ASSET PURCHASE AGREEMENT
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This Asset Purchase Agreement ("Agreement"), is made and entered into
this 17th day of September, 2002 by and among SLF Enterprises, Inc., an Arizona
corporation ("Buyer"), VALET-USA, INC., a New Jersey corporation ("Seller").
RECITALS
A. Seller desires to sell and Buyer desires to purchase
substantially all of Seller's assets related to Seller's dry cleaning business
(the "Business") and enter into other agreements related thereto in accordance
with the terms and conditions of this Agreement.
B. A condition precedent to Buyer entering into this Agreement
and consummating the transactions described herein is Seller's and Xxxxxxx
Xxxxx'x agreement not to compete with certain activities of Buyer after the
closing of the transactions described herein.
NOW, THEREFORE, in consideration of the premises and the agreements
and covenants herein contained and for other good and valuable consideration,
the receipt and sufficiency of which is hereby acknowledged and subject to and
upon the conditions and terms of this Agreement, the parties hereto, intending
to be legally bound, hereby agree as follows:
ARTICLE I
PURCHASE AND SALE OF ASSETS
1.1 PURCHASED ASSETS. Seller agrees to transfer, sell, convey, assign
and deliver to Buyer, and Buyer, in reliance upon the representations,
warranties and agreements and subject to the conditions set forth in this
Agreement, agrees to purchase, accept and acquire on the Closing Date (as
defined herein) good and marketable title in and to substantially all of the
assets used in connection with the Business located at 0000 X. Xxxxxxxx Xxxx.,
Xxxxxxx, Xxxxxxx 00000 (the "Premises"), free and clear of all charges, liens,
options, encumbrances and security interests (collectively, "Liens"), including
with limitation:
(a) all tangible personal property currently utilized in
connection with the Business including all furniture, fixtures,
computers (including all software licenses and hardware), equipment,
tools, machinery, patterns, motor vehicles, telephone systems,
communication devices, inventory, supplies, office equipment,
appliances, improvements and such other items as may be listed on
SCHEDULE 1.1(A) hereto (the "Tangible Assets");
(b) all customer lists and mailing lists used in the
Business;
(c) the name "Valet-USA" and any variants thereof and all
copyrights, copyright applications, trade names, trademarks, service
marks and logos related to the Business, and all registrations of and
applications for registration of the foregoing; together with the
goodwill associated with all of the foregoing, and all filings, files
and correspondence relating thereto;
(d) all phone numbers, pager numbers and facsimile numbers
utilized in connection with the Business; and world wide web domain
names and locations;
(e) all books, records, files and manuals related to the
Business or the Tangible Assets, including all sales data; customer
files and records; vendor and supplier list and records; product
specifications and designs; advertising layouts; marketing plans and
market research reports; employee files, lists and records;
employment manuals; training manuals; technical manuals; and all
similar documents and records relating to the Business;
(f) all of Seller's right to receive payments from
customers (other than hotel customers) in connection with finished or
in-process dry cleaning in the possession of Seller as of the Closing
Date; and
(g) all other assets, properties, rights, and interests as
of the Closing Date, which are owned by Seller and used in the
conduct of the Business.
All of the assets of Seller to be purchased by Buyer hereunder are
herein sometimes collectively referred to as the "Purchased Assets."
1.2 EXCLUDED ASSETS. Notwithstanding the foregoing, Seller is
retaining and is not transferring or selling to Buyer and the terms "Purchased
Assets" and "Tangible Assets" shall not include, the Excluded Assets (as defined
herein). For purposes of this Agreement the term "Excluded Assets" shall mean
(i) the Seller's Receivables (as defined herein), and (ii) those other assets
described on SCHEDULE 1.2.
1.3 LIABILITIES AND OBLIGATIONS TO BE ASSUMED. Buyer will not assume,
and will not be deemed to have assumed any liabilities of Seller, whether known,
unknown, existing, fixed, contingent or unliquidated, whenever arising prior to
the Closing Date or thereafter. Without limiting the foregoing, Buyer does not
assume and shall not be obligated to pay or satisfy any obligation, debt or
liability, contingent or otherwise, of Seller or any person or entity controlled
by, under common control with or controlling Seller (collectively, "Affiliates,"
individually, an "Affiliate") or any other person or entity, arising from or in
connection with the Business or any other business or activity of Seller or any
of its Affiliates, including without limitation, any liability for taxes,
whether measured by income, sales or otherwise. Notwithstanding the foregoing,
Buyer shall assume Seller's rights and obligations under Seller's lease relating
to the Premises (the "Lease"); provided, however, that such rights and
obligations being assumed by Buyer are those that relate solely to or arise
exclusively during the period commencing after the Closing Date.
1.4 PURCHASE PRICE. The aggregate consideration (the "Purchase
Price") to be paid by Buyer to Seller for the Purchased Assets shall be
$80,418.72, and shall be paid as follows:
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(a) $50,000 shall be paid to Seller in cash on the Closing Date, by
wire transfer of immediately available funds in accordance with wire
transfer instructions which shall be provided by Seller to Buyer
prior to the Closing Date; and
(b) as directed by Seller, Buyer shall execute and deliver a
promissory note (the "Promissory Note") in favor of Air Pegasus of
New York, Inc., and Affiliate of Seller, in the principal amount of
$30,148.72. Payment of the Promissory Note shall be secured by a lien
on the vehicles listed on SCHEDULE 1.1(A) hereto, pursuant to a
Recourse Assignment and Security Agreement (the "Security Agreement")
to be executed at the Closing by Buyer and Seller. The Promissory
Note and the Security Agreement shall be guaranteed by Xxxx Xxxxxx
and Xxxxxx Xxxxxx as set forth therein.
1.5 ALLOCATION OF PURCHASE PRICE. The Purchase Price provided for in
Section 1.4 shall be allocated among the Purchased Assets as follows:
Tangible Assets $40,000.00
Covenant Not To Compete $ 5,000.00
Goodwill $ 5,000.00
Automobiles $30,418.72
Buyer and Seller agree to complete and file all necessary tax forms in a manner
that is consistent with the foregoing allocation and to cooperate in providing
information necessary to complete such forms.
1.6 RETURN OF SECURITY DEPOSIT. It is acknowledged that Seller has
deposited an amount not less than $3,654.00 under the Lease as a security
deposit (the "Security Deposit"). At the Closing, Buyer shall pay to Seller (by
wire transfer), in addition to the Purchase Price, the Security Deposit. Upon
Seller providing to Buyer reasonably acceptable proof that the amount of the
Security Deposit exceeds $3,654.00, Buyer shall thereupon pay such excess amount
to Seller by wire transfer.
1.7 CLOSING. The closing of the transactions contemplated by this
Agreement (the "Closing") shall take place on September 17, 2002 if the
conditions set forth in Article V have been satisfied, or as soon thereafter as
such conditions have either been satisfied or waived by the party benefiting
from such conditions, at the Premises, or at such other place as the parties
shall agree (the "Closing Date"), and shall be effective as of 12:01 a.m. on the
Closing Date. It is acknowledged and agreed that the execution of this Agreement
and the Closing shall occur simultaneously.
At the Closing, Seller shall execute and deliver to Buyer the xxxx of
sale (as described herein), and the Assignment (as defined herein) and such
other appropriate instruments of assignment, transfer and conveyance and such
other documents as Buyer and Seller mutually agree are necessary to transfer to
Buyer title to and right to possession of the Purchased Assets, free and clear
of any Liens.
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ARTICLE II
REPRESENTATIONS AND WARRANTIES OF SELLER
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Seller and Xxxxxxx Xxxxx, jointly and severally, represent and
warrant to Buyer that the following statements are true and correct in all
material respects as of the date hereof and will be true and correct as of the
Closing Date:
2.1 ORGANIZATION; GOOD STANDING. Seller is a corporation duly
organized, validly existing and in good standing under the laws of the state of
New Jersey and has all requisite power and authority to own its properties and
assets and to conduct its business as now conducted. No current or former
Affiliate of Seller has ever had any interest in the Business or the Purchased
Assets.
2.2 AUTHORIZATION OF TRANSACTION. Seller has the power to enter into
this Agreement and such other instruments and documents to be executed in
connection with this Agreement and the transactions contemplated hereby and to
carry out their obligations hereunder and thereunder. The execution and delivery
of this Agreement and any documents entered into in connection with this
Agreement and the performance of Seller's obligations hereunder and thereunder
have been duly authorized by Seller's board of directors and shareholders and
pursuant to and in accordance with the laws governing Seller, and no other
proceedings on the part of Seller are necessary to authorize such execution,
delivery and performance. This Agreement has been duly executed by Seller and is
the valid and legally binding obligation of Seller, enforceable against Seller
in accordance with its terms. The Business has been marketed for sale by the
Seller. The Purchase Price constitutes reasonably equivalent value and fair
consideration for the Purchased Assets and is the highest and best offer
received after the Seller's marketing efforts. The Seller will be able to and
intends to promptly pay all liabilities of Seller from the Purchase Price and
its other available income and assets.
2.3 NO VIOLATION; CONSENTS. The execution, delivery and performance
by Seller of this Agreement and the transactions contemplated hereby, do not and
will not (i) conflict with or result in any violation of or constitute a breach
or default under any term of the Articles of Incorporation or Bylaws of Seller,
of any agreement, license, permit or other instrument to which Seller is a party
or by which Seller is bound or to which the Purchased Assets or the Business is
subject, or any order, judgment or decree of any court or Governmental Authority
(as defined herein) to which the same are bound or subject; (ii) result in the
creation of any Lien upon any of the Purchased Assets; (iii) cause Seller to
violate any Law (as hereinafter defined); or (iv) require, other than in
connection with the transfer of any transferable permits or the assignment of
Lease, the consent, waiver, authorization or approval of any federal, state or
local government or governmental department, agency, board, commission, bureau
or instrumentality, or public or self-regulatory body or authority (each, a
"Governmental Authority") or of any other person, entity or organization.
2.4 COMPLIANCE WITH LAWS. To the best of Seller's knowledge, Seller
is not in violation of, and the Business is being conducted in accordance with,
all federal, state or local laws, regulations, orders and other legal
requirements (collectively, "Laws," individually, a "Law") applicable thereto
and Seller has no knowledge, nor has Seller received notice of, any violation or
alleged violation by Seller of any Law, nor is Seller in default with respect to
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any order, judgment, award, injunction or decree of any court or Governmental
Authority or arbitrator, applicable, in any such case, to Seller, which would
adversely affect its ability to discharge its obligations or performs hereunder
or which would adversely affect the Business or any of the Purchased Assets.
2.5 TAXES. All federal, state, local or foreign, sales, withholding,
payroll and employment taxes, fees, assessment or charges, including any
interest, penalty or addition thereto (collectively, "Taxes," individually, a
"Tax") owed by Seller (whether or not shown on any Tax return), the non-payment
of which would have a material adverse affect on the transaction contemplated
hereby or would adversely affect Seller's ability to discharge its obligations
or performance hereunder or would create a lien or encumbrance on the Purchased
Assets or would cause Buyer to be liable or responsible for the payment thereof,
have been paid and all such current Taxes have been paid or provided for or will
be paid or provided for prior to the Closing. No Tax lien exists (or will exist)
on account of any Taxes due from Seller on or as to any of the Purchased Assets
or the Business and Seller has not committed any act (or omission), the effect
of which could result in any Tax lien affecting the Business or any of the
Purchased Assets. Seller has not received any notice of, and has no knowledge of
any Tax deficiency proposed or threatened against Seller, which could otherwise
affect the Business or the Purchased Assets.
2.6 ENVIRONMENTAL. (i) Seller (A) is in material compliance with any
and all Environmental Laws (as defined herein), (B) has received all permits,
licenses or other approvals required of it under applicable Environmental Laws
to conduct the Business, and (C) is in material compliance with all terms and
conditions of any such permit, license or approval. With respect to Seller (A)
there are no past or present releases of any material into the environment,
actions, activities, circumstances, conditions, events, incidents, or
contractual obligations which may give rise to any common law environmental
liability or any liability under any Environmental Law and (B) Seller has not
received any notice with respect to the foregoing, nor is any action pending or
to Seller's knowledge, threatened in connection with the foregoing. The term
"Environmental Laws" means all federal, state, local or foreign laws relating to
pollution or protection of human health or the environment (including, without
limitation, ambient air, surface water, groundwater, land surface or subsurface
strata), including, without limitation, laws relating to emissions, discharges,
releases or threatened releases of chemicals, pollutants, contaminants, or toxic
or hazardous substances or wastes (collectively, "Hazardous Materials") into the
environment, or otherwise relating to the manufacture, processing, distribution,
use, treatment, storage, disposal, transport or handling of Hazardous Materials,
as well as all authorizations, codes, decrees, demands or demand letters,
injunctions, judgments, licenses, notices or notice letters, orders, permits,
plans or regulations issued, entered, promulgated or approved thereunder.
(ii) Other than those that are or were stored, used or disposed of in
compliance with applicable law, no Hazardous Materials are contained on or about
the Premises, and to Seller's knowledge no Hazardous Materials were released on
or about the Premises during the period the Premises were leased or occupied by
Seller.
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(iii) To Seller's knowledge, there are no underground storage tanks
on or under the Premises that are not in compliance with applicable law.
2.7 TITLE TO ASSETS. At Closing, Seller will hold and own full,
unconditional good and marketable title to all of the Purchased Assets (except
that Seller does not own the Premises, but leases the Premises), free and clear
of all Liens (except for any Liens which may attach to the Purchased Assets by
reason of any action by Buyer). All of the Purchased Assets acquired by Seller
prior to the Closing Date were acquired in the ordinary course of business for
full and fair consideration, and no other entity or person has any further
right, title or interest in or to the Purchased Assets, except as otherwise
indicated herein.
2.8 ABSENCE OF UNDISCLOSED LIABILITIES. Seller knows of no
liabilities associated with the Purchased Assets or the Business that has not
been fully disclosed in writing to Buyer.
2.9 PROTECTION OF CREDITORS. Seller has not entered into this
Agreement or made any transfer or incurred any obligations hereunder or in
connection herewith, with actual intent to disturb, hinder, delay or defraud
either present or future creditors or other persons.
2.10 PROFESSIONAL ADVISORS. Seller has consulted with Seller's legal
counsel, tax counsel, accountants and other experts and advisors deemed
necessary by Seller in connection with the transactions contemplated herein.
2.11 TITLE AND TRANSFER OF ASSETS. Upon consummation of the
transactions contemplated hereby, good title to the Purchased Assets shall be
transferred to Buyer free and clear of all Liens, except as otherwise indicated
herein. Except with respect to the assignment of the Lease, no consent of any
third party is necessary to, and there exists no restriction on, the transfer of
any of the Purchased Assets to Buyer. No governmental permits or filings (which
have not previously been issued or made) are required on the part of Seller
prior to the Closing to effect the transactions contemplated hereby.
2.12 DISCLOSURE. All documents delivered or to be delivered by
Seller, and to the best of Seller's knowledge, all documents to be delivered on
behalf of Seller in connection with this Agreement and the transactions
contemplated hereby are true, complete and correct in all material respects.
Neither this Agreement, nor any other document delivered by Seller contain any
untrue statement of a material fact or omits a material fact necessary to make
the statements made by Seller herein or therein, in light of the circumstances
in which made, not misleading. Buyer acknowledges and agrees that the
representations made in this Section do not relate to any projections or other
documents forecasting Seller's future performance that may have been supplied
by, or on behalf of, Seller.
ARTICLE III
REPRESENTATIONS AND WARRANTIES OF BUYER
Buyer represents and warrants to Seller the following statements are
true and correct, in all material respects as of the date hereof and will be
true and correct as of the Closing Date:
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3.1 ORGANIZATION AND GOOD STANDING. Buyer is a corporation organized,
validly existing and in good standing under the laws of the State of Arizona and
has the corporate power to own and use its properties and to carry on its
business as now being owned and conducted by it.
3.2 OTHER AGREEMENTS. The documents executed and delivered by Buyer
at Closing shall be duly authorized by all necessary action of Buyer and, when
executed and delivered in accordance with the terms of this Agreement, will
constitute legally valid and binding obligations of Buyer, enforceable against
Buyer in accordance with their respective terms.
3.3 AUTHORIZATION. Buyer has the full power to enter into this
Agreement and to carry out its obligations hereunder. The execution, delivery
and performance of this Agreement by Buyer have been duly and effectively
authorized and approved by all requisite action of Buyer and no other acts or
proceedings on the part of Buyer are necessary to authorize this Agreement or
the transactions contemplated hereby.
3.4 NO BREACH OF STATUTE, DECREE OR ORDER. To the best of Buyer's
knowledge, Buyer is not in default under, or in violation in any material
respect of, any contract, commitment or undertaking or any applicable statute,
law, ordinance, decree, order, rule or regulation of any governmental body, and
the consummation of this Agreement and the transactions contemplated hereby will
not constitute or result in any such default, breach or violation. There is no
lawsuit, action, proceeding, claim or investigation by any Governmental
Authority pending or to Buyer's knowledge threatened, that would or could have a
material adverse effect on the transaction contemplated by this Agreement or on
the Buyer's ability to discharge its obligations or perform hereunder.
ARTICLE IV
COVENANTS AND OTHER AGREEMENTS OF BUYER AND SELLER
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4.1 NON-COMPETITION COVENANT. In consideration of the payment of the
Purchase Price, Seller and Xxxxxxx Xxxxx agree that for a period of five (5)
years after the Closing Date neither Seller, Xxxxxxx Xxxxx nor any Affiliate of
Seller or Xxxxxxx Xxxxx shall, directly or indirectly, as a stockholder (other
than as the holder of no more than 2% of the stock of a publicly traded
company), partner, officer, director, agent, independent contractor, consultant
or otherwise:
(a) engage in any business or activity which is
similar to or competitive with the Business
within a twenty-five (25) mile radius of the
Phoenix, Arizona Metropolitan Statistical Area;
(b) as it relates to the Business, purposefully
interfere or attempt to interfere with any of
Buyer's or Buyer's Affiliates agreements and
contracts (regardless of whether these agreements
and contracts are in writing or verbal), business
relationships or employees;
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(c) take any action which is likely to materially
adversely affect Buyer's relationship with, or
purposefully interfere with the business
relationship of or solicit the business or orders
of: (A) any customer of the Business, or (B) a
prospective or potential customer of the
Business; or
(d) solicit for employment, either directly or
indirectly, any of the employees who are or were
employed by Seller as of the Closing Date;
provided, however, the covenants and restrictions
set forth in this Section 4.1(d) shall expire and
be of no further force or effect as of the first
anniversary of the Closing Date.
4.2 TRANSITION OF THE BUSINESS.
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(a) CUSTOMER INVOICES. All amounts reflected on invoices
prepared by Buyer (the "Post-Closing Invoices") for services
performed by Buyer after the Closing Date shall be the sole and
exclusive property of Buyer. Seller agrees to promptly forward to
Buyer all payments received by Seller in connection with the
Post-Closing Invoices.
(b) COMMUNICATIONS WITH CUSTOMERS. Seller agrees to
cooperate with Buyer in connection with all communications to past,
present and prospective customers of the Business concerning the
purchase of the Business by Buyer.
(c) AVAILABILITY OF XXXXXXX XXXXX. During the 30-day period
immediately following the Closing Date, Xxxxxxx Xxxxx shall be
available on a full-time basis to provide transitional support and
services at the Premises. For a period of six (6) months following
the expiration of such 30-day period, Xxxxxxx Xxxxx shall be
available via telephone to provide transitional support and in
connection with the Business.
(d) SELLER'S RECEIVABLES. Any accounts receivable or other
sums related to services performed by the Business for or on behalf
of its hotel customers on or prior to the Closing Date are referred
to as the "Seller's Receivables". The Seller's Receivables shall be
the sole and exclusive property of Seller. Seller shall be permitted
to collect the Seller's Receivables directly from the customers.
Buyer agrees to promptly forward to Seller all payments received by
Buyer related to or in connection with Seller's Receivables. Buyer
and Seller shall cooperate with each other in connection with the
collection of the receivables.
4.3 BULK TRANSFER. Seller shall indemnify, defend and hold Buyer
harmless from and against any loss, liability, cost, expense or damage resulting
from the assertion of a claim made against the Purchased Assets or Buyer by any
creditor of Seller pursuant to the Arizona Bulk Sales Statutes, or any other
applicable law related to bulk sales.
4.4 NAME CHANGE. As soon as possible after the Closing Date Seller
will file with the Secretary of State of New Jersey and Secretary of State of
Arizona those documents delivered to Buyer pursuant to Section 5.6. Seller shall
provide Buyer with evidence of such filings. For a reasonable period not to
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exceed 180 days following the Closing Date Seller may use the name "Valet-USA"
solely for the purpose of winding up Seller's affairs. After such reasonable
period Seller will not use the name "Valet USA" for any purpose or in any
manner.
ARTICLE V
CONDITIONS TO AND EVENTS AT CLOSING
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The obligations of Buyer and Seller to consummate this Agreement and
to effect the transactions contemplated hereby shall, to the extent herein
provided, be subject to fulfillment on the Closing Date of each of the following
express conditions precedent hereinafter stated.
A. Buyer's obligations to consummate this Agreement and to effect the
transactions contemplated hereby shall be subject to the following conditions;
subject to the right of Buyer to waive any one or more of such conditions:
5.1 PERFORMANCE BY SELLER. All representations and warranties of
Seller contained in this Agreement shall be true and correct at and as of the
Closing Date, and Seller shall have performed and satisfied all covenants,
conditions, and agreements required or contemplated by this Agreement to be
performed and satisfied by Seller on or prior to the Closing Date.
5.2 CORPORATE DOCUMENTS. Seller shall have delivered to Buyer copies,
certified by a duly authorized officer, of (i) Seller's articles of
incorporation and by-laws, and (ii) resolutions of Seller's shareholders and
Seller's board of directors authorizing the execution of this Agreement and the
consummation of the transactions contemplated herein.
5.3 XXXX(S) OF SALE AND ASSIGNMENTS. Seller shall have executed and
delivered xxxx(s) of sale, assignments, and such other instruments of transfer,
with covenants of warranty of title as required herein, with respect to the
Purchased Assets in form and substance reasonably required to effectuate the
conveyances hereunder.
5.4 SCHEDULES AND EXHIBITS. Buyer and Seller shall have agreed on the
final forms of all Schedules to this Agreement.
5.5 ASSIGNMENT OF TELEPHONE NUMBERS. Seller shall have executed and
delivered to Buyer any and all assignments, releases or other documents
necessary to effectuate the transfer of the telephone, pager and facsimile
numbers described in Section 1.1(d) to Buyer.
5.6 CHANGE OF NAME; FOREIGN QUALIFICATION. Buyer will have received
in a form acceptable for filing with the Secretary of State of New Jersey and
Arizona copies of such documents as may be necessary to change Seller's
corporation name from Valet-USA, Inc.
5.7 SATISFACTION OF DEBT. Buyer shall have received evidence
satisfactory to it that (i) all claims, liens or encumbrances against any of the
Purchased Assets being acquired have been released, and (ii) UCC Termination
Statements relating to the Purchased Assets.
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5.8 FURTHER ASSURANCES. Buyer shall have received such further
instruments and documents as may reasonably be required to carry out the
transaction contemplated hereby and to evidence the fulfillment of the
agreements herein contained and the performance of all conditions to the
consummation of such transactions.
5.9 ASSIGNMENT OF LEASE. Buyer shall have received a fully executed
copy of that certain Assignment, Assumption and Consent Agreement, dated as of
the Closing Date, among Buyer, Seller and SC Lakeside Phoenix, Inc. (the
"Assignment").
B. Seller's obligations to consummate this Agreement and to effect
the transactions contemplated hereunder shall be subject to the following
conditions:
5.10 PERFORMANCE BY BUYER. All representations and warranties of
Buyer contained in this Agreement shall be true and correct at and as of the
Closing Date, and Buyer shall have performed and satisfied all covenants,
conditions, and agreements required or contemplated by this Agreement to be
performed and satisfied by it on or prior to the Closing Date.
5.11 DELIVERY OF PURCHASE PRICE. Buyer shall have paid to Seller that
portion of the Purchase Price as provided in Section 1.4(a) of this Agreement
and executed and delivered the Promissory Note and the Security Agreement to
Seller.
5.12 ASSIGNMENT OF LEASE. Seller shall have received a fully executed
copy of the Assignment.
5.13 SECURITY DEPOSIT. Seller shall have received the amount of the
Security Deposit.
5.14 SCHEDULES AND EXHIBITS. Buyer and Seller shall have agreed on
the final forms of all Schedules to this Agreement.
ARTICLE VI
SURVIVAL OF REPRESENTATIONS AND WARRANTIES
AND INDEMNIFICATION
6.1 SURVIVAL OF REPRESENTATIONS AND WARRANTIES. Except as hereinafter
set forth, the representations and warranties made in this Agreement shall
survive the Closing and sale contemplated hereby until February 29, 2004 (the
"Survival Date") and shall terminate on such date.
6.2 GENERAL INDEMNIFICATION.
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(a) BY SELLER AND XXXXXXX XXXXX. Subject to the provisions of this
Article VI, by adoption of this Agreement, Seller and Xxxxxxx Xxxxx, jointly and
severally agree, to the extent hereinafter provided and subject to the terms
hereinafter set forth, to defend, indemnify and hold harmless Buyer, its
officers, directors and shareholders, against and in respect of:
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(i) any and all loss, liability, costs, expenses and
damages arising in connection with, relating to or resulting from (A) any
material misrepresentation, breach of warranty, or non-performance by Seller,
Xxxxxxx Xxxxx or their Affiliates hereunder; (B) any liability or obligation of
Seller, whether accrued, absolute, fixed, contingent or otherwise, not expressly
assumed by Buyer pursuant to this Agreement, including, without limitation,
judgments or liens attached to or asserted against the Purchased Assets; (C) any
breach of any other covenant by Seller, Xxxxxxx Xxxxx or their Affiliates made
or contained in this Agreement or in any Exhibit, Schedule, certificate or
document executed and delivered to Buyer in connection with this Agreement or
the transactions contemplated herein and referred to herein; and (D) any
obligation or liability of Seller under the Lease relating to the period prior
to and including the Closing Date.
(ii) any and all costs, expenses (including settlement
payments made as provided in this Agreement), actions, suits, proceedings,
claims, demands, assessments, judgements, incident to or arising in connection
with, relating to or resulting from any matter described in subparagraph (i) of
this Section 6.1(a); and
(iii) any and all costs, expenses and other damages
incurred by Buyer in reasonably remedying any breach, misrepresentation, or
non-performance described above, including, by way of illustration and not
limitation, all reasonable legal and accounting fees, other professional
expenses and all filing fees, and collection costs incident thereto and all such
fees, costs and expenses incurred in defending such matters.
(b) BY BUYER. Subject to the provisions of this Article VI, by
adoption of this Agreement, Buyer agrees, to the extent hereinafter provided and
subject to the terms hereinafter set forth, to defend, indemnify and hold
harmless Seller, against and in respect of:
(i) any and all loss, liability, costs, expenses and
damages incurred arising in connection with, relating to or resulting from (A)
any material misrepresentation, breach of warranty, or non-performance by Buyer
hereunder; (B) any breach of any covenant by Buyer made or contained in this
Agreement or in any Exhibit, Schedule, certificate or document executed and
delivered to Seller in connection with this Agreement or the transactions
contemplated herein and referred to herein (including without limitation the
Assignment); and (C) any liability of Buyer incurred after the Closing Date in
connection with or arising out of its ownership or use of the Purchased Assets
or the operation of the Business;
(ii) any and all costs, expenses (including settlement
payments made as provided in this Agreement), actions, suits, proceedings,
claims, demands, assessments, judgements, incident to or arising in connection
with, relating to or resulting from any matter described in subparagraph (i) of
this Section 6.1(b); and
(iii) any and all costs, expenses and other damages
incurred by Seller in reasonably remedying any breach, misrepresentation, or
non-performance or discharging any liability described above, including, by way
of illustration and not limitation, all reasonable legal and accounting fees,
other professional expenses and all filing fees, and collection costs incident
thereto and all such fees, costs and expenses incurred in defending such
matters.
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(c) DAMAGES. Any and all of the items set forth in Sections
6.1(a) and 6.1(b) for which a party is entitled to be indemnified hereunder are
referred to herein as "Damages."
6.3 NOTICE OF, AND PROCEDURES FOR, COLLECTING INDEMNIFICATION.
(a) INITIAL CLAIM NOTICE. When a party becomes aware of a situation
which may result in Damages for which it would be entitled to be indemnified
hereunder, such party (the "Indemnitee") shall submit a written notice (the
"Initial Claim Notice") to the other party (the "Indemnitor") to such effect
with reasonable promptness after it first becomes aware of such matter and shall
furnish the Indemnitor with such information as it has available demonstrating
its right or possible right to receive indemnity. If the potential claim is
predicated on, or later results in, the filing by a third party of any action at
law or in equity (a "Third Party Claim"), the Indemnitee shall provide the
Indemnitor with a supplemental Initial Claim Notice not later than fourteen (14)
days prior to the date on which a responsive pleading must be filed, and shall
also furnish a copy of such claim (if made in writing) and of all documents
including, but not limited to, the pleading filed by the third party, and
received from the third party in support of such claim. Every Initial Claim
Notice shall, if feasible, contain a reasonable estimate by the Indemnitee of
the Damages which the Indemnitee may incur. In addition, each Initial Claim
Notice shall name, when known, the person or persons making the assertions that
are the basis for the Third Party Claim. Failure by the Indemnitee to deliver an
Initial Claim Notice or an update thereof in a timely manner shall not relieve
the Indemnitor of any of its obligations under this Agreement except to the
extent that actual monetary prejudice to the Indemnitor can be demonstrated.
(b) RIGHTS OF INDEMNITOR. The Indemnitor will have the right at any
time after its receipt of the Initial Claim Notice to assume and thereafter
conduct the defense of the Third Party Claim with counsel of its choice
reasonably satisfactory to the Indemnitee, and the Indemnitor shall settle,
compromise or litigate in good faith such claim; provided, however, that
Indemnitor shall not consent to any judgment or enter into any settlement with
respect to a Third Party Claim without the prior written consent of Indemnitee
(not to be withheld unreasonably) unless the judgment or proposed settlement
involves only the payment of money damages by Indemnitor and does not impose any
injunction or other equitable relief on the Indemnitee. If the Indemnitor elects
to settle, compromise or litigate such claim, all reasonable expenses, including
but not limited to all amounts paid in settlement or to satisfy judgments or
awards and reasonable attorneys fees and costs, incurred by the Indemnitor in
settling, compromising or litigating such claim shall be secured to the
reasonable satisfaction of Indemnitee. Indemnitee shall cooperate fully to make
available to the Indemnitor and its attorneys, representatives and agents, all
pertinent information under its control. Indemnitee shall have the right to
elect to settle or compromise all Third Party Claims and all other claims with
respect to which the Indemnitor has not, assumed the defense thereof and for
which Indemnitor has not, within fifteen (15) days after receipt of the Initial
Claims Notice, acknowledged in writing (i) its liability to defend, and (ii) its
election to assume full responsibility for the settlement, compromise and
litigation of such claim. In the event Indemnitor fails timely to defend,
contest or otherwise protect against any Third Party Claim, Indemnitee shall
have the right, but not the obligation, to defend, contest, assert cross-claims
or counterclaims or otherwise protect against the same, and may make any
compromise or settlement thereof and recover and be indemnified for its Damages
to the fullest extent of its indemnity rights under this Article VI from
Indemnitor, including, without limitation, reasonable legal expenses,
disbursements, and all amounts paid as a result of the Third Party Claim, or the
compromise or settlement thereof.
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(c) FINAL CLAIMS STATEMENT. Subject to the foregoing provisions, at
such time as Damages for which the Indemnitor is liable hereunder are incurred
by Indemnitee by actual payment thereof or by entry of a final judgment,
Indemnitee shall forward a Final Claims Statement to the Indemnitor setting
forth the amount of such Damages in reasonable detail on an itemized basis.
Indemnitee shall supplement the Final Claim Statement with such supporting proof
of loss (e.g., vouchers, canceled checks, accounting summaries, judgments,
settlement agreements, etc.) as the Indemnitor may reasonably request in writing
within thirty (30) days after receipt of a Final Claims Statement. All amounts
reflected on Final Claims Statements shall be paid promptly by Indemnitor to
Indemnitee. The Indemnitor will succeed to and be subrogated to any and all
rights (including, without limitation, insurance coverage, offset rights,
counter-claims and rights to third party contribution and indemnification) that
the Indemnitee may have with respect to a Third Party Claim.
6.4 OFF-SET. At such time as the aggregate amount for which Buyer is
entitled to be indemnified by Seller pursuant to this ARTICLE VI equals or
exceeds $750, Buyer shall be entitled to deduct, dollar-for-dollar, the amount
or amounts in excess of $750 from amounts to be paid pursuant to the Promissory
Note; provided, however, Buyer shall not be entitled to exercise its rights
under this Section 6.4 unless (i) the Damages relate to a claim made by a third
party that, as of or within 60 days prior to the Closing Date, was a customer,
supplier or vendor of Seller, and (ii) at least sixty (60) days have elapsed
since Buyer provided Seller with the applicable Initial Claim Notice. Except as
set forth in this Section 6.4, there shall be no off-set under the Promissory
Note.
6.5 REMEDIES CUMULATIVE. The remedies provided herein under this
Article VI shall be cumulative and shall not preclude assertion by any party
hereto of any other rights or the seeking of any other remedies against any
other party hereto for breach or default hereunder.
6.6 EXPIRATION OF INDEMNIFICATION OBLIGATIONS. After the Survival
Date, neither Seller nor Xxxxxxx Xxxxx shall have any further obligations under
this Article VI with respect to the liabilities for payment or indemnification
except for Damages with respect to which Buyer has given to either Seller or
Xxxxxxx Xxxxx written notice prior to such date. After the Survival Date, Buyer
shall not have any further obligations under this Article VI with respect to the
liabilities for payment or indemnification except for Damages with respect to
which Seller has given to Buyer written notice prior to such date.
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ARTICLE VII
MISCELLANEOUS
7.1 COVENANTS NOT TO COMPETE.
------------------------
(a) The parties hereto intend that Section 4.1 is to restrict the
activities of Seller, Xxxxxxx Xxxxx and their Affiliates only to the extent
necessary for the protection of Buyer's legitimate business interest in the
Business. If a court of competent jurisdiction should determine that any of the
provisions of Section 4.1 are unenforceable because of the scope of such
provision, such provision shall automatically be amended for such lesser term or
to such lesser extent as may grant Buyer the maximum protection permitted by
applicable law, and said circumstances and such provision, as modified, shall be
fully enforceable as though set forth herein. Any such modification shall not
affect the other provisions or clauses of this Agreement in any respect.
(b) The parties acknowledge and agree that: (i) the restrictions
contained in Section 4.1 are reasonable and necessary in order to protect
Buyer's legitimate business interest in the Business; and (ii) any breach or
violation of the covenants set forth in this paragraph could result in
irreparable harm and injury to Buyer; and (iii) Buyer would be without an
adequate legal remedy in any such case. In recognition of the foregoing, Seller,
Xxxxxxx Xxxxx and their Affiliates acknowledge and agree that in the event of
any actual violation or breach of Section 4.1, Buyer shall be entitled to
obtain, from any court of competent jurisdiction: (i) preliminary and permanent
injunctive relief; (ii) an equitable accounting of all profits or benefits
arising out of such violation or breach; (iii) direct damages arising from the
violation or breach; and (iv) any other relief Buyer may be entitled to in law
or in equity.
7.2 BROKER FOR SELLER. Seller agrees to indemnify and hold harmless
Buyer against any claims or liabilities asserted against it by any person, firm
or corporation acting or claiming to have acted in the capacity of a broker or
finder on behalf of Seller.
7.3 BROKER FOR BUYER. Buyer agrees to indemnify and hold Seller
harmless against any claims or liabilities asserted against it by any person,
firm, or corporation acting or claiming to have acted in the capacity of a
broker or finder on behalf of Buyer.
7.4 NOTICES. Any notice required or permitted hereunder shall be
given in writing and shall be effective for all purposes if hand delivered to
the party designated below, or if sent by telecopy (provided that such telecopy
is confirmed by telecopy confirmation slip) addressed to the addresses set forth
below, or to such other address and persons as shall be designated from time to
time by any party hereto in a written notice to the other in the manner provided
for in this paragraph. The notice shall be deemed to have been given at the time
of delivery if hand delivered, or if by telecopy, at the time of telecopy on a
business day. A party receiving notice which does not comply with the technical
requirements for notice under this paragraph may elect to waive any deficiencies
and treat the notice as having been properly given.
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If to Seller:
---------------------------------------------
Attn: ---------------------------------------
Telephone: (___) ___-_____
Facsimile: (___) ___-____
If to Xxxxxxx Xxxxx: Xxxxxxx Xxxxx
---------------------------------------------
Telephone: (___) ___-_____
Facsimile: (___) ___-____
with a copy to: Xxxxx Xxxxxx, Esq.
0000 Xxxxx Xxxxxxxx Xxxxxx, Xxxxx 00
Xxxxxx, Xxxxxxx 00000
Telephone: (000) 000-0000
Facsimile: (000) 000-0000
If to Buyer: SLF-Enterprises
000 X. Xxxxxxxx Xxxxx
Xxxxxxx, Xxxxxxx 00000
Attn: Xxxx Xxxxxx, President
Telephone: (000) 000-0000
Facsimile: (000) 000-0000
with a copy to: The Lowenbaum Partnership, L.L.C.
000 Xxxxx Xxxxxxx, Xxxxx 000
Xx. Xxxxx, Xxxxxxxx 00000
Attn: J. Xxxxxxx Xxxxxx, Esq.
Telephone:(000) 000-0000
7.5 AMENDMENT. This Agreement may be only amended or modified in
whole or in part by an instrument in writing executed in the same manner as this
Agreement and making specific reference thereto.
7.6 COUNTERPARTS. This Agreement may be executed in one or more
counterparts, all of which taken together shall constitute one instrument.
7.7 BINDING ON SUCCESSORS AND ASSIGNS. This Agreement shall be
binding upon, inure to the benefit of and be enforceable by and against the
parties hereto and their respective successors and assigns, provided, however,
that nothing contained in this Agreement shall confer upon any other person not
a party to this Agreement any rights or remedies hereunder.
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7.8 SEVERABILITY. In the event that any one or more of the provisions
contained in this Agreement or any application thereof shall be invalid, illegal
or unenforceable in any respect, the validity, legality or enforceability of the
remaining provisions of this Agreement and any other application thereof shall
not in any way be affected or impaired thereby; PROVIDED, HOWEVER, that to the
extent permitted by applicable law, any invalid, illegal or unenforceable
provision may be considered for the purpose of determining the intent of the
parties in connection with the other provisions of this Agreement.
7.9 WAIVERS. The parties may, by written agreement, (i) extend the
time for the performance of any of the obligations or other acts of the parties
hereof, (ii) waive any inaccuracies in the representations contained in this
Agreement or in any document delivered pursuant to this Agreement, (iii) waive
compliance with, or modify, any of the covenants or conditions contained in this
Agreement, and (iv) waive or modify performance of any of the obligations of any
of the parties hereto; PROVIDED, HOWEVER, that no such waivers or failure to
insist upon strict compliance with such obligation, covenant, agreement or
condition shall operate as a waiver of, or an estoppel with respect to, any
subsequent or other failure.
7.10 HEADINGS AND DEFINITIONS. The headings in the sections of this
Agreement are inserted for convenience only and in no way alter, amend, modify,
limit or restrict the contractual obligations of the parties.
7.11 LIABILITY FOR COSTS AND EXPENSES.
--------------------------------
(a) Each party shall be responsible for any debt, liability or
obligation, cost, expense or fee of any nature whatsoever including, without
limitation, any and all legal, accounting and other professional fees and
expenses incurred by it in connection with the negotiation, execution or
performance of this Agreement through the Closing Date.
(b) Except as specifically provided herein, neither party shall be
responsible for any debt, liability or obligation, cost, expense or fee of any
nature whatsoever, including, without limitation, any and all legal, accounting
and other professional fees and expenses incurred by another party in connection
with the negotiation, execution or performance of this Agreement.
7.12 ENTIRE AGREEMENT; LAW GOVERNING. All prior negotiations and
agreements between the parties hereto are superseded by this Agreement, and
there are no representations, warranties, understandings or agreements other
than those expressly set forth herein or in an Annex or Schedule delivered
pursuant hereto and incorporated herein by this reference, except as modified in
writing concurrently herewith or subsequent hereto. This Agreement shall be
governed and construed and interpreted according to the laws of the State of
Arizona, without regard to such state's conflict of laws principals.
7.13 FURTHER ASSURANCES. Each party shall do and perform, or cause to
be done and performed, all such further acts and things, and shall execute and
deliver all such other agreements, certificates, instruments and documents, as
the other party may reasonably request in order to carry out the intent and
accomplish the purposes of this Agreement and the consummation of the
transactions contemplated hereby.
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7.14 SURVIVAL. The covenants and agreements contained in Section 1.4,
1.6, 4.1, 4.3, 6.1, 6.2, 6.3, 6.4, 6.5, 6.6, 7.4, 7.11 and 7.13 shall survive
any expiration or termination of this Agreement and shall continue for an
indefinite period of time thereafter, except as otherwise specified in this
Agreement.
IN WITNESS WHEREOF, this Agreement has been duly executed by Buyer
and Seller as of and on the date first above written.
BUYER: SELLER:
SLF ENTERPRISES, INC. VALET-USA, INC.
By: By:
-------------------------------- -------------------------------------
Name: Xxxx Xxxxxx Name:
-----------------------------------
Title: President Title:
----------------------------------
The undersigned hereby joins in the execution of this Agreement to
acknowledge his obligations and covenants under this Agreement.
______________________
Xxxxxxx Xxxxx
