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Exhibit 10.1
SALE OF ASSETS AGREEMENT
AND PLAN OF REORGANIZATION
THIS SALE OF ASSETS AGREEMENT AND PLAN OF REORGANIZATION ("Agreement")
made this ______ day of ____________, 2000 by and between STAR SERVICES GROUP,
INC., a Florida corporation, or its assigns, ("Buyer") and PEERLESS BIG APPLE,
INC., a Florida corporation ("Seller" or "Big Apple").
W I T N E S S E T H
WHEREAS, Peerless Big Apple, Inc. ("Big Apple") is engaged in the
construction and demolition debris collection, hauling, and recycling business
in and around Miami-Dade County, Florida area and operates a solid waste
transfer station located at 0000 XX 00xx Xxxxxx, Xxxxx, Xxxxxxx ("MRF"); and
WHEREAS, the Buyer desires to purchase and Big Apple desires to sell,
transfer and assign substantially all of Big Apple's business assets, used or
useful, or intended to be used in the operation of Big Apple's business; and
WHEREAS, Buyer desires to assume and Big Apple desires to assign the
Management, Operation, and Option to Buy Agreement between Big Apple and Big
Apple Portable Toilet Services, Inc.; and
WHEREAS, Big Apple has the right to provide pre-development and
post-development solid waste management services with respect to the development
of Peerless Dade, Inc.'s ("Dade Recycling") property located at 00000 X. X. 00xx
Xxxxxx, Xxxxx, Xxxxxxx; and
WHEREAS, Buyer desires to assume and Big Apple desires to assign its
right to provide the aforementioned pre-development and post-development solid
waste management services; and
WHEREAS, the existing lease between Big Apple and Xxxxxx Xxxxxx shall
be assigned to Buyer; and
WHEREAS, the parties intend for this transaction to be treated as a
tax-free reorganization pursuant to the provisions of Section 368(a)(1)(c) of
the Internal Revenue Code, as amended, governing the acquisition by one
corporation of substantially all of the assets of another corporation solely in
exchange for voting stock of the acquiring corporation.
WHEREAS, this transaction is intended to comply with the provisions of
Section 368(a)(1)(c) of the Internal Revenue Code of 1986, as amended.
NOW THEREFORE, in consideration of the mutual promises, covenants and
agreements herein contained, the parties hereto, intending to be legally bound,
agree as follows:
SECTION 1. ASSETS PURCHASED FROM PEERLESS BIG APPLE, INC.. Peerless Big
Apple, Inc. ("Big Apple") agrees to sell to Buyer and the Buyer agrees to
purchase from Big Apple, on the terms and conditions set forth in this
Agreement, all of Big Apple's existing assets and business set forth on Schedule
1 hereto ("Big Apple Assets"). Big Apple Assets include, but are not limited to,
all hauling routes, customer lists, service contracts, telephone numbers, right
to use the "Big Apple" name, equipment and all permits, licenses and franchises
and all other assets, including the existing lease, that are required to operate
Big Apple as it is currently being operated. The obligation of Buyer to close on
this transaction is conditioned on Xxxxxx Xxxxxx, Xx. agreeing, in writing, to
either convert his $600,000 Convertible Debenture with Peerless Big Apple, Inc.
to Buyer's stock prior to or at the Closing, as defined in Section 7 hereof, or
convert the Convertible Debenture into a combination of stock and debt
acceptable to Buyer.
SECTION 2. EXCLUDED BIG APPLE ASSETS. Excluded from this sale and
purchase are Big Apple's accounts receivables through the date of Closing. The
Big Apple Assets shall not include any cash of Big Apple's business related to
services performed on or before the closing date or any advances, deposits or
prepaid items.
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SECTION 3. BIG APPLE LIABILITIES ASSUMED. The Buyer agrees to assume
and pay, discharge or perform as appropriate, only those debts, liabilities and
obligations of Big Apple specifically itemized on Schedule 2 hereto ("Assumed
Liabilities"). Buyer shall make a good faith effort to assume all the
obligations of a $1,000,000 Promissory by and among Xxxxx Xxxxxxxxxx, Xxxxxxx X.
Xxxxxxx, Xx. and Ocean Bank, attached hereto as Exhibit "A" (the "Ocean Bank
Note"). In the event Buyer is successful in assuming the Ocean Bank Note, the
Buyer shall not assume the $1,000,000 Promissory Note between Big Apple and
Xxxxxxx X. Xxxxxxx, Xx. (the "Xxxxxxx Note") listed on Schedule 2. In the event
Buyer is not successful in assuming the Ocean Bank Note, the Buyer shall assume
the Xxxxxxx Note listed in Schedule 2. However, the Xxxxxxx Note will be changed
to require interest only payments through February 28, 2001 with principal and
interest payments due monthly thereafter to Xx. Xxxxxxx, at an interest rate of
1% over prime as charged by CITIBANK, N.A., New York, New York, based upon a
five (5) year amortization schedule, until October 31, 2002 at which time the
remaining balance of the Xxxxxxx note (principal and any accrued or accumulated
interest) shall be due and payable in full. As security for the payment of the
Xxxxxxx Note, Buyer shall deliver 500,000 shares of registered and fully
tradeable Star Services Group, Inc. stock (the "Security") and all executed
documents required to transfer said stock into the name of Xxxxxxx X. Xxxxxxx,
Xx., to G. Xxxxxxx Xxxxxxx, P.A. of Jacksonville, Florida ("Escrow Agent") to be
held in escrow, pursuant to a mutually acceptable Escrow Agreement, until the
Buyer has fully paid off or satisfied the Xxxxxxx Note, at which time the
Security will be returned to Buyer. If the Buyer defaults on said Xxxxxxx Note
or the note is not paid in full on or before October 31, 2001, the Escrow Agent
may release the Security from escrow to Xxxxxxx X. Xxxxxxx, Xx. In the event the
Buyer defaults on the Xxxxxxx Note or the note is not paid in full on or before
October 31, 2001 and the value of the Security is less than the outstanding
balance (principal and any accrued or accumulated interest) due under the note,
then Buyer remains responsible for payment of the Xxxxxxx Note's outstanding
balance.
SECTION 4. PEERLESS DADE SOLID WASTE MANAGEMENT SERVICES. Big Apple
agrees to assign to Buyer all of its right, title and interest in and to its
agreement with Peerless Dade, Inc., d/b/a Dade Recycling & Disposal ("Peerless
Dade") to provide pre-development and post-development solid waste management
services at Peerless Dade's property located at 00000 X.X. 00xx Xxxxxx, Xxxxx,
Xxxxxxx and adjacent properties owned by the Florida Executive Land Trust No. 1
and No. 2 ("Trust Property").
SECTION 5. PURCHASE PRICE. The total purchase price ("Purchase Price")
for the Big Apple Assets and assignment of the solid waste management contract
referenced in Section 4 shall be paid and allocated as follows:
5.1 STOCK CONSIDERATION. The Buyer shall transfer One Million
One Hundred Fifty-Five Thousand (1,155,000) shares of fully paid, registered and
nonassessable common shares of Star Services Group, Inc. stock ("Stock
Consideration") to the individual shareholders of Peerless Big Apple, Inc. ("Big
Apple") or their respective designees and/or nominees in accordance with their
respective ownership interests and as designated at Closing (as defined in
Section 7) by the President of Big Apple. The Stock Consideration shall be
delivered within fifteen (15) business days of the Closing (as defined in
Section 7). The parties agree that Xxxxx Xxxxxxx of Xxxxxx Xxxxxxx & Company of
Montgomery, Alabama ("Xxxxxxx") shall be authorized to act as agent for the
shareholders of the Companies for the receipt of the Stock Consideration from
the Buyer's transfer agent. The Stock Consideration shall be delivered to
Xxxxxxx in accordance with written instructions provided to Buyer by the
President of Big Apple at the Closing. Except as provided in Section 12 of this
Agreement, 795,000 shares of the Stock Consideration will be freely tradeable as
of January 2, 2001 and that the remaining 360,000 shares will be freely
tradeable as of January 2, 2002. It is further understood and agreed by the
parties hereto that the sale or transfer of the Stock Consideration by the
individual shareholders of the Big Apple will only be restricted as set forth
above (the "Restricted Stock"). The share certificates received for the
Restricted Stock shall bear a restrictive legend making said shares subject to
the terms and conditions of this Section. Notwithstanding the foregoing,
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Xxxxxxx shall deliver 150,000 shares of the Stock Consideration, which becomes
freely tradeable on January 2, 2002, to G. Xxxxxxx Xxxxxxx, P.A. of
Jacksonville, Florida to be held in escrow until the Buyer has obtained a
transfer of the existing MRF permit and a modification of said permit to allow
the processing of between 800-1000 cubic yards of C&D debris per day at the MRF.
In the event the Buyer is unable to obtain the aforesaid permit transfer and
modification, the 150,000 shares shall be forfeited by Seller and returned to
Buyer by Escrow Agent upon written instructions from both parties. However, if
the Buyer is successful, at any time, in the future in obtaining said
modification then Seller shall be entitled to a return and reissue of said
150,000 shares.
5.2 ALLOCATION OF STOCK CONSIDERATION. The Stock
Consideration, referenced in Section 5.1 above, shall be allocated, other than
as provided below, in accordance with an allocation schedule to be agreed to by
the parties at or before Closing:
- 200,000 shares of stock allocated to Big Apple's right to provide pre
and post-development waste services at Dade Recycling's property
located at 00000 X. X. 00xx Xxxxxx, Xxxxx, Xxxxxxx and adjacent Trust
Property.
The parties each hereby covenant and agree that they will not take a position on
any income tax return, before any governmental agency charged with the
collection of any income tax, or in any judicial proceeding that is in any way
inconsistent with the terms of this Section 5.2 and Section 5.3.
5.3 TAX TREATMENT. The parties hereto intend that the
transactions contemplated by this Agreement be treated as a tax-free
reorganization under Section 368 of the Internal Revenue Code of 1986, as
amended. The parties agree to prepare and timely file all applicable Internal
Revenue Service forms and other governmental forms, to cooperate with each other
in the preparation of such forms, and to furnish each other with a copy of such
forms prepared in draft, within a reasonable period prior to the filing due date
thereof.
5.4 ADJUSTMENTS.
(a) The operation of Big Apple's business ("Big Apple's
Business") and related income and expenses up to the close of business on the
day before the Closing (as defined in Section 7) shall be for the account of
Seller and thereafter for the account of the Buyer. Expenses, including but not
limited to utilities, license fees, to the extent licenses are transferred,
personal or real property taxes, wages, vacation pay, payroll taxes and fringe
benefits of employees of the Seller or Big Apple's Business, shall be pro-rated
between the Seller and Buyer as of the close of business on the Closing date,
the proration to be made, insofar as reasonably possible, on the Closing Date,
with settlement of any remaining items to be made within sixty (60) days
following the Closing.
(b) After the Closing Date, Buyer shall use commercially
reasonable efforts to collect the money due the Seller from the Seller's
Business prior to the Closing Date and keep records of its collection efforts
and amount collected. Seller shall provide Buyer with a list of its receivables,
none of which shall be more than ninety (90) days past due (the "Seller's
Accounts Receivable"). The Buyer shall forward the amounts collected to the
Seller monthly. All monies received by Buyer, from customers utilizing the MRF,
shall first be applied to the Seller's Accounts Receivable. One hundred and
twenty (120) days after the Closing Date, Buyer shall prepare and forward to
Seller a written reconciliation of the Seller's Accounts Receivable showing
amounts collected and amounts uncollected during such 120 day period. After said
120 day period, Seller shall have the right to take such action as it may deem
necessary to collect any remaining Seller's Accounts Receivable and Buyer shall
have no further obligations in connection therewith.
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SECTION 6. INSTRUMENTS OF CONVEYANCE AND DUE DILIGENCE.
(a) At the Closing, the Buyer shall deliver all of the consideration,
including the agreed upon shares, as set forth in Sections 5 and 12, and Seller
shall execute and deliver to Buyer all necessary certificates of title, bills of
sale, endorsements, assignments and other good and sufficient instruments and
documents of conveyance and transfer as shall be required to effectuate the
sale, assignment, transfer and delivery of the Big Apple Assets and the contract
with Peerless Dade for pre-development and post-development solid waste
management services from Seller to Buyer.
(b) Seller shall at the Closing, as defined in Section 7, and from time
to time thereafter at Buyer's request and without further consideration, execute
and deliver to Buyer such instruments of transfer, conveyance and assignment in
addition to those referenced above as Buyer shall reasonably request to
transfer, convey and assign more effectively the Assets to Buyer.
(c) At the Closing, Seller shall provide Buyer with consents from all
of the shareholders of Peerless Big Apple, Inc. to the sale of substantially all
of the company's Assets to Buyer, as set forth herein, in accordance with
Section 607.0704, Florida Statutes and to Seller's Plan of Complete Liquidation
and Dissolution of Peerless Big Apple, Inc., substantially in the form attached
hereto as Exhibit "B".
(d) At the Closing, Seller shall provide an updated and complete
customer list showing names, addresses, service location and pricing and also
provide Buyer with a container and toilet location report.
(e) At the Closing, Seller shall provide updates for all schedules
attached to the Agreement.
6.1 DUE DILIGENCE. The Buyer's obligation to close under this
Agreement is contingent upon Buyer being satisfied with the results of its due
diligence investigation. Buyer shall have until October 5, 2000 to conclude its
due diligence ("Due Diligence Period"). The Due Diligence Period may be extended
by mutual agreement of the parties. After such period, the Buyer shall be deemed
to be satisfied with its due diligence unless written notice is sent to Seller,
within five (5) days after the Due Diligence Period, that Buyer is not satisfied
with its due diligence.
SECTION 7. CLOSING. Closing, subject to the terms and conditions of
this Agreement, the sale, transfer, assignment and delivery of the Assets, the
delivery of the Purchase Price, and the delivery of the other instruments and
certificates required hereunder, shall take place on or before October 16, 2000,
or at such other time and date as shall be mutually agreed upon by the parties
hereto in writing. Such time and date shall be referred to herein as the
"Closing". The date of the Closing is sometimes herein referred to as the
"Closing Date".
SECTION 8. OBLIGATIONS OF BUYER AND SELLER PRIOR TO CLOSING. From the
date of this Agreement until Closing:
(a) Seller shall afford to the representatives of Buyer access, during
normal business hours and upon reasonable notice, to the premises, properties,
books and records of the Seller, permit Buyer to inspect the Assets, and furnish
Buyer with such additional financial, corporate and operating data and other
information as to the Big Apple Assets as Buyer may from time to time reasonably
request; provided, however, that any furnishing of information to Buyer shall
not affect Buyer's right to rely on Seller's representations and warranties made
herein;
(b) Until and unless the Closing has been consummated, Buyer will
cause all information obtained in connection with the negotiation and
performance of this Agreement to be treated as confidential (except such
information as Buyer may be required or find necessary to disclose to any
governmental agency) and will not use, and will not knowingly permit others to
use, any such information in a manner detrimental to Seller;
(c) Except as otherwise provided by the prior written consent of
Buyer, Seller shall conduct its business and operations diligently and in the
same manner as it has heretofore been conducted, and use its best efforts to
maintain its assets, facilities and organization, to keep available to Buyer the
services of its
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officers, employees and agents, and to preserve present relationships with
suppliers, customers and others with which it conducts business.
(d) Except for transfer of permits which shall be obtained by Buyer,
post closing, the parties to this Agreement shall have obtained, at or prior to
Closing, all consents, if any, required for the consummation of the transaction
contemplated by this Agreement from any party to any contract, agreement,
instrument, lease, license, arrangement or understanding to which any of them is
a party, or to which the Big Apple Assets are subject. It is a condition
precedent to Buyer's obligation to close that Seller obtain the assignments,
consents or approvals set forth in Schedule 3 attached hereto and incorporated
herein by reference.
SECTION 9. CONDITIONS PRECEDENT TO OBLIGATIONS OF BUYER AND SELLER.
9.1 REPRESENTATIONS AND WARRANTIES AND OBLIGATIONS. The
representations and warranties of Buyer and Seller contained in this Agreement
shall be accurate on and as of the Closing Date with the same effect as though
such representations and warranties had been made on and as of such date.
9.2 COVENANTS. Each and all of the terms, covenants and
conditions of this Agreement to be complied with and performed by Buyer and
Seller on or before the Closing Date shall have been duly complied with and
performed.
9.3 NO ADVERSE CHANGE. No material and adverse change in the
business of the parties and/or the Big Apple Assets shall have occurred since
execution of the Agreement. Buyer and Seller shall not have suffered any loss or
damage to any of their respective properties or assets, whether or not covered
by insurance, since which change, loss or damage would materially affect or
impair the ability of Buyer and Seller to conduct their business.
9.4 SIMULTANEOUS CLOSING OF PURCHASES OF COMPANION
TRANSACTIONS. Buyer has entered into contracts to purchase assets from Peerless
Miami Avenue, Inc. and Peerless Dade, Inc. which are scheduled to close
simultaneous with this transaction ("Companion Transactions"). Buyer and Seller
acknowledge that the parties' obligation to close the transaction contemplated
by this Agreement, including without limitation the payment of the purchase
price or other consideration to Seller is conditioned upon the parties' ability
to simultaneously close the purchase or the assets of all of the Companion
Transactions, unless expressly waived by Buyer and Seller in writing.
SECTION 10. REPRESENTATIONS AND WARRANTIES OF SELLER. Seller hereby
warrants, represents and covenants, with respect to the Big Apple Assets which
are the subject of this transaction and Agreement, as of the date of the
execution of this Agreement and at the Closing, that:
(a) Seller is a Florida corporation duly organized, validly existing
and in good standing under the laws of all states in which Big Apple Assets,
which are the subject of this Agreement are located, with full authority to
execute and perform this Agreement, and the performance of this Agreement will
not result in a breach or constitute a default under Articles, Bylaws,
Contracts, and any statute, law, agreement, order or rule of any court or
governmental authority by which Seller is bound;
(b) Seller has all necessary powers to own its Assets and to operate
the businesses as now owned and operated by it; and they are duly authorized,
qualified and licensed under applicable laws, regulations, ordinances or orders
of public authorities to carry on their business in the places and in the manner
as now conducted;
(c) Except as otherwise provided herein, Seller has complete and
unrestricted power to sell, convey, transfer, assign and deliver to Buyer all of
the Big Apple Assets to be sold, conveyed, transferred, assigned and delivered
hereunder, and the instruments executed and delivered to Buyer hereunder are
valid in accordance with their terms and are effective for the purposes
contemplated;
(d) Seller has the complete and exclusive right to provide
pre-development and post-development solid waste management services
("Services") with respect to the entire future development of Peerless Dade,
Inc.'s ("Dade Recycling") property located at 00000 X.X. 00xx Xxxxxx, Xxxxx,
Xxxxxxx as well as the
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adjacent parcels owned by the Florida Executive Land Trust No.'s 1 and 2 and
Seller has complete authority to assign said Services with out approvals from
any third party.
(e) Except for the Assumed Liabilities set forth in Schedule 2, all of
the Assets described in Schedule 1 are free and clear of all debts, liens,
claims, pledges, mortgages, encumbrances and security interests;
(f) Seller shall not divulge, communicate, use to the detriment of
Buyer or for the benefit of any other person or persons, or misuse in any way,
any confidential or sensitive information or trade secrets of its business,
including, but not limited to, personnel information, know-how, customer lists,
or other financial and operating data in conjunction with the Assets being
transferred hereunder. Seller further acknowledges and agrees that any
information or data pertinent to this Agreement they have in their possession
will be transferred to Buyer;
(g) All pending or threatened litigation and any administrative or
judicial proceedings of any nature involving any of the Big Apple Assets are
described in Schedule 4. Seller shall be solely responsible for resolving any
pending or threatened enforcement action and any administrative or judicial
proceedings as described and set forth in Schedule 4. The Seller knows of no
other facts or circumstances which may result in any future civil,
administrative or criminal proceedings against the Seller. The assets and/or
insurance coverage of the Seller is adequate in character and amount to pay all
damages, losses, liabilities and expenses relating to or arising from the
litigation and proceedings described in Schedule 4;
(h) Except as specifically provided in Schedule 5, the Seller is not in
default under any law, ordinance, or order of any court or federal, state,
municipal or other governmental department, commission, board, bureau, agency or
instrumentality wherever located (other than as may be described elsewhere
herein); and there are no claims, actions, suits or proceedings pending or
threatened, against or affecting the Seller or any of the Assets at law or in
equity, or before or by any federal, state, municipal or other governmental
department, commission, board, bureau, agency or instrumentality, wherever
located, or before any arbitrator, arbitration panel or other dispute resolution
panel, which may result in any material adverse change in the financial
condition, results of operations, or Big Apple Assets or which may affect
Buyer's ability to operate the business or which may question the validity or
propriety of this Agreement or of any action taken or to be taken in accordance
with or in connection with this Agreement; and the Seller has received no notice
of any asserted past or present failure to comply with any law, ordnance,
regulation, permit, order or requirement;
(i) Except as described in Schedule 4 or Schedule 5, the Seller is not
subject to any judgment, writ, injunction, decree or other judicial order;
(j) The Seller is not aware of or know of any event or condition of any
character which would or could materially and adversely affect the Big Apple
Assets being sold hereunder or its business;
(k) Except as described in Schedule 4 or Schedule 5, Seller has not
received actually or contractually any notification (including requests for
information directed to the Seller) of any past or present failure by the Seller
to comply with any federal, state or local laws, regulations, permits,
franchises or orders applicable to them or the Big Apple Assets;
(l) To the best of Seller's knowledge and belief, it has all permits,
licenses and authorizations ("Permits") in place for operation of Big Apple's
business and all such Permits are transferable. Said permits are identified in
the attached Schedule 6 and complete copies of the Permits are attached to
Schedule 6.
(m) Seller will implement and complete the Plan of Liquidation and
Dissolution of Peerless Big Apple, Inc. as set forth in Exhibit "B" attached
hereto and incorporated herein by reference.
(n) Seller has disclosed all material facts necessary for Buyer to
purchase the Big Apple Assets transferred hereunder;
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(o) To the best of Seller's knowledge and belief, all representations
and warranties of Seller set forth in this Agreement, and in any written
statements and Schedules prepared in connection with this Agreement, are true
and correct as of the Closing.
(p) To the best of Seller's knowledge and belief, all of the financial
documents provided by Seller to Buyer fairly present the information as of the
date compiled.
(q) Seller hereby represents and warrants that its financial books and
records are available and that it will, at its own cost and expense, provide
audited financial statements. Seller will take any and all necessary actions to
provide such audited financial statements. Seller further represents and
warrants that it knows of no reason why it should not be able to provide such
audited financial statements.
(r) Seller shall not dissolve Peerless Big Apple, Inc. prior to 270
days after Closing.
SECTION 11. REPRESENTATIONS AND WARRANTIES OF BUYER. Buyer hereby
warrants, represents and covenants, as of the date of the execution of this
Agreement and at Closing, that:
(a) Buyer is a corporation duly organized, validly existing and in good
standing under the laws of the State of Florida is now and has been at all times
since its creation, duly authorized, qualified and licensed under all laws,
regulations, ordinances and orders of public authorities to carry on their
business.
(b) Buyer has full legal right, power and authority (corporate and
otherwise) to enter into this Agreement and to consummate the transactions
contemplated by this Agreement. Buyer does not need to give any notice to, or
make any filing with, or obtain the authorization, consent or approval of any
government or governmental agency in order to consummate the transactions
contemplated by this Agreement.
(c) The execution, delivery and performance of this Agreement, the
consummation of any transactions referred to in this Agreement or contemplated
by this Agreement and the fulfillment of the terms hereof and thereof will not:
(i) conflict with, or result in a breach or violation of the Articles of
Incorporation or By-Laws of Buyer; or (ii) conflict with, or result in a breach
under any document, agreement or other instrument to which Buyer is a party.
(d) The officer of Buyer executing this Agreement has the corporate
authority to enter into and bind Buyer to the terms of this Agreement, and Buyer
has taken all necessary corporate action to authorize the execution, delivery
and performance of this Agreement. All corporate action by Buyer necessary to
approve the transaction, including both shareholder and director approvals, have
been taken and a copy of the corporate resolution(s) authorizing this
transaction will be delivered at Closing.
(e) Buyer has made all filings with Securities and Exchange Commission
that it is required to make under the Securities Act of 1933 (the "Act") and the
Securities Exchange Act of 1934 (the "Exchange Act"), as amended collectively,
the "Public Reports"). The Public Reports accurately and completely describe, in
all material respects, Buyer's financial status, business operations and
prospects as of the date of such filings, and do not contain any untrue
statement of a material fact or omit any material fact(s) necessary to make the
information contained in the filings not misleading.
SECTION 12. HOLD HARMLESS AND INDEMNIFICATION. From and after the
Closing, the Seller will indemnify and hold the Buyer and its assigns,
subsidiaries, divisions, affiliates, officers, directors, agents and employees
harmless from and against any damage, loss, liability or expense (including
attorneys' fees and litigation expenses) incurred as a result of or in
connection with:
(a) the material untruth, violation or breach (collectively referred to
as "breach") of any of the representations, warranties, agreements or
obligations set forth in or made in connection with this Agreement; or
(b) any occurrence, act or omission of the Seller, which occurrence,
act or omission occurred prior to the Closing and for which the Seller is
legally responsible; or
(c) any liabilities not assumed by Buyer affecting any Assets being
transferred hereunder.
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Seller shall deliver 43,200 shares of the Stock Consideration, which
becomes fully tradeable on January 2, 2002, to G. Xxxxxxx Xxxxxxx, P.A. ("Escrow
Agent") to be held in escrow as security for Seller's indemnification
obligations regarding the material untruth, violation or breach of the
representations and warranties set forth in Section 10 of this Agreement
("Escrowed Shares"). Said Escrowed Shares shall be released to the Seller's
individual shareholders or designee if no claim for indemnification is asserted
by the Buyer under this Section 12 within two hundred seventy (270) days of the
Closing Date. Buyer will notify Escrow Agent, in writing, no later than close of
business (5:00 p.m. EST) on the 270th day from the Closing Date, of any pending
indemnification claim. In the absence of such notice, the Escrowed Shares may be
released to the Shareholders or their designee by the Escrow Agent as directed
by the Shareholders or their designee. The Buyer will give Seller written notice
of each time Buyer becomes aware of any fact or circumstance which may give rise
to an obligation of the Seller to indemnify Buyer under this Section 12, which
notice shall be accompanied by a copy of any claim made which may result in such
obligation to indemnify. All claims for indemnification must be submitted by
Buyer to Seller within Two Hundred Seventy (270) days of the Closing Date. The
Buyer's claim for indemnification ("Indemnification Demand") shall state: (a)
which of Seller's material representations or warranties are untrue or have been
breached; (b) the amount of losses, damages or expenses which the Buyer has
incurred or has suffered or is expected to suffer to which the Buyer may be
entitled to indemnification pursuant to this Section 12. The Seller may object
to the Indemnification Demand by sending Buyer a written notice stating the
objections and grounds for the objections ("Indemnification Objection"). If no
Indemnification Objection is sent within fifteen (15) days after Seller's
receipt of the Buyer's Indemnification Demand, Seller shall be deemed to have
acknowledged the correctness of the claim or claims specified in the
Indemnification Demand and shall either pay the full amount claimed in the
Indemnification Demand within thirty (30) days or instruct the Escrow Agent to
release a sufficient number of the Escrowed Shares to Buyer to satisfy the
Indemnification Demand. If for any reason the amount claimed in the
Indemnification Demand is not paid within thirty (30) days, the Buyer may
institute legal proceedings to enforce payment of the indemnification claim
contained in the Indemnification Demand and any other claim for indemnification
that the Buyer may have under this Agreement. Buyer agrees that it will not make
a claim for indemnification under this Section 12 for matters in the aggregate
having a value of less than $5,000.00. The Seller's liability for any
Indemnification Demand is limited to the Escrowed Shares.
SECTION 13. DEFAULT BY BUYER. If the Buyer fails to perform any of the
terms, covenants, conditions or obligations of this Agreement or in the event of
any breach or default by Buyer under this Agreement, or any other documents
executed or delivered in connection with the transactions contemplated by this
Agreement, the Seller shall have all rights and remedies that may be available
to Seller at law or in equity. No waiver by Seller of any such breach or
default, whether intentional or not, shall be deemed to extend to any prior or
subsequent breach or affect in any way any rights arising by virtue of any prior
or subsequent breach or default. The Buyer shall not be deemed in breach or
default under this Agreement until written notice of the breach or default has
been given to the Buyer and the Buyer has failed to remedy the breach or default
within ten (10) days of the receipt of said notice from Seller or their
designated representative or counsel.
SECTION 14. SURVIVAL OF REPRESENTATIONS. Except as otherwise provided
in Section 12, the representations, warranties, obligations and agreements of
the parties contained in Sections 5 (and its subsections), 10, 11 and 12 of this
Agreement or in any writing delivered pursuant to provisions of this Agreement
shall survive the Closing and the consummation of these transactions and any
examination on behalf of such parties.
SECTION 15. GENERAL.
(a) This Agreement and the schedules attached hereto embody the entire
agreement of the parties in relation to the subject matter hereof, and all prior
agreements have been merged into this Agreement. There
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are no understandings or agreements, verbal or otherwise, in relation thereto,
existing or that are enforceable between the parties except as hereinabove
expressly set forth. No change or modification of this Agreement shall be valid
unless the same shall be in writing, signed by both of the parties hereto, and
incorporated by reference herein;
(b) Nothing in this Agreement, whether expressed or implied, is
intended to confer any rights or remedies under or by reason of this Agreement
on any persons other than the parties to it and their respective heirs,
executors, administrators, successors and assigns, nor is anything in this
Agreement intended to relieve or discharge the obligation or liability of any
third persons to any party to this Agreement, nor shall any provision give any
third persons any right of subrogation over, or action against any party to this
Agreement.
(c) The rights and remedies to the parties to this Agreement in the
event of default are cumulative, and the exercise of any right or remedy shall
be without prejudice to the enforcement of any other right authorized by law, in
equity or this Agreement. The pursuit of any remedy provided in this Agreement
shall not constitute a forfeiture or waiver of any amount due for a defaulting
party or the right to maintain an action for any damages accruing for breach.
Forbearance to enforce one or more of the remedies provided by this Agreement,
on an event of default, shall not be deemed or construed to constitute a waiver
of the right to any remedy for that default.
(d) The subject headings of the Sections of this Agreement are included
for purposes of convenience only, and shall not affect the construction or
interpretation of any of its provisions.
(e) Each party to this Agreement agrees to pay its respective attorney,
accounting or other fees, plus all costs arising out of the negotiation and
preparation of this Agreement.
(f) The validity and interpretation of this Agreement and of each and
every clause, term and part hereof shall be governed by and construed in
accordance with the laws of the State of Florida, without giving effect to
conflict of laws.
(g) Seller and Buyer represent to each other that no broker or finder
has been employed by any of them in connection with this transaction. Each party
agrees to indemnify the other against all loss, cost, damage or expense arising
out of claims for fees or commission of brokers or finders employed or alleged
to have been employed by such party.
(h) All notices, requests, demands or other communications required or
permitted under this Agreement shall be sent by overnight mail, next day
delivery and fax, to Seller or Owner at their respective addresses appearing on
the signature page hereof and to Buyer at the addresses set forth below, and
notice shall be deemed given as of the date the notice is posted:
Seller: Xxxxx X. Xxxx
President
Peerless Big Apple, Inc.
0000 Xxxxxxxxxx Xxxx, Xxxxx 000
Xxxxxxxxxxxx, Xxxxxxx 00000
FAX: (000) 000-0000
with a copy to: G. Xxxxxxx Xxxxxxx, Esq.
c/o Lewis, Longman & Xxxxxx, P.A.
0000 Xxxxxxxxxx Xxxx, Xxxxx 000
Xxxxxxxxxxxx, Xxxxxxx 00000
FAX: (000) 000-0000
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Buyer: Xxxxxxx X. Xxxxxxx
President
Star Services Group, Inc.
0000 Xxxxx Xxxxxxxxx Xxxx
Xxxxxxx Xxxxx, XX 00000
FAX: (000) 000-0000
with a copy to: Xxxxxx X. Xxxxx
Xxxxx & Xxxxxxxx, LLP
00 Xxxx Xxxxxx
Xxxx Xxxxxxxxxx, XX 00000
FAX: (000) 000-0000
(i) If any provision hereof is held or finally determined to be invalid
or unenforceable to any extent for any reason, to the extent that such provision
is valid and enforceable, the arbiters or court of competent jurisdiction, as
the case may be, shall construe and interpret said provision to provide for
maximum validity and enforceability. If any provision of this Agreement is
invalid, illegal or unenforceable, the balance of this Agreement shall remain in
effect.
(j) In connection with any action or dispute or dispute arising under
this Agreement the prevailing party shall be entitled to an award of its
expenses including reasonable attorney fees and disbursements incurred or paid
before and at trial of any appellate proceedings.
(k) This Agreement shall not be assigned by either party without the
prior written consent of the other party. Notwithstanding the foregoing, it is
agreed that Buyer may assign this Agreement to a subsidiary. However, no such
assignment shall release Buyer from its obligations hereunder without the
specific release thereof by the Seller.
(l) This Agreement may be executed in any number of counterparts, each
of which shall be deemed an original.
SECTION 15. BENEFIT AND DURATION. This Agreement shall be binding upon
and shall inure to the benefit of the parties hereto and their respective heirs,
administrators, executors, successors and assigns. However, any assignment by
Seller must be agreed to in writing by Buyer. This Agreement shall continue in
effect until all the obligations, duties and warranties as specified herein,
shall be fully performed and satisfied.
IN WITNESS WHEREOF, the parties hereto have set their hands on the day
and year first above written.
BUYER:
STAR SERVICES GROUP, INC.
Attest:
BY: /s/ Xxxxxx Xxxxxxx BY: /s/ Xxxxxxx X. Xxxxxxx
----------------------------------- ---------------------------------
Corporate Secretary Xxxxxxx X. Xxxxxxx, Its President
SELLER:
PEERLESS BIG APPLE, INC.
Attest:
BY: /s/ G. Xxxxxxx Xxxxxxx BY: /s/ Xxxxx X. Xxxx
----------------------------------- ---------------------------------
Corporate Secretary Xxxxx X. Xxxx, Its President
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