AGREEMENT OF SALE
AGREEMENT OF SALE, made as of October 23, 1996, among Xxxxxx X. Xxxxxxxx, Xx.,
having an address at 00000 Xxxxxxxx Xxxxxx, Xxxx Xxxxx, Xxxxxxx 00000, Xxxxxx
Xxxx, as Trustee, having an address at 0000 Xxxxxxx Xxxxx, Xxxx Xxxxx, Xxxxxxx
00000, Xxxxx Xxxxxx, having an address at 0 Xxx Xxxxxxx, Xxxxxx, Xxx Xxxx 00000,
Xxxxx Xxxxx, having an address at 000 Xxxx 00xx Xxxxxx, Xxx. 00X, Xxx Xxxx, Xxx
Xxxx 00000, and Xxxxx Xxxxxxxx, having an address at 00 Xxxxxxx Xxxx,
Xxxxxxxxxx, Xxx Xxxx 00000 (collectively hereinafter referred to as "Sellers"),
and Triangle Imaging Group, Inc., a Florida corporation, having an address at 00
Xxxxx Xxxxxxxxxx Xxxxxx, Xxx Xxxxx, Xxx Xxxx 00000 ("Purchaser" or the
"Company"). (Xxxxxx Xxxxxxxx, Xxxxx Xxxxxxxx, Xxxxx Xxxxxx and Xxxxx Xxxxx and
sometimes referred to as "Xxxxxxxx Group" and Xxxxxx Xxxx, as Trustee, is
sometimes referred to as "Bass").
1. Agreement To Sell. Sellers agree to sell, transfer and deliver to Purchaser,
and Purchaser agrees to purchase, upon the terms and conditions hereinafter set
forth, 760 shares of the capital stock of Engineered Business Systems, Inc., a
corporation organized under the laws of Florida (the "Corporation"), having an
address at 0000 Xxxx Xxxxxx Xxxx, Xxxxxxx Xxxxx, Xxxxxxx 00000, said shares
constituting all of the authorized and issued shares of the Corporation owned by
Sellers (the "Shares"). Each of the Sellers own the following number of Shares:
Xxxxxx X. Xxxxxxxx, Xx. -- 377 Shares
Xxxxxx Xxxx -- 380 Shares
Xxxxx Xxxxxx -- 1 Share
Xxxxx Xxxxx -- 1 Share
Xxxxx Xxxxxxxx -- 1 Share
2. Purchase Price. The aggregate purchase price to be paid by Purchaser is
to be determined as set forth herein and payable as follows:
(a) Fifty Thousand Dollars ($50,000.00) is payable upon execution of this
agreement as a part of the contract deposit by either (i) by check (payable to
Xxxxxxxxx & Xxxxxxx, as attorneys for the Xxxxxxxx Group and Bass) subject to
collection. The nonpayment of said check shall give Sellers the right to declare
this agreement null and void, in addition to pursuing all other remedies against
Purchaser on said check or as otherwise permitted by law; or
(ii) Purchaser or its principal shareholder, shall deliver marketable
securities, satisfactory to the Sellers in their sole discretion, having a
market value of at least sixty thousand ($60,000.00), together with stock powers
and all other documents in form and substance satisfactory to Sellers to enable
Sellers to adequately secure the same as a part of the contract deposit.
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(b) Nine Hundred Fifty Thousand Dollars ($950,000.00) (payable to Xxxxxxxxx &
Xxxxxxx, as attorneys for the Xxxxxxxx Group and Bass) at the closing (the
"Closing Cash Payment").
(c) One Million Five Hundred Thousand Dollars ($1,500,000.00) at the closing by
the execution and delivery of a Promissory Note (or several notes issued half
among the Xxxxxxxx Group and half to Bass as each may direct) by Purchaser to
Sellers in said amount, substantially in the form of Exhibit A hereto (the
"Promissory Note"), secured by a Stock Pledge Agreement substantially in the
form of Exhibit B hereto (the "Stock Pledge Agreement"), and further secured by
a Security Agreement substantially in the form of Exhibit C hereto and UCC
Financing Statements creating a security interest in the assets of the
Corporation (the "Security Agreement"), with Florida documentary stamps paid by
Purchaser.
(d) Five Hundred Thousand (500,000) shares of the common capital stock of
Purchaser (the "Securities") upon execution of this agreement (to be registered
half among the Xxxxxxxx Group and half to Bass as each may direct).
The money or marketable securities and Securities received pursuant to (a) and
(d) above (the "Deposit") shall be held in escrow by Xxxxxxxxx & Xxxxxxx as
attorneys for Sellers in accordance with the terms of escrow annexed as Exhibit
__, to be applied to the purchase price at closing or upon Purchaser's default,
escrow agent shall deliver the Deposit to Sellers.
3. Adjustment to Closing Cash Payment/Promissory Note. The Corporation shall
have cash reserves of $700,000 at closing. During the period between contract
and closing, the Corporation shall not modify its normal business practices with
respect to accounts receivable and accounts payable. All corporate taxes owed by
the Corporation shall remain the obligation of the Corporation without
adjustments to the purchase price. The parties acknowledge that the purchase
price has been established anticipating that the Corporation has a combined
federal and state income tax liability for the fiscal year ended August 31, 1996
of approximately $150,000. In the event the Corporation's combined federal and
state income tax liability for the year ended August 31, 1996 is less than
$150,000 (the "Savings"), the purchase price shall be increased by an amount
equal to the Savings, which amount shall be added to the Promissory Note(s). To
the extent the cash reserves at closing are less than $700,000 due to the
combined tax liability (the "Tax Shortfall"), the purchase price shall be
adjusted by reducing the Cash Payment by the Tax Shortfall and adding the Tax
Shortfall to the Promissory Notes. To the extent the cash reserves at Closing
are less than $700,000 for any reason other than the Tax Shortfall (the
"Shortfall), the Purchase Price shall be reduced, and specifically the Closing
Cash Payment shall be reduced by the amount of the Shortfall.
4. Acceptable Funds. All money payable under this agreement, unless
otherwise specified, shall
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be paid either: (a) in cash, but not more than $1,000 shall be paid in cash; (b)
by good certified check(s) of Purchaser, or official check(s) of any bank,
savings bank, trust company, or savings and loan association which is a member
of the clearing house association serving Florida, payable as directed by or to
the order of Sellers; (c) by confirmed wire transfer(s) as directed by Sellers;
or (d) as otherwise agreed to in writing by the parties or their attorneys.
5. The Closing. The "closing" means the settlement of the obligations of Sellers
and Purchaser to each other under this agreement, including the payment of the
purchase price to Sellers as provided in Article 2 hereof and the delivery of
the closing documents provided for in Article 6 hereof. The closing shall be
held at the offices of Xxxxxxxxx & Xxxxxxx 0000 Xxxxxx Xxxx, Xxxx Xxxxx, Xxxxxxx
00000, at 10 A.M. on or before December 1, 1996 (the "closing date").
6. Closing Documents. At the closing Sellers shall execute and deliver to
Purchaser:
(a) the certificate or certificates for the Shares, duly endorsed so as to
effectively transfer ownership of the Shares to Purchaser, together with all
appropriate Federal and State transfer tax stamps affixed (subject to the
obligation of Purchaser to deposit the Shares with Sellers in accordance with
the provisions of the Stock Pledge Agreement); and
(b) letters of resignation from each Seller who is a director and officer of the
Corporation, effective as of the closing hereunder.
At the closing Purchaser shall execute and deliver to Sellers:
(a) the Promissory Note, Stock Pledge Agreement, Security Agreement and UCC
Financing Statements provided for in Article 2.
7. The Security Agreement. The Security Agreement shall create a purchase money
security interest in favor of Sellers in the goods, chattels and other personal
property described therein and all other personal property acquired after the
closing by the Corporation and used in connection with the business, together
with all proceeds thereof and all increases, substitutions, replacements and
additions thereto.
Purchaser agrees to perfect the security interest of the Security Agreement by
executing and delivering to Sellers appropriate Financing Statements and
extensions and renewals thereof, in accordance with the provisions of the
Uniform Commercial Code, and all other instruments or documents as may be
reasonably requested by Sellers. All filing fees in connection therewith shall
be paid by Purchaser. The provisions of this Article 7shall survive the closing.
8. Representations And Warranties Of Sellers. Each of the Sellers severally
represents and warrants to Purchaser as follows:
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(a) Seller has full power and authority to carry out and perform his/her
undertakings and obligations as provided herein.
(b) Seller is the owner of the Shares set forth in paragraph 1, and the Shares
are all of the issued and outstanding shares of stock of the Corporation owned
by Seller. All of the Shares have a par value of $.01, are fully paid and
non-assessable, have not been assigned, pledged or hypothecated, and are free of
all liens, and encumbrances (except for the shares of the Xxxxxxxx Group which
are subject to a Voting Trust Agreement.
(c) To the best of the Seller's knowledge, no action, approval, consent or
authorization of any governmental authority is necessary for Seller to
consummate the transactions contemplated hereby.
(d) To the best of the Seller's knowledge, the Corporation is a corporation duly
organized on September 1, 1989, under the laws of Florida, and the Corporation
is validly existing and has not been dissolved.
(e) To the best of the Seller's knowledge, there are no violations of any law or
governmental rule or regulation pending against Seller, the Shares or the
Corporation.
(f) To the best of the Seller's knowledge, (i) the Corporation has filed each
tax return, including without limitation all income, excise, property, gain,
sales, franchise and license tax returns, required to be filed by the
Corporation prior to the date hereof; (ii) each such return is true, complete
and correct, and the Corporation has paid all taxes, assessments and charges of
any governmental authority required to be paid by it; and (iii) the Corporation
has paid to the proper taxing authorities all income, social security,
unemployment and other taxes and amounts required to be paid or withheld with
respect to employees of the Corporation and others receiving compensation from
the Corporation.
(g) To the best of Seller's knowledge, the financial statements, balance sheets
and other information pertaining to the Corporation set forth in Exhibit D
hereto are true, correct and complete as of the dates and for the periods set
forth therein; have been prepared in accordance with generally accepted
accounting principles consistently applied; and fairly represent the financial
position of the Corporation at such dates and for such periods. To the best of
Seller's knowledge, the Corporation had at said dates no liabilities or
obligations of any kind, contingent or otherwise, not reflected in Exhibit F. To
the best of Seller's knowledge, except as shown in Exhibit D, the Corporation
owns outright each asset or item of property reflected therein, free of all
liens, claims and encumbrances.
(h) The authorized, issued and outstanding capital stock of the Corporation
is as
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set forth in Exhibit E and, except for the Voting Trust Agreement, there are no
agreements or options known by the Seller relating to the issuance or voting of
any of the shares of the Corporation.
(i) The subsidiaries of the Corporation are set forth on Exhibit F. (The
Checknet subsidiaries are to be disposed of per paragraph 22.)
9. Representations And Warranties Of Purchaser. Purchaser represents and
warrants to Sellers as follows:
(a) Purchaser is a corporation under the laws of Florida. Purchaser has full
power and authority to carry out and perform its undertakings and obligations as
provided herein. The execution and delivery by Purchaser of this agreement and
the consummation of the transactions contemplated herein have been duly
authorized by the Board of Directors of Purchaser and will not conflict with or
breach any provision of the articles of incorporation or by-laws of the
Purchaser, or any agreement or indenture to which Purchaser may be a party.
(b) All corporate action on the part of the Company, its directors and
stockholders necessary for the due authorization, execution, delivery and
performance by the Company of this Agreement and the Ancillary Agreements and
the consummation of the transactions contemplated herein and therein, and for
the due authorization, issuance and delivery of the Securities has been taken or
will be taken prior to the Closing. This Agreement and the Ancillary Agreements
are legal, valid and binding obligations of the Company, enforceable in
accordance with their respective terms, subject to applicable bankruptcy,
insolvency, reorganization and moratorium laws and other laws of general
application affecting enforcement of creditors' rights generally. The execution,
delivery and performance by the Company of this Agreement and the Ancillary
Agreements and compliance herewith and therewith and the issuance and sale of
the Securities will not result in any violation of or be in conflict with, or
result in a breach of, or constitute a default under, any term or provision of
any state or Federal law, ordinance, rule or regulation to which the Company is
subject, or the Company's Certificate of Incorporation or By-Laws, as amended
and in effect on the date hereof, or any mortgage, indenture, agreement,
instrument, judgment, decree, order or other restriction to which the Company is
a party or by which it is bound, or result in the creation of any mortgage,
pledge, lien, encumbrance or charge upon any of the properties or assets of the
Company pursuant to any such term. No stockholder has any pre-emptive right or
rights of first refusal by reason of the issuance of the Securities. The
Securities, when issued in compliance with the provisions of this Agreement,
will be validly issued, fully paid and nonassessable, and the Securities will be
free of any liens or encumbrances.
(c) No consent, approval, qualification, order or authorization of, or
filing with,
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any governmental authority is required in connection with the Company's valid
execution, delivery or performance of this Agreement and the Ancillary
Agreements, or the offer, issue or sale of the Securities by the Company, or the
consummation of any other transaction contemplated on the part of the Company
hereby.
(d) The offer, issuance and sale of the Securities as contemplated by this
Agreement are exempt from the registration requirements of the Securities Act,
and from any registration or filing requirements of any applicable state
securities laws and neither the Company nor anyone acting on its behalf will
take any action hereafter that would cause the loss of such exemption.
(e) There are no judgments, liens, suits, actions or proceedings pending or, to
the best of Purchaser's knowledge, threatened against Purchaser or its property.
(f) Purchaser has conducted such "due diligence" or investigation concerning,
without limitation, the Shares, the Corporation, the business of the Corporation
and its properties, assets, liabilities, prospects and financial condition as
Purchaser requires, or has waived same, prior to entering into this agreement.
10. No Other Representations. Purchaser acknowledges that neither Sellers nor
any representative or agent of Sellers have made any representation or warranty
(expressed or implied) regarding the Corporation, or any matter or thing
affecting or relating to this agreement, except as specifically set forth in
this agreement.
11. Conduct Of The Business. Sellers, until the closing, shall:
(a) endeavor to conduct the business in the normal, useful and regular manner;
(b) endeavor to preserve the business and the goodwill of the customers and
suppliers of the business and others having relations with Sellers; and
(c) give Purchaser and its duly designated representatives reasonable access to
the books and records of the Corporation, and furnish to Purchaser such data and
information pertaining to the Corporation as Purchaser from time to time
reasonably may request.
12. Conditions To Closing. The obligations of the parties to close
hereunder are subject to the following conditions:
(a) All of the terms, covenants and conditions to be complied with or performed
by the other parties under this agreement on or before the closing shall have
been complied with or performed in all material respects.
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(b) All representations or warranties of the other parties herein are true in
all material respects as of the closing date.
If Purchaser shall be entitled to decline to close the transactions contemplated
by this agreement, but Purchaser nevertheless shall elect to close, Purchaser
shall be deemed to have waived all claims of any nature arising from the failure
of Sellers to comply with the conditions or other provisions of this agreement
of which Purchaser shall have actual knowledge at the closing.
13. Liquidated Damages/Specific Performance. If Purchaser defaults under this
agreement, Sellers as their sole remedy shall be entitled to declare this
agreement null and void and to retain the Deposit and any other sums paid by
Purchaser hereunder as liquidated damages, whereupon this agreement shall
terminate (but the Ancillary Agreements shall survive) and neither Sellers nor
Purchaser shall have any further claim against the other, except insofar as the
representations and warranties made by Purchaser with respect to the Securities
delivered upon execution of this agreement or at closing and under the
registration rights agreement shall survive. [If Purchaser shall have deposited
marketable securities pursuant to 2(a)(ii) above, such shall be liquidated, with
Purchaser being entitled to the excess proceeds over $50,000 and Purchaser
remaining liable for the deficiency under $50,000.] If Sellers (or either of the
Xxxxxxxx Group or Bass) defaults under this agreement, Purchaser shall be
entitled to seek specific performance from the defaulting party.
14. Brokerage. The parties hereto represent and warrant to each other that they
have not dealt with any broker or finder in connection with this agreement or
the transactions contemplated hereby, and no broker or any other person is
entitled to receive any brokerage commission, finder's fee or similar
compensation in connection with this agreement or the transactions contemplated
hereby. Each of the parties shall indemnify and hold the other parties harmless
from and against all liability, claim, loss, damage or expense, including
reasonable attorneys' fees, pertaining to any broker, finder or other person
with whom such party has dealt. The provisions of this Article 14 shall survive
the closing.
15. Assignment. Purchaser shall not assign this agreement without the prior
written consent of Sellers in each instance. Any attempted assignment without
Sellers' consent shall be null and void.
16. Notices. All notices, demands and other communications required or permitted
to be given hereunder shall be in writing and shall be deemed to have been
properly given if delivered by hand or by registered or certified mail, return
receipt requested, with postage prepaid, to Sellers or Purchaser, as the case
may be, at their addresses first above written, or at such other addresses as
they may designate by notice given hereunder. Copies of all such notices,
demands and other communications simultaneously shall be given in the aforesaid
manner to Sellers' attorneys, Xxxxxxxxx & Xxxxxxx, attention Xxxxxxx Xxxxxxxxx,
Esq. 0000 Xxxxxx Xxxx, Xxxxx 000, Xxxx Xxxxx, Xxxxxxx 00000 and to Chekow &
Xxxxxx, P.C., attention Xxxxxx Xxxxxx, Esq., at 000 Xxxxx Xxxx Xxxx, Xxxxx Xxxx,
Xxx Xxxx 00000, and to Purchaser's attorney, Xxxxxxx X. Xxxxxx, Esq.
at 0000 Xxxx Xxxxxxx Xxxxxxxxx, Xx. Xxxxxxxxxx, Xxxxxxx 00000.
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17. Survival. None of the representations, warranties, covenants, or other
obligations of Sellers hereunder shall survive the closing, except as expressly
provided herein and then only for a period of one year from the closing date.
Acceptance of the duly endorsed Shares by Purchaser shall be deemed full and
complete performance and discharge of every agreement and obligation on the part
of Sellers hereunder, except those, if any, which expressly are stated herein to
survive the closing, and then such survival shall be only for a period of one
year.
The representations, warranties, covenants and other obligations of the
Purchaser hereunder, or under any of the Ancillary Agreements, shall survive
closing.
18. Entire Agreement. This agreement contains all of the terms agreed upon
between Sellers and Purchaser with respect to the subject matter hereof. This
agreement has been entered into after full investigation.
19. Changes Must Be In Writing. This agreement may not be altered, amended,
changed, modified, waived or terminated in any respect or particular unless the
same shall be in writing signed by the party to be bound.
20. Governing Law. This agreement shall be governed by and construed in
accordance with the laws of the State of Florida.
21. Binding Effect. This agreement shall not be considered an offer or an
acceptance of an offer by Sellers, and shall not be binding upon Sellers until
executed and delivered by both Sellers and Purchaser. Upon such execution and
delivery, this agreement shall be binding upon and inure to the benefit of the
parties hereto and their respective heirs, personal representatives, executors,
administrators, successors and permitted assigns.
22. Disposition of Checknet Prior to Closing. It is understood that the Checknet
companies are not included in this sale. Sellers may cause the Corporation to
dispose of the stock or the assets of the Corporation's Checknet subsidiaries,
as set forth in Exhibit F, prior to closing, without adjustment to the purchase
price. In connection with the disposition of the Checknet companies, the
Corporation shall enter into such agreements with the Checknet companies as may
be required (including, without limitation, assignments, assumptions, subleases
and facilities or services sharing arrangements) with respect to the property,
premises and equipment used, occupied or possessed by the Checknet companies and
so as to continue to afford such companies such use, occupancy and possession,
provided, however, that the existing liability of the Corporation for such use,
occupancy and possession by Checknet shall not be increased or extended under
any such agreements but transferred as effectively as possible to Checknet.
Purchaser shall have no claims, but shall cooperate with Seller to effect
the Checknet disposition if such is not concluded prior to closing.
23. Counterparts. This agreement may be executed in any number of
counterparts, each of which shall be deemed an original but all of which
together shall constitute one and the same instrument.
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24. Paragraph Headings. The paragraph headings in this agreement are for
convenience and reference only and shall not be deemed to alter or effect any
provision hereof.
25. Ancillary Documents. In connection with this agreement, the parties
have executed and delivered the following (the "Ancillary Agreements"):
(a) A Registration Rights Agreement, providing for the registration of the
Securities delivered hereunder at the time of contract and at closing, and
effective in accordance with its terms;
(b) An Investment Letter with respect to the Securities delivered hereunder at
the time of contract and at closing, and effective in accordance with its terms;
and
(c) A Shareholders Agreement with respect to the Securities.
26. Additional Documents. The parties agree to execute and deliver such
additional documents and instruments as may be necessary to effect the
transactions set forth in this agreement.
27. Attorneys and Accountants. Each of Seller and Purchaser shall pay their own
costs of the transaction, including attorneys and accountants, except Purchaser
shall pay for the costs of its "due diligence" including reimbursement of fees
and disbursements incurred by Xxxxxxx Radin & Co.
28. Actions or Proceedings. With respect to any legal action or proceeding
arising under this Agreement or any Ancillary Agreement the Purchaser, to the
fullest extent permitted by law, hereby: (a) submits to the jurisdiction of the
state and federal courts in the State of Florida; (b) agrees that the venue of
any such action or proceeding may be laid in Palm Beach County (in addition to
any county in which any collateral is located) and waives any claim that the
same is an inconvenient forum; (c)waives any right to immunity from any such
action or proceeding and waives any immunity or exemption of any property,
wherever located, from garnishment, levy, execution, seizure or attachment prior
to or in execution of judgment, or sale under execution or other process for the
collection of debts; (d) waives trial by jury; and (e) waives any right to
interpose any set-off or counterclaim or to plead laches or any statute of
limitations as a defense in any such action or proceeding, and waives all
statutory provisions and requirements for the benefit of Purchaser, now or
hereafter in force.
IN WITNESS WHEREOF, the parties have executed this agreement as of the date
first above written.
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In the presence of:
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Xxxxxx X. Xxxxxxxx, Xx.
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Xxxxxx Xxxx
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Xxxxx Xxxxxx
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Xxxxx Xxxxx
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Xxxxx Xxxxxxxx
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TRIANGLE IMAGING GROUP, INC.
ATTEST:
By ________________________
President
By ____________________
Secretary
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