Exhibit 2.3
CIRILIUM, INC./CIRILIUM HOLDINGS, INC.
ACQUISITION AGREEMENT
FEBRUARY 10, 2004
CIRILIUM, INC./CIRILIUM HOLDINGS, INC.
INVESTMENT AGREEMENT
THIS INVESTMENT AGREEMENT, (the "Agreement") is entered into as of February
10, 2004, by and among Heritage Communications Corporation, a Florida
corporation, ("Heritage"), Heritage Technologies, Inc., a Delaware corporation
("Heritage Technologies"), Cirilium, Inc., a Florida corporation ("Cirilium"),
Cirilium Holdings, Inc., a Delaware corporation ("NewCo"), St. Xxxxx Investment
Group, Inc. a Florida corporation ("St. Xxxxx")and Royal Palm Capital Group,
Inc., a Florida corporation (together with St. Xxxxx, except as otherwise noted,
"Royal Palm"). Each of Heritage, Cirilium, NewCo, and Royal Palm may be from
time to time herein collectively referred to as "Parties" and individually as a
"Party."
RECITALS
WHEREAS, Heritage, together with certain of Cirilium's other shareholders
as indicated on Schedule 1 hereto (the "Other Cirilium Shareholders"), wish to
transfer 100% of the shares of Common Stock of Cirilium to NewCo, subject to the
terms and conditions contained in this Agreement, and
WHEREAS, the parties hereto understand and acknowledge that the
transactions contemplated herein have been entered into with the expectation
that Royal Palm shall have caused NewCo to enter into a transaction in which the
holders of NewCo common stock, $.0001 par value per share (the "NewCo Common
Stock"), following the consummation of the transactions contemplated hereby,
shall receive shares of a class of securities that is listed for trading on a
stock exchange, interdealer quotation system or over-the-counter bulletin board,
as further set forth in Section 3.5; and
WHEREAS, consideration payable to Heritage and the other Cirilium
shareholders, in exchange for 100% of the Common Stock of Cirilium and certain
assets of Heritage subject to transfer as set forth in the Software Transfer
Agreement (defined below), shall consist of $635,000 (payable in the form of a
Note in the principal amount of $635,000 as set forth in Exhibit A hereto) and
6,000,000 shares of NewCo Common Stock (the "NewCo Shares"), as well as certain
other assurances and performances by Royal Palm, with all such consideration
subject to the terms and conditions set forth below, and
NOW, THEREFORE, in consideration of the foregoing recitals and the mutual
promises hereinafter set forth, the Parties hereto agree as follows.
1. FORMATION OF NEWCO. At all relevant times immediately prior to the
Closing (as defined in Section 3 below), Royal Palm and St. Xxxxx Investment
Group, Inc. shall own 100% of all securities of any class issued by NewCo. Prior
to the Closing, NewCo shall own no assets, and shall have issued no shares of
capital stock or other securities other than 14,000,000 shares of NewCo Common
Stock, of which St. Xxxxx shall own 1,400,000 shares of NewCo Common Stock).
Until such time as Royal Palm has fully performed all of its obligations under
this Agreement, Royal Palm shall not sell, exchange, pledge, hypothecate, loan
or otherwise transfer legal or beneficial ownership or any indicia thereof of
any of its NewCo Common Stock except as provided for under the terms of this
Agreement. Royal Palm shall be responsible for all costs associated with the
formation of NewCo. Upon the Closing, the Certificate of Incorporation and
Bylaws of NewCo shall be in the forms set forth at Exhibit B. The NewCo Shares
issued to Heritage and the Other Cirilium Shareholders shall not be bound by any
shareholders' agreement, voting trust agreement, or similar agreement (other
than as contemplated herein) and shall be free of all encumbrances and liens of
any kind and shall be duly issued, fully paid and nonassessable.
2. AGREEMENT TO SELL AND PURCHASE.
2.1 Authorization of Shares. On or prior to the Closing, Heritage and
the Other Cirilium Shareholders shall have authorized the sale to NewCo of
100% of the Common Stock of Cirilium (as contemplated in the Cirilium
Shareholders Agreement dated as of January __, 2004 between Cirilium and
the parties set forth therein) (collectively, the "Cirilium Shares") and
Heritage shall have authorized the transfer of certain assets owned by it
pursuant to the terms set forth in the Software Transfer Agreement set
forth as Exhibit C (the "Assets"). The Cirilium Shares shall have the
rights, preferences, privileges and restrictions of shares of common stock
set forth in the Articles of Incorporation of Cirilium, in the form
attached hereto as Exhibit D (the "Cirilium Articles") and Bylaws of
Cirilium, in the form attached hereto as Exhibit E (the "Cirilium Bylaws").
2.2 Sale and Purchase of Shares. Subject to the terms and conditions
contained herein, Heritage hereby agrees to sell to NewCo, and NewCo agrees
to purchase, the Cirilium Shares from Heritage (following compliance by the
Other Cirilium Shareholders with the Cirilium Shareholders Agreement
referenced in Section 2.1 above), subject to the purchase price set forth
in Sections 3.2 and 3.3 below.
2.3 Sale and Purchase of Assets. Subject to the terms and conditions
contained herein, Heritage hereby agrees to sell the Assets to NewCo, and
NewCo agrees to purchase the Assets from Heritage, subject to the terms of
the Software Transfer Agreement, the purchase price and other conditions
set forth in Sections 3.2, 3.3, and 3.5 below.
3. CLOSING, DELIVERY AND PAYMENT.
3.1 Closing. The closing under this Agreement (the "Closing") shall
take place at 3 p.m. on February 10, 2004, at the offices of Royal Palm ,
or at such other time or place as Royal Palm and Heritage may mutually
agree (the "Closing Date").
3.2 Deliveries. At the Closing, subject to the terms and conditions
hereof, Heritage will deliver to NewCo one or more certificates
representing 100% of the Cirilium Shares ("Share Certificate"); and
Heritage will deliver to NewCo such certificates of title, bills of sale,
assignments, and other instruments, each in a form reasonably acceptable to
NewCo, as may be necessary or convenient to consummate the transactions
contemplated in the Software Transfer Agreement and to vest in NewCo good
and marketable title to the Assets, free and clear of all mortgages,
pledges, liens, encumbrances, defects, adverse claims, and other charges
except as may be set forth on a Schedule of Exceptions conveyed to NewCo
prior to the Closing.
In consideration of the receipt of the Share Certificate and other
deliveries to be made at the Closing, NewCo will deliver a promissory note
in the principal amount of US $635,000.00 ("Purchase Price") made payable
to the order of Heritage in substantially the form attached hereto as
Exhibit A (the "Note").
As partial consideration supporting the Agreement described herein,
NewCo shall issue to Heritage and the Other Cirilium Shareholders that
number shares of NewCo Common Stock as is set forth on Schedule 1 hereto,
for an aggregate amount of 6,000,000 NewCo Shares.
3.3 Note. The Note as referenced in Section 3.2 above shall be subject
to the following terms: the maker of the Note shall be NewCo, for which
Royal Palm (but not St. Xxxxx) will act as guarantor of payment, the Note
shall bear no interest, except in the event of default (as set forth in the
Note), and shall be payable as follows: Thirty (30) days following the
Closing Date, NewCo shall tender a certified check, cashier's check, or
wire transfer to an account specified by Heritage in the amount of US
$211,666.00, unless such date falls upon a legal or bank holiday, in which
case NewCo shall tender said amount on the following business day; and
sixty (60) days following the Closing Date, NewCo shall tender a certified
check, cashier's check, or wire transfer to an account specified by
Heritage in the amount of US $211,666.00, unless such date falls upon a
legal or bank holiday, in which case NewCo shall tender said amount on the
following business day; ninety (90) days following the Closing Date, NewCo
shall tender a certified check, cashier's check, or wire transfer to an
account specified by Heritage in the amount of US $211,667.00, unless such
date falls upon a legal or bank holiday, in which case NewCo shall tender
said amount on the following business day.
3.4 Allocation of Purchase Price. All Parties hereby agree that the
Purchase Price shall be allocated among the Cirilium Shares and the Assets,
and that such allocation shall be completed by the Closing Date. Such
allocation shall be utilized by the parties in preparing and filing all
relevant federal and state tax returns and the Parties agree to cooperate
with each other in good faith in preparing such tax returns and forms,
including IRS Form 8594 and any required exhibits (or other forms required
pursuant to Internal Revenue Code Section 1060 or other applicable tax
laws.) Heritage's Federal Tax ID Number is: 00-0000000. Heritage
Technologies Federal Tax ID Number is: 00-0000000. Cirilium's Federal Tax
ID Number is: 00-0000000. NewCo's Federal Tax ID Number is: 00-0000000.
Royal Palm's Federal Tax ID Number is: 00-0000000.
3.5 Obligations of Royal Palm and NewCo.
(a) In addition to the delivery of the 6,000,000 NewCo Shares as
referenced in Section 3.2 above, as partial consideration supporting
this Agreement, on or before the six (6) month anniversary of the
Closing, Royal Palm and NewCo agree that NewCo shall have raised not
less than one million dollars (US $ 1,000,000.00) in committed capital
through the sale of up to an additional 6,000,000 shares of NewCo
Common Stock (the "NewCo Capital") at a price per share thereof not
less than $0.50. Royal Palm may source all or any part of the NewCo
Capital from its own funds and/or the funds of any affiliate(s) of
Royal Palm as well as from investor(s) not affiliated with Royal Palm.
The obligations of Royal Palm and NewCo with respect to raising the
NewCo Capital shall be in addition to NewCo's obligations under the
Note.
(b) In the event that NewCo shall have failed to raise the NewCo
Capital in the amount specified in 3.5(a), within the six month period
set forth therein, Royal Palm agrees to transfer to Heritage a certain
number of shares of NewCo Common Stock held by Royal Palm (including
shares of NewCo Common Stock then owned by St. Xxxxx, to the extent
necessary), which number shall be calculated according to the
following formula: 14,000,000 minus that number that is 14,000,000
minus the product of 14,000,000 multiplied by a fraction, the
numerator of which shall be the dollar amount of cash of the NewCo
Capital that has been raised by Royal Palm and paid into such accounts
of NewCo as it shall direct, pursuant to 3.5(a), and the denominator
of which shall be 1,000,000.
By way of example only, if, on the six month anniversary
following the Closing Date, NewCo and Royal Palm raise NewCo Capital
in the amount of $900,000, the number shares of NewCo Common Stock to
be transferred to Heritage shall be as follows:
14,000,000 - (14,000,000 * 900,000/1,000,000) =
1,400,000 NewCo Shares transferred to Heritage.
Any transfer of shares of NewCo Common Stock pursuant to this
Section 3.5(b) shall be in addition to the 6,000,000 NewCo Shares
tendered to Heritage and the Other Cirilium Shareholders pursuant to
Section 3.2. Royal Palm agrees that it shall execute such documents as
shall be reasonably necessary to effect such transfer, including but
not limited to stock powers in favor of Heritage.
(c) Further, provided that six months following the Closing Date
Royal Palm has raised NewCo Capital in a minimum amount of $750,000.00
pursuant to Section 3.5(a), if NewCo shall have failed to execute a
definitive agreement and plan of merger, exchange agreement or other
similar transaction that shall have been approved by NewCo's Board of
Directors in which (i) the shareholders of NewCo are entitled to
receive shares of capital stock of any person that are of a class that
is listed for trading on any national stock exchange, interdealer
quotation system or over the counter market and (ii) the issuer of
such securities agrees to
execute an agreement with Heritage and the Other Cirilium Shareholders
as are listed on Schedule 1 hereto with respect to registration rights
that is in substantially the form of the Registration Rights Agreement
set forth as Exhibit F hereto, then Royal Palm shall transfer to
Heritage Ten Million (10,000,000) shares of NewCo Common Stock
then-owned by Royal Palm (notwithstanding the provisions of
sub-section (b) above to the contrary, and which may include shares of
NewCo Common Stock then-owned by St. Xxxxx), which such transfer shall
be effected within ten (10) days following such anniversary. NewCo,
Cirilium and Royal Palm agree that as of such transfer date, the
Articles of Incorporation and Bylaws of NewCo and Cirilium shall be in
the same form as is set forth in connection with the certificates
delivered pursuant to Section 7.1(e) and 7.2(f) below. Costs
associated with any transaction described in the first sentence of
this paragraph, including listing fees, accountants' and attorneys'
fees, and other costs, shall be borne by NewCo and/or Royal Palm.
4. REPRESENTATIONS AND WARRANTIES OF HERITAGE.
All references to Cirilium contained in this Section 4 refer to Cirilium on
a consolidated basis. Except as set forth on a Schedule of Exceptions delivered
by Heritage to NewCo prior to the Closing, Heritage hereby represents and
warrants to Royal Palm as of the Closing as follows:
4.1 Organization, Good Standing and Qualification. Cirilium is a
corporation duly organized, validly existing and in good standing under the
laws of the State of Florida. Cirilium has all requisite corporate power
and authority to own and operate its properties and assets, to execute and
deliver this Agreement, to issue and sell the Cirilium Shares and to carry
out the provisions of this Agreement and to carry on its business as
presently conducted. Cirilium is duly qualified and is authorized to do
business and is in good standing as a foreign corporation in all
jurisdictions, in which the nature of its activities and of its properties
(both owned and leased) makes such qualification necessary, except for
those jurisdictions in which failure to do so would not have a material
adverse effect on Cirilium or its business.
4.2 Subsidiaries. Cirilium does not own or control any equity security
or other interest in any other corporation, limited partnership, limited
liability company, or other business entity, nor immediately prior to the
Closing, does any other business entity other than Heritage own or control
any equity security or interest in Cirilium. Cirilium is not a participant
in any joint venture, partnership or similar agreement.
4.3 Capitalization; Voting Rights. The authorized capital of Cirilium
immediately prior to the Closing will consist solely of 100,000 authorized
shares of common stock, of which 100,000 shares are issued and outstanding.
All issued and outstanding Cirilium Shares (a) have been duly authorized
and validly issued (b) are fully paid and nonassessable and (c) were issued
in compliance with all applicable state and federal laws and regulations
concerning the issuance of securities. The rights, preferences, privileges
and restrictions of the Cirilium Shares are as stated in the Cirilium
Articles. In addition to and supplementing any other warranty regarding the
capitalization and finances of Cirilium, Heritage specifically warrants
that other than the Cirilium Shares, Heritage has not caused Cirilium to
issue, and Cirilium has not issued, any securities of any type or kind
whatsoever, nor has Cirilium incurred any material indebtedness not
disclosed in the financial statements provided to NewCo or the Balance
Sheet (defined below), on its own behalf or on behalf of any other person
or entity, prior to the Closing. Except as set forth on the Schedule of
Exceptions, there are no outstanding options, warrants, rights (including
conversion or preemptive rights and rights of first refusal), proxy or
shareholder agreements, or agreements of any kind regulating the purchase
or acquisition of any Cirilium securities.
4.4 Authorization; Binding Obligations. All corporate action on the
part of Heritage and Cirilium, and each entity's officers, directors and
shareholders, necessary for the authorization of this Agreement, the
performance of all obligations of Heritage and Cirilium respectively
hereunder at the Closing and the authorization for the sale and delivery of
the Cirilium Shares has been taken or will be taken prior to the Closing as
applicable. The terms of this Agreement, when executed and delivered, will
be valid and binding obligations of Heritage and Cirilium enforceable in
accordance with its terms, except (a) as limited by applicable bankruptcy,
insolvency, reorganization, moratorium or other laws of general application
affecting enforcement of creditors' rights, and (b) general principles of
equity that restrict the availability of equitable remedies. The sale of
the Cirilium Shares are not and will not be subject to any preemptive
rights or rights of first refusal that have not been properly waived.
4.5 Liabilities. To the best of its knowledge, neither Cirilium nor
Heritage knows of any material contingent liabilities of Cirilium not
disclosed in the financial statements provided to Royal Palm or the Balance
Sheet, except (i) current liabilities incurred in the ordinary course of
business that individually or in the aggregate are not material to the
financial condition or operating results of Cirilium and (ii) obligations
not required to be reflected under generally accepted accounting principles
in the financial statements provided to Royal Palm or in the Balance Sheet.
4.6 Agreements; Aggregation.
(a) Heritage warrants that there are no material agreements,
understandings, instruments, contracts, proposed transactions,
judgments, orders, writs or decrees to which Cirilium is a party or by
which Cirilium is bound which may involve obligations (contingent or
otherwise) of, or payments to, Cirilium in excess of $5,000.00 (other
than obligations of, or payments to, Cirilium arising from the
ordinary course of business).
(b) For the purposes of subsection (a) above, all indebtedness,
liabilities, agreements, understandings, instruments, contracts and
proposed transactions involving the same person or entity shall be
aggregated for the purpose of meeting the individual minimum dollar
amount set forth in such subsection.
4.7 Related Party Transactions. Heritage warrants that there are no
obligations of Cirilium to officers, directors, shareholders, or employees
of Cirilium other than (a) for payment of salary for services rendered, (b)
reimbursement for reasonable expenses incurred on behalf of Cirilium and
(c) for other standard employee benefits made generally available to all
employees
4.8 Title to Properties and Assets; Liens, Etc. Heritage warrants that
Cirilium has good title to all its properties and assets, including the
properties and assets reflected in the most recent financial statements
provided to Royal Palm and/or the Balance Sheet, and good title to its
leasehold estates, in each case subject to no mortgage, pledge, lien,
lease, encumbrance or charge, other than (a) those resulting from taxes
which have not yet become delinquent, (b) minor liens and encumbrances
which do not materially detract from the value of the property subject
thereto or materially impair the operations of Cirilium, and (c) those that
have otherwise arisen in the ordinary course of business. All facilities,
machinery, equipment, fixtures, vehicles and other properties owned, leased
or used by Cirilium are in good operating condition and repair and are
reasonably fit and usable for the purposes for which they are being used.
Cirilium is in compliance with all material terms of each lease to which it
is a party or is otherwise bound. A copy of Cirilium's Balance Sheet,
current as of the date hereof and prepared in accordance with generally
accepted accounting principles, ("Balance Sheet") is attached hereto as
Exhibit G. A copy of each deed, title, lease, permit, or other certificate
or evidence of legal or beneficial
ownership of each real or personal property as used by Cirilium has been
provided to Royal Palm.
Heritage warrants that Heritage Technologies has good title to all the
Assets, in each case subject to no mortgage, pledge, lien, lease,
encumbrance or charge, other than (a) those resulting from taxes which have
not yet become delinquent, (b) minor liens and encumbrances which do not
materially detract from the value of the property subject thereto or
materially impair the operations of Heritage Technologies, and (c) those
that have otherwise arisen in the ordinary course of business. All the
Assets are in good operating condition and repair in accordance with
reasonable commercial standards in Heritage industry, ordinary wear and
tear excepted, and any such defects do not materially adversely affect the
value or utility of the Assets.
4.9 Title to Accounts. Heritage warrants that Cirilium has good title
to all its merchant accounts, bank accounts and in each case such accounts
are subject to no mortgage, pledge, lien, lease, encumbrance, charge,
freeze, overdraft, or hold. A current copy of an account statement and a
current copy of an account agreement (if available) for each such account
has been provided to Royal Palm.
4.10 Insurance Policies. Heritage warrants that Cirilium has complied
fully with the terms of all insurance policies entered into by Cirilium,
and that Cirilium is not in default, breach, or violation of any such
policy, nor to Heritage's knowledge, is there any fact that would give rise
to such a default, breach or violation. A copy of each insurance policy
entered into by Cirilium has been provided to Royal Palm.
4.11 Cirilium Intellectual Property. Heritage warrants that Cirilium
owns or possesses sufficient legal rights and titles to all patents,
trademarks, service marks, trade names, copyrights, trade secrets, internet
or world-wide web addresses and sites, services, computer software,
licenses, information and other proprietary rights and processes necessary
for its business as now conducted and as presently proposed to be
conducted, without any known infringement of the rights of others, that all
such rights and titles are currently in full force and effect and that no
such right or title is scheduled to expire according to its terms within
thirty (30) days following the Closing Date. A copy of each patent,
copyright, trade- or service- xxxx registration, internet domain
registration, co-location agreement, and software license as is or has been
used by Cirilium has been provided to Royal Palm.
(a) Cirilium has not received nor is Heritage aware of any
communication alleging that Cirilium (or any person acting or
purporting to act on behalf of Cirilium) has violated or, by
conducting its business as presently proposed, would violate any of
the patents, trademarks, service marks, trade names, copyrights or
trade secrets, rights in internet or world-wide web addresses and
sites, services, computer software, or other proprietary rights of any
other person or entity.
(b) Heritage is not aware of any employee of Cirilium that may be
obligated under any contract (including licenses, covenants or
commitments of any nature) or other agreement, or subject to any
judgment, decree or order of any court or administrative agency, that
would interfere with that employee's duties to Cirilium or that would
conflict with Cirilium's business as presently proposed to be
conducted. Neither the execution nor delivery of this Agreement,
nor the carrying on of Cirilium's business by Cirilium, nor the
conduct of Cirilium's business as presently proposed, will, to
Heritage's knowledge, conflict with or result in a breach of the
terms, conditions or provisions of, or constitute a default under, any
contract, covenant or instrument under which any employee is now
obligated.
4.12 (Deleted)
4.13 Compliance with Other Instruments. Cirilium is not in violation
or default of any term of its Cirilium Articles or Cirilium Bylaws, or of
any material provision of any mortgage, indenture, contract, agreement,
instrument or contract to which it is party or which binds or may bind it.
The execution, delivery, and performance of this Agreement, and the sale of
the Cirilium Shares pursuant hereto will not, with or without the passage
of time or giving of notice, result in any such material violation, or be
in conflict with or constitute a default under any such term, or result in
the creation of any mortgage, pledge, lien, encumbrance or charge upon any
of the properties or assets of Cirilium or the suspension, revocation,
impairment, forfeiture or nonrenewal of any permit, license, authorization
or approval applicable to Cirilium, its business or operations or any of
its assets or properties.
4.14 Litigation. There is no action, suit, proceeding or investigation
pending or to Heritage's knowledge currently threatened against Cirilium,
Heritage, or Heritage Technologies that questions the validity of this
Agreement, any provisions thereof, or the rights of Cirilium, Heritage, or
Heritage Technologies to enter into any such agreements, or to consummate
the transactions contemplated hereby or thereby, or which might result,
either individually or in the aggregate, in any material adverse change in
the assets, condition, affairs or prospects of Cirilium, financially or
otherwise, or any change in the current equity ownership of Cirilium, nor
is Heritage aware that there is any basis for any of the foregoing. The
foregoing includes, without limitation, actions pending or to Heritage's
knowledge threatened against Cirilium by reason of the past or present
employment relationships of any of Cirilium's employees.
4.15 Tax Returns and Payments. Heritage has disclosed to Royal Palm
the status with respect to all Cirilium's tax returns (federal, state and
local), that Cirilium is required to file. To Heritage's knowledge, all
other taxes due and payable by Cirilium on or before the Closing have been
paid or will be paid prior to the time they become delinquent with any
exceptions permitted by any taxing authority. Neither Heritage nor Cirilium
have been advised (a) that any of Cirilium's returns, federal, state or
other, have been or are being audited as of the date hereof, or (b) of any
deficiency in assessment or proposed judgment to its federal, state or
other taxes. Cirilium has no knowledge of any liability for any tax to be
imposed upon its properties or assets as of the date of this Agreement that
is not adequately provided for.
4.16 Employees. Cirilium has no collective bargaining agreements with
any of its employees. There is no labor union organizing activity pending
or, to Heritage's knowledge, threatened with respect to Cirilium. Heritage
is not aware that any officer or key employee, or that any group of key
employees, intends to terminate his, her or their employment with Cirilium,
nor does Cirilium have a present intention to terminate the employment of
any officer, key employee or group of key employees.
4.17 ERISA. Cirilium does not have or otherwise contribute to or
participate in any employee benefit plan subject to the Employee Retirement
Income Security Act of 1974.
4.18 Obligations of Management. Each officer of Cirilium is currently
devoting adequate business time to the conduct of the business of Cirilium.
To Heritage's knowledge, no current or former officer or key employee is
currently working for a competitor enterprise.
4.19 Registration Rights . Cirilium is presently not under any
obligation, and neither Heritage nor Cirilium has granted any rights to
register any of Cirilium's presently outstanding securities or any of its
securities that may hereafter be issued.
4.20 Compliance with Laws; Permits. To the knowledge of Heritage and
Cirilium have complied in all material respects with all applicable
statutes, rules, regulations, orders or restrictions of any domestic or
foreign government or any instrumentality or agency thereof in respect of
the conduct of its business or the ownership of its properties. No
governmental orders, permissions, consents, approvals or authorizations are
required to be obtained and no registrations or declarations are required
to be filed in connection with the execution and delivery of this Agreement
and performance thereunder, or, except such filings as shall have been made
prior to or concurrently with the Closing, and, if required, any such
filings that must be made subsequent to the Closing will be effective
within the time period required by law. Cirilium has all franchises,
permits, licenses and any similar authority necessary for the conduct of
its business as now being conducted by it, the lack of which could
materially and adversely affect the business, properties, prospects or
financial condition of Cirilium.
4.21 Offering Valid. Assuming the accuracy of the representations and
warranties of Royal Palm contained in Section 5.2 hereof, the offer and
sale of the Cirilium Shares will be effected in compliance with applicable
federal and state securities laws.
4.22 Disclosures. Neither this Agreement, the Exhibits hereto, nor any
other document delivered by Heritage, Cirilium, Heritage Technologies,
their attorneys or agents to Royal Palm or their attorneys or agents in
connection with the transactions contemplated hereby or thereby, taken as a
whole, contain any untrue statement of a material fact, nor omit to state a
material fact necessary in order to make the statements contained herein or
therein not misleading.
4.23 Minute Books. The minute books of Cirilium will be made available
to Royal Palm upon request through the Closing, and will contain a true and
complete summary of all meetings of directors and shareholders since the
time of incorporation.
4.24 Real Property Holding Corporation. Cirilium is not a real
property holding corporation within the meaning of Section 897(c)(2) of the
Internal Revenue Code of 1986, as amended (the "Code") and any regulations
promulgated thereunder.
4.25 Tax Elections. Cirilium has not elected pursuant to the Code to
be treated as an "S" corporation or a collapsible corporation pursuant to
Section 341(f) or Section 1362(a) of the Code, nor has it made any other
elections pursuant to the Code (other than elections which relate solely to
matters of accounting, depreciation or amortization) which would have a
material adverse effect on Cirilium, its financial condition, its business
as presently conducted or its present properties or material assets.
4.26 Additional Representations and Warranties of Heritage. In
addition to the representations and warranties set forth above, Heritage
specifically represents and warrants to Royal Palm with respect to the
receipt of the NewCo Shares as follows:
(a) Requisite Power and Authority. Heritage has all necessary
corporate power and authority under all applicable provisions of law
to execute and deliver this Agreement and to carry out its provisions.
All corporate action on Heritage's part required for the lawful
execution and delivery of this Agreement has been or will be
effectively taken prior to the Closing. Upon its execution and
delivery, the terms of this Agreement will be valid and binding
obligations of Heritage, enforceable in accordance with its terms,
except as limited by applicable bankruptcy, insolvency,
reorganization, moratorium or other laws of general application
affecting enforcement of creditors' rights, and general principles of
equity that restrict the availability of equitable remedies. Heritage,
as a corporation, represents that the execution, delivery and
performance by Heritage of this Agreement and the consummation by
Heritage of the transactions contemplated hereby, have been duly
authorized by all necessary corporate action.
To the knowledge of Heritage, the execution and performance of
the transactions contemplated by this Agreement by Heritage (i) will
not violate any provision of law applicable to Heritage; and (ii) will
not conflict with or result in any breach of any of the material
terms, conditions or provisions of, or constitute a default under, its
articles or bylaws or any indenture, lease, agreement or other
instrument to which Heritage is a party or by which it or any of its
properties is bound, or any decree, judgment, order, statute, rule or
regulation applicable to Heritage.
(b) Experience. Heritage has adequate net worth and means of
providing for its current needs and contingencies to sustain a
complete loss of its investment in NewCo. Heritage's overall
commitment to investments which are not readily marketable is not
disproportionate to its net worth, (taking into account the net worth
of investors in Heritage) and Heritage's investment in NewCo will not
cause such overall commitment to become excessive.
(c) Investment Representations. Heritage understands that the
NewCo Shares have never been registered under the Securities Act of
1933, as amended, and the regulations thereto ("Securities Act").
Heritage also understands that the NewCo Shares are being offered and
sold pursuant to an exemption from registration contained in the
Securities Act based in part upon Heritage's representations contained
in this Agreement. Heritage therefore further represents and warrants
as follows:
(1) Heritage Bears Economic Risk. Heritage has sufficient
experience in evaluating and investing in private placement
transactions of securities in companies similar to the NewCo so
that it is capable of evaluating the merits and risks of its
investment in NewCo and has the capacity to protect its own
interests. Heritage must bear the economic risk of this
investment indefinitely unless the NewCo Shares are registered
pursuant to the Securities Act, or an exemption from registration
is available. Heritage understands that neither NewCo nor Royal
Palm has any present intention of registering the NewCo Shares or
any other NewCo securities, except with respect to a transaction
contemplated under Section 3.5(c) above. Heritage also
understands that there is no assurance that any exemption from
registration under the Securities Act will be available and that,
even if available, such exemption may not allow Heritage to
transfer all or any portion of the NewCo Shares under the
circumstances, in the amounts, at the prices or at the times
Heritage might propose.
(2) Acquisition for Own Account. Heritage is acquiring the
NewCo Shares for its own account for investment only, and not
with a view towards their distribution.
(3) Heritage Can Protect Its Interest. Heritage represents
that by reason of its management's, business or financial
experience, Heritage has the capacity to protect its own
interests in connection with the transactions contemplated in
this Agreement. Furthermore, Heritage is aware of no publication
or of any advertisement in connection with the transactions
contemplated in the Agreement.
(4) Accredited Investor. Heritage represents that it is an
accredited investor within the meaning of Rule 501(a) of
Regulation D under the Securities Act.
(5) Rule 144. Heritage acknowledges and agrees that the
NewCo Shares must be held indefinitely unless they are
subsequently registered under the Securities Act or an exemption
from such registration is available. Heritage has been advised or
is aware of the provisions of Rule 144 promulgated under the
Securities Act as in effect from time to time which may permit
limited resale of NewCo Shares purchased in a private placement
subject to the satisfaction of certain conditions, including,
among other things, the availability of certain current public
information about NewCo, the resale occurring following the
required holding period under Rule 144 and the number of shares
being sold during any three-month period not exceeding specified
limitations.
(6) Residence. As corporation, the office or offices of
Heritage in which its investment decision was made is located at the address or
addresses of Heritage set forth on Exhibit H.
5. REPRESENTATIONS AND WARRANTIES OF ROYAL PALM AND NEWCO.
Royal Palm and NewCo hereby represent and warrant to Heritage and Heritage
Technologies as follows:
5.1 Requisite Power and Authority. Royal Palm and NewCo have all
necessary power and authority under all applicable provisions of law to
execute and deliver this Agreement and to carry out its provisions. All
action on Royal Palm's and NewCo's respective parts required for the lawful
execution and delivery of this Agreement have been taken prior to the
Closing. Upon their execution and delivery, the terms of this Agreement
will be valid and binding obligations of Royal Palm and NewCo respectively,
enforceable in accordance with their terms, except (a) as limited by
applicable bankruptcy, insolvency, reorganization, moratorium or other laws
of general application affecting enforcement of creditors' rights, and (b)
general principles of equity that restrict the availability of equitable
remedies. Royal Palm and NewCo represent that the execution, delivery and
performance by Royal Palm of this Agreement and the consummation of the
transactions contemplated hereby and thereby, have been duly authorized by
all necessary corporate action. The execution and performance of the
transactions contemplated by this Agreement by Royal Palm and NewCo (i)
will not violate any provision of law applicable to either such party; and
(ii) will not conflict with or result in any breach of any of
the material terms, conditions or provisions of, or constitute a default
under, its articles or bylaws or any indenture, lease, agreement or other
instrument to which Royal Palm or NewCo is a party or by which either or
any of their respective properties is bound, or any decree, judgment,
order, statute, rule or regulation applicable to Royal Palm and NewCo.
5.2 Experience. Royal Palm has carefully reviewed the representations
and warranties of Heritage contained in this Agreement and has made a
detailed inquiry concerning Cirilium, its business and its personnel, and
offices and concerning Heritage Technologies and the Assets. Cirilium and
its officers, directors, and personnel have made available to the Royal
Palm any and all written information that the Royal Palm has requested and
have answered all inquiries made by Royal Palm to Royal Palm's
satisfaction. Royal Palm has adequate net worth and means of providing for
its current needs and contingencies to sustain a complete loss of its
investment in Cirilium and in the Assets. Royal Palm's overall commitment
to investments which are not readily marketable is not disproportionate to
its net worth, (taking into account the net worth of investors in Royal
Palm) and Royal Palm's investment in Cirilium will not cause such overall
commitment to become excessive.
5.3 Investment Representations. Royal Palm understands that the
Cirilium Shares have never been registered under the Securities Act. Royal
Palm also understands that the Cirilium Shares are being offered and sold
pursuant to an exemption from registration contained in the Securities Act
based in part upon Royal Palm's representations contained in this
Agreement. Royal Palm hereby represents and warrants as follows:
(a) Royal Palm Bears Economic Risk. Royal Palm has substantial
experience in evaluating and investing in private placement
transactions of securities in companies similar to Cirilium so that it
is capable of evaluating the merits and risks of its investment in
Cirilium and has the capacity to protect its own interests. Royal Palm
must bear the economic risk of this investment indefinitely unless the
Cirilium Shares are registered pursuant to the Securities Act, or an
exemption from registration is available. Royal Palm understands that
neither Heritage nor Cirilium have any present intention of
registering the Cirilium Shares, or any other securities. Royal Palm
also understands that there is no assurance that any exemption from
registration under the Securities Act will be available and that, even
if available, such exemption may not allow Royal Palm to transfer all
or any portion of the Cirilium Shares under the circumstances, in the
amounts, at the prices or at the times Royal Palm might propose.
(b) Acquisition for Own Account. Royal Palm is acquiring the
Cirilium Shares for Royal Palm's own account for investment only, and
not with a view towards their distribution, and would not have been an
"underwriter" (as that term is defined in Section 2(a)(11) of the
Securities Act) with respect to the original purchase of the Cirilium
shares from Cirilium if it had then been a purchaser of such shares.
(c) Royal Palm Can Protect Its Interest. Royal Palm represents
that by reason of its management's, business or financial experience,
Royal Palm has the capacity to protect its own interests in connection
with the transactions contemplated in this Agreement. Furthermore,
Royal Palm is aware of no publication or of any advertisement in
connection with the transactions contemplated in the Agreement.
(d) Accredited Investor. Royal Palm represents that it is an
accredited investor within the meaning of Rule 501(a) of Regulation D
under the Securities Act.
(e) Company Information. Royal Palm has received and read the
financial statements and the Balance Sheet of Cirilium provided by
Heritage and has had an opportunity to
discuss Cirilium's business, management and financial affairs with
Heritage and Cirilium and their directors, officers and management and
has had the opportunity to review Cirilium's operations and
facilities. Royal Palm has also had the opportunity to ask questions
of and receive answers from Heritage and Cirilium and their management
regarding the terms and conditions of this investment.
(f) Rule 144. Royal Palm acknowledges and agrees that the
Cirilium Shares must be held indefinitely unless they are subsequently
registered under the Securities Act or an exemption from such
registration is available. Royal Palm has been advised or is aware of
the provisions of Rule 144 promulgated under the Securities Act as in
effect from time to time, which permits limited resale of Cirilium
Shares purchased in a private placement subject to the satisfaction of
certain conditions, including, among other things, the availability of
certain current public information about Cirilium, the resale
occurring following the required holding period under Rule 144 and the
number of shares being sold during any three-month period not
exceeding specified limitations.
(g) Residence. As corporation, the office or offices of Royal
Palm in which its investment decision was made is located at the
address or addresses of Royal Palm set forth on Exhibit H.
5.4 In addition to the representations and warranties set forth above,
Royal Palm and NewCo specifically represent and warrant with respect to
NewCo for all relevant times prior to and as of the Closing:
(a) NewCo is a corporation formed and in good standing under the
laws of the State of Delaware;
(b) NewCo has no assets or liabilities except as set forth below;
and
(c) NewCo has engaged in no activity except as may be connected
with its performances under this Transaction;
(d) NewCo has issued no securities, whether debt, equity, hybrid,
convertible, or otherwise, other than the 14,000,000 NewCo Shares, all
of which are owned by Royal Palm immediately prior to the Closing;
(e) Assuming the accuracy of the representations and warranties
of Heritage contained in Section 4 hereof, the offer, sale and
issuance of the NewCo Shares and will be effected in compliance with
applicable federal and state securities laws;
(f) Neither this Agreement, the Exhibits hereto, nor any other
document delivered by Royal Palm, NewCo, their attorneys or agents to
Heritage or their attorneys or agents in connection with the
transactions contemplated hereby or thereby, taken as a whole, contain
any untrue statement of a material fact, nor omit to state a material
fact necessary in order to make the statements contained herein or
therein not misleading.
6. POST CLOSING COVENANTS
6.1 Board Representation of Newco and Voting Agreement
Immediately following the Closing and until the consummation of a
transaction pursuant to the agreement to be executed that is described in
Section 3.5(c) above following which Heritage and Royal Palm shall cease to
own simultaneously any shares of NewCo Common Stock, with respect to any
vote or consent to elect or appoint members of the Boards of Directors of
NewCo and Cirilium, Heritage and Royal Palm
agree that each shall vote or otherwise consent such that the Boards of
Directors of each of NewCo and Cirilium shall include one member thereto
nominated by Heritage, and that such members of such Boards of Directors
shall not be removed except with the consent of Heritage (respectively, the
"Heritage Director"). However, this section shall not apply after such time
as Heritage and Royal Palm shall no longer own any shares of NewCo Common
Stock because of the consummation of a transaction pursuant to the
agreement to be executed as described in Section 3.5(c) of this Agreement
has occurred.
6.2 Major Transactions
Each of Heritage, Cirilium, Royal Palm and NewCo agree that for
so long as Heritage and Royal Palm shall simultaneously own any shares
of NewCo Common Stock, no Major Transaction may be approved or
undertaken by NewCo or Cirilium respectively without the consent of
the Board of Directors.
(a) A "Major Transaction" with respect to either of NewCo or
Cirilium shall include:
(1) Any amendment to or restatement of the articles of
incorporation or bylaws of either NewCo or Cirilium;
(2) The issuance of any securities except as otherwise
contemplated herein;
(3) The incurrence of any debt, obligation or liability
in excess of $100,000;
(4) Any transaction involving a merger, share exchange,
sale of all or substantially all of the assets of the
relevant corporation or other similar transaction, except as
set forth in paragraph 3.5(c) above;
(5) Entry by NewCo or Cirilium into any ne lines of
business;
(6) any action with respect to the establishment of any
other entities, whether pursuant to a holding company
structure or otherwise;
(7) take any action with respect to the dissolution,
liquidation or recapitalization of NewCo or Cirilium; and
(8) taking of any action with respect to the
establishment of any equity compensation program or plan
pursuant to which any equity security (including any
security convertible into an equity security) may be issued
to officers, directors or employees of Cirilium.
6.3 OTHER COVENANTS
(a) Maintenance of Business. Except as otherwise contemplated
herein, following the Closing Royal Palm and NewCo will use
commercially reasonable efforts to operate the business of NewCo and
Cirilium and will keep all of their respective business books, records
and files all in the ordinary course of business in accordance with
past practices consistently applied.
(b) Restriction on New Issuances. Notwithstanding anything to the
contrary in this Agreement, until the consummation of a transaction
pursuant to the agreement to be executed that is described in Section
3.5(c) above following which Heritage and Royal Palm cease to own
simultaneously any shares of NewCo Common Stock, (i) Cirilium shall
issue no securities of any kind without the written consent of
Heritage and (ii) NewCo shall not issue any shares of NewCo Common
Stock (or any other security) whether authorized but unissued or
treasury shares to any person without the consent of Heritage, except
that NewCo may issue up to (i) Two Million shares of NewCo Common
Stock as consideration paid in connection with the acquisition of any
third person or entity, or any assets or securities thereof and (ii)
Two Million shares of NewCo Common Stock pursuant to grants under any
written equity compensation plan approved by the Board of Directors of
NewCo under which officers, directors and employees of NewCo may
receive awards and which is administered by a committee of the Board
of Directors of NewCo which shall include the Heritage Director.
(c) Assignment of Contracts. Heritage shall cause Heritage
Technologies to assign to Newco (or Cirilium, at the option of NewCo)
the customer contracts listed on Exhibit J attached hereto,
subject to the consent of the other contracting parties, and Newco (or
Cirilium, at the option of NewCo) shall assume such contracts.
7. CONDITIONS TO CLOSING.
7.1 Conditions to NewCo's Obligations at the Closing. NewCo's
obligations to purchase the Cirilium Shares at the Closing are subject to
the satisfaction, at or prior to the Closing Date, of each of the following
conditions:
(a) Accuracy of Representations and Warranties; Performance of
Obligations. The representations and warranties made by Heritage in
Section 4 herein shall be true and correct as of the Closing Date with
the same force and effect as if they had been made as of the Closing
Date, and Heritage and Cirilium shall have performed all obligations
and conditions herein required to be performed or observed by Heritage
and Cirilium on or prior to the Closing Date.
(b) Consents, Permits, and Waivers. Heritage and Cirilium shall
have obtained any and all consents, permits and waivers necessary or
appropriate for consummation of the transactions contemplated by the
Agreement (except for such as may be properly obtained subsequent to
the Closing).
(c) Software Transfer Agreement . Heritage, Heritage
Technologies, NewCo and Royal Palm shall have entered into the
Software Transfer Agreement in substantially the form attached hereto
as Exhibit C.
(d) Compliance Certificate. Royal Palm shall have received a
certificate signed by an officer of each of Heritage and Cirilium and
dated as of the date of the Closing, stating that the conditions set
forth in Sections 7.1 (a) above have been satisfied.
(e) Secretary Certificate. Royal Palm shall have received copies
of the Certificate of Incorporation (certified by the Secretary of
State of the State of Florida), Bylaws, and resolutions of the Board
of Directors of Cirilium with respect to the transactions contemplated
herein, and a good standing certificate from the Secretary of State of
the State of Florida with respect to Cirilium dated not more than 7
days prior to the Closing Date, certified in a form reasonably
acceptable to Royal Palm by the Secretary of Cirilium as true and
correct copies thereof as of the date of the Closing.
(f) Noncompetition Agreement. Heritage, Cirilium and Royal Palm
shall have entered into the Noncompetition Agreement in substantially
the form attached hereto as Exhibit I.
7.2 Conditions to Obligations of Heritage. Heritage's obligation to
sell the Cirilium Shares and the Assets at the Closing is subject to the
satisfaction, on or prior to Closing, of each of the following conditions:
(a) Representations and Warranties True. The representations and
warranties of Royal Palm and NewCo shall be true and correct at the
date of the Closing, with the same force and effect as if they had
been made on and as of said date.
(b) Payment of Purchase Price. NewCo and Royal Palm shall have
delivered the NewCo Shares and the Note in exchange for the Cirilium
Shares purchased hereunder.
(c) Performance of Obligations. NewCo and Royal Palm shall have
performed and complied with all agreements and conditions herein
required to be performed or complied with by NewCo or Royal Palm on or
before the Closing.
(d) Software Transfer Agreement. Heritage, Heritage Technologies,
NewCo and Royal Palm shall have entered into the Software Transfer
Agreement in substantially the form attached hereto as Exhibit C.
(e) Compliance Certificate. Heritage shall have received a
certificate signed by an officer of each of NewCo and Royal Palm and
dated as of the date of the Closing, stating that the conditions set
forth in Sections 7.2 (a) and (c) above have been satisfied.
(f) Secretary Certificate. Heritage shall have received copies of
the Certificate of Incorporation (certified by the Secretary of State
of the State of Delaware), Bylaws, and resolutions of the Board of
Directors of NewCo with respect to the transactions contemplated
herein, and a good standing certificate from the Secretary of State of
the State of Delaware with respect to NewCo dated not more than 7 days
prior to the Closing Date, certified in a form reasonably acceptable
to Heritage by the Secretary of NewCo as true and correct copies
thereof as of the date of the Closing.
(g) Noncompetition Agreement. Heritage, Cirilium and Royal Palm
shall have entered into the Noncompetition Agreement in substantially
the form attached hereto as Exhibit I.
8. MISCELLANEOUS.
8.1 Indemnification.
(a) Royal Palm and NewCo hereby agree jointly and severally to
hold harmless and indemnify Heritage against any and all losses,
claims, liabilities, damages and expenses (and all costs including,
without limitation, reasonable attorneys' fees and expenses) resulting
from (i) any inaccuracy in or any breach by NewCo or Royal Palm of any
representation or warranty thereof set forth in any Section 5 above,
(ii) any breach of any covenant or agreement contained in this
Agreement required to be performed by NewCo or Royal Palm prior to or
following the Closing.
(b) Heritage and Cirilium hereby agree jointly and severally to
hold harmless and indemnify Royal Palm and NewCo against any and all
losses, claims, liabilities, damages and expenses (and all costs
including, without limitation, reasonable attorneys' fees and
expenses) resulting from (i) any inaccuracy in or any breach by
Heritage or NewCo of any representation or warranty thereof set forth
in any Section above, (ii) any breach of any covenant or agreement
contained in this Agreement required to be performed by Heritage or
NewCo prior to or following the Closing.
(c) If Heritage shall have received in transfer any NewCo Shares
from Royal Palm pursuant to Sections 3.5(b) or (c), Royal Palm agrees
to hold harmless and indemnify NewCo against any and all losses,
claims, liabilities, damages and expenses (and all costs, including,
without limitation, reasonable attorneys fees and expenses) by NewCo
resulting from any actions, claims, demands or legal proceedings
arising from or related to matters or events that shall occur with
respect to NewCo following the Closing.
8.2 Indemnification Procedures.
(a) Each party claiming indemnification ("Indemnified Party")
shall promptly give notice hereunder to the party from which such
Indemnified Party is claiming Indemnification ("Indemnifying Party")
after becoming aware of any claim as to which recovery may be sought
against the Indemnifying Party as a result of the terms of Section 8.1
above.
(b) If the Indemnifying Party shall not, within 30-calendar days
after its receipt of the notice required by Section 8.2(a) above,
advise Indemnified Party that the Indemnifying Party denies the right
of the Indemnified Party to indemnity in respect of the claim, then
the amount of such claim shall be deemed to be finally determined
between the parties hereto. If the Indemnifying Party shall notify the
Indemnified Party that it disputes any claim made by the Indemnified
Party, then the parties hereto shall endeavor to settle and compromise
such claim, and if unable to agree on any settlement or compromise,
such claim for indemnification shall be settled by appropriate
litigation, and any liability established by reason of such
settlement, compromise or litigation shall be deemed to be finally
determined.
8.3 Injunctive Relief. The Parties acknowledge that the restrictions
contained in this Agreement are reasonable and necessary to protect the
legitimate interests of the Parties, and that any violation of such
restrictions may result in irreparable injury to the Parties for which
money damages may not provide an adequate remedy. Therefore, the Parties
shall be entitled to seek equitable relief, including, without limitation,
preliminary and permanent injunctive relief, in any court of competent
jurisdiction and, to the extent applicable, an equitable accounting of all
earnings, profits and other benefits arising from the violation of any such
restrictions, which rights shall be cumulative and in addition to any other
rights or remedies to which the Parties seeking such relief may be
entitled.
8.4 Governing Law. This Agreement shall be governed in all respects by
and construed in accordance with the laws of the State of Florida, without
regard to the choice of law or conflicts of law provisions thereof. All
suits or other actions regarding disputes arising under this Agreement
shall be brought in the courts, whether state or federal, of Palm Beach
County, Florida.
8.4 Survival/Effect of Termination. The representations and warranties
made herein shall survive the Closing of the transactions contemplated
hereby for a period of two (2) years from the Closing Date. The provisions
of Sections 6 and 8 hereof shall survive any termination of this Agreement,
and no termination hereof shall deemed to release any party from any
liability for any breach by such party of the terms and provisions of this
Agreement. All statements as to factual matters contained in any
certificate or other instrument delivered by or on behalf of Cirilium
pursuant hereto in connection with the transactions contemplated hereby
shall be deemed to be representations and warranties by Cirilium hereunder
solely as of the date of such certificate or instrument.
8.5 Successors and Assigns. Except as otherwise expressly provided
herein, the provisions hereof shall inure to the benefit of, and be binding
upon, the permitted successors, assigns, heirs, executors and
administrators of the Parties hereto. This agreement may not be assigned by
any of the Parties hereto without the prior written consent of all other
Parties, and any attempted assignment in violation of this provision shall
be null and void.
8.6 Entire Agreement. This Agreement, the Exhibits and Schedules
hereto, and the other documents delivered pursuant hereto constitute the
full and entire understanding and agreement between the Parties with regard
to the subject matter hereof and no Party shall be liable or bound to any
other in any manner by any representations, warranties, covenants and
agreements except as specifically set forth herein and therein.
8.7 Severability. In case any provision of the Agreement shall be
invalid, illegal or unenforceable, the validity, legality and
enforceability of the remaining provisions shall not in any way be affected
or impaired thereby.
8.8 Amendment and Waiver. This Agreement may be amended or modified
only by a written consent signed by each of the Parties.
8.9 Delays or Omissions. It is agreed that no delay or omission to
exercise any right, power or remedy accruing to any Party, upon any breach,
default or noncompliance by another Party under this Agreement shall impair
any such right, power or remedy, nor shall it be construed to be a waiver
of any such breach, default or noncompliance, or any acquiescence therein,
or of or in any similar breach, default or noncompliance thereafter
occurring. It is further agreed that any waiver, permit, consent or
approval of any kind or character on NewCo's part with respect to any
breach, default or noncompliance under this Agreement or any waiver on such
Party's part of any provisions or conditions of the Agreement must be in
writing and shall be effective only to the extent specifically set forth in
such writing.
8.10 Notices. All notices required or permitted hereunder shall be in
writing and shall be deemed effectively given: (a) upon personal delivery
to the Party to be notified, (b) when sent by confirmed telex or facsimile
if sent during normal business hours of the recipient, if not, then on the
next business day, (c) five (5) days after having been sent by registered
or certified mail, return receipt requested, postage prepaid, or (d) one
(1) day after deposit with a nationally recognized overnight courier,
specifying next day delivery, with written verification of receipt. All
communications shall be sent to Heritage at the address as set forth on the
signature page hereof, or to Heritage at the address as set forth in
Exhibit L attached hereto and to NewCo at the address set forth on Exhibit
L attached hereto or at such other address as Heritage or NewCo may
designate by ten (10) days advance written notice to the other Parties
hereto.
8.11 Expenses. Each Party shall pay all costs and expenses that it
incurs with respect to the negotiation, execution, delivery and performance
of the Agreement.
8.12 Attorneys' Fees. In the event that any suit or action is
instituted to enforce any provision in this Agreement, the prevailing Party
in such dispute shall be entitled to recover from the losing Party all
reasonable fees, costs and expenses of enforcing any right of such
prevailing Party under or with respect to this Agreement, unless payment
for such fees and costs is otherwise provided for under this Agreement.
8.13 Titles and Subtitles. The titles of the sections and subsections
of the Agreement are for convenience of reference only and are not to be
considered in construing this Agreement.
8.14 Counterparts; Execution. This Agreement may be executed in any
number of counterparts, each of which shall be an original, but all of
which together shall constitute one instrument. All Parties are
specifically authorized to execute this Agreement and transmit the executed
Agreement and/or any schedules or Exhibits thereto or portions thereof by
facsimile transmission to each other Party, and such execution shall be
effective as if executed in the offices of NewCo as described in Section
3.1 herein. For convenience, NewCo's fax number may be set forth as part of
Exhibit L
8.15 Broker's Fees. Other than has been set forth herein, each of the
Parties hereto represents and warrants that no agent, broker, investment
banker, person or firm acting on behalf of or under the authority of such
Party hereto is or will be entitled to any broker's or finder's fee or any
other commission directly or indirectly in connection with the transactions
contemplated herein. Each of the Parties hereto further agrees to indemnify
each other Party for any claims, losses or expenses incurred by such other
Party as a result of the representation in this Section 8.13 being untrue.
8.16 Confidentiality. Each Party hereto agrees that, except with the
prior written consent of other Parties, it shall at all times keep
confidential and not divulge, furnish or make accessible to anyone any
confidential information, knowledge or data concerning or relating to the
business or financial affairs of the other Parties to which such Party has
been or shall become privy by reason of this Agreement, discussions or
negotiations relating to this Agreement, the performance of its obligations
hereunder or the
ownership of the Cirilium Shares purchased hereunder. The provisions of
this Section 8.14 shall be in addition to, and not in substitution for, the
provisions of any separate nondisclosure agreement executed by the Parties
hereto.
8.17 Pronouns. All pronouns contained herein, and any nouns or
variations thereof, shall be deemed to refer to the masculine, feminine or
neutral, singular or plural, as the context may require.
[COUNTERPART SIGNATURE PAGES FOLLOW]
SIGNATURE PAGE TO ACQUISITION AGREEMENT.
IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of
the date first above written.
ROYAL PALM CAPITAL GROUP, INC.
By: /s/ Xxxxxx X. Xxxxxx
---------------------------
Xxxxxx X. Xxxxxx, its CHAIRMAN
CIRILIUM HOLDINGS, INC., A DELAWARE CORPORATION
By: /s/
---------------------------
, its CHAIRMAN
HERITAGE COMMUNICATIONS CORPORATION, a FLORIDA Corporation
By: /s/
---------------------------
, its President
CIRILIUM, INC., a FLORIDA Corporation
By: /s/
---------------------------
, its President
HERITAGE TECHNOLOGIES, INC., a DELAWARE Corporation
(Signing as a party with respect to the representations and warranties contained
in Sections 4.12 and 4.14).
By: /s/
---------------------------
, its
ST. XXXXX INVESTMENT GROUP, INC., A FLORIDA CORPORATION
By: /s/
---------------------------
, its CHAIRMAN
SCHEDULES
Schedule 1
Cirilium Shareholders and corresponding
apportionment of NewCo Shares
to be received at Closing.
Number of
Number of NewCo Shares
Certificate Cirilium Shares issued at
Shareholder Numbers Owned Closing
--------------------------------------------------------------------------------------------
Heritage Communications Corporation 2 & 4 45,000 2,700,000
--------------------------------------------------------------------------------------------
Xxxxxxx X. Xxxxxx, Xx. Revocable Trust 6 20,900 1,254,000
--------------------------------------------------------------------------------------------
Xxxxxxx X. Xxxx, Trust 5 15,400 924,000
--------------------------------------------------------------------------------------------
J. Xxxxx Xxxxxx 7 9,900 594,000
--------------------------------------------------------------------------------------------
Xxxxx X. Xxxxxxx 8 3,300 198,000
--------------------------------------------------------------------------------------------
Xxxxxxxx X. Xxxxxx 10 2,200 132,000
--------------------------------------------------------------------------------------------
Xxxxx X. Xxxxxxx 11 2,200 132,000
--------------------------------------------------------------------------------------------
Xxxxx X. Xxxxxx 9 1,100 66,000
--------------------------------------------------------------------------------------------
100,000 6,000,000
-----------------------------------
EXHIBITS
Exhibit A - Note
Exhibit B - NewCo Certificate and Bylaws
Exhibit C - Software Transfer Agreement
Exhibit D - Cirilium Articles
Exhibit E - Cirilium Bylaws
Exhibit F - Registration Rights
Exhibit G - Cirilium Balance Sheet
Exhibit H - Addresses
Exhibit I - Noncompetition Agreement
Exhibit J - Contract List
[Any of the above exhibits can be viewed upon request]
