ASSET PURCHASE AGREEMENT
BY AND BETWEEN
COASTAL KIDDIE COLLEGE, INC.
AND
PHOENIX PRESCHOOL EDUCATION CENTERS, INC.
ASSET PURCHASE AGREEMENT dated as of the day of June 1996, by and among
Coastal Kiddie College, Inc., a corporation formed under the laws of the State
of North Carolina, whose mailing address is 000 Xxxx X. Xxxxx Xxxxx, Xxxxxxxxx,
Xxxxx Xxxxxxxx (hereinafter sometimes referred to as the "Company") and Phoenix
Preschool Education Centers, Inc., a corporation formed under the laws of the
State of Delaware, whose address is 000 Xxxx 00xx Xxxxxx, 00xx Xxxxx, Xxx Xxxx,
Xxx Xxxx (hereinafter sometimes referred to as the "Purchaser").
WHEREAS the Company is engaged in the business of providing day care
services to children from age of infancy through age five (5) at four (4)
locations details of which is indicated and incorporated herein, listed in
Exhibit "A" (hereinafter sometimes referred to as the "Business");
WHEREAS in connection with the operation of the Business, the Company
owns certain assets, including, but not limited to, machinery, equipment,
furniture, fixtures, vehicles, inventories and supplies;
WHEREAS the Company desires to sell to the Purchaser and the Purchaser
desires to purchase from the Company certain assets necessary for the operation
of the Business, upon the terms and subject to the conditions set forth herein;
and
NOW, THEREFORE, in consideration of the promises and of the mutual
agreements and covenants hereinafter set forth, the Company and the Purchaser
hereby agree as follows:
ARTICLE I
Definitions
SECTION 1.01. Certain Defined Terms. As used in this Agreement, the
following terms shall have the following meanings (such definitions to be
equally applicable to both the singular and plural forms of the terms defined):
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"Ancillary Agreements" means the other agreements, documents and
instruments to be executed and delivered by the Purchaser or the Company,
pursuant hereto, including, without limitation, the Xxxx of Sale and Restrictive
Covenant.
"Assumed Liabilities" means, and shall consist only of, the following:
(a) all Liabilities arising out of or accruing from ownership,
possession or use of the Transferred Assets or operation of the Business from
and after the Closing Date; provided, however, that in no event shall the term
"Assumed Liabilities" include any Liabilities for Taxes of the Company of any of
the foregoing that are on, based on, or imposed with respect to gross, adjusted
gross or net income, or are alternative or add-on minimum Taxes, franchise
Taxes, sales Taxes, payroll Taxes, similar Taxes or contingent liabilities for
any suit for personnel injury instituted in a court of competent jurisdiction.
"Xxxx of Sale" means the xxxx of sale and assignment, providing for,
among other things, the transfer of the Transferred Assets by the Company as the
case may be, to the Purchaser.
"Business Day" means any day other than a day on which banks in New
York are authorized or required to be closed.
"Encumbrance" means any and all liens, security interests,
encumbrances, mortgages, pledges, restrictions, charges, instruments, licenses,
encroachments, options, rights-of-recovery, judgments, orders and decrees of any
court of governmental entity, interests, product, environmental, Tax and other
liabilities and claims, in each case, of any kind or nature, whether secured or
unsecured, filed or unfiled, scheduled or unscheduled, noticed or unnoticed,
recorded or unrecorded, contingent or non-contingent, liquidated or
unliquidated, matured or unmatured, known or unknown.
"Excluded Assets" means all the assets of the Company not included in
the Transferred Assets, including, without limitation, all of the following:
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(a) all the cash on hand, deposits in bank accounts and marketable
securities;
(b) all the Receivables and prepaid expenses;
(c) all Actions, claims and contracts of the Company not assigned to
the Purchaser;
(d) all rights, title and interest in any refunds and credits for
prepaid amounts from Governmental Authorities with respect to Taxes that are the
responsibility of, and have been paid by, the Company under the terms of this
Agreement or prior to signing this Agreement;
(e) all rights, title and interests of the Company to and under this
Agreement and the Ancillary Agreements.
"Governmental Authority" means any United States Federal, state or
local or any foreign government, governmental commission, court, tribunal or
arbitrating body.
"Governmental Order" means any order, writ, judgment, injunction,
decree, stipulation, determination or award entered by or with any Governmental
Authority.
"Inventory" means all inventory, merchandise and goods held for resale.
"Liabilities" means any and all debts, liabilities, losses, claims,
damages, costs expenses, interest, awards, judgments, penalties and obligations,
whether accrued or fixed, absolute or contingent, mature or unmatured,
determined or determinable, including, without limitation, those arising under
any law, rule, regulation or Action of any Governmental Authority and those
arising under any contract, commitment or undertaking.
"Person" means any individual, partnership, firm, corporation,
association, trust, unincorporated organization or other entity, as well as any
syndicate or group that would be deemed to be a person under Section 13(d)(3) of
the Securities Exchange Act of 1934, as amended.
"Receivables" means any and all accounts receivable, notes and other
amounts receivable owed to the Company from third parties, including, without
limitation, third-party credit card
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companies, state and federal agencies, customers, vendors and employees, arising
from the Company's conduct of the Business, together with any unpaid financing
charges accrued thereon, including, without limitation, all deposits and
prepayments made by the Company.
"Retained Liabilities" means all Liabilities of the Company other than
the Assumed Liabilities, including, without limitation, the following:
(a) any litigation or claims with respect to any of the Transferred
Assets or the operation of the Business arising or accrued prior to the Closing
Date;
(b) except as set forth in Section 5.04, all Liabilities of the
Company;
(c) Liabilities for any Taxes imposed on the Transferred Assets that
are attributable to any period or portion thereof ending on or prior to the
Closing Date;
(d) any Liabilities arising or accrued with respect to ownership,
possession or use of any of the Transferred Assets or operation of the Business
prior to the Closing Date including all accounts payable of the Company as of
the Closing Date; and
"Tax" or "Taxes" means any and all taxes, imposts, duties, levies,
charges, withholdings, fees or excises imposed by any Governmental Authority or
instrumentality and any penalties or interest thereon, including, without
limitation, any gross, adjusted gross or net income tax, alternative or add-on
minimum tax, franchise, sales tax, employment-related tax (including, without
limitation, employee withholding, employment, social security, workers'
compensation, unemployment compensation and employer payroll taxes), or real or
personal property tax, together with any and all interest, penalties, additions
to tax or additional amounts imposed with respect to any of the foregoing.
"Transferred Assets" means any and all of the following:
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(a) all of the Company's rights and interests in and to the vehicles
all of which are owned by the Company (not leased) and are free and clear of
encumbrances, a list of said vehicles is attached hereto as Exhibit "B";
(b) all of the Company's rights, title and interest in the furnishings,
furniture, office supplies, signs, machinery, equipment, and all other tangible
assets and properties, real, personal or mixed, of every kind and description
physically located at or used by the Business, not specifically excluded, owned
by the Company;
(c) all rights, title and interest to the client list, including names,
address, telephone numbers and fees charged by the Business;
(d) all rights, title and interest in the existing telephone numbers
for the Business;
(e) all rights, title and interest in the names "Coastal Kiddie
College", "Coastal Kiddie College Early Learning Center", and any variations
thereof currently used by the Business for a period of ten (10) years from the
Closing Date;
(f) computer software and licenses presently used or owned by the
Business; and
(g) all of the assets listed in Exhibit D attached hereto.
ARTICLE II
Purchase and Sale
SECTION 2.01 Purchase and Sale; Assumption of Liabilities.
(a) On the terms and subject to the conditions set forth in this
Agreement, on the Closing Date, the Company shall sell, assign, transfer, convey
and deliver to the Purchaser the Transferred Assets, free and clear of all
liabilities, claims, duties, obligations and Encumbrances other than the Assumed
Liabilities, and the Purchaser shall purchase from the Company the Transferred
Assets and assume the Assumed Liabilities.
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(b) Except for the Assumed Liabilities or as expressly referred to in
any instrument of conveyance or assignments executed and delivered pursuant to
this Agreement, the Purchaser shall not assume or otherwise be responsible to
third parties for any Liabilities of the Company, or any Liabilities relating to
the Transferred Assets (including, but not limited to, the Retained
Liabilities).
SECTION 2.02
(a) Purchase Price. The aggregate consideration to be rendered for the
Transferred Assets which is based upon past performances and future exceptions
of the Business shall be three hundred sixty five thousand ($365,000.00) dollars
(the "Purchase Price").
(b) The Purchase Price is payable as follows:
(i) $115,000 to be paid at closing, ($10,000.00 of which shall
be deposited into an escrow account, to be returned to the Purchaser in the
event this transactions is terminated for any reason and not to be interpreted
as liquidated damages);
(ii) A note executed by the Purchaser to the Company in the
amount of $250,000.00 providing for payments to commence ninety (90) days from
the Closing Date and to provide for thirty two (32) equal payments of principal
with interest on the unpaid principal balance, paid quarterly until fully paid.
Interest will be calculated at an annual rate of eight (8%) percent.
(c) The Purchase Price is allocated as follows:
(i) Furniture and fixtures $ 40,000.00
(ii) Vehicles 50,000.00
(iii) Playground equipment 40,000.00
(iv) Equipment 60,000.00
(v) Inventory 15,000.00
(vi) Leasehold improvements 90,000.00
(vii) Customer list 20,000.00
(viii) Restrictive Covenant 50,000.00
-----------
Total $365,000.00
===========
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(c) The Purchase Price shall also include the services of Mr. Xxxxx
Xxxxx to train and help manage the Business and assist in locating future
businesses for the Purchaser to acquire subsequent to the Closing Date for a
period of three (3) months, for an average of five (5) hours per week, with the
actual amount of hours to vary on a week by week basis. Mr. Xxxxx Xxxxx will not
be entitled to any compensation for these services.
SECTION 2.03 Closing.
(a) The sale and purchase of the Transferred Assets and the assumption
of the Assumed Liabilities contemplated hereby shall take place at a closing
(the "Closing"), on or before July 15, 1996, (the "Closing Date").
(b) Notwithstanding the foregoing, the Closing may be held at a place
or at such other time or on such other date as the Company and the Purchaser
shall mutually agree upon in writing.
SECTION 2.04 Closing Deliveries.
(a) At the Closing the Company shall deliver, or cause to be delivered,
to the Purchaser the following:
(i) a Xxxx of Sale;
(ii) Leases for all of the locations of the Business. The
Leases will provide for an annual rent not to exceed $110,000.00 for year one of
the lease term, $120,000.00 for year two of the lease term, $140,000.000 for
year three of the lease term, $147,000.00 per year for years four and five of
the lease term and $150,000.00 per year for years six through ten of the lease
term. Additionally, the Leases will contain three options to renew the Leases,
at the election of the
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Purchaser, each for five year increments at an annual rental cost of $157,500.00
per year for the first five year option, $165,375.00 per year for the second
five year option and $173,643.75 per year for the third and final five year
option. All of said leases shall contain a Right of First Refusal for the
Purchaser to meet any offer for both the amount of consideration and terms of
the offer for sale of any or all of the leased property;
(iii) a Restrictive Covenant for a period of ten (10) years
and a radius of fifty (50) miles from the Business, executed by the Company, Mr.
Xxxxx Xxxxx and Xxx. Xxxxx Xxxxx;
(iv) Motor Vehicle Title to all of the vehicles listed in
Exhibit B;
(v) Clear title to all of the Transferred Assets;
(vi) such other instruments as may be reasonably requested by
the Purchaser to transfer the Transferred Assets to the Purchaser or evidence
such transfers in the public records.
(b) At the Closing, the Purchaser shall deliver to the Company the
following:
(i) a note for the balance of the Purchase Price;
(ii) any such other instruments as may be reasonably requested
by the Company.
ARTICLE III
Representations and Warranties of the Company
As an inducement to the Purchaser to enter into this Agreement, the
Company represents and warrants to the Purchaser as follows:
SECTION 3.01. Authority of the Company. The execution and delivery of
this Agreement and the Ancillary Agreements by the Company, the performance by
them of their obligations hereunder and thereunder and the consummation of the
transactions contemplated hereby and thereby have been duly authorized by all
requisite action on the part of the Company. This Agreement has been duly
executed and delivered by the Company and upon its execution and
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delivery the Ancillary Agreements will be, duly executed and delivered by the
Company, and (assuming due authorization, execution and delivery by the
Purchaser) this Agreement constitutes, and, upon their execution, the Ancillary
Agreements will constitute, legal, valid and binding obligations of the Company,
enforceable against the Company in accordance with their terms.
SECTION 3.02 No Conflict. The execution, delivery and performance of
this Agreement by the Company, and each of the Ancillary Agreements by the
Company, as the case may be, does not and will not (a) violate or conflict with
any statute, ordinance, law, rule, regulation or Governmental Order applicable
to the Company or the Transferred Assets, or (b) result in any breach of,
constitute a default (or event which with the giving of notice or lapse of time,
or both, would become a default) or require any consent under, or give to others
any rights of termination, amendment (including, without limitation, the
termination or diminution of any right to extend or renew any term), revocation,
acceleration or cancellation of, or result in the creation of any Encumbrance on
the Transferred Assets pursuant to, any note, bond, mortgage, indenture,
contract, agreement, license, permit, or other instrument relating to the
Transferred Assets to which the Company is a party or by which any of them or
any of the Transferred Assets are bound or affected, except such conflicts,
violations, breaches or defaults with respect to clauses (a) and (b) above that,
individually or in the aggregate, would not materially adversely affect the
value of any of the Transferred Assets or the Purchaser's ability to operate the
Business subsequent to the Closing or the Company's ability to transfer the
Transferred Assets to the Purchaser.
SECTION 3.03 Consents and Approvals. The execution, delivery and
performance of this Agreement by the Company does not and will not, and the
execution, delivery and performance of the Ancillary Agreements by the Company,
as the case may be, will not, require any consent, approval, authorization or
other action by, or filing with or notification to, any Governmental Authority.
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SECTION 3.04 Inventory. The Company has good and marketable title to
the Inventory, all of which is located at the Business, free and clear of all
liens and Encumbrances and, following the consummation of the transactions
contemplated hereby, such title will be held by the Purchaser free and clear of
all Encumbrances.
SECTION 3.05 Brokers. Any amounts due to any broker, finder or
investment banker in connection with the transactions contemplated by this
Agreement, including Xx. Xxxx Xxxxxxxxx and The Institute For Small Business
Development, Inc., shall be paid solely by the Company. The Company agrees to
indemnify the Purchaser for any claims made by any such broker, finder or
investment banker against the Purchaser.
SECTION 3.06 Personal Property Lease. There are no personal property
leases for property or equipment used by the Company in connection with the
Business.
SECTION 3.07 Liabilities. Except for Taxes not yet due or payable, the
Company has no material liabilities due to any creditor or vendor. Any liability
that does exist will be fully satisfied, evidence of which will be supplied to
the Purchaser on or before the Closing Date. In the event a franchise or
corporate search should reveal any liability of the Company, Purchaser shall
have the right to set-off said liability against any payments due Company under
the note referenced in Section 2.04 of this Agreement. Company shall be
responsible to pay to any vendor the amount due for inventory or supplies
ordered by the Company prior to the Closing Date not received by the Closing
Date.
SECTION 3.08 Maintenance of Books and Records. The books and records of
the Company are complete and accurate in all material respects. All copies,
information, representation (oral and in writing) were true and correct on the
date made and continue to be true and correct as of the Closing Date.
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SECTION 3.09 Taxes. All federal, state and local income, ad valorem,
excise, sales, use, franchise, payroll, personal property, premium and other
Taxes and assessments of any kind, including any penalty payments and interest
thereon which have become due and payable by the Company have been properly
computed, duly reported, fully paid and discharged. There are no unpaid taxes
which are or could become a lien on the properties or assets of the Company,
including the Transferred Assets, except for current taxes not yet due and
payable. There are no pending assessments or proposed adjustments or audits
presently in progress with respect to such returns.
SECTION 3.10 Disclosed information. The Company represents and warrants
that it has disclosed, in writing, to the Purchaser any and all factors known or
that should have been known by it's officers that would have an adverse affect
on the future profitability of the Business subsequent to the Closing date. This
includes factors that are both regulatory or otherwise.
SECTION 3.11 Current Repairs To Be Made By The Company. The Company
agrees to make the following repairs at it's own costs, independent of SECTION
3.10 herein, prior to the Closing Date:
(i) repair the parking lot at the Bryn Mawr Building; and
(ii) replace the required kitchen equipment (stove and
refrigerator) in each of the buildings to meet NSF code that would be
satisfactory for all building, fire, sanitary and day care authorities for the
Purchaser.
ARTICLE IV
Representations and Warranties of the Purchaser
As an inducement to the Company to enter into this Agreement, the
Purchaser represents and warrants to the Company as follows:
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SECTION 4.01 Authority of the Purchaser. The execution and delivery by
the Purchaser of this Agreement and the Ancillary Agreement to which it is a
party, the performance by it of its obligations hereunder and thereunder and the
consummation of the transactions contemplated hereby and thereby have been duly
authorized by all requisite action on the part of the Purchaser. This Agreement
has been duly executed and delivered by the Purchaser, and upon their execution
the Ancillary Agreements to which it is a party will be duly executed and
delivered by the Purchaser, and (assuming due authorization, execution and
delivery by the Company as the case may be) this Agreement constitutes, and upon
their execution and Ancillary Agreements to which it is a part will constitute,
legal valid and binding obligations of the Purchaser enforceable against the
Purchaser in accordance with their terms.
SECTION 4.02 No Conflict. The execution, delivery and performance by
the Purchaser of this Agreement and the Ancillary Agreements to which it is a
party do not and will not conflict with or violate any statute ordinance, law,
rule, regulation or Governmental Order applicable to the Purchaser.
SECTION 4.03 Consents and Approvals. The execution, delivery and
performance of this Agreement by the Purchaser does not and will not, and the
execution, delivery and performance of the Ancillary Agreements to which it is a
party by the Purchaser will not, require any consent, approval, authorization or
other action by, or filing with or notification to, any Governmental Authority.
SECTION 4.04 Litigation. No action is pending against the Purchaser
which seeks to delay or prevent the consummation of the transactions
contemplated hereby or which may adversely affect or restrict the Purchaser's
ability to consummate the transactions contemplated hereby.
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ARTICLE V
Additional Agreements
SECTION 5.01 Conduct of Business Prior to the Closing.
(a) Between the date of this Agreement and the Closing Date, unless the
Company shall have obtained the Purchaser's prior written consent, the Company
shall use best efforts to continue in full force and effect without material
modification all existing policies or binders of insurance presently maintained
in respect of the Business.
(b) Except as contemplated by this Agreement, between the date of this
Agreement and the Closing Date the Company shall not directly or indirectly, do,
or propose or agree to do any of the following, without the prior written
consent of the Purchaser:
(i) increase the compensation payable or to become payable to
any of the employees or agents engaged in the operation of the Business.
(ii) sell, transfer, assign, pledge, encumber, lease,
sublease, license or otherwise dispose or any of the Transferred Assets, other
than the normal selling of Inventory in the ordinary course;
(iii) fail to defend, initiate or proceed with any material
matter before any Governmental Authority that is necessary to protect the
Transferred Assets;
(iv) fail to (A) maintain the Transferred Assets in their
condition as of the date hereof (ordinary wear and tear excepted), (B) maintain
insurance for the Transferred Assets in effect on the date of this Agreement or
(C) in the event of a casualty, loss or damage to any of the Transferred Assets
prior to the Closing Date either repair or replace such damaged assets with an
item of equal value and quality or at the option of the Purchaser, transfer the
proceeds of any insurance payable with respect to such casualty, loss or damage,
to the Purchaser.
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SECTION 5.02 Regulatory and other Authorizations. Each party hereto
will use its best efforts to obtain all authorizations, consents, orders and
approvals of all Governmental Authorities and officials that may be or become
necessary for its execution and delivery of, and the performance of its
obligations pursuant to, this Agreement or the Ancillary Agreements and will
cooperate fully with each other party in promptly seeking to obtain all such
authorizations, consents, orders and approvals. The parties hereto will not take
any action that will have the effect of delaying, impairing or impeding the
receipt of any required approvals.
SECTION 5.03 Notice of Developments. Prior to the Closing, each party
shall (a) give prompt notice to the other of any material development affecting
the ability of the parties to consummate the transactions contemplated by this
Agreement and the Ancillary Agreements and (b) promptly notify the other party
in writing of any events, facts and occurrences arising subsequent to the date
hereof which could reasonably be expected to result in any material breach of
any representation, warrantee or agreement covenant contained in this Agreement.
SECTION 5.04 Conveyance Taxes. The Purchaser shall be liable for and
shall hold the Company harmless against any sales or use taxes that become
payable in connection with any of the transactions contemplated hereby;
provided, however, that the Purchaser shall not be liable under any
circumstances for any Taxes of the Company that are on or based upon the
Company's gross or net income and the Company will indemnify the Purchaser from
all losses, damages, liabilities and costs (including attorney's fees) relating
thereto. The Parties hereto shall reasonably cooperate in preparing and filing
all returns, reports and forms relative to all such Taxes and in resolving any
disputes or audits with respect to any taxable periods relating to such taxes.
SECTION 5.05 Further Action. Each of the parties hereto shall execute
such documents (including, without limitation, the Ancillary Agreements) and
other papers and take such further
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actions as may be reasonably required or desirable to carry out the provisions
hereof and the transactions contemplated hereby or, at or after the Closing, to
evidence the consummation of the transactions consummated pursuant to this
Agreement. Upon the terms and subject to the conditions hereof, each of the
parties hereto shall use its best efforts to take, or cause to be taken, all
actions and to do or cause to be done, all other things necessary proper or
advisable to consummate and make effective as promptly as practicable the
transactions contemplated by this Agreement and to obtain in a timely manner all
necessary waivers, consents and approvals and to effect all necessary
registrations and filings.
SECTION 5.06 Cash in Business. The Company shall be entitled to all the
cash in the Business at the close of business on the day preceding the Closing
Date.
SECTION 5.07 Transferred Employees. On or prior to the Closing Date,
the Company shall pay or cause to be paid (or establish arrangements for prompt
payment acceptable to the Purchaser in its sole discretion) all base salary,
overtime, bonuses, commissions, benefits and other compensation due to the
existing employees, agents and consultants of the Company and payroll and
similar Taxes thereon for all periods up to and including the date immediately
preceding the Closing Date. Immediately prior to the Closing, the Company shall
terminate all of the employees of the Business and as of the Closing the
Purchaser may offer at-will employment to one or all of such employees
("Transferred Employees"). As of the Closing Date the Purchaser shall be
responsible to the Transferred Employees for all base salary overtime, bonuses,
commissions, benefits and payroll and similar Taxes thereon for all periods
beginning on or after the Closing Date.
SECTION 5.08 Necessary Modifications To Buildings. The Company shall be
responsible to make any and all modifications and repairs (in excess of five
hundred dollars ($500.00) per center) to the locations of the Business that are
required to be made by any licensing agency or
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governmental authority in order to be certifiable as licensed day care centers
for the capacity presently authorized as indicated in Exhibit A.
SECTION 5.09 Re-determination of Purchase Price. The parties hereto
agree that the Purchase Price was determined based upon the current earnings of
the Business and the reasonable expectation of the future earnings of the
Business. In the event any change shall occur, whether regulatory or otherwise,
prior to the Closing Date that materially adversely affects the potential income
of the Business, the parties hereto agree to re-negotiate the Purchase Price in
good faith. Any modifications to the Purchase Price shall be made by a decrease
in the note payable to the Company or any subsequent holder or holder in due
course (as defined in the Uniform Commercial Code). This modification shall not
alter or amend any other provision of the Agreement or the Ancillary Agreements,
nor the rights of the parties thereunder.
SECTION 5.10 Environmental Matters. (i) There are no outstanding
allegations that the Company is in violation of any federal, state or local law,
regulation, rule, order, decree, ordinance or permit relating to pollution
control or environmental matters, (ii) there are no administrative or judicial
proceedings or actions pending or threatened against the Company pursuant to
such laws, regulations, rules, orders, decrees, ordinances or permits and (iii)
there are no claims outstanding against the Company which are asserted pursuant
to such laws, regulations, rules, orders, decrees, ordinances or permits. The
Company has never been, and currently is not, in violation of any Federal, state
or local law, regulation, rule, order, decree, ordinance or permit relating to
pollution control or environmental matters.
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ARTICLE VI
Conditions to Closing
SECTION 6.01 Conditions to Obligations of the Company. The obligations
of the Company to consummate the transactions contemplated by this Agreement
shall be subject to the fulfillment, at or prior to the Closing Date of each of
the following conditions:
(i) Representations and Warranties. The representations and
warranties of the Purchaser contained in this Agreement shall have been true and
correct in all material respects when made (other than such representations and
warranties as are made as of another specified date) and shall be true and
correct in all material respects as of the Closing Date.
(ii) Covenants. The covenants and agreements contained in this
Agreement to be complied with by the Purchaser on or before the Closing Date
shall have been complied with in all material respects.
(iii) No Order, Proceeding or Litigation. No Governmental
Authority shall have enacted, issued, promulgated, enforced or entered any
Governmental Order (whether temporary, preliminary or permanent) which is in
effect and has the effect of making the transactions contemplated hereby illegal
or otherwise prohibiting the consummation of the transactions contemplated by
this Agreement.
SECTION 6.02 Conditions to Obligations of the Purchaser. The
obligations of the Purchaser to consummate the transactions contemplated hereby
shall be subject to the fulfillment, at or prior to the Closing, of each of the
following conditions:
(i) Representations and Warranties. The representations and
warranties of the Company contained in this Agreement and in all of the
documents and financial records provided by the Company shall have been true and
correct in all material respects when made (other than such
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representations and warranties as are made as of another specified date) and
shall be true and correct in all material respects as of the Closing Date.
Included in, but not limited to, the financial documents that the Company
warrants to be true and correct are the documents attached hereto as Exhibit C.
This representation shall survive the Closing Date.
(ii) Covenants. All the covenants and agreements contained in
this Agreement to be complied with by the Company on or before the Closing Date
shall have been complied with.
(iii) No Order, Proceeding or Litigation. No Governmental
Authority shall have enacted, issued, promulgated, enforced or entered any
Governmental Order (whether temporary, preliminary or permanent) which is in
effect and has the effect of making the transactions contemplated hereby illegal
or otherwise prohibiting the consummation of the transactions contemplated by
this Agreement.
(iv) Liabilities. The Company shall have no material
liabilities, except for liabilities for Taxes not yet due and payable and
vendors in the ordinary course of business which will be fully paid and
satisfied by the Closing Date and evidence of which will be supplied to the
Purchaser. Any and all Encumbrances relating to the Transferred Assets shall be
removed by said date.
ARTICLE VII
Termination
SECTION 7.01 Termination. This Agreement may be terminated at any time
prior to the Closing:
(a) by either the Company or the Purchaser in the event of a material
breach or misrepresentation under this Agreement by the other party that is not
cured or is not in the progress of being cured within ten days after written
notice thereof is given by the party alleging such material
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breach or misrepresentation, in either case must be cured within fifteen days
after written notice;
(b) by the mutual written consent of the Company and the Purchaser;
(c) At the sole election of the Purchaser, in the event of any change
in law either within the State of North Carolina or under Federal Law or other
change relating to the Business that adversely affects the operation of Day Care
Centers or affect the operation of the Business after the Closing Date.
SECTION 7.02 Effect of Termination. In the event of the termination of
this Agreement as provided in Section 7.01(b) and (c), this Agreement shall
forthwith become void and there shall be no liability on the part of any party
hereto. Termination by either party in accordance with Section 7.01 (a) & (c)
shall be effective immediately upon the receipt of notice thereof and Section
7.01 (b) by a statement signed by both parties indicating mutual consent.
ARTICLE VIII
General Provisions
SECTION 8.01 Expenses. Except as otherwise provided in this Agreement,
all costs and expenses, including without limitation, fees and disbursements of
counsel, financial advisors and accountants, incurred in connection with this
Agreement and the transactions contemplated hereby shall be paid by the party
incurring such costs and expenses whether or not the Closing shall have
occurred.
SECTION 8.02 Notices. All notices and other communications given or
made pursuant hereto shall be in writing and shall be deemed to have been duly
given or made as of the date delivered if delivered personally or by telecopy
(during regular business hours of Monday through Friday, 9 a.m. through 5 p.m.
excluding legal holidays) or five days after being mailed by registered, Federal
Express, U.S. Postal Service Overnight Mail or certified mail (postage prepaid,
return receipt
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requested) to the parties at the following addresses (or at such other address
for a party as shall be specified by like notice, except that notices of changes
of address shall be effective upon receipt):
(a) if to the Company:
Xx. Xxxxx X. Xxxxx
000 Xxxx X. Xxxxx Xxxxx
Xxxxxxxxx, Xxxxx Xxxxxxxx 00000
Telephone: (000) 000-0000
Telecopy: ( ) -
With a copy to:
Xxxx X. Xxxxxxx, Esq.
X.X. Xxx 000
000 Xxx Xxxxxx Xxxxxx
Xxxxxxxxxxxx, Xxxxx Xxxxxxxx 00000-0000
Telephone: (000) 000-0000
Telecopy: (000) 000-0000
(b) if to the Purchaser:
Xx. Xxxxxxx X. Xxxxxxx
000 Xxxx 00xx Xxxxxx 00xx Xxxxx
Xxx Xxxx, Xxx Xxxx 00000
Telephone: (000) 000-0000
Telecopy: (000) 000-0000
With a copy to:
Xxxxx X. Xxxxxxx, Esq.
00 Xxxx Xxxxxx
Xxxxxxxxxx, Xxx Xxxxxx 00000
Telephone: (000) 000-0000
Telecopy: (000) 000-0000
SECTION 8.03 Amendment. This Agreement may not be amended, modified,
terminated or discharged except by an instrument in writing signed by the
parties hereto.
SECTION 8.04 Waiver. At the time prior to any Closing, either the
Company or the Purchaser hereto may (a) extend the time for the performance of
any of the obligations or other acts
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of the other party hereto (b) waive any inaccuracies in the representations and
warranties made by the other party and contained herein or in any document
delivered by the other party pursuant hereto and (c) waive compliance by the
other party hereto with any of the agreements or conditions contained herein.
Any such extension or waiver shall be valid if set forth in an instrument in
writing signed by the party to be bound thereby.
SECTION 8.05 Headings. The headings contained in this agreement are for
reference purposes only and shall not effect in any way the meaning or
interpretation of this Agreement.
SECTION 8.06 Severability. If any term or other provision of this
Agreement is invalid, illegal or incapable of being enforced by any rule of
North Carolina or Federal law or public policy, all other conditions and
provisions of this Agreement shall nevertheless remain in full force and effect.
Upon such determination that any term or other provision is invalid, illegal or
incapable or being enforced, the parties hereto shall negotiate in good faith to
modify this Agreement so as to effect the original intent of the parties as
closely as possible in an acceptable manner to the end that transactions
contemplated hereby are consummated as originally contemplated to the greatest
extent possible.
SECTION 8.07 Entire Agreement. This Agreement constitutes the entire
agreement of the parties hereto with respect to the subject matter hereof and
supersede all prior agreements and undertakings, both written and oral, with
respect to the subject matter hereof.
SECTION 8.08 Assignments. This Agreement may not be assigned by
operation of law or otherwise without the express written consent of the other
parties hereto (which consent may be granted or withheld in the sole discretion
of such other parties).
SECTION 8.09 No Third-Party Beneficiaries. This Agreement is for the
sole benefit of the parties hereto and their permitted assigns and nothing
herein, expressed or implied, shall give or be
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construed to give to any person or entity, other that the parties hereto, and
Indemnitee and such assigns, any legal or equitable rights hereunder.
SECTION 8.10 Governing Law. This Agreement shall be governed by, and
construed in accordance with, the laws of the State of North Carolina.
SECTION 8.11 Counterparts. This Agreement maybe executed in one or more
counterparts, and by the different parties hereto in separate counterparts, each
of which when executed shall be deemed to be an original but all of which taken
together shall constitute one and the same agreement.
SECTION 8.12 Consent to Jurisdiction. Each of the parties hereto hereby
agree to the jurisdiction of the State court located within Onslow County, North
Carolina for the purposes of enforcing the other parties' rights under this
Agreement and consent that service of any and all process upon it may be made as
set forth in Section 8.02 hereof.
SECTION 8.13 Confidentiality. For purposes of this paragraph
"Confidential Information" shall mean all information, data and knowledge
(whether in the form of documents, know-how or otherwise) relating, directly or
indirectly, to any party which is disclosed to another party and which is not
publicly available. Each party shall keep the Confidential Information of the
other parties to any person except to such of its advisors who need to know for
the purposes of advising it on this proposed transaction. The provisions of this
Section shall not apply to any Confidential Information that is (i) or hereafter
becomes, in the public domain as a result of causes other than the acts or
omissions of the party hereto under the duty of confidentiality or (ii) required
by law to be disclosed. If the Closing does not occur, each party will promptly
return all documents containing Confidential Information furnished to it by any
other party.
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IN WITNESS WHEREOF, The Company and the Purchaser have caused this
Agreement to be executed as of the date first written above by their respective
officers thereunto duly authorized.
Witness: COASTAL KIDDIE COLLEGE, INC.
("Company")
By:
------------------------------- -------------------------------------
Xxxxx Xxxxx, President
------------------------------- -------------------------------------
XXXXX XXXXX, Individual
------------------------------- -------------------------------------
XXXXX XXXXX, Individual
PHOENIX PRESCHOOL EDUCATION
CENTERS, INC. ("Purchaser")
By:
------------------------------- -------------------------------------
Xxxxxxx X. Xxxxxxx, President
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