ASSET PURCHASE AGREEMENT
By and Among
TAKEMEONVACATION, LLC, a Florida limited liability company
RVM PROMOTIONS, LLC, a Florida limited liability company
RVM VACATIONS, LLC, a Florida limited liability company
and
LEISURE PLAN, INC., a Florida corporation
ASSET PURCHASE AGREEMENT
TABLE OF CONTENTS
ARTICLE 1 Definitions........................................................1
ARTICLE 2 Purchase and Sale of Assets........................................11
ARTICLE 3 No Assumption of Liabilities.......................................17
ARTICLE 4 Closing............................................................21
ARTICLE 5 Representations and Warranties of Seller...........................22
ARTICLE 6 Representations and Warranties of Purchaser and Bluegreen..........32
ARTICLE 7 Covenants of Seller and Purchaser..................................33
ARTICLE 8 Survival of Representations and Warranties and Indemnification.....36
ARTICLE 9 Miscellaneous......................................................39
LIST OF SCHEDULE REFERENCES
Schedule Title Page
-------- ----- ----
Schedule 1.4(m) Seller's Pipeline of Domestic Vacation Ownership
Tours and Vacation Packages .......................... i
Schedule 1.4(o) Deposit Reimbursement Schedule ....................... ii
Schedule 1.13 Consulting Agreement ................................. iii
Schedule 1.15 Contracts of Seller .................................. iv
Schedule 1.23 Employment Agreements ................................ v
Schedule 1.27 Excluded Assets ...................................... vi
Schedule 1.34 Intellectual Property ................................ vii
Schedule 1.35 Inventory ............................................ viii
Schedule 1.41 Leases ............................................... ix
Schedule 1.43 Licenses of Seller ................................... x
Schedule 1.54 Personal Property .................................... xi
Schedule 1.59 Software ............................................. xii
Schedule 2.3 Business Plan ........................................ xiii
Schedule 2.4 Transfer Taxes and Closing Adjustments ............... xiv
Schedule 2.5 Wiring Instructions .................................. xv
Schedule 2.6 Allocation of Purchase Price ......................... xvi
Schedule 5.1 Organization, Standing and Foreign Qualification ..... xvii
Schedule 5.9 Title to Assets; Encumbrances ........................ xviii
Schedule 5.19 Compliance with Law .................................. xix
Schedule 5.21 Absence of Certain Changes or Events ................. xx
Schedule 5.27 Consumer Liability Claims ............................ xxi
Schedule 5.31 Unfulfilled Consumer Purchase Commitments and
Outstanding Bids ..................................... xxii
Schedule 5.32 Seller's Purchase Commitments and Outstanding Bids ... xxiii
Schedule 4.4(b) Xxxx of Sale ......................................... xxiv
Schedule 4.4(c) Assumption Agreement ................................. xxv
Schedule 4.4(e) Opinion of Counsel to Seller ......................... xxvi
Schedule 4.4(f) Opinion of Counsel to Purchaser ...................... xxvii
Schedule 12.16 Personal Obligations of Xxxxx Xxxxxxx ................ xxviii
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ASSET PURCHASE AGREEMENT
This ASSET PURCHASE AGREEMENT (this "Agreement") is made as of the 30th
day of September, 2002, by and among TakeMeOnVacation, LLC, a Florida limited
liability company (hereinafter "TMOV"), RVM Promotions, L.L.C., a Florida
limited liability company (hereinafter "RVM"), and RVM Vacations, LLC, a Florida
limited liability company (hereinafter "RVMV") each of whose principal business
address is 0000 Xxxxxxx Xxxxx, Xxxxxxx Xxxxx, Xxxxxxx 00000 (TMOV, RVM and RVMV
are collectively hereinafter referred to as the "Seller") and Leisure Plan,
Inc., a Florida corporation (hereinafter referred to as "Purchaser"), whose
principal business address is 0000 Xxxxxxxxxx Xxx Xxxxx, Xxxxx 000, Xxxx Xxxxx,
Xxxxxxx 00000. Bluegreen Corporation, a Delaware corporation (hereinafter
"Bluegreen"), which owns all of the stock of Purchaser, joins in this Agreement
to the extent specifically set forth herein.
W I T N E S S E T H:
WHEREAS, Seller is in the business of marketing Timeshare Interests and
producing and generating Leads and Prospects for the acquisition of Timeshare
Interests (the "Business"), through travel and vacation programs;
WHEREAS, Seller desires to sell to Purchaser certain Assets, as defined in
Section 1.4, that are related to or used in connection with the Business and
Purchaser desires to purchase the Assets, all upon the terms and conditions set
forth in this Agreement; and
WHEREAS, the parties hereto wish to document their understandings and
agreements in this regard;
NOW, THEREFORE, in consideration of the premises and the mutual covenants
hereinafter set forth and for other good and valuable consideration, the
sufficiency and receipt of which are hereby acknowledged, the parties hereto
agree as follows:
ARTICLE 1
DEFINITIONS
The following terms (in their singular and plural forms as appropriate) as
used in this Agreement shall have the meanings set forth below unless the
context requires otherwise:
1.1 "Accommodations" shall mean any apartment, condominium or cooperative
unit, cabin, lodge, hotel or motel room, campground or other private or
commercial structure which is situated on real or personal property and designed
for occupancy or use by one or more Persons.
1.2 "Affiliate" of a Person shall mean, when used with respect to a
specified Person, (i) another Person that, either directly or indirectly through
one or more intermediaries, controls or
is controlled by or is under common control with the Person specified; (ii) any
officer, director or Manager (as relates to any limited liability company) of
such Person; (iii) if such Person is an officer, director or Manager of another
Person, any company for which such Person acts in such capacity; and (iv) if
such Person is a natural person, any relative of or trust for the benefit of
such Person or any relative of such Person and shall include by way of example
and not limitation, as pertains to Seller, Paramount Marketing Consultants, Inc.
1.3 "Agreement" shall mean this Asset Purchase Agreement, including the
Schedules attached hereto.
1.4 " Assets" shall mean all of the assets, properties and rights of
Seller (excepting Excluded Assets) of every kind, nature, character and
description, whether real, personal or mixed, whether tangible or intangible,
whether accrued, contingent or otherwise relating to or utilized in the
Business, directly or indirectly, in whole or in part, in existence on the date
hereof, whether or not carried on the Books and Records of Seller, and wherever
located, which Assets are intended by way of example and not limitation, to
include the entire marketing operating system of Seller to include the Seller's
(i) Lead and Prospect production and generation system, (ii) telemarketing
vacation packages and tour and travel sales, (iii) reservation and reservations
systems, (iv) vacation, travel and tour fulfillment, (v) marketing
presentations, (vi) comprehensive tracking and reporting capability in respect
to the foregoing and (vii) the integration of the foregoing with vacation,
travel and tour planning and sales, (collectively "the System"), including but
not limited to the following:
(a) the Personal Property;
(b) the Inventory;
(c) the Intellectual Property;
(d) the Contracts of Seller;
(e) to the extent transferable, the Licenses, but excluding Seller's
business license;
(f) the goodwill of the Business, including, but not limited to,
goodwill associated with the trademarks, service marks, and trade names and the
name "TakeMeOnVacation" and "RVM";
(g) all rights, chooses in action and claims, known or unknown,
matured or unmatured, accrued or contingent, against Third Parties relating to
the Business, including the Intellectual Property infringements or to the
goodwill of the Business;
(h) all intangible personal property and assets including, without
limitation, franchises, guarantees, warranties, indemnities, certificates of
authority, and waivers and, the merchant account and credit card processing
facilities as referred to in Section 3.5.;
(i) customer, Lead and Prospect files, lists and databases, mailing
lists, supplier
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files, all other files, records, drawings, catalogues, stationery, advertising
materials and other documents (or copies thereof) related to the Assets or the
Business, and the use of any telephone numbers that are used in the operation of
the Business and any other tangible assets owned by Seller on the Closing Date
and used in the Business;
(j) the Software, telecommunication systems and processes,
documentation, related hardware, related maintenance agreements and any and all
prepayments and deposits relating to the System or any of the foregoing;
(k) Seller's Business methods and processes, including without
limitation, its internet-based marketing strategies and concepts,
technology-based marketing processes and services, and permission-based
marketing strategies and techniques;
(l) Seller's tour and travel club, known as Leisuretivity, and all
related databases, customer lists, transactions and information;
(m) Seller's pipeline, including the database related thereto, of
sold hooked and unhooked domestic Timeshare Interests tours and travel or
vacation packages (the "Pipeline"); which Pipeline, as of a date within five (5)
Business Days prior to the Closing Date, is set forth on SCHEDULE 1.4(m)
attached to this Agreement and incorporated herein by this reference; and
(n) any cash and cash equivalents and any accounts receivables or
membership payments (including Prospect payments and Leisuretivity member
payments) due and owing to Seller as relate to any benefits which are assumed to
be performed and satisfied by Purchaser under this Agreement, including Prospect
travel fulfillment and Leisuretivity benefits as set forth in Section 3.3
hereof.
(o) All deposits and all monetary reserves on account with any
hotels or other facilities, contractors or vendors, including hotel room
reservation deposits; provided, however, that Purchaser shall reimburse Seller
at Closing for such deposits in the amounts set forth in SCHEDULE 1.4(o)
attached to this Agreement and incorporated herein by this reference.
1.5 "Balance Sheet Date" shall mean June 30, 2002.
1.6 "Books and Records" shall mean all records of Seller pertaining to the
Assets, Business, properties, business operations, accounts, financial
condition, contractors, customers or suppliers of the Seller, regardless of
whether such Books and Records are maintained for tax or financial reporting
purposes.
1.7 Business" shall be as defined in the preamble of this Agreement.
1.8 "Business Day" shall mean any day other than a Saturday, Sunday or any
other day on which banks in the State of Florida are authorized or required to
be closed.
1.9 "Business Subsidiary" shall mean Leisure Plan, Inc., a Florida
corporation.
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1.10 " Closing" shall mean the consummation of the Asset acquisition and
the receipt of other Transaction Documents contemplated by this Agreement which
Closing shall be deemed to have occurred upon receipt of the Initial Purchase
Price by Seller.
1.11 " Closing Date" shall mean the opening of business on the date
hereof.
1.12 " Code" shall mean the Internal Revenue Code of 1986, as amended, and
the rules and regulations promulgated thereunder.
1.13 "Consulting Agreement" shall mean that certain Consulting Agreement
attached hereto as SCHEDULE 1.13 to be executed on the Closing Date by Purchaser
and Xxxxx Xxxxxxx, as Consultant.
1.14 " Contract" shall mean any written or oral contract, agreement,
understanding, lease, usufruct, license plan, instrument, commitment,
restriction, arrangement, obligation, undertaking, practice or authorization of
any kind or character or other document to which any Person is a party or that
is binding on any Person or its securities, assets or business.
1.15 "Contracts of Seller" shall mean the Contracts to which Seller is a
party and the Berkley Prospect Generation Contract referred to in Section 9.13.
Each Contract of Seller is identified on SCHEDULE 1.15 attached hereto.
1.16 "Cumulative Amount" shall mean a maximum of Fifteen Million
($15,000,000.00) Dollars payable by Purchaser to Seller, inclusive of the
Initial Purchase Price, the Deferred Purchase Payment and all or any portion of
the Earn Out Payment payable during the Earn Out Period.
1.17 "Damages" shall mean losses, liabilities, damages, Taxes, reasonable
costs and reasonable expenses (whether or not arising out of Third-Party
claims), including, without limitation, interest, penalties, reasonable
attorneys' fees and all other reasonable amounts paid in investigation, defense
or settlement of any lawsuit or claim. The term "Damages" is not limited to
matters asserted by Third Parties against Seller or against Purchaser or their
Affiliates, but includes Damages incurred or sustained by Seller or by Purchaser
or their Affiliates in the absence of Third Party claims.
1.18 " Default" shall mean (1) a breach of, default under, or
misrepresentation in or with respect to any Contract or License, including this
Agreement, (2) the occurrence of an event that with the passage of time or the
giving of notice or both would constitute a breach of, default under, or
misrepresentation in any Contract or License, including this Agreement, or (3)
the occurrence of an event that with or without the passage of time or the
giving of notice or both would give rise to a right to terminate, change the
terms of or renegotiate any Contract or License or to accelerate, increase, or
impose any Liability under any Contract or License, including this Agreement.
1.19 "Deferred Purchase Price Payment" shall mean the amount of Five
Hundred
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Thousand ($500,000.00) Dollars payable by Purchaser to Seller in accordance with
Section 2.2(a)(ii) of this Agreement.
1.20 "Earn Out Payment" shall mean the total dollar amount determined
pursuant to Section 2.3 of this Agreement.
1.21 "Earn Out Period" shall mean the period beginning on the Closing Date
and continuing through December 31, 2007 or upon the payment by Purchaser to
Seller of the Cumulative Amount, whichever shall first occur.
1.22 "Employee Benefit Plan" shall mean collectively, each pension,
retirement, profit-sharing, deferred compensation, stock option, employee stock
ownership, severance pay, vacation, bonus or other incentive plan, any other
written or unwritten employee program, arrangement, agreement or understanding,
whether arrived at through collective bargaining or otherwise, any medical,
vision, dental or other health plan, any life insurance plan, or any other
employee benefit plan or fringe benefit plan, including, without limitation, any
"employee benefit plan," as that term is defined in Section 3(3) of ERISA
currently or previously adopted, maintained by, sponsored in whole or in part
by, or contributed to by Seller or any Subsidiary or Affiliate thereof for the
benefit of employees, retirees, dependents, spouses, directors, independent
contractors, or other beneficiaries and under which employees, retirees,
dependents, spouses, directors, independent contractors or other beneficiaries
are eligible to participate. The "employee benefit plans" as defined in Section
3(3) of ERISA and any other plan, fund, policy, program, practice, custom,
understanding or arrangement providing compensation or other benefits to any
current or former officer or employee of Seller or any Subsidiary, or Affiliate
thereof or any dependent or beneficiary thereof, maintained by Seller or any
Subsidiary or under which Seller or any Subsidiary or any Affiliate thereof has
any Liability, whether or not they are or are intended to be (i) covered or
qualified under the Code, ERISA or any other applicable Law, (ii) written or
oral, (iii) funding or unfunded, (iv) actual or contingent, or (v) generally
available to any or all employees (or former employees) of Seller or any
Subsidiary (or their beneficiaries or dependents), including, without
limitation, all incentive, bonus, deferred compensation, flexible spending
accounts, cafeteria plans, vacation, holiday, medical, disability, share
purchase or other similar plans, policies, programs, practices or arrangements.
1.23 "Employment Agreements" shall mean those certain Employment
Agreements in the forms attached hereto as SCHEDULE 1.23 to be executed by
Purchaser as employer and (i) Xxxxxxx Xxxxx, Xx., (ii) Xxxxxx Xxxxxxx (iii)
Xxxxxxxxx Xxxxxx, (iv) Xxxxx Xxxxxxx, (v) Xxxxx Xxxx, and (vi) Xxx Xxxxxxxx,
respectively, as employees.
1.24 "Encumbrance" shall mean any Lien, judgment, pledge, claim, option,
right of first refusal or offer, charge, easement, lease, security interest,
other right, title or interest of any Third Party other than (i) for
non-delinquent Taxes and non-delinquent statutory liens arising other than by
reason of Default, (ii) statutory liens of landlords, liens created pursuant to
any Leases and liens of carriers, warehouseman, mechanics and materialmen
incurred in the ordinary course of business or (iii) encumbrances which are not
material to the Asset encumbered.
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1.25 "ERISA" shall mean Employee Retirement Income Security Act of 1974,
as amended.
1.26 "ERISA Plan" shall mean any Employee Benefit Plan which is an
"employee pension benefit plan," as that term is defined in Section 3(2) of
ERISA, or an "employee welfare benefit plan" as that term is defined in Section
3(1) of ERISA.
1.27 "Excluded Assets" shall mean the Total Purchase Price and all of
Seller's rights under this Agreement, Seller's minute book and member records
and those assets listed in SCHEDULE 1.27 attached hereto, all of which are not
part of the Assets that are being transferred to Purchaser.
1.28 "Financial Statements" shall mean (i) the audited financial
statements of Seller through December 31, 2001 and (ii) the reviewed financial
statements accompanied by accountant's letter through the Balance Sheet Date,
together with statements of income and expenses and the notes thereto and any
reports thereon of Seller's accountants. Financial Statements shall include and
reflect therein all accounts receivable of Seller as of the respective dates of
such Financial Statements.
1.29 "Fiscal Year" shall mean the period from the Closing Date through
December 31, 2002, and each of the years ending on December 31, 2003, 2004,
2005, 2006 and 2007.
1.30 "GAAP" shall mean United States generally accepted accounting
principles consistently applied.
1.31 "Governmental Authority" shall mean any federal, state, county,
local, foreign or other governmental or public agency, instrumentality,
commission, court authority, board or body of Seller.
1.32 "Indebtedness" with respect to any Person, shall mean and include the
aggregate amount of without duplication: (i) all obligations of such Person for
borrowed money; (ii) all obligations of such Person evidenced by bonds,
debentures, notes or other similar instruments, and all reimbursement or other
obligations of such Person in respect of letters of credit, banker's
acceptances, interest rate swaps or other financial products (excluding
performance bonds or bid bonds); (iii) all obligations of such Person to pay the
deferred acquisition price of assets or services, exclusive of trade payables
which, by their terms, are due and payable within ninety (90) calendar days
after the creation thereof; (iv) all capital lease obligations of such Person;
(v) all obligations or liabilities of others secured by a Lien on any assets
owned by such Person, irrespective of whether such obligation or liability is
assumed, to the extent of the lesser of such obligation or liability or the fair
market value of such asset; (vi) any guarantees of such Person of any
Indebtedness of another Person; and (vii) any unfunded or underfunded employee
benefit obligation of such Person.
1.33 "Initial Purchase Price" shall mean the amount of Two Million
($2,000,000.00) Dollars to be paid to Seller by Purchaser at Closing on the
Closing Date in accordance with Section 2.2 of this Agreement.
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1.34 "Intellectual Property" shall mean patents, patent applications,
patent rights, trademarks, trademark registration, trademark applications,
service marks, business marks, trade names, brand names, all other names and
slogan embodying business or product good will (or both), copyright
registrations, copyrights (including those in computer programs, Software,
including all source code and object code, development documentation,
programming tools, drawings, specifications and data), trade secrets, know how,
mask works, industrial designs, formulae, processes and technical information,
including confidential and proprietary information, and any rights under
licenses to any of the foregoing, whether or not subject to statutory
registration or protection, which by way of example and not limitation include
the items identified on SCHEDULE 1.34 attached hereto.
1.35 "Inventory" shall mean all the Seller's inventories held for sale in
the ordinary course of business to customers of the Seller, such as print
materials and videos, which by way of example and not limitation, include the
items identified on SCHEDULE 1.35 attached hereto.
1.36 "IRS" shall mean the Internal Revenue Service of the United States of
America.
1.37 "Knowledge" shall mean those facts or other matters of which a Person
is actually aware, or should have been, in the exercise of ordinary care, aware
of.
1.38 "Law" shall mean any code, law, order, ordinance, regulation, rule,
or statute of any Governmental Authority.
1.39 "Lead" shall mean any Person on any database or list of Seller who
may or has been offered a promotion by Seller (Seller agrees that such Leads are
to be used after Closing only as determined by Purchaser, which use may include
use by Purchaser, any Affiliate of Purchaser, any Third Party, the Seller or an
Affiliate of Seller all as may from time to time be determined by Purchaser
(i.e. determined by Purchaser to be usable by Excalibur, an Affiliate of Seller,
on terms agreed to by Purchaser and Excalibur). Purchaser acknowledges that any
Lead who owns a timeshare interest acquired from a timeshare developer other
than an Affiliate of Purchaser shall be excluded from the database or list of
Leads from and after the date of acquisition of such timeshare interest by such
owner.
1.40 "Leased Personal Property" shall mean all Personal Property that is
not owned by Seller that Seller either uses or has the right to use in the
Business.
1.41 "Leases" shall mean all of the leases listed on the SCHEDULE 1.41
attached hereto.
1.42 "Liability" shall mean any direct or indirect, primary or secondary,
liability, Indebtedness, obligation, penalty, expense (including, without
limitation, costs of investigation, collection and defense), claim, deficiency,
guaranty or endorsement of or by any Person (other than endorsements of notes,
bills and checks presented to banks for collection or deposit in the ordinary
course of business) of any type, whether accrued, absolute, contingent,
liquidated, unliquidated,
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matured, unmatured or otherwise.
1.43 "License" shall mean any license, franchise, notice, permit,
easement, right, certificate, authorization, approval or filing to which any
Person is a party or that is or may be binding on any Person or its securities,
property or business. Each Material License of Seller is identified on SCHEDULE
1.43 attached hereto.
1.44 "Lien" shall mean any mortgage, lien, security interest, pledge,
hypothecation, encumbrance, restriction, encroachment, easement, conditional
sale agreement, title retention or other security arrangement, defect of title,
adverse right or interest, charge or claim of any nature whatsoever of, on, or
with respect to any property or property interest.
1.45 "Litigation" shall mean any action, administrative or other
proceeding, arbitration, cause of action, claim, complaint, criminal
prosecution, inquiry, hearing, investigation (governmental or otherwise), notice
(written or oral) by any Person alleging potential liability or requesting
information relating to or affecting Seller, the Business, the Assets
(including, without limitation, Contracts of Seller), or the transactions
contemplated by this Agreement.
1.46 "Loss" shall mean any and all direct or indirect demands, claims,
payments, refunds, obligations, recoveries, deficiencies, fines, penalties,
interest, assessments, restitution, actions, causes of action, suits, losses,
Damages, punitive, exemplary or consequential damages payable in respect to or
related to any of the Assets or Business (including, but not limited to, lost
income and profits and interruptions of business), liabilities, costs, expenses
(including without limitation, (i) interest, penalties and reasonable attorneys'
fees and expenses, (ii) attorneys' fees and expenses necessary to enforce rights
to indemnification hereunder, and (iii) consultant's fees and other costs of
defense or investigation), and interest on any amount payable to a Third Party
as a result of the foregoing, whether accrued, absolute, contingent, known,
unknown, or otherwise.
1.47 "Material" or "Materially" shall be determined in light of the facts
and circumstances of the matter in question; provided, however, that any
specific monetary amount cited in this Agreement shall be deemed to determine
materiality in that instance.
1.48 "Material Adverse Change" or "Material Adverse Effect" shall mean any
Material adverse change in or effect on (i) the Business, operations, assets,
Liabilities, condition (financial or otherwise), results of operations, or
prospects, (ii) the ability of a party to consummate the transactions
contemplated by this Agreement or any of the Other Agreements to which it is or
will be a party, or (iii) the ability of a party to perform any of its
obligations under this Agreement or any of the Other Agreements to which it is
or will be a party, if such change or effect Materially impairs the ability of
such party to perform its obligations hereunder or thereunder, taken as a whole;
provided, however, that a Material Adverse Change or Material Adverse Effect
shall not include events or conditions generally affecting the Timeshare
Interest industry generally or effects resulting from general economic
conditions (including changes in real estate values or travel patterns), changes
in accounting practices or changes in Laws that do not have a materially more
adverse effect on such Person than that experienced by similarly situated
Persons.
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1.49 "Net Operating Profit of the Business" shall mean the pre-tax
operating income (loss) of the Business Subsidiary plus any indemnification
payments received from the Seller pursuant to the terms of this Agreement (to
the extent that the Business Subsidiary had previously incurred a Loss or
expense that resulted in such indemnification payment). The pre-tax operating
income (loss) of the Business Subsidiary shall be determined in accordance with
GAAP, consistent with provisions of Section 2.3(c)(5). In addition, Net
Operating Profit of the Business Subsidiary will be reduced by a reserve equal
50% of the fees paid to the Business Subsidiary by Leisuretivity members after
the Closing and will be utilized to pay any Liabilities related to Leisuretivity
activities. Each reserve will be reversed one year after its creation.
1.50 "Order" shall mean any decree, injunction, judgment, order, ruling,
writ, quasi-judicial decision or award or administrative decision or award of
any federal, state, local, foreign or other court, arbitrator, mediator,
tribunal, administrative agency or Governmental Authority to which any Person is
a party or that is or may be binding on any Person or its securities, assets or
business.
1.51 "Other Agreements" shall mean the agreements, documents, assignments
and instruments to be executed and delivered by Seller pursuant to this
Agreement.
1.52 "Payment Date" shall mean five (5) Business Days after the final
determination of the Earn Out Payment as provided in Section 2.3 hereof, unless
the Seller shall otherwise agree in writing.
1.53 "Person" shall mean a natural person or any legal, commercial or
Government Authority, including, without limitation, a corporation, general
partnership, joint venture, limited partnership, limited liability company,
trust, firm, business association or other entity.
1.54 "Personal Property" means collectively all furniture, fixtures,
furnishings, machinery, equipment, tools, leasehold improvements and other
tangible personal property or interests therein owned, leased or used by Seller
in the Business; which by way of example and not limitation includes the items
identified or SCHEDULE 1.54 attached hereto.
1.55 "Prospect" shall mean any Person who acquired a vacation or accepted
a promotional offering from Seller.
1.56 "Real Property Premises" shall mean the property and improvements,
located at 0000 Xxxxxxx Xxxxx, Xxxxxxx Xxxxx, Xxxxxxx 00000 therein owned,
leased, occupied, used or controlled by Seller as of the date of this Agreement
and all buildings, structures, fixtures and other improvements located thereon.
1.57 "Representative" shall mean any member, manager, officer, director,
principal, attorney, agent, employee or other representative.
1.58 "Seller's Accountant" shall mean the independent certified public
accounting firm retained by Seller in connection with the determination of the
Calculated Amounts under
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Section 2.3 of this Agreement.
1.59 "Software" shall mean any and all (i) computer programs (and all
licenses to use related thereto), including software implementations of
algorithms, models and methodologies, whether in source code or object code,
(ii) databases and compilations, including any and all data relating to
Prospects and collections of such data, whether machine readable or otherwise,
(iii) descriptions, flow charts and other work product used to design, plan,
organize and develop any of the foregoing and (iv) all documentation, including
user manuals and training Software, relating to any of the foregoing, in each
case developed or licensed by the Seller, or used in or necessary for the
conduct of its Business, which by way of example and not limitation includes the
items on SCHEDULE 1.59 attached hereto.
1.60 "Subsidiary" shall mean any Person of which at least a majority of
the securities or interests, having by the terms thereof, ordinary voting power
to elect a majority of the board of directors or others performing similar
functions with respect to such Person which is at the time directly or
indirectly owned or controlled by another Person, or by any one or more
Subsidiaries of such other Person, or by such other Person and one or more of
its Subsidiaries or Affiliates.
1.61 "Tax" or "Taxes" shall mean any federal, state, county, local,
foreign and other taxes, assessments, charges, fees, and impositions, including
interest and penalties thereon or with respect thereto, whether disputed or not.
1.62 "Tax Returns" shall mean all returns, reports, filings, declarations
and statements relating to Taxes that are required to be filed, recorded, or
deposited with any Governmental Authority, including any attachment thereto or
amendment thereof.
1.63 "Third Party" or "Third Parties" shall mean any Person that is not
Purchaser or Seller or an Affiliate of Purchaser or Seller.
1.64 "Timeshare Interest" shall mean interest in any arrangement, plan,
scheme or similar device, whether by membership agreement, tenancy in common,
sale, lease, deed, rental agreement, license, or right to use agreement or by
any other means, whereby a Person by means of a voluntary transfer receives
ownership rights (other than as security for an obligation) in or a right to use
Accommodations, for a period of time less than a full year during any given
year, but not necessarily for consecutive years.
1.65 "Total Purchase Price" shall mean the total consideration actually
paid to Seller by Purchaser for the purchase of the Assets pursuant to this
Agreement and which shall be calculated in accordance with Article 2 of this
Agreement.
1.66 "Transaction Documents" shall mean, collectively, the Employment
Agreements, the Consulting Agreement and any Other Agreements, documents,
certificates and instruments executed and delivered pursuant to this Agreement.
1.67 "Undisclosed Liabilities" shall mean any Liability that is not fully
reflected or
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reserved against in the Financial Statements (as is required pursuant to GAAP)
or fully disclosed in a Schedule attached to this Agreement other than
Liabilities incurred by the Seller in the ordinary course of business after June
30, 2002, which do not have a Material Adverse Effect.
ARTICLE 2
PURCHASE AND SALE OF ASSETS
2.1 Sale of Assets. The Seller hereby agrees to sell, transfer, assign,
convey and deliver to Purchaser, and Purchaser hereby agrees to purchase and
acquire from Seller, on the Closing Date, all right, title and interest of
Seller, legal or equitable, in and to all of the Assets, free and clear of any
and all Liens.
2.2 "Purchase Price."
(a) Purchaser shall pay to Seller on the dates as provided herein,
in consideration of the sale, transfer, assignment, conveyance and delivery of
the Assets, the Total Purchase Price as follows:
(i) At the Closing, Purchaser shall pay to Seller the Initial
Purchase Price.
(ii) One hundred eighty (180) days following the Closing Date,
Purchaser shall pay to Seller the Deferred Purchase Price Payment;
(b) By execution herein below, Bluegreen Corporation guarantees the
payment, when due, by Purchaser to Seller of the Initial Purchase Price, the
Deferred Purchase Price Payment and those portions of the Earn Out Payment
earned by Seller during the Earn Out Period, as provided for in this Agreement
and payment, when due, all Liabilities as are assumed by Purchaser in accordance
with the provisions of Article 3 of this Agreement. Bluegreen Corporation also,
by execution hereinbelow, guarantees performance of all obligations under this
Agreement to be performed following the Closing Date by it or Purchaser.
2.3 Earn Out Payment. Purchaser shall pay to Seller on the Payment Dates
those portions of the Earn Out Payment earned during the Earn Out Period as
determined in accordance with this Section.
(a) Until the Cumulative Amount has been paid in full by Purchaser
to Seller, Purchaser shall pay to Seller, on each Payment Date, the portion of
the Earn Out Payment earned during the Earn Out Period, as set forth in and in
accordance with the terms of this section.
(i) For each Fiscal Year, the Purchaser shall cause its
independent certified public accountant to prepare within one hundred twenty
(120) days following the end of each fiscal year audited financial statements of
the Business Subsidiary which shall include a calculation of the Net Operating
Profit of the Business Subsidiary for such Fiscal Year. Purchaser shall promptly
provide such financial statements to Seller upon Purchaser's receipt thereof.
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(ii) The Earn Out Payment during the Earn Out Period shall be
determined and paid as follows:
(a) the Purchaser shall pay to Seller an amount equal to
seventy-five (75%) percent of the Net Operating Profit of the Business
Subsidiary until Seller has been paid by Purchaser Five Million ($5,000,000.00)
Dollars of the Cumulative Amount.
(b) After Purchaser has paid Seller Five Million
($5,000,000.00) Dollars of the Cumulative Amount, then, thereafter, Purchaser
shall pay Seller an amount equal to fifty (50%) percent of the Net Operating
Profit of the Business Subsidiary until Seller has been paid by Purchaser an
additional Five Million ($5,000,000.00) Dollars (i.e., a total of Ten Million
($10,000,000.00) Dollars) of the Cumulative Amount.
(c) After Purchaser has paid Seller Ten Million
($10,000,000.00) Dollars of the Cumulative Amount then, thereafter, Purchaser
shall pay Seller an amount equal to twenty-five (25%) percent of the Net
Operating Profit of the Business Subsidiary until Purchaser has paid Seller an
additional Five Million ($5,000,000.00) Dollars (i.e. a total of Fifteen Million
($15,000,000.00) Dollars).
(b) Any payment of an Earn Out Payment as set forth in this Section
shall be made by wire transfer of immediately available funds to a bank
designated by Seller.
(c) Operations of the Business of TMOV. From the Closing Date to the
expiration of the Earn Out Period, the operations of the Business Subsidiary for
each Fiscal Year shall be managed as a separate, stand alone entity. The
Business Subsidiary shall conduct the Business substantially in accordance with
a Operating Budget agreed to by Seller and Purchaser and attached hereto as
SCHEDULE 2.3. Such "Operating Budget" shall be a detailed Operating Budget for
the applicable time period which Operating Budget shall include at least the
following items:
(1) an income statement, balance sheet and cash flow forecast,
together with selling, general and administrative expense summaries and
assumptions on which the operating budget is based;
(2) a capital expenditure budget for the applicable time
period setting forth both total anticipated capital expenditure and each such
anticipated expenditure in excess of Twenty Five Thousand ($25,000.00) Dollars,
together with the business justifications therefore;
(3) shall take into account the objectives, goals and targets
and changes in strategy and business operations for the coming time period. At
least one hundred twenty (120) days prior to the commencement of each Fiscal
Year, Purchaser shall review such Operating Budget for the forthcoming Fiscal
Year and shall submit any proposed changes to the same not less than sixty (60)
days prior to the commencement of each Fiscal Year to Seller. If within thirty
(30)
15
days after receipt thereof, Seller disagrees with the proposed changes to such
Operating Budget, Seller shall inform Purchaser, in writing, of such
disagreement and the parties shall seek to reconcile their differences in
respect to the proposed changes to the Operating Budget for the forthcoming
Fiscal Year. If at any time the Purchaser and Seller have not reconciled any
such difference (or for any reason such Operating Budget does not exist for any
particular year), then Purchaser shall conduct the Business Subsidiary and the
affairs and operations of the Business in a manner substantially consistent with
the Operating Budget attached hereto.
(4) During the Earn Out Period, the Business Subsidiary shall
be operated in an ordinary course of business, with the Operating Budget
operating as a guide therefore (except that the Business Subsidiary will no
longer accept new members respecting Leisuretivity nor shall there be any
marketing of Leisuretivity by any method; provided, however, the Business
Subsidiary may continue to fulfill private label clubs (including by way of
example without limitation such club related to Cross Media) as have been
established or offered in conjunction with activities of Leisuretivity).
Notwithstanding anything in this Agreement or otherwise to the contrary, while
it is intended that the Business Subsidiary will operate as set forth herein,
nothing herein shall require any Affiliate of the Business Subsidiary to incur
any expense on behalf of or make any contribution to the Business in excess of
One Million ($1,000,000.00) Dollars. During the Earn Out Period, the Business
Subsidiary will be operated in such a manner not to commingle any other
business, operations or liabilities with the Business Subsidiary excepting as
mutually agreed to between Seller and Purchaser. Without the prior written
consent of Seller, during the Earn Out Period, there shall be no expenses
imposed upon the Business Subsidiary by any Affiliate of Purchaser, including
without limitation, any corporate overhead charges, general and administrative
expense allocation or charges or expenses relating to accounting, human
recourses, legal and compliance and information technology nor will any services
or products be provided to the Business Subsidiary by an Affiliate of Purchaser,
except at rates that are at least as favorable as the Business Subsidiary could
obtain from Third Parties.
(5) Specifics of the Operation of the Operating Budget.
Bluegreen Corporation, an Affiliate of Purchaser, shall provide to the Business
Subsidiary during the Earn Out Period its corporate services relating to general
and administrative services reasonably necessary or desirable for the operation
of the Business and Business Subsidiary, including without limitation,
accounting, human resources, legal and compliance and information technology
services and the Business Subsidiary shall be charged therefore, for these
services, only in amount of twenty ($20.00) dollars per net Prospect tour
generated by the Business Subsidiary to any location; provided, however, that
the providing of such services for the foregoing amount shall not include cost
and expenses of employees, or Third Parties providing services to the Business
Subsidiary and is limited to the corporate services that Bluegreen Corporation
provides to itself or its Affiliates for similar matters. In addition, the
Business Subsidiary will charge Affiliates of Purchaser, including Bluegreen
Corporation and its subsidiaries, for the generation and production of each
Prospect as follows: two hundred eighty ($280.00) dollars for a day drive; three
hundred seventy-five ($375.00) dollars for a mini-vacation (containing one or
two nights vacation); four hundred fifty ($450.00) dollars for an extended stay
vacation (three (3) nights or more) and twenty-five ($25.00) dollars per unique
vacation package making a reservation processed by the Business Subsidiary for
any such Affiliate in respect to any reservation of a mini vacation not sold by
the Business
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Subsidiary. The Operating Budget shall include as an expense of the Purchaser
(and for purposes of calculation of any Earn Out payment such calculation shall
include as an expense of the Purchaser) the cost and expenses of those employees
referred to in Paragraph 7.4 of this Agreement, to the extent that such
employees render or provide services to Purchaser, regardless of whether such
employees are employed by Purchaser, or any Affiliate of Purchaser, including
Bluegreen Corporation. For purposes of the foregoing, such calculations shall
include all such costs and expenses payable or associated with such employees.
(6) Rights. Subject to the terms of this Agreement, Bluegreen
Corporation and its respective agents, officers, directors and designates shall
have the same authority over the Business Subsidiary from and after the Closing
Date as they may have over other Subsidiaries of Bluegreen Corporation.
(a) Computations. All audited financial statements of
the Business Subsidiary as provided for in this Paragraph 2.3 shall be prepared
in accordance with GAAP.
(b) Dispute Procedure. If there should be any
disagreement between Seller and Purchaser as to the proper computation of the
Calculated Amounts, Seller's Accountant and an independent certified public
accountant retained by Purchaser at Purchaser's expense, shall undertake to
reach agreement as to Calculated Amounts and shall promptly notify Seller and
Purchaser in writing as to such agreement. Any such agreement by such
accountants shall be conclusive and binding upon the Purchaser and Seller. If
within twenty (20) Business Days after the matter is referred to them, the
independent certified public accountant of Purchaser and Seller's Accountant are
unable to agree as to the Calculated Amount, such accountants jointly shall
promptly select a third independent certified public accounting firm (the "Third
Accountant"). The Third Accountant shall, within twenty (20) Business Days after
the matter is referred to the Third Accountant notify Purchaser and Seller in
writing of its determination of the Calculated Amount. Any such determination by
the Third Accountant shall (i) not be greater than the Calculated Amount as
determined by Seller's Accountant nor be less than the Calculated Amount as
determined by the accountants retained by Purchaser, and (ii) be conclusive and
binding upon the parties hereto.
(c) Fees and Expenses. The fees and expenses of the
Third Accountant and all other costs associated with any dispute in which a
Third Accountant is appointed, shall be paid by the non-prevailing party in the
resolution procedure set forth above, provided that Purchaser and Seller shall
each be responsible for its own attorneys' fees, accountants' fees and other
expenses incurred in accordance with the dispute. For purposes of this Section,
the non-prevailing party shall be considered to be the party whose proposed
Calculated Amount differs the most, in the aggregate, from the Calculated Amount
determined by the Third Accountant.
(d) Limitations on Earn Out Payments. Notwithstanding
anything to the contrary contained in this Agreement (i) the portion of Earn Out
Payment payable to Seller shall be decreased by any offset that is permitted to
be taken by Purchaser as to Seller as provided in this Agreement and for any
Losses ultimately determined to be owing to Purchaser by
17
Seller, to include any Default by Seller of this Agreement or any Seller
obligation to indemnify, (ii) the aggregate Earn Out Payment payable pursuant to
this Paragraph shall in no event exceed the Cumulative Amount less the Initial
Purchase Price and the Deferred Purchase Price Payment and (iii) there is no
guaranty by Purchaser or any other Person that the Earn Out Payments will, in
the aggregate together with the Initial Purchase Price and the Deferred Purchase
Price Payment, equal the Cumulative Amount.
(e) Arbitration of Foregoing Limitations on Earn Out
Payments. In the event that Purchaser believes that a portion of the Earn Out
Payment payable to Seller is to be decreased by any offsets as permitted
hereinabove or as otherwise stated in this Agreement, then, Purchaser shall
provide notice to Seller of such right of offset in the manner provided herein
for the giving of notices. Purchaser and Seller shall then, for a period of
thirty (30) days, undertake in good faith to reach agreement as to whether there
has been a Loss allowing Purchaser to decrease the Earn Out Payment payable to
Seller or otherwise resolve their differences concerning such allegations.
Purchaser and Seller shall cooperate with respect to revision of information
useful in determining whether there is an offset and the nature of circumstance
concerning such. If, after such time, Seller and Purchaser are unable to agree
as to whether there has been a Loss to which Purchaser is entitled to offset
against an Earn Out Payment payable to Seller, then Seller and Purchaser shall
submit the question of whether there has been or is a Loss entitling Purchaser
to an offset as against an Earn Out Payment payable to Seller, and a
determination as to the amount of the Earn Out Payment to binding arbitration in
Boca Raton, Florida, before a single Arbitrator ("Arbitrator") in accordance
with the then-prevailing rules of the American Arbitration Association.
The Arbitrator shall first determine whether there
has been a any Default by Seller under this Agreement or any Default by Xxxxx
Xxxxxxx of the Consulting Agreement between Purchaser and Xxxxx Xxxxxxx. If the
Arbitrator determines that there has not been such a Default, the Earn Out
Payment shall be as determined at the relevant time as provided herein without
offset. If the Arbitrator determines that there has been such a Default, then
the Arbitrator shall determine the amount of the Earn Out Payment payable to
Seller, taking into account the nature of the Default, the Loss resulting
therefrom. The determination of the Arbitrator as to the matters submitted for
arbitration hereunder shall be conclusive and binding upon Seller and Purchaser.
(f) No Third Party Beneficiaries. The Earn Out Payment
hereunder shall inure to the benefit of and be binding upon Seller and Purchaser
hereto and their respective heirs and permitted successors and assigns. Nothing
in this Section, expressed or implied, is intended to or shall (i) confer on any
Person or entity other than the parties hereto or their heirs or permitted
successors or assigns, any obligations or Liabilities under or by reason of this
Section concerning Earn Out Payments or the other agreements and transactions
provided for in this Section or (ii) constitute the parties hereto as partners
or participants in a joint venture.
(g) Assignment. None of the rights, remedies,
obligations or liabilities arising under this Section concerning the Earn Out
Payment shall be assignable by Seller or Purchaser without the prior written
consent of the other party except that Purchaser may assign the obligation to
pay to Seller the Earn Out Payment with an assignment of all or substantially
all of
18
its assets, provided that the assignee shall agree in writing to perform all of
the Purchaser's obligations hereunder.
2.4 Transfer Taxes and Closing Adjustments. Seller shall be responsible
for any Taxes imposed by reason of the transfer of the Assets provided hereunder
and any deficiency, interest or penalty asserted with respect thereto. The
following prorations and adjustments relating to the Assets will be made outside
of Closing as of the Closing Date, with Seller liable to the extent such items
relate to any time period prior to the Closing and Purchaser liable to the
extent such items relate to periods on or after the Closing: (i) personal
property, real estate, occupancy and other similar Taxes, if any, on or with
respect to the Assets other than Taxes imposed by reason of the transfer of the
Assets; and (ii) all other items that are shown on SCHEDULE 2.4.
2.5 Wiring Instructions. All payments to any party hereunder shall be made
to such party's bank account as set forth on SCHEDULE 2.5 attached hereto, or
such other bank account as such party shall have given notice to the other
parties hereto no later than five (5) Business Days prior to the date such
payment is due.
2.6 Allocation of Purchase Price. Purchaser and Seller shall allocate the
consideration paid by Purchaser hereunder in accordance with SCHEDULE 2.6
attached hereto, which SCHEDULE 2.6 shall be finalized upon the mutual agreement
of Purchaser and Seller as soon as reasonably practicable, subsequent to the
Closing Date pending review by Purchaser and Purchaser's accountants. Purchaser
and Seller shall utilize the allocation of consideration described in the
preceding sentence in the preparation of all Tax Returns or forms and for all
other Tax purposes. Any adjustment to the consideration paid pursuant to this
Agreement shall result in an appropriate adjustment to such allocation. Neither
Purchaser nor Seller shall agree to any adjustment relating to the manner in
which the consideration has been allocated as set forth in this Section 2.6
without the prior written approval of the other, which approval shall not be
unreasonably withheld.
2.7 Deliveries. All deliveries, payments and Transaction Documents,
relating to the Closing (i) shall be interdependent and none shall be effective
unless and until all are effective (except to the extent that the party entitled
to the benefit thereof has waived satisfaction or performance thereof as a
condition precedent to Closing), and (ii) shall be deemed to be consummated
simultaneously, except as specifically provided herein.
ARTICLE 3
NO ASSUMPTION OF LIABILITIES
3.1 General. Except as expressly set forth below respecting Liabilities
that Purchaser has agreed to be responsible for, Purchaser is not assuming and
shall not be liable for or with respect to any of Seller's Liabilities. Nothing
contained in this Article 3 or in any instrument of assumption executed by
Purchaser at the Closing shall be deemed to release or relieve Seller from its
representations, warranties, covenants and agreements contained in this
Agreement or any of the Other Agreements, including, without limitation, the
obligations of Seller to indemnify Purchaser in accordance with the provisions
of Article 8. Further, Seller shall pay, satisfy and perform when due
19
all of Seller's Liabilities other than those Liabilities expressly assumed by
Purchaser pursuant to the provisions of this Agreement or any of the
Transactional Documents and no disclosures made or exceptions noted with respect
to the representations, warranties, covenants and agreements of Seller contained
in this Agreement or any of the Other Agreements shall affect Seller's
obligation to pay, satisfy and perform all of Seller's Liabilities not expressly
assumed by Purchaser pursuant to the provisions of this Agreement.
3.2 Contracts. Notwithstanding the foregoing, Purchaser agrees to assume
Seller's obligations due to be performed after the Closing Date as respects the
Contracts of Seller which Contracts of Seller are attached hereto as Schedule
1.15 and which Contracts of Seller, Seller warrants to be free of Default
subject to the following:
Nothing contained in this Section shall be construed as an attempt to
agree to assign any Contract of Seller which is in Law non-assignable without
the consent of any other party thereto, unless such consent shall have been
given. Seller shall use its commercially reasonable efforts to obtain all such
necessary consents prior to the Closing, and to the extent any such necessary
consent has not been obtained, Seller shall continue its efforts to obtain such
consent after the Closing; provided Section 9.13 and 9.14 shall require consent
prior to Closing.
Upon Closing by Purchaser without Seller obtaining any assignment consent
that may be required in respect to any Contract of Seller and in order that the
full value of every such Contract which is included within the Assets may be
realized by Purchaser, at Purchaser's request, direction and expense, Seller
shall take all such action as shall in the opinion of Purchaser be reasonably
necessary or proper (i) in order to preserve for the benefit of Purchaser the
rights and obligations of Seller under such Contract, and (ii) to facilitate the
collection of the monies due and payable after Closing, or to become due and
payable, to Seller pursuant to every such Contract, and Seller shall remit such
monies to Purchaser within five (5) Business Days of collection. Purchaser shall
be entitled to the benefits accruing after the Closing Date of any such
non-assigned Contract. Purchaser, at its expense, shall perform all of Seller's
obligations due to be performed under any such non-assigned Contract that is
included among the Contracts assumed by Purchaser to the extent Purchaser is
being provided the benefits of such non-assigned Contract. This Agreement is not
intended to, and shall not, (i) benefit any Person other than Seller and
Purchaser or (ii) create any Third Party beneficiary right in any Person.
In addition to the foregoing, Purchaser agrees to assume Seller's
obligations as respects every Contract entered into by Seller of which Purchaser
elects to accept the benefits after the Closing arising under such Contract,
which Seller warrants to be free of Default. Upon election to accept any such
benefit by Purchaser, Purchaser shall thereby assume all of Seller's obligations
due to be performed after the Closing Date under any such Contract to the extent
Purchaser is provided the benefits of any such Contract.
3.3 Prospect Travel Fulfillment.
(a) Attached hereto as SCHEDULE 1.4(m) is the Seller's Pipeline (as
further identified in Section 1.4(m) of this Agreement). Purchaser shall satisfy
and perform when due from
20
and after the Closing Date all of Seller's obligations for use or occupancy of
Accommodations to be provided to Prospects as reflected in the vacation or
travel package sold to the respective Prospect as shown on the Books and
Records, and, additionally, Purchaser shall satisfy and perform Seller's
obligations for additional vacation benefits of car rentals, cruises, amusement
and/or entertainment tickets as shown on the Books and Records pertaining to
such respective Prospect; provided, however, such Purchaser obligation set forth
in this Section shall be limited to those Prospects received by Purchaser (or
its designate) and those Prospects for which Purchaser authorizes others to
receive and for which Purchaser receives compensation acceptable to Purchaser.
(b) Purchaser agrees to satisfy and perform when due Seller's
obligations to the Prospects who have joined and maintain their membership in
Leisuretivity, in accordance with the terms of such membership. Such obligations
include a composite of discounts and services offered to such Prospects by
Seller. Such Prospects are reflected on the Books and Records. The composite of
discounts and services are in respect to benefits of cruises, discount airfares,
car rentals, choice hotels, resort condominium rentals, golf discounts,
recreation and ski packages, and Leisuretivity vacation packages as the same are
reflected for a respective Prospect in the Books and Records.
(c) In accordance with the Books and Records and the Financial
Statements, certain percentages of Prospects who have acquired benefits,
including vacation or travel packages or Leisuretivity club memberships, from
Seller cancel the acquisition thereof and receive or are entitled to receive
refunds of amounts paid to Seller. Seller shall be responsible for and pay all
such requests for refunds received prior to Closing. Purchaser has examined the
Books and Records and such Financial Statements and Purchaser and Seller agree
that such documents shall serve as a good faith estimate of refunds for
cancellations as may be made to such Prospects following Closing. Purchaser
agrees that it shall satisfy and perform Seller's Liabilities for request for
refunds for cancellations received following Closing in respect to benefits
acquired from Seller by such Prospects; provided Purchaser's obligation shall be
limited to amounts consistent with the historical and customary refunds for
cancellations, plus ten (10%) percent thereof for Prospects or Leisuretivity
Club Memberships as set forth in the Books and Records and Financial Statements.
Purchaser agrees to satisfy and perform Seller's liabilities for requests for
refunds for cancellations by such Prospects or Leisuretivity Club Members
received after the Closing Date consistent with and limited by the foregoing.
Notwithstanding any other provision contained herein to the contrary, Purchaser
shall not assume and shall have no liability to satisfy, pay or perform any
Liability for cancellation and refunds except consistent with the terms of this
Paragraph, and Seller shall otherwise satisfy, pay and perform such Liability in
respect to such cancellations and refunds.
(d) Purchaser shall not assume the lease of the Real Property
Premises; however, Seller and Purchaser agree that Purchaser shall maintain use,
occupancy and possession of the Real Property Premises consistent with Seller's
use, occupancy and possession thereof for a time period after the Closing Date
of six (6) months; provided, however, that during such time period Purchaser
shall pay to Seller or such Affiliate of Seller as is the owner of such Real
Property Premises, a monthly rental amount of $10.61 per square foot occupied
plus common area maintenance charges. After the six (6) month term set forth
above, Purchaser may terminate its use, occupancy and possession at such time as
in the discretion of Purchaser so determines, provided
21
Purchaser shall deliver written notice of at least sixty (60) days prior to
Purchaser terminating and vacating such Real Property Premises. Monthly rental
payments as set forth hereinabove may be pro-rated for any actual time periods
regarding use, occupancy and possession. Seller shall keep in place any and all
deposits respecting utilities and be entitled to return thereof, if so
determined by Seller, at the time Purchaser vacates the Real Property Premises
and during any period of occupancy by Purchaser or the Real Property Premises
Seller shall continue providing to the Real Property Premises all essential
services and utilities. In the event that the Business is relocated to a
facility leased by Purchaser within any facility of an Affiliate of Purchaser,
monthly rental allocated to the Business Subsidiary shall equal the pro rata
portion of rent equal to the pro rata portion of the space occupied by the
Business Subsidiary.
(e) Notwithstanding any of the provisions contained in this
Paragraph to the contrary, Purchaser shall not be obligated to satisfy and
perform any of the Seller's Liabilities regarding Prospects, including travel
fulfillment, Leisuretivity, or refunds for cancellations, as provided for in
this Paragraph unless Purchaser has, as relates to the respective Prospect, been
assigned the account receivable due and owing by such Prospect and the Contract
benefits, including payment and potential travel by such Prospect or Purchaser
authorizes the Contract benefits of such Prospect to be received by another and
Purchaser receives a fee, acceptable to Purchaser, therefore.
3.4 Liabilities of Seller are set forth within Seller's Financial
Statement. To the extent Liabilities of Seller are due and owing following the
Closing Date and directly relate to the Assets acquired by Purchaser pursuant to
this Agreement, then Purchaser agrees to satisfy and perform such Seller
Liabilities in the amounts and not in excess thereof as set forth in the
Financial Statements; provided, however, that the Asset associated with such
Liability and all Contract benefits, including payment, from any Third Party
related to such Liability has been transferred and conveyed to Purchaser and
that the Liability does not constitute an Undisclosed Liability.
3.5 Merchant Account/Credit Cards. Seller is currently in possession of
merchant accounts through which credit card payments are processed regarding the
Business. Seller agrees that it shall assign all rights, titles and interests in
and to the merchant accounts to Purchaser in respect to this Asset acquisition.
Purchaser shall, upon such assignment, assume Seller's Liability in respect to
the reserves and fees regarding such merchant accounts. The merchant accounts
referenced in this section are identified by account number as follows:
(i) : MC/Visa Merchant Account #412061230100026
(ii) MC/Visa Merchant Account #412061230100356
(iii) MC/Visa Merchant Account #412061230101073
(iv) MC/Visa Merchant Account #412061230101081
(v) MC/Visa Merchant Account #412061236700829
(vi) Amex Merchant Account #4090958661
(vii) Amex Merchant Account #4090987678
(viii) Discover Merchant Account #601101009990217
(ix) Discover Merchant Account #601101513735900
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(x) Discover Merchant Account #601101308708542
(xi) Discover Merchant Account #601101089990939
Upon such assignment, Purchaser shall be responsible and have Liability
respecting such merchant accounts and credit card charges (i) for all charges,
fees, credits and refunds arising from sales occurring after Closing and (ii)
for credits, fees and refunds relating to the Business limited, however, to the
amount of and consistent with credits, fees and refunds provided for
cancellations as set forth hereinabove in Section 3.3(c); provided that
Purchaser shall assume all Liability for such credits, refunds and fees as
relate to the Business to the extent that the same result from or are caused by
the conduct or activity of Purchaser in operating the Business from and after
the date of Closing and Seller shall retain and pay any and all obligations and
Liability relating to such merchant accounts and credit card charges, including
for chargebacks or refund obligations, or fees, in respect to such merchant
accounts in excess of the amount of Purchaser's responsibilities under this
section.
ARTICLE 4
CLOSING
4.1 Closing. The closing of the transactions contemplated herein (the
"Closing") shall be held simultaneously with the execution of this Agreement by
exchange of documents via Federal Express and facsimile, unless the parties
hereto otherwise agree. All transactions at the Closing shall be deemed to take
place simultaneously.
4.2 Employment Agreements. At the Closing, the Employment Agreements shall
be executed by the respective parties.
4.3 Consulting Agreement. At the Closing, the Consulting Agreement shall
be executed by the respective parties.
4.4 Other Deliveries at Closing. In addition to the foregoing matters, at
the Closing:
(a) Purchaser shall deliver to Seller the Initial Purchase Price as
provided in Section 2.2 hereof;
(b) Purchaser shall have received from Seller an executed xxxx of
sale in form and substance acceptable to the Purchaser.
(c) Purchaser and Seller shall execute and deliver an Assumption
Agreement in form and substance acceptable to the Purchaser and Seller shall
execute and deliver to Purchaser such other assignments and other conveyance
documents reasonably necessary or desirable to transfer the Assets to Purchaser.
(d) Each party shall have delivered to the other party a certificate
dated the Closing Date certifying the incumbency of all persons who have
executed this Agreement or any
23
of the Other Agreements and attaching copies of all corporate resolutions
approving this Agreement, the Other Agreements and the consummation of the
transactions contemplated hereby and thereby. This certificate shall contain
specimens of the signatures of each person who executed this Agreement or any of
the Other Agreements on behalf of any party hereto.
(e) Seller shall have delivered to Purchaser an Opinion of
Greenberg, Traurig, P.A., counsel to Seller, dated as of the Closing Date in
form and substance acceptable to Purchaser.
(f) Purchaser shall deliver to Seller an Opinion of Xxxxxxxxx &
Scavo, P.C., counsel to Purchaser, dated as of the Closing Date, in form and
substance acceptable to Seller.
(g) Excalibur Marketing, LLC and Purchaser shall have entered into a
contract, in form and substance acceptable to Excalibur Marketing, LLC and
Purchaser.
(h) The Marketing Agreement, dated March 21, 2000 between The
Berkley Group, Inc., a Florida corporation ("Berkley") and Paramount Marketing
Consultants, Inc., a Florida corporation ("Paramount") relating to the
generation of Prospects on behalf of Berkley by Paramount shall be assigned by
Paramount to the Business Subsidiary, in form and substance acceptable to Seller
and Purchaser and such Marketing Agreement shall not be subject to any Lien.
(i) All Other Agreements and Transaction Documents contemplated in
this Agreement shall be executed by Seller or its requisite Affiliate and by the
relevant Third Party and delivered to Purchaser.
ARTICLE 5
REPRESENTATIONS AND WARRANTIES OF SELLER
Seller hereby represents and warrants to Purchaser and to Bluegreen
Corporation that:
5.1 Organization, Standing and Foreign Qualification. TMOV, RVM and RVMV
are limited liability companies duly organized, validly existing, and in good
standing under the laws of the State of Florida with the proper business power
and authority to carry on its Business and to own, lease and operate its Assets.
Correct and complete copies of Seller's Articles of Organization and all
amendments thereto and any Operating Agreement (certified by the Managers of
Seller) have been delivered to Purchaser. Neither the character of the Assets
nor the nature of the Business requires Seller to be duly qualified to do
business as a foreign corporation or business enterprise in any jurisdiction
outside those identified in Schedule 5.1 attached hereto and Seller is qualified
as a foreign business enterprise and in good standing in each listed
jurisdiction, except that the failure to be so qualified would not prevent
Seller from transferring the Assets to Purchaser free and clear of any
Encumbrance.
5.2 Authority and Binding Effect. Seller has the power and authority
necessary to enter into and perform their respective obligations under this
Agreement, the Other Agreements and to
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consummate the transactions contemplated hereby and thereby. The execution,
delivery and performance of this Agreement and the Other Agreements have been
approved by all necessary action of the authorized Representatives of Seller.
This Agreement has been, and the Other Agreements will be, executed and
delivered by duly authorized Representatives of Seller and each constitutes, or
will constitute when executed and delivered, the legal, valid and binding
obligation of Seller, enforceable against Seller in accordance with its terms.
To Seller's knowledge, each Person (other than Purchaser or Bluegreen
Corporation) to any Transaction Document who is not a Seller hereunder has the
power and authority necessary to enter into and perform its respective
obligations under the respective Transaction Document and to consummate the
transaction contemplated thereby. To Seller's knowledge, the execution, delivery
and performance of the respective Transaction Document by the Person (other than
Purchaser or Bluegreen Corporation) executing such Transaction Document who is
not a Seller hereunder, has been approved by such Person. To Seller's knowledge
the Transaction Document executed by a Person (other than Purchaser or Bluegreen
Corporation) who is not a Seller hereunder will be executed and delivered by a
duly authorized Person and will when constitute, when executed and delivered,
the legal, valid and binding obligation of such Person, enforceable against such
Person in accordance with the terms of such Transaction Document.
5.3 Validity of Contemplated Transactions, Restrictions. The execution,
delivery and performance of this Agreement and the Other Agreements by Seller
and the consummation of the transactions contemplated hereby or thereby, will
not (i) violate any provision of the Articles of Organization or Operating
Agreement of Seller, or any Law or Order relating to Seller, (ii) result in a
Default under, or require the consent or approval of any party to, any Contract
or License of Seller or its Affiliates, or (iii) result in the creation or
imposition of any Lien on the Assets. To Seller's knowledge, the execution,
delivery and performance of a Transaction Document by a Person who is not a
Seller hereunder (other than Purchaser or Bluegreen Corporation), and the
consummation of the transaction contemplated thereby will not (i) violate any
provision of any organizational document relating to such Person, or any Law or
Order relating to such Person, (ii) result in a Default under, or require the
consensual approval of any party to, any Contract or License applicable to such
Person, or (iii) result in the creation or imposition of any Lien.
5.4 Subsidiaries and Investments. Seller has no Subsidiaries and Seller
has not in the past and does not currently own, directly or indirectly, any
capital stock or other equity, ownership, proprietary or voting interest in any
Person.
5.5 Financial Statements. The Financial Statements (i) are in accordance
with the Books and Records of Seller which are complete and correct, (ii)
present fairly and on a consistent basis with past practice the financial
position of Seller as of the dates indicated and the results of its operations
and its cash flows for the periods then ended, and (iii) do not reflect any
write-up or revaluation increasing the book value of any Assets. The Financial
Statements contain all adjustments necessary to present fairly the financial
condition of Seller as of the respective dates indicated and the results of
operations of Seller and the Business for the respective periods indicated.
5.6 Absence of Undisclosed Liabilities. Neither Seller nor any of its
Representatives
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has received any verbal or written notice that there are any Undisclosed
Liabilities or any basis for or threat of an assertion against Seller, the
Business or the Assets of any Undisclosed Liability, except for Liabilities
incurred since the Balance Sheet Date in the ordinary course of business
consistent with past practice, none of which are Material; provided, however,
that Undisclosed Liabilities shall not include the Liabilities assumed by
Purchaser pursuant to Article 3 of this Agreement..
5.7 Absence of Changes. Since the Balance Sheet Date, (i) the Business has
been carried on only in the ordinary course consistent with past practice, (ii)
there has been no Material Adverse Change, and there has been no event or
circumstance which is reasonably anticipated to result in a Material Adverse
Change with respect to Seller, the Business or the Assets (iii) Seller has not
made any change in any method of accounting or accounting practice.
5.8 Tax Matters.
(a) Seller has not been delinquent in the payment of any Tax,
assessment, deposit or other charge as respects the Assets, by any Governmental
Authority and no Liability is pending or has been assessed, asserted or
threatened against Seller or any of the Assets in connection with any such Tax
and there is no basis for any such Liability. Seller has not received any notice
of assessment or proposed assessment and there are no pending Tax examinations
of or Tax claims asserted against any of the Assets, including without
limitation, any claim by any Governmental Authority. There are no Liens for any
Taxes (other than any Lien for Taxes not yet due and payable) on any of the
Assets.
5.9 Title to Assets; Encumbrances.
(a) Except as set forth in the SCHEDULE 5.9, the Seller has good
title to, or valid leasehold interests in, all Assets and properties purported
to be owned, operated, leased or occupied by it, or used in the operation of its
Business, free and clear of all Encumbrances. SCHEDULE 5.9 accurately contains
reference to whether an Asset is leased or owned by Seller or a Seller
Affiliate. The Seller has performed all the obligations required to be performed
by it with respect to all Assets leased by it through the date hereof. The
Seller enjoys peaceful and undisturbed possession of all Assets. None of the
Assets are subject to any commitment or other arrangement for their sale or use
by any Third Party, other than use by a Third Party in the ordinary course of
Business of Purchaser which use does not have a Material Adverse Affect on the
Business. The Assets are valued on the Books and Records at or below the
Seller's actual cost less an adequate and proper depreciation charge in
accordance with GAAP. Seller has not depreciated any of its Assets in a manner
inconsistent with applicable IRS guidelines, if any. The Assets include all
Assets that are used in the conduct of the Business. Other than the Assets
conveyed to Purchaser, there are not assets (i) the use of which is reasonably
necessary for the conduct and operation of the Business as now being conducted
and operated or (ii) the absence of which would have a Material Adverse Effect
on the Business.
5.10 Real Property Premises.
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(a) Seller's sole interest in real property, whether improved or
unimproved, leased or owned, is Seller's leasehold interest in the Real Property
Premises and no other real property is used by Seller in the conduct or
operation of the Business nor is necessarily necessary for the conduct of the
Business as now being conducted and operated by Seller.
(a) Seller enjoys peaceful and undisturbed possession of the Real
Property Premises.
(b) Seller has not received any written notice that the Real
Property Premises are subject to any Order for its sale, condemnation,
expropriation or taking (by eminent domain or otherwise) by any Governmental
Authority nor has any such sale, condemnation, expropriation or taking been
proposed or threatened.
5.11 Personal Property. The Personal Property is in good operating
condition and repair except for ordinary wear and tear, are sufficient for the
operation of the Business as presently conducted by Seller and are in conformity
with all applicable Law relating thereto currently in effect.
5.12 Intellectual Property/Software.
(a) Seller has not violated, infringed upon or unlawfully or
wrongfully used any xxxx that Seller uses in its Business. Seller has not
violated, infringed upon or unlawfully or wrongfully used the Intellectual
Property or Software of others. Neither use of the Intellectual Property nor the
Software nor any related rights or any customer lists, supplier lists or mailing
lists, as used in the Business or in the other businesses now or heretofore
conducted by Seller, infringes upon or otherwise violates the rights of others,
nor has any Person asserted a claim of such infringement or misuse. Seller has,
and upon consummation of the transactions contemplated by this Agreement,
Purchaser will have, all right, title and interest in the Intellectual Property
and Software. The consummation of the transactions contemplated by this
Agreement will not alter or impair any Intellectual Property or Software rights
of Seller or result in a Default under any Contract of Seller. Seller is not
obligated nor has Seller incurred any Liability to make any payments for
royalties, fees or otherwise to any Person in connection with any of Seller's
Intellectual Property or Software.
(b) Seller owns and has a proprietary and financial interest in the
Intellectual Property and Software. Seller validly holds any and all licenses
for use of the Software and the same are transferred to Purchaser as part of the
Assets. No Representative of Seller has entered into any Contract that requires
any Representative of Seller to assign any interest to inventions or other
Intellectual Property or Software or keep confidential any trade secrets,
proprietary data, customer lists or other business information or which
restricts or prohibits any Representative from engaging in competitive
activities with or the solicitation of customers from any competitor of Seller.
5.13 Seller Contracts and Commitments. SCHEDULE 1.15 sets forth all
Contracts of Seller. Such Contracts of Seller include:
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(a) Contracts involving any obligation or liability on the part of
the Seller including any Contract regarding production and generation of
Prospects, telemarketing activities, reservation services, vacation and tour
fulfillment, marketing, providing of services or goods to customers, including
Prospects, the credit card and merchant account service, factoring or selling of
accounts receivable, purchase orders, franchise agreements and undertakings or
commitments to any Governmental Authority relating to the Business or otherwise
affecting the Assets or Business, including the Contracts as referred to in
Section 9.13 of this Agreement by and between Paramount Marketing Consultants,
Inc, (a Seller Affiliate) and Berkley Group, Inc. dated March 21, 2000 and _____
________, 2000 (undated) and the Contract as referred to in Section 9.14 of this
Agreement by and between TMOV and Excalibur Marketing, LLC dated March 5, 2001
pursuant to which Seller or Seller Affiliates provide Prospects to the other
parties to such Contracts;
(b) Lease of personal property;
(c) Governmental Authority or regulatory license or permits required
to conduct the Business as presently conducted; or
(d) Performance or surety bond agreement.
Seller has not violated nor is Seller in Default of (and, to the
Knowledge of Seller, no other Third Party is in violation or Default of) any of
the Contracts of Seller. Each Contract of Seller is a valid agreement,
arrangement or commitment of the Seller, enforceable against the Seller in
accordance with its terms and, to the best Knowledge of the Seller, is a valid
agreement, arrangement or commitment of each other Third Party thereto,
enforceable against such Third Party in accordance with its terms, except in
each case where enforceability may be limited by bankruptcy, insolvency or other
similar laws affecting creditors' rights generally and except where
enforceability is subject to the application of equitable principles or
remedies. Seller is not a party to or subject to or bound by a Contract the
assignment of which is necessary in any respect in order to enable Purchaser to
carry on the Business after the Closing Date or which in any way is related to
the Business, except the Assets to be purchased by the Purchaser. To Seller's
Knowledge, neither the execution or delivery of any Transaction Document by any
Person who is not a Seller (other than Purchaser) hereunder will result in (a) a
breach of or any default under, any term or provision of any Contract or
Agreement, (b) a violation by such Person of any statute, rule, regulation,
ordinance, code, Order, judgment, injunction, decree or award applicable to such
Person or (c) an imposition of any encumbrance on the Assets.
5.14 No Conflict or Violation. Neither the execution and delivery of this
Agreement or any of the other Agreements to which Seller is a party, will result
in (a) Default of any term or provision of any of the Assets, including any
Contract or agreement that is part of the Assets, (b) a violation by the Seller
of any statute, rule, regulation, ordinance, code, order, judgment, injunction,
decree or award applicable to the Seller or (c) an imposition of any Encumbrance
on the Assets.
5.15 Restrictive Documents. Seller is not subject to, or a party to, any
charter, bylaw, mortgage, Lien, lease, License, permit, Contract or instrument,
or to any Law, rule, ordinance,
28
regulation, Order, judgment or decree, or any other restriction of any kind or
character, which (a) Materially affects the Assets, (b) would have Material
Adverse Effect on (i) the execution, delivery and performance by Seller of this
Agreement or any agreement contemplated hereby and consummation of the
transactions contemplated hereby and thereby or (ii) the continued operation of
the Business and the use of the Assets after the date hereof or the Closing Date
on substantially the same basis as Business and Assets were operated by Seller.
To Seller's Knowledge no Person executing any of the Transaction Documents, who
is not a Seller, is subject to, or party to, any Charter, By-Law, mortgage,
Lien, license, permit, agreement, Contract or instrument, or to any Law, rule,
ordinance, regulation, Order or decree or any other restriction of any kind of
character which would have a Material Adverse Affect on the performance of such
Person's obligations and duties under any such Transaction Document executed by
such Person.
5.16 Consents and Approvals; Licenses. No consent, approval,
authorization, license, order or permit of, or declaration, filing or
registration with, any Governmental Authority, or any other Person or entity, is
required to be made or obtained by Seller in connection with the execution,
delivery and performance of this Agreement or any of the Other Agreement and the
consummation of the transactions contemplated. To Seller's Knowledge no consent,
approval, authorization, license, Order or permit of or declaration filing a
registration with any Governmental Authority or any other Person or entity is
required to be made or obtained by a Person who is to execute a Transaction
Document and who is not a Seller in connection with such execution, delivery and
performance of such respective Transaction Document and the consummation of the
transaction contemplated thereunder.
5.17 Litigation. Seller is not in Default with respect to any Litigation
or Order, and there are no unsatisfied judgments against the Seller or the
Assets. There is no Litigation pending or, to Seller's Knowledge, threatened
against the Seller or its Business or Assets or relating to or affecting the
Transaction contemplated by this Agreement or any of the other Agreements, nor
to Seller's Knowledge the Transaction Documents executed by any Person (other
than Purchaser) who is not a Seller.
5.18 Inventories. The of Inventory of Seller has been acquired in the
ordinary course of the Business consistent with past practices and consist of
items of quality, quantity and condition consistent with past practices of
Seller and are generally usable and saleable in the ordinary course of the
Business without discount or reduction.
5.19 Compliance with Law.
The Seller and the conduct of its Business are in Material
compliance with all applicable laws or Orders, except to the extent
noncompliance would not have Material Adverse Change. There are no outstanding
Orders binding upon the Seller, the Assets or the Business. No notices from any
Governmental Authority with respect to any failure or alleged failure of Seller,
the Assets or the Business to comply with any Law or License have been received
by Seller or any of its Representatives except as set forth in SCHEDULE 5.19.
There are no pending or, to Seller's Knowledge, threatened investigations or
inquiries regarding the Seller, the Assets or the Business by any Governmental
Authority. Seller has not received any inspection reports, questionnaires,
29
inquiries, demands, requests for information, or claims of violations or
noncompliance with any Law from any Governmental Authority.
5.20 Benefit Plans. Purchaser will incur no Liability with respect to any
Employee Benefit Plan of Seller.
5.21 Absence of Certain Changes or Events. Except as set forth on the
SCHEDULE 5.21, since the Balance Sheet Date there has not been any:
(a) change in the Seller's condition (financial or otherwise),
Assets, Liabilities, working capital, reserves, earnings, Business or prospects,
except for changes in the ordinary course of Business which changes have not,
individually or in the aggregate, had a Material Adverse Change;
(b) (i) increase in the compensation payable or to become payable by
the Seller to any of its Managers, members, employees, consultants or sales
representatives whose total compensation for services rendered to Seller is
currently at an annual rate of $25,000 or more (collectively, "Personnel"), (ii)
bonus, incentive compensation, service award or other like benefit granted, made
or accrued, contingently or otherwise, for or to the credit of any of the
Personnel, (iii) employee welfare, pension, retirement, profit-sharing or
similar payment or arrangement made or agreed to by the Company for any
Personnel or (iv) new employment agreement to which the Seller is a party;
(c) sale, assignment or transfer of any of the Assets of the Seller,
valued at $20,000 or more, singly or in the aggregate, except in the ordinary
course of business, or discontinuance of any service provided by the Seller;
(d) cancellation of any indebtedness or waiver of any rights of
substantial value to the Seller, whether or not in the ordinary course of
business;
(e) amendment, cancellation or termination of any Contract of
Seller, License or other instrument, threat or anticipation of any such
amendment, cancellation or termination, which would result in a Material Adverse
Charge;
(f) capital expenditure or any incurring of Liability therefor,
involving payments, series of related costs, or at an annualized rate, of
$25,000 or more;
(g) failure of Seller to pay any of its Material Liabilities within
thirty (30) days of its due date;
(h) failure to operate the Business in the ordinary course, except
as described in any Schedule to this Agreement;
(i) change in accounting methods or practices by the Seller
affecting its Assets, Liabilities or Business (whether for accounting or tax
purposes);
30
(j) revaluation by the Seller of any of the Assets, including
without limitation, writing off notes or accounts receivable, other than in the
ordinary course of business consistent with past practices as reflected on the
Books and Records;
(k) damage, destruction or Loss (whether or not covered by
insurance) of $10,000 or more, singly or in the aggregate;
(l) mortgage, pledge grant or creation of any Encumbrance on any
Assets valued at $20,000 or more, singly or in the aggregate;
(m) Increase or change in Liabilities incurred or assumed by the
Seller for Contracts as may be assumed by Purchaser or any change in any
assumptions underlying or methods of calculating any such Liability;
(n) payment, discharge or satisfaction of any Liabilities in excess
of $5,000, other than the payment, discharge or satisfaction when due in the
ordinary course of business;
(o) incurrence by the Seller of any Liabilities to any Affiliate of
Seller;
(p) agreement or commitment by the Seller to do any of the
foregoing; or
(q) other event or condition of any character which in any one case
or in the aggregate would result in a Material Adverse Effect.
5.22 Contracts.
a. Capital Assets. There are no outstanding Contracts of Seller for
the acquisition of capital assets by Seller.
b. Employment; Other Contracts. There are no Contracts of Seller
with any employee, officer, agent, consultant, sales representative,
distributor, dealer, Third Party or Affiliate of Seller that relate to the
Business other than those disclosed by Seller to Purchaser in SCHEDULE 1.15
attached hereto.
c. Copies. Correct and complete copies of the all of the written
Contracts of Seller, and correct and complete descriptions of all oral Contracts
of Seller, together with all other matters reflected on SCHEDULE 1.15 attached
hereto have been delivered to Purchaser on or before the date hereof.
d. No Default. Seller is not in Material Default under any Contracts
of Seller and to the Knowledge of Seller, no other Person is in Material Default
under any Contract of Seller
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e. Assurances. Seller has not received any verbal or written notice
that any of the Contracts of Seller are not in full force and effect or does not
constitute a valid, legal and binding agreement of the parties thereto,
enforceable in accordance with its terms. The continuation, validity and
effectiveness of each of the Contracts if Seller will not be affected in any way
by the consummation of the transactions contemplated by this Agreement.
5.23 Labor Matters. The employment of all employees of Seller who are to
be employed by Purchaser are terminable at will by Seller without any penalty or
severance obligation payable by Purchaser. Seller will not owe any amounts to
any of such employees as of the Closing Date, including, without limitation, any
amounts incurred for wages, bonuses, vacation pay, sick leave or any severance
obligations. Seller is not a participant in any union agreement or collective
bargaining agreement or work rules or practices agreed to with any labor
organization or employee association. To the Knowledge of Seller no such
employee of Seller is presently involved in any Equal Employment Opportunity
Commission charges or other claims of employment discrimination made against
Seller. To the Knowledge of Seller, no employee of Seller is involved in any
Wage and Hour Department investigations. No labor strike, dispute, slowdown,
stoppage or lockout is pending or to the Knowledge of Seller threatened against
or affecting the Assets or the Business. No unfair labor practice charge or
complaint against Seller by any such employee is pending or to the Knowledge of
Seller threatened before the National Labor Relations Board or any similar
Governmental Authority.
5.24 No Brokers. The Seller has not entered into any Contract, arrangement
or understanding with any Third Party which will result in the obligation of
Purchaser to pay any finder's fee, brokerage commission or similar payment in
connection with the transactions contemplated hereby; provided Seller has
entered into an agreement with Xxxx, Xxxx & Co., LLC to pay such broker a
commission and Seller agrees to indemnify and hold Purchaser harmless from any
claim made by any Third Party, including Xxxx, Xxxx & Co., LLC for any such
commissions.
5.25 Statements True and Correct. No representation or warranty made by
Seller, nor any statement, Schedule, certificate or instrument furnished or to
be furnished by or on behalf of Seller to Purchaser pursuant to this Agreement
or attached hereto or any other document, agreement or instrument referred to
herein or therein, including, without limitation, the Financial Statements,
contains or will contain any untrue statement of Material fact or omits or will
omit to state a Material fact necessary to make the statements contained therein
not misleading.
5.26 Liabilities. The Seller does not have any Liabilities or obligations
(absolute, accrued, contingent, direct or indirect, known or unknown, matured or
unmatured, or otherwise) except (a) Liabilities which are reflected or reserved
against and are disclosed on the Financial Statement, (b) Liabilities incurred
in the ordinary course of business and consistent with past practice since the
date of the Balance Sheet, (c) Liabilities arising under Contracts, Licenses,
and Other Agreements described in the Schedules attached hereto or which are of
the type described in this Agreement, but because of the dollar amount or other
qualifications are not required to be listed in such Schedules, (d) Seller's
Liabilities or obligations owed to Prospects or customers of Seller in respect
to refunds for cancellations which are consistent with the past practices of
Seller for refunds for cancellations to Prospects or customers of Seller as
reflected in the Books and Records and not
32
in excess thereof.
5.27 Consumer Liability Claims. Except as set forth on SCHEDULE 5.27
attached hereto and incorporated herein by this reference, no consumer or
Prospect liability claim has been made or, to the Knowledge of Seller,
threatened against Seller with respect to the Assets or otherwise with respect
to the products or services of the Seller.
5.28 Compliance with Law. Accept to the extent that any violation would
not have a Material Adverse Effect, the Seller and the conduct of its Business
are in compliance with all applicable Laws or Orders, except as disclosed in
SCHEDULE 5.28. The Seller has not received any written notice to the effect that
the Seller is not in compliance with any of such Laws or Orders, and Seller has
no reason to anticipate that any presently existing circumstances are likely to
result in violations of any such Laws or Orders.
5.29 No Other Agreement to Sell. Seller does not have any legal
obligation, absolute or contingent, to any person or entity other than Purchaser
to sell the Assets, to effect any merger, consolidation or other reorganization
of the Assets or to enter into any agreement with respect thereto. Seller has
not made a commitment or entered into negotiations to sell or transfer any part
of the Assets other than to Purchaser.
5.30 Accounts Receivable. The accounts receivable reflected in the
Financial Statements, and all accounts receivable arising thereafter, represent
bona fide claims against debtors for sales, service performed or other charges
arising on or before the Closing Date, all products to be provided and services
to be performed which give rise to such accounts were sold without any Material
misrepresentation or deception and, in accordance with applicable Law. The
accounts receivable reflected in the Financial Statements will be subject to no
defenses, counterclaims or rights of set off and are or will be fully
collectible (subject to the reserve for bad debts in the Financial Statements)
within the ordinary course of its business without cost to Purchaser, except
fulfillment costs as described in Section 3.3 hereof. The Seller is not a party
to any Contract that provides for the sale, factoring or financing of its
accounts receivable.
5.31 Purchase Commitments and Outstanding Bids. SCHEDULE 5.31 attached
hereto and incorporated herein by this reference contains a complete and
accurate list of all unfulfilled consumer contracts for sales of products or
services, and any commitments and orders, whether oral or written, for the
delivery of products or performance of services by the Seller. As of the date of
this Agreement, no customer or Prospect of the Seller except as set forth on
SCHEDULE 5.31 has requested a refund in respect to any product or services
purchased.
5.32 Purchase Commitments and Outstanding Bids. SCHEDULE 5.32 attached
hereto and incorporated herein by this reference contains a complete and
accurate list of the ten (10) largest suppliers of the Seller in terms of goods,
services, Leads, Prospects or Prospect sources, during the year ended December
31, 2001 and January 2002-June 2002, showing the approximate total purchases or
business dollar amount by the Seller taken as a whole from each supplier during
such periods. Since December 31, 2001 there has been no Material Adverse Change
in the business relationship of the Seller with any supplier named in SCHEDULE
5.32. The Seller has not
33
received (i) any written or oral notice from any such supplier that it (i)
intends to file petition for relief under the provisions of Title 11 of the
United States Code ("United States Bankruptcy Code") or any similar federal or
state law for the relief of debtors or make an assignment for the benefit of its
creditors, (ii) intends to terminate its business relationship with the Seller
or (iii) requests Seller to increase its payment schedules for services provided
to the Seller.
5.33 Books and Records. The Books and Records have been fully, properly
and accurately maintained in all Material respects, and there are no Material
inaccuracies or discrepancies of any kind contained or reflected therein, and
they fairly present the financial position of the Seller in all respects. None
of the records, systems, controls, data or information of the Seller are
recorded, stored, maintained, operated or otherwise wholly or partly dependent
on or held by any means (including any electronic, mechanical or photographic
process, whether computerized or not) which (including all means of access
thereto and therefrom) are not under the exclusive ownership and direct control
of the Seller or accountants retained by the Seller.
ARTICLE 6
REPRESENTATIONS AND WARRANTIES OF PURCHASER
Purchaser and Bluegreen Corporation hereby represents and warrants to
Seller that:
6.1 Organization, Standing and Foreign Qualification. Purchaser is a
corporation duly organized, validly existing, and in good standing under the
laws of the State of Florida, with the power and authority to carry on its
business and to own, lease and operate its assets. Prior to the Closing, the
Purchaser has not conducted any operations nor incurred or accrued any
Liabilities.
6.2 Authority and Binding Effect. Purchaser and Bluegreen Corporation have
the power and authority necessary to enter into and perform their respective
obligations under this Agreement and to consummate their respective transactions
contemplated hereby. The execution, delivery and performance of this Agreement
and the Transaction Documents to which Purchaser and/or Bluegreen Corporation is
to be a party have been approved by all necessary action of the respective Board
of Directors of Purchaser and/or Bluegreen Corporation. This Agreement has been,
and the Transaction Documents to which Purchaser or Bluegreen Corporation is to
be a party will be, executed and delivered by duly authorized officers of
Purchaser or Bluegreen Corporation, as applicable, and each constitutes, or will
constitute when executed and delivered, the legal, valid and binding obligation
of Purchaser or Bluegreen Corporation, enforceable against Purchaser or
Bluegreen Corporation in accordance with its terms.
6.3 Validity of Contemplated Transactions, Restrictions. The execution,
delivery and performance of this Agreement and the Transaction Documents to
which Purchaser is to be a party and the consummation of the transactions
contemplated hereby or thereby, will not (i) violate any provision of the
Articles of Incorporation or By-Laws of Purchaser, or any Law or any Order
relating to Purchaser, or (ii) result in a Default under or require the consent
or approval of any party to any Contract or License to which Purchaser is a
party.
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6.4 No Broker. Neither Purchaser nor any Affiliate of Purchaser has
entered into or will enter into any Contract, arrangement or undertaking with
any Third Party or firm which will result in the obligation of Seller to pay any
finder's fee, brokerage, commission or similar payment in connection with the
transactions contemplated hereby.
6.5 Financial Statements. The audited consolidated financial statements
and unaudited interim consolidated financial statements of Bluegreen Corporation
(including, in each case, the notes, if any, thereto) included in the SEC
Reports (the "Bluegreen Financial Statements"), were prepared in accordance with
GAAP applied on a consistent basis during the periods presented (except as may
be indicated therein or in the notes thereto and except with respect to
unaudited statements as permitted by Form 10-Q of the SEC) and fairly present in
all Material respects (subject, in the case of the unaudited interim financial
statements, to normal, recurring year-end audit adjustments which are not
expected to be, individually or in the aggregate, Materially adverse to
Bluegreen, taken as a whole) the consolidated financial position of Bluegreen
and its consolidated Subsidiaries as at the respective dates thereof and the
consolidated results of their operations and cash flows for the respective
periods then ended. As used in this Section, "SEC Reports" shall mean each form,
report, schedule, registration statement, definitive proxy statement and other
document (together with all amendments thereof and supplements thereto) filed by
Bluegreen or any of its Subsidiaries with the Securities and Exchange Commission
since January 1, 2001 (as such documents have since the time of their filing
been amended or supplemented).
ARTICLE 7
COVENANTS OF SELLER AND PURCHASER
7.1 Right of Inspection; Access. During the Earn Out Period, Purchaser
shall give to Seller and its designees during normal business hours of
Purchaser, full and free access to all of the Books and Records relating to the
Business and shall furnish to Seller and its designees all additional financial,
legal and other information with respect to the Business and the Assets that
Seller may reasonably request. Seller, at its expense, shall have the right to
make copies of any of the records referred to above.
7.2 Confidentiality. Purchaser and Seller agree that each of them shall
not, and will use commercially reasonable efforts to ensure that none of its
Representatives or Affiliates will, (except as contemplated by this Agreement),
disclose to or file with any Third Party, (a) any confidential or non-public
information relating to the other parties to this Agreement, except (i) for a
disclosure that is required by Law or by a Governmental Authority or is
reasonably believed to be so required; (ii) information that is ascertainable or
obtained from public or published information; (iii) information received from a
Third Party not known to the disclosing party to be under an obligation to keep
such information confidential; (iv) information independently developed by the
disclosing party; or (v) information disclosed to or filed with any Third Party
necessary to obtaining the consents to the transactions contemplated by this
Agreement.
7.3 Use of Name. Purchaser shall be entitled to the exclusive use of the
name "TakeMeOnVacation" and "RVM" and "Leisuretivity" following the Closing
Date. In connection
35
with enabling Purchaser, at or after the Closing, to use such names and any
variation or derivation thereof, Seller shall execute and deliver to Purchaser
all consents related to such use of name as may be reasonably requested by
Purchaser from time to time and Seller shall cease and desist from continued use
of such names from and after the Closing Date.
7.4 Employees. Seller and Purchaser understand and agree that Purchaser
shall have no obligation to enter into or continue any employment arrangements
with any employee of Seller on or after the Closing Date, except as provided in
this Section. Purchaser (or Bluegreen Corporation as an Affiliate of Purchaser)
shall employ the employees identified in Section 1.23 of this Agreement pursuant
to the terms of the Employment Agreements as of the Closing Date. Such employees
shall, as of the Closing Date, resign from employment from Seller. Furthermore,
by the Closing Date, (i) Purchaser shall advise Seller of which other employees
of Seller Purchaser (or Bluegreen Corporation as an Affiliate of Purchaser)
desires to extend an employment offer and (ii) Purchaser ( or Bluegreen
Corporation as an Affiliate of Purchaser) shall deliver to such employees an
employment offer as determined by Purchaser (or Bluegreen Corporation as an
Affiliate of Purchaser). Any such employees who accept the employment offer from
Purchaser (or Bluegreen Corporation as an Affiliate of Purchaser) shall resign
from Seller or shall be terminated by Seller. Such employees of Seller who have
not been extended an employment offer by Purchaser (or Bluegreen Corporation as
an Affiliate of Purchaser), or who decline to accept an employment offer if
made, may, in the discretion of Seller be terminated. Neither Purchaser nor any
affiliate of Purchaser, including Bluegreen Corporation, shall incur any
Liability to Seller as a result of any offer of employment to Seller's employees
made by Purchaser or any Affiliate of Purchaser, including Bluegreen
Corporation, including but not limited to any Liability for interference with
contract or employment relations. Notwithstanding the employment of any such
employees by an Affiliate of Purchaser, including Bluegreen Corporation, the
expenses and costs associated with the employment of such employees shall, for
accounting purposes, including calculation of any Earn Out Payment, be
considered an expense and cost of the Purchaser, to the extent that such
employees render services to the Purchaser.
7.5 Certain Tax Matters. Purchaser, on the one hand, and Seller, on the
other hand, shall provide the other parties to this Agreement, at the expense of
the requesting party, with such assistance as may reasonably be requested by any
of them in connection with the preparation of any Tax Return, any audit or other
examination by any Governmental Authority, or any judicial or administrative
proceedings relating to Liability for Taxes as relates to the Assets, and each
will retain and provide the requesting party with any records or information
that may be relevant to any of the foregoing.
7.6 Consents and Approvals. Seller shall obtain all waivers, consents and
approvals of, and provide all notices to, all Persons whose waiver, consent or
approval is required by any Contract relating to Seller in order to consummate
the transactions contemplated by this Agreement. All written waivers, consents
and approvals obtained by, and all notices provided by, Seller shall be
delivered to Purchaser at or before the Closing in form and content reasonably
satisfactory to Purchaser.
7.7 Expenses.
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(a) The parties hereto shall each be responsible for all expenses
and fees incurred by themselves in connection with the transactions contemplated
hereby.
(b) Seller (at the Closing and not from or out of the Assets) shall
pay any fees and expenses in connection with the prepayment, release,
satisfaction or removal of any Liens affecting the Assets.
7.8 Further Assurances. At any time and from time to time after the
Closing, each party shall, at the request of the other party, take any and all
actions reasonably necessary to fulfill their respective obligations under this
Agreement (including by way of example and not limitation Seller's taking
actions reasonably necessary to put Purchaser in actual possession and operating
control of the Assets, and executing and delivering such further instruments of
conveyance, sale, transfer and assignment, and taking such other actions
reasonably necessary or desirable to effectuate, record or perfect the transfer
of the Assets to Purchaser free and clear of all Liens), or to otherwise
effectuate or consummate any of the transactions contemplated hereby.
7.9 Delivery of Books and Records. Seller shall retain at the Closing all
original documents, Books and Records pertaining to the Business. From time to
time until the third anniversary of the Closing, Seller shall make available,
and Purchaser shall have the right, at its expense, to make copies of, all
documents, Books And Records pertaining to the Business and to the Assets. Such
Books and Records shall be retained by Seller in their original, unaltered,
condition for a period of three (3) years after the Closing Date.
7.10 Discharge of Liens. At Closing, Seller shall discharge any Lien that
burdens any of the Assets and which is capable of being satisfied by the payment
of money.
7.11 Qualification and Corporate Existence. Seller shall deliver to
Purchaser certificates of the Secretary of State of the State of Florida, dated
not more than ten (10) days before the Closing Date, stating that Seller is a
limited liability company in existence under the laws of such state, is in good
standing, active and has paid all applicable Taxes due to such state.
7.12 Bulk Sales Laws. Purchaser hereby waives any compliance with the bulk
sales law of any state or other jurisdiction which might be applicable to the
transactions contemplated in this Agreement, subject to the agreement that
nothing in this Section 7.15 shall estop or prevent Purchaser from asserting as
a bar or defense to any action or proceeding brought under that Law that it is
not applicable to the sale contemplated under this Agreement. Seller hereby
agrees to indemnify, defend and hold Purchaser harmless from any expenses, costs
or damages (including reasonable attorney's fees) incurred by Purchaser
resulting from such waiver of compliance with such bulk sales laws.
7.13 Tax Clearance Certificates. Within sixty (60) days following the
Closing, Seller shall obtain and deliver to Purchaser a certificate or
certificates from the accounting department of Seller, certified by the chief
financial officer and manager of Seller, stating that no employment, income,
sales or use taxes are due and payable relating to the Business or Assets of
Seller prior to
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Closing.
ARTICLE 8
SURVIVAL OF REPRESENTATIONS AND
WARRANTIES AND INDEMNIFICATION
8.1 Survival of Representations and Warranties.
(a) All representations, warranties, agreements and covenants made
or undertaken by the parties in this Agreement or the Other Agreements are
material, have been relied upon by the other parties hereto, shall survive the
Closing hereunder until the expiration of the applicable statute of limitations
and shall not merge in the performance of any obligation by any party hereto
provided, however, the representations and warranties of the parties in Article
5 and Article 6 of this Agreement or in the Transaction Documents shall survive
the Closing only until the third anniversary of the Closing hereunder;
(b) The representations and warranties made by Seller and contained
in Article 5 of this Agreement and the representations and warranties made by
Purchaser and contained in Article 6 of this Agreement are deemed by the parties
hereto to have been made by Seller and Purchaser, as the case may be, on and as
of the Closing Date which is the date of execution of this Agreement by both
Seller and Purchaser. Seller acknowledges and agree that prior to the Closing
Date Purchaser or its Affiliates intends to perform such investigation of Seller
and the Business and the Assets as it may deem necessary or appropriate;
however, no investigation by Purchaser or any of its Affiliates will diminish or
obviate any of the representations, warranties, covenants or agreements made or
to be performed by Seller and its Affiliates pursuant to this Agreement or the
Other Agreements or Purchaser's or any Affiliate's right to fully rely upon such
representations, warranties, covenants and agreements.
8.2 Obligation of Seller to Indemnify. Notwithstanding anything in this
Agreement to the contrary, Seller shall have no liability under this Agreement
to make any indemnification under this Article 8 unless (i) Purchaser has first
suffered Damages in excess of Two Hundred Thousand ($200,000.00) Dollars (the
"Deductible"), in which case Seller's obligation to indemnify shall be for
Damages in excess of the Deductible and (ii) Seller receives notice in writing
from the indemnified party of such party's claim under said indemnity on or
before the third anniversary of the Closing Date. Notwithstanding anything in
this Agreement to the contrary, the maximum amount for which Seller can be
liable for a claim for indemnification by all indemnified parties under this
Agreement shall, in the aggregate, be Seven Million Five Hundred Thousand
($7,500,000.00) Dollars (the "Cap"). Purchaser acknowledges and agrees that
Xxxxx Xxxxxxx, individually, shall have no personal Liability to make any
indemnification payments to Purchaser or its Affiliates except to set forth, if
at all, in the Consulting Agreement and that Xxxxx Xxxxxxx shall have no
Liability to return or refund any distributions received from the Seller.
Subject to the foregoing, Seller agrees to indemnify Purchaser and its officers,
Board of Directors, Representatives, employees, counsel, agents, Affiliates and
assigns against, and hold each of them
38
harmless from, all Losses asserted against, imposed upon or incurred by any of
the foregoing by reason of, resulting from, arising out of, based upon or
otherwise in respect of the following;
(a) any inaccuracy in any representation or warranty made by
Seller pursuant to Article 5 of this Agreement;
(b) any Default of any covenant or agreement made or to be
performed by Seller or its Affiliates pursuant to this Agreement or the Other
Agreements; provided such Default shall not be subject to the Deductible nor
limited by the Cap; and
(c) any Liability of Seller unless assumed by Purchaser
pursuant to the terms of this Agreement or any Transactional Document, including
without limitation all Liabilities not assumed by Purchaser pursuant to Article
3; provided such shall not be subject to the Deductible nor limited by the Cap.
8.3 Obligation of Purchaser to Indemnify. Notwithstanding anything in this
Agreement to the contrary, Purchaser shall have no liability under this
Agreement to make any indemnification payment under Article 8 unless (i) Seller
has first suffered Damages in excess of Two Hundred Thousand ($200,000.00)
Dollars (the "Deductible"), in which case Purchaser's obligation to indemnify
shall be for Damages in excess of the Deductible and (ii) Purchaser receives
notice in writing from the indemnified party of such party's claim under said
indemnity on or before the third anniversary of the Closing Date.
Notwithstanding anything in this Agreement to the contrary, the maximum amount
for which Purchaser can be liable for any claims for indemnification by all
indemnified parties under this Agreement otherwise shall, in the aggregate, be
Seven Million Five Hundred Thousand ($7,500,000.00) Dollars (the "Cap"). Seller
acknowledges and agrees that no Affiliate of Purchaser shall have Liability to
make any indemnification payments to Seller and that any such Affiliate shall
have no Liability to return or refund any distributions received from the
Purchaser. Subject to the foregoing, Purchaser agrees to indemnify the Seller
and Seller's officers, directors, employees, counsel, agents, Affiliates,
shareholders and assigns against, and hold each of them harmless from, all
Losses asserted against, imposed upon or incurred by any of the foregoing by
reason of, resulting from, arising out of, based upon or otherwise in respect of
the following:
(a) any inaccuracy in any representation or warranty made by
Purchaser, pursuant to Article 6 of this Agreement;
(b) any Default of any covenant or agreement made or to be performed
by Purchaser pursuant this Agreement; provided, such Default shall not be
subject to the Deductible nor limited by the Cap; or
(c) Any Liability of Seller assumed by Purchaser pursuant to the
terms of this Agreement or any Transactional Document, including without
limitation all Liabilities assumed by Purchaser pursuant to Article 3; provided,
such shall not be subject to the Deductible nor limited by the Cap.
(d) Any personal Liability of Xxxxx Xxxxxxx described in Section
9.16;
39
provided, such shall not be subject to the Deductible nor limited by the Cap.
8.4 Notice of Loss or Asserted Liability. Promptly after (a) becoming
aware of circumstances that have resulted in a Loss for which any Person or
Persons entitled to indemnification pursuant to Section 8.2 or Section 8.3
intends to seek indemnification under such Section (the "Indemnified Party") or
(b) receipt by the Indemnified Party of written notice of any demand, claim or
circumstances which, with the lapse of time, the giving of notice or both, would
give rise to a claim or the commencement (or threatened commencement) of any
Litigation that may result in a Loss (an "Asserted Liability"), the Indemnified
Party shall give notice thereof (the "Claims Notice") to any other party or
parties obligated to provide indemnification pursuant to Section 8.2 or Section
8.3 (the "Indemnifying Party"). The Claims Notice shall describe the Loss or the
Asserted Liability in reasonable detail, and shall indicate the amount
(estimated, if necessary) of the Loss that has been or may be suffered by the
Indemnified Party. The Claims Notice may be amended on one or more occasions
with respect to the amount of the Asserted Liability or the Loss at any time
prior to final resolution of the obligation to indemnify relating to the
Asserted Liability or the Loss. If a Claims Notice is not provided promptly as
required by this Section 8.4, the Indemnified Party nonetheless shall be
entitled to indemnification by the Indemnifying Party to the extent that the
Indemnifying Party has not established that it has been prejudiced by such late
receipt of the Claims Notice. Notwithstanding the foregoing sentence, however,
if the Claims Notice is not provided prior to compromise or payment of any
Asserted Liability by the Indemnified Party, the Indemnified Party shall only be
entitled to indemnification by the Indemnifying Party to the extent that the
Indemnified Party has established that the Indemnifying Party has not been
prejudiced by such late receipt of the Claims Notice.
8.5 Opportunity to Contest. The Indemnifying Party may elect to compromise
or contest, at its own expense and with counsel reasonably acceptable to the
Indemnified Party, any Asserted Liability. If the Indemnifying Party elects to
compromise or contest such Asserted Liability, it shall within thirty (30) days
(or sooner, if the nature of the Asserted Liability so requires) notify the
Indemnified Party of its intent to do so by sending a notice to the Indemnified
Party (the "Contest Notice"), and the Indemnified Party shall cooperate, at the
expense of the Indemnifying Party, in the compromise or contest of such Asserted
Liability. If the Indemnifying Party elects not to compromise or contest the
Asserted Liability, fails to notify the Indemnified Party of its election as
herein provided or contests its obligation to indemnify under this Agreement,
the Indemnified Party (upon further notice to the Indemnifying Party) shall have
the right to pay, compromise or contest such Asserted Liability on behalf of and
for the account and risk of the Indemnifying Party. Anything in this Section 8.5
to the contrary notwithstanding, (i) the Indemnified Party shall have the right,
at its own cost and for its own account, to compromise or contest any Asserted
Liability, and (ii) the Indemnifying Party shall not, without the Indemnified
Party's written consent, settle or compromise any Asserted Liability or consent
to entry of any judgment which does not include an unconditional term releasing
the Indemnified Party from all Liability in respect of such Asserted Liability.
In any event, the Indemnified Party and the Indemnifying Party may participate,
at their own expense, in the contest of such Asserted Liability. Each of Seller
and Purchaser shall cooperate fully with the other as to all Asserted
Liabilities, shall make available to the others as reasonably requested all
information, records, and documents relating to all Asserted Liabilities and
shall preserve all such information, records, and documents
40
until the termination of any Asserted Liability. Each of Seller and Purchaser
also shall make available to the other, as reasonably requested, its personnel,
agents, and other representatives who are responsible for preparing or
maintaining information, records, or other documents, or who may have particular
knowledge with respect to any Asserted Liability.
8.6 Subrogation Rights. In the event that the Indemnifying Party shall be
obligated to indemnify the Indemnified Party pursuant to this Article 8, the
Indemnifying Party shall, upon payment of such indemnity in full, be subrogated
to all rights of the Indemnified Party with respect to the Loss to which such
indemnification relates; provided, however, that the Indemnifying Party shall
only be subrogated to the extent of any amount paid by it pursuant to this
Article 8 in connection with such Loss.
8.7 Indemnification Payments. Subject to the terms hereof and unless
contested pursuant to Section 8.5, an Indemnifying Party shall pay to the
Indemnified Party the full amount of any and all Losses (other than Losses
resulting from an Asserted Liability) under this Article 8 within ten (10) days
of receipt of the Claims Notice thereof and the full amount of any Loss
resulting from an Asserted Liability within ten (10) days of the date such
Litigation is terminated or the date a final judgment or award is rendered and
no appeal is taken, and thereafter the amount of such Loss shall bear interest
at a rate equal to the lesser of two percent (2%) per month or the maximum
amount permitted by law. Purchaser shall be entitled to offset from any payments
due to Seller for any reason whatsoever, including any Earn Out Payment, any
amount due and owing to Purchaser by way of indemnification pursuant to this
Article, and Purchaser shall not be liable for any amounts so offset.
MISCELLANEOUS
9.1 Notices.
(a) All notices, requests, demands and other communications
hereunder shall be (i) delivered by hand, (ii) mailed by registered or certified
mail, return receipt requested, first class postage prepaid and properly
addressed, or (iii) sent by national overnight courier service to the parties or
their assignees, addressed as follows:
41
To Seller: TakeMeOnVacation, LLC
RVM Promotions, LLC
RVM Vacations, LLC
0000 Xxxxxxx Xxxxx
Xxxxxxx Xxxxx, Xxxxxxx 00000
Attention: Xxxxx Xxxxxxx
with copies to: Xxxx Xxxxxxx, Esq.
Xxxxxxx X. Xxxxxxx, Esq.
Greenberg, Traurig, P.A.
0000 Xxxxxxxx Xxxxxx
Xxxxx, Xxxxxxx 00000
To Purchaser: Leisure Plan, Inc.
c/o Bluegreen Corporation
0000 Xxxxxxxxxx Xxx Xxxxx
Xxxxx 000
Xxxx Xxxxx, Xxxxxxx 00000
Attention: Xxxxx Xxxxxxxx, Esq.
With copies to: Xxxxx X. Xxxxx, Esq.
Xxxxxxxxx & Scavo, P.C.
0000 Xxxxxxxx Xxxx X.X.
Xxxxxxx, Xxxxxxx 00000
(b) All notices, requests, instructions or documents given to any
party in accordance with this Section9.1 shall be deemed to have been given (i)
on the date of receipt if delivered by hand, overnight courier service or (ii)
on the date three (3) Business Days after depositing with the United States
Postal Service if mailed by United States registered or certified mail, return
receipt requested, first class postage prepaid and properly addressed.
(c) Any party hereto may change its address specified for notices
herein by designating a new address by notice in accordance with this Section.
9.2 Entire Agreement. This Agreement, the schedules attached hereto and
the Transaction Documents constitute the entire agreement between the parties
relating to the subject matter hereof and thereof and supersede all prior oral
and written, and all contemporaneous oral negotiations, discussions, writings
and agreements relating to the subject matter of this Agreement.
9.3 Modifications, Amendments and Waivers.
(a) The parties hereto may, by mutual written agreement and in no
other manner make any other modifications of this Agreement approved by each of
the parties hereto.
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(b) The failure or delay of any party at any time or times to
require performance of any provision of this Agreement shall in no manner affect
its right to enforce that provision. No single or partial waiver by any party of
any condition of this Agreement, or the breach of any term, agreement or
covenant or the inaccuracy of any representation or warranty of this Agreement,
whether by conduct or otherwise, in any one or more instances shall be construed
or deemed to be a further or continuing waiver of any such condition, breach or
inaccuracy or a waiver of any other condition, breach or inaccuracy.
9.4 Successors and Assigns. This Agreement shall be binding upon and shall
inure to the benefit of and be enforceable by the parties hereto, and their
respective estates, successors, legal or personal representatives, heirs, and
assigns, but no assignment shall relieve any party of the obligations hereunder.
This Agreement cannot be assigned by any party without the prior written consent
of the other parties hereto.
9.5 Table of Contents; Captions; References. The table of contents and the
captions and other headings contained in this Agreement as to the contents of
particular articles, sections, paragraphs or other subdivisions contained herein
are inserted for convenience of reference only and are in no way to be construed
as part of this Agreement or as limitations on the scope of the particular
articles, sections, paragraphs or other subdivisions to which they refer and
shall not affect the interpretation or meaning of this Agreement. All references
in this Agreement to "Section," or "Article" shall be deemed to be references to
a Section or Article of this Agreement.
9.6 Governing Law. This Agreement has been negotiated and executed in the
State of Florida, will be substantially performed in the State of Florida, and
shall be controlled, construed and enforced in accordance with the substantive
Laws of the State of Florida, without respect to the Laws related to choice or
conflicts of Laws.
9.7 Pronouns. All pronouns used herein shall be deemed to refer to the
masculine, feminine or neuter gender as the context requires.
9.8 Severability. Should any one or more of the provisions of this
Agreement be determined to be invalid, illegal or unenforceable in any respect,
the validity, legality and enforceability of the remaining provisions hereof
shall not in any way be affected or impaired thereby. To the extent such
determination is reasonably likely to give rise to a Material Adverse Change,
the parties shall endeavor in good faith to replace the invalid, illegal or
unenforceable provisions with valid provisions the economic effect of which
comes as close as practicable to that of the invalid, illegal or unenforceable
provisions.
9.9 Remedies Not Exclusive. No remedy conferred by any of the specific
provisions of this Agreement is intended to be, nor shall be, exclusive of any
other remedy available at law, in equity or otherwise.
9.10 Jurisdiction; Consent to Service of Process.
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(a) Each of the parties hereby irrevocably and unconditionally
submits, for itself and its property, to the jurisdiction of any state or
superior court of the State of Florida located in Palm Beach County, Florida or
the United States District Court for the Southern District of Florida, and any
appellate court thereof, in any Litigation arising out of or relating to this
Agreement, or for recognition or enforcement of any judgment, and each of the
parties hereto hereby irrevocably and unconditionally agrees that all Litigation
may be heard and determined in such state court or, to the extent permitted by
law, in such Federal court. Each of the parties hereto agrees that a final
judgment in any such Litigation shall be conclusive and may be enforced in other
jurisdictions by suit on the judgment or in any other manner provided by law.
Each of the parties hereto agrees that it will not institute or seek to
institute any Litigation arising out of or relating to this Agreement (other
than an Litigation seeking enforcement of a judgment) in any forum other than a
state or circuit court of the State of Florida located in Palm Beach County,
Florida or the United States District Court for the Southern District of
Florida.
(b) Each of the parties hereby irrevocably and unconditionally
waives, to the fullest extent it may legally and effectively do so, any
objection it may now or hereafter have to the laying of venue of any Litigation
arising out of or relating to this Agreement in any state or circuit court
located in Palm Beach County, Florida or the United States District Court for
the Southern District of Florida. Each of the parties hereto hereby irrevocably
waives, to the fullest extent permitted by law, the defense of an inconvenient
forum to the maintenance of such Litigation in any such court.
9.11 Counterparts. This Agreement may be executed in any number of
counterparts, each of which shall be an original; but all of such counterparts
shall together constitute one and the same instrument.
9.12 Interpretations. Neither this Agreement nor any uncertainty or
ambiguity herein shall be construed or resolved against Purchaser or Seller
whether under any rule of construction or otherwise. No party to this Agreement
shall be considered the draftsman. On the contrary, this Agreement has been
reviewed, negotiated and accepted by all parties and their attorneys and shall
be construed and interpreted according to the ordinary meaning of the words used
so as fairly to accomplish the purposes and intentions of all parties hereto.
9.13 The Berkley Contracts. Purchaser and Seller acknowledge the existence
of those two certain Contracts dated the 21st day of March, 2000 (Berkley
Prospect Generation Contract) and the _____ day of __________, 2000 (Berkley
Relationship Contract) (undated) each being by and between the Berkley Group, a
Florida corporation, and Paramount Marketing Consultants, Inc., a Florida
corporation ("Paramount"), its Affiliates and others (hereinafter collectively
referred to as the "Berkley Contracts"). Such Berkley Contracts are hereunder
denominated Contracts of Seller.
(a) The Berkley Prospect Generation Contract shall be assigned by
Paramount to Purchaser such that Purchaser shall receive all payments thereunder
and Purchaser shall assume the obligation to perform thereunder. Such contract
shall expressly require Berkley to acquire Prospects from Purchaser
44
(b) The Berkley Relationship Contract shall not be assigned to
Purchaser nor shall the Berkley Relationship Contract be assigned to any other
Person. The Berkley Relationship Contract shall be amended to remove therefrom
any rights of exclusivity and shall be amended as agreed by Purchaser and
Seller.
9.14 The Excalibur Marketing Agreement. Excalibur Marketing, an Affiliate
of Seller, has entered into a Contract dated March 5, 2001 (the "Excalibur
Contract") with Seller by means of which Excalibur pays TMOV a per tour fee for
tours and Prospects to Las Vegas, Nevada. The assignment of such Contract and
the payments thereunder to Purchaser, and the consent thereto by all relevant
Third Parties (including Persons who are parties to such Excalibur Contract) is
an express condition precedent to the obligation of Purchaser hereunder. The
fees payable to Purchaser by Excalibur under such Contract shall be Ten ($10.00)
Dollars per Prospect arriving at the Las Vegas Welcome Center maintained by
Excalibur up to Nine Hundred (900) such Prospects, with the cost per Prospect
decreasing by increments of One Dollar ($1.00) per one hundred (100) Prospects.
9.15 Continued Prospect Generation. Following the Closing Date, Affiliates
of Seller, including but not limited to Paramount may continue to generate
Prospects. At Closing a Prospect Generation Agreement substantially the same as
the Berkley Relationship Contract shall be entered into by and between Purchaser
and Paramount, (and Affiliates of Paramount), by which Paramount and its
Affiliates will agree to provide solely and exclusively to Purchaser (and
Affiliates of Purchaser) Prospects that Paramount produces from its respective
marketing efforts for use by Purchaser and its Affiliates in their efforts to
sell Timeshare Interests in Purchaser-owned Timeshare Resorts or resorts owned
by Purchaser Affiliates subject, however, to the right of Paramount to produce
Prospects to Berkley as provided in Section 9.13 of this Agreement. The
agreed-upon prices for the production of Prospects to Purchaser in accordance
with such Agreement will be Two Hundred Eighty ($280.00) Dollars for a Day
Drive, Three Hundred Seventy-Five ($375.00) Dollars for a Mini-Vacation
(containing one or two nights vacation) and Four Hundred Fifty ($450.00) Dollars
for an Extended Stay Vacation (three nights or more). Such Agreement shall
provide that if Paramount or their Affiliates handle reservations for Purchaser,
then the reservations shall be handled at Twenty-five ($25.00) Dollars per
reservation, which amount is included in the per Prospect fee set forth in this
paragraph and shall only be chargeable if the Prospect originates from
Purchaser's operations independent of the Assets and such Prospect makes a
reservation through the Assets.
9.16 Xxxxx Xxxxxxx Personal Obligations. Purchaser and Seller acknowledge
that Xxxxx Xxxxxxx, as a principal of Seller, is personally obligated on a
variety of Contracts relating to the Seller, including equipment leases and the
merchant account, as referred to in Paragraph 3.5 of this Agreement. Such
equipment leases are more fully set forth on SCHEDULE 12.16 attached hereto.
Purchaser agrees that it shall as soon as reasonably practicable use its
commercially reasonable efforts to remove and release Xxxxx Xxxxxxx from such
obligations or Liability thereunder as assumed by Purchaser subject to and
limited by Article 3 of this Agreement. Purchaser agrees routinely to inform
Seller and Xxxxx Xxxxxxx of Purchaser's efforts in removing and releasing Xxxxx
Xxxxxxx from such. To the extent that Seller or Purchaser is unable to remove
Xxxxx Xxxxxxx from such personal obligations, then Purchaser shall indemnify and
hold harmless
45
Xxxxx Xxxxxxx from all losses in respect to such personal obligations subject to
and limited by, Article 3 and Article 9 of this Agreement.
IN WITNESS WHEREOF, the parties have caused their duly authorized
representatives to execute this Agreement as of the date first above written.
SELLER:
TAKEMEONVACATION, LLC
/S/ XXXXX XXXXXXX
----------------------------------
Signature
By: Xxxxx Xxxxxxx
-------------------------------
Title: CEO
----------------------------
Attest: /S/ XXXXXXX X. XXXXX, XX.
---------------------------
By: Xxxxxxx X. Xxxxx, Xx.
-------------------------------
[Signatures continued on next page]
46
RVM PROMOTIONS, LLC
/S/ XXXXX XXXXXXX
----------------------------------
Signature
By: Xxxxx Xxxxxxx
-------------------------------
Title: CEO
----------------------------
Attest: /S/ XXXXXXX X. XXXXX, XX.
---------------------------
By: Xxxxxxx X. Xxxxx, Xx.
-------------------------------
RVM VACATIONS, LLC
/S/ XXXXX XXXXXXX
----------------------------------
Signature
By: Xxxxx Xxxxxxx
-------------------------------
Title: CEO
----------------------------
Attest: /S/ XXXXXXX X. XXXXX, XX.
---------------------------
By: Xxxxxxx X. Xxxxx, Xx.
-------------------------------
PURCHASER:
LEISURE PLAN, INC., a Florida Corporation
/S/ XXXXX X. XXXXXXXX
----------------------------------
Signature
By: Xxxxx X. Xxxxxxxx
-------------------------------
Title: Secretary
----------------------------
Attest: /S/ XXXXXXX X. XXXXXXX
---------------------------
By: Xxxxxxx X. Xxxxxxx
-------------------------------
47
By execution herein below, Bluegreen Corporation guarantees the payment,
when due, by Purchaser to Seller of the Initial Purchase Price, the Deferred
Purchase Price Payment and those portions of the Earn Out Payment earned by
Seller during the Earn Out Period, as provided for in this Agreement and
payment, when due, all Liabilities as are assumed by Purchaser in accordance
with the provisions of Article 3 of this Agreement. Bluegreen Corporation also,
by execution hereinbelow, guarantees performance of all obligations under this
Agreement to be performed following the Closing Date by it or Purchaser.
BLUEGREEN CORPORATION,
a Massachusetts corporation
/S/ XXXXX X. XXXXXXXX
----------------------------------
Signature
By: Xxxxx X. Xxxxxxxx
-------------------------------
Title: Vice President
----------------------------
Attest: /S/ XXXXXXX X. XXXXXXX
---------------------------
By: Xxxxxxx X. Xxxxxxx
-------------------------------
48
