EXHIBIT 10.6
OPERATING AGREEMENT
BETWEEN
TROPICAL REPUBLIC, INC.
AND
WINDSOR CAPITAL CORP
DATED: SEPTEMBER 16, 0000
Xxxxxxxx Xxxxxxxx, Inc., a Florida Corporation controlled by Xxxxx
Xxxxxx as trustee ("Buyer"), Xxxxx Xxxxxx ("Guarantor"), and Windsor Capital
Corp. ("Seller"), a Delaware Corporation have entered into an agreement (the
"Sale Agreement") for the sale and purchase of the Seller's operating division
known as "Simply Cigars" (the "Division"). Specifically, the following locations
are to be sold on or before October 15, 1998 (the "Closing Date"), pursuant to
the Sale Agreement, and pursuant to this Agreement, Buyer will assume
responsibility for operations of the locations as indicated:
LOCATION OPERATIONS ASSUMPTION
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DATE
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1. Crystal Mall - Waterford, Connecticut September 16, 1998
2. Stratford Square Mall - Bloomingdale, Illinois September 23, 1998
3. Woodfield Mall - Xxxxxxxxxx, Illinois September 24, 1998
4. Xxxxxxxxxx Mall - Bethesda, Maryland September 18, 1998
5. Cambridgeside Galleria - Cambridge, Mass. September 17, 1998
6. Northshore Mall - Peabody, Mass. September 17, 1998
7. Xxxxxx Crossing Mall - Dublin, Ohio September 25, 1998
8. Emerald Square Mall - Attleborough, Mass. September 16, 1998
9. Annapolis Mall - Annapolis, Maryland September 18, 1998
A. The Buyer will assume all responsibility and liability for the
following during the period from the operations assumption date at each
location until the closing date, the ("Operating Period").
1. Hiring, training and payment of salaries and related expenses
of all operating personnel.
2. Payment of all rent due to landlords from the date of the
assumption of operations at each individual location.
3. Supplying of all inventory and merchandise for sale at each
location.
4. Payment of all taxes collected and or due to all
appropriate taxing authorities in each location. Copies of
each report and proof of payment will be simultaneously
provided to the Seller. At the Seller's option, Seller may
prepare the reports and submit them as due.
5. Payment of all other operating expenses of the Division.
B. The Buyer shall retain as compensation the proceeds of all sales during
the Operating Period.
C. The Buyer and Seller shall proceed as expeditiously as possible to the
consummation of the purchase and sale pursuant to the Sale Agreement
which provides for customary terms and provisions and a price of
$260,000, of which $44,000 shall be paid in cash, with a $130,000
credit against the purchase price being allowed by the Seller for the
Buyer's assumption of the Seller's lease liabilities at the specified
locations. The balance of the purchase price shall be paid pursuant to
a $86,000, 8% promissory note providing for payment of $43,000 plus
interest on March 31, 2000. The Buyer shall place a $10,000 deposit
against the purchase price, which shall be credited to Buyer at
the closing or, if the closing fails to occur for any reason other than
a breach of contract by the Seller, then the Seller shall retain the
deposit. In the event of such a breach it will be returned to the
Buyer.
D. This Operating Agreement is being entered into by the Buyer to induce
the Seller to enter into the Sale Agreement. The Seller is entering
into this Agreement to induce the Buyer into the assumption of all
operating expenses of the listed locations.
E. The Buyer agrees to operate in accordance with applicable legal
requirements (including but not limited to lease provisions) at the
individual locations and to indemnify and hold harmless the Seller from
and against any liability, loss, claim or obligation (including, but
not limited to reasonable attorney fees and expenses incurred during
the Operating Period).
F. The Seller agrees to assist the Buyer, at the Buyer's expense, in the
qualification of the Buyer's company(ies) at each location.
G. This agreement shall terminate upon the earlier of (i) closing of the
contemplated purchase and sale of the Division (the "Sale"), in which
case the Buyer shall own the Division or (ii) termination of the Sale
Agreement, in which case Buyer shall immediately return to Seller
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possession and control of the Division locations and assets; provided,
however, that termination of this Agreement shall not affect the
parties' obligations and liabilities accrued or based on events
occurring prior to such termination.
H. Guarantor hereby irrevocably and unconditionally personally guarantees
payment and performance by Buyer of all of its obligations hereunder.
I. In the event of litigation arising under this Agreement, the prevailing
party shall be entitled to recover from the nonprevailing party its
reasonable attorneys fees and expenses incurred in connection with such
litigation at all levels, including before the filing of suit.
GUARANTOR
/S/ XXXXX XXXXXX DATE 9/15/98
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SELLER
/S/ XXXXXX XXXXX XXXX 9/15/98
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BUYER
/S/ XXXXX XXXXXX DATE 9/15/98
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