EXHIBIT 10.1
ASSET SALE AGREEMENT
AGREEMENT made this 26th day of June, 1996, by and among DIPLOMAT
AMBASSADOR, INC., a Delaware corporation with offices at 0000 Xxxx Xxxxxx, 0xx
Xxxxx, Xxxxxxxxxxxx, Xxxxxxxxxxxx 00000-0000 ("Purchaser"), WINDSOR OPTICAL,
INC., a Delaware corporation with offices at 000 Xxxxxxxxx Xxxxxx, Xxxxxx Xxxx,
Xxx Xxxxxx 00000 ("Seller"), and XXX XXXXXXX and XXXXXXX XXXXXXX, individuals
with offices at 000 Xxxxxxxxx Xxxxxx, Xxxxxx Xxxx, Xxx Xxxxxx 00000
(collectively, the "Principals").
W I T N E S S E T H:
WHEREAS, Seller is engaged in the optical business, including but not
limited to the design, manufacture, importing, and sale of eyewear (the
"Business"); and
WHEREAS, Seller desires to sell to Purchaser, and Purchaser desires to
purchase from Seller, certain of Seller's assets, as hereinafter set forth; and
WHEREAS, Purchaser is willing to assume certain liabilities of Seller as
specifically set forth herein;
NOW, THEREFORE, in consideration of the premises, and the mutual covenants
and agreements hereinafter set forth, the parties hereby agree as follows:
1. Sale of Assets. Seller hereby agrees to sell to Purchaser, and
Purchaser hereby agrees to purchase from Seller, all of the assets and
properties of Seller, of every kind and description, wherever located, as the
same shall exist on the date of the closing of the transactions contemplated by
this Agreement (the "Closing"), including without limitation all furniture,
fixtures, equipment, copying machines, telephones, facsimile machines,
typewriters, accounts receivable, inventory, investments, creative materials,
artwork, photography, brochures, rights in, to and under contracts, commitments,
and orders for the sale of goods, patents, trademarks, trade names, copyrights,
records, files, customer lists, telephone numbers, and good will. When used
herein, the term "Assets" shall mean the assets and properties of Seller to be
sold, conveyed, transferred, and delivered by Seller pursuant to this Agreement.
The Assets do not include real property owned by Seller, computer leases, or the
personal property of the Principals listed on Schedule 1 annexed hereto.
2. Purchase Price. The purchase price for the Assets shall be $550,000.00,
payable as follows:
(a) The sum of $100,000.00 shall be paid to Seller at the Closing, in one
of the following manners as directed by Seller:
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certified, cashier's or attorney trust account check, or wire transfer of
immediately available funds.
(b) The sum of $150,000.00 shall be paid, together with interest at the
rate of seven percent (7%) per annum, in thirty-six (36) equal monthly
installments of $5,654.23 each, commencing January 10, 1997. The obligation to
make such payments shall be evidenced by the promissory note of Purchaser
substantially in the form of Exhibit A annexed hereto.
(c) The sum of $300,000.00 shall be paid, together with interest at the
rate of seven percent (7%) per annum, in eighty-four (84) equal monthly
installments of $4,527.80 each, commencing July 20, 1996. The obligation to make
such payments shall be evidenced by the promissory note of Purchaser
substantially in the form of Exhibit B annexed hereto.
3. Seller Liabilities.
(a) Purchaser hereby agrees to assume at the time of the Closing Seller's
obligation to pay, perform, and discharge the following liabilities and
obligations of Seller, which are the sole and exclusive liabilities and
obligations of Seller being assumed by Purchaser:
(i) Subject to the conditions precedent set forth in Section 9(c), a
loan (the "UJB Loan") from United Jersey Bank ("UJB") to Seller, which had an
outstanding balance of principal and accrued interest (including outstanding
letters of credit) of $922,908.83 as of June 24, 1996; as is set forth in
Section 10(d), the payment in full of the UJB Loan by Purchaser is a condition
precedent to the obligation of Seller and the Principals to consummate the
transactions contemplated by this Agreement;
(ii) The accounts payable of Seller listed or referred to on
Schedule 4(r) hereto and additional accounts payable incurred by Seller after
May 31, 1996 in the ordinary course of business; provided, that Purchaser is
only assuming accounts payable incurred after such date, including accounts
payable incurred after the date of such Schedule, to the extent that such
accounts are fully offset by Assets (or a right to receive Assets) corresponding
to such accounts payable; and
(iii) The contracts and obligations of Seller listed on Schedule
3(a)(iii) hereto. Purchaser shall be required to pay over to Seller the benefit
received by Purchaser from any contract or obligation of Seller that is not
assumed Purchaser hereunder unless Purchaser performs Seller's obligation
thereunder.
(b) Except as set forth in Section 3(a), but subject to the
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other provisions of this Section 3, Purchaser shall not be obligated to pay any
debts or perform any obligations of Seller as they exist on the date of the
Closing. Seller shall convey the Assets to Purchaser free and clear of any and
all claims, liens, or encumbrances, other than liens securing the UJB Loan.
(c) Seller hereby agrees to indemnify Purchaser and hold it harmless from
and against any and all loss, cost, liability, or expense, including reasonable
attorneys' fees, incurred by Purchaser arising out of any claim made against
Purchaser that Seller failed to timely pay its debts or perform its obligations
as they exist on the date of the Closing.
(d) Purchaser hereby agrees to indemnify Seller and the Principals and
hold them harmless from and against any and all loss, cost, liability, or
expense, including reasonable attorneys' fees, incurred by Seller or the
Principals arising out of any claim made against them that Purchaser failed to
timely pay the debts and obligations specifically assumed by Purchaser under
this Agreement.
(e) In the event that any claim is made against Purchaser that Seller
failed to timely pay its debts or perform its obligations as they exist on the
date of the Closing, other than the debts and obligations specifically assumed
by Purchaser under Section 3(a), and Seller fails to satisfy such claim within
thirty (30) days after receipt of written notice thereof from Purchaser,
Purchaser shall have the option to deduct and withhold from the amounts next
payable under the promissory notes delivered at the Closing, or, if the unpaid
balance of such promissory notes is insufficient, from consulting fees next
payable under the consulting agreement described in Section 6(a), an amount
equal to the amount of such claim. The amount so withheld shall be paid to the
appropriate party within seven (7) business days after the creditor who made the
claim agrees that Purchaser shall have no liability with respect thereto.
Notwithstanding the foregoing, Purchaser shall not set off or claim damages for
any undisclosed liabilities of Seller until first (i) discussing with Xxxxxxx
Xxxxxxx whether Purchaser received a corresponding benefit related to such
undisclosed liability, and (ii) advising Xxxxxxx Xxxxxxx in writing of its
determination to claim a set off or damages, which claim may be made by
Purchaser even if Xxxxxxx Xxxxxxx disagrees with Purchaser's right to same.
4. Representations and Warranties of Seller and the Principals.
Seller and each of the Principals hereby jointly and severally represent
and warrant to Purchaser as follows:
(a) Organization, Power and Standing. Seller is a
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corporation duly organized, validly existing, and in good standing under the
laws of the State of Delaware, is duly qualified and in good standing in the
State of New Jersey and in each jurisdiction where such qualification is
necessary, and has the corporate power and authority to carry on its business as
it is now being conducted, to own, lease, and operate its properties and to
carry out the transactions contemplated by this Agreement.
(b) Capitalization. All issued and outstanding shares of the capital stock
of Seller are owned by the parties set forth in Schedule 4(b) hereto.
(c) Authorization. The execution, delivery, and performance of this
Agreement by Seller and the consummation of the transactions contemplated hereby
have been duly authorized by the Board of Directors and shareholders of Seller,
and no other corporate proceedings on the part of Seller are necessary to
authorize, approve and perform this Agreement or the transactions contemplated
hereby. This Agreement has been duly and validly executed and delivered by the
Principals and on behalf of Seller, and constitutes a valid and binding
obligation of Seller and the Principals enforceable in accordance with its
terms, except to the extent that enforceability may be limited by general
principles of equity or laws relating to creditors' rights generally.
(d) Freedom to Contract. The execution and delivery of this Agreement, and
the consummation of the transactions contemplated hereby, do not and will not
violate or conflict with the provisions of the Certificate of Incorporation or
By-laws of Seller, or the provisions of any note, indenture, security agreement,
lease, guaranty, or other instrument to which Seller or either of the Principals
is a party or by which any of them is bound, except the UJB Loan, or result in a
breach or violation by Seller or either of the Principals of the provisions of
any order, injunction, judgment, or decree of any court, governmental authority,
or regulatory agency. Except as set forth on Schedule 4(d), the execution and
delivery of this Agreement, and the consummation of the transactions
contemplated hereby (including the assignment to Purchaser of licenses to use
trademarks and trade names), will not require the consent, approval, or
authorization of any person or entity or governmental authority, other than
Xxxxxx Comic Publications, Inc., whose consent Seller represents will be
obtained within fourteen (14) days after the date of the Closing, and UJB.
(e) Ownership of Assets. Except for liens securing the UJB Loan and except
as set forth on Schedule 4(e), Seller has good and valid title to all of the
Assets, free and clear of all liens, mortgages, security interests, pledges,
claims, restrictions, and other encumbrances of any nature whatsoever,
including, without limitation, chattel mortgages, conditional
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sales contracts, collateral security agreements, and other title or interest
retention agreements.
(f) Compliance with Laws, Permits, and Licenses. Seller has at all times
in the past, and at all times from the date hereof through the date of the
Closing shall, comply in all material respects with all state and local laws,
regulations, orders, judgments, and decrees applicable to its property, assets,
and operations, obtain all permits, licenses, orders, and approvals of federal,
state, local, or foreign governmental and regulatory bodies that are required in
order to permit it to carry on the Business as presently conducted, and neither
Seller nor either of the Principals has received any notice of any violation of
any applicable law, regulation, order, judgment, or decree. Except as set forth
on Schedule 4(f), no license, permit, or approval of any governmental or
regulatory body ("Permit") is material or necessary for the conduct of the
Business. All Permits of Seller are set forth on Schedule 4(f), and all of such
Permits are in full force and effect, no material violations thereof have been
recorded, and no proceeding to revoke, suspend, or otherwise limit any such
Permit is pending, or, to the best of Seller's and the Principals' knowledge,
threatened.
(g) Litigation. There is no suit, action, arbitration, or legal,
administrative, or other proceeding, or governmental investigation, or tax audit
pending, or, to the knowledge of Seller and each of the Principals threatened,
against Seller or any of its properties or businesses; there is no suit, action,
arbitration, or legal, administrative, or other proceeding, or governmental
investigation, or tax audit pending, or, to the knowledge of each of the
Principals threatened, against either of the Principals, or any of their
properties or businesses, which would be likely to materially and adversely
affect the Business or the transactions contemplated hereby; and neither Seller
nor either of the Principals has any knowledge of any basis for any such suit,
action, arbitration or proceeding. There is no judgment, order, injunction, or
decree of any court, governmental authority, or regulatory agency to which
Seller or either of the Principals, or any of their properties or businesses, is
subject which is likely to have a material and adverse effect on the
transactions contemplated by this Agreement. Neither Seller nor either of the
Principals is in default under any order, license, or demand of any federal,
state, or municipal or other governmental agency or with respect to any order,
writ, injunction, or decree of any court.
(h) Tax Matters. Each of Seller and each of the Principals has duly filed
all required federal, state, and local tax returns, including without limitation
income tax returns, federal, state, and local business privilege and license tax
returns, and sales, use, and transfer tax returns (all such returns being true
and complete when filed), and has paid all
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taxes shown to be due thereby or which have become due as a result of a
subsequent assessment. Seller's business has never had its federal income tax
returns audited by the Internal Revenue Service, nor has it had a New Jersey
Sales Tax audit during the three (3) year period ending on the date of this
Agreement. Seller's New Jersey Sales Tax I.D. Number is 000-000-000.
(i) Condition of Assets. The Assets are in good condition and repair
(ordinary wear and tear excepted) and suitable for the uses for which they are
intended. To Seller's and Principals' knowledge, all of the Assets comply in all
material respects with all federal, state, and local health and other applicable
laws, ordinances, regulations, orders, and other requirement relating thereto
currently in effect. There are no defects or deficiencies in the operating
condition or state of repair of, or any other condition or state of facts
affecting, any of the Assets which materially adversely affect or which may be
reasonably expected to materially affect adversely their use or detract from
their value.
(j) Books and Records. All accounts, books, check registers, bank
statements, accounting records, ledgers and official and other records of
Seller are complete and correct in all material respects, there are no material
inaccuracies or discrepancies of any kind contained or reflected therein, and
they fairly present the financial position of Seller and are accurately
reflected in the financial statements furnished by Seller to Purchaser and
described in Section 4 (n). Seller does not have any of its records, systems,
controls, data or information recorded, stored, maintained, operated or
otherwise wholly or partly dependent upon or held by any means (including any
electronic, mechanical or photographic process, whether computerized or not)
that (including all means of access thereto and therefrom) are not under
Seller's exclusive ownership and direct (or, as to records held by Seller's
accountants and attorneys, indirect) control.
(k) Customers. Neither Seller nor either of the Principals has knowledge
of any termination, cancellation, or limitation of, or any material adverse
modification or change in the business relationship of Seller with, any customer
or group of customers. Schedule 4(k) sets forth a true and accurate list of all
customers of Seller who ordered goods from Seller during the twelve (12) month
period ended May 31, 1996.
(1) Suppliers. Neither Seller nor either of the Principals has any
knowledge of the interruption or threatened interruption of any major source of
supply necessary for the continuing conduct of the Business substantially in the
manner in which it has been conducted prior to the date hereof. Schedule 4(l)
set forth a true and complete list of all suppliers from which Seller
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purchased goods or services during the twelve (12) month period ended May 31,
1996.
(m) Union Activity; Labor Disputes. Seller is not a party to any labor or
collective bargaining agreement with any labor organization, group, or
association, nor is it a member of any organization, group, or association the
membership in which binds Seller with respect to its employee hiring or
termination policies. There is no union representing or purporting to represent
any of the employees of Seller. There are no labor strikes, disputes, slow
downs, work stoppages or other labor troubles or grievances pending or, to the
knowledge of Seller and the Principals, threatened against or involving Seller.
No unfair labor practice complaint before the National Labor Relations Board, no
discharge or grievance before the Equal Employment Opportunity Commission and no
complaint, charge or grievance of any nature before any similar or comparable
governmental authority, in any case relating to Seller or the conduct of its
business, is pending or, to the knowledge of Seller and the Principals,
threatened. Seller is not liable for any overdue wages.
(n) Financial Statements. Seller has delivered to Purchaser copies of its
unaudited financial statements for the fiscal year ended December 31, 1995, and
unaudited interim financial statements for the period ended April 30, 1996,
copies of which are annexed hereto as Schedule 4(n). To the best of Seller's and
the Principal's knowledge, all of such financial statements have been prepared
in accordance generally accepted accounting principles applied on a basis
consistent with that of preceding accounting periods, and present fairly and
accurately in all material respects the financial condition, results of
operations, and assets and liabilities of Seller as at and for the periods
indicated.
(o) Accounts Receivable. Schedule 4(o) sets forth a true and correct list
of the accounts receivable of Seller as of June 25, 1996, such list being aged
to show the amounts of receivables which, as of June 25, 1996, were,
respectively, more than thirty (30), sixty (60) and ninety (90) days old. Except
for receivables which may be due from affiliates of Seller, and except for
discounts for buying groups customarily granted in the ordinary course of
optical business which are listed on Schedule 4(o), all of the accounts
receivable of Seller are actual and bona fide receivables representing
obligations for the total dollar amount shown on Schedule 4(o), resulted from
transactions in the ordinary course of the Business, and reflect extensions of
credit consistent with the past practice of Seller. Except as expressly set
forth on Schedule 4(o), Seller has not granted any credit to any customer whose
unpaid account is assigned to Purchaser hereunder, no customer whose unpaid
account is assigned to Purchaser hereunder has made any claim against Seller
with
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respective to a defective delivery of goods, and Seller has the legal right to
collect all of the receivables listed on Schedule 4(o) in full in accordance
with their terms without being subject to any recoupments, set-offs or
counterclaims. No accounts receivable have been written off since December 31,
1995. Except as set forth on Schedule 4(o), the terms on which Seller generally
grants credit to any customer is "2/10 net 30", i.e., a 2% discount for payments
made within ten (10) days after invoicing, and all payments due within thirty
(30) days of invoicing. Notwithstanding the foregoing, however, Purchaser
acknowledges and agrees that, except to the extent of the foregoing
representations and warranties, (A) Seller is not in any manner representing the
collectability or guaranteeing the collection of any or all accounts receivable,
in whole or in part, and (B) such accounts receivable are being transferred to
Purchaser "as is". The Principals agree to cooperate with Purchaser to assist it
in collecting the accounts receivable being transferred to Purchaser under this
Agreement; provided, that nothing set forth in this Section shall be deemed to
require that the Principals or Seller institute litigation on Purchaser's
behalf.
(p) Inventory. Schedule 4(p) sets forth a true and correct list of
Seller's inventory of work in progress, finished products, spare parts, and
other items held for resale or incorporation into items sold in connection with
the Business, as of June 24, 1996. The inventory reflected on Schedule 4(p) or
acquired after the date thereof and prior to the date of the Closing consists
and will consist at the time of the Closing of items that are not broken or
damaged and are usable for the purposes for which they are intended without the
addition of any parts. Purchaser acknowledges that no representation is being
made with respect to the price at which any inventory may be sold.
(q) Bank Accounts and Investments. Schedule 4(q) sets forth a true and
complete list of each bank, broker, or other institution in which Seller has an
account, including without limitation account number, name and address of the
institution where such account is held, the assets in the account, and names of
the parties with power to withdraw funds from such accounts. Except for the UJB
Loan, and except for outstanding checks and other items set forth on Schedule
4(q), Seller has no unpaid actual or contingent liability to the depositary
where such accounts are held, including but not limited to unpaid margin or
other loans, lines of credit, or letters of credit; no such account is pledged
as security for any obligation; and no person or entity has power to withdraw or
cause the withdrawal of funds or other assets from such accounts, by
presentation of a sight draft or letter of credit or exercise of a right of
set-off or otherwise.
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(r) Accounts Payable. Schedule 4(r) sets forth a true and correct list of
Seller's accounts payable as of __________, including the name and address of
each party to whom such payable is owed, the goods or services with respect to
which such payable is owed, the amount owed, and the date payment is due. Except
as set forth on Schedule 4 (r), no such payable was due and owing before the
date of such Schedule. All of the accounts payable of Seller are the result of
bona fide transactions by Seller in the ordinary course of its business.
(s) Patents, Trademarks, Copyrights. Schedule 4(s) sets forth a correct
and complete list of all material patents, trademarks, trade names, copyrights,
and applications therefor owned by Seller or used in the conduct of Seller's
business. Except as disclosed in Schedule 4(s): (i) Seller owns or possesses
adequate licenses or other valid rights to use (without the making of any
separate license payment to others or the obligation to grant rights to others
in exchange) all patents, trademarks, trade names, copyrights, know-how, and
other proprietary information necessary to the conduct of its business as
presently being conducted; (ii) the validity of such items or the title thereto
of Seller has not been questioned in any litigation to which Seller is a party;
and (iii) to the best of Sellers', and the Principals' knowledge, the conduct of
the business of Seller as now operated does not conflict with valid patents,
trademarks, trade names, or copyrights of others. Seller has not granted a
license to, or otherwise authorized any other person or entity to use, any
trademark or trade name or any proprietary right owned or licensed by Seller. No
infringement of any proprietary right owned or licensed by Seller is known to
Seller or the Principals. Seller is not in default of its obligations to any
party that has granted to Seller a license or other rights to use a trademark or
trade name.
(t) No Changes. Since December 31, 1995, except as disclosed in this
Agreement, there has not been any material adverse change in the assets,
liabilities, business properties, operations, prospects or position, financial
or otherwise, of Seller or on Seller's ability to perform its obligations
hereunder. From April 30, 1996 to the date of the Closing, Seller has been and
will be engaged in business and make commitments and expenditures only in the
regular and ordinary course.
(u) Representations on Closing. The representations and warranties of
Seller and the Principals contained in this Agreement will be true and correct
on the date of the Closing as though made on and as of such date, except to the
extent that they were intended by their context to be accurate only as of the
date on which made.
(v) Full Disclosure. No representation or warranty by
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Seller or either of the Principals in this Agreement, or in any Exhibit of
Schedule hereto, or any certificate furnished or to be furnished hereunder,
contains any untrue statement of material fact or omits to state any material
fact necessary to make any statement herein or therein not misleading. There is
no fact which Seller or either of the Principals has not disclosed to Purchaser
which may have a material adverse effect on the Assets or the transactions
contemplated hereby, or on Seller's or the Principals' ability to perform their
obligations hereunder.
5. Representations of Purchaser. Purchaser hereby represents and warrants
to Seller as follows:
(a) Organization, Power and Standing. Purchaser is a corporation duly
organized, validly existing, and in good standing under the laws of the State of
Delaware, is duly qualified and in good standing in the State of Pennsylvania
and in each jurisdiction where such qualification is necessary, and has the
corporate power and authority to carry on its business as it is now being
conducted and to own, lease, and operate its properties and carry out the
transactions contemplated by this Agreement.
(b) Authorization. The execution, delivery, and performance of this
Agreement by Purchaser and the consummation of the transactions contemplated
hereby have been duly authorized by the Board of Directors of Purchaser, and no
other corporate proceedings on the part of Purchaser are necessary to authorize,
approve and perform this Agreement or the transactions contemplated hereby. This
Agreement has been duly and validly executed and delivered by and on behalf of
Purchaser, and constitutes a valid and binding obligation of Purchaser
enforceable in accordance with its terms, except to the extent that
enforceability may be limited by general principles of equity or laws relating
to creditors' rights generally.
(c) Freedom to Contract. The execution and delivery of this Agreement, and
the consummation of the transactions contemplated hereby, do not and will not
violate or conflict with the provisions of the Certificate of Incorporation or
By-laws of Purchaser, or the provisions of any note, indenture, security
agreement, lease, guaranty, or other instrument to which Purchaser is a party or
by which it is bound, or result in a breach or violation by Purchaser of the
provisions of any order, injunction, judgment, or decree of any court,
governmental authority, or regulatory agency. The execution and delivery of this
Agreement by purchaser and the consummation of the transactions contemplated
hereby will not require the consent, approval, or authorization of any person or
entity or governmental authority.
(d) Litigation. There is no suit, action, arbitration, or
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legal, administrative, or other proceeding, or governmental investigation, or
tax audit pending, or, to the best knowledge of Purchaser, threatened against
Purchaser, or its properties or businesses. There is no judgment, order,
injunction, or decree of any court, governmental authority, or regulatory agency
to which Purchaser, or any of its properties or businesses is subject which is
likely to have a material and adverse effect on the transactions contemplated by
this Agreement. Purchaser is not in default under any order, license, or demand
of any federal, state, or municipal or other governmental agency or with respect
to any order, writ, injunction, or decree of any court.
(e) Financial Statements. Purchaser has delivered to Seller copies of its
financial statements for the fiscal year ended December 31, 1995, which were
certified by Xxxxx X. Xxxxxxxxx, CPA, and its unaudited financial statements for
the four (4) month period ended April 30, 1996. To the best of Purchaser's
knowledge, all of such financial statements have been prepared in accordance
generally accepted accounting principles applied on a basis consistent with that
of preceding accounting periods, and present fairly and accurately in all
material respects the financial condition, results of operations, and assets and
liabilities of Purchaser as at and for the periods indicated.
(f) No Changes. Since December 31, 1995, there has not been any material
adverse change in the assets, liabilities, business properties, operations,
prospects or position, financial or otherwise, of Purchaser. From December 31,
1995 to the date of the Closing, Purchaser has been and will be engaged in
business and make commitments and expenditures only in the regular and ordinary
course.
(g) Compliance with Laws, Permits, and Licenses. Purchaser has at all
times in the past, and at all times from the date hereof through the date of the
Closing shall, comply in all material respects with all state and local laws,
regulations, orders, judgments, and decrees applicable to its property, assets,
and operations, obtain all permits, licenses, orders, and approvals of federal,
state, local, or foreign governmental and regulatory bodies that are required in
order to permit it to carry on its business as presently conducted. Purchaser
has not received any notice of any violation of any applicable law, regulation,
order, judgment, or decree. All licenses, permits, or approvals of any
governmental or regulatory body ("Permits") that are material or necessary for
the conduct of Purchaser's business are in full force and effect, no material
violations thereof have been recorded, and no proceeding to revoke, suspend, or
otherwise limit any such Permit is pending, or, to the best of Purchaser's
knowledge, threatened.
(h) Full Disclosure. No representation or warranty by Purchaser in this
Agreement, or in any Exhibit or Schedule
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hereto, or any certificate furnished or to be furnished hereunder, contains any
untrue statement of material fact or omits to state any material fact necessary
to make any statement herein or thereunder not misleading. There is no fact
which Purchaser has not disclosed to Seller which may have a material adverse
effect on the transactions contemplated hereby or on Purchaser's ability to
perform its obligations hereunder.
6. Consulting and Employment Agreements; Covenant Against Competition.
(a) At the Closing, Purchaser and Xxx Xxxxxxx shall execute and deliver a
consulting agreement substantially in the form annexed hereto, which consulting
agreement shall provide for the payment to Xxx Xxxxxxx of a consulting fee in
the total amount of $250,000.00 over a three (3) year period beginning eight (8)
years after the date of the Closing.
(b) At the Closing. Purchaser and Xxxxxxx Xxxxxxx shall execute and
deliver a consulting agreement substantially in the form annexed hereto, which
employment agreement shall provide for Xxxxxxx Xxxxxxx to be employed by
Purchaser for an initial term of three (3) years.
(c) Each of Seller and Xxx Xxxxxxx hereby agrees that he or it will not,
for a period of three (3) years after the date of the Closing, engage or
participate in any manner whatsoever, either as an employee, employer,
consultant, agent, principal, partner, stockholder, corporate officer, or in any
other individual or representative capacity, in the Business in the United
States or Canada.
7. Sales Tax and Escrow. Purchaser, at its option, may file a notice with
respect to the transactions contemplated by this Agreement with the New Jersey
Division of Taxation. In the event that Purchaser elects to file such a notice,
Seller shall provide Purchaser with such information as may be necessary to
complete the forms requested by the Division of Taxation, including Form C-9600.
Seller and Purchaser hereby agree that, in the event that the Division of
Taxation notifies Purchaser that a portion of the purchase price must be held in
escrow to secure the payment of taxes in order to protect Purchaser from
liability to pay such taxes, the sum set forth in such notice shall be withheld
from the portion of the purchase price payable to Seller at the Closing (or, if
such notice is received by Purchaser after the Closing, from the first payments
due and payable under the promissory notes delivered at the Closing) and held in
escrow by Xxxxx Xxxx & Xxxxxxxx, Esqs., attorneys for Purchaser ("NRD"). If the
Division of Taxation issues a demand letter to Purchaser with respect to taxes
payable by Seller, NRD shall give written notice thereof to Seller and its
counsel. If NRD fails to receive from the Division of Taxation a written
withdrawal or
12
suspension of such demand letter within thirty (30) days after giving written
notice thereof to Seller or its counsel, NRD shall pay over the amount demanded
to the State of New Jersey from the escrowed funds, together with any interest
or penalties payable as a result of the thirty (30) days suspension of NRD's
right to pay same provided for in the preceding sentence, and the amount so paid
shall be credited against the purchase price. NRD shall pay over the escrowed
funds, or the remaining balance thereof, to Seller upon receipt of a clearance
letter from the Division of Taxation.
8. Access. Seller and the Principals shall afford to Purchaser and its
representatives free and full access, during normal business hours and upon
reasonable prior notice, to all of the books, records, contracts, commitments,
and other documents relating to Seller's business, properties, and assets, and
the right to consult with Seller's officers, employees, accountants, counsel,
and other representatives for the purpose of making such further investigations
of Seller's business as Purchaser shall desire to make. In connection with such
investigations, Seller and the Principals shall furnish to Purchaser copies of
all such documents, records, and information relating to Seller's properties,
assets, and business as Purchaser may from time to time reasonably request. In
the event that the transactions contemplated by this Agreement are not
consummated, Purchaser shall not solicit Purchaser's employees or sales
representatives to become employees, agents, contractors, or sales
representatives for Purchaser for a period of one (1) year after the termination
of this Agreement, or at any time use such information in a manner adverse to
Seller, and shall keep all of such information confidential.
9. Conditions Precedent to Obligations of Purchaser. The obligation of
Purchaser to consummate the purchase of the Assets and the other transactions
provided for herein is subject to the fulfillment on or prior to the date of the
Closing of the following conditions:
(a) The representations and warranties of Seller and the Principals
contained in this Agreement shall have been true at all times on and before the
date of the Closing, with the same effect as though continually made throughout
such period, except to the extent that any such representation or warranty was
intended by its context to be accurate only as of the date on which made; Seller
and the Principals shall have performed all obligations and complied with all
covenants and conditions required to be performed or complied with by them under
this Agreement; and Purchaser shall have received a certificate dated the date
of the Closing signed by the Principals individually and as officers of Seller
certifying to each of the foregoing effects.
13
(b) Purchaser shall have been furnished with a certificate of good
standing of the Secretary of State of the State of Delaware, certifying that
Seller is a corporation validly existing and in good standing under the laws of
the State of Delaware.
(c) Purchaser shall have received written confirmation from UJB that the
unpaid balance of principal and interest due and payable on the UJB Loan as of
the date of the Closing is not more than $922,908.83.
(d) Purchaser shall have received a certificate of the secretary of Seller
certifying as to the identities and signatures of the executive officers of
Seller, the Certificate of Incorporation and Bylaws of Seller (true copies of
which shall be annexed to such certificate), and the approval and full force and
effect of the resolutions of the Board of Directors and shareholders of Seller
approving this Agreement and the transactions contemplated hereby (true copies
of which shall be annexed to such certificate).
10. Conditions Precedent to Obligations of Seller and the Principals. The
obligation of Seller and the Principals to consummate the sale of the Assets and
the other transactions provided for herein are subject to the fulfillment at or
prior to the date of the Closing of the following conditions:
(a) The representations and warranties of Purchaser contained in this
Agreement shall have been true at all times on or before the date of the Closing
with the same effect as if continually made throughout such period, except to
the extent that any such representation or warranty was intended by its context
to be accurate only as of the date on which made; Purchaser shall have performed
all obligations and complied with all covenants and conditions required to be
performed or complied with by it under this Agreement; and Seller shall have
received a certificate dated the date of the Closing signed on behalf of
Purchaser, by its President, certifying to each of the foregoing effects.
(b) Seller shall have been furnished with a certificate of good standing
of the Secretary of the State of Delaware, certifying that Purchaser is a
corporation validly existing and in good standing under the laws of the State of
Delaware.
(c) Seller shall have received a certificate of the secretary of Purchaser
certifying as to the identities and signatures of the executive officers of
Purchaser, the Certificate of Incorporation and Bylaws of Purchaser (true copies
of which shall be annexed to such certificate), and the approval and full force
and effect of the resolutions of the Board of Directors of Purchaser approving
this Agreement and the
14
transactions contemplated hereby (true copies of which shall be annexed to such
certificate).
(d) Seller shall have received evidence, reasonably satisfactory to Seller
and its counsel, that the UJB Loan has been paid in full and that UJB has
released all liens securing the UJB Loan.
(e) Purchaser shall have executed and delivered the employment and
consulting agreements described in Section 6 and a written assumption of the
contracts and obligations of Seller assumed by Purchaser under this Agreement.
11. Pre-closing Inspection. Seller hereby agrees to permit Purchaser to
inspect the Assets at any reasonable time before the Closing.
12. Covenants. Each of the parties hereto hereby agrees to use his or its
best efforts to (a) cause all of the obligations imposed on him or it in this
Agreement to be duly complied with, and (b) obtain any and all consents,
waivers, amendments, modifications, approvals, and authorizations necessary for
the consummation of the transactions contemplated by this Agreement.
13. Closing.
(a) The Closing shall be held at the offices of Xxxxx Rice & Dreifuss,
Esqs., 000 X. Xxxxxxxxxx Xxxxxx, Xxxxxxxxxx, Xxx Xxxxxx 00000, on June 27, 1996
at 2:00 p.m., or at such other place or time or on such other date as may be
mutually agreed by the parties.
(b) At the Closing, Seller and the Principals shall deliver to Purchaser:
(i) A xxxx of sale, in the form annexed hereto as Exhibit C, and
such other instruments of sale, conveyance, transfer, and assignment,
satisfactory in form and substance to Purchaser and its counsel, as Purchaser
may reasonably require in order to convey to Purchaser all of Seller's right,
title, and interest in and to the Assets;
(ii) The certificate required by Section 9(a);
(iii) The Certificate of Good Standing required by Section 9(b);
(iv) Written assignments of all trademarks, copyrights, patents, and
applications and licenses therefor being conveyed by Seller to Purchaser
hereunder, satisfactory in form and content to Purchaser and its counsel; and
15
(v) The secretary's certificate required by Section 9(e).
(c) At the Closing, Purchaser shall deliver to Seller and the Principals:
(i) The Certificate required by Section 10(a);
(ii) The Certificate of Good Standing required by Section 10(b);
(iii) The promissory notes required by Sections 2(b) and 2(c);
(iv) A separate document confirming the assumption by Purchaser of
the obligations of Seller required to be assumed by Purchaser hereunder,
reasonably acceptable in form and content to Seller and its counsel;
(v) The evidence of the repayment of the UJB Loan and release of the
liens securing same required by Section 10(d); and
(v) The secretary's certificate required by Section 10(e).
(d) At the Closing, Purchaser and the Principals shall execute and deliver
the employment and consulting agreements referred to in Section 6.
(e) Purchaser shall have a period of thirty (30) days after the date of
the Closing to take physical possession of the Assets. Seller agrees to continue
in effect all insurance policies covering the Assets on the date of this
Agreement for the benefit of Purchaser during such thirty (30) day period in a
form previously reviewed and accepted by Purchaser.
14. Further Assurances.
(a) At any time or from time to time after the Closing, provided Purchaser
is not in breach of this Agreement, Seller and each of the Principals shall
execute and deliver such assignments, consents, documents, and further
instruments or transfer and conveyance, and take or cause to be taken all such
other actions, as Purchaser may reasonably request in order to put Purchaser in
actual possession and operating control of the Assets, or to more fully and
effectively vest in Purchaser, or to confirm its title to and possession of, the
Assets.
(b) At any time or from time to time after the Closing, provided Seller is
not in breach of this Agreement, Purchaser shall execute and deliver such
assumptions, consents, documents, and further instruments, and take or cause to
be taken all such
16
other actions, as Seller or the Principals may reasonably request in order to
confirm the assumption by Purchaser of the contracts and obligations of Seller
assumed by Purchaser hereunder.
15. Termination.
(a) This Agreement may be terminated at any time by the written agreement
of Seller and Purchaser.
(b) In the event of the termination of this Agreement in accordance with
the provisions of this Section 15, this Agreement shall forthwith become void
and be of no further effect, and there shall be no liability hereunder on the
part of any party hereto.
16. No Brokers. Each party hereto represents to the others that he or it
does not and will not have any liability for any broker's, finder's, or
originator's fee or similar charge in connection with the execution and delivery
of this Agreement or the consummation of the transactions contemplated hereby.
The party hereto through whom any such broker, finder, or originator asserts
any claim to a commission shall, in the event of a violation of this
representation, indemnify and hold harmless the other parties hereto from all
rights, claims and causes of action asserted by such broker, finder, or
originator, including reasonable attorneys' fees.
17. Notices. All notices which are required or which may be given pursuant
to the terms of this Agreement shall be in writing and shall be deemed to have
been duly given when personally delivered or mailed by certified mail, return
receipt requested, or by an overnight courier which provides a receipt for
delivery, to each party at the address set forth below, or at such other address
as such party may specify in a written notice given in accordance with this
Section:
If to Seller, or either of the Principals, to:
000 Xxxxxxxxx Xxxxxx
Xxxxxx Xxxx, Xxx Xxxxxx 00000
With a copy to:
Xxxxxx X. Xxxxxx, Esq.
Mesirov Xxxxxx Xxxxx Xxxxxx & Xxxxxxxx
0000 Xxxxxx Xxxxxx, 00xx Xxxxx
Xxxxxxxxxxxx, Xxxxxxxxxxxx 00000
If to Purchaser:
Xx. Xxxx Xxxxxxx
00 Xxxxxxxx Xxxxx
00
Xxxxx Xxxxxx, Xxx Xxxxxx 00000
and
Xx. Xxxxx Xxxxxxx
Diplomat-Ambassador Eyewear Group
0000 Xxxx Xxxxxx, 0xx Xxxxx
Xxxxxxxxxxxx, Xxxxxxxxxxxx 00000-0000
With a copy to:
Xxx X. Xxxx, Esq.
Xxxxx Rice & Dreifuss, Esqs.
000 X. Xxxxxxxxxx Xxxxxx
Xxxxxxxxxx, Xxx Xxxxxx 00000
18. Binding Effect. This Agreement shall be binding upon and shall inure
to the benefit of the parties hereto and their respective heirs, executors,
personal representatives, successors and assigns, and nothing in this Agreement,
express or implied, is intended to confer any rights on any other person.
19. Severability. The terms, conditions, covenants and provisions of this
Agreement shall be deemed to be severable. If any clause or provision herein
contained shall be adjudged to be invalid or unenforceable by a court of
competent jurisdiction or by operation of any applicable law, the same shall be
deemed to be severable and shall not affect the validity of any other clause or
provision herein, and all other clauses or provisions shall remain in full force
and effect. The parties agree that any court making such a determination is
hereby requested and empowered to modify such unenforceable provision and to
substitute therefor such limitation or provision of maximum scope as the court
then deems reasonable and judicially enforceable, and the parties further agree
that such substitute provision shall be as enforceable in said jurisdiction as
if set forth initially in this Agreement. Any such substitute provision shall be
applicable only in the jurisdiction in which the original provision was
determined to be unenforceable.
20. Non-Merger. The terms, provisions, covenants and representations
herein contained shall not merge in, but shall survive the Closing hereunder,
and shall continue in full force and effect as though set forth at length in the
closing documents for a period of three (3) years after the date of the Closing.
In the event that Purchaser has a claim against Seller hereunder with respect to
one or more inaccurate representations or warranties, (a) neither Seller nor the
Principals shall have liability to Purchaser for the first $25,000.00 of all
damages arising out of or represented by inaccuracies in representations and
warranties by Seller and the Principals, and (b) the maximum aggregate liability
of Seller and the principals to Purchaser
18
shall be the sum of (i) the $100,000.00 payable at the Closing, plus (ii) all
amounts payable under the promissory notes delivered at the Closing, plus (iii)
all amounts payable under the consulting agreement between Purchaser and Xxx
Xxxxxxx, plus (iv) the lesser of $700,000.00 or the net proceeds of the sale of
Seller's real property; provided, that if any such inaccuracy resulted from a
knowing and intentional misstatement by Seller or the Principals or was made
with intent to defraud, the limitation on Seller's and the Principals' liability
set forth in this sentence shall be ineffective and void, ab initio, as if such
limitation never was set forth in this Agreement.
21. Amendments, Waivers. This Agreement may not be modified, amended, or
supplemented, except by a writing signed by the party sought to be charged
therewith. No waiver by any party, whether express or implied, of any right or
remedy on any one occasion shall bar such party from exercising any of its
rights or remedies on any subsequent occasion, and no waiver of any provision of
this Agreement shall be binding unless it is in a writing signed by the party
against whom enforcement thereof is sought.
22. Entire Agreement. This Agreement constitutes the entire agreement
among the parties hereto with respect to the subject matter hereof and
supersedes all prior agreements and understandings, oral and written, among the
parties hereto with respect to the subject matter hereof. No party hereto has
made any representation or warranty to any other party except as expressly set
forth in this Agreement.
23. Applicable Law. This Agreement shall be governed by and construed in
accordance with the laws of the State of New Jersey applicable to agreements
made and to be performed wholly within such State.
24. Assignment. Neither this Agreement nor any of the parties' rights or
obligations hereunder may be assigned by any party hereto without the prior
written consent of the other parties hereto; provided, that Seller shall have
the right to assign payments due and owing under the promissory notes delivered
by Purchaser to Seller at the Closing to either or both of the Principals,
and/or any shareholder of Seller, and/or the spouse or children of any Principal
or shareholder of Seller, and/or a trust for the benefit of any of them.
25. Arbitration. Any dispute arising out of or relating to this Agreement
shall be settled by arbitration in Essex County, New Jersey in accordance with
the provisions set forth in the New Jersey Arbitration Act, N.J.S.A. 2A:24-1 et
seq. The arbitrator shall be a retired judge selected by the agreement of the
parties
19
to the dispute, or, if the parties to the dispute cannot agree on an arbitrator,
he shall be a retired judge selected by the assignment judge of Essex County,
New Jersey. The decision of such arbitration shall be final and binding on both
parties, and may be entered as a judgment in any court of appropriate subject
matter jurisdiction located in New Jersey. Notwithstanding the foregoing,
however, in the event that a dispute between the parties involves the failure of
Purchaser to make payments under the promissory notes delivered at the Closing
or under the consulting agreement between Purchaser and Xxx Xxxxxxx, based on a
claimed right to a set-off or otherwise, and Purchaser fails to place the amount
in dispute in escrow within thirty (30) days after receipt of written notice
from Seller or the Principals, Seller and the Principals shall have the right to
have such dispute resolved in a court of competent jurisdiction, rather than by
arbitration.
IN WITNESS WHEREOF, this Agreement has been executed by and on behalf of
the parties hereto as of the day and year first above written.
ATTEST: DIPLOMAT AMBASSADOR, INC.
By: /s/ Xxxx Xxxxxxx
----------------------------- -----------------------------
XXXX XXXXXXX
ATTEST: WINDSOR OPTICAL, INC.
By: /s/ Xxx Xxxxxxx
----------------------------- -----------------------------
XXX XXXXXXX
WITNESS:
/s/ Xxx Xxxxxxx
----------------------------- --------------------------------
XXX XXXXXXX, INDIVIDUALLY
/s/ Xxxxxxx Xxxxxxx
----------------------------- --------------------------------
XXXXXXX XXXXXXX, INDIVIDUALLY
20
EXHIBIT A
PROMISSORY NOTE
$150,000.00 June 26, 1996
DIPLOMAT AMBASSADOR, INC. ("Purchaser"), for value received, hereby
promises to pay to WINDSOR OPTICAL, INC. ("Windsor") at 0000 Xxx Xxxx Xxxx,
Xxxxxxxxxx Xxxxxx, Xxxxxxxxxxxx 00000 or at such other place as may be
designated in writing by Windsor, the principal sum of $150,000.00. Such
principal sum shall be payable, together with interest on the unpaid principal
balance at the rate of 7% per annum, in thirty-six (36) equal monthly
installments of $5,654.23 each in accordance with the amortization schedule
annexed hereto. The first installment payment under this note shall be paid on
January 10, 1997, and the remaining installments shall be paid thereafter on the
10th day of each succeeding month. Principal or interest may be prepaid by
Purchaser at any time, in whole or in part, without premium or penalty, based on
the then-current value of the amount being prepaid, which shall be calculated
assuming interest at the prime rate in effect at the time of prepayment. Amounts
prepaid shall be credited first against accrued but unpaid interest and then
against installments last coming due.
Purchaser's obligations to pay the amounts due pursuant to this note are
subject to a right of set-off pursuant to the agreement dated June 26, 1996 by
and among Windsor, Xxx Xxxxxxx, Xxxxxxx Xxxxxxx and Purchaser (the "Asset Sale
Agreement").
The entire principal sum, or the unpaid principal balance thereof, and all
accrued but unpaid interest thereon, shall
21
become immediately due and payable upon the occurrence of any one of the
following, each of which shall be an "Event of Default":
(i) Default in the payment of any installment of principal or interest for
five (5) days after it fell due which is not cured within ten (10) days after
written notice of such default is given to Purchaser by (a) certified or U.S.
Express mail, return receipt requested, or (b) Federal Express or other
overnight courier which provides a signed receipt for delivery, which notice
shall be deemed to have been given on the date actually delivered.
(ii) The filing by or against Purchaser in any court pursuant to any
statute either of the United States or of any state, of a petition in bankruptcy
or insolvency of for reorganization or for the appointment of a receiver or
trustee of all or a portion of the property of Purchaser, which is not actively
challenged by Purchaser, or is not discharged within sixty (60) days thereof, or
Purchaser making an assignment or similar arrangement for the benefit of
creditors.
Windsor shall be entitled to all costs of collection, including reasonable
attorneys' fees, incurred by Windsor in collecting or attempting to collect (a)
amounts due and payable under this note after the occurrence of an Event of
Default, or (b) amounts improperly set off against amounts due and payable under
this note and not paid into escrow within the time period specified in Section
25 of the Asset Sale Agreement.
The failure of Windsor to exercise any right under this note
22
shall not be considered a waiver of such right, which may be exercised at any
time and from time to time. The acceptance by Windsor of less than the amount
due and payable hereunder at the time any payment is made hereunder shall not be
considered a waiver of Windsor's right to receive all amounts due and payable
hereunder.
Any dispute arising out of or relating to this note shall be settled by
arbitration in Essex County, New Jersey in accordance with the provisions set
forth in the New Jersey Arbitration Act, N.J.S.A. 2A:24-l et seq. The arbitrator
shall be a retired judge selected by the agreement of the parties to the
dispute, or, if the parties to the dispute cannot agree on an arbitrator, he
shall be a retired judge selected by the assignment judge of Essex County, New
Jersey. The decision of such arbitration shall be final and binding on both
parties, and may be entered as a judgment in any court of appropriate subject
matter jurisdiction located in New Jersey. Notwithstanding the foregoing,
however, in the event that a dispute between Purchaser and Windsor involves the
failure of Purchaser to make payments under this Note, based on a claimed right
to a set-off or otherwise, and Purchaser fails to place the amount in dispute in
escrow within thirty (30) days after receipt of written notice from Windsor,
Windsor shall have the right to have such dispute resolved in a court of
competent jurisdiction, rather than by arbitration.
This note shall be governed by and construed in accordance with the laws
of the State of New Jersey applicable to agreements
23
made and to be performed wholly within such State.
Presentment, demand, protest, notice of protest, notice of dishonor and
all other notices and demands (other than those specifically required by this
note) are hereby waived.
ATTEST: DIPLOMAT AMBASSADOR, INC.
By:
----------------------------- --------------------------------
XXXX XXXXXXX
24
EXHIBIT B
PROMISSORY NOTE
$300,000.00 June 26, 1996
DIPLOMAT AMBASSADOR, INC. ("Purchaser"), for value received hereby
promises to pay to WINDSOR OPTICAL, INC. ("Windsor") at 0000 Xxx Xxxx Xxxx,
Xxxxxxxxxx Xxxxxx, Xxxxxxxxxxxx 00000 or at such other place as may be
designated in writing by Windsor, the principal sum of $300,000.00. Such
principal sum shall be payable, together with interest on the unpaid principal
balance at the rate of 7% per annum, in eighty four (84) equal monthly
installments of $4,527.80 each in accordance with the amortization schedule
annexed hereto. The first installment payment under this note shall be paid on
July 20, 1996, and the remaining installments shall be paid thereafter on the
20th day of each succeeding month. Principal or interest may be prepaid by
Purchaser at any time, in whole or in part, without premium or penalty, based on
the then-current value of the amount being prepaid, which shall be calculated
assuming interest at the prime rate in effect at the time of prepayment. Amounts
prepaid shall be credited first against accrued but unpaid interest and then
against installments last coming due.
Purchaser's obligations to pay the amounts due pursuant to this note are
subject to a right of set-off pursuant to the agreement dated June 26, 1996 by
and among Windsor, Xxx Xxxxxxx, Xxxxxxx Xxxxxxx and Purchaser (the "Asset Sale
Agreement").
The entire principal sum, or the unpaid principal balance
25
thereof, and all accrued but unpaid interest thereon, shall become immediately
due and payable upon the occurrence of any one of the following, each of which
shall be an "Event of Default":
(i) Default in the payment of any installment of principal or interest for
five (5) days after it fell due which is not cured within ten (10) days after
written notice of such default is given to Purchaser by (a) certified or U.S.
Express mail, return receipt requested, or (b) Federal Express or other
overnight courier which provides a signed receipt for delivery, which notice
shall be deemed to have been given on the date actually delivered.
(ii) The filing by or against Purchaser in any court pursuant to any
statute either of the United States or of any state, of a petition in bankruptcy
or insolvency of for reorganization or for the appointment of a receiver or
trustee of all or a portion of the property of Purchaser, which is not actively
challenged by Purchaser, or is not discharged within sixty (60) days thereof, or
Purchaser making an assignment or similar arrangement for the benefit of
creditors.
Windsor shall be entitled to all costs of collection, including reasonable
attorneys' fees, incurred by Windsor in collecting or attempting to collect (a)
amounts due and payable under this note after the occurrence of an Event of
Default, or (b) amounts improperly set off against amounts due and payable under
this note and not paid into escrow within the time period specified in Section
25 of the Asset Sale Agreement.
26
The failure of Windsor to exercise any right under this note shall not be
considered a waiver of such right, which may be exercised at any time and from
time to time. The acceptance by Windsor of less than the amount due and payable
hereunder at the time any payment is made hereunder shall not be considered a
waiver of Windsor's right to receive all amounts due and payable hereunder.
Any dispute arising out of or relating to this note shall be settled by
arbitration in Essex County, New Jersey in accordance with the provisions set
forth in the New Jersey Arbitration Act, N.J.S.A. 2A:24-1 et seq. The arbitrator
shall be a retired judge selected by the agreement of the parties to the
dispute, or, if the parties to the dispute cannot agree on an arbitrator, he
shall be a retired judge selected by the assignment judge of Essex County, New
Jersey. The decision of such arbitration shall be final and binding on both
parties, and may be entered as a judgment in any court of appropriate subject
matter jurisdiction located in New Jersey. Notwithstanding the foregoing,
however, in the event that a dispute between Purchaser and Windsor involves the
failure of Purchaser to make payments under this Note, based on a claimed right
to a set-off or otherwise, and Purchaser fails to place the amount in dispute in
escrow within thirty (30) days after receipt of written notice from Windsor,
Windsor shall have the right to have such dispute resolved in a court of
competent jurisdiction, rather than by arbitration.
This note shall be governed by and construed in accordance
27
with the laws of the State of New Jersey applicable to agreements made and to be
performed wholly within such State.
Presentment, demand, protest, notice of protest, notice of dishonor and
all other notices and demands (other than those specifically required by this
note) are hereby waived.
ATTEST: DIPLOMAT AMBASSADOR, INC.
By:
----------------------------- --------------------------------
XXXX XXXXXXX
28
EXHIBIT C
XXXX OF SALE
THIS XXXX OF SALE is made and delivered this 26th day of June, 1996 by
WINDSOR OPTICAL, INC., a corporation ("Seller"), to DIPLOMAT AMBASSADOR, INC., a
corporation ("Buyer"), pursuant to an Asset Sale Agreement dated June 26, 1996
(the "Purchase Agreement") between Seller, Xxx Xxxxxxx, Xxxxxxx Xxxxxxx and
Buyer, providing for the sale by Seller to Buyer certain of the assets of Seller
used or useful in the operation of Seller's optical business (the "Business").
WITNESSETH, THAT FOR AND IN CONSIDERATION of the mutual promises contained
in the Purchase Agreement, and for other good and valuable consideration, the
receipt and sufficiency of which are hereby acknowledged by Seller, and pursuant
to the Purchase Agreement, Seller hereby bargains, sells, grants, assigns,
transfers and conveys unto Buyer and its successors and assigns:
(1) the machinery, equipment, furniture, fixtures and other property
listed in Schedule A attached hereto and by this reference
incorporated herein, and (2) all inventory owned by Seller on the
date hereof, together with any and all rights which Seller holds
under any guaranty or warranty covering any or all of such property.
TO HAVE AND TO HOLD the same unto Buyer and its successors and assigns
forever.
IN ADDITION, from time to time after the date hereof, without further
consideration, Seller shall execute and deliver such other instruments of
assignment, transfer and conveyance and shall take such other action as Buyer
may reasonably request in order more effectively to assign, transfer and convey
to Buyer, and the place Buyer in possession and control of, any of the property
being assigned, transferred and conveyed to Buyer hereunder, or to enable Buyer
to exercise and enjoy all rights and benefits of SELLER with respect thereto.
SELLER HEREBY represents and warrants to, and covenants with, Buyer and
its successors an assigns that immediately prior to the delivery for this Xxxx
of Sale, Seller was the sole owner of, and had good and marketable title to, all
property assigned, transferred and conveyed to Buyer hereunder; that by this
Xxxx of Sale, Seller is conveying to Buyer good and marketable title to such
property; that except for Liens (as hereinafter defined) for taxes not yet due
and payable, and Liens securing the "UJB Loan" (as that term is defined in the
Purchase Agreement), such property is conveyed to Buyer hereunder free and clear
of all Liens; that Seller will warrant and defend the title hereby
29
conveyed to Buyer against the claims of all persons whomsoever; and that the
property assigned, transferred and conveyed to Buyer hereunder includes all
tangible personal property required to be assigned, transferred and conveyed to
Buyer pursuant to the Purchase agreement. As used in this Xxxx of Sale, the term
"Liens" means all mortgages, pledges, liens, security interest, leases,
conditional sales agreements, charges, restrictions or any other encumbrances
whatsoever.
This Xxxx of Sale shall inure to the benefit of and be binding upon Seller
and Buyer and their respective successors and assigns.
IT WITNESS WHEREOF, Seller has executed and delivered this Xxxx of Sale on
the day and year first above written.
SELLER:
WINDSOR OPTICAL, INC.
BY:
----------------------------------
XXX XXXXXXX
ACCEPTED:
BUYER:
DIPLOMAT AMBASSADOR, INC.
BY:
----------------------------------
XXXXX XXXXXXX
30
SCHEDULE 1
Personal Property
1. Entire contents Xxxxx Xxxxxxx office except for files pertaining to
current Windsor operations.
2. Personal items in the office of Xxx Xxxxxxx such as clock, antique frame
collection, personal plaques, artwork.
3. 1 Laptop computer and color printer and 1 Compaq PC
4. 1 fax machine
5. 1 microwave and 1 toaster.
SCHEDULE 3(a)(iii)
List of Contracts
Merlin Telephone System
Xxxxxx-Xxxxx Mailing Machine
Copier Maintenance
IBM-36 Maintenance
SCHEDULE 4(b)
Windsor Shareholders:
Xxx Xxxxxxx
Ketebec Enterprises Ltd.
SCHEDULE 4(d)
Consents for WINDSOR to transfer trademark licenses attached.
Att: Xxxxxxx Xxx Xxxx
Xxxxxx Comics
Xxxx Xxxxxx
SCHEDULE 4(e)
Ownership of Assets
There are no liens except for liens securing the UJB loan.
SCHEDULE 4(f)
There are no license, permit or approval of any governmental or regulatory body
necessary for the conduct of the business.
SCHEDULE 4(1)
Suppliers
A complete list of all suppliers during the prior 12 month period is furnished
with Schedule 4(r) titled Supplier Invoice Summary.
SCHEDULE 4(n)
Financial Statements are attached as required by paragraph 3(n).
