PURCHASE AND SALE AGREEMENT
PURCHASE AND SALE AGREEMENT (this "Agreement") made as of the 24th day of
September, 2001 between ASD GROUP, INC., a Delaware corporation (as to the
parcels located on Industry Street), and AUTOMATIC SYSTEMS DEVELOPERS, INC., a
New York corporation (as to the Titusville Road parcel), both having an office
at 0 Xxxxxxxx Xxxxxx, Xxxxxxxxxxxx, Xxx Xxxx, 00000 ("Seller"), and PNC BANK,
NATIONAL ASSOCIATION, a national banking association having an office at Xxx
Xxxxx Xxxxxx Xxxxxxxxx, Xxx Xxxxxxxxx, Xxx Xxxxxx 00000 ("Purchaser").
W I T N E S S E T H
A. Seller is the owner of certain premises lying and being in the Town of
LaGrange, County of Dutchess, State of New York, located at 0 Xxxxxxxx Xxxxxx, 0
Xxxxxxxx Xxxxxx, 0 Xxxxxxxx Xxxxxx and on Titusville Road, and known as Grid
Numbers 133400-6361-03-100356, 133400-6361-03-112342, 133400-6361-03-124330 and
133400-6360-03-081270 on the Dutchess County Tax Map, all as more particularly
described on Schedule A-1 through A-4 annexed hereto (collectively, the
"Premises"); and
B. On June 5, 2001, Seller filed voluntary petitions for relief under
Chapter 11 of Title 11, United States Code with the Clerk of United States
Bankruptcy Court for the Southern District of New York ("Bankruptcy Court"),
Case Number 01-36481 and Case Number 01-36475 (CGM); and
C. Subject to the approval of the Bankruptcy Court, Seller desires to sell
to Purchaser, and Purchaser desires to purchase from Seller, all of Seller's
right, title and interest in and to the Premises, upon the terms and conditions
hereinafter set forth.
NOW THEREFORE, for good and valuable consideration, including the mutual
covenants and agreements herein contained, the receipt and sufficiency of which
are hereby acknowledged, Seller and Purchaser agree as follows:
1. Agreement of Purchase and Sale. Subject to the approval of the
Bankruptcy Court, Seller agrees to sell and convey, and Purchaser agrees to
purchase, all that certain plot, piece or parcel of land, with the buildings and
improvements, if any, thereon erected, referred to herein as the Premises,
together with any and all (a) easements, rights-of-way, alleys, strips or gores
of land, privileges and appurtenances, and rights to the same, if any, belonging
to and inuring to the benefit of the Land and (b) right, title and interest, if
any, of Seller in and to any land lying in the bed of any street, road or
avenue, opened or proposed, in front of or adjoining the Premises to the center
line thereof.
2. Purchase Price.
The purchase price is One Million and 00/100 Dollars ($1,000,000.00). (the
"Purchase
1
Price"), payable at Closing (as hereinafter defined) by crediting such amount
against that certain loan obligation of Seller and others to Purchaser pursuant
to a certain Revolving Credit Agreement, as amended and modified.
3. Items to Which Title is Subject. The Premises are sold and are to be
conveyed subject to:
(a) All present and future zoning, building and environmental laws,
ordinances, codes, restrictions and regulations of any municipal, state,
federal or other governmental authority, including without limitation, all
boards, bureaus, commissions, departments and bodies thereof, now or
hereafter having jurisdiction over the Premises (such authorities
collectively, "Governmental Authority").
(b) All violations of law or ordinances, orders or requirements of any
Governmental Authority having jurisdiction, and the conditions giving rise
thereto against or affecting the Premises at the time of Closing, whether
or not notices thereof have been noted in or issued by any Governmental
Authority.
(c) Such facts as a current accurate survey or personal inspection
would show.
(d) Any and all covenants, restrictions and easements of record, and
those covenants, restrictions and easements set forth on Schedule B.
(e) Rights, if any, relating to the construction and maintenance in
connection with any public utility of wires, poles, pipes, conduits and
appurtenances, thereto, on, under or across the Premises.
(f) Real estate taxes, water and sewer charges.
(g) Assessments or installments thereof, whether or not a lien on the
Closing Date (as hereinafter defined) which are not due and payable prior
to the Closing Date.
(h) Any lien, encumbrance or other matter which affects title to the
Premises created or suffered to be created by Purchaser or any party whose
rights with respect to the Premises (or any portion thereof) derive by,
through or under Purchaser, except that any liens, claims, interests,
encumbrances and other charges including, without limitation, all real
estate taxes, assessments and governmental impositions of every nature and
description (collectively, "Liens") which are due and payable prior to the
Closing Date shall attach to the proceeds of the sale.
(i) Any matter which Purchaser's title insurance company shall either
omit from Purchaser's title insurance policy or for which it shall issue an
endorsement affirmatively insuring against enforcement of same out of the
Premises, whether such omission or insurance is based upon payment of the
lien, escrow, indemnity, or otherwise, but at no additional cost to
Purchaser.
2
(j) Standard exceptions set forth in the form of title insurance
policy of the Title Company (as hereafter defined) that are not typically
removed by a customary Seller's affidavit of title.
(k) Encumbrances of xxxxxx, driveways, retaining walls, areaways,
steps, trim and cornices, if any.
The items set forth in this Section 3 are hereinafter referred to,
collectively, as the "Permitted Encumbrances."
4. Closing Adjustments.
(a) Purchaser shall take title to the Premises subject to all real
estate tax liens of record filed by the Town of LaGrange and/or County of
Dutchess for the period prior to the Closing Date. There shall be no
adjustment for real estate taxes or water and sewer charges.
(b) Each party shall bear all fees, charges and expenses incurred by
it in connection with the transaction contemplated by this Agreement,
without contribution from the other party, except as may be specifically
herein set forth to the contrary. Purchaser shall be solely responsible for
the real property transfer tax, if any, and the recording fees in
connection with recording of the Deeds (as hereinafter defined) as well as
the cost of any title insurance premiums and title examination.
5. Deeds.
(a) The deeds conveying the Premises shall be bargain and sale deeds
without covenants in proper form for recording (collectively, the "Deeds")
and shall be duly executed and acknowledged so as to convey to Purchaser
fee simple title to the Premises, free of all encumbrances, except for the
Permitted Encumbrances.
(b) At Closing, Seller will deliver a resolution of its Board of
Directors authorizing the sale and purchase of the Premises in accordance
with this Agreement and the delivery of the Deeds accordingly, and a
certificate by the Secretary or Assistant Secretary of the corporation
certifying such resolution.
(c) Seller represents that it is not a "foreign person" as such term
is defined in the Internal Revenue Code of 1954, as amended (the "Code").
At Closing, Seller shall deliver to Purchaser a certificate of Seller
stating that it is not a foreign person and giving such other information
as required by Section 1445 of the Code and Purchaser shall not deduct or
withhold any portion of the Purchase Price. Purchaser shall retain such
certification until the end of the fifth (5th) taxable year after the date
hereof, and shall make it available to the Internal Revenue Service when
requested, in accordance with the requirements of Section 6001 of the Code
and regulations thereunder.
6. Real Estate Transfer Tax. To the extent not otherwise precluded by
Section
3
1146(c) of the Bankruptcy Code and/or ordered by the Bankruptcy Court, all
transfer taxes and recording fees, if any, due by virtue of this transaction and
the delivery of the Deeds shall be paid by Purchaser. At Closing, Purchaser
shall deliver a certified or bank check to the order of the recording officer of
the county in which the Deeds are to be recorded, or a check satisfactory and
payable to the order of the title company for the amount of all applicable real
property transfer taxes and recordation fees and a certified or bank check to
the order of the appropriate officer, or a check satisfactory to and payable to
the order of the title company for any other tax payable by reason of the
delivery of the Deeds, and a return, if any be required, duly executed by
Seller. Purchaser also agrees to execute the return and to cause the check and
the return to be delivered to the appropriate officer promptly after Closing.
The provisions of this Section 6 shall survive Closing.
7. Title.
(a) Seller shall give and Purchaser shall accept title to the Premises
subject to the Permitted Encumbrances. Purchaser shall order a title report
of the Premises and cause a copy of the report to be delivered to Seller's
attorney, as soon as practicable after receipt thereof. If, (i) after the
date hereof, any title defects arise which are uninsurable and which would
materially interfere with the operation and use of the Premises, and as a
result thereof Seller shall be unable to convey title or deliver possession
of the Premises, all as stipulated in the Order, or (ii) at the time of
Closing the Premises does not conform with the provisions hereof, then the
Closing Date under this Agreement shall be extended for a period of up to
thirty (30) days, during which period Seller shall have the right, but not
the obligation, to remove any such defect in title, deliver possession, or
make the Premises conform, as the case may be, all as herein agreed, then
Purchaser may, as its sole remedy, terminate this Agreement by sending
written notice of such termination to Seller within three (3) days after
the expiration of such thirty (30) day period, in which event, this
Agreement shall terminate and neither party shall have any further
obligations or liabilities hereunder except those which expressly survive
such termination. If Purchaser does not terminate this Agreement within
such three (3) day period, the Closing shall occur on the third (3rd)
business day after the end of such three (3) day period and Purchaser shall
accept title as Seller has on the Closing Date without reduction of the
Purchase Price. Other than as provided in this Agreement, Seller shall not
be required to bring any action or proceeding or incur any expense to
obtain such title as it has agreed to convey hereunder. Notwithstanding the
foregoing, Purchaser may elect to accept such title as Seller has on the
Closing Date without reduction of the Purchase Price.
8. Waiver of Vendee's Lien/No Recording. Purchaser shall not have, and hereby
waives, any vendee's lien against the Premises, and Purchaser shall not record
this Agreement or any memorandum or evidence thereof in any public records.
Purchaser's breach of any of its obligations or agreements under this Section 8
shall be deemed to be a material breach by Purchaser hereunder and shall entitle
Seller to terminate this Agreement. This Section 8 shall survive the termination
of this Agreement.
9. Bankruptcy Court Approval.
(a) Purchaser and Seller acknowledge that their respective obligations
to consummate
4
the purchase and sale of the Premises shall be contingent upon the entry of
an order by the Bankruptcy Court approving the sale of the Premises to
Purchaser by Seller, which order shall be in form substantially similar to
Schedule C attached hereto (the "Order") with no material alteration which
adversely affects either Purchaser or Seller. Seller shall keep Purchaser
fully informed of such efforts through its pursuit of the same, including
keeping Purchaser advised in advance of dates and times of the various
Bankruptcy Court hearings. Seller agrees to incorporate into such motions
and accompanying proposed orders the reasonable and timely requests of
Purchaser which are consistent with this Agreement.
(b) This Agreement constitutes a binding agreement subject only to the
approval of the Bankruptcy Court. Seller covenants and agrees to recommend
that this Agreement be approved by the Bankruptcy Court and will use all
reasonable efforts to obtain such approval as soon as possible after the
date of full execution and delivery of this Agreement, and Purchaser shall
cooperate fully with Seller in its efforts to obtain such approval.
(c) Upon receipt of any Bankruptcy Court Order obtained pursuant to this
Agreement, Seller shall use reasonable efforts to provide a copy of the
same to Purchaser.
10. Adjustments for Assessments Payable in Annual Installments.
Intentionally omitted.
11. Use of Portion of Purchase Price to Satisfy Liens or Encumbrances.
Intentionally omitted.
12. Excuse of Seller's Performance; Default and Damages.
(a) If on the Closing Date, Seller does not have such title as it has
agreed to convey under this Agreement and is unable to convey title in
accordance with the terms of this Agreement (without regard to whether,
after the Closing Date, Seller obtains or is able to obtain or convey such
xxxxxx or satisfy such condition), Purchaser's sole remedy shall be to
cancel this Agreement or accept such title as Seller has on the Closing
Date without reduction of the Purchase Price.
(b) If the Closing fails to occur as a result of a willful refusal of
Seller, without cause, to convey to Purchaser title to the Premises and
deliver the Deed (as opposed to Seller's inability to convey title in
accordance with the terms of this Agreement), Purchaser may either
terminate this Agreement, or, as Purchaser's sole and exclusive remedy at
law or in equity, xxx for specific performance.
13. Closing Date. Provided that the approval of the Bankruptcy Court has been
obtained, substantially similar to the Order with no material alteration which
aversely affects Purchaser, the Deed shall be delivered upon the receipt of the
Purchase Price and the closing of the transaction contemplated by this Agreement
("Closing") shall occur, at the office of Purchaser's attorney at 10:00 a.m. on
October 5, 2001 (the "Closing Date").
14. Brokerage. Except as set forth in the next sentence, Purchaser and Seller
represent
5
and warrant to each other that neither party has dealt with any broker, finder
or the like in connection with the transaction contemplated by this Agreement or
with regard to the Premises. Seller represents that it has dealt with CR
Properties, Inc., in connection with the sale of the Premises; however, such
broker did not bring about the transaction contemplated by this Agreement.
Purchaser and Seller each agree to indemnify, defend and hold the other harmless
from and against all loss, expense (including, without limitation, reasonable
attorneys' fees disbursements and court costs), damage and liability resulting
from a breach, or alleged breach, of their respective representations set forth
above. Purchaser agrees to give testimony to this effect in case any action or
proceeding is instituted by any real estate broker or any person, licensed or
otherwise, in connection with this transaction. This Section 14 shall survive
the termination of this Agreement or delivery of the Deed.
15. Notices. Unless otherwise provided herein, any notice, demand, request or
other communications made, given required or permitted pursuant to this
Agreement shall be sufficient if it is (a) in writing, (b) delivered either (i)
personally against written receipt, or (ii) mailed by certified or registered
United States first-class mail, return receipt requested, postage prepaid, or
(iii) delivered by a nationally reputable overnight carrier service providing
for next business day receipted delivery, and (c) addressed to the party for
whom intended, as follows:
if to Seller:
ASD GROUP, INC.
0 Xxxxxxxx Xxxxxx
Xxxxxxxxxxxx, XX 00000
Telecopier No.: (000) 000-0000
Attention: Xxxxxxx Xxxxx, CFO
with a copy to:
CERTILMAN BALIN XXXXX & XXXXX, LLP
00 Xxxxxxx Xxxxxx
Xxxx Xxxxxx, Xxx Xxxx 00000
Telecopier No.: (000) 000-0000
Attention: Xxxxxxx X. Xxxxxxx, Esq.
if to Purchaser:
PNC BANK, NATIONAL ASSOCIATION
Xxx Xxxxx Xxxxxx Xxxxxxxxx
Xxx Xxxxxxxxx, Xxx Xxxxxx 00000
Telecopier No.: (000) 000-0000
Attention: Mr. Xxxx Xxxxx, Vice President
with a copy to:
XXXXX XXXXXXX XXXXXXX & XXXXX LLP
000 Xxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Telecopier No.: (000) 000-0000
Attention: Xxxxxxxx Xxxxxx, Esq.
Either party may designate by notice given to the other a new address to
which notices or other communications intended for such party shall thereafter
be given. Unless otherwise stated in this Agreement, a notice or other
communication shall be deemed given on the date same is either delivered against
written receipt or delivery is refused, as evidenced by the records of the
United States Postal Service, the delivery service or the overnight courier
service, as appropriate. Notices given by the attorneys for the parties shall be
deemed notice given by the parties.
16. Eminent Domain. If, after the date hereof and prior to the Closing Date,
all or any part of the Premises is subject to condemnation or is condemned or is
taken by a body having the power of eminent domain, this Agreement shall remain
in full force and effect. Seller shall use its best efforts to collect the
condemnation award and on the Closing Date Seller shall deliver to Purchaser the
full amount of any award so collected, net of its expenses related thereto, or
assign to Purchaser its right to collect same if uncollected. Seller shall not
settle any condemnation proceeding without Purchaser's prior approval.
17. Delivery of Premises. Seller shall deliver the Premises to Purchaser at
the Closing, vacant and free of all occupants or tenancies of any nature or
description and in its then "as is" condition. Purchaser acknowledges that ASD
Acquisition Group, Inc., is purchasing substantially all of the the personal
property of Seller and that such personal property shall be in and upon certain
of the Premises at the time of closing and that Purchaser will be leasing
certain of the Premises to ASD Acquisition Group, subsequent to the closing
pursuant to the terms of a lease.
18. Representations and Warranties of Seller. Seller warrants and represents
to Purchaser, as of the date hereof, which representations and warranties shall
be true and correct in all material respects of the Closing Date, that Seller is
a corporation duly organized and validly existing under the laws of the State of
Delaware, and subject to the approval of the Bankruptcy Court, has the power and
authority to enter into this Agreement and to consummate the transactions
contemplated hereby.
19. No Survival of Representations. The acceptance by Purchaser of the Deed
transferring title to the Premises to Purchaser shall be deemed to be full
performance of and discharge of any and all agreements and obligations to be
performed by Seller pursuant to the provisions of this Agreement. None of the
representations, warranties, terms, covenants or conditions of this Agreement or
obligations of the parties hereto shall hereto shall survive the Closing and
delivery of the Deed, except as may be specifically set forth in this Agreement.
20. Premises "As Is". All undertakings and agreements between the parties
prior to the date hereof are merged herein. This Agreement fully and completely
expresses the parties'
7
agreement. Purchaser has inspected the Premises, or caused an inspection thereof
to be made on Purchaser's behalf. Purchaser is acquainted with the condition of
the Premises and the sub-surface conditions beneath the Premises and is taking
title to the Premises subject to all environmental conditions affecting the
Premises. Purchaser acknowledges that neither Seller nor any person acting or
purporting to act for Seller has made or now makes any representations or
warranties, and that Seller is unwilling to make any representations and has
held out no inducements to Purchaser other than those expressed herein. Without
limiting the generality of the foregoing, Purchaser has not relied on any
representations or warranties, and Seller has not made any representations or
warranties in either case express or implied, as to (i) the current or future
real estate tax liability, assessment or valuation of the Premises; (ii) zoning
ordinances and the ability to obtain a variance in respect to the non-compliance
of the Premises with zoning ordinances; (iii) the presence or absence of any
rules or notices of violations of law issued by any Governmental Authority; (iv)
the presence or absence of hazardous materials or the existence of environmental
violations, or (v) any other matter or thing affecting or relating to the
Premises. Seller is not liable or bound in any manner by any verbal, or written
statements, representations, real estate brokers' "set-ups" or information
pertaining to the Premises or the operation, layout, expenses, condition,
income, leases or rents furnished by any real estate broker, salesman, agent,
employee, or other person, unless the same are specifically set forth herein.
Purchaser agrees to take the Premises "as is", and in its present condition,
subject to reasonable use, wear and tear, and damage by fire and other
casualties, due to a taking by condemnation or eminent domain and natural
deterioration between the date hereof and the Closing Date.
21. No Assignment. This Agreement may not be assigned or otherwise
transferred by Purchaser; provided, however, Purchaser shall have the right to
assign this Agreement at the Closing, to any Affiliate of Purchaser whose name
and address shall have been provided to Seller at least two (2) business days
prior to the Closing Date. The term "Affiliate" shall mean any entity which
shall: (1) Control, (2) be under the Control of, or (3) be under common Control
with the Purchaser and which shall have substantially the same principals as
Purchaser. The term "Control" shall mean ownership of more than fifty percent
(50%) of the outstanding voting stock of a corporation or other majority equity
and control interest if not a corporation and the possession of power to direct
or cause the direction of the management and policy of such corporation or other
entity, whether through the ownership of voting securities, by statute or
according to the provisions of a contract.
22. No Liability. No individual members, officers, directors, shareholders,
agents or representatives of Seller or Purchaser shall have any personal
liability under this Agreement, either for the observance or performance of such
party's rights, duties or obligations hereunder or for the default of such party
to observe and perform its obligations hereunder, or under any document executed
in connection with the transactions contemplated hereby, or otherwise.
23. Termination Right. Notwithstanding anything herein to the contrary,
Purchaser shall have the right to terminate this Agreement if (i) Seller fails,
within thirty (30) days from the date hereof, to obtain the Order, or (ii) the
Order is vacated or materially modified without Purchaser's consent.
8
24. Inspections.
(a) At any time prior to Closing. Seller will give Purchaser and its
consultants, contractors, engineers, and other representatives access
to the Premises at reasonable times and upon notice to Seller.
Purchaser, at its expense, may take measurements, show the Premises to
contractors, architects, insurers, banks and other lenders or
investors, and prospective tenants, and conduct soil tests, borings,
percolation tests, surveys, site analyses, structural tests, and other
such tests, inspections or investigations with respect to the Premises
as Purchaser may desire (collectively, "Inspections"). Seller agrees
to cooperate with and assist Purchaser as Purchaser may desire,
provided that Purchaser agrees to use all reasonable efforts to avoid
any damage or interference to the Premises as a result of any
Inspections performed thereon and agrees to restore the Premises to
substantially the same condition as existed prior to Inspections.
(b) Prior to entering the Premises for the purpose of conducting
Inspections, Purchaser shall provide Seller with no less than
twenty-four (24) hours' prior notice, which may be give by facsimile
(Attention: Xxxxxxx Xxxxx), on each occasion before entering upon the
Premises, advising Seller of the date and anticipated time of such
entry as well as the nature of the Inspections to be undertaken, so
that Seller may have a representative present at such times. In no
event shall such notice be given later than 4 p.m. of the business day
prior to the anticipated date of any such entry.
25. No Financing Contingency. This Contract is specifically not subject
to Purchaser's ability to obtain financing.
26. Miscellaneous.
(a) Modification of Agreement; Waivers. This Agreement may not be
changed or terminated, nor may its provisions and requirements be
waived, unless such modification, termination or waiver is in writing
and signed by the party or parties against whom such modification,
termination or waiver is to be enforced.
(b) Severability. If any term or provision of this Agreement shall, to
any extent, be invalid or unenforceable, the remainder of this
Agreement shall not be affected and each such remaining provision of
this Agreement shall be valid and enforceable to the fullest extent
permitted by law.
(c) Recording of Agreement. Purchaser hereby agrees that is shall not
record this Agreement or any memorandum hereof.
(d) Captions. The captions contained in this Agreement are for
convenience and reference only and in no way define, limit or describe
the scope or intent of this Agreement or in any way affect this
Agreement.
(e) Governing Law. This Agreement, and all questions of interpretation
hereof and
9
all controversies hereunder, shall be construed in accordance with and
governed by the laws of the State of New York, without giving effect
to principles of conflicts of law.
(f) No Third Party Rights. This Agreement shall not be deemed to
create any rights in any third parties that were not heretofore in
existence.
(g) Counterparts. This Agreement may be executed in one or more
counterparts, each of which shall be deemed an original and all of
which when taken together shall constitute one and the same
instrument.
(h) Further Assurances. Each of the parties hereto agrees to cooperate
with the other party in executing any ancillary agreements that may
hereafter be necessary from time to time or carry out the intent of
the parties herein contemplated.
(i) Calculation of Time. Whenever in this Agreement a period of time
is stated as a number of days, it shall be construed to mean calendar
days; provided, however, that when any period of time so stated would
end upon a Saturday, Sunday or legal holiday, such period shall be
deemed to end upon the next day following which is not a Saturday,
Sunday or legal holiday and if the number of days is expressed as
business days, then days on which national banks are required or
permitted to close shall not count toward such total.
(j) Schedules. The schedules attached to this Agreement are
incorporated herein by reference and are made a part of this
Agreement.
10
IN WITNESS WHEREOF, this Agreement has been duly executed by the parties
hereto as of the day and year first above written.
SELLER:
ASD GROUP, INC.
By: /s/ Xxxxxxx X. Xxxxxxxxxx
----------------------------------
Name: Xxxxxxx X. Xxxxxxxxxx
Title: C.O.O.
AUTOMATIC SYSTEMS DEVELOPERS, INC.
By: /s/ Xxxxxxx X. Xxxxxxxxxx
----------------------------------
Name: Xxxxxxx X. Xxxxxxxxxx
Title: C.O.O.
PURCHASER:
PNC BANK, NATIONAL ASSOCIATION
By: /s/ Xxxx Xxxxx
----------------------------------
Name: Xxxx Xxxxx
Title: Vice President
11
Schedule of Exhibits
To
Purchase and Sale Agreement
Exhibit Title
------- -----
Schedule A Legal Description of Premises
Schedule B Covenants, Restrictions and Easements
Schedule C The Order
