ASSET PURCHASE AGREEMENT
ASSET PURCHASE AGREEMENT made this _____ day of March, 1999 (but effective as of
February 2, 1999) by and between BASIC ORGANIZA TION OF MIDDLE ECONOMIC
RESURGENCE SOCIETY, INC., a Florida corporation ("Seller"), and XXXXXXX.XXX,
INC., a Florida corpora tion ("Buyer").
RECITALS:
A. Seller operates and is the sole owner of all assets of a line of business
commonly known as and referred to herein as the Boomers line of business.
B. Buyer wishes to purchase the assets of the Boomers line of business
(excluding all liabilities of whatever nature related thereto except as
otherwise expressly provided in this Agreement) currently conducted by Seller
(the "Transferred Business") so that, after the consummation of the purchase and
the transactions contemplated hereunder, Buyer will be actively conducting the
Transferred Business.
C. The transfer of the Transferred Business will be effected by the transfer
(the "Asset Transfer") to Buyer of those assets and properties, tangible and
intangible, of and pertaining to or used in the Transferred Business, wherever
located, and whether or not on the books and records of Seller listed on the
SCHEDULE OF ASSETS attached hereto (such assets and property being collec tively
referred to herein as the "Purchased Assets").
NOW, THEREFORE, in consideration of the premises and the mutual covenants
herein contained, the parties hereto agree as follows:
ARTICLE I
PURCHASE AND SALE OF ASSETS
1.1 SALE OF PURCHASED ASSETS. On the terms and subject to the conditions
contained herein, Seller agrees to sell to Buyer and Buyer agrees to buy from
Seller, at the Closing described in Section 2.1 hereof, all of the Purchased
Assets.
1.2 COMPLETION OF ASSET TRANSFER. At the Closing, Seller shall transfer and
assign to Buyer good and valid title to the Purchased Assets free and clear of
any liens. The transfer and delivery of the Purchased Assets by Seller to Buyer
shall be effected by the execution and delivery of all necessary instru ments of
transfer. Seller shall take all other steps as may be reasonably necessary to
put Buyer in actual possession and operating control of the Purchased Assets. To
the extent that
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any sale, transfer, use or other similar taxes may be imposed by reason of such
sale, transfer, assignment and delivery of the Purchased Assets, Buyer shall pay
such taxes.
1.3 NON-COMPETE. Seller covenants that for a period of three (3) years after
the Closing Date (as defined in Section 2.1 below), Seller (distinct from its
officers and directors) will not, directly or indirectly, either on its own or
in conjunction with or on behalf of any person, firm or company, carry on, or be
engaged, or hold an interest in carrying on within the United States any
business that could be deemed similar to the Boomers line of business.
Notwithstanding the foregoing, the parties acknowledge and agree that ownership
by Seller of the securities of Buyer to be issued to Seller at Closing shall not
constitute a breach of this Section 1.3. In the event that the covenant of
Seller contained in this Section 1.3 is more restrictive than permitted by the
law of the jurisdiction in which Buyer seeks enforcement thereof, the covenant
of Seller contained in this Section 1.3 shall be limited to the extent permitted
by law.
1.4 PURCHASE PRICE. The total consideration for all of the transactions
contemplated by this Agreement (the "Purchase Price") shall be (a) forty five
thousand dollars ($45,000) allocated to tangible assets, (b) cancellation of
debt in the amount of two hundred fifty five thousand nine hundred dollars
($255,900) owed by Seller to Buyer (after applying the cash payment described in
clause (a) to such debt) and (c) five million four thousand (5,004,000) shares
of common stock of Buyer ("Common Stock"). The Purchase Price shall be due at
the Clos ing. The Common Stock shall be issued to the parties and in the
denominations set forth on the SCHEDULE OF RECIPIENTS, provided that the
requirements for issuance stipulated by Buyer's securi ties counsel are met.
1.5 SUBSEQUENT DOCUMENTATION. At any time and from time to time after the
Closing, upon the request of Buyer and without further consideration to Seller,
but with Buyer and Seller bearing their own respective expenses coincident
thereto, Buyer and Seller shall do, execute, acknowledge and deliver, or will
cause to be done, executed, acknowledged and delivered, all such further acts,
assignments, transfers, conveyances, assumptions, powers of attorney and
assurances as may be reasonably required for the better assigning, transferring,
granting and conveying to Buyer or for aiding and assisting in collecting and
reducing to possession and control of Buyer any or all of the Purchased Assets.
Notwithstanding the foregoing, the parties acknowledge and agree that (i) Buyer
shall bear all expenses in connection with the delivery and transportation of
all tangible personal property purchased hereunder and (ii) Seller shall take
all reasonable steps necessary for securing consents to contracts assigned
hereunder.
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ARTICLE II
THE CLOSING
2.1 CLOSING. The Closing of the purchase and sale of the Purchased Assets
provided for in this Agreement (the "Closing") shall take place at 10:00 a.m.,
Florida time, at the offices of Xxxxxxxxxx Xxxxxxx & Xxxxx, P.A., 0000 X.
Xxxxxxxx Xxxxx, Xxxx Xxxxx, Xxxxxxx 00000, on March ___, 1999 BUT SHALL BE
RETROAC TIVELY EFFECTIVE AS OF FEBRUARY 2, 1999 (the "Closing Date"). At the
Closing:
(a) Seller shall execute and deliver to Buyer:
(i) all title deeds and documents in respect of the Purchased Assets;
(ii) a xxxx of sale in the form of EXHIBIT "A" for the Purchased
Assets executed by Seller in favor of Buyer (the "Purchase Xxxx
of Sale");
(iii) a Certificate of Officer executed by the president of Seller,
certifying as follows:
(A) No injunction or temporary restrain ing order has been
issued which restrains, prohibits or invali dates the Asset
Transfer or the other transactions contemplated by this
Agreement; and
(B) No legal action or proceeding has been instituted or
threatened seeking to restrain, prohibit or invalidate the
purchase or sale of the Purchased Assets or the other
transactions contemplated by this Agreement; and
(iv) an Investment Representation Letter in the form attached hereto
as EXHIBIT "B".
(b) Buyer shall deliver to Seller:
(i) the shares as specified in Section 1.4(a) above;
(ii) a Satisfaction of Debt in the form attached hereto as EXHIBIT
"C"; and
(iii) evidence of the assumption of the liabili ties set forth on the
SCHEDULE OF ASSUMED LIABILITIES (the "Assumed Liabilities").
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ARTICLE III
REPRESENTATIONS AND WARRANTIES
3.1 REPRESENTATIONS AND WARRANTIES OF SELLER. Seller represents and warrants to
Buyer as of the date hereof as fol lows:
(a) EXECUTION AND VALIDITY OF AGREEMENT. Seller has all requisite
corporate power and authority to execute and deliver this Agreement,
and to perform its obligations hereunder. This Agreement and the
Purchase Xxxx of Sale will be duly executed and delivered by Seller
and, assuming due authoriza tion, execution and delivery by the other
parties thereto, constitute the legal, valid and binding agreement of
Seller, enforceable against Seller in accordance with its terms,
except as enforcement may be limited by bankruptcy, insolvency, reorga
nization, moratorium or other laws relating to or limiting creditors'
rights generally or by equita ble principles relating to
enforceability.
(b) CORPORATE ORGANIZATION. Seller is a corporation duly organized,
validly existing and in good standing under the laws of Florida, and
has the corporate power and authority to own, use and operate
properties and to carry on the business as the same is now being
conducted by Seller.
(c) NO CONFLICT. Neither the execution and delivery of this Agreement, nor
the performance by Seller of the transactions contemplated hereby and
thereby, will (i) violate or conflict with any of the provisions of
the Articles of Incorporated or Bylaws of Seller; (ii) with or without
the giving of notice or the lapse of time or both, violate or
constitute a default under, or result in the ac celeration of or
entitle any party to accelerate (whether after the giving of notice or
lapse of time or both) any obligation under any lien, in denture, deed
of trust, lease, contract, agree ment, license or other instrument or
violate any provision of any law, order, judgment, decree, restriction
or ruling of any governmental author ity to which Seller is a party or
by which any of its property is bound; or (iii) result in the creation
of any lien, mortgage, pledge, charge, claim, security interest,
encumbrance or any other contractual restriction of any nature
whatsoever ("Lien") upon any of the Purchased Assets, the loss of any
license or other contractual right
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with respect thereto or, affect the ability of Buyer to conduct
successfully the Transferred Business subsequent to the Closing.
(d) ABSENCE OF CERTAIN CHANGES OR EVENTS. Since De cember 31, 1998, there
has not been, with respect to the Boomers line of business:
(i) any change in the business or financial condition or any other
event directly re lated to Seller which could reasonably be
expected, either in any case or in the ag gregate, to have a
material adverse effect on the business, operations or properties
of the Boomers line of business taken as a whole ("Material
Adverse Effect");
(ii) the incurrence of any indebtedness for money borrowed in respect
of the Boomers line of business or the creation of any Lien on
any of the Purchased Assets (whether tangible or intangible);
(iii) any transfer or grant of any rights under any licenses,
agreements, trademarks, tradenames, inventions, processes, techni
cal know-how or other proprietary rights related to the Boomers
line of business either within or outside the United States;
(iv) any material damage, destruction or loss to any of the Purchased
Assets (whether or not covered by insurance); or
(v) any agreement to do any of the foregoing in respect of the
Purchased Assets.
Notwithstanding the foregoing, Seller makes no representations or
warranties concerning its financial condition.
(e) ABSENCE OF LIENS. Seller has and, at Closing, Buyer will have, good
and valid title to the Pur chased Assets, free of all Liens except
liens for Taxes (as defined in subsection (p) below) not yet due and
payable and other minor imperfections which do not interfere with the
use or ownership of the Purchased Assets.
(f) CONDITION AND ADEQUACY OF PURCHASED ASSETS. The tangible Purchased
Assets are in a good state of repair and operating condition, ordinary
wear and
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tear excepted.
(g) TRADEMARKS. The SCHEDULE OF INTELLECTUAL PROPERTY attached hereto sets
forth all domestic trade marks, brand names, copyrights, copyright
regis trations, technical know-how and other proprietary rights
relating to the Transferred Business used and/or owned in whole or in
part by Seller. No licenses, sublicenses, covenants or agreements have
been granted or entered into by Seller pursu ant to which Seller
licenses any person to use any of the foregoing or any other technical
knowhow or other proprietary rights of Seller applicable to the
Boomers line of business. Seller owns all domestic trademarks, brand
names, or copyrights, processes, technical know-how and other propri
etary rights used in the Transferred Business, free of any Liens. No
proceedings have been in stituted or are pending or threatened which
chal lenge the validity of the ownership or use by Seller either
within or outside the United States of any trade name, brand name or
copyright. There is no infringing use of any of such trademarks or
infringement of any of such copyrights by any other person, either
within or outside the United States, known to Seller.
(h) CONTRACTS. The SCHEDULE OF CONTRACTS attached hereto accurately lists
all contracts, agreements and arrangements, whether written or oral,
express or implied, or having any other legally binding basis which
are material to the Transferred Busi ness to which the Transferred
Business is a party directly or indirectly or by which it or any of
its property is bound on the date hereof. True, correct and complete
copies of the written con tracts, leases, agreements, plans and
arrangements listed on the SCHEDULE OF CONTRACTS have been made
available to Buyer. Summaries of all oral contracts listed on the
SCHEDULE OF CONTRACTS are correct and do not omit to state any fact
neces sary to make the statements therein complete or not misleading.
(i) COMPLIANCE WITH CONTRACTS, AGREEMENTS, ETC. Seller is in substantial
compliance with all terms and provisions of all contracts listed on
the SCHEDULE OF CONTRACTS and all such contracts are valid and binding
in accordance with their terms and in full force and effect in all
material re spects, and no material breach or material default by
Seller or event which, with notice or lapse of
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time or both, could constitute a material breach or material default
by Seller, exists with respect thereto, and no party thereto has given
notice or asserted to Seller that Seller is in default thereunder and
no other party thereto is in breach or default thereunder.
(j) LITIGATION. There are no lawsuits, actions, arbi trations or legal or
administrative or regulatory proceedings, charges, complaints or
investigations pending or threatened against Seller in respect of the
Transferred Business. None of the Purchased Assets is subject to or
bound by, any order, judg ment, injunction, stipulation, award or
decree (whether rendered by a court or administrative agency or by
arbitration). There are no cita tions, fines or penalties heretofore
asserted against Seller under any foreign, federal, state or local law
that remain unpaid that bind the Purchased Assets and Seller has not
received any unresolved notice from any foreign, federal, state or
local agency or other governmental authority with respect to any
violation of any foreign, federal, state or local law, regulation,
order or decree applicable to the Transferred Business.
(k) GOVERNMENTAL REGULATIONS. There have been no notices received and
there are no proceedings pending or threatened, with respect to a
violation by Seller of any law, rule, regulation, decree or order
applicable to the Transferred Business.
(l) BROKER'S OR FINDER'S FEES. Seller has not autho rized any person to
act as a broker, finder or in any similar capacity in connection with
the trans actions contemplated by this Agreement other than those
whose fees and expenses with respect to such transactions will be paid
in full by Seller.
(m) CORPORATE RECORDS. The books and records of Seller are complete and
correct in all material respects, have been maintained in accordance
with good business practices, have been made available to Buyer and
are in Buyer's possession.
(n) LABOR MATTERS. None of the directors or officers of Seller has been
informed that any of the key employees of the Boomers line of business
plans to terminate his, her or their employment during the one hundred
eighty (180) day period subsequent to the Closing Date.
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(o) TAX MATTERS. All Tax Returns (as hereinafter defined) required by law
to be filed on or prior to the date hereof by, or with respect to the
operations, activities and assets of the Trans ferred Business have
been properly and timely filed with the appropriate governmental
agencies having jurisdiction, and all such Tax Returns are correct,
accurate and complete in all material respects. All Taxes (as
hereinafter defined) shown to be due on such Tax Returns have been
paid. For purposes of this Agreement, "Tax" or "Taxes" shall mean all
federal, state, local and foreign taxes, charges, fees, levies or
other assessments, whether in the nature of income, profits,
franchise, sales, value added, use, transfer, occupation, property,
severance, produc tion, excise, withholding, employers', customs or
gross receipts, and other taxes or duties of any kind whatsoever in
respect of the Transferred Business (including interest, additions to
tax, penalties and fines (with respect to any tax)). "Tax Return" and
"Tax Returns" shall mean any report, return or other information, or
any amend ment thereof, required to be filed or supplied in connection
with any Tax.
(p) OMISSIONS. No representation or warranty by Seller contained in this
Agreement, and no written statement, certificate, schedule, list or
other written information furnished by or on behalf of Seller to Buyer
pursuant to this Agreement or in connection with the transactions
contemplated hereby when taken together with the other state ments
herein or therein contains any untrue state ment of a material fact or
omits to state a mate rial fact necessary in order to make the state
ments herein or therein, in light of the circum stances under which
they were made, not mislead ing. There is no fact known to Seller
which mate rially adversely affects or in the future would (so far as
can now be foreseen) materially ad versely affect the Transferred
Business which has not been set forth in this Agreement.
(q) INVESTMENT STATUS. Seller is acquiring the shares of Common Stock
issuable to Seller hereunder and each of the parties named on the
SCHEDULE OF RECIPIENTS is acquiring the shares of Common Stock
issuable to him hereunder for their own accounts and not with a view
to, or for sale in connection with, any distribution of the Common
Stock of Buyer.
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(r) INVESTMENT EXPERIENCE; SOPHISTICATION. Seller has had the opportunity
to meet with management of Buyer and explore with the management of
Buyer the current and potential future value of the Common Stock.
Seller further represents and warrants that Buyer at no time has given
any projection or guaranty to Seller as to the future worth of the
Common Stock.
(s) NO APPLICATION OF BULK SALES LAWS. Seller repre sents that neither the
Asset Transfer nor the other transactions contemplated pursuant to
this Agreement are subject to any bulk transfer laws.
3.2 REPRESENTATIONS AND WARRANTIES OF BUYER. Buyer repre sents and warrants to
Seller and as of the Closing Date as follows:
(a) ORGANIZATION. Buyer is a corporation duly orga nized, validly existing and
in good standing under the laws of Florida and has all requisite corpo rate
power and authority to own, use and operate its property and to carry on
its business.
(b) AUTHORITY. The execution and delivery of this Agreement by Buyer, the
purchase of the Purchased Assets and the performance of the other transac
tions herein have been duly authorized by the Board of Directors of Buyer
and the authorizing resolutions have been certified to Seller by the
officers of Buyer. This Agreement has been duly executed and delivered by
Buyer and, assuming due authorization, execution and delivery by Seller,
constitutes the legal, valid and binding agreement of Buyer enforceable
against Buyer in accordance with its terms, except as enforcement may be
lim ited by bankruptcy, insolvency, reorganization, moratorium or other
laws relating to or limiting creditors' rights generally or by equitable
prin ciples relating to enforceability.
(c) NO CONFLICT. Neither the execution and delivery of this Agreement, nor the
performance by Buyer of the transactions contemplated hereby will (i)
violate or conflict with any of the provisions of the Articles of
Incorporation or Bylaws of Buyer; (ii) with or without the giving of notice
or the lapse of time or both, violate or constitute a default under, or
result in the acceleration of or entitle any party to accelerate (whether
after the giving of notice or the lapse of time or both) any obligation
under any mortgage, charge, indenture,
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deed of trust, lease, contract, agreement, license or other instrument or
any provision of any law, order, judgment, decree, restriction or ruling of
any governmental authority to which Buyer is a party, or by which any of
its property is bound.
(d) BROKER'S OR FINDER'S FEES. Buyer has not autho rized any person to act as a
broker, finder or in any other similar capacity in connection with the
transactions contemplated by this Agreement.
(e) OMISSIONS. No representation or warranty by Buyer contained in this
Agreement and no written state ment, certificate, schedule, list or other
written information furnished by or on behalf of Buyer to Seller pursuant
to this Agreement or in connection with the transactions contemplated
hereby when taken together with the other statements herein or therein
contains any untrue statement of a mate rial fact or omits to state a
material fact neces sary in order to make the statements herein or therein,
in light of the circumstances under which they were made, not misleading.
There is no fact known to Buyer which materially adversely affects or in
the future would (so far as can now be fore seen) materially adversely
affect the Transferred Business or issuance of the Common Stock which has
not been set forth in this Agreement.
3.3 LIMITATIONS ON SURVIVAL. Each of the representations and warranties made by
the parties in Article III of this Agree ment shall survive the Closing to and
until the date which is one (1) year after the Closing Date PROVIDED that a
fraudulent representation or warranty contained herein shall survive the Closing
to and until the date which is one hundred twenty (120) days following
expiration of the applicable statutes of limita tions with respect to claims for
fraud (at which time they shall terminate). Each of the representations and
warranties contained in Section 3.1(p) shall survive the Closing to and until
the date which is one hundred twenty (120) days following expiration of the
applicable statutes of limitations with respect to the Taxes to which such
representation or warranty relates, and each of the representations and
warranties contained in Sections 3.1(a) and (b) and Sections 3.2(a) and (b) will
survive the Closing and shall not terminate.
ARTICLE IV
ACTIONS SUBSEQUENT TO THE CLOSING DATE
4.1 BOOKS AND RECORDS. Seller shall deliver to Buyer all books, papers, files
and records that relate to the Transferred
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Business and the Purchased Assets relating to the Transferred Business. Buyer
agrees to permit Seller to have access to, and to make copies of, all books,
papers, files and records of Buyer during normal business hours and upon
reasonable notice, to the extent necessary to enable Seller to discharge any
legal obliga tions relating to its ownership of the Purchased Assets.
4.2 CONFIDENTIALITY. Seller agrees to keep confidential and not disclose to any
person or use for its own benefit any trade secret or other confidential
information concerning the Boomers line of business or Buyer, except that which
is in the public domain through no fault of Seller and except as Seller may be
legally required to disclose pursuant to applicable laws, regulations, court or
administrative orders. Buyer agrees to keep confidential and not disclose to any
person or use for its own benefit any information concerning Seller except
information which is in the public domain and except as Buyer may be legally
required to disclose pursuant to applicable laws, regulations, court or
administrative orders.
4.3 COOPERATION IN LITIGATION. Each party shall provide the other with such
cooperation as may reasonably be requested, at the expense of the requesting
party (unless the requesting party is to be indemnified with respect thereto, in
which case such cooperation shall be given at the expense of the indemnify ing
party), in connection with the defense of any litigation whether existing at the
Closing Date or arising thereafter out of, or relating to, the business or
affairs of the Transferred Business, including without limitation, by making
available all books and records reasonably available relating thereto, and all
employees having knowledge of the matters in controversy.
4.4 NON-SOLICITATION OF EMPLOYEES. For a period of one (1) year after the
Closing Date, no party hereto shall, either on its own account or in conjunction
with or on behalf of any other person, firm or company, solicit or entice away
from any other party hereto, any officer, employee or customer.
4.5 USE OF NAME. Upon Closing, Buyer shall have the right to use the name
"Boomers" in its corporate name and in connection with the operation of the
Transferred Business.
4.6 PUBLICITY. Neither Seller nor Buyer shall make or cause to be made any
public announcement concerning the transac tions contemplated by this Agreement
without giving prior written notice to the other party.
4.7 TAX BASIS INFORMATION. As soon as practicable after the Closing Date,
Seller shall deliver to Buyer: all information necessary to prepare a tax basis
balance sheet which will state with respect to each asset (including all
tangible and intangible personal property) comprising the Transferred Business
at the
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Closing Date the adjusted tax basis, the method of amortization or depreciation
used, the accumulated depreciation or amortiza tion claimed, the date placed in
service, and the useful life used to compute depreciation, amortization and/or
investment tax credit and remaining useful life; and true, correct and complete
copies of all Tax Returns, deficiencies, assessments, audit reports, closing
agreements with and notices from any taxing authority, accounting work papers
and pertinent financial records for the Transferred Business for all years with
respect to which the statute of limitations has not expired.
4.8 PERFORMANCE OF OBLIGATIONS BY BUYER. With respect to all contracts assigned
to Buyer pursuant to this Agreement, Buyer covenants and agrees to perform the
contractual obligations required to be performed by the terms thereof on or
after the Closing Date (except to the extent such obligations arise as a result
of any failure by Seller to perform any agreement or covenant contained therein
on or before the Closing Date).
4.9 BULLETIN BOARD APPLICATION. Within ninety (90) days of the Closing Date,
Buyer shall (a) use its best efforts to have a member firm of the National
Association of Securities Dealers, Inc. file an application on Form 211 to have
shares of the Buyer's Common Stock trade on the Over-the-Counter Electronic
Bulletin Board, and (b) file a registration statement on Form 10- SB at the
Securities and Exchange Commission to become a report ing company as that term
is described in the Securities Exchange Act of 1934.
4.10 REINSTATEMENT; PAYROLL TAXES. In the event that Seller is not validly
existing and in good standing under the laws of Florida on the Closing Date,
Buyer shall rectify such situation with Seller's cooperation. In the event that
Seller has not paid all withholding and employers' Taxes, Buyer shall pay same
at its own expense.
4.11 LEGEND REMOVAL. Upon expiration of the holding period applicable to the
Common Stock imposed thereon by Rule 144 as promulgated the Securities and
Exchange Commission, Buyer agrees to cooperate to the best of its ability to
have the restrictive legends removed from the certificates representing the
Common Stock.
ARTICLE V
INDEMNIFICATION
5.1 INDEMNIFICATION BY SELLER. Subject to the limitations set forth in Section
5.7, Seller hereby covenants to indemnify Buyer, its officers, directors,
employees and representatives (each a "Buyer Indemnified Party" and
collectively, the "Buyer Indemnified Parties"), against, and agrees to protect,
save and
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keep harmless the Buyer Indemnified Parties from payment, and hereby assumes
liability for the payment of all liabilities (including liabilities for taxes),
obligations, losses, damages, penalties, claims, actions, suits, judgments or
settlements of any nature or kind, whether known or unknown, absolute or contin
gent, accrued or unaccrued, liquidated or unliquidated and including all costs,
expenses and disbursements (including reasonable cost of investigation by, and
actual attorneys', accountants' and expert witnesses' fees and expenses payable
to, third parties) (collectively, "Loss" or "Losses"), arising out of or
resulting from (a) any breach by Seller of a representation or warranty
contained herein, (b) any failure by Seller to perform any agreement or covenant
contained herein or (c) any claim or cause of action of any third party arising
out of any action, inaction, event, condition or obligation (other than
contractual obligations of Buyer required to be performed by the terms thereof
on or after the Closing Date) of Seller occurring or existing prior to the
Closing Date.
5.2 INDEMNIFICATION BY BUYER. Subject to the limitations set forth in Section
5.7, Buyer hereby agrees to indemnify Seller, its officers, directors, employees
and representatives (each a "Seller Indemnified Party" and collectively, the
"Seller Indemnified Parties") against, and agrees to protect, save and keep
harmless the Seller Indemnified Parties from payment, and hereby assumes
liability for the payment, of any or all Losses or Loss arising out of or
resulting from (a) any breach by Buyer of a representation or warranty contained
herein, (b) any failure by Buyer to perform any agreement or covenant contained
herein, (c) that certain agreement dated March 4, 1998 between Xxxxxx X. Xxxxx &
Associates and Seller, or (d) any claim or cause of action of any third party
arising out of any action, inaction, event, condition or obligation (other than
contractual obliga tions of Seller not transferred to Buyer hereunder and
required to be performed by the terms thereof on or after the Closing Date) of
Buyer occurring or existing on or following the Closing Date.
5.3 PROCEDURE FOR GENERAL CLAIMS.
(a) GENERAL CLAIMS BY BUYER. Buyer shall give written notice to Seller
with respect to any claim or event with respect to which Buyer
believes it is or may be entitled to indemnification pursuant to
Section 5.1 setting forth the general nature and basis of said claim
or event and the amount thereof to the extent known. Each notice of
claim shall be delivered in accordance with Section 6.3 hereto.
(b) GENERAL CLAIMS BY SELLER. Seller shall give writ ten notice to Buyer
with respect to any claim or
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event with respect to which Seller believes a Seller Indemnified Party
is or may be entitled to indemnification pursuant to Section 5.2
setting forth the general nature and basis of said claim or event and
the amount thereof to the extent known. Each notice shall be delivered
in accor dance with Section 6.3 hereto.
5.4 PROCEDURE FOR THIRD PARTY CLAIMS.
(a) CLAIMS BY BUYER AND SELLER. Buyer, on behalf of itself or any Buyer
Indemnified Party, on the one hand, or Seller, on behalf of itself or
any Seller Indemnified Party on the other hand (the "Indemni fied
Party") shall give prompt written notice to the party from whom
indemnification is sought (the "Indemnifying Party") pursuant to
Section 6.3 hereof (a "Notice of Third Party Claim") of any claim,
action, suit or proceeding brought by any third party relating to
litigation, administrative proceedings or similar actions
(collectively, "Third Party Claims") with respect to which such
Indemnified Party believes it is entitled to in demnification
hereunder, together with an estimate of the amount in dispute
thereunder and a copy of any claim, process, legal pleadings or
correspon dence with respect thereto received by the Indem nified
Party. In connection with any such Third Party Claim, the Indemnifying
Party may, at its election and expense, participate in the defense of
such Third Party Claim and no such Third Party Claim shall be settled
without the consent of the Indemnifying Party, which shall not be
unreason ably withheld, provided that the Indemnifying Party shall
have acknowledged in writing the In demnifying Party's obligation to
indemnify in respect of such Third Party Claim and the Indemni fying
Party shall have provided reasonable assur ance (and related documents
thereof) that the Indemnifying Party has and will have the financial
ability to fulfil such obligations. With respect to any Third Party
Claim relating solely to the payment of money damages and which will
not result in the Indemnified Party becoming subject to in junctive or
other equitable relief, within ten (10) days of receipt of notice of
such Third Party Claim, the Indemnifying Party may, by written notice
to the Indemnified Party, assume the de fense of such Third Party
Claim through counsel of its own choosing which is reasonably
acceptable to the Indemnified Party and with all expenses thereof to
be paid by the Indemnifying Party, in
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which event the Indemnified Party may participate in the defense
thereof with all expenses thereof to be paid by such Indemnified
Party, PROVIDED that such Indemnified Party shall have the right to
employ separate counsel to represent such In demnified Party if, in
such Indemnified Party's reasonable judgment, a conflict of interest
be tween the Indemnifying Party and such Indemnified Party exists with
respect to such Third Party Claim with all expenses thereof to be paid
by the Indemnified Party. In the event that the Indemni fying Party
is, directly or indirectly, conducting the defense against any Third
Party Claim, the fees and expenses of counsel to the Indemnified Party
shall be paid by the Indemnifying Party. If the Indemnifying Party
fails to assume the defense of such Third Party Claim by delivering a
written notice of the Indemnifying Party's intention to assume such
defense within ten (10) days of re ceipt of the initial notice
thereof, or thereafter abandons or fails diligently to pursue such de
fense, the Indemnified Party may assume such de fense. In the event
the Indemnifying Party exer cises its right to undertake the defense
against any such Third Party Claim as provided above, the Indemnified
Party shall cooperate with the Indem nifying Party in such defense and
make available to the Indemnifying Party all pertinent records,
materials and information in its possession or under its control
relating thereto as is reason ably required by the Indemnifying Party,
with all expenses thereof incurred in connection therewith to be paid
by the Indemnifying Party. Similarly, in the event the Indemnified
Party is, directly or indirectly, conducting the defense against any
such Third Party Claim, the Indemnifying Party shall cooperate with
the Indemnified Party in such defense and make available to the
Indemnified Party all such records, materials and information in the
Indemnifying Party's possession or under the Indemnifying Party's
control relating thereto as is reasonably required by the Indemnified
Party, with all expenses incurred in connection therewith to be paid
by the Indemnifying Party. Notwithstanding anything in this Section
5.4 to the contrary, however, in the event of a claim with respect to
which the Indemnifying Party has agreed to assume the defense thereof,
the Indemni fying Party shall not thereafter be entitled to dispute,
and hereby agree not to dispute, the Indemnified Party's right to
indemnification therefor pursuant to Section 5.1 or Section 5.2
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hereof or any subsequent claims of the Indemnified Party with respect
to such Third Party Claim.
(b) SETTLEMENT OR DECISION OF THIRD PARTY CLAIMS. The Indemnifying Party
shall not, without the written consent of the Indemnified Party, (i)
settle or compromise any Third Party Claim or consent to the entry of
any judgment which does not include as an unconditional term thereof
the delivery by the claimant or plaintiff to the Indemnified Party of
a written release from all liability in respect of such Third Party
Claim, (ii) settle or compromise any Third Party Claim in any manner
that may, in the reasonable judgment of the Indemnified Party,
adversely affect the Indemnified Party (including without limitation,
any settlement or compromise that includes any admission of negligence
or other malfeasance on the part of the Indemnified Party), or (iii)
upon the issuance of an order of a court of competent jurisdiction or
an arbitrator with respect to such Third Party Claim, appeal or oth
erwise challenge such order without the consent of the Indemnified
Party. Similarly, no Third Party Claim which is being defended in good
faith by the Indemnifying Party in accordance with the terms of this
Agreement shall be settled by the Indemnified Party without the
written consent of the Indemni fying Party, which consent shall not be
unreason ably withheld. Upon the settlement or compromise of any Third
Party Claim, the order of a court of competent jurisdiction or
arbitrator (if the In demnified Party has failed to consent to the xx
xxxx or challenge thereof) with respect thereto or the final,
non-appealable order of any appellate court (if the Indemnified Party
has consented to the appeal or challenge thereof) with respect
thereto, as the case may be, any resulting settle ment, award, damages
or judgment shall be paid by the Indemnifying Party.
5.5 INDEMNIFICATION MATTERS. In cases where any Indemni fied Party has made a
prior payment with respect to any liability that is the subject of
indemnification under Sections 5.1 or 5.2 hereof, the Indemnifying Party shall
also pay interest on such funds at a rate per annum equal to the prime rate
published by First Union National Bank of Florida, N.A. in effect from time to
time during the relevant period, said interest to be due from the date of such
prior payment to the date of payment of any such funds by the Indemnifying
Party. The parties agree that payments by an Indemnifying Party made under
Sections 5.1 or 5.2 hereof shall be treated as an adjustment to the Purchase
Price for tax purposes. The provisions of this Article V shall not be deemed
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to be a limitation or waiver of any other remedy afforded by law to Buyer for
indemnification under Section 5.1 hereof.
5.6 TAX INDEMNIFICATION. Seller hereby agrees to indemnify the Buyer
Indemnified Parties against, and agrees to protect, save and keep harmless the
Buyer Indemnified Parties from pay ment, and subject to Section 4.10 hereinabove
hereby assumes liability for the payment, of all Taxes with regard to the
operations, activities and assets of the Transferred Business for (a) all years
or periods (or portions thereof) ending (or deemed to end) on or prior to the
Closing Date and (b) any taxable year or period of Seller which ends after the
Closing Date to the extent that the Taxes are allocable to the operations of the
Transferred Business up to the Closing Date, as determined on the basis of the
permanent records of Seller (including workpapers).
5.7 TERMINATION OF INDEMNIFICATION. The obligations to indemnify and hold
harmless an Indemnified Party (a) pursuant to Section 5.6 shall terminate one
hundred twenty (120) days follow ing the expiration of the applicable statutes
of limitations with respect to the Tax liabilities in question (giving effect to
any waiver, mitigation or extension thereof), (b) pursuant to Sec tions 5.1(a)
and 5.2(a) shall terminate with respect to any theretofore unasserted claim when
the applicable representation or warranty terminates, pursuant to Section 3.3,
and (c) pursuant to the other clauses of Sections 5.1 and 5.2 shall not
terminate; PROVIDED, HOWEVER, that such obligations to indemnify and hold
harmless shall not terminate with respect to any item as to which the person to
be indemnified shall have, before the expiration of the applicable period,
previously made a claim by delivering a notice pursuant to Section 5.3 or
Section 5.4 hereof to the Indemnifying Party.
ARTICLE VI
GENERAL PROVISIONS
6.1 EXPENSES. All fees, commissions and other expenses incurred by any party
hereto in connection with the negotiation of this Agreement and in preparing to
consummate the Asset Transfer and the other transactions contemplated hereby,
includ ing any fees and expenses of their respective counsel and xxxxx cial
advisors, shall be borne by the party incurring such fee or expense.
6.2 EXECUTION IN COUNTERPARTS. This Agreement may be executed in counterparts,
both of which shall be considered one and the same agreement, and shall become a
binding agreement when both counterparts have been signed by each party and
delivered to the other party.
6.3 NOTICES. All notices, request, demands or other
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communications provided herein shall be made in writing and shall be deemed to
have been duly given if delivered personally or sent by registered or certified
first class mail, postage prepaid, as follows:
(a) If to Seller: Basic Organization of Middle
Economic Resurgence Society, Inc.
0000 X.X. 00xx Xxxxxx
Xx. Xxxxxxxxxx, XX
Attn: Xxxxxx X. Xxxxxxxxx
with a copy to: Xxx X. Xxxxxx, Esq.
P. O. Xxx 000000
Xxxx Xxxxx, XX 00000
(b) if to Buyer: Xxxxxxx.Xxx, Inc.
000 "X" Xxxxxx #000
Xxxxxx, XX 00000-0000
Attn: J. Xxxxxx Xxxxxxx
with a copy to: Mirkin & Xxxxx, P.A.
0000 Xxxx Xxxxx Xxxxx Xxxx. #000
Xxxx Xxxx Xxxxx, XX 00000
Attn: Xxxx X. Xxxxxx, Esq.
or to such other address as either party shall have specified by notice in
writing to the other party. All such notices, re quests, demands and
communications shall be deemed to have been received on the date of delivery or
on the third business day after the mailing thereof.
6.4 GOVERNING LAW. This Agreement shall be governed by and construed in
accordance with the laws of the State of Florida as applied to contracts entered
into and to be performed in Florida and without regard to the application of
principles of conflict of laws.
6.5 TITLES AND HEADINGS. Titles and headings to Articles and Sections herein
are inserted for convenience of reference only and are not intended to be a part
of or to affect the meaning or interpretation of this Agreement.
6.6 SUCCESSORS AND ASSIGNS. This Agreement shall not be assignable by Seller
without the prior written consent of Buyer or by Buyer without the prior written
consent of Seller. This Agreement shall be binding upon and shall inure to the
benefit of the parties hereto and their successors in interest and assigns
(provided that such successors in interest and assigns are permitted under this
Agreement).
6.7 ENTIRE AGREEMENT; NO ORAL WAIVER. This Agreement, the Schedules and the
certificates and other documents contemplated
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hereby constitute the entire agreement between the parties pertaining to the
subject matter hereof and supersede all prior and contemporaneous agreements,
understandings and representa tions, whether oral or written, of the parties in
connection therewith except to the extent incorporated or specifically referred
to herein. No covenant or condition or representation not expressed in this
Agreement shall affect or be effective to interpret, change or restrict this
Agreement. No prior drafts of this Agreement and no words or phrases from any
such prior drafts shall be admissible into evidence in any action, suit or other
proceeding involving this Agreement or the transactions contem plated hereby.
This Agreement may not be changed or terminated orally, nor shall any change,
termination or attempted waiver of any of the provisions of this Agreement be
binding on any party unless in writing signed by Seller and Buyer. No
modification, waiver, termination, rescission, discharge or cancellation of this
Agreement and no waiver of any provision of or default under this Agreement
shall affect the right of Seller or Buyer thereaf ter to enforce any other
provision or to exercise any right or remedy in the event of any other default,
whether or not similar.
6.8 SEVERABILITY. If any provision of this Agreement shall be declared by any
court of competent jurisdiction to be illegal, void or unenforceable, all other
provisions of this Agreement shall not be affected and shall remain in full
force and effect.
6.9 NO THIRD-PARTY RIGHTS. Nothing in this Agreement, express or implied, shall
or is intended to confer upon any person other than the parties hereto or their
respective succes sors or permitted assigns, any rights or remedies of any
nature or kind whatsoever under or by reason of this Agreement, includ ing
without limitation any rights of employment.
6.10 SUBMISSION TO JURISDICTION. Each of the parties hereto
hereby irrevocably unconditionally:
(a) submits for itself and its property in any legal action or proceeding
relating to this Agreement, (i) except as otherwise provided in clause
(ii) below, to the exclusive general jurisdiction of the courts of the
State of Florida and the United States sitting in Broward County,
Florida PROVIDED -------- that such submission shall not limit the
ability of Buyer or Seller to proceed against such person in any court
of competent jurisdiction in the event that jurisdiction in such
courts of exclu sive jurisdiction is denied, and (ii) to the non-
exclusive general jurisdiction of the courts of the State of Florida
and the United States sitting in Broward County, Florida in respect of
any legal action or proceeding for the recognition and en forcement of
any judgment;
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(b) consents that any such action or proceeding may be brought in such
courts and waives any objection that it may now or hereafter have to
the venue of any such action or proceeding in any such court or that
such event or proceeding was brought in an inconvenient court and
agrees not to plead or claim the same;
(c) agrees that service of process in any such action or proceeding may be
effected by mailing a copy thereof by registered or certified mail (or
any substantially similar form of mail), postage pre paid, to its
address set forth in Section 6.3; and
(d) agrees that nothing herein shall affect the right to effect service of
process in any other manner permitted by law or shall limit the right
to xxx in any other jurisdiction.
6.11 REMEDIES. In the event of any failure or refusal by any party to comply
with any covenant or agreement contained in this Agreement, the other party
shall have the right to pursue the remedy of specific performance.
6.12 ATTORNEYS' FEES. In the event of any controversy, claim or dispute between
the parties arising out of or relating to this Agreement, or the breach thereof,
the prevailing party shall be entitled to recover from the losing party
attorneys' fees, expenses and costs actually incurred.
IN WITNESS WHEREOF, the parties have executed, delivered and entered into this
Agreement as of the day and year first above written.
BASIC ORGANIZATION OF MIDDLE
ECONOMIC RESURGENCE SOCIETY, INC.
By:_______________________________
Name:__________________________
Title:_________________________
XXXXXXX.XXX, INC.
By:_______________________________
J. Xxxxxx Xxxxxxx, President
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