Asset Purchase Agreement
THIS ASSET PURCHASE AGREEMENT (the "Agreement") is made and entered into by and
among AmeriNet Xxxxx.xxx, Inc., a publicly held Delaware corporation with a
class of securities registered under Section 12(g) of the Securities Exchange
Act of 1934, as amended ("AmeriNet" and the "Exchange Act," respectively);
Xxxxxxx Communications, Inc., a Florida corporation and wholly owned subsidiary
of AmeriNet ("Xxxxxxx"); and, AmeriNet Communications, Inc., a Florida
corporation and wholly owned subsidiary of AmeriNet ("AmeriCom"), AmeriNet,
Xxxxxxx and AmeriCom being sometimes hereinafter collectively referred to as the
"Parties" or generically as a "Party").
Preamble:
WHEREAS, in light of the resignation of Xxxxxx X. Xxxxxxxxxx and his
spouse, Xxxxx X. Xxxxxxxxxx ("Mr. and Xxx. Xxxxxxxxxx") as officers and
directors of Xxxxxxx, in violation of their obligations under their employment
agreements with Xxxxxxx and the reorganization agreement between them and
AmeriNet, AmeriNet believes that it would be imprudent to continue to loan
operating and other funds required by Xxxxxxx; and
WHEREAS, without continuing capital infusions Xxxxxxx will not be able to
continue its operations, will be unable to make payments required to maintain
ownership of its current assets and may be subjected to material litigation due
to its inability to meet contractual obligations; and
WHEREAS, AmeriNet has caused the organization of AmeriCom to engage in
business activities similar to those heretofore engaged in by Xxxxxxx and is
willing to provide AmeriCom with limited operating loans in order to permit it
to acquire Lorilei's assets and certain of its existing operations, in
consideration for assumption of specified liabilities of Xxxxxxx associated with
such assets and operations; and
WHEREAS, the boards of directors of AmeriNet, Xxxxxxx and AmeriCom have all
recommended that Xxxxxxx sell all of its assets and specified operations to
AmeriCom in order to limit its exposure to litigation that would otherwise be
expected to occur and AmeriNet, as the sole stockholder of Xxxxxxx and AmeriCom,
has approved such transaction:
NOW, THEREFORE, in consideration of the covenants, promises and
representations set forth herein, and for other good and valuable consideration,
the Parties, intending to be legally bound, hereby agree as follows:
Witnesseth:
ARTICLE ONE
DEFINITIONS & RULES OF CONSTRUCTION
1.1 Definitions
As used in this Agreement, the following words, terms and phrases shall
have the meanings ascribed to them below:
(A) "Agreement" shall mean this asset purchase agreement.
(B) "Assets" shall mean all of the right, title and interest that
Xxxxxxx possesses and has the right to transfer in and to all of the
following described properties, assets and rights used or useful in
connection with the Business as the same shall exist on the Closing
Date:
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(1) all of the right, title and interest of Xxxxxxx in and to
all real estate, furniture, fixtures and equipment, whether
record, beneficial or inchoate;
(2) the Inventory;
(3) all intangible assets and accounts receivable used in or
relating to the Business, wheresoever situated and whether
or not specifically referred to herein or in any instrument
of conveyance delivered pursuant to this Agreement, and
whether or not any of such assets have any value for
accounting purposes or are carried or reflected on or
referred to in any of the books or financial statements of
Xxxxxxx;
(4) all of Lorilei's rights and interests in, to and under the
Dependent Service Agreements, Material Contracts and
Purchase Orders;
(5) the Books and Records;
(6) all of Lorilei's telephone numbers, web pages and e-mail
addresses;
(7) all prototypes, design models and samples which specifically
relate to the products or services of the Business; and
(8) all goodwill associated with the Business.
(C) "Assumed Liabilities" shall mean the specific obligations of
Xxxxxxx, as and to the extent disclosed in exhibit 1.1(C) annexed
hereto and made a part hereof.
(D) "Books and Records" shall mean all books, records, bank
statements, budgets, financial statements, correspondence, computer
programs, software developments, trade secrets, customer lists,
supplier lists, site plans, surveys, plans and specifications,
marketing materials, floor plans, tax assessment records, billing and
collection records, engineering plans and specifications, as-built
drawings, development plans and all other intangible personal property
rights of Xxxxxxx.
(E) "Business" shall mean all of Lorilei's business, investment and
operations, other than those specifically excluded in exhibit 1.1(E)
annexed hereto and made a part hereof.
(F) "Close" or "Closing" shall mean the consummation of the
transactions contemplated by this Agreement.
(G) "Closing Date" shall mean the date established for such purpose
in the manner set forth in Section 2(D).
(H) "Code" shall mean the Internal Revenue Code of 1986, as amended.
(I) "Contracts" shall mean all contracts, agreements, understandings,
indentures, notes, bonds, loans, instruments, leases, subleases,
mortgages, franchises, licenses, commitments or binding arrangements,
express or implied, oral or written, whether or not enforceable.
(J) "Damages" as used herein, shall include any claims, actions,
demands, losses, costs, expenses, liabilities (joint or several),
penalties and damages, including counsel fees and expenses incurred in
investigating or in attempting to avoid the same or oppose the
imposition thereof (all of which shall be net of the proceeds of
insurance, if any).
(K) "Disputed Item(s)" shall mean any disputes that are not resolved
by reference to specific provisions of this Agreement, without
recourse to this Agreement's dispute resolution procedures.
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(L) "Dependent Service Agreements" shall mean the Contracts,
alliances or joint ventures entered into by Xxxxxxx with third parties
for the generation of business for Xxxxxxx or the provision of
services, supplies, equipment, media placement, personnel or access to
facilities, equipment or time, for the benefit or use of Lorilei's
clients or customers.
(M) "Employee Benefit Plan" shall mean any:
(1) Non-qualified deferred compensation or retirement plan or
arrangement which is an Employee Pension Benefit Plan;
(2) Qualified defined contribution retirement plan or
arrangement which is an Employee Pension Benefit Plan;
(3) Qualified defined benefit retirement plan or arrangement
which is an Employee Pension Benefit Plan including any
Multi-employer Plan as defined in ERISA Section 3(37)); or
(4) Employee Welfare Benefit Plan.
(N) "Employee Pension Benefit Plan" shall have the meaning set forth
in ERISA Section 3(2).
(O "Employee Welfare Benefit Plan" shall have the meaning set forth
in ERISA Section 3(1).
(P) (1)"Encumbrance" shall mean any title defect, mortgage,
assignment, pledge, hypothecation, security interest, title
or retention agreement, levy, execution, seizure,
attachment, garnishment, deemed trust, lien, easement,
option, right or claim of others, or charge or encumbrance
of any kind whatsoever.
(2)"Permitted Encumbrance" shall mean those specific
Encumbrances detailed in exhibit 1.1(P)(2) annexed hereto
and made a part hereof, but only to the extent, including
duration, amounts and nature specified therein.
(Q) "Excluded Liabilities" shall mean all of Lorilei's liabilities
other than the Assumed Liabilities.
(R) "ERISA" shall mean the Employee Retirement Income Security Act of
1974, as amended.
(S) "Indemnities" shall mean AmeriNet, AmeriCom and their members,
officers, directors, managers, employees and agents.
(T) "Inventory"shall mean such of Lorilei's products, including raw
materials, work in progress, finalized products, subassemblies and
spare parts used to produce, generate, develop or manufacture products
of the Business, services provided through the Business or assemble
network systems.
(U) "Knowledge" shall mean actual knowledge after reasonable
investigation.
(V) "Material" shall mean when used with reference to Damages, losses
and expenses, those Damages, losses and expenses which would, either
alone or together with all other matters qualified by such term, have
led a prudent person to re-evaluate the desirability of engaging in
the course of conduct, investment or decision involved.
(W) "Material Contracts" shall mean those Contracts entered into by
Xxxxxxx and listed on exhibit 1.1(W) annexed hereto and made a part
hereof.
(X) "Permits and Licenses" shall mean all government permits,
licenses, authorizations, certificates of occupancy and approvals
which are possessed by Xxxxxxx and used in the operation of the
Business.
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(Y) "Purchase Orders" shall mean all firm orders from customers for
the purchase of goods or services from Xxxxxxx which relate to the
Business, some of which are listed on 1.1(Y) annexed hereto and made a
part hereof.
(Z) "Real Property" shall mean all real property owned by Xxxxxxx,
including, without limitation, the improved real property more
particularly described in exhibit 1.1(Z) annexed hereto and made a
part hereof.
(AA) "Purchase Price" shall have the meaning set forth in Section
2.1(C).
(AB) "Purchase Price Adjustment" shall have the meaning set forth in
Section 3.4 below.
(AC) "Tax" shall mean any federal, state, local or foreign income,
gross receipt, license, payroll, employment, excise, severance, stamp,
occupation, premium, windfall profits, environmental (including any
tax under Code Section 59A), custom duties, capital stock, franchise,
profits, withholding, social security (or similar), unemployment,
disability, real property, personal property, sales, use, transfer,
registration, value added, alternative or add-on minimum, estimated,
or other tax of any kind whatsoever, including any interest, penalty,
or addition thereto, whether disputed or not.
(AD) "Tax Return" shall mean any return, declaration, report, claim
for refund, information return or statement relating to taxes,
including any schedule or attachment thereto, and including any
amendment thereof.
1.2 Rules of Construction
(A) When a reference is made in this Agreement to schedules or
exhibits, such reference will be to a schedule or exhibit to this
Agreement unless otherwise indicated.
(B) The words "include," "includes" and "including" when used herein
will be deemed in each case to be followed by the words "without
limitation."
(C) The table of contents and headings contained in this Agreement
are for reference purposes only and will not affect in any way the
meaning or interpretation of this Agreement.
(D) The captions in this Agreement are for convenience and reference
only and in no way define, describe, extend or limit the scope of this
Agreement or the intent of any provisions hereof.
(E) All pronouns and any variations thereof will be deemed to refer
to the masculine, feminine, neuter, singular or plural, as the
identity of the Party or Parties, or their personal representatives,
successors and assigns may require.
(F) The Parties agree that they have been represented by counsel
during the negotiation and execution of this Agreement and, therefore,
waive the application of any law, regulation, holding or rule of
construction providing that ambiguities in an agreement or other
document will be construed against the Parties drafting such agreement
or document.
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Article Two
Operative Provisions
2.1 Purchase & Sale
(A) Purchase and Sale of Assets:
Subject to the terms and conditions of this Agreement, and
in reliance on the representations, warranties and agreements
contained herein, on the Closing Date, Xxxxxxx shall sell,
convey, assign, transfer and deliver or cause to be sold,
conveyed, assigned, transferred and delivered to AmeriCom, and
AmeriCom shall purchase and acquire from Xxxxxxx, the Assets
existing as of the Closing Date free and clear of any Encumbrance
other than the Permitted Encumbrances, in consideration for
AmeriCom's assumption of the Assumed Liabilities.
(B) Assumption of Assumed Liabilities:
(1) On and subject to the terms and conditions of this
Agreement, AmeriCom agrees to assume and become responsible
for all of the Assumed Liabilities at the Closing.
(2) AmeriCom will not assume or have any responsibility with
respect to any Excluded Liabilities, and Xxxxxxx shall
retain all liability with respect to the Excluded
Liabilities, some of which are included in the schedule
annexed hereto and made a part hereof as exhibit 2.1(B)(2).
(C) Purchase Price:
The sole Purchase Price to be paid by AmeriCom under this
Agreement to Xxxxxxx is AmeriCom's agreement to assume the
Assumed Liabilities (the "Purchase Price").
(D) Closing:
The Closing on this Agreement shall take place at the
offices of AmeriNet on the first business day following execution
of this Agreement selected for such purposes by AmeriNet, at such
time as shall be established therefor by AmeriNet.
(E) Allocation:
The Parties agree to allocate the Purchase Price and the
Assumed Liabilities among the Assets for all purposes (including
financial accounting and tax purposes) in accordance with the
allocation set forth on Schedule 2.1(E) annexed hereto and made a
part hereof, and shall make all necessary filings (including
those required under Code Section 1060) in accordance with that
allocation.
(F) Non-Assignable Assets.:
(1) Notwithstanding anything contained in this Agreement to the
contrary, this Agreement shall not constitute an agreement
or an attempted agreement to transfer, sublease or assign
any contract, license, lease, commitment, sales or Work
Order or any other agreement or any claim, right or benefit
arising thereunder or resulting therefrom if any such
attempted transfer, sublease or assignment without the
consent of any other party thereto would constitute a breach
thereof or would in any way adversely affect the rights of
AmeriCom thereunder.
(2) Xxxxxxx shall, between the date hereof and the Closing Date
(and, if requested by AmeriCom, after the Closing Date), use
its commercially reasonable best efforts to obtain the
consent of any party or parties to any such contracts,
licenses, leases, commitments, sales orders, purchase orders
or other agreements to the transfer, sublease or assignment
thereof by Xxxxxxx to AmeriCom or AmeriCom's designees
hereunder in all cases in which such consent is required.
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(3) If any such consent is not obtained, or if an attempted
assignment would be ineffective or would affect the rights
of Xxxxxxx thereunder such that AmeriCom would not in fact
receive all such rights, Xxxxxxx shall perform such
agreement for the account of AmeriCom or otherwise cooperate
with AmeriCom in any arrangement necessary or desirable to
provide for AmeriCom or its designees the benefits of any
such agreement, including without limitation, holding assets
as trustee for AmeriCom, enforcement for the benefit of
AmeriCom of any and all rights of Xxxxxxx against the other
party thereto arising out of the breach, termination or
cancellation of such agreement by such other party or
otherwise.
(4) Notwithstanding any of the provisions of this Section 2(F)
nothing herein shall be deemed to:
(a) Waive or excuse any obligation on the part of Xxxxxxx,
or any condition for the benefit of AmeriCom, to obtain any
necessary consents of any person or entity to the assignment
to AmeriCom of any of the Assets or any contract, license,
lease, commitment, order or other agreement required to be
assigned hereunder; or
(b) Relieve Xxxxxxx ofits obligation to transfer record
ownership of any of the Assets that it holds as trustee for
AmeriCom as a result of the unavailability to obtain
required consents, immediately following the termination of
such impediment.
2.2 Special Indemnity Provisions
(A) Indemnity Obligations of Xxxxxxx:
Xxxxxxx hereby agrees to indemnify and hold the Indemnities harmless at all
times from and after the Closing Date against and in respect of any Damages
resulting to any of the Indemnities from:
(1) any misrepresentation or breach of warranty made by Xxxxxxx
in or under this Agreement or any agreement executed in
connection therewith;
(2) breach or default in the performance by Xxxxxxx of any of
the covenants to be performed by Xxxxxxx under this
Agreement or any agreement executed in connection therewith;
(3) any debts, liabilities or obligations of Xxxxxxx, whether
accrued, absolute, contingent, or otherwise, due to become
due, except for the Assumed Liabilities;
(4) any claim affecting the Assets or any liability, other than
the Assumed Liabilities, or expense which is allowable
against or incurred by AmeriCom because of Lorilei's
non-compliance with any and all applicable Bulk Sales Laws;
and
(5) the continued operations of Xxxxxxx after the Closing Date.
(B) Indemnity Obligations of AmeriCom:
(1) AmeriCom agrees to defend, indemnify, and hold harmless
Xxxxxxx and its officers, directors, employees and agents,
and their representatives, heirs, successors and assigns
(collectively, the "Xxxxxxx Indemnities") from, against and
in respect of any and all loss, liability and expense,
including, without limitation, reasonable attorneys' fees
and expenses and settlement costs (all of which shall be net
of the proceeds of insurance, if any) ("Lorilei's Damages")
resulting from:
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(a) any misrepresentation or breach of warranty or
nonfulfillment of any obligation by AmeriCom under this
Agreement or from an misrepresentation in or omission from
any other instrument furnished or to be furnished to Xxxxxxx
pursuant to this Agreement;
(b) AmeriCom's failure to discharge the Assumed Liabilities.
(C) Indemnification Procedure:
(1) The Parties agree that promptly upon receipt of notice of
any demand, assertion, claim, action or proceeding, judicial
or otherwise with respect to any matter as to which one or
more Parties have agreed to indemnify one or more other
Parties under the provisions of this Agreement, the Parties
receiving the notice will give prompt notice thereof in
writing to the other Parties, together with the statement of
such information respecting such demand, assertion, claim,
action or proceeding as the receiving Party shall then have;
provided, however, that the Parties obligated to indemnify
shall not be relieved of liability hereunder for failure by
the receiving Parties to give prompt written notice, unless
the Parties responsible for indemnification are prejudiced
by such failure, in which case they shall not be liable for
any indemnity under this Agreement to the extent so
prejudiced.
(2) If the Parties responsible for indemnification acknowledge
full liability under this Agreement, they shall have the
right to contest and defend by all appropriate legal or
other proceedings any demand, assertion, claim, action or
proceeding with respect to which they have been called upon
to indemnify the Parties entitled to indemnification under
the provisions of this Agreement; provided, that:
(a) notice of intention to contest shall be delivered to
the Parties entitled to indemnification within twenty (20)
calendar days from the receipt by the Parties responsible
for indemnification of notice of the assertion of such
demand, assertion, claim, action or proceeding;
(b) the Parties responsible for indemnification will pay
all costs and expenses of such contest, including all
attorneys' and accountants' fees, and the cost of any bond
required by law to be posted in connection with such
contest;
(c) such contest shall be conducted by reputable attorneys
employed by the Parties responsible for indemnification
(with the reasonable approval of the Parties being
indemnified) at the Parties responsible for
indemnification's sole cost and expense, but the Parties
entitled to indemnification shall have the right to
participate in such proceedings and to be represented by
attorneys of their own choice, at their own cost and
expense;
(d) if after such opportunity, the Parties responsible for
indemnification do not elect to assume the defense in any
such proceedings, they shall be bound by the results
obtained by the Parties entitled to indemnification,
including without limitation any out-of-court settlement or
compromise.
(3) The Parties responsible for indemnification will not settle
any claim without the prior written consent of the Parties
entitled to indemnification, unless the settlement contains
a complete and unconditional release of the Parties entitled
to indemnification, and the settlement does not involve the
imposition of any non-monetary relief on the Parties
entitled to indemnification.
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ARTICLE THREE
REPRESENTATIONS AND WARRANTIES
3.1 Xxxxxxx
Xxxxxxx hereby represents and warrants to AmeriCom as a material
inducement to its entry into this Agreement, based on information provided
by Mr. & Xxx. Xxxxxxxxxx to Lorilei's current management, that:
(A) Organization:
Xxxxxxx is a corporation duly organized, validly existing and in
good standing under the laws of the State of Florida, is qualified to
do business as a foreign corporation in the states listed and has the
subsidiaries specifically listed in exhibit 3.1(A).
(B) Authority:
(1) Generally:
(a) Xxxxxxx has the full right, power and authority
(including full corporate power and authority) to execute
and deliver this Agreement and to perform Lorilei's
obligations hereunder, and to carry out the transactions
contemplated in this Agreement, except as may be limited by
bankruptcy, insolvency, reorganization, moratorium or other
similar laws affecting creditors' rights generally. Without
limiting the generality of the foregoing, Lorilei's Board of
Directors and Lorilei's shareholders have taken all
corporate action necessary to authorize, and have duly
authorized the execution, delivery, and performance of this
Agreement by Xxxxxxx.
(b) The Agreement constitutes the valid and legally binding
obligation of Xxxxxxx, enforceable in accordance with its
terms and conditions.
(2) Non-contravention:
Except as otherwise disclosed on Schedule 3.1(B)(2), annexed
hereto and made a part hereof, neither the execution and the
delivery of this Agreement, nor the consummation of the
transactions contemplated hereby (including the assignments
and assumptions referred to above), will:
(a) violate any constitution, statute, regulation, rule,
injunction, judgment, order, decree, ruling, charge, or
other restriction of any government, governmental agency, or
court to which Xxxxxxx is subject or any provision of
Lorilei's Articles of Incorporation or By-laws, or
(b) conflict with, result in a breach or constitute a
default under, result in the acceleration of, result in the
creation of any Encumbrance upon the Assets, create in any
party the right to accelerate, terminate, modify, or cancel,
or require any notice, authorization, consent, approval,
exemption or other action under any of the Contracts or to
which any of the Assets are subject, except where the
violation, conflict, breach, default, acceleration,
termination, modification, cancellation, or failure to give
notice, would not have a Material adverse effect on the
financial condition of AmeriCom taken as a whole or on the
ability of the Parties to consummate the transactions
contemplated by this Agreement. Without limiting the
generality of the foregoing, the transfer of the Assets to
AmeriCom is not subject to any Bulk Sales Laws.
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(3) Compliance with Laws:
The Business has been conducted in compliance with all
applicable laws and regulations of foreign, federal, state
and local governmental authorities. Xxxxxxx holds, and is in
compliance in all material respects with, all licenses,
permits, and authorizations necessary for the conduct of
Lorilei's business pursuant to applicable statutes, laws,
ordinances, rules, regulations, codes, or any law of any
governmental body, agency, commission, or unit to which
Xxxxxxx and/or the Business or Assets may be subject, the
failure of which would have a Material adverse effect on the
Business and such licenses, permits and authorizations which
are transferable to AmeriCom, and are so transferred, will
be in full force and effect following the Closing. Xxxxxxx
has not received any notice of any alleged violation of any
such statute, order, rule, regulation or requirement in
connection with the operation of the Business or the Assets.
(C) Litigation:
(1) There are no actions, suits or proceedings pending, or, to
Lorilei's Knowledge, threatened or anticipated before any
court or governmental or administrative body or agency
affecting the Business or the Assets, except as set forth on
3.1(C)(1), annexed hereto and made a part hereof.
(2) Xxxxxxx is not presently subject to any injunction, order or
other decree of any court of competent jurisdiction which
affects the Business or the Assets.
(D) Governmental Approvals:
Except for:
(1) necessary corporate action, and
(2) consents required with respect to the assignment to AmeriCom
of the Material Contracts and Dependent Service Agreements
and certain Assumed Liabilities disclosed on Schedule
3.1(D), no order, permission, consent, approval, license,
authorization, registration or validation of, or filing
with, or exemption by any governmental agency, commission,
board or public authority, or any other person is required
to authorize, or is required in connection with, the
execution, delivery or performance by Xxxxxxx of this
Agreement, or any other agreement or instrument to be
executed or delivered by Xxxxxxx herewith.
(E) Books and Records:
Lorilei's Books and Records (including customer order files,
employment records and production and manufacturing records) for the
Business are complete, true and correct in all material respects.
(F) Accuracy of Representations and Warranties:
(1) All of Lorilei's warranties and representations as herein
above stated shall be true on the Closing Date and the same
shall survive the Closing and be deemed incorporated,
whether explicitly stated therein or not, into all documents
or other instruments delivered by Xxxxxxx to AmeriCom at the
Closing.
(2) No representation, warranty, or statement of Xxxxxxx omits
or will omit to state any Material fact necessary to make
such representation, warranty, or statement in this
Agreement accurate and not misleading in any material
respect.
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(3) The copies of all instruments, agreements, or other
documents and written information relating to the Business
or the Assets delivered to AmeriCom by Xxxxxxx or Lorilei's
representatives pursuant to or in connection with this
Agreement are or shall be complete and correct in all
material respects as of the date of this Agreement and as of
the Closing Date, subject to changes made in the ordinary
course of business.
(G) Tax Reports, Returns and Payments:
Except as set forth on Schedule 3.1(G), there are no security
interests on any of the Assets that arose in connection with any
failure (or alleged failure) to pay any Tax, and Xxxxxxx has withheld
and paid all Taxes required to have been withheld and paid in
connection with amounts paid or owing to any employee employed by the
Business, independent contractor, creditor, or other third party with
respect to the Business.
(H) Material Contracts and Other Commitments:
(1) Dependent Service Agreements, Material Contracts and
Purchase Orders
(a) Composite exhibit 3.1(H)(1)(a) sets forth a complete
and correct list of all of the Dependent Service Agreements,
Material Contracts and Purchase Orders (true and correct
copies of each have been delivered to AmeriCom).
(b) Except as set forth in exhibit 3.1(H)(1)(b), Xxxxxxx
has not received notice from any person who is a party to
any Dependent Service Agreement, Material Contract or Work
Order, and Xxxxxxx has no reason to believe, that Xxxxxxx is
in default of any of the terms, conditions or provisions of
any Dependent Service Agreement, Material Contract or Work
Order and Xxxxxxx has not received notice from any party
thereto with respect to the same.
(c) Each such Dependent Service Agreement, Material
Contract or Work Order is valid, binding and enforceable in
accordance with its terms, and no condition exists that
(with the passage of time, the giving notice, or both) would
lead to a default with respect to, or permit any party
thereto to terminate, accelerate or amend any such
agreement, and Xxxxxxx has performed in all Material
respects all of its obligations under each Dependent Service
Agreement, Material Contract or Work Order in accordance
with its terms.
(d) Except as disclosed on Schedule 3.1(H)(1)(d), the
Material Contracts, Purchase Orders and Dependent Service
Agreements are all of Lorilei's Contracts relating to the
Business which to the best of Lorilei's knowledge, are
necessary for the operation of the Business as presently
conducted by Xxxxxxx.
(2) Assignability of Material Contracts:
Except as set forth in exhibit 3.1(H)(2) annexed hereto and
made a part hereof, the consent or approval of the other
contracting party to any Dependent Service Agreement,
Material Contract or Work Order is not required for the
transfer of the Assets to AmeriCom and the consummation of
the transactions contemplated herein.
(3) Product Warranties:
Except as set forth in Schedule 3.1(H)(3):
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(a) There has not occurred any event that may give rise to
liability on the part of Xxxxxxx in respect of any claim
that any of the products produced or sold on the part of
Xxxxxxx in connection with the Business:
1. is not or was not at the time of such occurrence in
compliance in all material respects with all applicable
federal, state, local and foreign laws and regulations or
2. is not or was not at the time of such occurrence fit for
use, and does not or did not conform in all material
respects to any promises or affirmations of fact made on the
container or labels for such product or in connection with
its sale.
(b) There has not occurred any event that may give rise to
liability on the part of AmeriCom based on any claim that
there is or was at the time of such occurrence any design
defect with respect to any of such products or that any of
such products fails or failed to contain adequate warning,
presented in a reasonably prominent manner, in accordance
with applicable laws and current industry practice with
respect to its contents and use, or that any such product
fails to meet contract specifications.
(I) Title to Assets:
(1) Assets.
Xxxxxxx has good and marketable title to all of the Assets,
free and clear of all Encumbrances, except for the Assumed
Liabilities and the Permitted Encumbrances.
(2) Governmental Code Violations.
Xxxxxxx has not received any notices from any city, village
or other governmental authority and Xxxxxxx has no Knowledge
of the basis of, any zoning, building, fire or health code
violations in respect to the Real Property that have not
been heretofore corrected.
(J) Employment Matters:
(1) Payroll.
Schedule 3.1(J)(1) attached hereto correctly sets forth the
total gross payroll for the persons listed thereon for the
period ended immediately before Closing, together with the
amount of bonuses, pension and profit sharing contributions
and other compensation of any nature to be paid to any such
persons pursuant to agreement, custom or present
understanding.
(2) Employee Benefits.
(a) Schedule 3.1(J)(2)(a) attached hereto lists each
Employee Benefit Plan that Xxxxxxx maintains or to which
Xxxxxxx contributes for persons employed in the Business.
(b) Xxxxxxx does not maintain, contribute to or participate
in, and has never maintained, contributed to or participated
in any Multi-employer Plan as defined in ERISA Section
3.1(37).
(3) Employees Not Covered By Collective Bargaining Agreements.
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(a) None of the employees who work in Lorilei's Business
are subject to any collective bargaining or union agreement.
(b) There is no existing representation question respecting
any employees of Xxxxxxx who work in the Business, nor to
Lorilei's Knowledge are there any organizational efforts
with respect to any employees of Xxxxxxx who work in the
Business.
(K) Environmental:
(1) There has not been, as of the date hereof, any "release" (as
defined in 42 U.S.C.ss.9601(22)) or threat of a "release" of
any hazardous substances" (as defined in 42
U.S.C.ss.9602(14) or on or about any of the Real Property.
(2) Xxxxxxx has not by contract, agreement, or otherwise
arranged for the disposal or treatment, or arranged with a
transporter for transport for disposal or treatment, of
hazardous substances at any "facility" (as defined in 42
U.S.C. ss. 9601(9)) owned or operated by another person or
entity.
(3) The Real Property being conveyed by Xxxxxxx and the use of
such real property are in compliance with and Xxxxxxx is in
compliance with all applicable laws, statutes, ordinances,
rules and regulations of any governmental or
quasi-governmental authority (federal, state or local)
relating to environmental protection, underground storage
tanks, toxic waste, hazardous waste, oil or hazardous
substance handling, treatment, storage, disposal or
transportation, or arranging therefor, respecting any
products or materials previously or now located, delivered
to or in transit to or from the Real Property, including
without limitation the Resource Conservation and Recovery
Act, the Comprehensive Environmental Response, Compensation
and Liability Act, and the Superfund Amendments and Re-
authorization Act of 1986.
(4) All of Lorilei's past disposal practices relating to
hazardous substances and hazardous wastes have been
accomplished in accordance with all applicable laws, rules,
regulations and ordinances.
(5) Xxxxxxx has not been notified of nor is there any basis for
any potential liability of Xxxxxxx with respect to the
clean-up of any waste disposal site or facility, and has not
obtained any information to the effect that any site at
which it has disposed of hazardous substances or oil has
been or is under investigation by any local, state or
federal governmental body, authority or agency.
(L) Advertising:
Neither any advertising by Xxxxxxx nor any promotional material
used by Xxxxxxx at any time has contained any material untrue or
misleading statements or claims with respect to the products or
services of the Business.
(M) Broker's Fees:
Xxxxxxx has no liability or obligation to pay any fees or
commissions to any broker, finder or agent with respect to the
transactions contemplated by this Agreement for which AmeriCom could
become liable or obligated.
(N) Real Property:
(1) Except for the Permitted Encumbrances, Xxxxxxx has good and
marketable title and owns outright, free and clear of all
Encumbrances, each improvement, fixture or item of equipment
located in or on the Real Property; to the Knowledge of
Xxxxxxx, the presence of each improvement, fixture, or piece
of equipment on the Real Property does not violate any law,
including without limitation any zoning, building, safety,
health or other law, and the Real Property is zoned for the
purposes for which such premises are currently being used
15
(2) The Real Property has not been condemned or otherwise
taken by public authority and to Lorilei's Knowledge no
condemnation or taking is threatened or contemplated.
(O) Patents, Trademarks, Trade Names, Trade Secrets, Etc.:
(1) Except for the patents, trademarks (registered or
unregistered), service marks (registered or unregistered),
trade names, assumed names and copyrights identified on
Schedule 3.1(O), Xxxxxxx does not own or use in connection
with the Business:
(a) any patents, trademarks (registered or unregistered),
trade names, assumed names and copyrights, nor has it on
file any applications therefor,
(b) any licenses, permissions and other agreements relating
to intellectual property used in the Business; or
(c) any agreements relating to technology, know-how or
processes used in or necessary for the conduct of the
Business.
(2) Xxxxxxx has the sole and exclusive right, free from any
liens, mortgages, security interests, charges or
encumbrances, to use the trade names, assumed names,
technology, copyrights (other than copyrights licensed under
the Dependent Service Agreements and any other non-exclusive
software licenses held by Xxxxxxx), know-how and processes
and all trade secrets required for or incident to the
conduct of the Business where currently conducted, and the
consummation of the transactions contemplated by this
Agreement will not alter or impair any such rights.
(3) No claims have been asserted by any person with respect to
the ownership, validity, enforceability or use of any or of
any confusingly similar or delusive trade names, assumed
names, copyrights, applications therefor, technology,
know-how, processes or trade secret or challenging or
questioning the validity or effectiveness of any such
license, permission or agreement and, to the Knowledge of
Xxxxxxx, there is no valid basis for any such claim, and the
use or other exploitation of such trade names, assumed
names, copyrights, applications therefor, technology,
know-how, processes and trade secrets by Xxxxxxx, to the
Knowledge of Xxxxxxx, does not infringe on or dilute the
rights of any person; and, to the Knowledge of Xxxxxxx, no
other person is infringing the rights of Xxxxxxx with
respect to such trade names, assumed names, copyrights,
applications therefor, technology, know-how, processes or
trade secrets.
3.2 AmeriCom
AmeriCom hereby represents and warrants to Xxxxxxx as a material
inducement to Lorilei's entry into this Agreement, that:
(A) Organization:
AmeriCom is a Florida corporation, validly existing and in good
standing under the laws of the State of Florida.
16
(B) Authority:
(1) Authority Generally.
(a) AmeriCom has the full right, power and authority to
execute and deliver this Agreement and to perform AmeriCom's
obligations hereunder.
(b) Without limiting the generality of the foregoing,
AmeriCom's board of directors has duly authorized the
execution, delivery, and performance of this Agreement by
AmeriCom.
(c) The Agreement constitutes the valid and legally binding
obligation of AmeriCom, enforceable in accordance with its
terms and conditions, except as may be limited by
bankruptcy, insolvency, reorganization, moratorium or other
similar laws affecting creditors' rights generally.
(2) Non-contravention.
Neither the execution and the delivery of this Agreement,
nor the consummation of the transactions contemplated hereby
(including the assignments and assumptions referred to in
Section 3 above), will:
(a) violate any constitution, statute, regulation, rule,
injunction, judgment, order, decree, ruling, charge, or
other restriction of any government, governmental agency, or
court to which AmeriCom is subject or any provision of
AmeriCom's Articles of Incorporation or Bylaws, or
(b) conflict with, result in a breach or 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 AmeriCom
is a party or by which it is bound or to which any of its
assets is subject, except where the violation, conflict,
breach, default, acceleration, termination, modification,
cancellation, or failure to give notice, would not have a
Material adverse effect on the financial condition of
AmeriCom taken as a whole or on the ability of the Parties
to consummate the transactions contemplated by this
Agreement.
(C) Litigation & Adverse Conditions:
There are no actions, suits or proceedings pending, or to
AmeriCom's Knowledge, threatened or anticipated before any court or
governmental or administrative body or agency affecting AmeriCom,
AmeriCom's property, or AmeriCom's ability to consummate the
transaction contemplated by this Agreement.
(D) Broker's Fees:
AmeriCom has no liability or obligation to pay any fees or
commissions to any broker, finder or agent with respect to the
transactions contemplated by this Agreement for which Xxxxxxx could
become liable or obligated.
(E) Accuracy of Representations or Warranties:
(1) All of AmeriCom's warranties and representations as herein
above stated shall be true on the Closing Date and the same
shall survive the Closing and be deemed incorporated,
whether explicitly stated therein or not, into all documents
or other instruments delivered by AmeriCom to Xxxxxxx at the
Closing.
17
(2) No representation, warranty, or statement of AmeriCom omits
or will omit to state any material fact necessary to make
such representation, warranty, or statement in this
Agreement accurate and not misleading in any material
respect.
ARTICLE FOUR
COVENANTS
The Parties agree as follows with respect to the period after the
Closing:
(A) Mail and Remittances:
(1) After the Closing, all mail addressed to Xxxxxxx and
AmeriCom relating to their respective businesses shall be
delivered promptly by each Party to the other Party;
provided, however, that AmeriCom is hereby authorized to
open all mail addressed to Xxxxxxx and Xxxxxxx personnel,
determine whether or not it pertains to the subject matter
of this Agreement, and if so, retain such mail and respond
as the successor in interest to Lorilei's Business.
(2) Payments received by AmeriCom on accounts receivable of
Xxxxxxx shall be retained by AmeriCom, which is hereby
authorized on behalf of Xxxxxxx to endorse any negotiable
instruments and deposit them, together with any cash
received, in AmeriCom's financial accounts.
(B) Closing Date Employment Costs:
(1) AmeriCom shall be responsible for all expenses and amounts
payable with respect to employees employed or leased by
AmeriCom with respect to the Business accrued or earned on
and after the Closing Date.
(2) Notwithstanding anything in this Agreement to the contrary,
AmeriCom shall have no liability for any employment costs,
bonuses expenses, benefits, reimbursements or liabilities
whatsoever pertaining attributable to Mr. or Xxx.
Xxxxxxxxxx, nor shall Mr. or Xxx. Xxxxxxxxxx be entitled to
credit for any of the performance of the Business following
the Closing.
(C) Joint Press Release:
AmeriNet, Xxxxxxx and AmeriCom shall agree upon the form and
substance of :
(1) a joint press release or other public announcement of this
Agreement and the transactions contemplated hereby;
(2) other matters including, but not limited to, form letters to
customers, related to this Agreement or any of the
transactions contemplated hereby which shall be released on
or after the Closing; provided, however, that nothing in
this Agreement shall be deemed to prohibit any Party from
making any disclosure which its counsel deems necessary or
advisable in order to fulfill such Party's disclosure
obligations imposed by law or contract.
18
ARTICLE FIVE
MISCELLANEOUS
(A) Expenses:
Except as otherwise provided in this Agreement, each of the
Parties agrees to pay, without right of reimbursement from any other,
the costs incurred by such Party incident to the preparation and
execution of this Agreement and performance of their respective
obligations hereunder, whether or not the transactions contemplated by
this Agreement shall be consummated, including, without limitation,
the fees and disbursements of legal counsel, accountants and
consultants employed by the respective Parties in connection with the
transactions contemplated by this Agreement; provided, however, that
AmeriCom pay sales and other transfer taxes, if any.
(B) Assignability:
(1) No Party may assign or transfer its rights and obligations
under this Agreement without the prior written approval of
the other Parties; provided, however, that AmeriCom may
assign AmeriCom's rights under this Agreement to an
affiliate of AmeriCom or as security to any of AmeriCom's
lenders.
(2) This Agreement shall inure only to the benefit of and be
binding upon the Parties and their respective successors and
representatives and permitted assigns.
(3) This Agreement shall be binding upon and inure to the
benefit of the Parties and their respective heirs, personal
representatives and voluntary and involuntary successors and
assigns.
(C) Applicable Law & Venue:
This Agreement shall be construed, interpreted and enforced in
accordance with, and governed by, the laws of the State of Florida and
venue for any proceeding arising hereunder, whether in law, equity,
administration or alternate dispute resolution, shall, to the extent
legally permissible, lie exclusively in Palm Beach County, Florida.
(D) Counterparts & Facsimile Execution:
This Agreement may be executed in one or more counterparts, each
of which will be deemed to be an original, but all of which together
shall constitute one and the same instrument and signatures
transmitted by facsimile transmission shall be fully binding.
(E) Parties in Interest:
This Agreement will be binding upon, inure to the benefit of, and
be enforceable by and against the respective successors and assigns of
the Parties and shall not be assigned by any Party without express
written prior consent of AmeriNet.
(F) Remedies:
(1) No delay or omission on the part of any Party in exercising
any right or remedy shall operate as a waiver of said right
or remedy or any other right or remedy.
(2) A waiver on any one occasion shall not be construed as a bar
to or a waiver of any right on any future occasion.
(3) Every right and remedy of a Party shall be cumulative and in
addition to every other right and remedy expressed in this
Agreement or allowed by law or equity, and may be exercised
singularly or concurrently.
19
(G) Survival of Representations and Warranties:
(1) All representations and warranties made by either Party to
this Agreement shall survive the Closing and any
investigation at any time made by or on behalf of the other
Party, and shall expire on the second anniversary of the
Closing Date.
(2) Notwithstanding the preceding sentence, any representation
or warranty made in this Agreement in respect of which
indemnification may be sought under this Agreement and the
indemnification provided for in this Agreement for breach of
such representation or warranty shall survive the time at
which it would otherwise terminate pursuant to the preceding
sentence or this Agreement, if notice of the breach thereof
giving rise to such right to indemnification shall have been
given in good faith to the Parties against whom such
indemnification may be sought prior to such time.
(H) No Third-Party Beneficiaries:
Neither this Agreement nor any provision hereof, nor any document
or instrument executed or delivered pursuant to this Agreement, shall
be deemed to create any right in favor of or impose any obligation
upon any person or entity other than Xxxxxxx, AmeriNet and AmeriCom.
(I) Severability:
Whenever legally possible, each provision of this Agreement will
be interpreted in such manner as to be effective and valid under
applicable law, but if any provision of this Agreement is held to be
invalid, illegal or unenforceable in any respect under any applicable
law or rule in any jurisdiction, such invalidity, illegality or
unenforceability will not affect any other provision or any other
jurisdiction but this Agreement will be interpreted, construed and
enforced in such jurisdiction as if such invalid, illegal or
unenforceable provision had never been contained herein.
(J) Entire Agreement:
(1) This Agreement and the agreements, instruments, schedules
and other writings referred to in this Agreement contain the
entire understanding of the Parties with respect to the
subject matter of this Agreement.
(2) There are no restrictions, agreements, promises, warranties,
covenants or undertakings other than those expressly set
forth herein or therein.
(3) This Agreement supersedes all prior agreements and
understandings between the Parties with respect to its
subject matter.
(K) Amendments:
This Agreement may not be amended, changed or terminated orally,
and no attempted change, termination or waiver of any of the
provisions hereof shall be binding unless in writing and signed by the
Parties against whom the amendment, change, termination or waiver is
sought to be enforced.
(L) Exhibits:
Each exhibit and schedule referenced in this Agreement shall be
annexed hereto and shall be considered a part hereof as if set forth
in the body hereof in full.
20
(M) Negotiated Transactions:
The provisions of this Agreement were negotiated by the Parties,
this Agreement and the agreements, indentures and other instruments
incidental hereto shall be deemed to have been drafted by all of the
Parties and this Agreement shall not be interpreted more or less
favorably in favor of or against a Party based on its authorship.
(O) Dispute Resolution:
(1) If there is any dispute hereunder which cannot be resolved
by the Parties (a "Disputed Item"), either Party may seek a
resolution by arbitration by applying for an arbitrator to
be appointed by the American Arbitration Association in
accordance with the rules and regulations of that
association, except as specifically modified hereby.
(2) In the event arbitration is requested, both Parties must
proceed as quickly as possible to arbitration and accept the
results of same as final and binding.
(3) The losing Party in the arbitration shall pay all of the
costs of the arbitration. In the event that the results of
the arbitration cannot be said to result in a winning Party
and a losing Party, the arbitrator shall decide how the
costs and expenses of the arbitration shall be borne by the
Parties.
(4) Any judgment upon the award rendered by the arbitrator may
be enforced in the Circuit Court sitting in and for Palm
Beach County, Florida.
(P) Notices:
(1) All notices, demands or other communications given hereunder
will be in writing and will be deemed to have been duly
given on the first business day after mailing by United
States registered or certified mail, return receipt
requested, postage prepaid, addressed as follows:
(a) To AmeriNet: AmeriNet Xxxxx.xxx, Inc.; Crystal
Corporate Center; 0000 Xxxxx Xxxxxxxx Xxxxx, Xxxxx 000-X;
Xxxx Xxxxx, Xxxxxxx 00000; Attention: Xxxxx Xxx Xxxxx,
President; Telephone (000) 000-0000, Fax (000) 000-0000;
and, e-mail xxxxx@xxxxxxxxxxxxx.xxx; with copies to
AmeriNet Xxxxx.xxx, Inc.; 0000 Xxxxxxxxx 00xx Xxxxxxx;
Xxxxx, Xxxxxxx 00000; Xxxxxxx X. Xxxxxxx, Secretary;
Telephone (000) 000-0000, Fax (000) 000-0000; and, e-mail,
xxxxxxx@xxxxxxxx.xxx; and with a copy to
The Yankee Companies, Inc.; Crystal Corporate Center;
0000 Xxxxx Xxxxxxxx Xxxxx, Xxxxx 000; Xxxx Xxxxx, Xxxxxxx
00000; Attention: Xxxxxxx Xxxxx Xxxxxx, President; Telephone
(000) 000-0000, Fax (561) 000- 0000; and, e-mail
xxxxxxxxxx@xxxxxx.xxx;
(b) To Xxxxxxx: Xxxxxxx Communications, Inc.; Xxxx Xxxxxx
Xxx 000000; Xxxxx, Xxxxxxx 00000; 0000 Xxxxxxxxx 00xx
Xxxxxx; Xxxxx, Xxxxxxx 00000; Attention: Xxxxxx Xxxxxxxx,
Vice, President; Telephone (000) 000-0000; Fax (352)
861-1339; e-mail xxxxxxx@xxxxxxxxxxx.xxx with copies to
Xxxxxxx Communications, Inc.; 0000 Xxxxxxxxx 00xx
Xxxxxxx; Xxxxx, Xxxxxxx 00000; Xxxxxxx X. Xxxxxxx,
Secretary; Telephone (352) 000- 0000, Fax (000) 000-0000;
and, e-mail, xxxxxxx@xxxxxxxx.xxx; and with a
copy to
21
The Yankee Companies, Inc.; Crystal Corporate Center;
0000 Xxxxx Xxxxxxxx Xxxxx, Xxxxx 000; Xxxx Xxxxx, Xxxxxxx
00000; Attention: Xxxxxxx Xxxxx Xxxxxx, President; Telephone
(000) 000-0000, Fax (561) 000- 0000; and, e-mail
xxxxxxxxxx@xxxxxx.xxx;
(c)
To AmeriCom: AmeriNet Communications, Inc.; Xxxx Xxxxxx
Xxx 000000; Xxxxx, Xxxxxxx 00000; 0000 Xxxxxxxxx 00xx
Xxxxxx; Xxxxx, Xxxxxxx 00000; Attention: Xxxxxxxx X. Xxx
Xxxxx, President; Telephone (000) 000-0000; Fax (352)
861-1339; e-mail xxxxxxx@xxxxxxxxxxx.xxx with copies to
AmeriNet Communications, Inc.; 0000 Xxxxxxxxx 00xx
Xxxxxxx; Xxxxx, Xxxxxxx 00000; Xxxxxxx X. Xxxxxxx,
Secretary; Telephone (352) 000- 0000, Fax (000) 000-0000;
and, e-mail, xxxxxxx@xxxxxxxx.xxx; and with a
copy to
The Yankee Companies, Inc.; Crystal Corporate Center;
0000 Xxxxx Xxxxxxxx Xxxxx, Xxxxx 000; Xxxx Xxxxx, Xxxxxxx
00000; Attention: Xxxxxxx Xxxxx Xxxxxx, President; Telephone
(000) 000-0000, Fax (561) 000- 0000; and, e-mail
xxxxxxxxxx@xxxxxx.xxx; or such other address or to such
other person as any Party will designate to the other for
such purpose in the manner hereinafter set forth.
(2) At the request of any Party, notice will also be provided by
overnight delivery, facsimile transmission or e-mail,
provided that a transmission receipt is retained.
(3) (a) The Parties acknowledge that Yankees serves as a
strategic consultant to AmeriNet and has acted as
scrivener for the Parties in this transaction but
that Yankees is neither a law firm nor an agency
subject to any professional regulation or oversight.
(b) Because of the inherent conflict of interests
involved, Yankees has advised all of the Parties
to retain independent legal and accounting
counsel to review this Agreement and its exhibits
and incorporated materials on their behalf.
(c) The decision by any Party not to use the services
of legal counsel in conjunction with this
transaction will be solely at their own risk,
each Party acknowledging that applicable rules
of the Florida Bar prevent AmeriNet's general
counsel, who has reviewed, approved and caused
modifications on behalf of AmeriNet, from
representing anyone other than AmeriNet in this
transaction.
(Q) Further Assurances:
From time to time after the Closing, Xxxxxxx will execute and
deliver, or cause its affiliates to execute and deliver, to AmeriCom
such instruments of sale, transfer, conveyance, assignment and
delivery, and such consents, assurances, powers of attorney and other
instruments as may be reasonably requested by AmeriCom or its counsel
in order to vest in AmeriCom all right, title and interest of Xxxxxxx
in and to the Assets and otherwise in order to carry out the purpose
and intent of this Agreement.
(R) Specific Performance:
Each of AmeriCom and Xxxxxxx acknowledges and agrees that the
other would be damaged irreparably in the event any of the provisions
of this Agreement are not performed in accordance with their specific
terms or otherwise are breached, and AmeriCom and Xxxxxxx shall be
entitled to enforce specifically this Agreement and the terms and
provision thereof in any action instituted, in any court of the United
States or any state thereof having jurisdiction over AmeriCom and
Xxxxxxx and the matter, subject to Section 5(S) below, in addition to
any other remedy to which they may be entitled, at law or in equity.
22
(S) Jurisdiction:
(1) Subject to Section 5(O), AmeriCom and Xxxxxxx each hereby
submits to the jurisdiction of any state or federal court or
private dispute resolution tribunal sitting in Palm Beach
County, Florida, in any action or proceeding arising out of
or relating to this Agreement and agrees that all claims in
respect of the action or proceeding may be heard and
determined in any such court or tribunal.
(2) AmeriCom and Xxxxxxx each agree not to bring any action or
proceeding arising out of or relating to this Agreement in
any other court or tribunal.
(3) Each of the Parties waives any defense of inconvenient forum
to the maintenance of any action or proceeding so brought
and waives any bond, surety, or other security that might be
required of any other Party with respect thereto.
In Witness Whereof, the Parties hereby have caused this Agreement to be
duly executed as of the last day and year set forth below.
Signed, sealed and delivered
In Our Presence:
AmeriNet Xxxxx.xxx, Inc.
--------------------------
__________________________ By: /s/ Xxxxxxxx X. Xxx Xxxxx
Xxxxxxxx X. Xxx Xxxxx, President
Dated: October 17, 2000
Attest: /s/ Xxxxxxx X. Xxxxxxx
Xxxxxxx X. Xxxxxxx, Secretary
STATE OF FLORIDA }
COUNTY OF XXXXXX } SS.: (Corporate Seal)
On this __th day of October, 2000, before me, a notary public in and
for the county and state aforesaid, personally appeared Xxxxxxxx X. Xxx Xxxxx
and Xxxxxxx X. Xxxxxxx, to me known, and known to me to be the president and
secretary of AmeriNet Xxxxx.xxx, Inc., the above-described Delaware corporation,
and to me known to be the persons who executed the foregoing instrument, and
acknowledged the execution thereof to be their free act and deed, and the free
act and deed of AmeriNet Xxxxx.xxx, Inc., for the uses and purposes therein
mentioned. In witness whereof, I have hereunto set my hand and affixed my
notarial seal the day and year in this certificate first above written. My
commission expires: __________________________.
{Seal}
--------------------------
Notary Public
23
Xxxxxxx Communications, Inc.
--------------------------
__________________________ By: /s/ Xxxxxx Xxxxxxxx
Xxxxxx Xxxxxxxx, Vice President
Dated: October 17, 2000
Attest: /s/ Xxxxxxx X. Xxxxxxx
Xxxxxxx X. Xxxxxxx, Secretary
STATE OF FLORIDA }
COUNTY OF XXXXXX } SS.: (Corporate Seal)
On this __th day of October, 2000, before me, a notary public in and
for the county and state aforesaid, personally appeared Xxxxxx Xxxxxxxx and
Xxxxxxx X. Xxxxxxx, to me known, and known to me to be the vice president and
secretary of Xxxxxxx Communications, Inc., the above-described Florida
corporation, and to me known to be the persons who executed the foregoing
instrument, and acknowledged the execution thereof to be their free act and
deed, and the free act and deed of Xxxxxxx Communications, Inc., for the uses
and purposes therein mentioned. In witness whereof, I have hereunto set my hand
and affixed my notarial seal the day and year in this certificate first above
written. My commission expires: _____________________.
(Seal)
--------------------------
Notary Public
AmeriNet Communications, Inc.
--------------------------
__________________________ By: /s/ Xxxxxxxx X. Xxx Xxxxx
Xxxxxxxx X. Xxx Xxxxx, President
Dated: October 17, 2000
Attest: /s/ Xxxxxxx X. Xxxxxxx
Xxxxxxx X. Xxxxxxx, Secretary
STATE OF FLORIDA }
COUNTY OF XXXXXX } SS.: (Corporate Seal)
On this __th day of October, 2000, before me, a notary public in and
for the county and state aforesaid, personally appeared Xxxxxxxx X. Xxx Xxxxx
and Xxxxxxx X. Xxxxxxx, to me known, and known to me to be the president and
secretary of AmeriNet Communications, Inc., the above-described Florida
corporation, and to me known to be the persons who executed the foregoing
instrument, and acknowledged the execution thereof to be their free act and
deed, and the free act and deed of AmeriNet Communications, Inc., for the uses
and purposes therein mentioned. In witness whereof, I have hereunto set my hand
and affixed my notarial seal the day and year in this certificate first above
written. My commission expires:_______________:
{Seal}
--------------------------
Notary Public
24
Exhibits & Schedules
Index
Exhibit
Designation Description
Xxxx of Sale Exhibit 1 Listing & Description of Assets Transferred
Instrument of Assumption of Liabilities
1.1(C) The Assumed Liabilities
1.1(E) Parts of Business Not Transferred
1.1(P)(2) Permitted Encumbrances
1.1(W) Material Contracts
1.1(Z) Legal Description of Real Property and Improvements
3.1(A) List of States in Which Xxxxxxx is Qualified to Conduct Business
and List of Xxxxxxx Subsidiaries
3.1(H)(1)(a) Dependent Service Agreements, Material Contracts and Work
Orders
3.1(H)(1)(b) Existing Defaults
3.1(H)(2) Consents to Transfer Required
Schedule
Designation Description
1.1(Y) Work Orders
2.1(E) Allocation of Purchase Price
2.1(B)(2) Excluded Liabilities
3.1(B)(2) Exceptions to Non-contravention Warranty
3.1(C)(1) Litigation
3.1(D) Governmental Approvals
3.1(G) Tax Related Security Interests
3.1(H)(1)(d) Other Agreements Required for Operation of Business
3.1(H)(3) Exceptions to Xxxxxxx Representations Concerning Absence of
Liabilities or Potential Liabilities
3.1(J)(1) Final Xxxxxxx Payroll and Benefits Data
3.1(J)(2)(a) List of Lorilei's Employee Benefit Plans
3.1(O) Lorilei's Intellectual Property
25
Xxxx of Sale
THIS XXXX OF SALE ("Xxxx of Sale") from Xxxxxxx Communications, Inc., a
Florida corporation ("Xxxxxxx") to the order of AmeriNet Communications, Inc., a
Florida corporation ("AmeriCom").
Preamble:
WHEREAS, Xxxxxxx and AmeriCom are parties to an asset purchase agreement
dated as of the 17th day of October, 2000 (the "Agreement"), pursuant to which
Xxxxxxx is selling certain of Lorilei's assets to AmeriCom.
NOW, THEREFORE, for good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, Xxxxxxx hereby:
Witnesseth:
(A) Capitalized terms used herein but not defined herein shall have
the meanings assigned such terms in the Agreement.
(B) Xxxxxxx hereby sells, conveys, transfers, assigns and delivers to
AmeriCom, and AmeriCom accepts from Xxxxxxx, all of the right, title
and interest that Xxxxxxx possesses and has the right to transfer in
and to all of the Assets used or useful in connection with the
Business as the same shall exist on the date hereof, including,
without limitation, the following designated assets (collectively, the
"Assets"):
(1) all of the right, title and interest of Xxxxxxx in and to
all furniture, fixtures, vehicles and equipment listed on
Exhibit 1 annexed hereto and made a part hereof;
(2) the Inventory;
(3) all intangible assets wheresoever situated and whether or
not specifically referred to herein or in the Agreement, and
whether or not any of such assets have any value for
accounting purposes or are carried or reflected on or
referred to in any of the books or financial statements of
Xxxxxxx;
(4) all of Lorilei's rights and interests in, to and under the
Dependent Service Agreements, Material Contracts and
Purchase Orders;
(5) the Books and Records;
(6) all of Lorilei's telephone numbers, facsimile transmission
numbers, e-mail addresses and web pages;
(7) all prototypes, design models and samples which specifically
relate to the products or services of the Business; and
(8) all goodwill associated with the Business.
(C) Xxxxxxx warrants to AmeriCom that on the date hereof, Xxxxxxx is
the true and lawful owner of the Assets, holds good, absolute and
marketable title in and to all of the Assets, and has full corporate
power and authority to sell and convey the same, in each case free and
clear of all Encumbrances other than the Permitted Encumbrances.
26
(D) From time to time after the date hereof, Xxxxxxx will execute and
deliver to AmeriCom such instruments of sale, transfer, conveyance,
and such consents, assurances, powers of attorney and other
instruments as may be reasonably requested by AmeriCom or its counsel
in order to vest in AmeriCom all right, title and interest of Xxxxxxx
in and to the Assets and otherwise to carry out the purpose and intent
of this Xxxx of Sale.
(E) (1) Notwithstanding any other provisions of this Xxxx of Sale to
the contrary, nothing contained in this Xxxx of Sale shall
in any way supersede, modify, replace, amend, change,
rescind, waive, exceed, expand, enlarge or in any way affect
the provisions, including the warranties, covenants,
agreements, conditions, representations or, in general any
of the rights and remedies, and any of the obligations and
indemnifications of Xxxxxxx set forth in the Agreement nor
shall this Xxxx of Sale expand or enlarge any remedies under
the Agreement including without limitation any limits on
indemnification specified therein.
(2) This Xxxx of Sale is intended only to effect the transfer of
certain property to be transferred pursuant to the Agreement
and shall be governed entirely in accordance with the terms
and conditions of the Agreement.
In Witness Whereof, Xxxxxxx has caused this Xxxx of Sale to be executed and
delivered on the date set forth below.
Xxxxxxx Communications, Inc.
--------------------------
__________________________ By: /s/ Xxxxxx Xxxxxxxx
Xxxxxx Xxxxxxxx, Vice President
Dated: October 17, 2000
Attest: /s/ Xxxxxxx X. Xxxxxxx
Xxxxxxx X. Xxxxxxx, Secretary
STATE OF FLORIDA }
COUNTY OF XXXXXX } SS.: (Corporate Seal)
On this __th day of October, 2000, before me, a notary public in and for
the county and state aforesaid, personally appeared Xxxxxx Xxxxxxxx and Xxxxxxx
X. Xxxxxxx, to me known, and known to me to be the vice president and secretary
of Xxxxxxx Communications, Inc., the above-described Florida corporation, and to
me known to be the persons who executed the foregoing instrument, and
acknowledged the execution thereof to be their free act and deed, and the free
act and deed of Xxxxxxx Communications, Inc., for the uses and purposes therein
mentioned. In witness whereof, I have hereunto set my hand and affixed my
notarial seal the day and year in this certificate first above written. My
commission expires:_____________.
(Seal)
--------------------------
Notary Public
27
Instrument of Assumption of Liabilities
THIS INSTRUMENT OF ASSUMPTION OF LIABILITIES (the "Indenture) is issued by
AmeriNet Communications, Inc., a Florida corporation ("AmeriCom") in favor of
Xxxxxxx Communications, Inc., a Florida corporation ("Xxxxxxx").
Witnesseth:
First: All capitalized terms used herein but not defined herein shall have
the meanings assigned such terms in the Agreement.
Second: In consideration of the sale and assignment by Xxxxxxx to AmeriCom of
the Assets pursuant to the terms of that certain asset purchase
agreement dated as of the 17 day of October, 2000 which is
incorporated herein by this reference (the "Agreement"), AmeriCom
hereby agrees to assume, pay, perform and discharge all Assumed
Liabilities.
Third: Notwithstanding any other provisions of this Indenture to the
contrary, nothing contained in this Indenture shall in any way
supersede, modify, replace, amend, change, rescind, waive, exceed,
expand, enlarge or in any way affect the provisions, including the
warranties, covenants, agreements, conditions, representations or, in
general any of the rights and remedies, and any of the obligations and
indemnification of Xxxxxxx set forth in the Agreement nor shall this
Indenture expand or enlarge any remedies under the Agreement including
without limitation any limits on indemnification specified therein.
This Indenture is intended only to effect the transfer of certain
liabilities to be transferred pursuant to the Agreement and shall be
governed entirely in accordance with the terms and conditions of the
Agreement.
Fourth: Except as expressly set forth in this Indenture, AmeriCom does not
assume any other obligation, liability or indebtedness of Xxxxxxx.
Fifth: Neither this Indenture nor any provision hereof, nor any document or
instrument executed or delivered pursuant to this Indenture, shall be
deemed to create any right in favor of or impose any obligation upon
any person or entity other than Xxxxxxx, AmeriNet and AmeriCom.
Sixth: This Indenture shall be governed by, construed and enforced in
accordance with the laws of the State of Florida.
* * *
28
In Witness Whereof, AmeriCom has executed this Instrument, as of the
day and year set forth below.
AmeriNet Communications, Inc.
--------------------------
__________________________ By: /s/ Xxxxxxxx X. Xxx Xxxxx
Xxxxxxxx X. Xxx Xxxxx, President
Dated: October 17, 2000
Attest: /s/ Xxxxxxx X. Xxxxxxx
Xxxxxxx X. Xxxxxxx, Secretary
STATE OF FLORIDA }
COUNTY OF XXXXXX } SS.: (Corporate Seal)
On this __th day of October, 2000, before me, a notary public in and
for the county and state aforesaid, personally appeared Xxxxxxxx X. Xxx Xxxxx
and Xxxxxxx X. Xxxxxxx, to me known, and known to me to be the president and
secretary of AmeriNet Communications, Inc., the above-described Florida
corporation, and to me known to be the persons who executed the foregoing
instrument, and acknowledged the execution thereof to be their free act and
deed, and the free act and deed of AmeriNet Communications, Inc., for the uses
and purposes therein mentioned. In witness whereof, I have hereunto set my hand
and affixed my notarial seal the day and year in this certificate first above
written. My commission expires:_____________________.
{Seal}
--------------------------
Notary Public
Exhibit 1.1(C)
The Assumed Liabilities
Creditor Total Owed Monthly Payment Term Description
AmeriNet Group $241,000.00 N/A On Demand Loan Working Capital
Arch Paging $113.58 $60.00 Net 20 Pagers
AT&T Wireless $603.56 $500-700.00 DUR Cell Phones
BCBS $0.00 $2,700.00 Net 30 Health Insurance
Business Exec. Network $50.00 $50.00 DUR Comp. Membership
Brian's Lawn Ser. $0.00 $125.00 Net 30 Landscaping Services
Closet Maid $347.24 $347.24 DUR Studio Shelves
Xxxxx Comm. $1,567.00 $1,567.00 DUR Imp. Trade Pub. Adv.
Culligan Water $55.98 $50.00 Net 10 Water
Xxxxxxxxx et al $482.00 $482.00 Net 10 Legal-Xxxxx Xxxxxxx
DJP Security $60.26 Qtrly. $60.26 Net 10 Security Monitoring
Earl's Well Drilling $90.00 N/A Net 10 Well Repair
Fine Print $1,887.85 $1,887.87 Net 30 Printer-Important
Future Quest $0.00 $66.29 Net 10 Internet Provider
Hanover Insurance $0.00 $292.30 Net 20 Workers Comp.
Hanover Insurance $477.80 $477.80 Net 20 Auto Ins.
Hanover Insurance $598.13 $598.13 Net 20 Comm. Package
Hy-Tech Whole $1,964.18 $1,964.18 Net 30 Equipment Purchase
Home Team Ser. $0.00 6 mo./yr. Net 30 Pest Control
Intermedia $2,429.26 $1,324.00 DUR L/LD Phone
Xxxxxxxx Pearlm $208.93 $208.93 Net 30 Legal
Markertek $600.08 $600.08 Net 30 Equipment Supplies
Neopost $565.40 Per Year Net 30 Postage Meter
Office Automation $150.00 $0.00 Net 20 Consultants
Exhibit 1.1(E)
Parts of Business Not Transferred
All of Lorilei's business, investment and operations, other than the operations
of the d/b/a Ocala News Tonight will be transferred. On August 24, 2000, the
principals of Xxxxxxx decided to cease all operations in relations to the local
news program, Ocala News Tonight.
Exhibit 1.1(P)(2)
Permitted Encumbrances
Exhibit 1.1(C), the liens apportioned to the schedule of Assumed
Liabilities is annexed hereto and made a part hereof.
The principal place of business for Xxxxxxx is 0000 XX 00xx Xxxxxx, Xxxxx,
Xxxxxxx 00000, Xxxxxx County, Florida, Airport Industrial Park. On or about
January 20, 2000, the City of Ocala notified Xxxxxxx that the existing water
system in Airport Industrial Park would be replaced by hookup to the City of
Ocala water system. Since this date, the water line has been installed and
tested. Xxxxxxx has provided the necessary information to the City of Ocala to
determine the impact fee for such water system. To date, Xxxxxxx is waiting on
notification for the City regarding the date of hookup and the amount of the
impact fee.
As of 9/29/00, a title search report has been prepared. A copy of the title
search report is attached hereto and incorporated herein. Specifically, The
Restrictions/Easements, Other Encumbrances and Standard Exceptions are
incorporated hereto.
Exhibit 1.1(W)
Material Contracts
The following table represents material contracts in the form of bank
notes, finance agreements with leasing companies and, mortgage, in excess of
$5,000.00.
Creditor Total Owed Monthly Term Description
Payment
AmSouth Bank $18,585.70 $463.55 9/30/04 Auto Loan
Chrysler Fin. $10,785.84 $363.08 6/13/03 Auto Loan
Colonial Pacific $5,648.73 $400.89 10/26/01 Lease-Prod. Equip.
Colonial Pacific $11,278.52 $768.35 6/4/01 Lease-Prod. Equip.
Credential $6,363.04 $368.28 12/17/01 Lease Phone System
ORIX $5,505.36 $177.61 5/28/03 Lease-Comp. Equip.
ORIX $5,076.11 $574.78 3/9/01 Lease-Voice Mail
Preferred Cap. $14,033.88 $506.36 10/19/03 Lease-Prod. Equip.
SBLS $188,840.15 $2,094.00 2022 Mortgage
Total $266,117.33
The following table represents material contracts in the form of client
contracts in excess of $5,000.00.
Client Contract Date Description
Amount Executed
American Heritage Homes $8,245.00 5/17/00 CD Business Cards
Xxxxxxx & Xxxxxx $6,000.00 9/14/00 Marketing Plan Creation
Beazer Homes $23,946.00 8/28/00 Home Design Brochures
Xxxxxx Xxxxxx $19,020.00 11/30/99 Media Buy
GNR Health Sys. $30,780.00 6/9/00 Catalog Creation
Lennar Development $8,995.00 7/25/00 Website Development
Total $96,986.00
Exhibit 1.1(Z)
Legal Description of Real Property and Improvements
The legal description of real property is as follows:
Xxx 0, Xxxxx X, Xxxxxxx Xxxxxxxxxx Xxxx, as per plat thereof
recorded in Plat Book 1, Page 192, Public Records of Xxxxxx
County, Florida.
Attached and annexed hereto and made a part hereof, is the Contract for Sale and
Purchase and Commitment to Insure Title.
The legal description of the improvements to the real property is as follows:
Xxx 0, Xxxxx X, Xxxxxxx Xxxxxxxxxx Xxxx, as per plat thereof
recorded in Plat 1, Pages 92 and 93, of the Public Records of
Xxxxxx County, Florida.
The address is 0000 XX 00xx Xxxxxx, Xxxxx, Xxxxxxx 00000, Xxxxxx County,
Florida. Lorilei's facility is 5,000 square feet in total space, with 3,500
square feet devoted to office and production space and 1,500 square feet devoted
to studio space. The entire building is air conditioned and heated. Attached and
annexed hereto and made a part hereof, is the Mortgage for the building.
Exhibit 3.1(A)
List of States in Which Xxxxxxx is Qualified to Conduct Business
and List of Xxxxxxx Subsidiaries
Xxxxxxx is qualified to conduct business in the State of Florida. Xxxxxxx has no
subsidiaries.
Exhibit 3.1(H)(1)(a)
Dependent Service Agreements, Material Contracts
and Work Orders
Xxxxxxx does not have any Dependent Service Agreements or Work Orders other than
as reflected in Exhibit 1.1(W) and Schedule 1.1(Y), incorporated by references
herein.
Exhibit 3.1(H)(1)(a)
Dependent Service Agreements, Material Contracts
and Work Orders
Xxxxxxx does not have any Dependent Service Agreements or Work Orders other than
as reflected in Exhibit 1.1(W) and Schedule 1.1(Y), incorporated by references
herein.
Exhibit 3.1(H)(1)(b)
Existing Defaults
While Xxxxxxx has not received any notice of default on any of their material
contracts such as equipment finance leases, Xxxxxxx would like to disclose that
some payments on leases have not been made in a timely manner.
FINOVA Loan Administration repossessed the Pre-Press Film equipment on 9/19/00
previously to Lorilei's request. It was Lorilei's intention to have the
Pre-Press repossessed because Xxxxxxx was unable to make any revenue from
offering this service. Xxxxxxx tried to exchange the equipment for something
more useful but to no avail.
The Bank of America automobile loan is for the Volvo. In August, 2000, Xxxxxxx
notified Bank of America that Xxxxxx X. Xxxxxxxxxx has resigned, filed
bankruptcy and left the State of Florida. Xxxxxxx further informed Bank of
American that the Volvo was for Gerald's primary use and since he is no longer
employed, that Xxxxxxx had no use for the vehicle and would like the vehicle
repossessed. No payment has been made to Bank of America since July 2000. To
date, Xxxxxxx has not been contacted as to when the repossession will take
place.
Exhibit 3.1(H)(2)
Consents to Transfer Required
The following table represents the consents to transfer required for all
material contracts.
Creditor Total Owed Monthly Term Description
Payment
AmSouth Bank $18,585.70 $463.55 9/30/04 Auto Loan
Chrysler Fin. $10,785.84 $363.08 6/13/03 Auto Loan
Freedom Cap. $4,438.28 $442.03 8/27/01 Lease -Comp. Equip.
ORIX $5,505.36 $177.61 5/28/03 Lease-Comp. Equip.
ORIX $5,076.11 $574.78 3/9/01 Lease-Voice Mail
SBLS $188,840.15 $2,095.00 2022 Mortgage
The Associates $1,384.84 $378.97 10/01/00 Lease-Audio
The Manifest $1,227.69 $274.71 10/20/00 Lease-Comp. Equip.
Total $235,843.97
Attached and annexed hereto and made a part hereof, are copies of the consent
letters to each of the above creditors.
Schedule 1.1(Y)
Work Orders
The following table represents customer Work Orders. These are contracts for
purchase of goods and services from Xxxxxxx which relate to the Business.
Client Contract Date Description
Amount Executed
Advent Product Development $500.00 6/22/00 Produce :60 Commercial
Advent Product Development $500.00 7/21/00 Produce :60 Commercial
Advent Product Development $500.00 9/25/00 Produce :60 Commercial
Advent Product Development $500.00 10/24/00 Produce :60 Commercial
American Heritage Homes $8,245.00 5/17/00 CD Business Cards
AmeriNet Xxxxx.xxx $600.00 9/27/00 Website Revision
AmeriNet Xxxxx.xxx $1,460.00 10/20/00 Website Update
Xxxxxxx & Xxxxxx $6,000.00 9/14/00 Marketing Plan Creation
Beazer Homes $23,946.00 8/28/00 Home Design Brochures
Xxxxxxx & Xxxx LLP $495.00 7/26/00 PowerPoint Presentation
Xxxxxx Xxxxxx $19,020.00 11/30/99 Media Buy
FL. Camp for Children $3,995.00 3/13/00 Promotional Video
Xxxxx'x Auto Art $1000.00 9/7/00 Direct Mail Insertion
GNR Health Sys. $30,780.00 6/9/00 Catalog Creation
Xxxxx Xxxxxx for President $11,000.00 12/8/99 Agency Retainer
Home Builders Assoc. $1,632.00 10/12/00 Printing Invitations
Lennar Development $8,995.00 7/25/00 Website Development
Millennium Sound & Design $3,742.00 11/30/00 Promotional Ordering
Park Square Homes $2,250.00 7/28/00 Website Changes
Park Square Homes $325.00 10/10/00 Slides of Website
WSA Marketing $480.00 11/23/99 Mo. Website Hosting
Total $125,965.00
ALLOCATION OF PURCHASE PRICE: Schedule 2.1E
Assets Acquired:
Current Assets
Cash 578.60
Total Current Assets 578.60
Other Assets
Costs in Excess of Xxxxxxxx 11,871.00
Prepaid renatl on all assets not acquired,
and purchase of all accounts receivable 254,653.51
---------------------
Total Other Assets 266,524.51
---------------------
Total Assets Acquired 267,103.11
Liabilities Assumed
Current Liabilities
Accounts Payable 26,103.11
Loan Payable-AmeriNet 241,000.00
Total Liabilities Assumed 267,103.11
Schedule 2.1(B)(2)
Excluded Liabilities
Creditor Total Debt Description
Adelphia Cable $2,120.60 Comm. Leased Access
Advanta Mastercard $3,744.84 GRC Guaranteed Debt
AmSouth Bank $28,109.68 Line of Credit
AmSouth Bank $18,585.70 Auto Loan-Mountaineer
Bank of American $24,488.55 Volvo - Repo
Xxxx South $353.48 Yellow Page Advertisement
Xxxxxxxxxx Media $2,085.00 Person. Advert. Leigh Placed
Xxxxx Xxxxxxxx $1,831.95 Legal
Chevron $1,251.09 GRC Guaranteed Debt
Chrysler Fin. $10,785.84 Auto Loan-Caravan
Colonial Pacific $1,142.88 Lease-LCD Projector
Colonial Pacific $3,291.59 Lease-Comp. Equip.
Colonial Pacific $5,648.73 Lease-Prod. Equip.
Colonial Pacific $11,278.52 Lease-Prod. Equip.
Comcast Cable $2,131.15 Comm. Leased Access
Cable Rep/Xxx Comm. $9,788.30 Comm. Leased Access
Credential $6,363.04 Lease Phone System
Xxxxxxxxxx Loan from SH $38,505.30 Personal $ Loaned Xxxxxxx
Xxxxxxxxxx Exp. Xxxx. $6,787.63 Not on Books-Never Was
DECCA $2,114.60 Comm. Leased Access
Xxxxx Media $13,350.00 Billboard Advertising
Florida Office Associates $34,051.92 3 yr. Orlando Office Lease
Fox 31 $7,650.00 Media Camp.(SW GA Con.)
Freedom Cap. $4,438.28 Prod. Equipment Lease
HGTV $21,420.00 Comm. Leased Access
Schedule 2.1(B)(2)
Excluded Liabilities
Creditor Total Debt Description
HPS Printing $218.32 Pre-Press Supplies
Xxxxx Xxxxx $4,262.00 Accountant
XxXxxxxxx Note $52,186.50 Leigh's Dad Loan to Xxxxxxx
Mail South, Inc. $4,596.23 Direct Mail-Client Related
Media Line $300.00 Personnel Ad. Ocala News
Office Depot $2,374.77 GRC Guaranteed Debt
OK-106 $216.75 Media Camp.(SW GA Con.)
ORIX $5,505.36 Lease Comp. Equip.
ORIX $5,076.11 Lease Voice Mail
Photographic Waste $193.00 Film Developer Waste
Preferred Cap. $14,033.88 Lease-Prod. Equip.
X.X. Xxxxxx $204.10 Subscription Renewal
Sam's Club $3,266.89 GRC Guaranteed Debt
SBLS $188,840.15 Mortgage
Staples $3,912.67 GRC Guaranteed Debt
TCI Media a/k/a AT&T $6,825.00 Media Camp.(SW GA Con.)
The Associates $1,384.84 Lease - Audio
The Xxxxx Co. $11,959.50 Billboards (SW GA Con.)
The Manifest $1,227.69 Lease - Comp. Equip.
Thomson S. GA. Marketing $2,977.56 Direct Mail Insertion Co.
Time Warner Comm. $7,424.53 Comm. Leased Access
Tri-State Outdoor Media $15,682.50 Billboards (SW GA Con.)
Xxxxxxx Printing $1,305.83 Billboard Printing
WAAC FM $1,530.00 Media Camp.(SW GA Con.)
WALB-TV $9,945.00 Media Camp.(SW GA Con.)
Schedule 2.1(B)(2)
Excluded Liabilities
Creditor Total Debt Description
WCTV-6 $5,064.30 Media Camp.(SW GA Con.)
WISK FM $1,075.89 Media Camp.(SW GA Con.)
WJAD FM Radio $2,094.50 Media Camp.(SW GA Con.)
WJIZ FM $2,703.00 Media Camp.(SW GA Con.)
WKAK FM $1,700.00 Media Camp.(SW GA Con.)
WMTM FM $1,840.01 Media Camp.(SW GA Con.)
WOBB FM $2,570.40 Media Camp.(SW GA Con.)
WQVE FM $1,666.00 Media Camp.(SW GA Con.)
WTLH FM $1,211.25 Media Camp.(SW GA Con.)
WTUF FM $1,380.06 Media Camp.(SW GA Con.)
Total $628,073.26
Schedule 3.1(B)(2)
Exceptions to Non-contravention Warranty
None.
Schedule 3.1(C)(1)
Litigation
To Lorilei's knowledge, there are not actions, suits or proceedings
pending, or, threatened or anticipated before any court or governmental or
administrative body or agency affecting the Business, except the following
information.
During the month of August 1999, Xxxxxxx placed a spot air time buy on
behalf of a client with Home & Garden Television ("HGTV"). The total buy for
this flight was $21,420.00. Not long after the buy was placed, trade industry
reports made allegations that HGTV inserted national spots in local break slots.
This allegation proved to be true for some customers which meant that there was
a possibility that our client's spot did not air according to the buy scheduled.
In any event, Xxxxxx X. Xxxxxxxxxx, former CEO of Xxxxxxx, wanted proof from
HGTV that this was not the case and that our client's spot ran according to
schedule. After many months of correspondence between Xxxxxxx and HGTV, this
issue was never resolved. Xxxxxx X. Xxxxxxxxxx never was satisfied with the
proof that HGTV provided. The account was then forwarded to HGTV's collection
agency. The outcome was the same, Xxxxxx X. Xxxxxxxxxx refused to come to a
resolution with HGTV based on the insufficient proof provided. The account has
been forwarded to the collection agency's legal department. To date, no suit has
been filed to Lorilei's knowledge.
Xxxxxx Xxxx, a former sales representative, for Xxxxxxx resigned on June
28, 2000. She resigned due to irreconcilable differences with Xxxxxx X.
Xxxxxxxxxx, CEO and Xxxxx X. Xxxxxxxxxx, President. Shortly after her departure,
she obtained an attorney who wrote a demand letter for past wages that Xxxxxx
felt she was entitled to based on her commission structure. Xxxxxxx hired their
attorney to respond to Sheryl's demand. The response from Lorilei's attorney
basically stated that there was no basis for her claim. To date, not suit has
been filed to Lorilei's knowledge.
On August 1, 2000, Xxxxxx X. Xxxxxxxxxx and Xxxxx X. Xxxxxxxxxx resigned
from Xxxxxxx. Shortly thereafter, Xxxxxx X. Xxxxxxxxxx obtained an attorney
demanding collection of his last paycheck for 8/5/00, for wages 8/16-8/31/00.
Lorilei's Legal Affairs Department responded by informing Xxxxxxxxxx'x attorney
that Xxxxxx X. Xxxxxxxxxx had violated his employment agreement and therefore
Xxxxxxx did not feel it was their duty to pay him the last paycheck. To date,
not suit has been filed to Lorilei's knowledge.
On September 19, 2000 a 10 day demand letter was sent to Xxxxxx Xxxxxx
College. Xxxxxx Xxxxxx College ("EWC") owes Xxxxxxx $27,300.37 for infomercial
production, CD Rom authoring, creation of promotional items, graphic and print
services. While Xxxxxxx feels that they have gone above and beyond the
parameters of the contracts to provide a finished product that meets EWC's
approval, EWC will not make payment on their account or communicate with
Xxxxxxx.
September 1, 0000, Xxxxx Xxxxxxxxxx executed an office lease for a sales
office in Orlando with Corporate Investments, Inc. There were trade arrangements
made in the amount of
Exhibit 3.1(C)(1)
Litigation
$5,000.00. Basically, The Firm Multimedia would produce an infomercial for
Corporate Investments International, Inc. In return, The Firm Multimedia would
occupy one of their office suites. Sometime during the year Corporate
Investments International, Inc. decided that they wanted a CD-Rom instead of a
infomercial. As of October 16, 2000, The Firm Multimedia has completed the
CD-Rom and sent it to Corporate Investments International, Inc. for approval. On
October 13, 2000, Xxxxxxx received a letter from Corporate Investment
International's attorney demanding payment in full for the one year lease term
and threaten that suit would be filed if no payment is received. Lorilei's legal
affairs department has replied and provided information in reference to the
above events. Xxxxxxx feels that this is a misunderstanding and that this issue
will be resolved out of court.
Schedule 3.1(D)
Governmental Approvals
None
Schedule 3.1(G)
Tax Related Security Interests
There are no security interests on any of the Assets that arose in
connection with any failure to pay any Tax, and Xxxxxxx has withheld and paid
all Taxes required with respect to the Business..
Schedule 3.1(H)(1)(d)
Other Agreements Required for Operation of Business
Other than Exhibits 1.1(W), Material Contracts and Exhibit 3.1(H)(1)(a),
Dependent Service Agreements, Material Contracts, Purchase Orders, which are
incorporated by reference, no other agreements are required for operation of
business.
Schedule 3.1(H)(3)
Exceptions to Xxxxxxx Representations Concerning
Absence of Liabilities or Potential Liabilities
To the best of Lorilei's knowledge, there has not been any event that may
give rise to liability on the part of Xxxxxxx in respect of any claim for the
products produced or sold.
Schedule 3.1(J)(1)
Final Xxxxxxx Payroll and Benefits Data
The following table represents the total gross payroll for personnel for
the period ended immediately before Closing.
Employee Gross Pay Commissions Included Employee Expense
in Gross Pay Reimbursement
Included in Gross Pay
Xxxxx Xxxxxx $720.00 $0.00 $0.00
Xxxxx Xxxxxx $1,512.50 $0.00 $0.00
Xxxxxx Xxxxxxxx $1,258.33 $0.00 $0.00
Duff DeVaul $1,250.00 $0.00 $0.00
Xxxxxx XxXxxxxx $1,050.00 $0.00 $0.00
Xxxxxx Xxxxxxxx $1,666.67 $0.00 $0.00
Xxxxx Xxxx $1,500.00 $0.00 $0.00
Xxxxx Xxxxxx $1,091.67 $0.00 $0.00
Xxxxx Xxx Xxxxx $1,733.33 $0.00 $0.00
Xxxxxx Xxxxxx $1,025.00 $0.00 $0.00
Xxxxxx Xxxxxx $2,500.00 $0.00 $0.00
Xxxx Xxx $1,300.00 $0.00 $0.00
Xxxx Xxxxx $1,500.00 $0.00 $0.00
Xxxxxx XxXxxxxx $708.00 $0.00 $0.00
Xxxxx Xxxxxxxxx $965.00 $0.00 $0.00
Xxxxxxx Xxxxxx $1,250.00 $0.00 $0.00
$21,030.50 $0.00 $0.00
Schedule 3.1(J)(2)(a)
List of Lorilei's Employee Benefit Plans
Xxxxxxx offers health insurance to its employees through Blue Cross Blue
Shield after 90 days of employment. Xxxxxxx contributes one-half or $94.00 of
the employee's monthly premium. Xxxxxxx employees may add their family to the
health insurance plan at their own personal expense.
After 90 days of employment, Xxxxxxx employees are entitled to 40 hours of
personal time to be used for doctors appointments and the like. After one year
of employment, Xxxxxxx employees are entitled to 40 hours of vacation time and
40 hours of personal time. Every year on the anniversary date of the employee's
hire date, they are entitled to 40 hours of vacation and 40 hours of personal
time. The following table represents time accrued immediately before closing.
Employee Vacation Hours Personal Hours Total Hours
Xxxx Xxxxx 0.00 0.00 0.00
Xxxxx Xxxx 0.00 40.00 40.00
Xxxxx Xxxxxx 0.00 0.00 0.00
Duff DeVaul 0.00 40.00 40.00
W. Xxxx Xxxxxx 0.00 40.00 40.00
Xxxxxx Xxxxxx 40.00 31.50 71.50
Xxxx Xxx 0.00 0.00 0.00
Xxxxxx XxXxxxxx 40.00 30.00 70.00
D. Xxxxx Xxxxxxxx 0.00 24.00 24.00
Xxxxx Xxxxxxxxx 16.00 36.50 52.50
Xxxxx Xxxxxx 0.00 8.75 8.75
Xxxxx Xxxxxx 0.00 40.00 40.00
Xxxxxx Xxxxxx 0.00 40.00 40.00
Schedule 3.1(O)
Lorilei's Intellectual Property
The attached Excel spreadsheet which represents Lorilei's Trademarks and
Copyrights is annexed hereto and made a part hereof.
Xxxxxxx has two fictitious names registered with the State of Florida. The
Firm Multimedia and Ocala News Tonight. Annexed hereto and made a part hereof
are the Fictitious Name Registration Certificates.
