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EXHIBIT 10.11
AGREEMENT TO PURCHASE BUSINESS DATED DECEMBER 16, 1996,
BETWEEN THE COMPANY AND XXXXX X. XXXXX
AGREEMENT TO PURCHASE BUSINESS
This Agreement ("Agreement") made this 16th day of December, 1997, between
Xxxxxxx & Co., Inc. ("Xxxxxxx"), a corporation organized and existing under the
laws of the State of Georgia, hereinafter referred to as "Seller," and Xxxxx X.
Xxxxx, an individual, hereinafter referred to as "Buyer."
The parties recite and declare:
WHEREAS, The Seller owns a tennis and pool facility known as Petersburg
Racquet Club ("PRC"), which operates as a division of Seller.
WHEREAS, Seller also maintains a commercial real estate brokerage business,
a land development business, Xxxx Homes, Inc. and Keystone Homes, Inc. which are
not involved or contemplated by this Agreement.
WHEREAS, That the Agreement is specifically limited to the sale of the PRC
division of Seller.
SECTION ONE
DEFINITIONS
As used herein the following terms are defined as follows:
PETERSBURG RACQUET CLUB REAL ESTATE: The real estate denoted by the attached
plat (Buyer and Seller agree that time is of the essence in the execution of
this Agreement. Seller is presently having a plat prepared which should be
completed by December 19, 1997) which includes but is not limited to the pool,
the 8 hard courts, the 7 soft courts, the clubhouse, the two parking lots, and
the land adjacent to Courts 6 and 7 which may be used to construct two
additional tennis courts.
NET RECEIVABLES: All trade accounts receivable of PRC at the end of the day on
the date of closing.
TENNIS MAINTENANCE EQUIPMENT: All equipment existing and used exclusively for
the maintenance of the tennis courts and grounds of PRC and listed on Exhibit A.
OFFICE EQUIPMENT: All office equipment existing and used in the clubhouse
operations of PRC and listed on Exhibit A.
FURNITURE: All furniture existing and used in the clubhouse of PRC and listed on
Exhibit A.
POOL FURNITURE: All lawn furniture existing and used at PRC and listed on
Exhibit A.
INVENTORY: All tennis racquets, clothing, shoes, tennis accessories, concession
items, and various tennis accessories, stored in the clubhouse.
XXXXXXX DEVELOPMENTS: The subdivisions known as Bakers Ferry, The Boulders,
Cedar Rock, Chaparral, The Summit at Xxxxx Creek, and the Village at Xxxxx
Creek.
ENCUMBRANCES: The first mortgage on the PRC real estate with SouthTrust Bank and
all utility and governmental easements. The second mortgage described in Section
Four will also be an encumbrance upon the closing of the sales transaction as
described in this Agreement.
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SECTION TWO
SALE OF BUSINESS
Seller desires to sell and Buyer desires to buy the assets of PRC for the
price and on the terms and conditions hereinafter set forth.
Xxxxxxx will sell to Buyer free and clear of all liabilities and
encumbrances (except as set forth in Section Four) all of the assets of PRC (the
"Assets"), which includes but is not limited to goodwill, the name Petersburg
Racquet Club, Petersburg Racquet Club real estate, net receivables, tennis
maintenance equipment, office equipment, furniture, pool furniture, and
inventory. Seller agrees to assign for the benefit of Buyer, any and all
contract rights related to PRC. There shall be no assumption of liabilities by
the Buyer except as set forth in Section Four.
SECTION THREE
PRC USE AGREEMENT FOR XXXXXXX
Buyer agrees to provide Seller with 7 memberships at PRC for Seller's own
use at no charge for initiation fees or dues to the member. Memberships granted
under this section shall be subject to normal rules regarding facility usage.
Buyer may not arbitrarily terminate memberships granted under this section. Any
membership terminated which has been granted under this section must be for the
cause of willful and gross violation of the normal rules regarding facility
usage. Seller may assign these memberships to anyone of its own choosing. Seller
agrees to provide buyer with a list of the memberships Seller has assigned.
Memberships under this agreement will pay for any charges that the members make
such as lessons, concessions, and merchandise purchases. Seller will have the
right to amend the list of the memberships upon written notice to Buyer.
Seller and its subsidiaries shall have the right to use the conference room
and deck of PRC for normal business meetings in which businesses Seller and its
subsidiaries are engaged upon reasonable notice to the Buyer. This right will
terminate on December 31, 2002.
SECTION FOUR
CONSIDERATION
In consideration for the transfer of the assets of PRC Buyer agrees to
compensate Seller in the amount of (1) $ 805,000.00 for the PRC real estate,
tennis maintenance equipment, office equipment, furniture and pool furniture;
and (2) a to be determined amount for inventory and net receivables as described
below as follows:
A) The sum of One Hundred Thousand Dollars ($100,000.00) on or before the
closing date of December 31, 1997.
B) Execute a Promissory note in favor of Seller for the sum of approximately
One Hundred Twenty five Thousand Dollars ($125,000.00) at an annual
interest rate of 8.25 percent secured by a security deed on the Petersburg
Racquet Club real estate and all personal property assets of PRC, evidenced
by a UCC filing. The note will accrue interest for the first year of the
note. At the end of the first year of the note, the accrued interest will
be added to the principal amount of the note, and thereafter interest only
will be paid monthly until December 31, 2002 when the note will become due.
The note will be due five years from the closing date of December 31, 1997
which is December 31, 2002. The note cannot be fully paid and the security
interest released until the assumed mortgage referenced in
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Item C below is fully paid and/or satisfied or the Seller is released from
all liability on the assumed mortgage. The promissory note will be
personally guaranteed by the Buyer.
C) Assume the existing first mortgage with SouthTrust Bank on the Petersburg
Racquet Club real estate which amounts to approximately $580,000.00. The
total debt assumed and incurred in Items B and C will be $705,000.00.
(i.e., If the assumed loan balance is $575,000.00 then the promissory note
in Item B above will be $ 130,000.00.)
D) Eighty five percent of Net Receivables at the time of closing to be paid as
received by Buyer. Such payment on receipts will be due on Friday of the
following week of receipt of the receivable. Seller will provide Buyer with
a detailed listing of net receivables as soon as practicable after closing.
Seller will identify charges for past due membership dues on such list.
E) Inventory existing at the date of closing will be purchased at cost by a
method acceptable to both Buyer and Seller.
SECTION FIVE
XXXXXXX MONEY
In consideration for the execution of this agreement Buyer agrees to
deposit with Xxxxxxx X. Xxxxxxx, escrow agent, the sum of twenty five thousand
dollars ($25,000.00). This money will be credited against money due at the time
of closing. In the event the Buyer is unable to close this transaction due to
Buyer's breach the Buyer will forfeit this amount. The xxxxxxx money will be
refundable if Buyer is unable to obtain financing for the purchase of PRC
through the assumption or the wraparound of the Seller's loan as referenced in
Section Four.
SECTION SIX
ALLOCATION OF PURCHASE PRICE
The purchase price as stated in the above Section Four will be allocated to
the various assets of the business at closing.
SECTION SEVEN
CLOSING
This consummation of the sale and purchase transaction contemplated by this
Agreement shall take place on or before December 31, 1997. At such time the
Seller will deliver to the Buyer a Xxxx of Sale, a General Warranty Deed, and
all other instruments as is required for the proper consummation of this
transaction. On such closing date, adjustments will be made for premiums on
insurance, taxes, membership dues, and any other items which require adjustment.
At closing, Seller shall deliver or cause to be delivered to Buyer, at
Seller's sole cost and expense, and in addition to the other documents provided
for herein, each of the following items:
A) A xxxx of sale duly executed by Seller, conveying to Buyer the personal
property assets
B) Such evidence or documents as may be reasonably required by the Title
Company and counsel to Buyer evidencing the status and capacity of Seller
and the authority of the person of persons who are executing the various
documents on behalf of the Seller in connection with the sale of the Assets
C) All Keys to all locks on the PRC real estate (to the extent that such are
available) and an accounting for keys in possession of others; all on-site
books and records pertaining to the Assets (but expressly excluding
information tax returns of Seller) and originals of all
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documents in the possession of the Seller pertaining to members of PRC,
including, but not by way of limitation, all applications, correspondence
and credit reports relating to each such member;
D) A letter, executed by Seller, advising the PRC members of the sale of the
Assets to Buyer and directing that dues and other payments thereafter be
sent or delivered to Buyer, which letter may be delivered by Buyer to the
tenants or posted in a conspicuous place in PRC.
At closing, Seller shall pay the following costs of such closing: All fees
and costs for releasing all encumbrances, liens and security interest of record
which are not Encumbrances, surveyor's fees, transfer taxes levied on account of
the transfer of the PRC real estate from Seller to Buyer; and Seller's legal
fees incurred in connection with this transaction. At closing Buyer shall pay
the following costs of such closing: the premium for the Owner's Policy of Title
Insurance to be issued by Title Company in connection with this transaction; the
fees for recording the Deed: and Buyer's legal fees incurred in connection with
this transaction.
SECTION EIGHT
XXXXXXX DEVELOPMENTS
Buyer agrees to waive membership initiation fees to PRC for new homebuyers
in Xxxxxxx developments provided the new homebuyer joins PRC within 60 days
after the purchase of the new home.
SECTION NINE
RECORDS AND THE LIKE
All on site records, customers' lists, correspondence, all files and
advertising materials, and data relating to PRC are included in the sale. Seller
will retain original invoices for PRC related business transacted before the
date of closing. Buyer will have the right to inspect these invoices as it
reasonably relates to the conduct of Buyer's business.
SECTION TEN
ARBITRATION
All disputes arising under this Agreement or related to this sale (other
than claims in equity) shall be resolved by arbitration in accordance with the
Commercial Arbitration Rules of the American Arbitration Association.
Arbitration shall be by a single arbitrator experienced in the matters at issue
and selected by the Seller and Buyer in accordance with the Commercial
Arbitration Rules of the American Arbitration Association. The arbitration shall
be held in such place in Augusta, Georgia, as may be specified by the arbitrator
(or any place agreed to by the Seller, the Buyer and the arbitrator). The
decision of the arbitrator shall be final and binding as to any matters
submitted under this Agreement; provided, however, if necessary, such decision
and satisfaction procedure may be enforced by either the Seller or the Buyer in
any court of record having jurisdiction over the subject matter or over any of
the parties to this Agreement. All costs and expenses incurred in connection
with any such arbitration proceeding (including reasonable attorneys fees) shall
be borne by the party against which the decision is rendered, or, if no decision
is rendered, such costs and expenses shall be borne equally by the Seller as one
party and the Buyer as the other party. If the arbitrator's decision is a
compromise, the determination of which party or parties bears the costs and
expenses incurred in connection with any such arbitration proceeding shall be
made by the arbitrator on the basis of the arbitrator's assessment of the
relative merits of the parties' positions.
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SECTION ELEVEN
CONTINUATION OF BUSINESS RELATIONSHIP BEYOND AGREEMENTS
The parties recognize that in making this agreement the compatibility of
the organizations. It is the intent of both organizations that the business
relationship as formally outlined in the above agreement will continue beyond
the expiration of any agreements.
SECTION TWELVE
ADDITIONAL INDEBTEDNESS
The Buyer agrees not to incur additional indebtedness against the
Petersburg Racquet Club real estate and personal property assets than what is
set forth in Section Four of the Agreement, which is a total of $705,000.00,
without first obtaining the express written consent of Seller.
SECTION THIRTEEN
WOODED AREA BETWEEN LOWER HARD COURTS AND THE PASS
Seller agrees to maintain a natural screening buffer between The Pass and
the lower hard courts for as long as Seller owns that property. In the event
Seller sells this property Buyer shall have the first right of refusal to
purchase this property at the offered contractual price.
SECTION FOURTEEN
REPRESENTATIONS OF SELLER
Seller shall provide to Buyer, at Seller's expense prior to closing, a plat
of the PRC real estate. Seller represents to Buyer that:
A) Seller has marketable fee simple title to the PRC real estate subject only
to the Encumbrances. To Seller's knowledge there are no easements affecting
the PRC real estate which interfere with PRC's present operation.
B) The Assets will be maintained in at least as good a working order and
condition as of the date of this Agreement, normal wear and tear excepted.
C) To Seller's knowledge, the PRC real estate is properly zoned for its
present use.
D) Seller has no knowledge of (i) any condemnation proceedings having been
instituted or threatened against the PRC real estate or any portion
thereof, and (ii) pending public improvements in , about or outside the PRC
real estate which will in any manner affect access to the PRC real estate.
E) To the best of its knowledge, Seller has received no notice of any claim of
violation of any ordinance, rule, or regulation of any government with
jurisdiction, or any agency, body or subdivision thereof, affecting the
condition or operation of PRC.
F) To the best of its knowledge, Seller believes the PRC real estate has been
constructed and/or maintained without the use of asbestos or PCB's or other
hazardous substances, and no governmental authority has notified Seller of
the need to take corrective action regarding elimination or control of such
hazardous or dangerous substances on or about the PRC real estate.
G) To the best of its knowledge, Seller believes the PRC real estate is not
located in the 100 year flood plain; has adequate drainage and water run
off facilities; the parking areas are free from significant standing water
after a rainfall; and no fees, connection charges or
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assessments are due or pending for the installation or operation of any
drainage, or water run off facilities related thereto.
H) To the best of its knowledge, Seller believes there are no structural
defects in any of the PRC improvements, including without limitation, any
structural defects in the foundations, exterior walls, and roofs.
I) To the best of its knowledge, Seller believes no portion of the PRC real
estate is affected by any special assessments, whether or not a lien
thereon, and there is no proceeding pending as of the date hereof for the
increase of the assessed valuation of any portion of the PRC real estate.
J) Each party executing and delivering this Agreement and all documents to be
executed and delivered on behalf of Seller in regard to the consummation of
the transaction contemplated hereby has due and proper authority to execute
and deliver same.
SECTION FIFTEEN
BINDING EFFECT
The parties agree that this Agreement shall be governed by, construed and
enforced in accordance with the laws of the State of Georgia.
Seller shall have the right upon reasonable notification, to review records
material to performance under this Agreement.
The parties agree that the failure of either party to insist upon strict
compliance with any of the provisions of this contract shall not be considered
to be a waiver of any subsequent default of the same or similar nature.
The parties agree that in the event any provisions have been deemed invalid
or unenforceable for any reason, all other provisions shall nevertheless remain
in full force and effect.
The parties agree that this Agreement will bind and inure to their heirs,
executors, administrators, successors, and assigns. Such assignment will not
relieve Buyer from personal obligation under the terms of this Agreement.
The parties agree that this Agreement shall be executed in triplicate and
each document shall be considered an original.
In witness whereof, the parties have executed this agreement on the 16th
day of December 1997.
Witness SELLER: Xxxxxxx & Co., Inc.
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Xxxx X. Xxxxxxx
As it's President
BUYER: Xxxxx X. Xxxxx
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NOTARY PUBLIC, Richmond County, Georgia
My Commission Expires:
