Exhibit 10.2
STOCK OPTION AGREEMENT
THIS STOCK OPTION AGREEMENT ("Agreement") is made and entered into as
of July 15, 2002 by and among AMERICAN LEISURE HOLDINGS, INC., a Nevada
corporation ("Buyer") and L. Xxxxxxx Xxxxxx ("Seller").
RECITALS
WHEREAS, Hickory Travel Systems, Inc. (the "Company") is engaged in the
business of providing specialty travel services (the "Business"). The Company
together with its Subsidiaries is defined herein as the "Hickory Group";
WHEREAS, Seller owns thirty-three (33) shares (the "Shares") of capital
stock, without par value, of the Company (the "Company Common Stock"), which
constitutes a majority of the issued and outstanding shares of the capital stock
of the Company; and
WHEREAS, in consideration for $10.00, the receipt of which is hereby
acknowledged, Seller hereby grants an option to Buyer to purchase, upon
exercise, the Shares.
NOW, THEREFORE, the parties hereto agree as follows:
ARTICLE I
SALE AND TRANSFER OF SHARES; CLOSING
1.1 Sale and Purchase. Upon the terms and subject to the conditions of
this Agreement and on the basis of the representations, warranties and covenants
contained herein, at the Closing, upon exercise of the Buyer Option, by Buyer
delivering written notice to Seller in accordance with Section 14.3 herein,
Seller shall sell to Buyer the Shares free and clear of all Liens, and Buyer
shall purchase the Shares.
1.2 Payment of Purchase Price. Subject to the terms and conditions of
this Agreement, and in reliance upon the representations and warranties and
covenants contained herein, at the Closing, in consideration for the Shares,
Buyer shall issue to the Seller Eighteen Thousand Shares of Series B Convertible
Redeemable Preferred Stock of the Buyer as set forth in a Certificate of
Designations in the form annexed hereto as Exhibit "A".
1.3 Closing. The Closing shall take place at the offices of Xxxxx
Xxxxxx & Xxxxx, LLP, 000 Xxxxxxx Xxxxxx, 00xx Xxxxx, Xxx Xxxx, Xxx Xxxx at 10:00
a.m. local time, on a date, not more than ten (10) Business Days nor less than
five (5) Business Days after Buyer exercises the Buyer Option by written
exercise notice to Seller in accordance with Section 14.3. The Closing, and all
transactions to occur at the Closing, shall be deemed to have taken place at,
and shall be effective as of, the close of business on the Closing Date.
ARTICLE II
REPRESENTATIONS AND WARRANTIES OF SELLER
The Seller makes the following representations and warranties to Buyer
as of the date hereof and as of the Closing Date, unless a different date is
specifically provided herein. Seller shall deliver the Schedule to this
Agreement within five (5) Business Days from the date of this Agreement.
2.1 Organization, Qualification, etc.
(a) The Company is a corporation duly organized, validly
existing and in good standing under the laws of its jurisdiction of
incorporation with full corporate power and authority to carry on its
business as it is now being conducted and proposed to be conducted, and to own,
and operate its business and assets.
(b) The Company is duly qualified, licensed or admitted to do
business and in good standing in the jurisdictions in which the conduct of its
business, the ownership, operation of its properties and assets, or the
transactions contemplated by this Agreement, require it to be so qualified,
licensed or admitted, where the failure to be so qualified, licensed or admitted
would have a Material Adverse Effect upon the Company and its Subsidiaries,
taken as a whole.
2.2 Subsidiaries.
(a) Each Subsidiary is a corporation duly organized, validly
existing and in good standing under the laws of its jurisdiction of
incorporation, and has full corporate power and authority to carry on its
business as it is now being conducted and to own, operate and lease its
businesses and assets. Each Subsidiary is duly qualified, licensed or admitted
to do business and is in good standing in those jurisdictions in which the
ownership, operation of such Subsidiary's businesses and assets, the conduct or
nature of its business, or the consummation of the transactions contemplated
herein makes such qualification, licensing or admission necessary, except where
the failure to have such qualification, licensing or admission would have a
Material Adverse Effect upon the Company and its Subsidiaries, taken as a whole.
..
(b) All of the outstanding shares of capital stock of each
Subsidiary have been duly authorized and validly issued, are fully paid and
non-assessable, and are owned, beneficially and of record, by the Company or a
Subsidiary wholly owned by the Company free and clear of all Liens and there are
no outstanding Options with respect to any Subsidiary.
2.3 Capitalization. The total authorized capital stock of the Company
consists of ten thousand shares of Company Common Stock. Of such authorized
capital stock, the only issued and outstanding shares are sixty-three shares of
Company Common Stock. All of the issued and outstanding Company Common Stock
have been duly authorized and validly issued, are fully paid and non-assessable,
are free of pre-emptive rights, and were offered, issued, sold and delivered by
such company in compliance with all applicable state and federal securities
laws.
2.4 Corporate Record Books. The corporate minute books of each of the
Company and each member of the Hickory Group are complete and correct in all
material respects and contain all of their proceedings of shareholders and
directors.
2.5 Title to Stock. All of the issued and outstanding shares of the
capital stock of the Company are and immediately prior to Closing will be owned
beneficially and of record by the Persons in the amounts and as set forth on
Schedule 2.5 hereto. Seller is the sole record and beneficial owner of the
Shares and has sole managerial and dispositive authority with respect to the
Shares. The Shares are free and clear of all Liens. All proxies granted with
respect to the Shares have been validly revoked. Upon delivery to Seller by
Buyer of the Purchase Price at the Closing, Seller will convey, and Buyer will
own and hold, good and marketable title to the Shares, free and clear of any and
all Liens or contractual restrictions or limitations whatsoever.
2.6 Options and Rights. Except as otherwise described in Schedule 2.6
hereto, there are no outstanding subscriptions, options, warrants, rights,
securities, contracts, commitments, understandings or arrangements under which
the Company is bound or obligated to issue any additional shares of its capital
stock or rights to purchase shares of its capital stock (collectively,
"Options"). There are no agreements, arrangements or understandings between
Seller, the Company and any other Person regarding the Shares (or the transfer,
disposition, holding or voting thereof).
2.7 Authorization. Seller has full legal right, power and capacity to
enter into this Agreement and all other agreements, documents, instruments and
certificates contemplated herein or related hereto (the "Ancillary Documents")
and perform his obligations hereunder and thereunder. Seller was represented by
and had the benefit of legal counsel who participated in the preparation and
negotiation of this Agreement. Upon execution and
delivery of this Agreement and the Ancillary Documents by the parties hereto and
thereto, this Agreement and each of the Ancillary Documents shall constitute the
legal, valid and binding obligation of Seller, enforceable against him in
accordance with their respective terms, except as enforceability may be limited
by bankruptcy, insolvency, reorganization, moratorium or other similar laws
affecting the enforcement of creditor rights generally and by general equitable
principles.
2.8 No Violation; Consents and Approvals. Except as set forth on
Schedule 2.8 hereto, the execution and delivery by Seller of this Agreement, the
Ancillary Documents and the fulfillment of and compliance with the respective
terms hereof and thereof by Seller do not and will not, (a) conflict with or
result in a breach of the terms, conditions or provisions of, (b) constitute a
default or event of default under (with due notice, lapse of time or both), (c)
result in the creation of any Lien upon the capital stock or assets of the
Company pursuant to, (d) give any third party the right to accelerate any
obligation under, (e) result in a violation of, or (f) require any
authorization, consent, approval, exemption or other action by or notice to any
Authority or other third party (including, without limitation, any creditor,
customer or supplier) pursuant to, the Charter Documents of the Hickory Group or
any Regulation, Order or Contract to which the Hickory Group or Seller is
subject. Seller has complied with all applicable Regulations and Orders in
connection with the execution, delivery and performance of this Agreement, the
Ancillary Documents and the transactions contemplated hereby and thereby. None
of the Company or any member of the Hickory Group or Seller is required to
submit any notice, report, or other filing with any governmental authority in
connection with Seller's execution or delivery of this Agreement, the Ancillary
Documents or the consummation of the transactions contemplated hereby and
thereby. No authorization, consent, approval, exemption or notice is required to
be obtained by any of the Company, any member of the Hickory Group or Seller in
connection with the execution, delivery, and performance of this Agreement, the
Ancillary Documents and the transactions contemplated hereby and thereby.
2.9 Financial Statements; Undisclosed Liabilities.
(a) The audited consolidated balance sheets as of December 31,
2000 and December 31, 1999 and related consolidated statements of income and
retained earnings and consolidated statements of cash flows for the years ended
December 31, 2000 and December 31, 1999, including all notes thereto (the
"Financial Statements") fairly present the consolidated financial position of
the Company as at the respective dates thereof and the consolidated results of
operations and cash flows of the Company for the periods indicated in accordance
with GAAP applied on a consistent basis throughout the periods involved (except
for changes in accounting principles disclosed in the notes thereto). For
purposes of this Agreement, the balance sheet of the Company as of December 31,
2000 is referred to as the "Balance Sheet" and the date thereof is referred to
as the "Balance Sheet Date".
(b) Except as set forth on Schedule 2.9 attached hereto, to
the Seller's knowledge, none of the Hickory Group has any liability, whether
accrued, absolute or contingent, of a type required to be reflected on a balance
sheet or described in the notes thereto in accordance with GAAP, in excess of
$1,000 for any single undisclosed liability or $50,000 for all such undisclosed
liabilities.
2.10 Employees.
(a) Except as set forth on Schedule 2.10, since the Balance
Sheet Date, there have been no increases in the compensation or benefits payable
to or to become payable to, or any special bonuses, to any officer, director,
key employee or other employee, except ordinary salary increases implemented on
a basis and in amounts consistent with past practices and amounts.
(b) Except as set forth on Schedule 2.10 hereto, the Hickory
Group has been, and currently is, in compliance in all material respects with
all Federal, State and local Regulations and Orders affecting employment and
employment practices applicable thereto, including, without limitation, those
Regulations promulgated by the Equal Employment Opportunity Commission, and
those relating to terms and conditions of employment and wages and hours.
(c) Except as set forth on Schedule 2.10, (i) the Hickory
Group is not bound by or subject to (and none of its assets or businesses is
bound by or subject to) any arrangement with any labor union; (ii) no employees
of the Hickory Group are represented by any labor or trade union or covered by
any collective bargaining agreement with the Hickory Group; and (iii) no
campaign to establish such representation is in progress; and (iv) there is no
pending or, to the Knowledge of Seller, threatened labor dispute involving the
Hickory Group and any group of its employees nor has the Hickory Group
experienced any labor interruptions over the past three years. The Hickory
Group's relationship with its employees is good.
2.11 Absence of Changes. Since the Balance Sheet Date, the Hickory
Group has conducted its business only in the Ordinary Course of Business and
there has not been: (a) any material damage, destruction or loss, whether
covered by insurance or not, with regard to the Hickory Group's properties and
business; (c) any amendment or change in the Hickory Group's authorized or
issued capital stock, or Charter Documents; (d) any declaration, setting aside
or payment of any dividend or distribution (whether in cash, stock or property)
in respect of, the capital stock of the Hickory Group, any purchase, retirement,
redemption or other acquisition of, any grant of any stock option, warrant or
other right to purchase shares of, or the grant of any registration rights with
respect to, the capital stock of the Hickory Group; (e) any cancellation of, or
agreement to cancel any indebtedness or obligation owing to the Hickory Group;
(f) any amendment, modification or termination of any existing Permits or
Contracts, or entering into any new Contract or plan relating to any salary,
bonus, insurance, pension, health or other employee welfare or benefit plan for
or with any directors, officers, employees or consultants of the Hickory Group;
(g) any entry into any material Contract by the Hickory Group not in the
Ordinary Course of Business, including, without limitation, relating to any
borrowing, capital expenditure or the sale or purchase of any property, rights,
or assets or any options or similar agreements with respect to the foregoing;
(h) any disposition by the Hickory Group of any material asset; (i) any adverse
change in any Contract or relationship with any customer or supplier the sales
patterns, pricing policies, accounts receivable or accounts payable relating to
the Hickory Group; (j) any write-down of the value of any inventory of the
Hickory Group, or write-off, as uncollectible, of any notes, trade accounts or
other receivables; or (k) any change by the Hickory Group in accounting methods
or principles.
2.12 Contracts.
(a) Except as set forth on Schedule 2.8, no consent of any
party to any Contract is required in connection with the execution, delivery or
performance of this Agreement, or the consummation of the transactions
contemplated hereby.
(b) Each material Contract to which any member of the Hickory
Group is a party is in full force and effect and is valid and enforceable in
accordance with its terms. Each member of the Hickory Group has performed in all
material respects all obligations required to be performed by it and (i) is not
in default in any respect under or in breach of, and (ii) is not in receipt of
any claim of default or breach under any material Contract. No event has
occurred which with the passage of time or the giving of notice or both would
result in a default, breach or event of non-compliance under any material
Contract to which any member of the Hickory Group is subject (including without
limitation all performance bonds, warranty obligations or otherwise) which would
cause a Material Adverse Effect upon the Company and its Subsidiaries, taken as
a whole. No member of the Hickory Group has any present expectation or
intention of not fully performing all such obligations. Seller has no Knowledge
of any breach or anticipated breach by the other parties to any such material
Contract to which any member of the Hickory Group is a party.
2.13 Real Estate and Personal Property Matters.
(a) The Hickory Group has good and marketable title to all of
the properties and assets reflected in the Balance Sheet or acquired after the
date thereof (other than properties sold or otherwise disposed of since the date
thereof in the Ordinary Course of Business) free and clear of all Liens, except
(i) statutory Liens not yet delinquent, (ii) such imperfections or
irregularities of title, Liens, easements, charges or other encumbrances that do
not detract from or interfere with the present use of the properties or assets
subject thereto or affected thereby, otherwise impair present business
operations at such properties, or do not detract from the value of such
properties and assets, taken as a whole, or (iii) as reflected in the Balance
Sheet.
(b) The Hickory Group owns, and will on the Closing Date own,
good and marketable title to all the personal property and personal assets,
tangible or intangible, used in the Business except as to those assets leased,
all of which leases are in good standing and no party is in default thereunder.
Except as set forth on Schedule 2.13, none of the assets belonging to or held by
the Hickory Group is or will be on the Closing Date subject to any (i) Contracts
of sale or lease, or (ii) Liens. Except for normal breakdowns and servicing
requirements, all machinery and equipment regularly used by the Hickory Group in
the conduct of its business is in good operating condition and repair, ordinary
wear and tear excepted.
(c) There has not been since the date of the most recent
Balance Sheet, and will not be prior to the Closing Date, any sale, lease, or
any other disposition or distribution by the Hickory Group of any of its assets
or properties and any other assets now or hereafter owned by it, except
transactions in the Ordinary Course of Business. On and after the Closing Date,
the Hickory Group, as direct or indirect wholly-owned subsidiaries of Buyer,
will own, or have the unrestricted right to use, all properties and assets that
are currently used in connection with the Business.
2.14 Litigation. Except as set forth on Schedule 2.14, there is no
Claim pending or, to the Knowledge of Seller, threatened against, relating to or
affecting Seller, the Hickory Group or any of the assets or businesses of the
Hickory Group nor is there any Order outstanding against Seller, the Hickory
Group or any of the assets or properties of the Hickory Group.
2.15 Tax Matters.
(a) The Hickory Group has filed all federal, state, and local
tax reports, returns, information returns and other documents (collectively, the
"Tax Returns") required to be filed with any federal, state, local or other
taxing authorities (each a "Taxing Authority", collectively, the "Taxing
Authorities") in respect of all relevant taxes, including without limitation
income, premium, gross receipts, net proceeds, alternative or add on minimum, ad
valorem, value added, turnover, sales, use, property, personal property
(tangible and intangible), stamp, leasing, lease, user, excise, duty, franchise,
transfer, license, withholding, payroll, employment, fuel, excess profits,
occupational and interest equalization, windfall profits, severance, and other
charges (including interest and penalties) (collectively, the "Taxes") and in
accordance with all tax sharing agreements to which Seller or the Hickory Group
may be a party. All Taxes required or anticipated to be paid for all periods
prior to and including the Closing Date have been paid or are adequately
provided for in the Financial Statements, including any of the Hickory Group's
Taxes that may be due or claimed to be due as a result of the consummation of
the transactions contemplated by this Agreement. All Taxes which are required to
be withheld or collected by the Hickory Group have been duly withheld or
collected and, to the extent required, have been paid to the proper Taxing
Authority or properly segregated or deposited as required by applicable laws.
There are no Liens for Taxes upon any property or assets of the Hickory Group
except for Liens for Taxes not yet due and payable. Neither Seller nor the
Hickory Group has executed a waiver of the statute of limitations on the right
of the Internal Revenue Service or any other Taxing Authority to assess
additional Taxes or to contest the income or loss with respect to any Tax
Return. The basis of any depreciable assets, and the methods used in determining
allowable depreciation (including cost recovery), is correct and in compliance
with the Internal Revenue Code of 1986, as amended and the regulations
thereunder (the "Code") in all material respects.
(b) No audit of the Hickory Group or the Hickory Group's Tax
Returns by any Taxing Authority is currently pending or threatened, and, except
as set forth on Schedule 2.15, no issues have been raised by any Taxing
Authority in connection with any Tax Returns. No material issues have been
raised in any examination by any Taxing Authority with respect to the Hickory
Group which reasonably could be expected to result in a proposed deficiency for
any other period not so examined, and there are no unresolved issues or unpaid
deficiencies relating to such examinations. The items relating to the business,
properties or operations of the Hickory Group on the Tax Returns filed by or on
behalf of the Hickory Group for all taxable years (including the supporting
schedules filed therewith), available copies of which have been supplied to
Buyer, state accurately the information
requested with respect to the Hickory Group and such information was derived
from the books and records of the Hickory Group.
(c) The Hickory Group has not made nor has become obligated to
make, nor will as a result of any event connected with the Closing become
obligated to make, any "excess parachute payment" as defined in Section 280G of
the Code (without regard to subsection (b)(4) thereof).
(d) No member of the Hickory Group is a Subchapter S
corporation and has never been a Subchapter S corporation.
2.16 Compliance with Regulations and Orders; Permits; Affiliations.
(a) To the Knowledge of Seller, the Hickory Group is presently
complying with all applicable Regulations and Orders of Authorities in respect
of its operations, businesses, equipment, practices, real property, plants,
structures and other properties, and all other aspects of its business and
operations, including, without limitation, all Regulations and Orders relating
to the safe conduct of business, hazardous waste, environmental protection,
handicapped access, fair housing, quality and labeling, antitrust, Taxes,
consumer protection, equal opportunity, discrimination, health, sanitation,
fire, zoning, building and occupational safety. There are no Claims pending,
nor, to the Knowledge of Seller, are there any Claims threatened, nor have
Seller or the Hickory Group received any written notice, regarding any
violations of, or defaults under, any Regulations and Orders enforced by any
Authority claiming jurisdiction over the Hickory Group, including, without
limitation, any requirement of OSHA, any pollution and environmental control
agency (including air and water) or the agencies having responsibility for the
Real Estate Settlement Procedures Act, the Fair Housing Act, Americans With
Disabilities Act, or any similar regulations.
(b) Except as set forth on Schedule 2.16, the Hickory Group
has all permits, licenses, provider numbers, orders, franchises, registrations
and approvals (collectively, "Permits") required for the Hickory Group to
conduct its business as presently conducted. Each such Permit is valid and in
full force and effect and, to the Knowledge of Seller, no suspension or
cancellation of any such Permit is threatened.
(c) Except as set forth on Schedule 2.16, (i) none of the
Hickory Group nor Seller is in violation of any Regulation, Order, rule or
requirement with respect to any industry affiliation and membership of the
Hickory Group in any business or industry group relating to the operation of the
Hickory Group (collectively, the "Business Groups"), and (ii) no consent of any
such Business Group is required for the Hickory Group or Seller to consummate
the transactions contemplated by this Agreement.
2.17 ERISA and Related Matters.
(a) Except as set forth in Schedule 2.17 hereto, none of the
Hickory Group, nor any ERISA Affiliate of the Hickory Group, is a party to or
participates in or has any liability or contingent liability with respect to:
(i) any "employee welfare benefit plan" or "employee
pension benefit plan" or "multi-employer plan" (as those terms are respectively
defined in Sections 3(1), 3(2) and 3(37) of the Employee Retirement Income
Security Act of 1974, as amended ("ERISA"); or
(ii) any retirement or deferred compensation plan,
incentive compensation plan, stock plan, unemployment compensation plan,
vacation pay, severance pay, bonus or benefit arrangement, insurance or
hospitalization program or any other fringe benefit arrangements for any
employee, director, consultant or agent, whether pursuant to contract,
arrangement, custom or informal understanding, which does not constitute an
"employee benefit plan" (as defined in Section 3(3) of ERISA); or
(iii) any employment agreement not terminable on 30
days' or less written
notice, without further liability. Any plan, arrangement or agreement required
to be listed on Schedule 2.17 for which any Seller or any ERISA Affiliate of any
Seller may have any liability or contingent liability is sometimes hereinafter
referred to as a "Benefit Plan". For purposes of this Section, the term "ERISA
Affiliate" shall mean any trade or business, whether or not incorporated, that
together with the Hickory Group would be deemed a "single employer" within the
meaning of Section 4001(b)(i) of ERISA.
(b) Except as set forth on Schedule 2.17, the Hickory Group is
in compliance in all material respects with the terms of all of its Benefit
Plans and every Benefit Plan is in compliance with all of the requirements and
provisions of ERISA and all other Regulations and Orders applicable thereto,
including without limitation the timely filing of all annual reports or other
filings required with respect to such Benefit Plans. None of the assets of any
Benefit Plan are invested in employer securities or employer real property, as
those terms are defined in Section 407(d) of ERISA. There have been no
"prohibited transactions" (as described in Section 406 of ERISA or Section 4975
of the Code) with respect to any Benefit Plan and neither the Hickory Group nor
any ERISA Affiliate of the Hickory Group has otherwise engaged in any prohibited
transaction. There has been no "accumulated funding deficiency" as defined in
Section 302 of ERISA, nor has any reportable event as defined in Section 4043(b)
of ERISA occurred with respect to any Benefit Plan. Actuarially adequate
accruals for all obligations or contingent obligations under the Benefit Plans
are reflected in the most recent Balance Sheet provided to Buyer and such
obligations include a pro rata amount of the contributions which would otherwise
have been made in accordance with past practices for the plan years which
include the Closing Date.
2.18 Intellectual Property.
(a) The Hickory Group has the right to use the Intellectual
Property used in the Business, and except as otherwise set forth therein, the
Intellectual Property is, and will be on the Closing Date, free and clear of all
royalty obligations and Liens. There are no Claims pending, or, to the Knowledge
of Seller, threatened, against the Seller or the Hickory Group that the Hickory
Group's use of any of such Intellectual Property infringes the rights of any
Person. Seller (i) has no Knowledge of any use of any of the Intellectual
Property constituting an infringement thereof, and (ii) has no right, claim or
interest in or to any of the Intellectual Property.
(b) Except as set forth on Schedule 2.18 hereto, the Hickory
Group is not a party in any capacity to any franchise, license or royalty
agreement respecting any of the Intellectual Property and there is no conflict
with the rights of others in respect to any of the Intellectual Property now
used in the conduct of the Business.
(c) Except as set forth on Schedule 2.18, all of the current
software applications used by the Hickory Group in the operation of the Business
(the "Software"), including, without limitation, software applications commonly
referred to as "Front Office, Back Office, Inventory Management, Hotel and Car
Reservations, Airline ticketing, Cruise Bookings and Guest Services" complies
with the necessary requirements to function efficiently. The Software, to the
extent it is licensed from any third party licensor or constitutes
"off-the-shelf" software, is held by the Hickory Group under valid, binding and
enforceable licenses and is not terminable upon consummation of the transactions
contemplated by this Agreement without any Person's consent. All of the Hickory
Group's computer hardware has validly licensed software installed therein. None
of the Hickory Group has sold, assigned, licensed, distributed or in any other
way disposed of or encumbered the Software.
2.19 Environmental Matters. Except as disclosed in Schedule 2.19: (i)
neither the Business nor the operation thereof violates any applicable
Environmental Law, and no condition or occurrence (any accident, happening or
event which occurs or has occurred at any time prior to the Closing Date, which
results in or could result in a claim against the Hickory Group or Buyer or
creates or could create a liability or loss for the Hickory Group or Buyer)
exists or has occurred which, with notice or the passage of time or both, would
constitute a violation of any Environmental Law; (ii) the Hickory Group is in
possession of all Environmental Permits required under any applicable
Environmental Law for the conduct or operation of the Business (or any part
thereof), and the Hickory Group is in full compliance with all of the
requirements and limitations included in such Environmental Permits; (iii) the
Hickory Group has not stored or used any Hazardous Material on or at any
property or facility
now or previously owned, leased or operated by the Hickory Group; (iv) the
Hickory Group has not received any notice from any Authority or other Person
that the Business or the operation of any of its facilities is in violation of
any Environmental Law or any Environmental Permit or that it is responsible (or
potentially responsible) for the cleanup of any Hazardous Materials at, on or
beneath any property or facility now or previously owned, leased or operated by
the Hickory Group, or at, on or beneath any land adjacent thereto or in
connection with any waste or contamination site; (v) the Hickory Group is not
the subject of any Claim by any Authority or other Person involving a demand for
damages or other potential liability with respect to a violation of
Environmental Laws or under any common law theories relating to operations or
the condition of any facilities or property (including underlying groundwater)
owned, leased, or operated by the Hickory Group; (vi) the Hickory Group has not
buried, dumped, disposed, spilled or released any Hazardous Materials on,
beneath or adjacent to any property or facility now or previously owned, leased
or operated by the Hickory Group or any property adjacent thereto; (vii) no
property or facility now or previously owned, leased or operated by the Hickory
Group, is listed or proposed for listing on the National Priorities List
pursuant to CERCLA, on the CERCLIS or on any other federal or state list of
sites requiring investigation or clean-up; (viii) there are no underground
storage tanks, active or abandoned, including petroleum storage tanks, on or
under any property or facility now or previously owned, leased or operated by
the Hickory Group; (ix) the Hickory Group has not directly transported or
directly arranged for the transportation of any Hazardous Materials to any
location which is listed or proposed for listing on the National Priorities List
pursuant to CERCLA, on the CERCLIS or on any federal or state list or which is
the subject of any enforcement action or other investigation by any Authority
which may lead to material Claims against the Hickory Group for any remedial
work, damage to natural resources or personal injury, including Claims under
CERCLA;
2.20 Banking Arrangements. Except as may be disclosed in the Balance
Sheet or on Schedule 2.20 hereto, the Hickory Group has no liability or
obligation relating to funds or money borrowed by or loaned to the Hickory Group
(whether under any credit facility, line of credit, loan, indenture, advance,
pledge or otherwise).
2.21 Insurance. The policies of property, fire, liability, business
interruption, workers' compensation and other forms of insurance held by the
Hickory Group and the dollar amount of coverage are consistent with other
companies engaged in a business similar to the Business. Such policies are
valid, outstanding and enforceable and all premiums due have been paid. Except
as disclosed on Schedule 2.21, Seller has no Knowledge of any state of facts, or
of the occurrence of any event which might reasonably (a) form the basis for any
claim against the Hickory Group not fully covered by insurance for liability on
account of any express or implied warranty or tortious omission or commission,
or (b) result in material increase in insurance premiums of the Hickory Group.
2.22 [Intentionally omitted]
2.23 Brokerage. None of the Hickory Group nor any Seller has employed
any broker, finder, advisor, consultant or other intermediary in connection with
this Agreement or the transactions contemplated by this Agreement who is or
might be entitled to any fee, commission or other compensation from the Hickory
Group or any Seller, or from Buyer or its Affiliates, upon or as a result of the
execution of this Agreement or the consummation of the transactions contemplated
hereby.
2.24 Improper and Other Payments. Except as set forth on Schedule 2.24
hereto: (a) none of the Hickory Group, any director, officer, employee thereof,
nor, to the Knowledge of Seller, any agent or representative of the Hickory
Group nor any Person acting on behalf of any of them, (i) has made, paid or
received any contribution, gift, bribe, rebate, payoff, influence payment,
kickbacks or other similar payments to or from any Person or Authority, whether
in money, property or services (1) to obtain favorable treatment in securing
business, (2) to pay for favorable treatment for business secured, (3) to obtain
special concessions or for special concessions already obtained, or (4) in
violation of any Regulation or Order or (ii) established or maintained a fund or
asset that has not been recorded on the books and records of the Hickory Group;
(b) no contributions have been made, directly or indirectly, to a domestic or
foreign political party or candidate; (c) no improper foreign payment (as
defined in the Foreign Corrupt Practices Act) has been made; and (d) the
internal accounting controls of the Hickory Group are believed by the Hickory
Group's management to be adequate to detect any of the foregoing under current
circumstances.
2.25 [Intentionally omitted].
2.26 Significant Customers and Suppliers.
(a) Except as set forth on Schedule 2.27, none of the Hickory
Group's significant customers (or persons or entities that are sources of a
significant number of customers) have canceled or substantially reduced or, to
the Knowledge of Seller, are currently attempting or threatening to cancel a
contract or substantially reduce utilization of the services provided by the
Hickory Group in the conduct of the Business.
(b) Except as set forth on Schedule 2.27, none of the Hickory
Group's significant suppliers and service providers have canceled or
substantially reduced or, to the Knowledge of Seller, is currently attempting or
threatening to cancel a contract or substantially reduce products or services to
the Hickory Group in the conduct of the Business.
2.27 Disclosure. Neither this Agreement nor any of the exhibits hereto
or certificate furnished hereunder by or on behalf of Seller or the Hickory
Group with respect to the transactions contemplated hereby contains any untrue
statement of a material fact or omits a material fact necessary to make each
statement contained herein or therein not misleading. It is acknowledged that,
notwithstanding the language of this Agreement, the Seller did not deliver the
Schedules to the Agreement as of the date hereof.
2.28 Investment Representations. Seller will be acquiring the Series B
Stock and any shares of Buyer Common Stock (as defined below) issuable upon
conversion thereof under this Agreement ("Buyer Securities") for investment for
his own account and not with a view to, or for resale in connection with, any
distribution thereof in violation of applicable law, and such Seller has no
present intention to sell, convey, dispose of or otherwise distribute any
interest in or risk related to Buyer Securities issued hereunder except pursuant
to an effective registration statement or in a manner consistent with the
requirements of the federal and state securities laws. Seller has no contract,
understanding, agreement or arrangement with any Person to sell, assign, or
otherwise transfer to such Person, or to any other Person, any or all of the
Buyer Securities that Seller will receive in connection with the transactions
contemplated by this Agreement. Seller acknowledges that he understands that the
Buyer Securities will receive hereunder have not been registered under the
Securities Act by reason of a specific exemption from the registration
provisions of the Securities Act which depends upon, among other things, the
bona fide nature of the investment intent as expressed herein. Seller hereby
agrees that the certificates representing the Buyer Securities may bear a
restrictive legend (and Buyer's transfer agent may be given stop transfer
instructions) to the effect described above and shall include such additional
legends as necessary to comply with applicable U.S. federal securities Laws,
state blue sky laws and other applicable restrictions due to such lack of
registration.
ARTICLE III
REPRESENTATIONS AND WARRANTIES OF BUYER
Buyer represents and warrants to Seller as of the date hereof and as of
the Closing Date, unless a different date is specifically provided herein as
follows:
3.1 Corporate Organization, etc. Buyer, formerly known as
XxxxxxxxXX.xxx, Inc., is a corporation duly organized, validly existing and in
good standing under the laws of its jurisdiction of incorporation with full
corporate power and authority to carry on its business as it is now being
conducted and to own, operate and lease its properties and assets.
3.2 Authorization, etc. Buyer has full corporate power and authority to
enter into this Agreement and the Ancillary Documents to which it is a party and
to carry out the transactions contemplated hereby and thereby. The Board of
Directors of Buyer has duly authorized the execution, delivery and performance
of this Agreement, the Ancillary Documents to which it is a party and the
transactions contemplated hereby and thereby, and no other corporate proceedings
on its part are necessary to authorize this Agreement, such Ancillary Documents
and the transactions contemplated hereby and thereby. Upon execution and
delivery of this Agreement and the
Ancillary Documents by the parties hereto and thereto, this Agreement and the
Ancillary Documents to which Buyer is a party shall constitute the legal, valid
and binding obligation of Buyer, enforceable against Buyer in accordance with
their respective terms, except as enforceability may be limited by bankruptcy,
insolvency, reorganization, moratorium or other similar laws affecting the
enforcement of creditors rights generally and by general equitable principles.
3.3 No Violation. The execution, delivery and performance by Buyer of
this Agreement and the Ancillary Documents to which it is a party, and the
fulfillment of and compliance with the respective terms hereof and thereof by
Buyer, do not and will not (a) conflict with or result in a material breach of
the terms, conditions or provisions of, (b) result in a violation of, or (c)
require any authorization, consent, approval, exemption or other action by or
notice to any Authority pursuant to, the certificate of incorporation or by-laws
of Buyer, or any Regulation to which Buyer is subject, or any material Contract
or Order to which Buyer or its properties are subject. Buyer will comply with
all applicable Regulations and Orders in connection with its execution, delivery
and performance of this Agreement and the transactions contemplated hereby.
3.4 Governmental Authorities. Buyer has complied in all material
respects with all applicable Regulations in connection with its execution,
delivery and performance of this Agreement, the Ancillary Documents to which it
is a party and the transactions contemplated hereby and thereby. Buyer is not
required to submit any notice, report, or other filing with any governmental
authority in connection with its execution or delivery of this Agreement, the
Ancillary Documents to which it is a party or the consummation of the
transactions contemplated hereby and thereby. No authorization, consent,
approval, exemption or notice is required to be obtained by Buyer in connection
with the execution, delivery, and performance of this Agreement, the Ancillary
Documents to which it is a party and the transactions contemplated hereby and
thereby.
3.5 Brokerage. Buyer has not employed any broker, finder, advisor,
consultant or other intermediary in connection with this Agreement or the
transactions contemplated by this Agreement who is or might be entitled to any
fee, commission or other compensation from Buyer, upon or as a result of the
execution of this Agreement or the consummation of the transactions contemplated
hereby. Buyer shall be solely responsible for any and all fees, commissions or
other compensation to the Buyer's Broker.
3.6 Capitalization. The total authorized capital stock of the Buyer
prior to Closing will be (a) 100,000,000 shares of Common Stock par value $0.001
per share ("Buyer Common Stock"), and (b) 10,000,000 shares of Preferred Stock,
par value $0.01 per share, not more than 1,000,000 shares of which will be
designated as Series A Preferred Stock and not more than 1,000,000 shares of
which shall be designated as Series B Stock. All of the issued and outstanding
Buyer Common Stock and Series A Preferred Stock have been, and the Series B
Stock (and any Buyer Common Stock issuable upon conversion thereof) will be,
duly authorized and validly issued, are fully paid and non-assessable, are free
of pre-emptive rights, and were, or in the case of such Series B Stock will be,
offered, issued, sold and delivered by Buyer in compliance with all applicable
state and federal securities laws (assuming the truth of Seller's
representations set forth in Section 2.28).
3.7 Disclosure. Neither this Agreement or any of the Ancillary
Documents to which Buyer is a party nor any exhibits, attachments, written
statements, documents, certificates or other items prepared for or supplied to
Seller by Buyer with respect to the transactions contemplated hereby contains
any untrue statement of a material fact or omits a material fact necessary to
make each statement contained herein or therein not misleading.
ARTICLE IV
COVENANTS OF SELLER
From the date hereof until the Closing Date, except as otherwise
consented to or approved by Buyer in writing, Seller in case of covenants
applicable solely to Seller shall, or, in the case of covenants applicable to
the Company, use good faith efforts to cause the Company and each other member
of the Hickory Group to:
4.1 Regular Course of Business. Except as set forth on Schedule 4.1
hereto, use reasonable
commercial efforts to operate its business diligently and
in good faith and in the Ordinary Course of Business, including, without
limitation: (i) use reasonable commercial efforts to maintain all of its
respective properties in good order and condition; (ii) use reasonable
commercial efforts to maintain (except for expiration due to lapse of time) all
Contracts in effect without change except as expressly provided herein; (iii)
use reasonable commercial efforts to comply with the provisions of all
Regulations and Orders applicable to the Hickory Group and the conduct of its
respective business; (iv) use reasonable commercial efforts to maintain
insurance and reinsurance coverage as in effect on the date hereof up to the
Closing Date; (v) use reasonable commercial efforts to preserve the business of
the Hickory Group intact; (vi) use reasonable commercial efforts to keep
available for the Hickory Group and Buyer, the services of the officers and
employees of the Hickory Group; and (vii) use reasonable commercial efforts to
preserve the goodwill of clients, suppliers and others having business relations
with the Hickory Group.
4.2 Certain Restrictions. Refrain from: (i) changing or amending the
Charter Documents of the Company or any other member of the Hickory Group; (ii)
merging with or into or consolidating with any other Person; (iii) acquiring all
or substantially all of the stock or the assets of any Person or changing the
character of its business; (iv) issuing or selling any shares of the Company's
or any other member of the Hickory Group's capital stock of any class or any
securities convertible into, or options, warrants to purchase or rights to
subscribe to, any shares of such capital stock; (v) permitting any liens upon,
pledging or otherwise encumbering any shares of such capital stock or any of
their respective assets or properties; (vi) declaring, paying or setting aside
for payment any dividend or other distribution to any of the stockholders of the
Company or any other member of the Hickory Group, in respect of their respective
capital stock or otherwise; (vii) directly or indirectly, redeeming, retiring,
purchasing or otherwise acquiring any shares of their respective capital stock
or any of their respective indebtedness for money borrowed in advance of any
scheduled repayment date; (viii) making any capital expenditures, or commitments
with respect thereto; (ix) incurring, assuming or guaranteeing any indebtedness,
obligations or liabilities or entering into any transactions or making any
commitment to do any of the foregoing except in the Ordinary Course of Business
or for purposes of consummation of the transactions contemplated by this
Agreement and in any case only after consultation with Buyer; (x) canceling,
releasing, waiving or compromising any debt, Claim or right in their respective
favor; (xi) altering the rate or basis of compensation of any of their
respective officers, directors, employees or consultants; and (xii) taking any
action or failing to take any action as a result of which any of the other
changes or events listed in Section 2.12 hereof is likely to occur.
4.3 Cash and Cash Equivalents. Preserve, and expend solely in the
Ordinary Course of Business, its cash and cash equivalents.
4.4 Interim Financial Information. To the extent prepared in the
Ordinary Course of Business, furnish to Buyer unaudited financial statements
(including, without limitation, balance sheets and statements of income, changes
in stockholders' equity and cash flow) and information for each calendar month,
promptly following the conclusion of such month, and as Buyer may otherwise
reasonably request.
4.5 Full Access and Disclosure.
(a) Afford to Buyer and its counsel, accountants and other
authorized representatives reasonable access during business hours to the
Hickory Group's facilities, properties, books and records in order that Buyer
may have full opportunity to make such reasonable investigations as it shall
desire to make of the affairs of the Hickory Group's, including financial
statement and other audits at the sole cost and expense of Buyer; and Seller
shall cause the Hickory Group's officers, employees and auditors to furnish on a
timely basis such additional financial and operating data and other information
as Buyer shall from time to time reasonably request including, without
limitation, any internal control recommendations applicable to the Hickory Group
made by the Hickory Group's independent auditors in connection with any
examination of the Hickory Group's Financial Statements and books and records.
(b) Promptly notify Buyer in writing if Seller becomes aware
of any fact or condition that causes or constitutes a breach of any
representation or warranty of Seller as of the date of this Agreement, or if
Seller becomes aware of the occurrence after the date of this Agreement of any
fact or condition that would
(except as expressly contemplated by this Agreement) cause or constitute a
breach of any such representation or warranty had such representation or
warranty been made as of the time of occurrence or discovery of such fact or
condition. Should any such fact or condition require any change in any schedule
hereto, Seller will promptly deliver to Buyer a proposed amendment or supplement
to such schedule specifying such change. No such proposed amendment or
supplement to a schedule shall constitute an amendment or supplement to such
schedule until Buyer shall have consented thereto. Seller will promptly notify
Buyer of the occurrence of any breach of any covenant of Seller in this Article
4 or Article 6 or of the occurrence of any event that may make the satisfaction
of the conditions in Article 7 impossible or unlikely.
4.6 Fulfillment of Conditions Precedent. Refrain from taking any action
which, if taken on or prior to the Closing Date, would constitute a breach of
this Agreement. Seller shall use his best efforts to obtain at his expense, on
or prior to the Closing Date, all such waivers, permits, consents, approvals or
other authorizations from third parties and Authorities, and to do all things as
may be necessary or desirable in connection with the transactions contemplated
by this Agreement in order to fully and expeditiously consummate the
transactions contemplated by this Agreement.
4.7 Tax Returns. File all Tax Returns and reports with respect to Taxes
which are required to be filed for Tax periods ending on or before the Closing
Date (a "Pre-Closing Tax Return"), and the Hickory Group shall pay all Taxes due
in respect of such Pre-Closing Tax Returns to the appropriate Taxing Authority;
and the Hickory Group shall pay all costs associated with the preparation
thereof.
4.8 No Solicitation or Negotiation. Seller shall refrain from, and
cause and his representatives, agents, advisors, accountants and attorneys to
refrain from, and shall use his good faith efforts to cause the Hickory Group
and its directors, officers, employees, representatives, agents, advisors,
accountants and attorneys to refrain from, initiating, soliciting or
encouraging, directly or indirectly, any inquiries or the making of any proposal
with respect to, or engage in negotiations concerning, or provide any
confidential information or data to any Person with respect to, or have any
discussions with any Persons relating to, any acquisition, business combination
or purchase of all or any significant asset of, or any equity interest in, the
Hickory Group, or otherwise facilitate any effort or attempt to do or seek any
of the foregoing, and shall immediately cease and cause to be terminated any
existing activities, discussions or negotiations with any parties conducted
heretofore with respect to any of the foregoing. Should the Hickory Group or
Seller be contacted with respect to any offer, inquiry or proposal, Seller shall
immediately advise Buyer in writing of the name, address and phone number of the
contact and the nature of the inquiry.
4.9 Termination of Agreements. Terminate or cause to be terminated, on
or prior to the Closing Date, (i) any stockholders agreements, voting
agreements, voting trusts, options, warrants and employment agreements between
the Hickory Group and any employee and (ii) any existing agreement between the
Hickory Group and any stockholder of the Hickory Group not reflecting fair
market terms, except such existing agreements as are set forth on Schedule 4.9.
ARTICLE V
COVENANTS OF BUYER
Buyer hereby covenants and agrees with the Seller that prior to the
Closing or the termination of this Agreement:
5.1 Full Access and Disclosure.
(a) Buyer shall afford to Seller, and his counsel, accountants
and other authorized representatives an opportunity to make such reasonable
investigations as they shall desire to make of the business of Buyer; and Buyer
shall cause its officers, employees and auditors to furnish such additional
financial and operating data and other information as Seller shall from time to
time reasonably request.
(b) Buyer shall Promptly notify Seller in writing if Buyer
becomes aware of any fact or
condition that causes or constitutes a breach of any representation or warranty
of Buyer as of the date of this Agreement, or if Buyer becomes aware of the
occurrence after the date of this Agreement of any fact or condition that would
(except as expressly contemplated by this Agreement) cause or constitute a
breach of any such representation or warranty had such representation or
warranty been made as of the time of occurrence or discovery of such fact or
condition. Should any such fact or condition require any change in any schedule
hereto, Buyer will promptly deliver to Seller a proposed amendment or supplement
to such schedule specifying such change. No such proposed amendment or
supplement to a schedule shall constitute an amendment or supplement to such
schedule until Seller shall have consented thereto. Buyer will promptly notify
Seller of the occurrence of any breach of any covenant of Buyer in this Article
5 or Article 6 or of the occurrence of any event that may make the satisfaction
of the conditions in Article 7 impossible or unlikely.
5.2 Further Assurances with respect to Other Transactions. Buyer will
use reasonable commercial efforts to cause its common stock to be listed on the
American Stock Exchange ("AMEX") and shall provide Seller with a copy of all
correspondence with AMEX relating to such listing.
ARTICLE VI
PRE-CLOSING COVENANTS
6.1 Further Assurances. Subject to the terms and conditions of this
Agreement, each of the parties hereto shall use his or its best efforts to take,
or cause to be taken, all action, and to do, or cause to be done, all things
necessary, proper or advisable under applicable Regulations to consummate and
make effective the transactions contemplated by this Agreement.
6.2 Consents. Without limiting the generality of Section 6.1, each of
the parties hereto shall use his or its best efforts to obtain all Permits of
all Persons and Authorities necessary, proper or advisable in connection with
the consummation of the transactions contemplated by this Agreement prior to the
Closing Date. With respect to every material Contract of the Hickory Group, even
those Contracts for which a consent or approval is not required under the terms
of such Contract, upon the execution and delivery of this Agreement, each party
to each such Contract shall, after consultation with and coordination by Buyer,
be advised of the transaction contemplated hereby.
6.3 No Termination of Seller's Obligations by Subsequent Incapacity,
Etc. Seller specifically agrees that the obligations of Seller hereunder shall
not be terminated by the death or incapacity of Seller.
6.4 Confidentiality. From the date hereof to and including the Closing
Date, Buyer, on the one hand, and Seller, on behalf of himself and the Hickory
Group, on the other hand, shall cause its principals, officers and other
personnel and authorized representatives to hold in confidence, and not disclose
to any other Person without the other party's prior consent, all written and
oral information furnished or disclosed by or received from such party or its
officers, directors, employees, agents, counsel and auditors in connection with
the transactions contemplated hereby except as may be contemplated therein.
6.5 Public Announcements. Each party shall refrain from disclosing any
of the terms of this Agreement to any third party (other than Buyer's advisors
and senior lending group and the Seller's advisors) without the other party's
prior written consent unless required by any applicable law. The form, content
and timing of any and all press releases, public announcements or publicity
statements (except for any disclosures under or pursuant to Federal or State
securities laws in connection with the registration of Buyer's securities or
otherwise) with respect to this Agreement or the transactions contemplated
hereby shall be subject to the prior approval of the Buyer and the Seller.
ARTICLE VII
CONDITIONS TO THE OBLIGATIONS OF THE BUYER
Each and every obligation of Buyer under this Agreement shall be
subject to the satisfaction, on or
before the Closing Date, of each of the following conditions, unless waived in
writing by Buyer:
7.1 Representations and Warranties; Covenants and Agreements. The
representations and warranties of Seller contained in Article II and elsewhere
in this Agreement and all information contained in any exhibit, certificate,
schedule or attachment hereto or in any writing delivered by, or on behalf of,
Seller to Buyer, shall be true and correct when made and shall be true and
correct in all material respects on the Closing Date as though then made, except
as expressly provided herein. Seller shall have performed and complied with all
agreements, covenants and conditions and shall have made all deliveries required
by this Agreement to be performed, delivered and complied with by him prior to
the Closing Date or at the Closing. Seller shall have executed and delivered to
Buyer a certificate, dated the Closing Date, certifying to the foregoing.
7.2 No Injunction. No preliminary or permanent injunction or other
Order, decree or ruling issued by any Authority, or any Regulation promulgated
or enacted by any Authority shall be in effect, which would prevent the
consummation of the transactions contemplated hereby.
7.3 Third Party Consents. Seller shall have delivered to Buyer, in form
and substance reasonably acceptable to Buyer, all consents, approvals, waivers
or other authorizations listed in Schedule 2.8 with respect to the execution,
delivery and performance of this Agreement and the consummation of the
transactions contemplated hereby, such that each of the Contracts of the Hickory
Group remains in effect (without default, acceleration, termination, assignment,
right of termination or assignment, payment, increase in rates or compensation
payable, penalty, interest or other adverse effect) from and after the Closing
Date as such Contracts operated and were in effect before the Closing Date. With
respect to the material Contracts of the Hickory Group for which notice of the
transaction had been, or should have been, delivered to the other party thereto
pursuant to Section 6.2 hereof; (a) all such parties to such Contracts shall
have been notified of the transactions contemplated hereby and (b) none of
Buyer, Seller or the Hickory Group shall have received any notice of
terminations or amendments of, or any indication from such party of their intent
to terminate or amend, such contract, unless such amendment shall not adversely
affect the Hickory Group.
7.4 Regulatory Approvals. The Authorities listed in Schedule 2.8 hereto
shall have approved the applications listed in such Schedule with respect to the
change of control represented by the transactions contemplated by this
Agreement, and such approval shall not impose financial obligations on the
Hickory Group or Buyer that are objectionable to it.
7.5 Due Diligence. Buyer shall have completed its due diligence
investigation with respect to the Hickory Group including, but not limited to,
business, financial, legal, operational, customer, worker's compensation,
employee (both internal and external) and real estate due diligence, with
results satisfactory to Buyer in its sole discretion.
7.6 FIRPTA Certificate. Seller shall have delivered to Buyer a
certificate to the effect that such Seller is not a foreign person pursuant to
Section 1.1445-2(b) of the Treasury regulations.
7.7 Seller's Closing Documents. Seller shall have delivered to Buyer
executed originals of each of the Seller Closing Documents.
7.8 ISRA Compliance. Seller shall have delivered to Buyer evidence of
the non-applicability of, or compliance with, the provisions of ISRA reasonably
acceptable to Buyer.
7.9 No Material Adverse Change. There shall have been no Material
Adverse Change with respect to the Company since the date of this Agreement.
Buyer shall have received a certificate (which shall be addressed to Buyer),
dated the Closing Date, from Seller certifying to the foregoing.
ARTICLE VIII
CONDITIONS TO THE OBLIGATIONS OF THE SELLER
Each and every obligation of Seller under this Agreement shall be
subject to the satisfaction, on or before the Closing Date, of each of the
following conditions unless waived in writing by Seller:
8.1 Representations and Warranties; Performance. The representations
and warranties of Buyer contained in Article III and elsewhere in this Agreement
and all information contained in any exhibit, schedule or attachment hereto, or
in any writing delivered by Buyer to Seller, shall be true and correct in all
material respects when made and shall be true and correct in all material
respects on the Closing Date as though then made, except as expressly provided
herein. Buyer shall have performed and complied in all material respects with
all agreements, covenants and conditions required by this Agreement to be
performed and complied with by them prior to the Closing Date. An authorized
officer of Buyer shall have delivered to Seller a certificate, dated the Closing
Date, certifying to the foregoing.
8.2 No Injunction. No preliminary or permanent injunction or other
Order, decree or ruling issued by any Authority, or any Regulation promulgated
or enacted by any Authority shall be in effect, which would prevent the
consummation of the transactions contemplated hereby.
8.3 Purchase Price. Seller shall have received the Purchase Price
required to be delivered at Closing and to which Seller is entitled pursuant to
Section 1.2 hereof.
8.4 Additional Loan. The Company shall have received the proceeds of a
loan from Buyer in the amount of $1,600,000, the proceeds of which shall be
used, in part, to repay Seller the amount of a promissory note to by the Company
to Seller in the amount of $250,000.
8.5 Buyer's Closing Documents. Buyer shall have delivered to Seller
executed originals of each of the other Buyer's Closing Documents.
ARTICLE IX
TERMINATION OF OPTION
9.1 Methods of Termination. This Agreement, and Buyer's right to
exercise the Buyer Option herein, shall terminate:
(a) by mutual consent of Buyer and Seller; and
(b) by either Seller or Buyer, at any time after December 31,
2002 (the "Outside Date"), provided that the right to terminate this Agreement
under this Section 9.1(b) shall not be available to Seller if its failure to
perform has been the cause of or resulted in the failure of the Closing to be
consummated on or before the Outside Date.
9.2 Procedure Upon Termination. In the event this Agreement is
terminated as provided in Section 9.1:
(a) each party shall redeliver all documents and other
material of any other party relating to the transactions contemplated hereby,
whether obtained before or after the execution hereof, to the party furnishing
the same;
(b) all information received by any party hereto of the other
party or the Hickory Group (other than information which is a matter of public
knowledge or which has heretofore been or is hereafter published in any
publication for public distribution or filed as public information with any
governmental authority) shall not at any time be used for the advantage of, or
disclosed to third parties by, such party to the detriment of the party
furnishing such information; and
(c) no party hereto shall have any further liability or
obligation to any other party under or in connection with this Agreement;
provided, however, the non-breaching or non-defaulting party shall not be
foreclosed from bringing a Claim or cause of action or otherwise recovering from
the breaching or defaulting party.
ARTICLE X
CLOSING DELIVERIES
10.1 Deliveries by Seller. At the Closing, in addition to any other
documents or agreements required under this Agreement, Seller shall deliver to
Buyer the following:
(a) Certificates, in genuine and unaltered form, representing
the Shares and the Seller Note, free and clear of all Liens, duly endorsed in
blank or accompanied by duly executed stock powers endorsed in blank, for
transfer to Buyer;
(b) Evidence, in form satisfactory to Buyer, that all consents
and approvals referred in Schedule 2.8 have been obtained;
(c) The Certificate of Incorporation of the Company certified
by the New Jersey Department of Treasury;
(d) Certificates of Good Standing for the Company from the
State of New Jersey;
(e) Evidence acceptable to Buyer, in its sole discretion, of
the termination of any shareholder or buy/sell agreement among the shareholders
of the Company;
(f) Evidence acceptable to Buyer that the "Desktop" program
presently being implemented by the Company with respect to certain software and
applications will result in all embedded systems and control systems being owned
free and clear of all Liens by the Company;
(g) A certificate to the effect that Seller is not a foreign
person pursuant to Section 1.1445-2(b) of the Treasury regulations;
(h) Evidence, in form satisfactory to Buyer, that the
Authorities listed in Schedule 2.8 hereto shall have approved the applications
listed in such Schedule with respect to the change of control represented by the
transactions contemplated by this Agreement, and such approval shall not impose
financial obligations on the Hickory Group or Buyer that are objectionable to it
(i) The Employment Agreement, substantially in the form
annexed hereto as Exhibit "B" hereto (the "Employment Agreement") executed by
Seller; and
(j) Such other agreements, documents and instruments
reasonably requested by Buyer to effectuate the transactions contemplated in
this Agreement.
10.2 Deliveries by Buyer. At the Closing, Buyer shall deliver to
Seller the following:
(a) The Purchase Price;
(b) The Articles of Incorporation of Buyer certified by the
Nevada Secretary of States;
(c) A Certificate of Good Standing for Buyer from the State of
New Jersey;
(d) A certificate signed by the secretary of Buyer certifying
the Bylaws of Buyer and Board approval of the transactions contemplated in this
Agreement;
(e) The Employment Agreement executed by Buyer; and
(f) The loan to the Company described in Section 8.4.
(g) Such other agreements, documents and instruments
reasonably requested by Seller to effectuate the transactions contemplated in
this Agreement.
ARTICLE XI
POST-CLOSING COVENANTS
11.1 Further Assurances. If at any time after the Closing Date, Buyer,
on the one hand, or Seller, on the other hand, shall consider or be advised that
any further agreements, instruments, documents, deeds, papers, assignments or
assurances in law or in any other things are necessary, desirable or proper to
vest, perfect or confirm, of record or otherwise, in such party, the title to
any property or rights of the other acquired or to be acquired by reason of, or
as a result of, this Agreement or any of the transactions contemplated herein,
the other party agrees that it or they shall execute and deliver all such proper
agreements, instruments, documents, deeds, papers, assignments and assurances in
law and do all things necessary, desirable or proper to vest, perfect or confirm
title to such property or rights in such party and otherwise to carry out the
purpose of this Agreement.
11.2 Lock-Up. Seller hereby agrees not to offer to sell, contract to
sell or otherwise sell, dispose of, loan, pledge or grant any rights with
respect to (collectively, a "Disposition") any shares of Series B Stock issued
hereunder or any shares of Common Stock issued in conversion thereof
(collectively, "Securities") for the period commencing on the Closing Date
through, the date thirty-six (36) months later (the "Lock-Up Period").
Notwithstanding the foregoing, Buyer shall lend to Seller an amount of cash, (or
arrange a guarantee) to allow Seller to pay income tax on the Series B Stock
issued hereunder, which loan may be secured by a pledge of Series B Stock (or
Buyer Common Stock) with a Market Value (as defined in the Employment Agreement)
equal to the principal amount of such loan. The foregoing restriction is
expressly agreed to preclude Seller from engaging in any hedging or other
transaction which is designed to or reasonably expected to lead to or result in
a Disposition of Securities during the Lock-Up Period even if such Securities
would be disposed of by someone other than Seller. Such prohibited hedging or
other transactions would include without limitation any short sale (whether or
not against the box) or any purchase, sale or grant of any right (including
without limitation any put or call option) with respect to any Securities or
with respect to any security (other than a broad-based market basket or index)
that includes, relates to or derives any significant part of its value from
Securities. Certificates evidencing the Securities may contain the following
legend:
The securities evidenced by this certificate are subject to a Lock-Up
contained in the Stock Option Agreement dated July 15, 2002 by and
among L. Xxxxxxx Xxxxxx and American Leisure Holdings, Inc., a copy of
which is on file with American Leisure Holdings, Inc. and may not be
sold, conveyed, encumbered, hypothecated or otherwise transferred
except with the prior written consent of American Leisure Holdings,
Inc. or in accordance with such agreement.
ARTICLE XII
SURVIVAL OF TERMS; INDEMNIFICATION
12.1 Survival; Knowledge.
(a) All of the terms and conditions of this Agreement,
together with the representations, warranties and covenants contained herein or
in any instrument or document delivered or to be delivered pursuant to this
Agreement, shall survive the execution of this Agreement and the Closing
notwithstanding any investigation heretofore or hereafter made by or on behalf
of any party hereto; provided, however, that (i) the agreements and covenants
set forth in this Agreement shall survive and continue until all obligations set
forth therein shall have been performed and satisfied; and (ii) all
representations and warranties shall survive and continue until two (2) years
from the Closing Date (the "Anniversary Date"), except for representations and
warranties for which a claim for indemnification hereunder (an "Indemnification
Claim") shall be pending as of the Anniversary Date, in which event such
representations and warranties shall survive with respect to such
Indemnification Claim until the final disposition thereof.
(b) The right to indemnification, payment of damages or other
remedy based on such representations, warranties, covenants, and obligations
will not be affected by any investigation conducted with respect to, or any
knowledge acquired (or capable of being acquired) at any time, whether before or
after the execution and delivery of this Agreement or the Closing Date, with
respect to the accuracy or inaccuracy of or compliance with, any such
representation, warranty, covenant, or obligation. The waiver of any condition
based on the accuracy of any representation or warranty, or on the performance
of or compliance with any covenant or obligation, will not affect the right to
indemnification, payment of damages, or other remedy based on such
representations, warranties, covenants, and obligations.
12.2 Indemnification by Seller. Subject to this Article XII, Seller
shall indemnify, defend and hold harmless Buyer and each of the officers,
directors, employees, shareholders, attorneys, accountants, partners,
representatives, agents, successors and assigns of each of the foregoing (each
an "Buyer Indemnified Party" and collectively, the "Buyer Indemnified Parties"),
at all times after the date of this Agreement, against and in respect of any and
all Claims (including, without limitation, the fees and expenses of counsel)
resulting from, or in respect of any misrepresentation, breach of warranty, or
nonfulfillment of any covenant or other obligation on the part of Seller under
this Agreement, any document relating thereto or contained in any schedule
(without giving effect to any amendment or supplement thereto) or exhibit to
this Agreement or from any misrepresentation in or omission from any
certificate, schedule, other agreement or instrument by Seller hereunder.
12.3 Indemnification by Buyer. Subject to this Article XII, Buyer shall
indemnify, defend and hold harmless Seller and each of the representatives,
agents, successors and assigns of Seller (each a "Seller Indemnified Party" and
collectively, the "Seller Indemnified Parties"), at all times after the date of
this Agreement, against and in respect of any and all Claims (including, without
limitation, the fees and expenses of counsel) resulting from, or in respect of,
any misrepresentation, breach of warranty, or nonfulfillment of any covenant or
other obligation on the part of Buyer under this Agreement, any document
relating thereto or contained in any schedule (without giving effect to any
amendment or supplement thereto) or exhibit to this Agreement or from any
misrepresentation in or omission from any certificate, schedule, other agreement
or instrument by Buyer hereunder.
12.4 Third Party Claims.
(a) Except as otherwise provided in this Agreement, the
following procedures shall be applicable with respect to indemnification for
third party Claims. Promptly after receipt by the party seeking indemnification
hereunder (hereinafter referred to as the "Indemnitee") of notice of the
commencement of any (a) Tax audit or proceeding for the assessment of Tax by any
taxing authority or any other proceeding likely to result in the imposition of a
Tax liability or obligation, or (b) any action or the assertion of any Claim,
liability or obligation by a third party (whether by legal process or
otherwise), against which Claim, liability or obligation the other party to this
Agreement (hereinafter the "Indemnitor") is, or may be, required under this
Agreement to indemnify such Indemnitee, the Indemnitee will, if a Claim thereon
is to be, or may be, made against the Indemnitor, notify the Indemnitor in
writing of the commencement or assertion thereof and give the Indemnitor a copy
of such Claim, process and all legal pleadings. The Indemnitor shall have the
right to participate in the defense of such action with counsel of reputable
standing. The Indemnitor shall have the right to assume the defense of such
action unless such action (i) may result in injunctions or other equitable
remedies in respect of the Indemnitee or its business; (ii) may result in
liabilities which, taken with other then existing Claims under this Article 5,
would not be fully indemnified hereunder; or (iii) may have an adverse impact on
the business or financial condition of the Indemnitee after the Effective Date
(including an effect on the Tax liabilities, earnings or ongoing business
relationships of the Indemnitee). The Indemnitor and the Indemnitee shall
cooperate in the defense of such Claims. In the case that the Indemnitor shall
assume or participate in the defense of such audit, assessment or other
proceeding as provided herein, the Indemnitee shall make available to the
Indemnitor all relevant records and take such other action
and sign such documents as are necessary to defend such audit, assessment or
other proceeding in a timely manner.
(b) Upon judgment, determination, settlement or compromise of
any third party Claim, the Indemnitor shall pay promptly on behalf of the
Indemnitee, and/or to the Indemnitee in reimbursement of any amount theretofore
required to be paid by it, the amount so determined by judgment, determination,
settlement or compromise, unless in the case of a judgment an appeal is made
from the judgment, plus all other Claims of the Indemnitee with respect thereto
(including legal fees and expenses). If the Indemnitor desires to appeal from an
adverse judgment, then the Indemnitor shall post and pay the cost of the
security or bond to stay execution of the judgment pending appeal. Upon the
payment in full by the Indemnitor of such amounts, the Indemnitor shall succeed
to the rights of such Indemnitee, to the extent not waived in settlement,
against the third party who made such third party Claim.
(c) Prior to paying or settling any Claim against which an
Indemnitor is, or may be, obligated under this Agreement to indemnify an
Indemnitee, the Indemnitee must first supply the Indemnitor with a copy of a
final court judgment or decree holding the Indemnitee liable on such claim or
failing such judgment or decree, and must first receive the written approval of
the terms and conditions of such settlement from the Indemnitor. An Indemnitor
shall have the right to settle any Claim against it or as to which it has
assumed the defense, subject to the prior written approval of the Indemnitee,
which approval shall not be unreasonably withheld provided that such settlement
involves only the payment of a fixed sum which the Indemnitor is obligated to
pay and does not include any admission of liability or other such similar
admissions by or related to Indemnitee with respect to such Claim.
(d) An Indemnitee shall have the right to employ its own
counsel in any case, but the fees and expenses of such counsel shall be at the
expense of the Indemnitee unless: (i) the employment of such counsel shall have
been authorized in writing by the Indemnitor in connection with the defense of
such action or Claim; (ii) the Indemnitor shall not have employed, or is
prohibited under this Section 5.4 from employing, counsel in the defense of such
action or Claim; or (iii) such Indemnitee shall have reasonably concluded that
there may be defenses available to it which are contrary to, or inconsistent
with, those available to the Indemnitor, in any of which events such fees and
expenses of not more than one additional counsel for the indemnified parties
shall be borne by the Indemnitor.
12.5 Limitation on Indemnification.
(a) None of the Buyer Indemnified Parties shall assert any
Indemnification Claim hereunder against Seller until such time as, and solely to
the extent that, the aggregate of all such claims which the Buyer Indemnified
Parties may have against Seller shall exceed One Hundred Thousand Dollars
($100,000). The aggregate of all Claims against Seller shall be limited to
recourse against the Series B Stock (and any securities issued in conversion
thereof), as provided in Section 12.8 below.
(b) None of the Seller Indemnified Parties shall assert any
Indemnification Claim hereunder against Buyer until such time as, and solely to
the extent that, the aggregate of all such claims which the Seller Indemnified
Parties may have against Buyer shall exceed One Hundred Thousand Dollars
($100,000).
12.7 Survival of Indemnification. These indemnification provisions
shall survive the termination or other expiration of this Agreement until the
third (3rd) anniversary of the Closing Date, except for those Indemnification
Claims which shall be pending as of the first anniversary of the Closing Date,
in which event, such Indemnification Claims and the related indemnification
provisions shall survive until the final disposition thereof.
12.8 Satisfaction of Indemnification Claims. In the event of a Claim
against Seller, such Claim shall be satisfied solely by Seller transferring to
Buyer a number of shares of Series B Stock equal to the quotient obtained by
dividing the liquidation preference thereof by the amount of such claim or a
number of shares of Buyer Common Stock equal to the quotient obtained by
dividing the greater of the (a) fair market value of such Buyer Common Stock or
(b) the conversion price used to convert the Series B Stock into Buyer Common
Stock. The indemnification provisions hereof shall be the exclusive remedy for
all actions against a party hereto in respect of the
transactions contemplated hereby, except in the event of any fraud, intentional
misrepresentation or willful breach, for which there shall be no limitation on
the remedies of the non-breaching, misrepresenting or fraudulent party.
12.9 Effect of Investigation.
(a) Any due diligence review, audit or other investigation or
inquiry undertaken or performed by or on behalf of Buyer shall not limit,
qualify, modify or amend the representations, warranties or covenants of, or
indemnities by, Seller made or undertaken pursuant to this Agreement,
irrespective of the knowledge and information received (or which should have
been received) therefrom by Buyer.
(b) Any due diligence review, audit or other investigation or
inquiry undertaken or performed by or on behalf of Seller shall not limit,
qualify, modify or amend the representations, warranties and covenants of, or
indemnities by, Buyer made or undertaken pursuant to this Agreement,
irrespective of the knowledge and information received (or which should have
been received) therefrom by Seller.
ARTICLE XIII
DEFINITIONS; INTERPRETATIONS
13.1 Headings. The article, section and other headings contained in
this Agreement are for reference purposes only and do not affect in any way the
meaning or interpretation of this Agreement (or any provision hereof).
13.2 Pronouns and Plurals. Whenever the context may require, any
pronoun used in this Agreement shall include the corresponding masculine,
feminine, or neuter forms, and the singular forms of nouns, pronouns, and verbs
include the plural and vice versa.
13.3 Construction. The parties acknowledge that each party has reviewed
and revised this Agreement and that the normal rule of construction to the
effect that any ambiguities are to be resolved against the drafting party shall
not be employed in the interpretation of this Agreement.
13.4 Certain Definitions. Capitalized terms not defined in this
Agreement, shall have the following respective meanings:
"Affiliate" means, with regard to any Person, (a) any Person,
directly or indirectly, controlled by, under common control of, or controlling
such Person, (b) any Person, directly or indirectly, in which such Person holds,
of record or beneficially, five percent or more of the equity or voting
securities, (c) any Person that holds, of record or beneficially, five percent
or more of the equity or voting securities of such Person, (d) any Person that,
through Contract, relationship or otherwise, exerts a substantial influence on
the management of such Person's affairs, (e) any Person that, through Contract,
relationship or otherwise, is influenced substantially in the management of
their affairs by such Person, or (f) any director, officer, partner or
individual holding a similar position in respect of such Person.
"Assets" of any Person as of any date means all assets of such
Person as presented on a balance sheet prepared in accordance with GAAP as of
such date, but excluding therefrom any and all Restricted Cash of such Person.
"Authority" means any international, federal, state local or
municipal governmental, regulatory or administrative body, agency, department,
division, subdivision, office, arbitrator or other authority, any court or
judicial authority, or any public, private or industry regulatory agency or
authority.
"Claim" means any action, claim, obligation, liability,
damage, loss, deficiency, cost, expense, commitment, lawsuit, demand, suit,
inquiry, hearing, investigation, notice of a violation, litigation, proceeding,
arbitration, or other dispute, whether civil, criminal, administrative or
otherwise, whether pursuant to
contractual obligations or otherwise.
"Contract" means any agreement, contract, commitment,
instrument or other binding arrangement or understanding, whether written or
oral.
"Debt" means, for any Person as of any date, the aggregate
outstanding and unpaid balance (including but not limited to unpaid principal,
accrued interest, costs and expenses) of all indebtedness of such Person which
bears interest that would be included in Interest Expense of such Person for a
fiscal period that includes such date.
"Environmental Law" means any Regulation, Order, settlement
agreement or governmental requirement, which relates to or otherwise imposes
liability or standards of conduct concerning mining or reclamation of mined
land, discharges, emissions, releases or threatened releases of noises, odors or
any pollutants, contaminants or hazardous or toxic wastes, substances or
materials, whether as matter or energy, into ambient air, water, or land, or
otherwise relating to the manufacture, processing, generation, distribution,
use, treatment, storage, disposal, cleanup, transport or handling of pollutants,
contaminants, or hazardous wastes, substances or materials, including (but not
limited to) the Comprehensive Environmental Response, Compensation and Liability
Act of 1980, the Superfund Amendments and Reauthorization Act of 1986, as
amended, the Resource Conservation and Recovery Act of 1976, as amended, the
Toxic Substances Control Act of 1976, as amended, the Federal Water Pollution
Control Act Amendments of 1972, the Clean Water Act of 1977, as amended, any so
called "Superlien" law, and any other similar Federal, state or local statutes.
"Environmental Permit" shall mean Permits, certificates,
approvals, licenses and other authorizations relating to or required by
Environmental Law and necessary or desirable for the Corporation's business.
"GAAP" means United States generally accepted accounting
principles, applied on a consistent basis.
"Hazardous Material" means (A) any petroleum or petroleum
products, flammable explosives, radioactive materials, asbestos in any form that
is or could become friable, urea formaldehyde foam insulation and transformers
or other equipment that contain dielectric fluid containing levels of
polychlorinated biphenyls (PCBs); (B) any chemicals or other materials or
substances which are now or hereafter become defined as or included in the
definition of "hazardous substances," "hazardous wastes," "hazardous materials,"
"extremely hazardous wastes," "restricted hazardous wastes," "toxic substances,"
"toxic pollutants" or words of similar import under any Environmental Law; and
(C) any other chemical or other material or substance, exposure to which is now
or hereafter prohibited, limited or regulated by any Authority under any
Environmental Law.
"Intellectual Property" means any patent, patent application,
copyright, trademark, trade name, service xxxx, service name, trade secret,
know-how, confidential information or other intellectual property or proprietary
rights.
"Knowledge" means, with respect to any Person, if such Person
is an individual, that (i) such Person has actual knowledge or awareness of a
particular fact or matter or (ii) if circumstances exist such that a reasonable
and prudent person would make further inquiry, and thereupon, with due diligence
and conducting a reasonably comprehensive investigation concerning the existence
of such fact or matter, such Person could be expected to discover or otherwise
become aware of such fact or matter. If other than an individual, that any
individual serving as director, officer, employee, partner, executor, trustee or
any similar capacity whatsoever of such Person, has, or at any time had,
knowledge of such fact or matter.
"Lien" means any security interest, lien, mortgage, pledge,
hypothecation, encumbrance, Claim, easement, restriction or interest of another
Person of any kind or nature.
"Material Adverse Change" means any development or change
which has, had or would have a Material Adverse Effect.
"Material Adverse Effect" means, as to any Person, any
circumstances, events, state of facts or matters which has had, or might
reasonably be expected to have, a material adverse effect on (i) such Person's
business, operations, properties, assets, condition (financial or otherwise), or
results, or (ii) the ability of such Person to consummate any of the
transactions contemplated by this Agreement or any of the related agreements,
instruments or documents or (iii) the benefits contemplated to be conferred on
such Person by this Agreement or any of the related agreements, instruments or
documents.
"Order" means any decree, consent decree, judgment, award,
order, injunction or consent of or by an Authority.
"Ordinary Course of Business" shall mean an action taken by a
Person only if (i) such action is consistent with the past practices of such
Person and is taken in the ordinary course of the normal day-to-day operations
of such Person, (ii) such action is not required to be authorized by the board
of directors of such Person (or by any Person or group of Persons exercising
similar authority), and (iii) such action is similar in nature and magnitude to
actions customarily taken, without any authorization by the board of directors
(or by any Person or group of Persons exercising similar authority), in the
ordinary course of the normal day-to-day operations of other Persons that are in
the same line of business as such Person.
"Person" means any individual, corporation, partnership,
limited partnership, limited liability partnership or company, joint venture,
company, syndicate, union, unincorporated organization, association, trust,
entity, Authority or natural person.
"Properties" means each and every type of home, condominium,
hotel room, suite or other residential accommodation which Hickory, any of its
Subsidiaries or Hickory offers or otherwise makes available to rent as occupancy
for any Person for a period of up to one (1) year.
"Regulation" means any law, statute, rule, regulation,
ordinance, requirement, announcement or other binding action of or by an
Authority.
"Securities Act" shall have the meaning assigned to such term
in Section 1.6 hereof.
"Subsidiary" means any Person which the Company owns, directly
or indirectly, 50% or more of the outstanding stock or other equity interests.
ARTICLE XIV
MISCELLANEOUS PROVISIONS
14.1 Amendment and Modification. Subject to applicable law, this
Agreement may be amended, modified and supplemented only by a written agreement
signed by the Companies, Buyer and Seller.
14.2 Entire Agreement. This Agreement, including the schedules and
exhibits hereto and the documents, annexes, attachments, certificates and
instruments referred to herein and therein, embodies the entire agreement and
understanding of the parties hereto in respect of the agreements and
transactions contemplated by this Agreement and supersedes all prior agreements,
representations, warranties, promises, covenants, arrangements, communications
and understandings, oral or written, express or implied, between the parties
with respect to such transactions. There are no agreements, representations,
warranties, promises, covenants, arrangements or understandings between the
parties with respect to such transactions, other than those expressly set forth
or referred to herein.
14.3 Notices. All notices, requests, demands and other communications
required or permitted hereunder
shall be in writing and shall be deemed to have
been duly given when delivered by hand or mailed, first class certified mail
with postage paid or by overnight receipted courier service:
If to Seller, to:
L. Xxxxxxx Xxxxxx
c/o Hickory Travel Systems, Inc.
Park 00 Xxxxx Xxxx
Xxxxxxxxxxx, Xxx Xxxxxx 00000
with a copy to:
Xxxxxxxxxx Xxxxxxx PC
00 Xxxxxxxxxx Xxxxxx
Xxxxxxxx, XX 00000
Attention: Xxxxxxxx X. Xxxx, Esq.
or to such other person or address as Seller shall furnish by notice to Buyer in
writing.
If to Buyer to:
AMERICAN LEISURE HOLDINGS, INC.
0000 Xxxxxx Xxxx
Xxxxxxx, Xxxxxxx 00000
Attn: President
with a copy to:
Xxxxx Xxxxxx & Xxxxx, LLP,
000 Xxxxxxx Xxxxxx, 00xx xxxxx,
Xxx Xxxx, Xxx Xxxx
Attn.: Xxxxx X. Xxxxxx, Esq.
or to such other person or address as Buyer shall furnish by notice to Seller in
writing.
14.5 Exhibits and Schedules. The Exhibits and Schedules referred to in
this Agreement are attached hereto and incorporated herein by this reference.
Disclosure of a specific item in any one Schedule shall be deemed restricted
only to the Section of this Agreement to which such disclosure relates, except
where, and to the extent that, there is an explicit cross-reference in such
Schedule to another Schedule.
14.6 Waiver of Compliance; Consents. Any failure of any party hereto to
comply with any obligation, covenant, agreement or condition herein may be
waived in writing by the other parties hereto, but such waiver or failure to
insist upon strict compliance with such obligation, covenant, agreement or
condition shall not operate as a waiver of, or estoppel with respect to, any
subsequent or other failure. Whenever this Agreement requires or permits consent
by or on behalf of any party hereto, such consent shall be given in writing.
14.7 Assignment. This Agreement and all of the provisions hereof shall
be binding upon and inure to the benefit of the parties hereto and their
respective successors and permitted assigns, but neither this Agreement nor any
of the rights, interests or obligations hereunder shall be assigned by any of
the parties hereto without the prior written consent of the other parties,
except that Buyer may assign its rights, interests and obligations hereunder to
any wholly-owned Subsidiary, and may grant Liens or security interests in
respect of its rights and interests hereunder, without the prior approval of
Seller.
14.8 Governing Law. The Agreement shall be governed by the internal
laws of the State of New York as to all matters, including but not limited to
matters of validity, construction, effect and performance.
14.9 Jurisdiction of Disputes; Waiver of Jury Trial. In the event any
party to this Agreement commences any litigation, proceeding or other legal
action in connection with or relating to this Agreement or any matters described
or contemplated herein, with respect to any of the matters described or
contemplated herein or therein, the parties to this Agreement hereby (a) agree
under all circumstances absolutely and irrevocably to institute any litigation,
proceeding or other legal action in a court of competent jurisdiction located
within the City and County of New York, New York, whether a state or federal
court; (b) agree that in the event of any such litigation, proceeding or action,
such parties will consent and submit to personal jurisdiction in any such court
described in clause (a) of this Section and to service of process upon them in
accordance with the rules and statutes governing service of process (it being
understood that nothing in this Section shall be deemed to prevent any party
from seeking to remove any action to a federal court in New York, New York); (c)
agree to waive to the full extent permitted by law any objection that they may
now or hereafter have to the venue of any such litigation, proceeding or action
in any such court or that any such litigation, proceeding or action was brought
in an inconvenient forum; (d) agree as an alternative method of service to
service of process in any legal proceeding by mailing of copies thereof to such
party at its address set forth here in for communications to such party; (e)
agree that any service made as provided herein shall be effective and binding
service in every respect; and (f) agree that nothing herein shall affect the
rights of any party to effect service of process in any other manner permitted
by Law. EACH PARTY HERETO WAIVES THE RIGHT TO A TRIAL BY JURY IN ANY DISPUTE IN
CONNECTION WITH OR RELATING TO THIS AGREEMENT OR ANY MATTERS DESCRIBED OR
CONTEMPLATED HEREIN OR THEREIN, AND AGREE TO TAKE ANY AND ALL ACTION NECESSARY
OR APPROPRIATE TO EFFECT SUCH WAIVER.
14.10 Injunctive Relief. The parties hereto agree that in the event of
a breach of any provision of this Agreement, the aggrieved party or parties may
be without an adequate remedy at law. The parties therefore agree that in the
event of a breach of any provision of this Agreement, the aggrieved party or
parties may elect to institute and prosecute proceedings in any court of
competent jurisdiction to enforce specific performance or to enjoin the
continuing breach of such provision, as well as to obtain damages for breach of
this Agreement. By seeking or obtaining any such relief, the aggrieved party
shall not be precluded from seeking or obtaining any other relief to which it
may be entitled.
14.11 Dealings in Good Faith; Best Efforts. Each party hereto agrees to
act in good faith with respect to the other party in exercising its rights and
discharging its obligations under this Agreement. Each party further agrees to
use its best efforts to ensure that the purposes of this Agreement are realized
and to take all further steps as are reasonably necessary to implement the
provisions of this Agreement. Each party agrees to execute, deliver and file any
document or instrument necessary or advisable to implement or satisfy the
express provisions of this Agreement.
14.12 Binding Effect. This Agreement shall not be construed so as to
confer any right or benefit upon any Person other than the signatories to this
Agreement and each of their respective successors and permitted assigns.
14.13 Delays or Omissions. No delay or omission to exercise any right,
power or remedy accruing to any party hereto, upon any breach or default of any
other party under this Agreement, shall impair any such right, power or remedy
of such party nor shall it be construed to be a waiver of any such breach or
default, or an acquiescence therein, or of or in any similar breach or default
thereafter occurring; nor shall any waiver of any single breach or default be
deemed a waiver of any other breach or default theretofore or thereafter
occurring. Any waiver, permit, consent or approval of any kind or character on
the part of any party hereto of any breach or default under this Agreement, or
any waiver on the part of any party of any provisions or conditions of this
Agreement must be made in writing and shall be effective only to the extent
specifically set forth in such writing. All remedies, either under this
Agreement or by law or otherwise afforded to any party, shall be cumulative and
not alternative.
14.14 Severability. Unless otherwise provided herein, if any provision
of this Agreement shall be invalid, illegal or unenforceable, the validity,
legality and enforceability of the remaining provisions shall not in
any way be affected or impaired thereby.
14.15 Expenses. All fees, costs and expenses (including, without
limitation, legal, auditing and accounting fees, costs and expenses) incurred in
connection with considering, pursuing, negotiating, documenting or consummating
this Agreement and the transactions contemplated hereby shall be borne and paid
solely by the party incurring such fees, costs and expenses.
14.16 Counterparts. This Agreement may be executed in two or more
counterparts, each of which shall be deemed an original, but all of which
together shall constitute one and the same instrument.
14.17 Attorneys' Fees. If any party to this Agreement seeks to enforce
the terms and provisions of this Agreement, then the prevailing party in such
action shall be entitled to recover from the losing party all costs in
connection with such action, including without limitation reasonable attorneys'
fees, expenses and costs incurred with respect to trials, appeals and
collection.
[remainder of page intentionally left blank]
IN WITNESS WHEREOF, the parties hereto have made and entered into this
Agreement the date first hereinabove set forth.
BUYER:
AMERICAN LEISURE HOLDINGS, INC.
By: /s/ XXXXXXX X. XXXXXX
---------------------
Xxxxxxx X. Xxxxxx
President
SELLER:
/s/ L. XXXXXXX XXXXXX
---------------------
L. Xxxxxxx Xxxxxx
