EXHIBIT 10.1
STOCK PURCHASE AGREEMENT
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THIS STOCK PURCHASE AGREEMENT, dated as of this 22nd day of June, 1999 (the
"Agreement"), is entered into by and among CHAI CAPITAL, LTD., a Florida limited
partnership ("Seller" or "Chai"); XXXXXXX HOMEBUILDERS INCORPORATED, a Florida
corporation (the "Company" or 'Xxxxxxx"); and CENTURY PARTNERS GROUP, LTD., a
Florida limited partnership ("Buyer" or "Century").
W I T N E S S E T H:
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WHEREAS, Seller owns 1,785,714 shares of the Company's Class A Common
Stock, par value $.01 per share ("Class A Common Stock"), and 1,500,000 shares
of the Company's Class B Common Stock, par value $.01 per share ("Class B Common
Stock"); and
WHEREAS, Seller owns outstanding debentures of the Company (the
"Debentures") in the aggregate principal amount of $4,000,000, which are
convertible into 7,142,857 shares of Class A Common Stock of the Company; and
WHEREAS, Seller is contemplating converting the Debentures into Class A
Common Stock prior to the Closing (as defined below); and
WHEREAS, Buyer desires to purchase from Seller, and Seller desires to sell
to Buyer, an aggregate 7,355,000 shares of Class A Common Stock and 1,500,000
shares of Class B Common Stock (collectively hereinafter, the "Chai Shares"), in
accordance with and pursuant to the terms and conditions contained hereinafter;
and
WHEREAS, the Company desires to issue shares of its Class A Common Stock
(the "Xxxxxxx Shares"), to Buyer as of the date hereof in exchange for a
promissory note, as described below.
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NOW, THEREFORE, in consideration of the foregoing and the mutual covenants
contained herein, and intending to be legally bound hereby, the parties hereto
hereby agree as follows:
1. PURCHASE AND SALE OF SHARES.
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1.1 Purchase and Sale of the Chai Shares. Upon the terms and subject to
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the conditions of this Agreement, at the Closing (the "Closing"), as more fully
described below, Seller shall sell, assign, convey, transfer and deliver the
Chai Shares to Buyer, and Buyer shall purchase, acquire and accept the Chai
Shares from Seller.
1.2 Consideration for the Chai Shares. In consideration of the
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aforesaid sale, assignment, conveyance, transfer and delivery of such Chai
Shares, at the Closing, Buyer shall pay to Seller and/or its designees a total
of Ten Million Dollars ($10,000,000) (the "Purchase Price"). Buyer shall pay
the Purchase Price to the Seller and/or its designees at the Closing as follows:
Buyer shall pay $5,000,000 in cash at the Closing, less the deposit of
$278,761.07 referred to in Section 1.9 below, and Buyer shall deliver to the
Seller and/or its designees at the Closing, a negotiable promissory note
executed by the Buyer, payable to the order of the Seller and/or its designees,
in the aggregate principal amount of $5,000,000 ("the Chai Promissory Note").
The Chai Promissory Note shall be substantially in the form attached hereto as
Exhibit A, and incorporated herein by reference. The Chai Promissory Note shall
bear no interest and shall be payable $2,000,000 in the aggregate six (6) months
after Closing, and $3,000,000 in the aggregate ten (10) months after Closing.
The Chai Promissory Note shall be secured during the term thereof by an
Irrevocable Stand-by Letter of Credit (the "Letter of Credit"), with an
aggregate face amount equal to the lesser of (i) $5,000,000 and (ii) the then
outstanding principal aggregate amount of the Chai Promissory Note. The Letter
of Credit shall be issued by a bank reasonably acceptable to the Seller and on
such terms and in such
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form as attached hereto and made a part of Exhibit A annexed hereto and
incorporated herein by reference. The Letter of Credit shall include provisions
that the Letter of Credit shall be payable immediately upon a failure of the
Buyer to make any payment under the Chai Promissory Note when due. The parties
hereto further agree that Seller may request at or prior to the Closing that the
Chai Promissory Note be issued to Seller and/or its designees, such that more
than one Chai Promissory Note is to be issued by Buyer at Closing. In such an
event, each such Chai Promissory Note so issued will be for less than the
aggregate $5,000,000 principal amount referred to above, but all of such Chai
Promissory Notes together shall in the aggregate have a principal amount of
$5,000,000. In addition, corresponding Letters of Credit shall be issued to
Seller and/or its designees corresponding with such Chai Promissory Notes and
the terms thereof. For purposes of this Agreement, the term Chai Promissory Note
and Letter of Credit shall refer to the singular or plural of such instruments,
as the case may be. In addition, for purposes of this Agreement, the term
designees of Chai shall include the limited and general partners of Chai. The
parties hereto further acknowledge that it is the intention of the Seller and/or
its designees to enter into an agreement with the issuer (the "Issuer"), of the
Letter of Credit to provide that the Issuer will redeem and/or substitute such
Chai Promissory Note and/or Letter of Credit for cash upon such terms and
conditions as the Issuer and the Seller and/or its designees so agree. Seller
agrees to be responsible for any and all costs incurred as a consequence of any
such redemption or substitution of the Chai Promissory Note and/or Letter of
Credit. Buyer further acknowledges that Seller and/or its designees may, in lieu
of reaching an agreement with the Issuer, as aforesaid, seek to convert the Chai
Promissory Note into cash by assigning the same, together with the Letter of
Credit to a third person, including a financial institution other than the
Issuer. Buyer agrees to fully cooperate with Seller and Issuer, including any
third party as described above, with respect thereto, including without
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limitation, affording Seller and its designees access to Issuer prior to filing
or submitting any Letter of Credit application with Issuer. Except with respect
to the above-described redemption, substitution or assignment of the Chai
Promissory Note and/or Letter of Credit by Seller and/or its designees, the cost
of providing and maintaining such Letter of Credit shall be the sole
responsibility of Buyer.
1.3 Sale of the Xxxxxxx Shares.
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(1) Upon the terms and subject to the conditions of this Agreement,
as of the date hereof, Century agrees to purchase from Xxxxxxx, and Xxxxxxx
agrees to sell, convey, transfer and deliver to Century, shares of Xxxxxxx'x
Class A Common Stock in the amount and for the consideration described below.
Century shall issue to Xxxxxxx as of the date hereof, Century's Promissory Note
(the "Century Promissory Note"), for the aggregate principal amount of
$25,000,000. The Century Promissory Note will be issued in exchange for the
issuance by Xxxxxxx of 22,123,893 shares of Class A Common Stock valued at $1.13
per share of Class A Common Stock, which valuation, Buyer and Xxxxxxx
acknowledge is equivalent to the market value of such shares of the Company's
Class A Common Stock, after considering various criteria of value. In addition,
as of the date hereof, Century hereby agrees to pay to the Company in cash an
aggregate $221,238.93, representing the aggregate par value for such shares of
Class A Common Stock, being issued to Century by Xxxxxxx hereunder.
Notwithstanding the foregoing, the principal amount of the Century Promissory
Note will be reduced by the par value cash consideration so paid. In addition,
and anything contained herein to the contrary notwithstanding, the Xxxxxxx
Shares being issued hereunder, the Century Promissory Note, and the aforesaid
cash par value payment, shall be held in escrow by the Escrow Agent, as defined
below, pending the Closing of the transactions contemplated hereunder, and which
escrow shall be maintained in accordance with the terms of that
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certain Escrow Agreement, attached hereto as Exhibit D, and incorporated herein
by reference. In the event no Closing is effectuated and this Agreement is
terminated as provided hereinafter, then the Century Promissory Note shall be
returned to Century and the Xxxxxxx Shares shall be returned to Xxxxxxx for
cancellation and such Xxxxxxx Shares shall be deemed never to have been issued;
and the aforesaid $221,238.93 cash par value payment shall be automatically
deemed part of the Deposit, as defined hereinafter, and shall be transferred in
accordance with Article VIII hereto. In the event of a Closing, the Xxxxxxx
Shares shall be released to Century, and the Century Promissory Note and the
aforesaid cash par value payment shall be released to Xxxxxxx. The escrow of the
Xxxxxxx Shares and the Century Promissory Note and the cash par value payment
shall be subject to the terms of that certain escrow agreement to be executed
and delivered as of the date hereof, and attached hereto and incorporated herein
by reference as Exhibit B. In addition, the parties hereto hereby agree that
Century shall execute and deliver its proxy to Xxxxx Xxxxxxx, in substantially
the form attached hereto and incorporated herein by reference as Exhibit C, and
which proxy shall provide that Xxxxx Xxxxxxx and/or his designees shall have the
sole right to vote such Xxxxxxx Shares during such time that such Xxxxxxx Shares
are maintained in escrow. The parties hereto hereby agree that in the event such
proxy is held to be invalid or its validity is challenged by Century or its
designees, then at the sole discretion of Seller, this Agreement shall be
terminate, as provided hereinafter. In addition, pending Closing, without the
prior written approval of Seller, Buyer hereby agrees not to, directly or
indirectly, take any action which would require any vote of the Company's
shareholders, except for the proxy statement referred to hereinafter. Buyer
further agrees that Buyer will not take any action, directly or indirectly, to
challenge the validity of such proxy.
(2) The Century Promissory Note shall be in the form of a non-
recourse promissory note, substantially in the form annexed as Exhibit B to
this Agreement, and incorporated
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herein by reference. The Century Promissory Note shall be due two years from the
Closing, and shall bear interest at the rate of 5% per annum. The shares of
Class A Common Stock to be issued by Xxxxxxx to Century shall contain such
restrictive legends as are required by applicable securities laws and
regulations, as more fully described hereinafter. In addition, the parties
hereto hereby agree that the Century Promissory Note shall be secured by assets
of Century, having a fair market value of not less than $25,000,000, the
principal amount of the Century Note, as of the Closing.
(3) The parties to this Agreement agree that Century may pay the
Century Promissory Note by conveying to Xxxxxxx interests in real property or
other assets owned by Century. The value of such real estate interests or other
assets shall be determined based upon the fair market value of such assets, as
then determined by a qualified independent appraiser.
1.4 Closing. The Closing of the transactions contemplated by this
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Agreement shall take place at the offices of Akerman, Senterfitt & Xxxxxx, P.A.
("Akerman" or "ASE"), SunTrust International Center, Xxx Xxxxxxxxx Xxxxx Xxxxxx,
00xx Xxxxx, Xxxxx, Xxxxxxx 00000, at 10:00 a.m., Eastern Time, on August 2,
1999, or such other date and time as shall be mutually agreed upon by the
parties hereto. The date on which the Closing occurs is referred to herein as
the "Closing Date."
1.5 Deliveries by Seller. At Closing, Seller shall deliver or cause to be
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delivered to Buyer:
(1) stock certificates representing the Chai Shares, duly endorsed or
accompanied by stock powers duly executed in blank, with signatures
medallion guaranteed;
(2) the compliance certificate referred to in Subsection 7.2 (c)
hereof; and
(3) all other documents, certificates, instruments or writings
required to be delivered by Seller at or prior to the Closing pursuant to
this Agreement or otherwise required in connection herewith.
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1.6 Deliveries by Xxxxxxx. At Closing, Xxxxxxx shall deliver or cause
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to be delivered to Buyer:
(1) stock certificates representing the Xxxxxxx Shares being held in
escrow;
(2) the compliance certificate referred to in Subsection 7.2 (c)
hereof; and
(3) all other documents, certificates, instruments or writings
required to be delivered by Xxxxxxx at or prior to the Closing pursuant to this
Agreement or otherwise required in connection herewith.
1.7 Deliveries by Buyer to Seller. At Closing, Buyer shall deliver
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or cause to be delivered to Seller (or to such persons as may be designated by
the Seller):
(1) $5,000,000 in cash (less the amount of $278,761.07 plus earned
interest thereon, evidencing the Deposit, which will be released to Seller at
Closing), by wire transfer of immediately available funds in United States
dollars, to a bank account maintained by Akerman on behalf of Seller;
(2) the executed Chai Promissory Note, secured by the Letter of
Credit. As indicated above, the Chai Promissory Note and corresponding Letter of
Credit may, at the discretion of the Seller and/or its designees, be divided
into two or more instruments in such denominations as the Seller and/or its
designees may determine, the total principal amounts of which shall equal
$5,000,000, and all such Promissory Notes shall be secured by corresponding
Letter(s) of Credit.
(3) the compliance certificate referred to in Subsection 7.1 (c)
hereof; and
(4) all other documents, certificates, instruments or writings
required to be delivered by Buyer at or prior to the Closing pursuant to this
Agreement or otherwise required in connection herewith.
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1.8 Deliveries by Buyer to Xxxxxxx. At Closing, Buyer shall
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deliver or cause to be delivered to Xxxxxxx (or to such persons as may be
designated by Xxxxxxx):
(1) the cash par value payment for the Xxxxxxx Shares, being held in
escrow;
(2) the executed Century Promissory Note, being held in escrow;
(3) the compliance certificate referred to in Subsection 7.1 (c)
hereof; and
(4) all other documents, certificates, instruments or writings
required to be delivered by Buyer to Xxxxxxx at or prior to the
Closing pursuant to this Agreement or otherwise required in
connection herewith.
1.9 Deposit; Material Adverse Effect. Simultaneously with the
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execution of this Agreement, Century will deliver to ASE, to be held in escrow
a deposit of $278,761.07 (the "Deposit"), in accordance with the terms and
conditions of an escrow agreement, the form of which is annexed hereto as
Exhibit E, and incorporated herein by reference. The Deposit shall be deposited
in an interest-bearing account in the name of ASE (the "Escrow Agent"), at
Union Planters Bank, or such other bank as mutually agreed upon by the parties
hereto, and shall be released together with earned interest thereon to Seller at
Closing, to satisfy a portion of the Purchase Price as provided herein. If the
transactions contemplated by this Agreement fail to close as of the Closing (or
such other date, if such Closing Date is mutually extended by the parties
hereto), the Escrow Agent shall release the Deposit (plus earned interest
thereon) in accordance with the terms and conditions of this Agreement. For
purposes of this Agreement, unless otherwise provided hereinafter, "Material
Adverse Effect" with respect to a party, shall mean any event, change, or
occurrence which, individually or together with any other event, change, or
occurrence, has a material adverse impact on (i) the financial position,
business, or results of operations of such party and its affiliates, if any,
taken as a whole, or (ii) the ability of such party to materially perform its
obligations under this
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Agreement or to consummate the transactions contemplated by this Agreement in
accordance with applicable law and regulation.
2. REPRESENTATIONS AND WARRANTIES OF XXXXXXX.
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Xxxxxxx hereby represents and warrants to Century as follows:
2.1 Organization, Standing, and Power. Xxxxxxx is a corporation duly
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organized, validly existing, and in good standing under the laws of the State of
Florida, and has the corporate power and authority to carry on its business as
now conducted and to own, lease, and operate its assets. Xxxxxxx is duly
qualified or licensed to transact business as a foreign corporation in good
standing in the States of the United States and foreign jurisdictions where the
character of its assets or the nature or conduct of its business requires it to
be so qualified or licensed, except where any such failure to be so qualified
would not have a Material Adverse Effect on Xxxxxxx.
2.2 Authority, Non-Contravention, No Breach by Agreement.
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(1) Xxxxxxx has the full power and authority (including full
corporate power and authority) necessary to execute, deliver, and perform its
obligations under this Agreement and to consummate the transactions contemplated
hereby. The execution, delivery, and performance of this Agreement, and the
consummation of the transactions contemplated herein have been duly and validly
authorized by all necessary action (including valid corporate authorization by
the adoption of this Agreement by Xxxxxxx'x duly constituted Board of
Directors), in respect thereof on the part of Xxxxxxx. This Agreement represents
the legal, valid, and binding obligations of Xxxxxxx, enforceable against
Xxxxxxx in accordance with its their respective terms, except to the extent that
enforcement hereof may be limited by (a) bankruptcy, insolvency, reorganization,
moratorium, fraudulent conveyance or other similar laws, now or hereafter in
effect, relating to creditors' rights
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generally, and (b) general principles of equity (regardless of whether
enforceability is considered in a proceeding at law or in equity).
(2) Neither the execution and the delivery of this Agreement, nor the
consummation of the transactions contemplated hereby, will (1) violate any law,
injunction, judgment, order, decree, or other restriction of any government,
governmental agency, or court to which Xxxxxxx is subject, or any provision of
its charter or bylaws, or (2) except as otherwise provided herein, conflict
with, result in a breach of, constitute a default under, result in the
acceleration of, create in any party the right to accelerate, terminate, modify,
or cancel, or require any notice under any agreement, contract, lease, license,
instrument, or other arrangement to which Xxxxxxx or its subsidiaries is a party
or by which they are bound or to which any of their assets are subject, except
for any such consent to the transactions contemplated hereunder by Xxxxxxx'x
lenders.
(3) Other than in connection or compliance with the provisions of the
securities laws, no notice to, filing with, or consent of, any public body or
authority is necessary for the, consummation by Xxxxxxx of the transaction
contemplated in this Agreement.
2.3 Capital Stock.
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(1) As of the date hereof, the authorized capital stock of Xxxxxxx
consists solely of 41,500,000 shares of Common Stock, par value $.01 per share,
of which 40,000,000 shares of Common Stock have been designated as Class A
Common Stock, and 1,500,000 shares have been designated as Class B Common Stock;
and 5,000,000 shares of Preferred Stock, par value $.01 per shares (the
"Preferred Stock"). As of the date hereof, the only shares of capital stock of
Xxxxxxx outstanding or reserved for issuance were as follows: (i) 4,145,968
shares of Class A Common Stock were issued and outstanding; (ii) 1,500,000
shares of Class B Common Stock were issued and
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outstanding; (iii) 8,097,357 shares of Class A Common Stock were reserved for
issuance upon the exercise of outstanding options, warrants, Debentures and
derivative securities, exclusive of shares of Class B Common Stock; and (v) no
shares of Preferred Stock have been issued. The amount of issued and outstanding
shares, including shares reserved for issuance, do not include the Xxxxxxx
Shares being issued as of the date hereof. Other than described herein, and in
the exhibits and schedules attached hereto, there are no other additional shares
of capital stock, options, warrants and/or derivative securities currently
outstanding. All of the issued and outstanding shares of Class A Common Stock
and Class B Common Stock have been validly issued, and are fully paid and
nonassessable, except with respect to the Xxxxxxx Shares which are being paid
for, in part, by the execution and delivery of the Century Promissory Note and
no representation is hereby given with respect to any future payment in
connection with such Century Promissory Note. None of the outstanding shares of
capital stock of Xxxxxxx have been issued in violation of any preemptive rights
of the current or past shareholders of Xxxxxxx.
(2) The Chai Shares and the Xxxxxxx Shares being sold hereunder by
Chai and Xxxxxxx respectively, when delivered to Century will not be subject to
any liens or other encumbrances, except as otherwise created or described
hereunder, and except for any restrictions imposed by applicable securities laws
and regulations.
2.4 Xxxxxxx Subsidiaries. Xxxxxxx has disclosed in Schedule 2.4
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attached hereto and incorporated herein by reference, all of the Xxxxxxx
subsidiaries that are corporations (identifying their respective jurisdiction of
incorporation) and all of the Xxxxxxx subsidiaries that are general or limited
partnerships or other noncorporate entities (identifying the law under which
such respective entities were organized, and the amount and nature of the
ownership interest therein of such Xxxxxxx subsidiaries). Xxxxxxx or one of its
wholly-owned subsidiaries owns all of the issued and outstanding
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shares of capital stock (or other equity interests) of each of the Xxxxxxx
subsidiaries, except as otherwise disclosed hereunder and in the Schedules
hereto, and Xxxxxxx and/or its subsidiaries are not a party to any contract or
other agreement pursuant to which Xxxxxxx and/or its subsidiaries is required to
issue any shares of capital stock or other equity interests in any such
subsidiaries to any third party. There are no outstanding contracts or
agreements relating to any obligation on the part of Xxxxxxx or of any Xxxxxxx
subsidiary to vote or to otherwise dispose of any shares of the capital stock
(or other equity interests) of Xxxxxxx or any such Xxxxxxx subsidiary, except as
otherwise provided herein. All of the shares of capital stock (or other equity
interests) of each Xxxxxxx subsidiary held by Xxxxxxx are fully paid and
nonassessable under the applicable corporation or similar laws of the
jurisdiction in which such subsidiary is incorporated or organized, and are
owned free and clear of any liens and restrictions of any kind, except for such
restrictions as imposed by applicable securities laws and/or regulations, and
except for any other restrictions imposed by any of the Company's lenders. Each
Xxxxxxx subsidiary is either a partnership, limited liability corporation, or a
corporation, and each such subsidiary is duly organized, validly existing, and
(as to corporations) in good standing under the laws of the jurisdiction in
which it is incorporated or organized, and has the full power and authority
(including corporate power and authority) necessary for it to own, lease, and
operate its assets and to carry on its business as now conducted. Each Xxxxxxx
subsidiary is duly qualified or licensed to transact business as a foreign
corporation in good standing in the States of the United States and foreign
jurisdictions where the character of its assets or the nature or conduct of its
business requires it to be so qualified or licensed, except where failure to so
qualify would not have a Material Adverse Effect on Xxxxxxx.
2.5 Financial Statements. To the best of Xxxxxxx'x knowledge, the
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financial statements of Xxxxxxx (including the notes thereto), set forth in
Xxxxxxx'x public filings with the Securities and
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Exchange Commission (the "SEC"), have been prepared in accordance with generally
accepted accounting principals ("GAAP"), applied on a consistent basis through
the periods covered thereby; present fairly the financial condition of Xxxxxxx
and its subsidiaries as of such dates; and the results of operations of Xxxxxxx
and its subsidiaries for such periods, are correct and complete, and are
consistent with the books and records of Xxxxxxx and its subsidiaries; provided,
however, that the interim financial statements of Xxxxxxx are subject to normal
year-end adjustments and lack footnotes and other presentation items.
2.6 Absence of Undisclosed Liabilities. To the best of Xxxxxxx'x
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knowledge, and except as disclosed in Xxxxxxx'x public filings with the SEC,
including Xxxxxxx'x financial statements and footnotes thereto and except as
disclosed in this Agreement and/or the Exhibits and Schedules hereto, neither
Xxxxxxx nor any of the Xxxxxxx subsidiaries have any liabilities that are
reasonably likely to have, individually or in the aggregate, a Material Adverse
Effect on Xxxxxxx. For purposes of this Section 2.6 a Material Adverse Effect
shall be deemed to be any liability or liabilities in the aggregate equal to or
greater than $250,000. Neither Xxxxxxx nor any of the Xxxxxxx subsidiaries has
incurred or paid any liability since March 31, 1999, the date of Xxxxxxx'x last
quarterly report on Form 10-Q, except for such liabilities incurred or paid (i)
in the ordinary course of business or which are not reasonably likely to have,
individually or in the aggregate, a Material Adverse Effect on Xxxxxxx, as
defined above; (ii) in connection with the transactions contemplated by this
Agreement, or (iii) except as disclosed in the Company's public filings with the
SEC, or in this Agreement or in the Schedules or Exhibits hereto.
2.7 Absence of Certain Changes or Events. Since March 31, 1999, there
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have been no events, changes, or occurrences which have had, or are reasonably
likely to have, individually or in the aggregate, a Material Adverse Effect on
Xxxxxxx.
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2.8 Tax Matters.
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(1) All tax returns required to be filed by or on behalf of Xxxxxxx
or any of the Xxxxxxx subsidiaries have been timely filed or requests for
extensions have been timely filed, granted, and have not expired for periods
ended on or before the date of this Agreement, and on or before the date of the
most recent fiscal year end immediately preceding the Closing, and all such tax
returns filed are complete and accurate in all material respects. All taxes
shown on filed tax returns, or to the best of Xxxxxxx'x knowledge otherwise due,
have been paid. There is no audit examination or refund litigation with respect
to any taxes, except as disclosed in Xxxxxxx'x public filings with the SEC or
reserved against in the financial statements of Xxxxxxx contained in the public
filings with the SEC. All taxes and other material liabilities due with respect
to any completed and settled tax examinations or concluded tax litigation have
been paid. There are no liens with respect to taxes upon any of the assets of
Xxxxxxx or any of the Xxxxxxx subsidiaries.
(2) Neither Xxxxxxx nor any of the Xxxxxxx subsidiaries has executed
an extension or waiver of any statute of limitations on the assessment or
collection of any tax due (excluding such statutes that relate to years
currently under examination by the Internal Revenue Service or other applicable
taxing authorities) that is currently in effect.
(3) Adequate provision for any material taxes due or to become due
for Xxxxxxx or the Xxxxxxx subsidiaries for the period or periods through and
including March 31, 1999, has been made and is reflected on such Xxxxxxx
financial statements, as set forth in Xxxxxxx'x public filings with the SEC.
(4) Material deferred taxes of Xxxxxxx and the Xxxxxxx subsidiaries
have been provided for in accordance with GAAP consistently applied.
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(5) To the best of Xxxxxxx'x knowledge, neither Xxxxxxx nor any of
the Xxxxxxx subsidiaries has made any payments, is obligated to make any
payments, or is a party to any contract that could obligate it to make any
payments that would be disallowed as a deduction under Section 280G or 162(m) of
the Internal Revenue Code of 1986, as amended (the "IRC"), and which would have,
individually or in the aggregate, a Material Adverse Effect on Xxxxxxx.
(6) There has not been an ownership change, as defined in IRC Section
382(g), of Xxxxxxx or any of the Xxxxxxx subsidiaries that occurred during or
after any taxable period in which Xxxxxxx or any of the Xxxxxxx subsidiaries
incurred a net operating loss that carries over to any taxable period ending
after September 30, 1998, except in connection with the transaction with Chai in
July, 1998 and the transactions contemplated pursuant to this Agreement, and
except as otherwise described in the public filings of Xxxxxxx with the SEC.
(7) Neither Xxxxxxx nor any of the Xxxxxxx subsidiaries is a party to
any tax allocation or sharing agreement (except with one another) and neither
Xxxxxxx nor any of the Xxxxxxx subsidiaries has been a member of an affiliated
group filing a consolidated federal income tax return (other than a group, the
common parent of which was Xxxxxxx ), or has any material liability for taxes of
any person as a transferee or successor or by contract or otherwise.
(8) To the best of Xxxxxxx'x knowledge, each of Xxxxxxx and its
subsidiaries has withheld and paid all taxes required to have been withheld and
paid in connection with amounts paid or owing to any employee, independent
contractor, creditor, stockholder, or other third party.
(9) To the best of Xxxxxxx'x knowledge, Xxxxxxx is not subject to any
pending or threatened audit proceedings from any tax agency. In addition, to the
best of Xxxxxxx'x knowledge, Xxxxxxx is current in the payment of sales taxes
and other state and local taxes.
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2.9 Assets. Xxxxxxx and the Xxxxxxx subsidiaries have good and
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marketable title, free and clear of all liens (except for any such liens granted
in favor of Xxxxxxx'x lenders or mechanics or other types of construction liens
arising in the ordinary course of business), to all of their respective assets,
including all real property (except for such easements, reservation of rights
and other conditions set forth in such title policies relating to such real
property, and which title policies have previously been delivered to Buyer).
Xxxxxxx and the Xxxxxxx subsidiaries currently maintain insurance in amounts,
scope, and coverage which, in the reasonable opinion of Management of Xxxxxxx,
are adequate for the operations of Xxxxxxx and the Xxxxxxx subsidiaries.
Neither Xxxxxxx nor any of the Xxxxxxx subsidiaries has received notice from any
insurance carrier that (i) such insurance will be canceled or that coverage
thereunder will be reduced or eliminated, or (ii) premium costs with respect to
such policies of insurance will be substantially increased. There are presently
no claims pending under any such policies of insurance and no notices have been
given by Xxxxxxx or any of the Xxxxxxx subsidiaries under such policies, except
as may be given with respect to any litigation matters disclosed hereunder, in
the public filings of Xxxxxxx with the SEC, and in the Schedules attached
hereto.
2.10 Real Property.
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(1) Schedule 2.10 lists and describes briefly all real property owned
by Xxxxxxx and its subsidiaries, as of the date hereof. To the knowledge of
Xxxxxxx, there are no pending, or threatened condemnation proceedings, lawsuits,
or administrative actions relating to the real property owned by Xxxxxxx and its
subsidiaries, except as otherwise described in Xxxxxxx'x public filings with the
SEC or in this Agreement or in any Schedule or Exhibit attached hereto.
19
(2) Schedule 2.10 lists and describes briefly all real property
leased or subleased to any of Xxxxxxx and its subsidiaries and attaches, correct
and complete copies of the leases and subleases listed in Schedule 2.10.
(3) Schedule 2.10 lists all residential or commercial real estate
development projects of Xxxxxxx or of any Xxxxxxx subsidiary, and includes the
total number of units under development and the total units remaining unsold as
of the date of this Agreement (hereinafter referred to individually or
collectively as the "Development Project(s)"). With respect to each Development
Project:
(1) there exists no default, nor to the knowledge of Xxxxxxx, is
it reasonably likely that there will be a default, under the terms of any
construction loan agreement, mortgage, promissory note, guaranty, or other loan
document relating to the Development Projects (except for any consents required
in connection with the consummation of the transactions contemplated hereunder);
(2) to the knowledge of Xxxxxxx, there are no actions, suits,
liens, lis pendens, or other proceedings, of any kind or nature whatsoever,
pending or threatened against Xxxxxxx or the Xxxxxxx subsidiaries which may
affect the successful construction and sale of the residences comprising each
Development Project;
(3) To the knowledge of Xxxxxxx, there are no violations or
notices of violations of any federal or state law or municipal ordinance or
order or requirement of the city or county in which the Development Projects are
located or any municipal department or other governmental authority having
jurisdiction affecting the Development Projects, which violation in any way
materially relates to or materially affects the Development Projects;
20
(4) To the knowledge of Xxxxxxx, all utility services necessary
for the construction of residences or other improvements as required or
contemplated in each Development Project and the operation and use thereof for
their intended purpose are available or will be available;
(5) To the knowledge of Xxxxxxx, each Development Project has
obtained all necessary and material development approvals for the construction
of residences or other improvements as stated in Schedule 2.10 from the
appropriate federal, state and local governmental entities or will obtain all
necessary development approvals without substantial delay, except for Phase II
of the Development Project known as Malibu Bay. As used herein "development
approvals" includes but is not limited to, any revisions to the Miami-Dade
County, Broward County or Palm Beach County comprehensive development master
plan, final plat approval from the appropriate governmental entity, approval for
water and sewer capacity and service, concurrency approvals, permits and/or
impact fee payments to the applicable water management districts, approval
and/or payment of applicable school board impact fees, and any other permit or
approval required to obtain final certificates of occupancy or of completion for
each Development Project;
(6) To the best of Xxxxxxx'x knowledge, if any of the
Development Projects are located within federal or state jurisdictional
wetlands, as such term is defined under applicable state and federal law, all
permits, and other developmental approvals necessary for the construction of
residences upon jurisdictional wetlands have been obtained, and all mitigation
fee payments have been made to the State of Florida, the applicable water
management district or the United States Army Corps of Engineers; and
(7) To the best of Xxxxxxx'x knowledge, if Xxxxxxx or a
Xxxxxxx subsidiary has entered into a binding agreement or contract with any
contractor, subcontractor, materialman or supplier, said agreement or contract
is not material to the operations of Xxxxxxx and
21
does not encompass the provision of labor or the performance of services which
cannot be terminated after giving notice of such termination by Xxxxxxx of not
more than three (3) months.
2.11 Environmental Matters. To the best of Xxxxxxx'x knowledge,
---- ----------------------
the environmental studies conducted at the time of any loan entered into in
connection with the acquisition of real property by Xxxxxxx are true and
correct, and copies of said reports have been made available to Buyer. In
addition, to the best of Xxxxxxx'x knowledge, since the date of such studies,
Xxxxxxx is not aware of any facts or events, including any spills of
environmentally hazardous materials on such properties, which would render such
studies materially untrue or materially incorrect in any material fashion as of
the date hereof.
2.12 Compliance With Laws.
---- --------------------
(1) To the best of Xxxxxxx'x knowledge, Xxxxxxx and the Xxxxxxx
subsidiaries have at all times operated in all material respects and are
presently in compliance in all material respects with all material applicable
federal, state, local, foreign or other laws, rules, regulations, guidelines,
orders, injunctions, building and other codes, ordinances, permits and licenses,
authorizations, judgments, decrees of federal, state, local, foreign or other
authorities, and all material orders, writs, decrees and consents of any
governmental or political subdivision or agency thereof, or any court or similar
entity established by any such governmental or political subdivision or agency
thereof (collectively, the "Laws"), except where any such non-compliance would
not result in any Material Adverse Effect on Xxxxxxx.
(2) To the best of Xxxxxxx'x knowledge, Xxxxxxx has not received
any notification or communication from any agency or department of federal,
state, or local government or any regulatory authority or the staff thereof (i)
asserting that Xxxxxxx or any of the Xxxxxxx subsidiaries is not in material
compliance with any of the Laws or orders which such governmental authority or
22
regulatory authority enforces, except for such non-compliance which would not be
reasonably likely to have, individually or in the aggregate, a Material Adverse
Effect on Xxxxxxx, (ii) threatening to revoke any material permits, or (iii)
requiring Xxxxxxx or any of the Xxxxxxx subsidiaries to enter into or consent to
the issuance of a cease and desist order, formal agreement, directive,
commitment, or memorandum of understanding, or to adopt any corporate resolution
or similar undertaking, which restricts materially the conduct of the Company's
business, or in any manner relates to the Company's capital adequacy, the
Company's credit or reserve policies, the Company's management, or the payment
of dividends by the Company.
2.13 Licenses and Permits. To the best of Xxxxxxx'x knowledge,
---- --------------------
Xxxxxxx and the Xxxxxxx subsidiaries have obtained, have paid for and have in
full force and effect all material licenses, franchises, permits, approvals,
certificates, certifications and other authorizations from all applicable
governmental authorities which are necessary for the conduct of the Company's
business as currently conducted and the ownership, use, occupancy and operation
of the Company's assets (the "Licenses and Permits"). Renewal of each of the
Licenses and Permits has been, or will be as of the Closing, timely applied for
to the extent required under all Laws, and to the extent appropriate to protect
renewal rights thereunder. To the best of Xxxxxxx'x knowledge, there is no fact
or event which is likely to prevent the renewal of any of the Licenses and
Permits under existing Law or which, with the passage of time or the giving of
notice or both, is likely to constitute a material violation of the terms of any
of the Licenses and Permits or of any applications or agreements made in
connection therewith. No action or proceeding is pending or, to the best of the
Xxxxxxx'x knowledge, threatened which could result in the revocation,
cancellation, suspension, material modification or limitation of any of the
Licenses and Permits. To the best of Xxxxxxx'x knowledge, Xxxxxxx and the
Xxxxxxx subsidiaries are not delinquent, which would have a Material Adverse
23
Effect on Xxxxxxx, in the payment of any monies for the Licenses and Permits
which have been granted to any of them. The representations made in this Section
2.13 are qualified to the extent that any failure of the same shall not affect
the rights and obligations of the parties hereto unless such failure shall,
individually or in the aggregate, have a Material Adverse Effect on Xxxxxxx.
2.14 Labor Difficulties. Except as set forth in Schedule 2.14,
---- ------------------
which, individually or in the aggregate, shall not have a Material Adverse
Effect on Xxxxxxx and its subsidiaries, (i) Xxxxxxx and the Xxxxxxx subsidiaries
are not parties to a union agreement or collective bargaining agreement and to
the best of Xxxxxxx'x knowledge, no attempt to organize any employees of
Xxxxxxx and the Xxxxxxx subsidiaries has been made, proposed or threatened; (ii)
there is no labor strike, formal labor dispute, formal labor grievance, labor
arbitration proceeding, general slowdown or stoppage, or charge of unfair labor
practice pending before a court, regulatory body or arbitration tribunal, or, to
the best of Xxxxxxx'x knowledge, no event has occurred which would constitute
reasonable grounds for such a strike, formal dispute, formal grievance,
proceeding or charge; (iii) to the best of Xxxxxxx'x knowledge, no union
representation question exists respecting any employees of Xxxxxxx and the
Xxxxxxx Subsidiaries; (iv) to the best of Xxxxxxx'x knowledge, there are no
charges or complaints of discrimination or sexual harassment pending before the
United States Equal Employment Opportunity Commission or any other federal,
state, local or foreign agency or tribunal against Xxxxxxx and the Xxxxxxx
subsidiaries; and (v) to the best of Xxxxxxx'x knowledge, Xxxxxxx and the
Xxxxxxx subsidiaries are in compliance in all material respects with all
federal, state and local labor and employment-related laws. Notwithstanding the
foregoing, no representation or warranty is hereby given as to the effect that
the negotiation, execution and/or consummation of this Agreement would have on
Xxxxxxx'x and its subsidiaries' relationships with its employees and/or agents.
24
Xxxxxxx shall use its reasonable efforts to retain its employees between the
date hereof and the Closing Date.
2.15 Employee Benefit Plans.
---- ----------------------
(1) Attached as Schedule 2.15 to this Agreement is a list of all
stock option, 401(k), and health benefit plans, all other written employee
programs, arrangements, or agreements, all medical, vision, dental, or other
health plans, all life insurance plans, and all other employee benefit plans or
fringe benefit plans, including "employee benefit plans" as that term is defined
in Section 3(3) of the Employee Retirement Income Security Act of 1974, as
amended ("ERISA"), currently adopted, maintained by, sponsored in whole or in
part by, or contributed to by Xxxxxxx or the Xxxxxxx subsidiaries for the
benefit of employees, retirees, dependents, spouses, directors, independent
contractors, or other beneficiaries of Xxxxxxx or any Xxxxxxx subsidiary, and
under which employees, retirees, dependents, spouses, directors, independent
contractors, or other beneficiaries of Xxxxxxx or of any Xxxxxxx subsidiary are
eligible to participate (collectively, the "Xxxxxxx Benefit Plans").
(2) To the best of Xxxxxxx'x knowledge, neither Xxxxxxx nor any of
the Xxxxxxx subsidiaries has any liability for retiree health and life benefits
or any other retirement benefits under any of the Xxxxxxx Benefit Plans. To the
best of Xxxxxxx'x knowledge, no Xxxxxxx Benefit Plan is subject to ERISA.
(3) Except for outstanding stock options, and except for any
obligations arising from the Company's agreements with Xxxxxx Xxxx and with
Xxxxx Xxxxxxxxx, neither the execution and delivery of this Agreement nor the
consummation of the transactions contemplated hereby will (i) result in any
payment (including severance, unemployment compensation or golden parachute)
becoming due to any director or any employee of Xxxxxxx or any of the Xxxxxxx
subsidiaries from
25
Xxxxxxx or any of the Xxxxxxx Subsidiaries under any Xxxxxxx Benefit Plan, (ii)
increase any benefits otherwise payable under any Xxxxxxx Benefit Plan, or (iii)
result in any acceleration of the time of payment or vesting of any such
benefit.
2.16 Material Contracts. Except as disclosed in Schedule 2.16, this
---- ------------------
Agreement, the other Schedules and Exhibits attached hereto, and/or Xxxxxxx'x
public filings with the SEC, neither Xxxxxxx, the Xxxxxxx subsidiaries, nor any
of their respective assets, businesses, or operations, is a party to, or is
bound or affected by, or receives benefits under, (i) any employment, severance,
termination, consulting, or retirement contract providing for aggregate payments
to any person in any calendar year in excess of $75,000, (ii) any contract
relating to the borrowing of money by Xxxxxxx or any of the Xxxxxxx subsidiaries
or the guarantee by Xxxxxxx or any of the Xxxxxxx subsidiaries of any such
obligation, (iii) any contracts which prohibit or restrict Xxxxxxx or any of the
Xxxxxxx subsidiaries from engaging in any business activities in any geographic
area, line of business, or otherwise in competition with any other person, and
(iv) any other contract or amendment thereto that would be required to be filed
as an exhibit to a Form 10-K filed by Xxxxxxx with the SEC, as of the date of
this Agreement. Attached as Schedule 2.16, additionally, is a list of all
material contingent liabilities of Xxxxxxx and its subsidiaries, including
warranties given by Xxxxxxx and/or its subsidiaries with respect to houses
previously sold and delivered by Xxxxxxx and its subsidiaries.
2.17 Litigation. Schedule 2.17 sets forth each instance in which any of
---- ----------
Xxxxxxx and its subsidiaries (i) is subject to any outstanding injunction,
judgment, order, decree, ruling, or charge or (ii) is a party or, to the
knowledge of Xxxxxxx, is threatened to be made a party to any action, suit,
proceeding, hearing, or investigation of, in, or before any court or quasi-
judicial or administrative agency of any federal, state, local, or foreign
jurisdiction or before any arbitrator.
26
2.18 Insurance. Schedule 2.18 sets forth all of the insurance
---- ---------
policies currently in place and maintained by Xxxxxxx and/or Xxxxxxx'x
subsidiaries.
2.19 No Third Party Option. There are no existing agreements, options,
---- ---------------------
commitments or rights with, of or to any person to acquire any of Xxxxxxx'x or
of the Xxxxxxx subsidiaries' assets or any interest therein, except for those
contracts entered into in the ordinary course of business for the sale of
inventory of Xxxxxxx and the Xxxxxxx subsidiaries.
2.20 Disclosure. No statement, representation or warranty by Xxxxxxx or
---- ----------
the Xxxxxxx subsidiaries in this Agreement, including the Schedules hereto,
contains any untrue statement of material fact, or omits to state a material
fact, necessary to make such statements, representations and warranties not
misleading.
2.21 Brokers. Xxxxxxx has no liability or obligation to pay any fees or
---- -------
commission to any broker, finder or agent with respect to the transactions
contemplated by this Agreement for which Century could become liable or
obligated.
2.22 Reports. To the best of the Xxxxxxx'x knowledge, Xxxxxxx has filed
---- -------
all reports required to be filed with the SEC under the Securities Exchange Act
of 1934 (the "1934 Act"), since the date that Xxxxxxx went public through the
date of this Agreement (collectively, the "Xxxxxxx SEC Documents"). To the
best of the Xxxxxxx'x knowledge, none of the Xxxxxxx SEC Documents, as of the
respective filing dates, contained any untrue statement of a material fact or
omitted to state a material fact required to be stated therein or necessary in
order to make the statements therein, in light of the circumstances under which
they were made, not misleading.
3. Representations and Warranties of Buyer.
-- ----------------------------------------
Buyer represents and warrants to Seller and to Xxxxxxx as follows:
27
3.1 Organization. Buyer is a limited partnership duly organized, validly
--- -------------
existing and in good standing under the laws of the State of Florida and has all
requisite power and authority to own, lease and operate its properties and to
carry on its business as it is now being conducted, except where the failure to
be so organized, existing and in good standing or to have such power or
authority would not, individually or in the aggregate, reasonably be expected to
have a Material Adverse Effect on the business or financial condition of Buyer
and its subsidiaries, taken as a whole. For purposes of this Agreement, unless
otherwise provided hereinafter, "Material Adverse Effect" with respect to Buyer,
shall mean any event, change, or occurrence which, individually or together with
any other event, change, or occurrence, has a material adverse impact on (i) the
financial position, business, or results of operations of Buyer and its
affiliates, taken as a whole, or (ii) the ability of Buyer to materially perform
its obligations under this Agreement or to consummate the transactions
contemplated by this Agreement in accordance with applicable law and regulation.
3.2 Authority Relative to this Agreement. Buyer has full power and
--- -------------------------------------
authority to execute and deliver this Agreement and to consummate the
transactions contemplated hereby. The execution and delivery of this Agreement
by Buyer and the consummation by Buyer of the transactions contemplated hereby
have been duly and validly authorized by the Board of Directors of the general
partner of the Buyer, and no other proceedings on the part of Buyer or any of
its affiliates are necessary to authorize this Agreement or to consummate the
transactions contemplated hereby. This Agreement has been duly and validly
executed and delivered by Buyer and constitutes a valid and binding agreement of
Buyer, enforceable against Buyer in accordance with its terms, except to the
extent that enforcement hereof may be limited by (a) bankruptcy, insolvency,
reorganization, moratorium, fraudulent conveyance or other similar laws, now or
hereafter in effect,
28
relating to creditors' rights generally and (b) general principles of equity
(regardless of whether enforceability is considered in a proceeding at law or in
equity).
3.3 Consents and Approvals; No Violations. Except as contemplated by this
--- -------------------------------------
Agreement, neither the execution and delivery of this Agreement by Buyer nor the
consummation by Buyer of the transactions contemplated hereby will (i) conflict
with or result in a breach of the certificate of limited partnership, limited
partnership agreement or other similar document of the Buyer; (ii) conflict with
or result in a breach of the Articles of Incorporation, Bylaws or other similar
document of Buyer's general partner; (iii) require on the part of Buyer any
filing with, or obtaining any permit, authorization, consent or approval of, any
governmental entity; (iv) result in a default (or give rise to any right of
termination, cancellation or acceleration) under any of the terms, conditions or
provisions of any note, mortgage, indenture, other evidence of indebtedness,
guarantee, license, agreement or other contract or instrument to which Buyer or
any of its subsidiaries or other affiliates is a party or by which they or any
of their properties or assets may be bound, or (v) to the knowledge of Buyer,
violates any law, ordinance, rule, regulation, decree or order applicable to
Buyer, any of its subsidiaries or any of their respective properties or assets.
3.4 Sufficient Funds. Buyer has or will have at Closing sufficient funds
--- -----------------
available, in cash or through a promissory note and letter of credit, to
purchase all of the Chai Shares at the Purchase Price set forth herein, and to
perform all of its obligations hereunder. Buyer shall have at the Closing
sufficient cash on hand to satisfy the cash portion of such Purchase Price.
3.5 Business Sophistication. Buyer has the business sophistication
--- -----------------------
and acumen necessary to evaluate the terms and conditions of this Agreement and
the transactions contemplated hereby. Buyer further acknowledges and agrees
that Buyer has conducted its own due diligence investigation of Seller and of
the Company and has completed such due diligence investigation to
29
its own satisfaction; and has been afforded the opportunity to ask all relevant
questions of Seller and of Company's Management, and has received satisfactory
responses to all of such inquiries. Buyer further agrees that Buyer is relying
on no representations or warranties of Seller, the Company or of any other
person with respect to the transactions contemplated hereunder, other than what
is set forth herein. The foregoing is not intended to exempt any party from
fraud. In addition, Buyer hereby represents, warrants and agrees that Buyer is
acquiring the Chai Shares and the Xxxxxxx Shares (collectively, the"Shares"),
for investment purposes only, for its own account, and without the intent toward
the further sale and/or distribution thereof. Buyer further acknowledges and
agrees that the Shares have not been registered under the Securities Act of
1933, as amended (the "Securities Act"), and that said Shares shall be deemed
"restricted" under the Securities Act, and may not be sold transferred or
otherwise disposed of unless the Shares are registered with the SEC or an
applicable exemption from the registration requirements of the Securities Act is
then available in the opinion of counsel satisfactory to the Company.
Accordingly, Buyer further agrees and acknowledges that the certificates
evidencing such Shares will bear an appropriate restrictive legend and a stop
transfer notation will be placed on the books and records of the Company's
transfer agent. Buyer further represents, warrants and covenants that Buyer has
no current intention of liquidating, dissolving or effectuating a going private
transaction with respect to the Company.
4. Representations and Warranties of Chai.
---------------------------------------
Chai hereby represents and warrants to Century as follows:
4.1 Organization. Chai is a limited partnership duly organized, validly
--- ------------
existing and in good standing under the laws of the State of Florida and has all
requisite power and authority to own its properties and to carry on its business
as it is now being conducted.
30
4.2 Authority Relative to this Agreement. Chai has full power and
------------------------------------
authority to execute and deliver this Agreement and to consummate the
transactions contemplated hereby. The execution and delivery of this Agreement
by Chai and the consummation by Chai of the transactions contemplated hereby
have been duly and validly authorized by the Board of Directors of the general
partner of the Chai, and by the limited partners of Chai, and no other corporate
proceedings on the part of Chai's general partner or any of its affiliates are
necessary to authorize this Agreement or to consummate the transactions
contemplated hereby. This Agreement has been duly and validly executed and
delivered by Chai and constitutes a valid and binding agreement of Chai,
enforceable against Chai in accordance with its terms, except to the extent that
enforcement hereof may be limited by (a) bankruptcy, insolvency, reorganization,
moratorium, fraudulent conveyance or other similar laws, now or hereafter in
effect, relating to creditors' rights generally and (b) general principles of
equity (regardless of whether enforceability is considered in a proceeding at
law or in equity).
4.3 Consents and Approvals; No Violations. Except as contemplated by
-------------------------------------
this Agreement, neither the execution and delivery of this Agreement by Chai nor
the consummation by Chai of the transactions contemplated hereby will (i)
conflict with or result in a breach of the certificate of limited partnership,
limited partnership agreement or other similar document of Chai; (ii) conflict
with or result in a breach of the Articles of Incorporation, Bylaws or other
similar document of Chai's general partner; (iii) require on the part of Chai
any filing with, or obtaining any permit, authorization, consent or approval of,
any governmental entity (except for such filings as may be required under
Sections 13 and/or 16 of 1934 Act with respect to the Company); or (iv) result
in a default (or give rise to any right of termination, cancellation or
acceleration) under any of the terms, conditions or provisions of any note,
mortgage, indenture, other evidence of indebtedness, guarantee,
31
license, agreement or other contract or instrument to which Chai is a party or
by which Chai or any of its properties or assets.
4.4 Litigation. Chai (i) is not subject to any outstanding
--- ----------
injunction, judgment, order, decree, ruling, or charge or (ii) is not a party
or, to the best of Chai's knowledge, is not threatened to be made a party to any
action, suit, proceeding, hearing, or investigation of, in, or before any court
or quasi-judicial or administrative agency of any federal, state, local, or
foreign jurisdiction or before any arbitrator.
5. Survival of Representations and Warranties; Indemnification.
-----------------------------------------------------------
(1) Survival of Representation and Warranties. The
-----------------------------------------
representations and warranties contained in this Agreement shall survive the
Closing for a period of two years except as otherwise provided in this Agreement
(or until the expiration of any applicable statute of limitations, if such
period is shorter). Each representation and warranty set forth herein is
qualified by any other representation and warranty hereunder made by such party,
such that if any disclosure is made in accordance with any representation and
warranty and such disclosure would effect another representation and/or warranty
made hereunder by such party, then such other representation and/or warranty
shall be deemed automatically qualified by any such disclosure. The
representations and warranties being made hereunder by Xxxxxxx are only being
made hereunder by such corporate entity and are not being made hereunder by any
person in their individual capacity as an officer, director or affiliate of the
Company.
(2) Indemnification by Buyer. Buyer shall defend, indemnify,
--- ------------------------
and hold harmless Chai and Xxxxxxx and their respective affiliates and their
respective officers, directors, shareholders, parties, representatives, and
employees (individually, a "Xxxxxxx Indemnitee" and collectively, the "Xxxxxxx
Parties' Indemnitees"), from and against any and all claims, losses,
32
deficiencies, liabilities, obligations, damages, penalties, punitive damages,
costs, and expenses (including, without limitation, reasonable legal,
accounting and expert witness fees), whether or not resulting from third party
claims (collectively, "Adverse Consequences"), suffered by Xxxxxxx Parties
Indemnitees, which arise out of or result from: any material inaccuracy or
material misrepresentation or material breach of any of the representations,
warranties, covenants or agreements made by Buyer in this Agreement or in any
document, certificate or affidavit delivered by the Buyer pursuant to the
provisions of this Agreement; and/or any untrue statement or alleged untrue
statement of, or omission or alleged omission to state, a material fact in any
proxy statement filed by Xxxxxxx (the "Proxy Statement") with the SEC to the
extent such statement or omission is made in reliance upon and in conformity
with written information furnished to the Xxxxxxx Parties Indemnitees by Buyer
specifically for use in the Proxy Statement.
(3) Indemnification by the Company. The Company shall defend,
------------------------------
indemnify, and hold harmless Buyer and its affiliates and its respective
officers, directors, shareholders, representatives and employees (individually,
a "Century Indemnitee" and collectively the "Century Indemnitees"), from and
against any and all Adverse Consequences whether or not resulting from third
party claims, suffered by a Century Indemnitee, which arise out of or result
from any inaccuracy or misrepresentation in or breach of any of the
representations, warranties, covenants or agreements made by Xxxxxxx in this
Agreement or in any document, certificate or affidavit delivered by Xxxxxxx
pursuant to the provisions of this Agreement.
(4) Indemnification by Chai. Chai shall defend, indemnify, and
--- -----------------------
hold harmless the Century Indemnitees from and against any and all Adverse
Consequences suffered by the Century Indemnitees, which arise out of or result
from any inaccuracy or misrepresentation in or breach of any of the
representations, warranties, covenants or agreements made by Chai in this
Agreement or
33
in any document, certificate or affidavit delivered by Chai pursuant to the
provisions of this Agreement; and/or any untrue statement or alleged untrue
statement of, or omission or alleged omission to state, a material fact in the
Proxy Statement to the extent such statement or omission is made in reliance
upon and in conformity with written information furnished to Century and/or
Xxxxxxx by Chai specifically for use in the Proxy Statement.
(5) Indemnification Payments. Except as otherwise provided in this
------------------------
Agreement all indemnity payments, whether by the Century, Chai or the Company,
to be made under this Agreement shall be made in immediately available funds.
(6) Indemnification Procedure. If any party entitled to
--- --------------------------
indemnification (the "Indemnified Party") receives a claim from a third party or
asserts a claim for indemnification against another party or the other parties
(the "Indemnifying Party(ies)") under this Agreement (a "Claim"), then the
Indemnified Party shall promptly notify each Indemnifying Party thereof in
writing; provided, however, that no delay on the part of the Indemnified Party
in notifying any Indemnifying Party shall relieve the Indemnifying Party from
any obligation hereunder unless (and then solely to the extent) the Indemnifying
Party thereby is prejudiced. Any Indemnifying Party shall have the right to
defend the Indemnified Party against a Claim with counsel of its choice
reasonably satisfactory to the Indemnified Party, so long as the Indemnifying
Party notifies the Indemnified Party in writing within ten (10) days after the
Indemnifying Party has been given notice of such Claim by the Indemnified Party.
So long as the Indemnifying Party is conducting the defense of the Claim, as set
forth above (A) the Indemnified Party may retain separate co-counsel at its sole
cost and expense and participate in the defense of the Claim, (B) the
Indemnified Party shall not consent to the entry of any judgment or enter into
any settlement with respect to the Claim without the prior written consent of
the Indemnifying Party (not to be withheld unreasonably), and (C) the
34
Indemnifying Party shall not consent to the entry of any judgment or enter into
any settlement with respect to a third party Claim without the prior written
consent of the Indemnified Party (which consent shall not be unreasonably
withheld). Both the Indemnifying Party and the Indemnified Party shall
cooperate fully with one another in connection with the defense, compromise, or
settlement of any such Claim or action, including, without limitation, by making
available to the other all pertinent information and witnesses within its
control.
(7) Remedies Cumulative. The remedies provided for herein shall be
-------------------
cumulative and shall not preclude assertion by any party of any other rights or
the seeking of any other remedies against any other party. Nothing contained in
Section 5 shall be construed in any way to limit, impair or modify any
provisions of this Agreement or to otherwise impose any additional liability or
obligation on either party at any time for any liability or obligation of the
any other party other than such party's obligation to indemnify as provided in
this Agreement.
6. Conduct of Business Pending Consummation of the Closing.
-------------------------------------------------------
6.1 Affirmative Covenants of Xxxxxxx and the Xxxxxxx Subsidiaries.
-------------------------------------------------------------
(1) Unless the prior written consent of Buyer shall have been
obtained, and except as otherwise expressly contemplated herein, each of Xxxxxxx
and the Xxxxxxx subsidiaries shall (i) operate its business only in the ordinary
course of business, (ii) use reasonable efforts to preserve intact its business
organization and assets and maintain its rights and franchises, and (iii) take
no other action which would materially adversely affect the rights of Buyer
pursuant to this Agreement.
6.2 Negative Covenants of Xxxxxxx. Except as specifically permitted by
-----------------------------
this Agreement, from the date of this Agreement until the earlier of the Closing
Date or the termination of this Agreement, the Company and Chai hereby covenant
and agree that they will not do or agree
35
or commit to do, or permit Xxxxxxx or any of their affiliates to do or agree or
commit to do, any of the following without the prior written consent of the
chief executive officer, president, or financial officer of Buyer, and which
consent shall not be unreasonably withheld:
(i) amend the Articles of Incorporation, and/or By-laws of Xxxxxxx or any
Xxxxxxx subsidiary;
(ii) incur any additional debt obligation for borrowed money (other than
indebtedness of Xxxxxxx or the Xxxxxxx subsidiaries to each other), except in
the ordinary course of business for the Development Projects, provided that any
such additional debt obligation shall not exceed $3,000,000 in the aggregate;
(iii) repurchase, redeem, or otherwise acquire or exchange directly or
indirectly, any shares, or any securities convertible into any shares, of the
capital stock of Xxxxxxx or any of the Xxxxxxx subsidiaries (except for the
Debentures), or declare or pay any dividend or make any other distribution in
respect of Xxxxxxx'x capital stock;
(iv) except as contemplated by this Agreement, issue, sell, pledge,
encumber, authorize the issuance of, enter into any contract to issue, sell,
pledge, encumber, or authorize the issuance of, or otherwise permit to become
outstanding, any additional shares of the Company's capital stock, or any stock
appreciation rights, or any option, warrant, conversion, or other right to
acquire any such stock, or any security convertible into any such stock;
(v) adjust, split, combine or reclassify any capital stock of Xxxxxxx or
any of the Xxxxxxx subsidiaries or issue or authorize the issuance of any other
securities in respect of or in substitution for shares of Xxxxxxx Common Stock
(except the Debentures), or sell, lease, mortgage or otherwise dispose of or
otherwise encumber any shares of capital stock of any Xxxxxxx subsidiary (unless
any
36
such shares of stock are sold or otherwise transferred to another Xxxxxxx
Subsidiary) or any asset other than in the ordinary course of business;
(vi) purchase any securities or make any material investment, either by
purchase of stock or securities, contributions to capital, asset transfers, or
purchase of any assets, in any third party, or otherwise acquire direct or
indirect control over any third party, or acquire or lease new or additional
assets (other than in the ordinary course of business);
(vii) grant any increase in compensation or benefits to the employees or
officers of Xxxxxxx or the Xxxxxxx subsidiaries generally; pay any severance or
termination compensation other than pursuant to written policies or written
contracts in effect on the date of this Agreement and disclosed; enter into or
amend any severance agreements with employees, officers or directors of Xxxxxxx
or the Xxxxxxx subsidiaries; grant any increase in fees or other increases in
compensation or other benefits to directors of Xxxxxxx or the Xxxxxxx
subsidiaries; or voluntarily accelerate the vesting of any stock options or
other stock-based compensation or employee benefits.
(viii) enter into or amend any employment contract between Xxxxxxx or the
Xxxxxxx subsidiaries and any employees, officers or directors of Xxxxxxx or the
Xxxxxxx subsidiaries;
(ix) adopt any new employee benefit plan of Xxxxxxx or the Xxxxxxx
subsidiaries or terminate or withdraw from, or make any change in or to, any
existing employee benefit plans of Xxxxxxx or the Xxxxxxx subsidiaries other
than any such change that is required by law or that, in the judgment of
counsel, is necessary or advisable to maintain the tax qualified status of any
such plan, or make any distributions from such employee benefit plans, except as
required by law, the terms of such plans or consistent with past practices;
37
(x) make any change in any tax or accounting methods or systems of
internal accounting controls, except as may be appropriate to conform to changes
in tax laws or regulatory accounting requirements or GAAP; or
(xi) enter into, modify, amend, or terminate any contract or waive,
release, compromise, or assign any rights or claims, except in the ordinary
course of business.
6.3 Covenants of Century. From the date of this Agreement until the
--------------------
earlier of the Closing Date or the termination of this Agreement, Century
covenants and agrees that it shall (i) take no action which would materially
adversely affect the ability of Xxxxxxx and/or Chai from performing its
covenants and agreements under this Agreement; and shall (ii) take no action or
cause any party to take any action which would materially interfere with the
Company's business as currently being conducted.
6.4 Adverse Changes in Condition. Each party hereto hereby agrees to give
----------------------------
written notice promptly to the other party hereto upon becoming aware of the
occurrence or impending occurrence of any event or circumstance relating to it
or any of its affiliates which (i) is reasonably likely to have, individually or
in the aggregate, a Material Adverse Effect on such party, or (ii) would cause
or constitute a material breach of any of its representations, warranties, or
covenants contained herein, and to use its reasonable efforts to prevent or
promptly remedy the same. In addition, any party hereunder who knows of any
breach of any representation, warranty and/or covenant by the other party or
parties hereto shall promptly notify the other parties hereto of any such
breach.
6.5 Reports. Xxxxxxx shall use its best efforts to file all reports
-------
required to be filed by it with the SEC between the date of this Agreement and
the Closing Date and, to the extent permitted by law, shall deliver to the other
parties hereto copies of all such reports promptly after the same are filed.
38
6.6 Agreement as to Efforts to Consummate. Subject to the terms and
-------------------------------------
conditions of this Agreement, each party hereto hereby agrees to use, and to
cause its affiliates to use, its reasonable efforts to take, or cause to be
taken, all actions, and to do, or cause to be done, all things necessary,
proper, or advisable under applicable Laws to consummate and make effective, as
soon as practicable after the date of this Agreement, the transactions
contemplated by this Agreement. Each party shall use, and shall cause each of
its affiliates to use, its reasonable efforts to obtain all consents necessary
or desirable for the consummation of the transactions contemplated by this
Agreement.
6.7 Investigation and Confidentiality.
---------------------------------
(1) Xxxxxxx and Chai agree to cooperate with Buyer and to provide to
Buyer and its representatives with such books, records, documents, information
and other material reasonably requested by Buyer or its representatives,
provided, however, that any and all of such requests must be directed directly
to Xxxxx Xxxxxxx or Xxxxxxx Xxxxxxxx. Buyer hereby agrees that Buyer shall not
contact any employees, consultants, suppliers or customers of Xxxxxxx without
the prior written approval of Xxxxx Xxxxxxx.
(2) Confidentiality. Buyer shall hold in strict confidence, and shall
---------------
cause its directors, officers, employees, representatives and agents to hold in
strict confidence, any information which they, or any of them, receive in
connection with the transactions contemplated by this Agreement, in accordance
with and subject to the terms of the confidentiality agreement, dated as of
October 14, 1998 between Buyer and the Company (the "Confidentiality
Agreement").
6.8 Press Releases. Prior to the Closing Date, Xxxxxxx, Xxxx
--------------
and Buyer shall consult with each other as to the form and substance of any
press release or other public disclosure material related to this Agreement or
any other transaction contemplated hereby, and each party agrees that
39
neither party shall issue any press release relating to the signing of this
Agreement or the transactions contemplated hereby prior to receiving the consent
of the other parties hereto; provided, that nothing herein shall be deemed to
prohibit any party from making any disclosure which its counsel deems necessary
or advisable in order to satisfy such party's disclosure obligations imposed by
applicable law and/or regulation.
6.9 Certain Actions. Except with respect to this Agreement and the
---------------
transactions contemplated hereby, after the date of this Agreement and prior to
any termination hereof, neither Xxxxxxx nor Chai nor any of its representatives
shall directly or indirectly solicit any proposal from any third party to
purchase a controlling equity interest in Xxxxxxx.
6.10 Director's and Officers Insurance'. For six (6) years after the
----------------------------------
Closing, Buyer shall cause the Company to maintain in effect tail insurance
coverage providing directors' and officers' liability insurance covering those
persons who are currently covered by the Company's directors' and officers'
liability insurance policy to the extent that it provides coverage for events
occurring on or prior to the Closing (a copy of which has been heretofore
delivered to Buyer), so long as the aggregate premium therefor would not be in
excess of $35,000, after calculating the total amount of such premium, currently
estimated to be approximately $98,000, less any and all refunds, rebates,
discount, credits and/or offsets from such premiums as a result of the
termination of the Company's current directors' and officers' liability
insurance policy and the transformation thereof to such tail insurance,
currently estimated to be approximately $70,000. If such aggregate premiums for
such tail insurance would at any time exceed $35,000, as described above and
after giving effect to such refunds, rebates, discounts, credits and/or
offsets, then the Company shall, at the election of Xxxxx Xxxxxxx (or, if he is
unable to act, Xxxxxxx Xxxxxxxx), either (i) cause to be maintained policies of
tail insurance which provide the maximum coverage available at an aggregate
premium equal to
40
$35,000, as described above; or (ii) accept payment from Xxxxx Xxxxxxx (or such
other persons as may be designated by him or Xxxxxxx Xxxxxxxx) of the difference
between the aggregate premium and said $35,000 threshold, and apply such amount,
together with the maximum premium required to be paid by the Company hereunder,
to maintain such policies in effect. In addition, the Company hereby agrees to
maintain, and Century hereby agrees to cause the Company to so maintain,
directors and officers insurance for those members of the Board of Directors of
the Company who continue to serve as members of the Company's Board of Directors
subsequent to the Closing Date, in such amounts as at least equal to the
coverage currently maintained by the Company, and the afore-described six year
period of time shall be extended for such persons such that such time period
shall commence as of the date such persons cease serving on the Company's Board
of Directors.
6.11 Consulting Agreement. Xxxxx Xxxxxxx shall enter into a five
---- --------------------
(5) month consulting agreement with Xxxxxxx commencing as of the Closing Date
based upon a monthly compensation amount of Twenty Nine Thousand One Hundred
Sixty Seven Dollars ($29,167) and containing such other provisions as set forth
on Exhibit F, attached hereto and incorporated herein by reference.
6.12 Change of Company Name. Buyer shall cause Xxxxxxx to change
---- ----------------------
its name by amending the charter documents of Xxxxxxx within twelve (12) months
after the Closing Date to a name which does not include the name "Xxxxxxx" in
any form. Prior to such time and within five (5) days of the Closing Date,
Xxxxxxx shall commence doing business and shall do business solely under a
fictitious name that does not include the name "Xxxxxxx" in any form, and shall
file such documents as are required to be filed by the State of Florida in
connection with fictitious name filings within such five (5) day time period.
6.13 Restructuring of Transaction at Request for Century. Prior to the
---- ---------------------------------------------------
Closing, if Century is advised by its counsel, accountants or other
representatives, that it would be in its interests
41
for business, tax or legal reasons that the transactions contemplated hereunder
be restructured as a merger or other business combination, the parties hereto
shall use their reasonable efforts to restructure the transactions contemplated
by this Agreement as long as the Closing is not delayed and provided further
that the rights and obligations of the parties hereto are not materially
altered, and provided further that Century shall be solely responsible for all
costs incurred in connection with any such restructuring.
7. Conditions to Closing.
----------------------
7.1 Conditions to the Obligations of Chai and Xxxxxxx. The obligations
-------------------------------------------------
of Chai and Xxxxxxx to consummate the transactions contemplated by this
Agreement are subject to the fulfillment at or prior to the Closing of each of
the following conditions (any or all of which may be waived, to the extent
permitted by applicable law, in whole or in part by Chai and Xxxxxxx):
(1) Representations and Warranties. The representations and
--------------------------------
warranties made by Century in this Agreement shall be true, correct and complete
in all material respects, as of the date when made and at and as of the Closing
Date, as though such representations and warranties were made at and as of the
Closing Date.
(2) Performance. Century shall have performed and complied with,
-----------
in all material respects, all agreements and covenants required by this
Agreement to be so performed or complied with by Century at or prior to the
Closing.
(3) Compliance Certificate. Century shall have delivered to Chai
----------------------
and Xxxxxxx a certificate, dated as of the Closing Date, executed by a duly
authorized officer of Century's general partner, certifying the fulfillment of
the conditions set forth in Subsections (a) and (b) above.
(4) No Injunction. On the Closing Date, there shall not be in
-------------
effect any judgment, order, injunction or decree issued by a court of competent
jurisdiction restraining or
42
prohibiting consummation of the transactions contemplated by this Agreement or
any litigation pending seeking to restrain or prohibit the consummation of the
transactions contemplated by this Agreement.
(5) Banks' Consent. On or prior to the Closing Date, Xxxxxxx
--------------
shall have received the consent of its primary lenders to the transactions
contemplated herein, and such consent cannot be waived without the prior
written approval of Century, and provided further that such banks' consent is
subject only to such conditions as are reasonably acceptable to the Company,
Chai and to Century.
7.2 Conditions to the Obligations of Century. The obligations of
----------------------------------------
Century to consummate the transactions contemplated by this Agreement are
subject to the fulfillment at or prior to the Closing of each of the following
conditions (any or all of which may be waived, to the extent permitted by
applicable law, in whole or in part, by Century):
(1) Representations and Warranties. The representations and
------------------------------
warranties made by Chai and Xxxxxxx in this Agreement shall be true, correct and
complete in all material respects, as of the date when made and at and as of the
Closing Date, as though such representations and warranties were made at and as
of the Closing Date.
(2) Performance. Chai and Xxxxxxx shall respectively have
-----------
performed and complied with, in all material respects, all agreements and
covenants required by this Agreement to be so performed or complied with by Chai
and Xxxxxxx, respectively, at or prior to the Closing.
(3) Compliance Certificate. Chai and Xxxxxxx shall have delivered
----------------------
to Century a Certificate, dated as of the Closing Date, executed by a duly
authorized officer of Chai's general partner, and a duly authorized officer of
Xxxxxxx certifying the fulfillment of the conditions set forth in Subsections
(a) and (b) above.
43
(4) No Injunction. On the Closing Date, there shall not be in
-------------
effect action seeking damages, injunction, any judgment, order, injunction or
decree issued by a court of competent jurisdiction restraining or prohibiting
consummation of the transactions contemplated by this Agreement or any
litigation pending seeking to restrain or prohibit the consummation of the
transactions contemplated by this Agreement.
(5) Debenture Conversion. Chai shall convert the Debentures into
--------------------
shares of Class A Common Stock of Xxxxxxx.
(6) Banks' Consent. On or prior to the Closing Date, Xxxxxxx
--------------
shall have received the consent of its primary lenders to the transactions
contemplated herein, and such consent cannot be waived without the prior written
approval of Xxxxxxx and Chai, and provided further that such banks' consent is
subject only to such conditions as are reasonably acceptable to the Company,
Chai and to Century.
8. Termination, Amendment and Waiver.
---------------------------------
8.1 Termination. This Agreement may be terminated and the transactions
-----------
contemplated hereby may be abandoned, as follows:
(1) at any time, by mutual written agreement of Chai, Weitzer, and
Buyer; or
(2) in the event of a material breach or breaches of the Agreement's
material covenants, the non-breaching party may terminate this Agreement by
delivery of a written notice to the other party advising it of such termination;
or
(3) in the case of a material inaccuracy of any material
representation or warranty of the other party which cannot be or has not been
cured within thirty (30) days (or such shorter period of time if the Closing is
to occur prior to the expiration of such thirty (30) day period) after notice
thereof to the party making such representation or warranty; or
44
(4) in the event any necessary consent from any third party or
any applicable governmental agency or authority, shall have been withdrawn or
not given as of the Closing Date; or
(5) the Closing shall have not occurred by August 2, 1999, or
shall have not occurred by any mutually agreed upon Closing Date hereunder.
8.2 Procedure and Effect of Termination. In the event of the
-----------------------------------
termination of this Agreement and the abandonment of the transactions
contemplated hereby pursuant to Section 8.1 hereof, this Agreement shall
terminate and be of no further force or effect; and, upon the giving of such
notice, the transactions contemplated hereby shall be abandoned, without further
action by Chai, Weitzer, or Century, and no party to this Agreement shall have
any further liability or obligation hereunder (except as otherwise set forth in
this Agreement). Upon the termination of this Agreement pursuant to Section 8.1
hereof:
(1) Century shall promptly return all non-public documents and
other materials (and all copies thereof) obtained from Chai or Xxxxxxx relating
to the transactions contemplated hereby, whether so obtained before or after the
execution hereof, to the party furnishing the same, and all confidential
information received by Century with respect to the Xxxxxxx shall be treated in
accordance with confidentiality agreement referred to herein;
(2) At the option of Chai and/or Xxxxxxx, any and all filings,
applications and other submissions made pursuant hereto shall, to the extent
practicable, be withdrawn from the governmental entity or other person to which
made;
(3) The confidentiality agreement described above shall survive
any termination of this Agreement; and
45
(4) The Xxxxxxx Shares shall be released from escrow and
delivered to Xxxxxxx, and the Century Promissory Note shall be returned to
Century; provided, however, that the par share cash consideration shall be
released from escrow and deemed part of the Deposit, and shall be transferred
with the Deposit in accordance with Section 8.3 hereto.
8.3 Liability. In the event of termination as set forth above, this
---------
Agreement shall become null and void, and the liability of the parties hereto to
each other shall be determined as set forth below. In the event that Century
shall be the defaulting or breaching party hereunder and said Agreement is
terminated, in accordance with Section 8.2 above, as a result thereof, then
Xxxxxxx shall be permitted to retain the Deposit (plus interest earned thereon)
as the exclusive remedy hereunder. The parties hereto hereby agree and
acknowledge that the retention of said Deposit does not constitute a penalty,
but represents a fair and reasonable estimate of the Company's damages as a
consequence of the Agreement being terminated. In the event that Xxxxxxx and/or
Chai shall be the defaulting or breaching party hereunder and said Agreement is
terminated, in accordance with Section 8.2 above, as a result thereof, then the
Deposit (plus interest earned thereon) shall be returned to Century. In
addition, in the event of said termination as a result of Xxxxxxx and/or Chai
being the breaching party of a representation or warranty hereunder, and Xxxxxxx
and/or Chai intentionally breached such representation or warranty, or in the
event Xxxxxxx and/or Chai intentionally determines not to proceed hereunder
toward Closing (provided that such decision is not based upon any breach or
default of Century hereunder) then Xxxxxxx shall pay Century the aggregate sum
of $500,000 as Century's exclusive remedy against Xxxxxxx and Chai hereunder (in
addition to the return of the Deposit as described above). In the event the
aforesaid $500,000 payment to Century by Xxxxxxx is solely the result of an
intentional breach by Chai or an intentional
46
determination not to proceed to Closing being made solely by Chai, then Chai
shall reimburse Xxxxxxx the $500,000 that Xxxxxxx is obligated to pay Century
hereunder. The parties hereto hereby agree and acknowledge that the payment of
said $500,000 does not constitute a penalty, but represents a fair and
reasonable estimate of Century's damages as a consequence of the Agreement being
terminated. In addition, in the event that this Agreement is terminated solely
as a result of the Company effectuating a transaction with a third party within
six months subsequent to the date hereof, then the parties hereto hereby agree
that in lieu of Xxxxxxx paying Century liquidated damages of $500,000, as
aforesaid, that Century shall be entitled to the return of its Deposit and
liquidated damages in the amount of $1,000,000, as Century's exclusive remedy
for the transaction not being consummated as contemplated by the terms of this
Agreement. In the event the Closing is not effectuated and this Agreement is
terminated in accordance with Section 8.2 hereto, and said termination is not
the result of a breach or default by any party hereto, then the Deposit and
earned interest thereon, shall be released to Century. The parties hereto
further agree that the failure or inability to obtain the consent of the
Company's banks, as required hereunder, shall not be deemed a default or breach
by any party hereto.
8.4 Costs. If any legal action or other proceeding is brought for the
-----
enforcement of this Agreement or because of an alleged dispute, breach, default,
or misrepresentation in connection with any of the provisions of this Agreement,
the successful or prevailing party or parties shall be entitled to recover
reasonable attorney's fees and all other costs incurred in such action or
proceeding, in addition to any other relief to which it or they may be entitled,
through and including all appeals.
9. Miscellaneous.
--------------
9.1 Notices. All notices, requests, demands, waivers and other
-------
communications required or permitted to be given under this Agreement shall be
in writing and shall be deemed to have been
47
duly given if delivered personally, by mail (certified or registered mail,
return receipt requested) or by facsimile transmission (receipt of which is
confirmed):
(a) If to Century, to:
000 XX 00xx Xxxxxx
Xxxxx. Xxxxxxx 00000
Attention: Xxxxxx Xxxx
Fax: 000-000-0000
with a copy to:
Xxxxx, Xxxxxxxxx & Xxxxx P.A.
0000 Xxxx Xxxxxx Xxxxx, Xxxxx 000
Xxxxx, Xxxxxxx 00000
Attention: Xxxxx X. Xxxxx, Esq.
Fax 000-000-0000
(b) If to Chai, to:
Chai Capital, Ltd.
00000 Xxxxxxxx Xxx
Xxxxx 000
Xxxxx Xxxxx, XX 00000
Attention: Xxxxxxx Xxxxxxxx
Fax: 000-000-0000
with a copy to:
Akerman, Senterfitt & Xxxxxx, P.A.
SunTrust International Center
Xxx Xxxxxxxxx Xxxxx Xxxxxx, 00xx Xxxxx
Xxxxx, Xxxxxxx 00000-0000
Attention: Xxxx X. Xxxxxxx, Esquire
Fax: 000-000-0000
(c) If to Xxxxxxx, to:
Xxxxxxx Homebuilders Incorporated
00000 Xxxxxxxx Xxx
Xxxxx 000
Xxxxx Xxxxx, XX 00000
Attention: Xxxxx Xxxxxxx
Fax: 000-000-0000
48
with a copy to:
Akerman, Senterfitt & Xxxxxx, P.A.
SunTrust International Center
Xxx Xxxxxxxxx Xxxxx Xxxxxx, 00xx Xxxxx
Xxxxx, Xxxxxxx 00000-0000
Attention: Xxxx X. Xxxxxxx, Esquire
Fax: 000-000-0000
or to such other person or address as a party shall specify by notice in
writing. All such notices, requests, demands, waiver and other communications
shall be deemed to have been given on the date on which so hand-delivered, on
the third business day following the date on which so mailed and on the date on
which sent by facsimile transmission and confirmed, except for a notice of
change of person or address, which shall be effective only upon receipt thereof.
9.2 Entire Agreement. This Agreement and the Exhibits and Schedules
----------------
attached hereto and the Confidentiality Agreement contains the entire
understanding of the parties hereto with respect to its subject matter. This
Agreement supersedes all prior agreements and understandings, oral and written,
with respect to its subject matter.
9.3 Amendment, Modification and Waiver. This Agreement may be amended,
----------------------------------
modified or supplemented at any time, but only by written agreement of the
parties hereto. Any failure of Chai, Century, or Xxxxxxx to comply with any term
or provision of this Agreement may be waived, to the extent permitted by
applicable law, by the other party(s) at any time by an instrument in writing
signed by or on behalf of such other party, but such waiver or failure to insist
upon strict compliance with such term or provision shall not operate as a waiver
of, or estoppel with respect to, any subsequent or other failure to comply, or
any other term or provision.
9.4 Severability. Should any provision of this Agreement, or any
------------
clause thereof, for any reason be determined to be invalid or unenforceable,
such determination shall not affect the validity
49
or enforceability of any other provision of this Agreement, or any clause
thereof, which other provisions and clauses shall remain in full force and
effect, and the application of such invalid or unenforceable provision, or such
clause thereof, to persons or circumstances other than those as to which it is
held invalid or unenforceable shall be valid and be enforced to the fullest
extent permitted by applicable law.
9.5 Binding Effect; Assignment. This Agreement and all of the provisions
--------------------------
hereof shall be binding upon and inure to the benefit of the parties hereto and
their respective successors and permitted assigns, provide that neither this
Agreement nor any of the rights, interests or obligations hereunder may be
assigned, directly or indirectly, by any party without the prior written
consent of the other party(s) hereto.
9.6 Third-Party Beneficiaries-. This Agreement is not intended and shall
--------------------------
not be deemed to confer upon or give any person, except the parties hereto and
their respective successors and permitted assigns, any remedy, claim, liability,
reimbursement, cause of action or other right under or by reason of this
Agreement.
9.7 Counterparts. This Agreement may be executed simultaneously in
------------
counterparts, each of which shall be deemed an original, but all of which
together shall constitute one and the same instrument.
9.8 Forum; Attorney's Fees'. Any suit, action or proceeding brought by
-----------------------
Chai, Xxxxxxx or Century, or any of their respective affiliates, arising out of
or based upon this Agreement shall be instituted in Miami-Dade County, Florida.
In the event of any such litigation, the prevailing party shall be entitled to
recover from the other party hereto all costs and expenses, including reasonable
attorney's fees, so incurred in connection with such litigation.
50
9.9 Interpretation. The article and section headings contained in
--- --------------
this Agreement are solely for the purpose of reference, are not part of the
agreement of the parties and shall not in any way affect the meaning or
interpretation of this Agreement. As used in this Agreement, the term "person"
means and includes an individual, a partnership, a joint venture, a corporation,
a trust, an unincorporated organization and a government or any department or
agency thereof. As used in this Agreement, the terms "affiliate" and "associate"
have the respective meanings set forth in Rule 12b-2 of the General Rules and
Regulations promulgated under the 1934 Act. When used in the Agreement, the word
"including" shall be deemed on each occasion to be followed by the words
"without limitation." No party to this Agreement shall be considered the
draftsman of this Agreement and the schedules and exhibits hereto.
9.10 Governing Law. This Agreement shall be governed by, and construed
---- -------------
in accordance with, the laws of the State of Florida, without reference to
principles of conflicts of law.
9.11 Piggy-Back Registration Rights. The parties hereto hereby agree
---- ------------------------------
and acknowledge that Chai and its designees shall have piggyback registration
rights for a period of two (2) years from the Closing Date with respect to all
shares of capital stock of Xxxxxxx owned by Chai and/or its designees as of the
date hereof, with respect to any registration statement filed by Xxxxxxx during
such time period (exclusive of a registration statement on Form S-8 or other
form that such shares cannot be included under); provided, however, that if any
such registration statement relates to an underwritten offering and such
managing underwriter of such offering advises Xxxxxxx or Century that it cannot
complete the public offering and sell all of the shares of the Company's Common
Stock on behalf of Chai and/or its designees, Xxxxxxx or Century may decline to
register such part or all of such shares as the managing underwriter advises
cannot be so sold.
51
9.12 Costs and Expenses. The parties hereto hereby acknowledge and
---- ------------------
agree that subsequent to the date hereof, the Company, with the assistance of
Century, may prepare and/or file an information statement and/or proxy statement
as to matters that the parties mutually agree. The parties hereto further agree
that the mailing of said information statement and/or proxy statement shall not
be deemed a condition precedent to the Closing. The parties hereto further
agree and acknowledge that, notwithstanding anything contained herein to the
contrary, in the event the consummation of the transactions contemplated
hereunder are not consummated as a result of any breach of this Agreement by
Century or a result of Century's failure to perform hereunder as required, then
Century shall be solely liable for all expenses related to such proxy and/or
information statement up until the date that this Agreement is so terminated.
In addition, the parties hereto hereby further agree that in the event the
Company is required to pay Xxxxxx Xxxx and/or Xxxxx Xxxxxxxxx any xxxxxxxxx
payments under the terms of their existing agreements with the Company up to an
aggregate $150,000, then Chai shall be responsible for all of such expenses.
IN WITNESS WHEREOF, the parties hereto have executed this Stock
Purchase Agreement as of the day and year first above written.
CHAI:
CHAI CAPITAL, LTD., a Florida limited
partnership
By: CHAI CAPITAL CORP., a Florida
corporation, as general partner
By: /S/ Xxxxxxx Xxxxxxxx
--------------------------------
Xxxxxxx Xxxxxxxx, President
BUYER:
52
CENTURY PARTNERS GROUP, LTD.,
a Florida limited partnership
By: CENTURY ENTERPRISES GROUP,
INC. a Florida corporation,
as general partner
By: /S/ Xxxxxx Xxxx
--------------------------------
Xxxxxx Xxxx, President
XXXXXXX:
XXXXXXX HOMEBUILDERS, INC., a Florida
corporation
By: /S/ Xxxxx Xxxxxxx
--------------------------------
Xxxxx Xxxxxxx, President
53
