurance policies.
5.13 TAXES. Seller has filed or caused to be filed within the
time and within the manner prescribed by law, including extensions, all Federal,
state, local and foreign tax returns which are required to be filed by or with
respect to, any taxes of Seller or its Business. Seller has paid all taxes
reflected in all such returns and
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reports and the information requested in such returns and reports are true and
correct in all material respects. All taxes payable by, or due from, Seller have
been fully paid or adequately provided for in the books and Financial Statements
of Seller. There are not outstanding agreements or waivers extending the
statutory period of limitation applicable to any tax return of Seller.
There are no known or proposed penalties, interest, or
deficiency assessments in respect to Federal income tax returns or other tax
returns filed by Seller. There are no examinations by the Internal Revenue
Service ("IRS") or other tax authority for any years pending with respect to or
which could effect Seller. Federal and state tax returns of Seller have never
been audited by the respective tax authorities and no deficiencies have been
asserted thereby; Seller has not executed or filed with the Internal Revenue
Service or other authority any agreement, extending the period for assessment
and collection of any Federal or other tax, nor is Seller party to any action or
proceeding by any government authority for assessment or collection of taxes,
nor has any claim for assessment or collection of taxes been asserted against
Seller.
5.14 EMPLOYEE BENEFITS AND CONTRACTS. Except as specified on
Schedule 5.14, Seller does not provide or is not obligated to provide benefits
to any employee or former employee of Seller under an "Employee Benefit Plan"
(as such term is defined in Section 3.3 of the Employee Retirement Income
Security Act of 1974, as amended through the date of this Agreement ("ERISA")).
Purchaser is not
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assuming any obligations with respect to employment matters or employee benefits
of:
(i) Seller;
(ii) or any member of the group, trades or businesses
(whether or not incorporated) of which Seller is or may be a member, and which
are under common control within the meaning of Section 414 of the Internal
Revenue Code of 1986, as amended ("Code").
The entities described in Subsections (i) and (ii) above are
referred to herein as the "Control Group". By way of example and not by way of
limitation, Purchaser is not assuming any obligations of a Control Group with
respect to: (i) any employee benefit plan, as defined in Section 3(3) of ERISA
(whether a welfare plan, pension plan or single employer plan (as such terms are
defined in ERISA), (ii) any collective bargaining agreement, (iii) any severance
or vacation pay plan or arrangement, (iv) any medical or dental plan or
arrangement, (v) any disability plan or arrangement (whether or not self
insured, (vi) any employment agreement (whether written, oral or implied), (vii)
any claim of a right to indemnity by any fiduciary of any employee benefit plan,
(viii) any excise tax imposed under the applicable provisions of the Code, (ix)
any civil penalty under ERISA, (x) any amount payable to the Pension Benefit
Guaranty Corporation, or (xi) withdrawal liability for a multi-employer or
multiple employer plan. Seller agrees to indemnify and hold Purchaser harmless
from any costs or obligation (including reasonable attorneys fees) imposed on
Purchaser or its successors or its affiliates with respect to
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employment matters and employee benefits, including such costs as Purchaser or
its successors or its affiliates may incur in defending a claim or demand with
respect to such employment matters and employee benefits.
5.15 BROKERS. No brokers, finders, or other persons have been
engaged, or brokers' fees, finders' fees, or commissions incurred, by either
Seller or the Shareholder in connection with the transactions contemplated by
this Agreement.
5.16 NEGATIVE COVENANTS. Since December 31, 1996, to the date
hereof, there has not been and prior to Closing there will not be (except with
the prior approval of Purchaser or as specifically permitted or required by this
Agreement):
(a) any material adverse change in the financial condition,
net worth, assets, liabilities, personnel, business, or results of operations of
Seller;
(b) any damage, destruction, or loss, whether or not covered
by insurance, materially and adversely effecting Seller, its Business, the
Assets or the Assumed Contracts;
(c) any loans to or borrowings by Seller or pledge with
respect to Assets or the Assumed Contracts;
(d) any other event or condition of any character pertaining
to or materially and adversely affecting Seller, its Business, the Assets or the
Assumed Contracts;
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(e) any loan, guarantee, gift, bonus, pension, retirement,
insurance, death or other fringe benefit accrued, paid, or granted to any
employee of Seller;
(f) any amendment to the Articles of Incorporation or By-Laws
of Seller or any merger or consolidation of Seller;
(g) any issuance, sale or acquisition of any shares, equity
securities, securities convertible into equity securities, warrants, options or
other securities or rights to acquire securities by Seller, directly or
indirectly, or any declaration or payment of dividends with respect thereto, or
grant or issuance of any options, warrants, calls or commitments of any kind in
respect thereto;
(h) any sale, lease, abandonment, or other disposition by
Seller of any of its Assets, other than in the ordinary course of business;
(i) any waiver by Seller of any claim or right having
substantial value;
(j) any agreement or commitment by Seller to incur any
additional obligation or liability, absolute or contingent, except current
liabilities incurred, or obligations under contracts entered into, in the
ordinary course of business;
(k) any decrease in Seller's assets or net worth, other than
in the ordinary course of business; or
(l) any transaction by Seller other than in the ordinary
course of its business.
5.17 SUPPLEMENTS TO SCHEDULES. From time to time after the
date of this Agreement and prior to Closing, Seller or the Shareholder will
promptly
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inform Purchaser in writing and supplement or amend any Schedules or
Exhibits to this Agreement, if any matter arises which, if existing or occurring
at the date of this Agreement, would have been required to be set forth or
described in any Schedule or Exhibit or it becomes necessary to correct any
information in such Schedule or Exhibit which has become inaccurate; provided,
no Schedule or Exhibit may be supplemented or amended without the written
consent of Purchaser.
5.18 BEST EFFORTS. Seller and the Shareholder from the date of
this Agreement until the closing date will (i) use their best efforts to obtain
any consent, authorization or approval of, or exemption by, any governmental
authority or agency, or third party required to be obtained or made by or in
connection with this Agreement for the taking of any action in the connection
with the consummation thereof, (ii) duly comply with all applicable laws as may
required for the valid and effective sale and transfer of the assets and assumed
contract and for the performance for all of the acts and all things consummated
by this Agreement and (iii) take all action necessary and appropriate to
preserve and protect the value and utility of the acquisition assets and assumed
contracts including, without limitation the maintenance insurance policies.
5.19 NOTIFICATION. Seller and Shareholder shall give prompt
notice to Purchaser of (i) any event or alleged event which would constitute a
default under this Agreement or which would cause any warranty or representation
of Seller or the Shareholder under this Agreement to be untrue or misleading, or
(ii) any notice or other communication from any third party alleging that the
consent from any
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such third party is or may be required with respect to the transactions
contemplated in this Agreement.
5.20 EXCLUSIVITY. Until this Agreement is terminated, if it is
terminated, Seller and Shareholder will not discuss a possible merger, sale or
other distribution of all or any part of the Assets or Assumed Contracts (a
"Sale") with any other person or provide any information to any other person
regarding Seller, other than (i) such information provided to its legal counsel,
investment advisors, accountants and other representatives acting in a fiduciary
capacity or (ii) information which is traditionally provided in the regular
course of its business operations to third parties where Seller and Shareholder
have no reason to believe that such information may be utilized to evaluate a
possible Sale. Seller and the Shareholder represent that Seller is not a party
to or bound by any Agreement with respect to a Sale other than this Agreement.
5.21 STATEMENTS TRUE AND COMPLETE. No representation or
warranty of Seller or the Shareholder in this Agreement, nor any statement or
certificate furnished or to be furnished to Purchaser pursuant thereto, in
connection with the transactions contemplated hereby, contain or will contain
any untrue statement of fact or omits or will omit to state a fact necessary to
make the statements contained herein or therein not misleading. All
representations and warranties of Seller and the Shareholder shall survive the
Closing.
6. REPRESENTATIONS, WARRANTIES, AND COVENANTS OF PURCHASER. Purchaser
represents, warrants, and covenants as follows, which representations,
warranties,
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and covenants shall continue in full force and effect to and including Closing,
and shall survive Closing:
6.1 CORPORATE ORGANIZATION AND GOOD STANDING. Purchaser is
duly organized, validly existing, and in good standing under the Laws of the
State of Maryland.
6.2 AUTHORITY; APPROVAL OF TRANSACTIONS. Purchaser has full
power and authority to enter into this Agreement and to consummate the
transactions contemplated hereby. The execution and delivery of this Agreement
and the transactions contemplated hereby have been duly authorized by all
necessary corporate action. No other corporate proceeding is necessary to
authorize the execution and delivery of this Agreement or the consummation of
the transactions contemplated hereby.
6.3 NO VIOLATION. The execution and delivery of this Agreement
does not, and the consummation of the transactions contemplated hereby will not,
violate any provision of, or result in the acceleration of any obligation under,
any mortgage, lien, lease, agreement, instrument, order, arbitration award,
judgment, or decree to which Purchaser is a party or by which it is bound. This
Agreement has been duly executed and delivered by Purchaser and constitutes its
valid and binding obligation.
6.4 NO JUDGMENTS, ORDERS, OR INJUNCTIONS. There is no
judgment, order, injunction, or decree of any Court, governmental authority or
regulatory
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agency to which Purchaser is subject, which might adversely affect or restrict
its ability to consummate the transactions contemplated hereby.
6.5 NO THREATENED OR PENDING PROCEEDINGS. There is no suit,
action, arbitration, or legal, administrative or other proceedings or
governmental investigation, pending or, to the best knowledge of Purchaser,
threatened against or related to it which might adversely affect or restrict its
ability to consummate the transactions contemplated hereby.
6.6 BROKERS. No brokers, finders, or other persons have been
engaged, or brokers' fees, finders' fees, or commissions incurred, by Purchaser
in connection with the transactions contemplated by this Agreement.
6.7 STATEMENTS TRUE AND COMPLETE. No representation or
warranty of Purchaser, nor any statement or certificate furnished or to be
furnished to Seller or the Shareholder, pursuant hereto, in connection with the
transactions contemplated hereby, contain or will contain any untrue statement
of a fact or omit or will omit to state a fact necessary to make the statements
contained herein or therein not misleading. All representations and warranties
of Purchaser shall survive closing.
7. CONDITIONS TO PURCHASER'S OBLIGATIONS. Purchaser's obligations
hereunder are subject to the fulfillment prior to or on Closing of each of the
following conditions, the performance of any of which may be waived in writing
by Purchaser.
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7.1 REPRESENTATIONS AND WARRANTIES TRUE ON CLOSING. The
representations and warranties of Seller and the Shareholder contained in this
Agreement, including the Exhibits and Schedules (as supplemented) thereto, shall
be true in all respects on Closing as though such representations and warranties
were made as of such time.
7.2 COMPLIANCE. Seller and the Shareholder shall have
performed and complied in all respects with all covenants, agreements and
conditions required by this Agreement to be performed and complied with by each
of them prior to or on Closing.
7.3 DUE DILIGENCE RESULTS. Nothing shall have come to the
attention of Purchaser or its agents in the course of its due diligence
investigation pursuant to Section ?., below, or otherwise which demonstrates
that any of the representations or warranties of Seller is inaccurate or
incomplete.
7.4 OPINION OF COUNSEL. Seller and the Shareholder shall have
delivered to Purchaser an opinion of counsel, dated as of Closing, in form and
substance reasonably satisfactory to Purchaser and its counsel, to the effect
that:
(i) Seller is a corporation duly organized, validly
existing, and in good standing under the laws of the State of Florida, and has
the corporate power to own its properties and conduct its businesses in the
places where such properties are located and such businesses are conducted.
(ii) This Agreement, and any other agreement executed
in connection herewith have been duly executed and delivered, where necessary,
by Seller and the Shareholder, and constitute their valid, legally binding
obligations in accordance with their respective terms except that such
enforceability may be limited by bankruptcy, insolvency, reorganization,
rehabilitation, moratorium, or similar laws now or hereafter in effect affecting
creditors' rights generally; and specific performance and injunctive and other
forms of equitable relief may be subject to
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equitable defenses and to the discretion of the court before which any
proceeding therefor may be brought.
(iii) The execution and delivery of this Agreement
and any other agreement in connection herewith, and the consummation of the
transactions contemplated hereby or thereby will not result in any breach in the
terms or conditions of, or constitute a default under, any instrument or
obligation to which Seller or the Shareholder, are a party or are bound, or by
which Seller or the Shareholder may be bound, or violate any existing statute,
order, writ, injunction, or decree of any court, administrative agency, or
governmental body.
(iv) The execution and delivery of this Agreement is
sufficient and effective to vest in Purchaser all right, title, and interest of
Seller in and to the Assets and the Assumed Contracts, free and clear of all
mortgages, liens, encumbrances, charges, security interests, or restrictions of
any kind, except to the extent set forth in this Agreement.
(v) To their knowledge, such counsel does not know of
any pending or threatened legal, administrative, arbitration, or other
proceeding or governmental investigation affecting Seller, nor any violation by
Seller of any law, statute, ordinance or regulation, or any federal, state or
local law, including, without limitation, those relating to antitrust, civil
rights, or the equal protection of the law, nor of any notice of violation of
such laws, statutes, ordinances, or regulations having been received by Seller.
7.5 NON-COMPETITION COVENANT AND AGREEMENT OF THE SHAREHOLDER.
The Shareholder shall have executed and delivered to Purchaser the
Non-Competition Covenant and Agreement attached hereto as Exhibit 7.5., the
execution and delivery of such Agreement is a material inducement to the
Purchaser to enter into this Agreement,
7.6 LEASE. Seller shall have caused the lease covering
Seller's Business located at 000 Xxxxxxx Xxxxxx, Xxxxx 000, Xxxxxxxxx Xxxxxxx,
Xxxxxxx to have been assigned by Seller to Purchase on terms acceptable to
Purchaser.
7.7 EMPLOYMENT CONTRACT. Purchaser and Shareholder shall have
executed an employment contract for services to be performed by Shareholder for
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Purchaser, commencing on the Closing Date, substantially in the form of Exhibit
7.7 attached hereto.
8. CONDITIONS TO SELLER'S OBLIGATIONS. Seller's obligations hereunder
are subject to the fulfillment prior to or on Closing of each of the following
conditions, the performance of any of which may be waived in writing by Seller.
8.1 REPRESENTATIONS AND WARRANTIES TRUE ON CLOSING.
Purchaser's representations and warranties, contained in this Agreement, shall
be true in all respects on Closing as though such representations and warranties
were made as of such time.
8.2 COMPLIANCE. Purchaser shall have performed and complied in
all material respects with all covenants, agreements and conditions required by
this Agreement to be performed and complied with by Purchaser prior to or on
Closing.
9. INVESTIGATION OF SELLER. Purchaser may at any time prior to Closing,
though its representatives, accountants, or counsel, make such investigation of
Seller as Purchaser deems necessary or advisable, and its representatives shall
have access to both Seller's premises as is mutually agreeable and to such
books! records and documents as Purchaser shall reasonably request. Purchaser
shall be furnished such operating data and other information as it may request.
Such investigation by Purchaser shall not affect the representations, warranties
or covenants or Seller hereunder.
10. TERMINATION. This Agreement and the transactions contemplated
hereby may be terminated at any time prior to Closing: (a) by unanimous consent
of
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Seller and Purchaser; or (b) by Purchaser if, as a result of its investigation
made pursuant to Section 9, above, Purchaser in its sole discretion notifying
the Seller that it has determined not to proceed to Closing on this Agreement.
Except as otherwise provided herein, termination of this Agreement pursuant to
this Section ? shall terminate all obligations of the parties hereunder.
In the event that Purchaser notifies Seller that it is terminating this
Agreement pursuant to this Section 10, Purchaser shall pay or reimburse Seller
for Seller's reasonable legal and accounting fees in accordance with the
provisions of the Agreement executed by the parties which is attached hereto as
Exhibit 10.
11. INDEMNIFICATION.
11.1 INDEMNIFICATION BY SELLER AND THE SHAREHOLDER. In
addition to any other indemnification contained in this Agreement, Seller and
the Shareholder, individually, jointly and severally, covenant and agree with
Purchaser to indemnify Purchaser, its directors, officers, shareholders, and
lenders, their successors and assigns, and hold them harmless from, against, and
in respect of any and all costs, losses, claims, liabilities, fines, penalties,
damages, and expenses (including interest which may be imposed in connection
therewith, court costs, and reasonable fees and disbursements of counsel)
(collectively, "Damages"), incurred by any of them in connection with:
(a) all liabilities or obligations of or claims against
Purchaser of any nature, including in connection with any contracts or
agreements entered into by Seller prior to Closing, whether accrued, absolute,
contingent, or otherwise,
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attributable to any state of facts or event existing or occurring on or before
Closing (whether known or unknown to Seller or the Shareholder) other than any
such liabilities incurred in connection with the Assumed Contracts which have
been specifically assumed by Purchaser.
(b) any misrepresentation, omission, or breach of any of the
representations, warranties, covenants, or agreements made by Seller or the
Shareholder in this Agreement, in the Exhibits or Schedules hereto, or any
agreements delivered in connection with the transactions contemplated hereby;
(c) the Retained Liabilities; or
(d) any action, suit, proceeding, compromise, settlement,
assessment, or judgment arising out of or incident to any of the matters
indemnified against in this Section _____.
11.2 INDEMNIFICATION BY PURCHASER. In addition to any other
indemnification contained in this Agreement, Purchaser covenants and agrees with
Seller to indemnify Seller, its directors, officers, shareholders, and lenders,
their successors and assigns, and hold them harmless from, against, and in
respect of any and all costs, losses, claims, liabilities, fines, penalties,
damages, and expenses (including interest which may be imposed in connection
therewith, court costs, and reasonable fees and disbursements of counsel)
(collectively, "Damages"), incurred by any of them in connection with:
(a) any misrepresentation, omission, or breach of any of the
representations, warranties, covenants, or agreements made by Purchaser in this
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Agreement or in any agreement delivered in connection with the transactions
contemplated hereby; or
(b) the obligation of Purchaser to pay any liabilities
allocated to Purchaser and/or specifically assumed by Purchaser; or
(c) any action, suit, proceeding, compromise, settlement,
assessment, or judgment arising out of or incident to any of the matters
indemnified against in this Section _____.
11.3 RIGHT TO DEFEND, ETC. Within seven (7) days after the
written assertion against an Indemnified Party by a third person of a claim or
liability which would entitle the Indemnified Party to Damages, the Indemnified
Party shall give written notice of the claim to the party obligated to indemnify
it ("Indemnifying Party"). Failure to give such notice, or any delay prejudicial
to the interests of the Indemnifying Party, shall relive the Indemnifying Party
of any obligation of indemnification with respect to such claim or liability.
Upon receipt of timely notice, the Indemnifying Party shall undertake the
responsibility for the defense of such claim, at its own expense. If, within
seven (7) days after delivery of the notice of claim by the Indemnified Party,
the Indemnifying Party fails to advise the Indemnified Party of its agreement to
consent and defend against any such claim, or if the Indemnifying Party does not
participate in such litigation, proceedings, or settlement negotiations, for any
reason, then the Indemnified Party shall have the right, at the Indemnifying
Party's expense, to take such action as it deems appropriate to defend, contest,
settle, or compromise any such claim or liability, and
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the Indemnifying Party agrees to be bound by any and all rulings, judgments,
compromises, and settlements reached by the Indemnified Party in good faith, in
the same manner as if it has participated therein.
11.4 PAYMENT.
(a) Each Indemnifying Party agrees to reimburse each
Indemnified Party within thirty (30) days after presentation of an itemized
statement of Damages incurred by such Indemnified Party.
(b) If payment is not made within such thirty (30) day period,
the Indemnified Party may offset such Damages against any amounts owed by it to
the Indemnifying Party.
11.5 SETTLEMENT. Except as provided in subsection ?, no
Indemnified Party shall be entitled to indemnification under this Section 11 if
such Indemnified Party voluntarily makes any payment in respect of, settles, or
offers to settle, or consents to any compromise or admits liability with respect
to, any third-party claim without the prior consent (which consent shall not be
unreasonably withheld) of the Indemnifying Party.
12. FURTHER ASSURANCES. Seller and the Stockholders shall, at any time
and from time to time on and after the Closing Date, upon request by Purchaser
and without further consideration, take such actions or cause others to do so,
and execute, acknowledge and deliver, or cause to be executed, acknowledged and
delivered, all transfers, conveyances, powers of attorney and assurances, as may
be required or desirable for the better conveying, transferring, assigning,
delivering,
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assuring and confirming to Purchaser, or its respective successors and assigns,
or for aiding and assisting in collecting or reducing to possession, the Assets,
and any or all of the Stockholder's obligations under this Agreement, and to
assist Purchaser in exercising any rights with respect thereto.
13. RISK OF LOSS. If, prior to Closing, any of the Assets or Assumed
Contracts are destroyed or damaged, such loss shall be borne solely by Seller.
14. SALES TAXES. Seller shall pay or have reduced from the Purchase
Price otherwise payable to Seller all sales, transfer, excise and documentary
taxes, and all recordation and filing fees, if any, payable in connection with
the transactions contemplated hereby.
15. MISCELLANEOUS.
15.1 SURVIVAL. All representations, warranties, covenants and
agreements of the parties herein shall survive the execution of this Agreement
and no representations, warranty or covenant shall be deemed to be merged in any
closing document unless expressly otherwise agreed to in writing.
15.2 GOVERNING LAW; VENUE. All questions concerning the
construction, validity and interpretation of this Agreement and the performance
of the obligations imposed by this Agreement will be governed by the internal
laws, and not the law of conflicts, of the State of Florida. The parties hereto
further agree that any action brought to enforce any right or obligation under
this Agreement shall be subject to the exclusive jurisdiction of the Courts of
the State of Florida.
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15.3 TIME IS OF THE ESSENCE. Time is material and of the
essence with regard to the performance of all obligations and the payment of all
sums pursuant to this Agreement.
15.4 EXPENSES. Each party will pay all of its expenses in
connection with the negotiation of this Agreement, the performance of its
obligations hereunder, and the consummation of the transactions contemplated by
this Agreement.
15.5 HEADINGS. The headings set forth herein are for
convenience only and shall not be used in interpreting the text of the sections
in which they appear.
15.6 INCORPORATION OF EXHIBITS AND SCHEDULES. Each of the
Exhibits and Schedules attached hereto is by this reference incorporated herein
and made a part of this Agreement.
15.7 NOTICES. Any notice or other communication required,
permitted or desirable hereunder, shall be sufficiently given if sent by United
States Mail, postage prepaid, addressed as follows:
SELLER: Xxxxx Xxxxxx, President
Corporate Accommodations, Inc.
000 Xxxxxxx Xxxxxx
Xxxxx 000
Xxxxxxxxx Xxxxxxx, XX 00000
With Copy To: Xxxxxx Xxxx, Esquire
Xxxx & Xxxxxx
0000 Xxxxxxxx Xxxxxx Xxxxxxx
Xxxxx 000
Xxxxxxxx, XX 00000
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PURCHASER: Xxxx X. Xxxxxxxx, President
Xxxxxxxxx, Inc.
0000 Xxxxxxxxxxxx Xxxxx
Xxxxxxxxxxxx, XX 00000
With Copy To: Wechsler, Xxxxxx & Xxxxxxxx,
Chartered
0000 Xxxxxxxxxx Xxxxxx
Xxxxx 000X
Xxxxxxxx, XX 00000
Attn: Xxxxx X. Xxxxxxxx, Esq.
15.8 SUCCESSORS AND ASSIGNS. This Agreement shall be binding
upon and inure to the benefit of the successors and assigns of the parties
hereto.
15.9 ENTIRE AGREEMENT. This Agreement and the Exhibits and
Schedules attached hereto, sets forth the entire agreement and understanding of
the parties, and there are no other prior or contemporaneous written or oral
agreements, undertakings, promises, warranties, or covenants not specifically
referred to, attached hereto or contained herein. This Agreement cannot be
waived, modified or changed except by a writing signed by all of the parties
hereto.
15.10 COUNTERPARTS. This Agreement may be executed in one or
more counterparts, and/or by facsimile signature, any one of which need not
contain the signatures of more than one party, but each of which shall
constitute an original and all such counterparts taken together shall constitute
one and the same instrument.
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IN WITNESS WHEREOF, the parties hereto have executed this Agreement
under seal on the day and year first above written.
PURCHASER: SELLER:
XXXXXXXXX, INC. CORPORATE ACCOMMODATIONS,
INC.
By: /s/ Xxxx X. Xxxxxxxx By: /s/ Xxxxx Xxxxxx
------------------------- ------------------------------
Xxxx X. Xxxxxxxx, Xxxxx Xxxxxx,
President President
THE SHAREHOLDER:
By: /s/ Xxxxx Xxxxxx
------------------------------
Xxxxx Xxxxxx
Individually
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