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Exhibit 10.4
PURCHASE AGREEMENT
This Purchase Agreement is made this 1st day of June, 1997 (this
"Agreement") by and among PROM MANAGEMENT GROUP, INC., a California corporation
doing business as Maxim Property Management, and PROM X, INC., a California
corporation doing business as The Corporate Living Network (collectively
referred to herein as "Seller") and XXXXXXXXX, INC., a Maryland corporation
("Purchaser");
W I T N E S S E T H
WHEREAS, Seller is, among other activities, engaged in the business of
providing corporate housing in units located at certain properties in the
Northern California area;
WHEREAS, Purchaser desires to purchase, and Seller desires to sell, an
exclusive right (the "Exclusivity") to lease units in certain properties managed
by the Seller described in Schedule 1.1 hereto, a list of Seller's customers in
connection with this business (the "Customer List") and all of Seller's interest
in the rental contracts and other documents described in Schedule 1.2 hereto
(the "Assumed Contracts") upon the terms and conditions hereinafter set forth
(the Exclusivity, Customer List and Assumed Contracts being hereafter
collectively referred to as the "Business"); and
WHEREAS, as a condition to purchasing the Business, Purchaser has
requested that the Seller execute a Non-Competition Agreement in the form
attached hereto as Exhibit 7.4 (the "Non-Competition Agreement"), and the Seller
has agreed to do so;
NOW, THEREFORE, in consideration of the mutual promises contained in
this Agreement and other good and valuable consideration, the receipt and
sufficiency of which is hereby acknowledged, the parties hereto hereby agree as
follows:
1. SALE AND PURCHASE OF BUSINESS. Upon the terms and conditions of this
Agreement, Seller shall deliver, transfer and convey to Purchaser, and Purchaser
shall purchase and pay for, the Business and the Non-Competition Agreement. The
Business is being sold "as is" with all faults and conditions and no
representations and warranties, express or implied, except as set forth in this
Agreement.
1.1 EXCLUSIVITY. Seller shall, subject to the conditions set
forth in this Section 1.1, grant to Purchaser the exclusive right commencing
June 1, 1997 and
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ending May 31, 2000 (the "Exclusivity Period") to rent corporate housing units
at the properties described on Schedule 1.1; provided, however, that Corporate
Apartment Rentals (a corporate housing provider unaffiliated with the Seller)
may rent as corporate housing during the Exclusivity Period no more than thirty
(30) units at Park Place.
To maintain its right of exclusivity with respect to a
property, Purchaser shall comply with the following conditions:
A. Subject to the next sentence, Purchaser shall, from
and after the xxxx Xxxxxx has made available to
Purchaser sufficient units at a property (but only at
such times as sufficient units are available at a
property), rent a minimum number of units at such
property, which number is set forth in Schedule 1.1
with respect to each property. In order to maintain
its exclusive rights with respect to a property,
Purchaser shall rent at least the minimum number of
units at such property for at least nine months in
each of the following twelve-month periods: June 1,
1997 - May 31, 1998; June 1, 1998 - May 31, 1999;
June 1, 1999 - May 31, 2000. (If a sufficient number
of units are not available to Purchaser at a property
in any month to enable Purchaser to rent the minimum
number of units required at that property, but
Purchaser shall have rented the units available to
it, Purchaser shall be deemed to have rented the
minimum number of units at that property for that
month.) Purchaser shall use reasonable efforts to
stagger lease commitments with respect to the
corporate units on each property. Seller shall use
reasonable efforts to make available to Purchaser a
mix of unit types (e.g., one bedroom, two bedroom,
three bedroom) on each property to enable Purchaser
to conduct its corporate housing business on each
property.
B. Purchaser shall not rent more units at such property
than the maximum number set forth in Schedule 1.1,
unless Seller in its sole and absolute discretion
agrees on a case-by-case basis that Purchaser may
rent a greater number of units at such property.
C. All leases entered into by Purchaser with respect to
the units at such property shall have a minimum term
of six months, unless Seller shall in its sole and
absolute discretion on a case-by-case basis consent
to shorter-term leases.
D. Purchaser shall make timely payments of rent and
other charges. The rental rate for each unit shall be
the market rate in effect at
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the time for units on the property, without
deductions for concessions, specials, etc., unless
such concessions, specials and the like are in effect
for units on the property for four months or longer;
provided, however, that concessions, specials, etc.
that are in effect during an initial lease-up phase
with respect to a property shall not be deducted even
if they run for a period of four months or more.
Purchaser shall pay any late charges, lock-out
charges and other similar charges as set forth in the
applicable lease agreement.
E. Purchaser and Purchaser's vendors shall maintain the
insurance required by Seller, as set forth in the
insurance addendum to Schedule 1.1.
F. Purchaser shall sign the form of lease agreement in
effect for Seller's units on the property. Purchaser
must sign standard lease agreements, addendums and
any other documents in connection with leasing the
units in effect at each property. A copy of the
current standard form is attached as Exhibit C.
Seller may amend, change or replace such lease form
in its sole and absolute discretion at any time but
not to reduce the ability for the Purchaser to
provide corporate apartments. Each such lease must be
signed at the property office and a key will be
delivered at that time. Any material breach of any
such lease agreement(s) at a property which is not
timely cured shall result in loss of exclusivity for
Purchaser at that property.
G. Purchaser shall conduct its business at the
properties at a quality-of-performance service level
customary in the industry (e.g., Purchaser's
employees shall interact with Seller's employees in a
professional and courteous manner). Purchaser shall
abide by all the rules and regulations in effect on
the properties. Seller shall notify Purchaser in
writing of noncompliance with quality of service
standards, and Purchaser shall cure such
noncompliance within thirty (30) days of receipt of
such notice.
Upon Seller's reasonable request therefor, Purchaser shall
provide documentation of compliance with the conditions set forth above.
So long as Purchaser complies with the above conditions with
respect to a property, Seller shall not rent units at such property (other than
at Park Place, as noted above) to any corporate housing provider other than
Purchaser and shall refer to Purchaser all requests to rent such units. In the
event Purchaser fails to comply with the above conditions with respect to a
property, Purchaser shall no longer have
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the right of exclusivity for such property; provided, however, that, so long as
Purchaser does not lose exclusivity for failure to comply with condition D. or
G. above or for failure to maintain the insurance it must maintain, Purchaser
shall continue to have the right to rent units at such property and all terms
and provisions of this Agreement except those pertaining to exclusivity shall
remain operative with respect to such property; and provided further, that
Purchaser shall continue to have the right of exclusivity for all other
properties with respect to which Purchaser is in compliance.
Seller shall develop and implement a policy regarding
Purchaser's right of exclusivity and shall use reasonable efforts to oversee
compliance by Seller's employees with such policy. If Purchaser notifies Seller
in writing of a violation of Seller's exclusivity policy, Seller shall notify in
writing the leasing agent responsible for the violation of non-compliance with
Seller's policy.
IF RECURRING VIOLATIONS (DEFINED BELOW) OF THE EXCLUSIVITY
POLICY OCCUR, PURCHASER AND SELLER AGREE THAT PURCHASER SHALL, AS ITS SOLE AND
EXCLUSIVE REMEDY, BE ENTITLED TO DAMAGES EQUAL TO $250.00 PER MONTH PER LEASE
DURING THE TERM OF THE LEASE OR LEASES ENTERED INTO BY CORPORATE HOUSING
PROVIDERS OR TENANTS IN VIOLATION OF THE EXCLUSIVITY POLICY. "RECURRING
VIOLATIONS" MEANS A SECOND VIOLATION IN ANY CALENDAR YEAR WITH RESPECT TO ANY
PROPERTY DESCRIBED IN SCHEDULE 1.1, OCCURRING AFTER SELLER HAS RECEIVED WRITTEN
NOTICE FROM PURCHASER OF THE FIRST VIOLATION.
Seller shall, during the Exclusivity Period, refer all
requests for corporate rentals (e.g., renting of furniture plus one amenity) or
rentals of furniture only units for less than six months to Purchaser, for no
referral fees. Such referrals shall be provided so long as Purchaser has not
lost its exclusivity due to quality of performance issues (professionalism,
timely service, timely payment and so on.) For all referrals after the
Exclusivity Period, Purchaser shall pay Seller the market rate referral fees.
So long as Purchaser provides a letter of responsibility
acceptable to Seller in its sole and absolute discretion and Seller is satisfied
that Purchaser has the financial ability to perform its obligations under a
lease, Seller shall waive the security deposit for each lease entered into by
Purchaser; provided, however, that if Purchaser fails to make timely payment of
rents and charges, Seller may require Purchaser to provide security deposits.
Notwithstanding the preceding sentence, Purchaser must abide by all property
policies regarding "holding" apartments, which include at present a security
deposit for a forty-eight hour hold; Purchaser
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acknowledges that such policies are subject to change at any time in Seller's
sole and absolute discretion.
Seller's on-site staff shall not be involved in Purchaser's
rental of the corporate units described in Schedule 1.1, except as follows:
- the preparation of the lease and related materials
- provision of property tours upon eight-hours prior
notice (Purchaser shall endeavor to give such notice
by facsimile)
- delivery to Purchaser's occupants of Purchaser's
move-in materials
- allowing entry to Purchaser's vendors as reasonably
needed
Purchaser agrees to indemnify Seller against any Damages (as
defined in paragraph 12.2 hereof) incurred by Seller as a result of Seller's
on-site staff allowing entry to Purchaser's vendors.
Purchaser and Purchaser's occupants must sign all disclosure
statements required by Seller. Seller may amend, change or replace such
disclosure statements in its sole and absolute discretion at any time. Purchaser
shall be responsible for obtaining signatures on disclosure statements for each
occupant of Purchaser. The current disclosure statement for Mansion Grove is
attached as Exhibit D.
Purchaser shall provide to Seller a resident profile for each
of Purchaser's occupants prior to occupancy.
Purchaser shall, if required by law, change the locks for each
new occupant of space leased by Purchaser. Purchaser agrees to provide Seller
with copies of new keys when locks are changed. Purchaser agrees to indemnify
Seller against any Damages incurred by Seller as a result of failure to change a
lock for a new occupant, whether required by law or not.
1.2 SALE OF PROPERTIES BY SELLER. Purchaser and Seller
acknowledge and agree that, in the event Seller transfers properties containing
more than fifty percent (50%) of the units listed on Schedule 1.1 hereto (for
purposes of this paragraph 1.2, the "Units") which Purchaser has the exclusive
right to rent as corporate housing, Purchaser shall be so deprived of
property-driven customer contacts representing the underlying goodwill of the
Business that the value of the Business being purchased by Purchaser will be
significantly affected. Purchaser and Seller therefore agree that if, prior to
June 1, 1999, Seller sells at one time or from
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time to time properties that, on a cumulative basis, contain more than fifty
percent (50%) of the Units which Purchaser has the exclusive right to rent as
corporate housing (the "Sale Threshold"), Seller shall immediately refund to
Purchaser an amount equal to the product of (a) a fraction of the Purchase Price
set forth in Section 3.2 (the "Purchase Price") the numerator of which is the
number of days remaining from and after the date of the sale which results in
the Sale Threshold being met until June 1, 1999 and the denominator of which is
730 multiplied by (b) the percentage of Units sold.
1.3 ADVERTISING RIGHTS. As part of Seller's For Rent Magazine
or Renter's Digest property advertising, or any similar property periodical,
which contains a "by line" advertising The Corporate Living Network, said "by
line" shall, during the period of exclusivity provided for in Section 1.1, read:
"Ask about XxxxxXxxx'x fully furnished corporate accessorized apartments, call:
1-800-______"). The telephone number used shall be either the local Northern
California number or the 800 number acquired by Purchaser pursuant to Section
1.3 of this Agreement. Seller will provide such "by line" advertising for a
property so long as such advertising results in no additional cost to Seller and
Purchaser has retained its exclusive rights with respect to such property. If
additional costs arise, Purchaser may elect to pay such additional costs and in
that event, Seller shall maintain the "by line" advertising. Any additional
advertising by Purchaser concerning corporate housing or otherwise, including
without limitation, specific advertisements of corporate housing and yellow
pages advertisements for corporate housing shall be the responsibility of
Purchaser. During the Exclusivity Period, Purchaser shall have the right to
display reasonable items (e.g., displays stating "Corporate Housing Available")
and materials at the rental office on the properties at which the corporate
units described in Schedule 1.1 are located and with respect to which Purchaser
has maintained its exclusivity, subject to Seller's prior written approval of
such materials, which approval shall not unreasonably be withheld.
1.4 TELEPHONE NUMBERS. Purchaser shall have the right in
perpetuity to use the 800 telephone number and telephone numbers relating to the
Northern California offices of The Corporate Living Network and, to the extent
assignable, such numbers will be assigned to Purchaser. The costs of
transferring these numbers and any costs of operating these numbers shall be
borne by Purchaser.
1.5 UNDERSTANDINGS OF THE PARTIES WITH RESPECT TO THE
BUSINESS. It is understood that Alderwood, Park Central, Hilltop and Timberleaf
are syndicated properties and that Kensington and Xxxxxxx Xxxx are joint
ventured properties. In the event that events beyond the control of Seller make
it impossible for Seller to grant the exclusivity described in Section 1.1 for
these properties, Seller shall allow exclusivity, upon the conditions set forth
in Section 1.1, for a replacement number of units ("Replacement Units") in
locations comparable to or better than said
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properties. Replacement Units at a property shall not increase the minimum
number of units which Purchaser must rent at said property in order to maintain
the exclusivity described in Section 1.1.
It is understood that Trellis Square, Canyon Xxxxx and Bay
Landing are properties that are fee managed by Prom Management Group, Inc. All
existing leases at these properties shall be assigned to Purchaser pursuant to
terms to be agreed upon by Purchaser and the property owner; however, it is
understood and agreed that Seller can give no assurance to Purchaser regarding
the conduct of business on these properties in the future.
In the event that Seller sells during the Exclusivity Period
any of the properties indicated in Schedule 1.1 as subject to Purchaser's right
of exclusivity and Seller is thereafter unable to grant (or cause the transferee
thereof to grant) the exclusivity for these properties required by Section 1.1,
Seller shall allow exclusivity, upon the conditions set forth in Section 1.1,
for Replacement Units in locations comparable to or better than said properties;
provided, however, that Replacement Units at a property shall not increase the
minimum number of units which Purchaser must rent at said property in order to
maintain the exclusivity described in Section 1.1; and provided further, that if
Seller sells properties on which more than fifty percent (50%) of the units as
to which Purchaser has a right of exclusivity are located, Purchaser shall have
the rights set forth in Section 1.2.
IF SELLER IS UNABLE TO PROVIDE REPLACEMENT UNITS, PURCHASER
AND SELLER AGREE THAT ANY LOSSES SUFFERED BY PURCHASER WOULD BE DIFFICULT OR
IMPOSSIBLE TO CALCULATE, AND PURCHASER AND SELLER THEREFORE AGREE THAT SELLER
SHALL PAY TO PURCHASER AS LIQUIDATED DAMAGES AND NOT AS A PENALTY $2,500.00 PER
TRANSFERRED UNIT NOT REPLACED WITH A REPLACEMENT UNIT.
It is understood that Seller currently has some leases to
third-party corporate housing providers at the properties set forth on Schedule
1.1. Purchaser and Seller agree that such leases shall not be included in the
Assumed Contracts and shall not be assigned to Purchaser. Seller shall use
reasonable efforts to terminate the leases to third-party corporate housing
providers (except for Corporate Apartment Rentals) upon expiration of such
leases and shall allow extensions of such leases only to accommodate existing
occupants at the units covered by such leases.
It is understood that the rental contract between Seller and
Cort shall be included in the Assumed Contracts and that the term of the Cort
contract shall expire no later than December 31, 1997. Purchaser shall, prior to
January 1, 1998,
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continue to use Cort as a supplier of furniture as long as Cort's service,
quality and price meet Purchaser's standards. If Purchaser determines that Cort
does not meet Purchaser's standards, Purchaser shall provide reasonable evidence
of such failure to Seller. Prior to January 1, 1998, Purchaser shall not
knowingly negatively affect Cort's provision of complimentary furniture to
Seller. Purchaser reserves the right in its sole and absolute discretion to
supply its own housewares (including electronics) or to contract independently
for such housewares.
It is understood that Seller currently operates a
limited-scale corporate housing program in Arizona and the Pacific Northwest.
Purchaser agrees that The Corporate Living Network name and trademark may
continue to be used by Seller outside of northern California.
It is understood that the sale of the Business to Purchaser
pursuant to this Agreement does not involve the sale of real property.
1.6 ASSIGNMENT OF SERVICE CONTRACTS. With respect to the
Assumed Contracts, Seller shall, on the Closing Date set forth in Section 4 of
this Agreement (the "Closing Date"), or as soon thereafter as practicable,
assign to Purchaser all of the related, underlying contracts for the rental of
apartments, furniture, and housewares and all of the unrelated underlying
contracts for the provision of electric usage, cable television service, water,
sewer, telephone service and so on (all such contracts are referred to
hereinafter the "Service Contracts"). Upon such assignment, Purchaser shall (a)
be entitled to all of Seller's rights (including the right to the return of all
security deposits, if any, paid by Seller), (b) assume all of Seller's
obligations, and (c) make all further payments due under the terms of the
Service Contracts, as though the named party to each Service Contract.
1.7 NON-ASSIGNABLE SERVICE CONTRACTS. The parties hereto
recognize that it may be impossible or impractical for Seller to assign all of
the Service Contracts. A Service Contract that is impossible or impractical to
assign shall be referred to hereafter as a "Non-assignable Service Contract".
Seller agrees that Non-assignable Service Contracts shall not be extended beyond
their initial expiration dates. With respect to each Non-assignable Service
Contract, the following shall apply as of the Closing Date and thereafter: (a)
Seller shall assign its economic rights and obligations with respect to such
Contracts; (b) Seller shall remain legally obligated under the terms of such
Contracts; (c) Purchaser shall be entitled to all of Seller's rights (including
the right to the return of security deposits, if any, paid by Seller), and shall
assume all of Seller's financial obligations and make all further payments due
by Seller under the terms of the Non-Assignable Service Contracts which accrue
on or after the Closing Date; and (d) Purchaser shall indemnify and hold Seller
harmless for any claim made against Seller due to the non-payment or
non-performance by Purchaser of any financial or other obligation assumed by
Purchaser hereunder with respect to each such Non-assignable Service Contract.
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Seller shall remain liable for and shall indemnify and hold Purchaser harmless
for any claim made against Purchaser with respect to the non-performance or
non-payment of any financial or other obligation of Seller with respect to a
Non-assignable Service Contract which accrued prior to the Closing Date.
1.8 PRORATIONS. Amounts due or payable or prepaid on Service
Contracts, Non-assignable Service Contracts and all other Assumed Contracts, all
as and when actually collected (whether such collection occurs prior to or after
the Closing Date), and expenses normal to the operation and maintenance of Prom
X, Inc. (together with commissions and bonuses to Prom X Inc. and property
personnel) shall be prorated as of the close of business, May 31, 1997, based on
a 365 day year. Seller is not selling to Purchaser and Purchaser is not
purchasing any of Seller's accounts receivable for amounts due to Seller prior
to the Closing Date. Purchaser shall receive a credit in the amount of security
deposits received by Seller with regard to Assumed Contracts. Said security
deposits are set forth in Exhibit 1.8. Purchaser shall reimburse Seller for the
security deposits paid by Seller set forth in Exhibit 1.8. Any delinquent rents
collected after the Closing Date shall be promptly paid to Seller, and Purchaser
shall use reasonable efforts to collect such delinquent rents.
2. ASSUMPTION OF LIABILITIES. Purchaser shall assume the obligations
and liabilities of Seller with respect to the Business that arise on or after
the Closing Date (the "Assumed Liabilities"), including obligations relating to
security deposits that Seller has received with regard to Assumed Contracts that
must be refunded to the makers of such security deposits. Purchaser shall not
assume, and Seller shall remain liable for, all of Seller's obligations and
liabilities with respect to the Business which have arisen prior to the Closing
Date, nor shall Purchaser be responsible for any expenses incurred by Seller in
the conduct of the Business prior to the Closing Date (the "Retained
Liabilities").
3. DEPOSIT UPON EXECUTION OF AGREEMENT; PAYMENT OF PURCHASE PRICE;
PAYMENTS FOLLOWING CLOSING.
3.1 DEPOSIT OF $100,000.00. Upon execution of this Agreement,
Purchaser shall deposit in an interest-bearing account in favor of Seller the
sum of $100,000.00 (the "Deposit"). The Deposit and interest accrued thereon
shall be credited to the Purchase Price at the Closing described in Section 4 of
this Agreement (the "Closing"). In the event this Agreement terminates prior to
Closing, the Deposit and interest thereon shall be returned to Purchaser.
3.2 PAYMENT OF PURCHASE PRICE. The Purchase Price for the
Business being sold to Purchaser and the Non-Competition Agreement is One
Million Eight Hundred Ninety Thousand Dollars ($1,890,000.00). The Purchase
Price shall be paid in the following manner:
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(a) The Deposit and interest accrued thereon shall be paid
from the account described in Section 3.1 to Seller.
(b) The remainder of the Purchase Price shall be paid by
Purchaser to Seller at Closing by wire transfer.
3.3 PAYMENTS FOLLOWING CLOSING. Following the Closing,
Purchaser and Seller shall each make payments to the other in accordance with
the prorations described in Paragraph 1.8 above and all other relevant
provisions of this Agreement. In order to take account of such required
payments, the Purchaser and Seller agree to perform the following: (i) an
interim accounting of all payments required (an "Interim Accounting")
within thirty (30) days of the Closing Date and (ii) a final accounting of all
payments required (a "Final Accounting") within sixty (60) days of the Closing
Date.
(a) To the extent that the Interim Accounting indicates that
payments are required from Purchaser, Purchaser shall, within fifteen
(15) days thereafter, pay to Seller such required payments. To the
extent that the Interim Accounting indicates that payments are required
from Seller, Seller shall, within fifteen (15) days thereafter, pay to
the Purchaser such required payments.
(b) To the extent that the Final Accounting indicates that
payments are required from Purchaser, Purchaser shall, within fifteen
(15) days thereafter, pay to Seller such required payments. To the
extent that the Final Accounting indicates that payments are required
from Seller, Seller shall, within fifteen (15) days thereafter, pay to
the Purchaser such required payments.
In the event and to the extent that Purchaser or Seller
becomes aware following the Final Accounting of additional payments that need to
be made, such party shall promptly notify the other of such payments, and
Purchaser and Seller agree that any amount needing to be paid from one to the
other shall be promptly paid by the responsible party to the other.
4. CLOSING DATE; CLOSING; DELIVERIES.
(a) The sale and purchase of the Business and Non-Competition
Agreement shall occur on June 1, 1997, which is the Closing Date. Amounts due
and payable on Assumed Contracts shall be prorated between Purchaser and Seller
as of the close of business, May 31, 1997.
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(b) The documents to be transferred and the payments to be
made in connection with the transactions contemplated by this Agreement, which
is the Closing, shall be transferred and made at the offices of Xxxxxxxx and
Xxxxxxxx, LLP in Palo Alto, California, or at such other location as may be
agreed to by the parties, at 10:00 a.m. on June 2, 1997, or at such other time
and date as shall be mutually agreed upon by the parties.
(c) At the Closing, Seller shall deliver to Purchaser the
following:
(i) An executed Assignment and Assumption Agreement
in the form attached hereto as Exhibit 4 ("Assignment and Assumption
Agreement") assigning the Assumed Contracts to Purchaser;
(ii) The Non-Competition Agreement; and
(iii) Any consents required to properly assign the
Assumed Contracts to Purchaser, to the extent obtainable.
(d) At the Closing, Purchaser shall deliver to Seller the
Purchase Price to the extent required in Section 3 hereof and an executed
Assignment and Assumption Agreement.
5. REPRESENTATIONS, WARRANTIES AND COVENANTS OF SELLER. Seller
represents and warrants, as follows:
5.1 AUTHORIZATION, NO CONFLICTS. The Seller has the power,
capacity and authority to execute and deliver this Agreement and to consummate
the transactions contemplated herein. The execution, delivery and performance of
this Agreement and any related agreement by Seller have been duly and validly
authorized by the Board of Directors of Seller and by all other necessary
corporate action on the part of Seller. This Agreement and any related
agreements constitute the legally valid and binding obligations of Seller,
enforceable against Seller in accordance with their respective terms. The
execution, delivery and performance of this Agreement by Seller and the
execution, delivery and performance of any related agreements and the
consummation of the contemplated transactions by Seller will not violate or
constitute a breach or default, whether upon lapse of time and/or the occurrence
of any act or event or otherwise, under the Articles of Incorporation or By-Laws
of Seller or any other contract, commitment or arrangement of Seller, or result
in the imposition of any encumbrance against any of the Assumed Contracts or, to
the best of Seller's knowledge, violate any applicable law.
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5.2 ASSUMED CONTRACTS.
(a) Schedule 1.2 contains an accurate and complete list of all
the Assumed Contracts. To the best of Seller's knowledge, (i) each Assumed
Contract is valid and in full force and effect; (ii) Seller has duly performed
all of its obligations thereunder; and (iii) no breach or default, alleged
breach or default, or event which would (with the passage of time, notice or
both) constitute a breach or default thereunder by Seller, as the case may be,
or, any other party or obligor with respect thereto, has occurred or as a result
of this Agreement or consummation of the transactions contemplated by this
Agreement will occur. Consummation of the transactions contemplated by this
Agreement will not (and will not give any person a right to) terminate or modify
any rights of, or accelerate or augment any obligation of, Seller under any of
such Assumed Contracts.
(b) With respect to any lease which is an Assumed Contract (a
"Lease") and which is not a Non-assignable Service Contract, in addition to the
representations set forth in Section 5.2(a), above, Seller represents itself to
be the absolute owner of each such Lease with the absolute right and title to
assign Lease and the rents, income and profits due or to become due thereunder,
and all security deposits and prepaid rents held by Seller with respect thereto.
To the best of Seller's knowledge, (i) all Leases are valid and in full force
and have not been modified, amended or terminated, except as stated herein; (ii)
there are no outstanding assignments or pledges by Seller thereof or of the
rents, income and profits due or to become due thereunder; and (iii) each lessee
is in possession and paying rent and other charges as required under its Lease.
5.3 TITLE TO ASSETS. Seller has, and will continue to have at
the Closing Date, good and marketable title to all the Assumed Contracts;
provided, however, that leases of units are subject to mortgages or deeds of
trust on the properties at which the units are located. Except with respect to
the Non-assignable Service Contracts, Seller has the right, power, and authority
to sell, convey, assign, transfer and deliver the Assumed Contracts to Purchaser
in accordance with the terms of this Agreement.
5.4 LEGAL MATTERS. There is no suit, action, arbitration,
legal, administrative or other proceeding or governmental investigation
instituted against or, to the best of Seller's knowledge, pending or threatened
against Seller, its assets or liabilities which might have a material adverse
effect on the Business, or which might affect or restrict Seller's ability to
consummate the transactions contemplated hereby at Closing. There is no
judgment, order, injunction, or award or decree of any court, governmental
authority, or regulatory agency to which Seller is subject that will have a
material adverse effect on the Business, and Seller has not received written
notice that it is in violation of any Federal, State, or local law or regulation
including, without limitation, those relating to labor, antitrust, civil
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rights or equal protection of the law which would have a material adverse effect
on the Business.
5.5 BROKERS. No brokers, finders, or other persons (other than
Seller or existing employees of Seller) have been engaged, or brokers' fees,
finders' fees, or commissions been incurred, by Seller in connection with the
transactions contemplated by this Agreement.
5.6 PERIOD PRECEDING EXECUTION OF AGREEMENT. Since April 30,
1997, to the date hereof, there has not been to the best of Seller's knowledge:
(a) any damage, destruction, or loss, whether or not covered
by insurance, materially and adversely affecting Seller or the
Business;
(b) any pledge by Seller of the Assumed Contracts;
(c) any notice received by Seller that a corporate client is
unable to pay rent where such failure would have a material and adverse
effect on the Business.
5.7 SUPPLEMENTS TO SCHEDULES. From time to time after the date
of this Agreement and prior to Closing, Seller shall promptly inform Purchaser
in writing and supplement or amend any Schedules or Exhibits to this Agreement,
if any matter arises which, if existing or occurring at the date of this
Agreement, would have been required to be set forth or described in any Schedule
or Exhibit or if it becomes necessary to correct any information in such
Schedule or Exhibit which has become inaccurate in any material respect.
5.8 REASONABLE EFFORTS. Seller from the date of this Agreement
until the closing date will (i) use reasonable efforts to obtain any consent,
authorization or approval of, or exemption by, any governmental authority or
agency, or third party required to be obtained by it in connection with this
Agreement or the taking of any action in connection with the consummation
hereof, (ii) duly comply with all applicable laws as may required for the valid
and effective sale and transfer of the Assumed Contracts and for the performance
for all of the acts and all things contemplated by this Agreement and (iii) take
all reasonable actions necessary and appropriate to preserve and protect the
value of the Assumed Contracts.
5.9 NOTIFICATION. Prior to the Closing Date, Seller shall give
prompt notice to Purchaser of (i) any event or alleged event which would
constitute a default under this Agreement or which would cause any warranty or
representation of Seller under this Agreement to be untrue or misleading, or
(ii) any notice or other communication from any third party alleging that the
consent from any such
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14
third party is or may be required with respect to the transactions contemplated
in this Agreement.
5.10 NO NEGOTIATIONS OUTSIDE AGREEMENT. Until this Agreement
is terminated, if it is terminated, Seller will not discuss a possible merger,
sale or other distribution of all or any part of the Business (a "Sale") with
any other person or provide any information to any other person regarding
Seller, other than (i) such information provided to its legal counsel,
investment advisors, accountants and other representatives acting in a fiduciary
capacity or (ii) information which is traditionally provided in the regular
course of its business operations to third parties where Seller has no reason to
believe that such information may be utilized to evaluate a possible Sale.
Seller represents that Seller is not a party to or bound by any Agreement with
respect to a Sale other than this Agreement.
5.11 LIMITATIONS REGARDING REPRESENTATIONS AND WARRANTIES. As
used in this Agreement or in any other agreement, document, certificate or
instrument delivered by Seller to Purchaser, the phrase "to the best of Seller's
actual knowledge", "to the best of Seller's knowledge" or any similar phrase
shall mean the actual, not constructive or imputed, knowledge of Xxxxx Xxxxxxx,
who is the Executive Vice President and Chief Financial Officer of Prom
Management Group, Inc., which is the property manager for the properties subject
to this Agreement, without any obligation on her part to make any independent
investigation of the matters being represented and warranted, or to make any
inquiry of any other persons, or to search or examine any files, records, books,
correspondence and the like. Purchaser agrees to inform Seller promptly in
writing if it discovers that any representation or warranty of Seller is
inaccurate in any material respect, or if it believes that Seller has failed to
deliver to Purchaser any document or material which it is obligated to deliver
hereunder. Seller agrees that all representations and warranties of Seller shall
survive for six months following the Closing. If Purchaser has actual knowledge
that any representation or warranty of Seller is not true and correct as of the
Closing Date and elects to purchase the Business notwithstanding such fact,
Purchaser shall be deemed to have waived such specific breach of representation
and warranty and to have released Seller from all liability or responsibility in
connection therewith, and neither Purchaser nor Purchaser's permitted assignees
or successors shall be entitled to commence any action or to recover damages
from Seller based upon such specific breach of a representation or warranty. If
Purchaser has actual knowledge that any representation or warranty of Seller is
not true and correct as of the Closing Date and elects not to purchase the
Business, then this Agreement shall terminate, Purchaser shall, as its sole and
exclusive remedy, receive back the Deposit and neither party shall have any
further liability to the other except with respect to any such liability that
expressly survives a termination of this Agreement.
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15
6. REPRESENTATIONS, WARRANTIES, AND COVENANTS OF PURCHASER. Purchaser
represents, warrants, and covenants as follows:
6.1 AUTHORITY; APPROVAL OF TRANSACTIONS. Purchaser has the
power, capacity and authority to execute and deliver this Agreement and to
consummate the transactions contemplated hereby. The execution, delivery and
performance of this Agreement and any related agreement by Purchaser have been
duly and validly authorized by the Board of Directors of Purchaser and by all
other necessary corporate action on the part of Purchaser. This Agreement and
any related agreements constitute the legally valid and binding obligations of
Purchaser, enforceable against Purchaser in accordance with their respective
terms. The execution, delivery and performance of this Agreement by Purchaser
and the execution, delivery and performance of any related agreements and the
consummation of the contemplated transactions by Purchaser will not violate or
constitute a breach or default, whether upon lapse of time and/or the occurrence
of any act or event or otherwise, under the Articles of Incorporation or By-Laws
of Purchaser or any other contract, commitment or arrangement of Purchaser, or
violate any law.
6.2 LEGAL MATTERS. There is no suit, action, arbitration,
legal, administrative or other proceeding or governmental investigation pending
or, to the best knowledge of Purchaser, threatened against or related to it
which might adversely affect or restrict its ability to consummate the
transactions contemplated hereby.
6.3 BROKERS. No brokers, finders, or other persons have been
engaged, or brokers' fees, finders' fees, or commissions incurred, by Purchaser
in connection with the transactions contemplated by this Agreement.
6.4 REASONABLE EFFORTS. Purchaser from the date of this
Agreement until the Closing will (i) use reasonable efforts to obtain any
consent, authorization or approval of, or exemption by, any governmental
authority or agency, or third party required to be obtained by it in connection
with this Agreement for the taking of any action in connection with the
consummation hereof and (ii) duly comply with all applicable laws as may be
required for the performance of all acts and all things contemplated by this
Agreement.
6.5 LIMITATIONS REGARDING REPRESENTATIONS AND WARRANTIES. As
used in this Agreement, or in any other agreement, document, certificate or
instrument delivered by Purchaser to Seller, the phrase "to the best of
Purchaser's actual knowledge", "to the best of Purchaser's knowledge" or any
similar phrase shall mean the actual, not constructive or imputed, knowledge of
Xxxx Xxxxxxxx, who is the President of the Purchaser, without any obligation on
his part to make any independent investigation of the matters being represented
and warranted, or to
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16
make any inquiry of any other persons, or to search or examine any files,
records, books, correspondence and the like. Seller agrees to inform Purchaser
promptly in writing if it discovers that any representation or warranty of
Purchaser is inaccurate in any material respect, or it believes that Purchaser
has failed to deliver to Seller any document or material which it is obligated
to deliver hereunder. Purchaser agrees that all representations and warranties
of Purchaser shall survive for six months following the Closing. If Seller has
actual knowledge that any representation or warranty of Purchaser is not true
and correct as of the Closing Date and shall elect to sell the Business
notwithstanding such fact, Seller shall be deemed to have waived such specific
breach of representation and warranty and to have released Purchaser from all
liability or responsibility in connection therewith, and neither Seller nor
Seller's permitted assignees or successors shall be entitled to commence any
action or to recover damages from Purchaser based upon such specific breach of a
representation or warranty. If Seller has actual knowledge that any
representation or warranty of Purchaser is not true and correct as of the
Closing Date and shall elect not to sell the Business, then this Agreement shall
terminate, Purchaser shall receive back the Deposit and neither party shall have
any further liability to the other except with respect to any such liability
that expressly survives a termination of this Agreement.
7. CONDITIONS TO PURCHASER'S OBLIGATIONS. Purchaser's obligations
hereunder are subject to the fulfillment prior to or on Closing of each of the
following conditions, the performance of any of which may be waived in writing
by Purchaser.
7.1 REPRESENTATIONS AND WARRANTIES TRUE ON CLOSING. The
representations and warranties of Seller contained in this Agreement, including
the Exhibits and Schedules (as supplemented) thereto, shall be true in all
material respects on Closing as though such representations and warranties were
made as of such time.
7.2 COMPLIANCE. Seller shall have performed and complied in
all material respects with all covenants, agreements and conditions required by
this Agreement to be performed and complied with by it prior to or on Closing.
7.3 DUE DILIGENCE RESULTS. Nothing shall have come to the
attention of Purchaser or its agents in the course of its due diligence
investigation pursuant to Section 9, or otherwise which demonstrates that any of
the representations or warranties of Seller is inaccurate or incomplete.
7.4 NON-COMPETITION AGREEMENT OF THE SELLER. Seller shall have
executed and delivered to Purchaser the Non-Competition Agreement, the execution
and delivery of such Agreement being a material inducement to the Purchaser to
enter into this Agreement.
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7.5 EMPLOYMENT AGREEMENTS. Purchaser shall have entered into
employment agreements satisfactory to Purchaser in its sole and absolute
discretion with Xxxxxxxxxx Xxxxxxx and Xxxxxx Xxxxxxxxx.
8. CONDITIONS TO SELLER'S OBLIGATIONS. Seller's obligations hereunder
are subject to the fulfillment prior to or on Closing of each of the following
conditions, the performance of any of which may be waived in writing by Seller.
8.1 REPRESENTATIONS AND WARRANTIES TRUE ON CLOSING.
Purchaser's representations and warranties, contained in this Agreement, shall
be true in all material respects on Closing as though such representations and
warranties were made as of such time.
8.2 COMPLIANCE. Purchaser shall have performed and complied in
all material respects with all covenants, agreements and conditions required by
this Agreement to be performed and complied with by Purchaser prior to or on
Closing.
9. INVESTIGATION OF SELLER'S RECORDS. Purchaser may at any time prior
to Closing, through its representatives, accountants, or counsel, make such
investigation of Seller's records relating to the Business as Purchaser deems
reasonably necessary or advisable, and its representatives shall have access to
both Seller's premises as is mutually agreeable and to such books, records and
documents as Purchaser shall reasonably request. Purchaser shall be furnished
such operating data and other information as it may reasonably request. Such
investigation shall be at Purchaser's expense.
10. CONFIDENTIALITY. Seller and Purchaser agree that this Agreement and
the transactions contemplated by this Agreement, as well as any other agreements
between the Seller and the Purchaser with respect to the transactions
contemplated by this Agreement, and any information provided to Purchaser by
Seller regarding the properties subject to this Agreement or regarding the
transactions contemplated by this Agreement, shall be held in strict confidence
by each party hereto prior to the Closing; provided, however that Seller and
Purchaser agree that the confidentiality required by this Section 10 shall not
be breached as a result of any filings made prior to the Closing by Purchaser
with the Securities and Exchange Commission.
11. TERMINATION. This Agreement and the transactions contemplated
hereby may be terminated at any time prior to Closing: (a) by unanimous consent
of Seller and Purchaser; or (b) by Purchaser if, as a result of its
investigation made pursuant to Section 9, Purchaser in its sole discretion
determines not to proceed to Closing on this Agreement. Except as otherwise
provided herein, termination of this Agreement pursuant to this Section 11 shall
terminate all obligations of the parties hereunder.
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12. INDEMNIFICATION.
12.1 INDEMNIFICATION BY SELLER. In addition to any other
indemnification contained in this Agreement, Seller covenants and agrees with
Purchaser to indemnify Purchaser, its directors, officers, shareholders, and
lenders, their successors and assigns, and hold them harmless from, against, and
in respect of any and all costs, losses, claims, liabilities, fines, penalties,
damages, and expenses (including interest which may be imposed in connection
therewith, court costs, and reasonable fees and disbursements of counsel)
(collectively, "Damages"), incurred by any of them in connection with:
(a) any misrepresentation, omission, or breach of any of the
representations, warranties, covenants, or agreements made by Seller in
this Agreement, in the Exhibits or Schedules hereto, or any agreements
delivered in connection with the transactions contemplated hereby;
(b) the Retained Liabilities; or
(c) any personal injury or property damage occurring on the
properties set forth on Schedule 1.1 hereof arising solely from the
negligence or willful misconduct of Seller, its employees, agents or
vendors.
12.2 INDEMNIFICATION BY PURCHASER. In addition to any other
indemnification contained in this Agreement, Purchaser covenants and agrees with
Seller to indemnify Seller, its directors, officers, shareholders, and lenders,
their successors and assigns, and hold them harmless from, against, and in
respect of any and all costs, losses, claims, liabilities, fines, penalties,
damages, and expenses (including interest which may be imposed in connection
therewith, court costs, and reasonable fees and disbursements of counsel)
(collectively, "Damages"), incurred by any of them in connection with:
(a) any misrepresentation, omission, or breach of any of the
representations, warranties, covenants, or agreements made by Purchaser
in this Agreement or in any agreement delivered in connection with the
transactions contemplated hereby;
(b) the Assumed Liabilities; or
(c) any personal injury or property damage occurring on the
properties set forth on Schedule 1.1 hereof arising solely out of the
negligence or willful misconduct of Purchaser, its employees, agents or
vendors.
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12.3 RIGHT TO DEFEND, ETC. Within seven (7) days after the
written assertion against an Indemnified Party by a third person of a claim or
liability which would entitle the Indemnified Party to Damages, the Indemnified
Party shall give written notice of the claim to the party obligated to indemnify
it ("Indemnifying Party"). Failure to give such notice, or any delay prejudicial
to the interests of the Indemnifying Party, shall relieve the Indemnifying Party
of any obligation of indemnification with respect to such claim or liability to
the extent the Indemnifying Party is in fact prejudiced by such failure or
delay. Upon receipt of timely notice, the Indemnifying Party shall undertake the
responsibility for the defense of such claim, at its own expense. If, within
seven (7) days after delivery of the notice of claim by the Indemnified Party,
the Indemnifying Party fails to advise the Indemnified Party of its agreement to
contest and defend against any such claim, or if the Indemnifying Party does not
participate in such litigation, proceedings, or settlement negotiations, for any
reason, then the Indemnified Party shall have the right, at the Indemnifying
Party's expense, to take such action as it deems appropriate to defend, contest,
settle, or compromise any such claim or liability, and the Indemnifying Party
agrees to be bound by any and all rulings, judgments, compromises, and
settlements reached by the Indemnified Party in good faith, in the same manner
as if it has participated therein.
12.4 PAYMENT.
(a) Each Indemnifying Party agrees to reimburse each
Indemnified Party within thirty (30) days after presentation of an itemized
statement of Damages incurred by such Indemnified Party.
(b) If payment is not made within such thirty (30) day period,
the Indemnified Party may offset such Damages against any amounts owed by it to
the Indemnifying Party.
12.5 SETTLEMENT. Except as otherwise provided in this
Agreement, no Indemnified Party shall be entitled to indemnification under this
Section 12 if such Indemnified Party voluntarily makes any payment in respect
of, settles, or offers to settle, or consents to any compromise or admits
liability with respect to, any third-party claim without the prior consent
(which consent shall not be unreasonably withheld) of the Indemnifying Party.
13. REMEDIES FOR BREACH OF CONTRACT. In the event of a threatened
breach by Purchaser or Seller of any of the provisions of this Agreement, the
party not threatening to breach shall be entitled to injunctive relief, in whole
or in part and from time to time, as more fully described below. Except as
otherwise expressly set forth in this Agreement, in the event of one or more
breaches by Purchaser or Seller of any of the provisions of this Agreement or
the Assignment and Assumption Agreement, the non-breaching party shall be
entitled to (a) injunctive relief, in
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whole or in part and from time to time, as more fully described below, and (b)
actual damages, in an aggregate amount not to exceed the Purchase Price. The
parties acknowledge that remedies at law for any breach by Purchaser or Seller
of the provisions of this Agreement will be inadequate and, accordingly, that
the non-breaching party shall, in addition to all other available remedies
(including, without limitation, seeking such monetary damages as can be shown to
have been sustained by reason of such breach, subject to the limitation set
forth in the preceding sentence), be entitled to injunctive or other equitable
relief without being required to post bond or other security of any character,
and without having to prove or otherwise establish the inadequacy of available
remedies at law for the breach hereof by the breaching party; and the Purchaser
and Seller further agree that neither shall plead or otherwise defend any claim
of breach or threatened breach on grounds of adequate remedy at law in an action
by the non-breaching party for injunctive relief. Injunctive relief and the
right to seek actual damages (subject to the limitation set forth above) shall
be cumulative and nonexclusive remedies and shall be in addition to any other
remedy to which a non-breaching party hereunder is entitled, subject to the
aforesaid limitation on the amount of damages.
14. FINANCIAL STATEMENTS.
Seller has delivered to Purchaser true and correct copies of:
(i) a balance sheet relating to the business of
Seller as at December 31, 1996 and statements of income and expenditures for the
fiscal period then ended; and
(ii) a balance sheet relating to the business of
Seller as at April 30, 1997 and statements of income and expenditures for the
period then ended.
Seller shall deliver to Purchaser as soon as practicable after
Closing a balance sheet relating to the Business as at May 31, 1997 and
statements of income and expenditures for the period then ended.
15. RISK OF LOSS. If, prior to Closing, furniture located pursuant to
the rental contract between Seller and Cort in units on the properties subject
to this Agreement is destroyed or damaged, such loss shall be borne, as between
Purchaser and Seller, solely by Seller.
16. SALES TAXES. Seller shall pay or have reduced from the Purchase
Price otherwise payable to Seller all sales, transfer, excise and documentary
taxes, and all recordation and filing fees, if any, payable in connection with
the transactions contemplated hereby.
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17. MISCELLANEOUS.
17.1 GOVERNING LAW; VENUE. All questions concerning the
construction, validity and interpretation of this Agreement and the performance
of the obligations imposed by this Agreement will be governed by the internal
laws, and not the law of conflicts, of the State of California. The parties
hereto further agree that any action brought to enforce any right or obligation
under this Agreement shall be subject to the exclusive jurisdiction of the
Courts of the State of California.
17.2 TIME IS OF THE ESSENCE. Time is material and of the
essence with regard to the performance of all obligations and the payment of all
sums pursuant to this Agreement.
17.3 EXPENSES. Each party will pay all of its expenses in
connection with the negotiation of this Agreement, the performance of its
obligations hereunder, and the consummation of the transactions contemplated by
this Agreement. Expenses incurred in connection with the Deposit shall be paid
fifty percent (50%) by the Purchaser and fifty percent (50%) by the Seller.
17.4 HEADINGS. The headings set forth herein are for
convenience only and shall not be used in interpreting the text of the sections
in which they appear.
17.5 INCORPORATION OF EXHIBITS AND SCHEDULES. Each of the
Exhibits and Schedules attached hereto is by this reference incorporated herein
and made a part of this Agreement.
17.6 NOTICES. Any notice or other communication required,
permitted or desirable hereunder, shall be sufficiently given if sent to a party
by facsimile to the facsimile number shown below for such party and if sent to a
party by certified United States Mail to the address shown below for such party.
SELLER: Xxxxx Xxxxxxx
Prom Management Group, Inc.
000 Xxxxxx Xxxxxxx
Xxxxxxx, Xxxxxxxxxx 00000-0000
Facsimile Number: (000) 000-0000
With Copy To: Xxxx Xxxxxx, Esq.
Xxxxxxxx and Xxxxxxxx, LLP
000 Xxxx Xxxx Xxxx
Xxxx Xxxx, Xxxxxxxxxx 00000
Facsimile Number: (000) 000-0000
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PURCHASER: Xxxx X. Xxxxxxxx, President
XxxxxXxxx, Inc.
0000 Xxxxxxxxxxxx Xxxxx
Xxxxxxxxxxxx, XX 00000
Facsimile Number: (000) 000-0000
With Copy To: Xxxx X. Xxxxxx, Esq.
Xxxxxx & Xxxxxxx LLP
000 Xxxxx Xxxxx Xxxxxx
Xxxxxxxxxxx, XX 00000
Facsimile Number: (000) 000-0000
17.7 SUCCESSORS AND ASSIGNS. This Agreement shall be binding
upon and inure to the benefit of the successors and assigns of the parties
hereto.
17.8 NO ASSIGNMENT WITHOUT APPROVAL. This Agreement shall not
be assigned by either the Purchaser or the Seller without the prior written
approval of the other.
17.9 ENTIRE AGREEMENT. This Agreement and the Exhibits and
Schedules attached hereto, sets forth the entire agreement and understanding of
the parties, and there are no other prior or contemporaneous written or oral
agreements, undertakings, promises, warranties, or covenants not specifically
referred to, attached hereto or contained herein. This Agreement cannot be
waived, modified or changed except by a writing signed by all of the parties
hereto.
17.10 COUNTERPARTS. This Agreement may be executed in one or
more counterparts, and/or by facsimile signature, any one of which need not
contain the signatures of more than one party, but each of which shall
constitute an original and all such counterparts taken together shall constitute
one and the same instrument.
17.11 ATTORNEYS' FEES. In any action brought by either the
Purchaser or Seller in connection with this Agreement and the transactions
contemplated hereby, the prevailing party in such action shall be entitled to
recover from the other party reasonable attorneys' fees, costs and expenses.
17.12 RIGHT TO REVIEW. Purchaser agrees that Seller has the
right to review that portion of the Registration Statement on Form S-1
("Registration Statement") proposed to be filed by Purchaser with the Securities
and Exchange Commission describing this Agreement and the transactions
contemplated hereby prior to the filing of the Registration Statement.
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IN WITNESS WHEREOF, the parties hereto have executed this
Agreement under seal on the day and year first above written.
PURCHASER SELLER
XXXXXXXXX, INC., a Maryland
corporation PROM MANAGEMENT GROUP,
INC., a California corporation dba
Maxim Property Management
By: /s/ Xxxx X. Xxxxxxxx By: /s/ Xxxxx X. Xxxxxxx
-------------------------- ------------------------------
Xxxx X. Xxxxxxxx Xxxxx X. Xxxxxxx
President Executive Vice President and
Chief Financial Officer
PROM X, INC., a California
corporation dba The Corporate
Living Network
By: /s/ Xxxxx X. Xxxxxxx
------------------------------
Xxxxx X. Xxxxxxx
Assistant Secretary
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