1
LIMITED LIABILITY COMPANY INTEREST OPTION AGREEMENT
AGREEMENT dated as of April 5, 1999 between Xxxxxx & Xxxxxx,
Inc., a Delaware corporation with a principal office at 000 Xxxxxxxx Xxxxxxxxx,
Xxxxx Xxxx, XX 00000 ("G&C"), and Prime Financial Services, Inc., a New York
corporation with a principal office at 00 Xxxxxxx Xxxxxx, Xxxxxxxxxxxx, XX 00000
("PFSI").
WHEREAS, G&C, Prime Financial Services, Inc, a Delaware
corporation (the "Newco"), PFSI, Xxxxxxx Xxxx and Xxxxx Xxxxxxx ("Xxxxxxx") have
entered into a Stock and Asset Purchase Agreement dated April 5, 1999 (the
"Purchase Agreement"), pursuant to which G&C will acquire all of the outstanding
capital stock of Prime Capital Services, Inc., a New York corporation ("PCSI"),
and Asset and Financial Planning, Ltd., a New York corporation ("AFPL"), and the
Newco will acquire certain assets of PFSI, all in exchange for common stock of
G&C, as described in the Purchase Agreement; and
WHEREAS, the Purchase Agreement provides that PFSI will grant,
and PFSI desires to grant, to G&C, the right to purchase PFSI's interest in
Healthvest LLC, a Delaware limited liability company (the "Company"), upon the
terms hereinafter set forth;
NOW, THEREFORE, in consideration of the mutual covenants of
the parties and other consideration, the receipt of which is hereby acknowledged
by the parties, the parties hereby agree as follows:
1. OPTION. PFSI hereby grants to G&C the right to purchase
(the "Option") PFSI's 50% limited liability company interest in the Company (the
"Interest"), free and clear of all liens, encumbrances, claims of third parties,
security interests, mortgages, pledges, agreements, options and rights of others
of any kind whatsoever, whether or not filed, recorded or perfected, and
including, without limitation, any conditional sale or title retention agreement
or lease in the nature thereof or any financing statements filed in any
jurisdiction or any agreement to give any such financing statements, on the
terms and conditions hereinafter set forth.
2. PURCHASE PRICE. The aggregate purchase price of the
Interest shall be $1.00.
3. EXERCISE OF OPTION. The Option shall become exercisable
immediately upon the date hereof.
2
4. TERM OF OPTION. The term of the Option shall be a period of
five (5) years from the date hereof.
5. METHOD OF EXERCISE OF OPTION. Subject to the terms and
conditions of this Agreement, the Option shall be exercisable by notice and
payment to PFSI in accordance with the procedure prescribed herein. The notice
shall state the election to exercise the Option and be signed by G&C.
6. CLOSING. Delivery of an assignment of the Interest on a
form reasonably satisfactory to G&C and payment of the Purchase Price (the
"Closing") shall take place on the tenth business day after the receipt by PFSI
of the notice of the exercise of the option (the "Closing Date").
7. ACTIONS; DIRECTIONS; DISTRIBUTIONS. Prior to the expiration
of the Option, PFSI shall not take any action with respect to the Interest
without the prior written consent of G&C. PFSI shall follow the direction of G&C
with regard to any notices, elections, and exercises of rights available to PFSI
under the Limited Liability Company Agreement, dated October 31, 1996 among the
Company, PFSI and Xxxxx Xxxxxx, Inc. ("Schein"). PFSI shall give notice to G&C
of, and G&C shall be entitled to, all dividends, spinoffs and other
distributions made to PFSI as a member of the Company (collectively, the
"Distributions") as if G&C owned the Interest from January 1, 1999, but G&C may
collect any Distribution only upon exercise of the Option.
8. REPRESENTATIONS OF PFSI; LIMITATION OF REPRESENTATIONS.
(a) PFSI is the beneficial or registered owner of 50% of the
ownership interests of the Company. Xxxxx Xxxxxx and PFSI are the only
beneficial or registered owners of the ownership interests of the Company.
(b) PFSI makes no, and expressly disclaims any,
representations or warranties of any kind, express or implied (including,
without limitation, any warranty, representation, obligation or liability with
respect to fitness, use, merchantability, collectibility or loss of use) or
otherwise in regard to the Company (except as set forth in Section 8(a) above),
it being understood and agreed by G&C that the condition and operations
(financial or otherwise) of the Company shall be AS IS and with all faults.
9. ASSIGNMENT. As of the Closing Date and contingent upon the
Closing, PFSI, in consideration of the payment of the Purchase Price and other
good and valuable consideration, the sufficiency of which is acknowledged, shall
assign to G&C from all debts, contracts, agreements, promises, claims, demands,
suits, actions, judgements, executions, and damages, direct or indirect, known
or unknown, which PFSI then has, or thereafter may have, against the Company.
-2-
3
10. NOTICES. All notices or other communications which are
required or permitted hereunder shall be in writing and sufficient when
delivered personally or telecopied by confirmed facsimile or the day signed for
or rejected by addressee after mailing by registered or certified mail, return
receipt requested, or the next business day if sent by nationally recognized
overnight courier providing for a return receipt, in each case postage prepaid,
addressed to the address set forth with the parties name at the top of this
Agreement, and if directed to G&C, with a copy to Akabas & Xxxxx, 000 Xxxxxxx
Xxxxxx, 00xx Xxxxx, Xxx Xxxx, XX 00000, Attn: Xxxx X. Xxxxxx, Esq. (Facsimile:
(000) 000-0000). Any party may by notice to the other parties change the address
to which notice or other communications to it are to be delivered or mailed.
11. ASSIGNABILITY. This Agreement shall not be assignable
otherwise than by operation of law by any party hereto without the prior written
consent of the other parties, and any purported assignment without such prior
written consent shall be void, except that G&C may assign this agreement to a
corporation controlling, controlled by or under common control with G&C or in a
sale of all or substantially all of the assets of G&C.
12. WAIVER. No failure of a party hereunder to exercise and no
delay by a party hereunder in exercising any right or remedy under this
Agreement shall constitute a waiver of such right or remedy. No waiver by a
party hereunder of any such right or remedy under this Agreement shall be
effective unless made in writing.
13. SEVERABILITY. The invalidity or unenforceability of any
particular provision of this Agreement in any jurisdiction shall not affect the
other provisions hereof or such provision in other jurisdictions, and this
Agreement shall be construed in such jurisdiction in all respects as if such
invalid or unenforceable provisions were omitted. Furthermore, in lieu of such
illegal, invalid, or unenforceable provision in such jurisdiction there shall be
added automatically as a part of this Agreement a provision as similar in terms
to such illegal, invalid, or unenforceable provisions as may be possible and be
legal, valid and enforceable.
14. ENTIRE AGREEMENT. This Agreement contains the entire
understanding of the parties with respect to the Option for the Interest and
supersedes any prior agreement between the parties. No change, termination or
attempted waiver of any of the provisions hereof shall be binding unless in
writing and signed by the party against whom the same is sought to be enforced.
15. GOVERNING LAW. This Agreement shall be governed by and
construed in accordance with the laws of the State of New York applicable to
contracts entered into, executed and to be performed wholly in such state.
-3-
4
16. COUNTERPARTS. This Agreement may be executed in multiple
counterparts all of which taken together shall constitute one and the same
instrument.
IN WITNESS WHEREOF, each of the undersigned corporations has
caused this Agreement to be executed by its duly authorized officer as of the
date and year first above written.
PRIME FINANCIAL SERVICES, INC.,
a New York corporation
By:/s/ Xxxxxxx Xxxx
-------------------------------
Name: Xxxxxxx Xxxx
Title: President
XXXXXX & CIOCIA, INC.
By:/s/ Xxxxxx Xxxxxxxxx
-------------------------------
Name: Xxxxxx Xxxxxxxxx
Title: Chief Operating Officer
-4-
