ASSET PURCHASE AGREEMENT
THIS AGREEMENT has been made and entered into as of this 20th day of
August, 1999, by and between XXXXXXXX & XXXXX, INC., a Florida corporation doing
business as G&L GROUP (the "Seller" or "G&L"), QUIKBIZ INTERNET GROUP, INC., a
Nevada corporation, publically authorized to trade and do business in Florida
and/or assigns (the "Buyer" or "QBIZ"), and XXXXX XXXXX and XXXXX X. XXXXXX
(collectively the "R/E Owner").
W I T N E S S E T H:
WHEREAS, Seller is a privately held Florida corporation in good
standing with the Secretary of State providing advertising and marketing
services to businesses located throughout the Continental United States, (the
"Business"); and
WHEREAS, Buyer, is a Nevada corporation in good standing with the
Secretary of State and is a public company trading under the symbol "QBIZ" and
is a reporting corporation with the United States Securities and Exchange
Commission (SEC); and
WHEREAS, the Board of Directors of each of the constituent corporations
deems it advisable that the equipment, accounts receivable and clients held by
Seller be acquired by Buyer; and
WHEREAS, Buyer desires to purchase from Seller and Seller desires to
sell to Buyer certain assets which represent many, but not all, of the assets
used in connection with the Business, on the terms and subject to the conditions
hereinafter set forth; and
WHEREAS, Buyer may designate A.D.S. Advertising Corp. d/b/a "The
Xxxxx Agency", its wholly owned Florida corporation to receive and/or assume any
of its QBIZ rights and liabilities hereunder, and
WHEREAS, Xxxxx Xxxxx and Xxxxx X. Xxxxxx (collectively "R/E Owner")
are the sole owners of the Real Estate upon which Seller conducts its Business;
and
WHEREAS, as part of the same transaction, the R/E Owner agrees to give
to Buyer or its designee a $190,000 Mortgage upon the real estate described
below.
NOW, THEREFORE, in consideration of the mutual promises and covenants
herein contained, the parties, intending to be legally bound, agree as follows:
1. ASSETS TO BE CONVEYED. On the Closing Date, Seller agrees to sell,
assign, transfer, convey and deliver to Buyer and Buyer agrees to purchase and
acquire all of Seller's right, title and interest in and to all of the assets
owned by Seller in connection with the Business, other than those assets
specifically excluded pursuant to this Agreement (the "Assets"), including, the
following assets:
a. All of Seller's existing active clients, contracts with and
pending orders with said clients (the "Clients"), including those described in
Schedule 1A attached hereto;
b. All of Seller's accounts receivable relative to the Clients
("Receivables") including those described in Schedule 1B attached hereto, Seller
warrants that the Receivables are and will be 100% collectible;
c. The equipment, office furniture and fixtures ("Equipment")
described in Schedule 1C, which Seller warrants that the Equipment will be in
working order at the time of Closing;
d. All of Seller's work in progress ("Existing Orders"),
including proposals generated by Seller which are described on Schedule 1D
attached hereto, together with all revenue or business resulting from Seller's
Existing Orders;
e. Certain of Seller's rights and interest under Seller's
existing leases and service contracts ("Leases and Service Contracts") including
Seller's lease with the R/E Owner. Schedule 1E attached hereto lists all of
Seller's Leases or Service Contracts, and which ones Buyer will be assuming;
f. The "Other Business Assets" that are listed in Schedule N/A
attached hereto;
g. Certain tangible and intangible personal property, rights
and interests of Seller including, its goodwill, the names, customer records,
trademarks, trade names, service marks, logos, copyrights, fictitious names,
patents and patent applications, trade secrets, processes, know-how, royalties,
as well as the following: (1) Rights of set-off against Clients and creditors,
any claims causes of action, judgments, claims, and demands of any nature,
except if the foregoing relate to excluded assets under this Agreement or to
liabilities not assumed by Buyer; and (2) books, files, papers and records
relating to the operation of the Business and not relating solely to the
corporate affairs of Seller (the "Business Records") and the aforesaid property
and assets, except for those assets specifically excluded under this Agreement.
For five (5) years after the Closing Date, Buyer will afford Seller such access
to the Business Records in Buyer's possession as is reasonably necessary. In the
event Buyer sells the business prior to the expiration of the five-year period,
it will use its best efforts to provide for continuation of such rights of
inspection.
1.5 REAL ESTATE TO BE CONVEYED. On the Closing Date, the R/E Owner
will, by Mortgage Deed (the "R/E Mortgage"), convey a third mortgage and
security interest in the real estate described in Schedule 1.5 attached hereto,
together with all buildings and other improvements as well as the rents and
profits, located at 0000 X.X. 0xx Xxxxxx, Xx. Xxxxxxxxxx, Xxxxxxx with property
identification number 494209170020 (the "Real Estate"). The R/E Mortgage will
secure a $190,000 Promissory Note from the Seller and the R/E Owner to the Buyer
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("Promissory Note"). If the total liabilities paid by Buyer in paragraph 3 of
this Asset Purchase Agreement ultimately exceed the Receivables by an amount
less than $150,000 amount inclusive of all principle, interest, penalties, costs
or attorneys' fees (the "Savings"), than the principle balance of the Promissory
Note shall be reduced by the amount of the Savings. The parties will calculate
any Savings when all the assumed liabilities have been paid or settled or 2
years from the execution of the Promissory Note, whichever first occurs. Absent
default, no payments shall be due and no interest shall be due for three (3)
years following the execution of the Promissory Note. At the beginning of the
fourth year, the Promissory Note shall be amortized (at the prime rate then
existing) and paid over five (5) years in equal monthly payments. Payments may
be made in U.S. currency or in QBIZ stock (based upon the value of the QBIZ
stock at the time of payment). By this Asset Purchase Agreement, the Buyer will
permit the R/E Owner to substitute collateral (i.e. transfer the mortgage lien
from the Real Estate to other real or personal property) provided: (i) the
existing first or second mortgage lenders have given the R/E Owner written
notice of default, triggered primarily by the recording of the R/E Mortgage;
(ii) the R/E Owner tenders collateral of equal or greater value, which is
acceptable to the Buyer; and (iii) the Real Estate Owner pays for any costs,
taxes or fees incident to the transfer.
2. EXCLUDED ASSETS. The following are not included in the Assets and
shall not be conveyed to Buyer:
a. Seller's corporate documents, corporate seal, minute book,
charter documents, corporate stock record book, ledgers, bank statements and
such other books and records as pertain to the organization, existence and
capitalization of Seller; and
b. The items listed on Schedule 2B attached hereto.
3. ENCUMBRANCES & ASSUMPTION OF LIABILITIES.
(a) Liabilities Assumed. Buyer shall not assume, nor in any
way be responsible for, any liabilities, commissions, compensation, debts,
obligations, trade payables or other expenses of the Seller other than those
described in Schedule 3A attached hereto which shall not exceed the individual
amounts described in Schedule 3A and not to exceed the Receivables by more than
$150,000.00 in total. That schedule describes the name, address, account number,
telephone and facsimile numbers, contact person, as well as the status, amount
due, nature of the indebtedness, whether the debt is secured or unsecured, and
the status of any collection efforts. Additionally, that schedule reflects which
of Seller's assets or the Real Estate are encumbered (if any) by such creditors.
All of Seller's Assets to be sold or transferred hereunder shall be free and
clear of all claims, liens and encumbrances, except for those items specifically
disclosed in Schedule 3A or elsewhere in this Agreement. Except as otherwise
provided in this paragraph or elsewhere in this Agreement and attachments
hereto, the Buyer is not assuming Seller's accounts payable or the obligations
or duties of the Seller.
(b) Cash Flow Measures. If at any time during the first 2
years following Closing, the assumed payables due and owing ("A/P") exceed
assigned Receivables received ("A/R"), the Seller and/or the R/E Owner, at
Buyer's request, shall immediately loan Buyer cash equal to 50% of the existing
shortfall (the "Shortfall Loans"). Buyer shall repay any Shortfall Loans within
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thirty (30) days of receipt, with repayment being in cash or the equivalent
amount of QBIZ stock. The total amount of all Shortfall Loans given will not
exceed $75,000.00.
4. CONSIDERATION. The purchase price for the sale and purchase of
Assets shall be Six Hundred Ten Thousand Dollars ($610,000.00), together with
the assumption of certain liabilities by the Buyer as further set forth in this
Agreement. The purchase price shall be paid as follows:
a. The purchase price shall be paid in QBIZ restrictive stock
(the "Shares"), valued at $1.25 for each share of common stock for a total of
488,000 shares (subject to the adjustments described below). 366,000 of the
Shares will be issued to Seller within three (3) business days of closing (the
"Closing Shares"). The balance of the restrictive stock and/or a cash equivalent
("Remaining Shares") to be paid shall be distributed to the Seller within one
year from the Closing. While the parties presently fix the number of Remaining
Shares at 122,000, that number and the number of Closing Shares shall be
adjusted up and/or down at the time of distribution (i.e. 1 year from Closing)
by virtue of the following:
(i) Up. Buyer will provide Seller with a one-year
floor price of QBIZ restrictive common stock of $1.10 ("Floor Price"). In the
event the stock price falls below the Floor Price, Seller will issue additional
restrictive common shares to make up the difference between the Floor Price and
actual price of the Closing Shares and the Remaining Shares. Only in the event
the stock price of the Closing Shares and the Remaining Shares, one year from
date of purchase, is below the Floor Price, will the shares get adjusted. Seller
shall use the average closing price, of five trading days, preceding the
one-year anniversary of the closing of the purchase, as a basis to determine the
price of common stock.
(ii) Down. Seller guarantees that Buyer will receive
a minimum of $700,000.00 in gross profits from the Clients or new clients,
excluding existing or past clients of the Xxxxx Agency or its subsidiaries or
affiliates ("Xxxxx Clients"). A list of existing Xxxxx Clients is attached
hereto as Schedule 4. In the event, after one-year from closing of this
Agreement, if the guarantee of gross profits is not achieved, $.80 of every
dollar below $700,000.00 will be deducted from the 122,000 shares at price of
$1.25 per share, up to a maximum of the 122,000 shares as adjusted by the (above
described) "Floor Price" adjustment. This provision does not apply to the
Closing Shares.
(iii) The Buyer shall have the sole option of either
remitting these shares or paying their cash equivalent or a combination of both.
In the event, the Buyer shall elect the cash option, the cash value of said
stock shall be determined on the date remittance is due.
b. While the Buyer reserves the right to re-adjust same within
2 weeks with a letter from Buyer's CPA to both parties, the purchase price shall
initially be allocated in the following manner:
Equipment $ 80,000
Good Will $ 0
Real Estate $190,000
Clients $340,000
Total $610,000
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5. CLOSING. The closing of the transactions contemplated by this
Agreement (the "Closing") shall be held at the offices of Xxxxxxx X. Xxxxxx,
P.A., at 000 Xxxxxxxxx 0 Xxxxxx, Xxxxx 000, Xxxx Xxxxxxxxxx, Xxxxxxx, at a date
and time mutually agreed upon by the parties but no later than 45 days following
the execution of this Agreement.
6. SELLER'S DOCUMENTS. The Seller (and the R/E Owner, where applicable)
shall deliver at Closing (unless otherwise indicated), the following:
a. Bills of sale, assignments, vehicle titles, mortgage deeds
(from R/E Owner), and other good and sufficient instruments of conveyance and
transfer, in form and substance satisfactory to Buyer and its counsel, together
with all required consents as shall be effective to vest in Buyer all of
Seller's right, title and interest in the Assets and the proper R/E Mortgage
upon the Real Estate; and
b. Updated list of Clients, together with all Client files,
all contracts, all work in progress.
c. Updated list of Receivables; and
d. Documentation acceptable to Buyer which confirm the
approximate principle balance of the first and second mortgages on the Real
Estate; and
e. All the Leases and Service Contracts together with all
addendums or modifications thereto, to be delivered to Buyer within 2 days
before Closing; and
f. Corporate resolutions authorizing the transaction; and
g. Satisfactions, releases and/or terminations of any lien or
encumbrance upon the Assets in favor of Gateway, Xxxxxx Financial, any
governmental entity or any other party. Said satisfactions shall be properly
executed and in recordable form. Alternatively, Seller may provide the
appropriate estoppel letters from these creditors within 20 days of the
execution of this Agreement with the satisfactions to follow within 30 days
after closing; and
h. Closing statement; and
i. A payroll ledger and attached letter attesting to the
amount of regular compensation paid to Seller's employees, to be signed or
initialed by each employee. Seller's most recently filed monthly sales tax
return and proof of payment. These documents are to be delivered to Buyer within
three (3) business days prior to closing, whichever first occurs; and
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j. Copies of all non-compete agreements signed by any of the
Seller's employees; and
k. Written consents from any creditors, or other personal or
entities, whose consent is required for the transfer and assignment of the
Assets other than mortgage holders; and
l. All records and other documents in control or possession of
Seller relating to the Business other than Seller's accounting books which will
be retained by Seller but made available to Buyer or its agents or accountants
for inspection from time to time hereafter upon reasonable notice to Seller; and
m. Current state and county lien search (to be paid by Buyer)
showing no liens or encumbrances against the Assets or Real Estate except for
those Seller will be satisfying at Closing or those that Buyer has explicitly
agreed to assume in this Agreement; and
n. A written Employment Contract, Non-Compete and
Confidentiality Agreement from Xxxxx Xxxxx expanding upon the terms outlined in
his August 2, 1999 "Letter of Understanding for Employment" attached hereto as
Schedule 6N. The territory of such Agreement will be the Continental United
States. It will also require Xxxxx Xxxxx to devote his full-time efforts to
Seller and not to engage in other business endeavors not specifically and
previously approved in writing by Buyer. It will also impose a duty of
confidentiality and non-disparagement in favor of the Buyer. As President, Xxxxx
Xxxxx'x duties will include managing The Xxxxx Agency on a full-time daily
basis. The Agreement shall also specify his responsibility, authority, standards
concerning his performance, and where he will be performing his work. The term
of the Agreement shall be three (3) years from Closing. His employment may be
terminated early by either party, for cause (to be spelled out in the Employment
Non-Compete Agreement), without affecting the covenant not-to-compete and the
duty of confidentiality. In the event Xxxxx Xxxxx'x employment is terminated by
Buyer without cause, Xxxxx Xxxxx'x covenant not-to-compete will be relaxed to
permit him to compete so long as he observes his duty of confidentiality and
keeps "hands off" of QBIZ's and The Xxxxx Agency's clients, officers, agents,
independent contractors and employees. Xxxxx Xxxxx may direct that his
compensation be paid through Xxxxxx Studios, Inc., a Florida corporation, in
which event that company (together with its officers, directors, and
shareholders) would have to join in the execution of a Non-Compete and
Confidentiality Agreement.
o. Regarding the Real Estate, a Lease and Assignment of Lease
(or Sublease) acceptable to the Buyer.
p. Written estoppel information from any other (other than
Seller) tenants, subtenants, assignees in the Real Estate (other than Seller)
confirming that rent is current, that no advanced rent and security deposits
have been paid, that there are no setoffs or claims and that the term is
month-to-month.
q. A right of first refusal agreement relative to the sale of
the Real Estate.
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r. A mortgagee title insurance commitment (with a policy to
follow at Buyer's election and expense) showing title to the Real Estate vested
in the R/E Owner subject only to the first and second mortgages described in
this Asset Purchase Agreement. Buyer will pay the cost of the Commitment.
s. Such other documents, instruments or certificates as shall
be reasonably requested by Buyer or its counsel or contemplated by or attached
to this Agreement; and
t. A recitation from the R/E Owner and Xxxxxx Studios, Inc.
disclaiming any interest in the Assets.
7. BUYER'S DOCUMENTS. Buyer shall cause to be delivered to Seller at
Closing (unless otherwise indicated) the following:
a. The Closing Shares (within 3 business days after Closing);
and
b. The Remaining Shares (1 year after Closing); and
c. Corporate resolutions authorizing the transaction; and
d. Such other documents, instruments or certificates as shall
be reasonably requested by Seller or its counsel or contemplated by or attached
to this Agreement.
8. COOPERATION. Seller, R/E Owner and Buyer shall, on request, on or
after the Closing Date, cooperate with each other by furnishing any additional
information, executing and delivering any additional documents and/or
instruments and doing any and all such other things as may be reasonably
required by the parties or their counsel to consummate or otherwise implement
the transactions contemplated by this Agreement.
9. SELLER'S REPRESENTATIONS, WARRANTIES AND COVENANTS. Seller and the
R/E Owner hereby make the following representations, warranties and covenants,
each of which shall be deemed to be a separate representation, warranty and
covenant, all of which have been made for the purpose of inducing Buyer to join
in and execute this Agreement, and in reliance on which Buyer has entered into
this Agreement, all of which shall survive the Closing of this transaction:
a. Seller is a corporation duly organized, validly existing
and in good standing under the laws of the State of Florida, with full power
under its Articles of Incorporation and By-Laws to carry on its business as now
being conducted and to enter into and to perform this Agreement; and
b. The execution and delivery of this Agreement has been duly
authorized by Seller's directors and shareholders, and this Agreement has been
duly executed and delivered to Buyer and constitutes a legal, valid and binding
agreement, enforceable in accordance with its terms; and
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c. On the Closing Date, Seller will convey good and marketable
title to all of the Assets, free and clear of all liens, pledges and
encumbrances whatsoever, except as set forth on Schedule 3A. Seller represents
that all liens and encumbrances reflected on that Schedule are fully assumable
by the Buyer; and
d. Except for restrictions in the R/E Owner's first and second
mortgage on obtaining secondary financing, the execution and performance of this
Agreement will not violate any order, rule, judgment or decree to which Seller
and R/E Owner are subject or breach any contract, agreement or other commitment
to which Seller and/or RE Owner is a party or by which Seller and/or R/E Owner
are bound; and
e. There is no litigation, action, suit, investigation or
other proceeding pending or threatened which may give rise to any claim against
any of the Assets, the Real Estate or adversely affect Seller's or the R/E
Owner's ability to perform in accordance with the terms of this Agreement, and
Seller and R/E Owner are not aware of any facts which could reasonably result in
any such proceeding; and
f. Between the date hereof and the Closing Date, the Business
shall be conducted in the ordinary course and in accordance with the Preclosing
Guidelines attached hereto as Schedule 9F. Executive compensation and
reimbursements shall be maintained at the levels existing at the time this
Agreement is executed; and
g. On the date of Closing, Seller and R/E Owner have or will
have complete and unrestricted power to sell, transfer and deliver to the Buyer
the Assets and Real Estate Mortgage provided for under the terms of this
Agreement, and the instruments executed or to be executed and delivered to the
Buyer hereunder are or will thereupon be valid in accordance with their terms,
and will effectively vest in the Buyer good and marketable title to such Assets
and a valid third mortgage lien upon the Real Estate, free and clear of any and
all liabilities, obligations, and encumbrances, except as otherwise provided
herein; and
h. There are no judgments, liens, actions or proceedings
pending against Seller or R/E Owner in any court or agency which would impair
the value of the Assets being sold hereunder or restrict their right and
authority to convey said Assets and Real Estate Mortgage to Buyer, free and
clear of all liens, encumbrances or claims of any kind, except as otherwise
described herein; and
i. The Business of Seller is presently conducted and will be
conducted until the date of Closing in accordance with generally accepted
accounting principals and, except as otherwise disclosed herein, in compliance
with all laws, rules and regulations of the local, state and federal governments
in effect and pertaining to said business and its operations. Except for
restrictions in the R/E Owner's first and second mortgage on obtaining secondary
financing, the transfer of the Assets and Real Estate Mortgage will in no way
violate any laws or regulations, or constitute any breach of any agreement that
Seller or R/E Owner may be a party to. Seller and R/E Owner will do nothing to
adversely affect the continuous operation of the Business or cause waste to the
Real Estate; and
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j. There are no outstanding taxes or accounts payable prior to
the date of Closing for which Buyer or the R/E Owner will be obligated to pay,
or which might result in a lien or levy upon the Assets or Real Estate, except
as otherwise provided herein.
k. Seller and R/E Owner are aware of no occurrence, event,
action, omission, governmental plan or regulation that has, or is likely to
have, a substantial and negative impact on the Real Estate or any goodwill
associated with the Seller, the name "The G&L Group", the operation of the
Business, or the validity of the Existing Orders, Seller's contracts with its
Clients, employees, vendors; and
l. Other than those disclosed herein or attached to this
Agreement there are no service contracts, employment agreements, license
agreements, independent contractor agreements, executory contracts, supplier
contracts, leases, equipment leases, maintenance agreements or other agreements
relative to the Real Estate, operation of the Business or the Assets; and
m. Buyer has been provided access to all financial business,
banking, employment and other records relative to the operation of the Business
and the Assets (the "Records"). R/E Owner and Seller have maintained the Records
in the ordinary course of business and have not kept them or altered them in
such a manner to be deceptive or misleading; and
n. Pending Closing (on this Agreement) Seller and R/E Owner
shall not cause or permit sale or dissipation of any of the Assets or waste of
the Real Estate, except in the ordinary course of business; and
o. Neither R/E Owner nor Seller are not a party to, subject to
or bound by, any agreement with any lender or otherwise, or by any judgment,
order, writ, injunction or decree of any court or governmental body which could
prevent or would be violated by the carrying out of this Agreement except for
restrictions in the R/E Owner's first and second mortgage on obtaining secondary
financing; and
p. Seller and Xxxxx Xxxxx hereby agree that they shall not,
whether directly or indirectly, alone or together, either as an individual or as
a partner, joint venturer, employee or agent of any other person or entity, for
a period of three (3) years from the date of Closing, engage in the business of
advertising or marketing, in any capacity. Seller and Xxxxx Xxxxx further agree
that concurrent with closing, they shall execute and deliver to the Buyer, in a
form satisfactory to the Buyer, a Non-compete and Confidentiality Agreement
according to the terms of this section. The territory to which this Non-compete
Agreement extends shall encompass the Continental United States. This being the
territory serviced or contemplated to be serviced by the Seller. Xxxxx Xxxxx
shall be bound by this warranty of non-competition and shall execute the
Non-compete Agreement in his individual capacity at the time of Closing. Should
Xxxxx Xxxxx direct his executive compensation be paid through Xxxxxx Studios,
Inc., that company (together with its officers, directors and shareholders) will
join in the execution of the Non-Compete and Confidentiality Agreement.
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q. R/E Owner and Seller represent and warrant that, as of the
date hereof, they have no knowledge of any hazardous substances as defined by
the Comprehensive Environmental Response, Compensation and Liability Act of 1980
("CIRCLA"), 42 USC 9601(14), pollutants or contaminants as defined by the
Resource Conservation and Recovery Act ("RCRA"), 42 USC Section 6903 (5), or
other similar applicable federal or state laws and regulations; and that no
asbestos, PCBs or urea formaldehyde have been generated, released, stored, or
deposited over, beneath, or on the premises or on or in any structures located
on the premises from any source whatsoever by Seller or R/E Owner, their
predecessors in interest in the premises, or any other person. Seller and R/E
Owner covenant that they will indemnify, hold harmless, and defend Buyer from
any and all claims, loss, damage, response costs, and expenses arising out of or
in any way relating to a breach of these environmental representations (but only
to the extent that they would otherwise have liability under CIRCLA, RCRA or
other similar applicable federal or state laws or regulations), including but
not limited to: (a) claims of third parties (including governmental agencies),
for damages, penalties, response costs, injunctive or other relief; (b)
expenses, including fees of attorneys and experts, of reporting the existence of
hazardous substances or hazardous wastes to any governmental agency; (c) any and
all expenses or obligations, including attorneys' fees, incurred at, before, or
after any trial or appeal therefrom or administrative proceeding or appeal
therefrom, whether or not taxable as costs, including, without limitation,
attorneys' fees, paralegal's fees, witness fees (expert and otherwise),
deposition costs, copying and telephone charges and other expenses, all of which
shall be paid by Seller and R/E Owner when accrued.
r. Seller shall not affect any significant modifications of
the Receivables, Existing Orders, in contracts with Clients, employees, vendors
or independent contractors without the prior written consent of the Buyer.
Seller may obtain additional Clients, Receivables and Existing Orders during the
period subsequent to this Agreement and prior to Closing, which may be assumed
by Buyer, at Buyer's election.
s. All Contracts, service agreements, leases and other similar
executory agreements assigned herein are fully assignable by Buyer.
t. All of the Assets are presently located at the Real Estate
and will be located there at the time of the Closing, except only as diminished
in the ordinary course of business; and
u. Seller has, to the best of its knowledge, filed all
required federal, state and local tax returns or reports relating to its
business. Seller has no knowledge of a default under or a violation of any
applicable statute, law, ordinance, decree, order, rule, regulation, or license
of any governmental body, which had or may have a material adverse effect upon
the Business or the Assets; and
v. R/E Owner warrants and represents that it will remain
current on all obligations which are secured by a lien or mortgage on the Real
Estate. Further, the R/E Owner warrants that the Real Estate is presently
encumbered by a first mortgage in favor of Gateway in the approximate principal
balance of $296,000 and a second mortgage in favor of SBA's designee in the
approximate principal balance of $260,000 and no other liens exist.
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w. Seller and R/E Owner are aware of no litigation, action,
suit, investigation, claims, or facts likely to give rise to claims held or
asserted by Seller's present or former employees, vendors, any other Buyers (who
may have negotiated with Seller for purchase of any of the Assets or Real
Estate), and real estate broker or independent contractors, other than those
detailed below ____________________________N/A_______________ .
x. Seller warrants that the scheduled Receivables are and will
be 100% collectible within 6 months after Closing, that the Equipment will be in
working order at the time of Closing, and that the Schedule of Clients
accurately reflects Seller's Clients and their relationship with the Seller.
10. BUYER'S REPRESENTATIONS, WARRANTIES AND COVENANTS. Buyer hereby
makes the following representations, warranties and covenants to the best of
Buyer's knowledge, each of which shall be deemed to be a separate
representation, warranty and covenant, all of which have been made for the
purpose of inducing Seller to join in and execute this Agreement, and in
reliance on which Buyer has entered into this Agreement, all of which shall
survive the Closing of this transaction:
a. Buyer is a corporation duly organized, validly existing and
in good standing under the laws of the State of Nevada and authorized to do
business in Florida, with full power under Articles of Incorporation and By-Laws
to enter into and perform under this Agreement or will be within five (5)
business days after execution of this Agreement; and
b. The execution and delivery of this Agreement by Buyer has
been duly authorized by Buyer's directors and shareholders, and this Agreement
will have been duly ratified and constitute a legal, valid and binding
agreement, enforceable in accordance with its terms; and
c. The execution and performance of this Agreement will not
violate any order, rule, judgment or decree to which Buyer is subject or breach
any contract, agreement or other commitment to which Buyer is a party or by
which Buyer is bound; and
d. There is no litigation, action, suit, investigation or
other proceeding pending or threatened which may adversely affect Buyer's
ability to perform in accordance with the terms of this Agreement, and Buyer is
not aware of any facts which could reasonably result in any such proceeding.
11. CONDITIONS TO BUYER'S OBLIGATION. The failure of this condition
does not relieve Seller and/or R/E Owner of liability for their default. The
obligation of Buyer to consummate this Agreement is subject to the satisfaction
of each of the following conditions which may be waived, in writing, by Buyer:
a. The written representations and warranties of Seller and
R/E Owner to Buyer are true, complete and correct in all material respects as of
the Closing Date, with the same force and effect as if then made; and
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b. The Seller and R/E Owner execute, along with the other
documents called for under this Agreement, a covenant not to compete; and
c. Buyer is satisfied with the Receivables and the Payables to
be assumed as of the time of Closing and satisfied with Seller's books and
records (access, condition and content); and
d. All of the terms, covenants and conditions to be complied
with or performed by Seller and/or R/E Owner on or before the Closing Date are
duly complied with and performed in all material respects.
12. CONDITIONS TO SELLER'S OBLIGATION. The failure of these conditions
does not relieve Buyer from liability for a Buyer default. The obligation of
Seller and/or R/E Owner to consummate this Agreement is subject to the
satisfaction of each of the following conditions, any of which, may be waived,
in writing, by Seller and R/E Owner:
a. The representations and warranties of Buyer to Seller are
true, complete and correct in all material respects as of the Closing Date, with
the same force and effect as if then made;
b. All of the terms, covenants and conditions to be complied
with or performed by Buyer on or before the Closing Date are duly complied with
and performed in all material respects.
13. SURVIVAL OF REPRESENTATIONS AND WARRANTIES. The several
representations and warranties of the parties contained herein shall survive the
Closing without limitation.
14. SELLER'S REMEDIES. Buyer agrees that the future value of the stock
offered by the Buyer as well as other covenants of the Buyer herein contained
cannot be readily ascertained on the open market and that Seller and R/E Owner
will be irreparably harmed if this Agreement is not specifically enforced.
Therefore, in the event that Seller and/or R/E Owner shall institute any action
specifically to enforce Buyer and/or Buyer's performance under this Agreement,
Buyer hereby agrees to waive the defense that Seller has an adequate remedy at
law and to interpose no opposition, legal, or otherwise, as to the proprietary
of specific performance as a remedy. Nothing herein shall preclude the Seller
and R/E Owner from bringing an action for damages or pursuing any other remedy
available at law or in equity.
15. BUYER'S REMEDIES. Seller and R/E Owner agree that the Assets and
authorizations contracted to be conveyed hereunder cannot be readily obtained on
the open market and that Buyer will be irreparably injured if this Agreement is
not specifically enforced. Therefore, in the event that Buyer shall institute
any action specifically to enforce R/E Owner and/or Seller's performance under
this Agreement, Seller and R/E Owner agree to waive the defense that Buyer has
an adequate remedy at law and to interpose no opposition, legal or otherwise, as
to the propriety of specific performance as a remedy. In the event Buyer elects
to terminate this Agreement as a result of Seller's and/or R/E Owner's breach
instead of seeking specific performance, Buyer shall be entitled to return of
the Escrow Deposit. Nothing herein shall preclude the Buyer from bringing an
action for damages or pursuing any other remedy available in law or equity.
12
16. DAMAGE. The risk of loss or damage to the Assets and Real Estate to
be sold to Buyer hereunder shall be upon Seller and R/E Owner at all times prior
to Closing. In the event of such loss or damage, Seller and R/E Owner shall
promptly notify Buyer thereof and repair, replace or restore any such Assets and
Real Estate to their former condition as soon as possible after its loss and
prior to the Closing Date. If damage has occurred and such repair or restoration
of any such damage has not been completed prior to the Closing Date, Buyer may,
at its option:
a. Elect to consummate the Closing, in which event Seller and
R/E Owner shall pay to Buyer the costs of such repair, replacement or
restoration as is required to restore the Asset and/or Real Estate to its former
condition and against such obligation shall assign to Buyer all of Seller's and
R/E Owner's rights under any applicable insurance policies. Buyer shall, in such
xxxxx, xxxxxx to Seller and R/E Owner an itemized list of the cost of such
repair, replacement or restoration. If the parties are unable to agree upon such
costs, the matter shall be referred to a qualified architect mutually acceptable
to Seller and R/E Owner and Buyer whose decision as to the costs shall be final
and whose fees and expenses shall be paid one-half by R/E Owner/Seller and
one-half by Buyer; or
b. Elect to postpone the Closing Date for a period of up to
ninety (90) days to permit Seller to make such repairs, replacement or
restoration as is required to restore the Asset and/or Real Estate to its former
condition. If, after the expiration of the extension period granted by Buyer,
the Asset and/or Real Estate has not been adequately repaired, replaced or
restored, Buyer may terminate this Agreement. If the parties disagree as to
whether the Asset has been adequately repaired, replaced or restored, the matter
shall be referred to a mutually acceptable qualified expert whose decision shall
be final, and whose fees and expenses shall be paid one-half by R/E Owner/Seller
and one-half by Buyer.
17. EXPENSES. Except as otherwise provided herein, the parties shall
bear their own attorney's fees. All recording costs for deeds, bills of sale,
assignments, and other instruments of transfer, all costs incident to complying
with any bulk sales laws or clearing title to the Assets, and all applicable
sales, transfer, use, stamp or other taxes shall be paid equally by Seller and
R/E Owner at or before Closing. The Buyer agrees to the pro-ration of real
property taxes due for the fiscal tax year of 1999 based upon its occupancy of
the premises located at 0000 Xxxxx Xxxxxxxxx Xxxx, Xxxx Xxxxxxxxxx, Xxxxxxx.
18. ASSIGNABILITY. Neither party may assign its rights hereunder
without the prior written consent of the other party. Before or after Closing,
Buyer at its election may assign all or some of its rights and liabilities
hereunder to its wholly owned subsidiary, A.D.S. Advertising Corp., a Florida
corporation d/b/a The Xxxxx Agency (The Xxxxx Agency).
19. NOTICES. All necessary notices, demands and requests required or
permitted to be given under the provisions of this Agreement shall be in writing
and shall be deemed duly given if mailed by certified mail, postage prepaid,
addressed as follows:
a. If to Seller: With copies to:
Xxxxxxxx & Xxxxx, Inc. Xxxx X. Xxxxxxxx, P.A.
0000 Xxxxxxxxx Xxxx 0000 X. Xxxxxxx Xxxxxxx, Xxxxx 000
Xx. Xxxxxxxxxx, Xxxxxxx 00000 Ft. Xxxxxxxxxx, Xxxxxxx 00000
13
b. If to R/E Owner: With copies to:
Xxxxx Xxxxx and Xxxxx X. Xxxxxx Xxxx X. Xxxxxxxx, P.A.
0000 X.X. 0xx Xxxxx 0000 X. Xxxxxxx Xxxxxxx, Xxxxx 000
Xxxxxxxxx Xxxxx, Xxxxxxx 00000 Ft. Xxxxxxxxxx, Xxxxxxx 00000
c. If to Buyer: With copies to:
Quikbiz Internet Group, Inc. Xxxxxxx X. Xxxxxx, Esquire
C/O Xxxx Xxxxxxxx Xxxxxxx X. Xxxxxx, P.A.
0000 X.X. 00xx Xxxxxx, Xxxxx 000 000 XX 0 Xxxxxx, Xxxxx 000
Xx. Xxxxxxxxxx, Xxxxxxx 00000 Ft. Xxxxxxxxxx, XX 00000
20. NO BROKERS OR FINDERS. Seller/R/E Owner and Buyer hereby warrant
and represent to each other that this Agreement was not induced or procured
through any person, firm or corporation acting as a broker or finder. Each of
the parties herewith agree to indemnify and hold each other harmless from any
liability, loss, damage, costs or expense, including reasonable attorneys' fees
and expenses, suffered or incurred as a result of a breach of the foregoing
warranty and representation.
21. ENTIRE AGREEMENT. This Agreement, including the schedules and
exhibits attached supersedes any prior agreements between the parties and
contains all of the terms agreed upon with respect to the subject matter hereof.
This Agreement may not be altered or amended, except by an instrument in writing
signed by the party against whom enforcement of any such change is sought.
22. COUNTERPARTS. This Agreement may be signed in any number of
counterparts with the same effect as if the signature on each such counterpart
were on the same instrument, provided any changes or interlineations appear in
all counterparts and are initiated on all counterparts.
23. HEADINGS. The headings of the paragraphs of this Agreement are for
convenience only and in no way modify, interpret or construe the meaning of
specific provisions of the Agreement.
24. SCHEDULES. The Schedules to this Agreement are a material part
hereof.
25. SEVERABILITY. In case any one or more of the provisions contained
in this Agreement should be invalid, illegal or unenforceable in any respect,
the validity, legality and enforceability of the remaining provisions contained
herein shall not in any way be affected or impaired thereby.
26. CHOICE OF LAW AND VENUE. This Agreement is to be construed and
governed by the laws of the State of Florida. Any action to enforce this
Agreement shall be brought in Broward County, Florida, unless, in Buyer's
determination, action in another jurisdiction is necessary to insure
enforcement.
14
27. CONFIDENTIALITY. Seller and Xxxxx Xxxxx agree to keep confidential
(i.e. not revealing to third parties) the finances, business knowhow, trade
secrets, customer lists, and methods of practice of Buyer, Seller and/or their
affiliates.
28. CREDITOR'S CLAIMS. Within five (5) days of first notice of any of
R/E Owner's or Seller's creditors claiming amounts due or rights not disclosed
by Seller and/or R/E Owner in this Agreement, Buyer shall give Seller and R/E
Owner written notice specifying the creditor's name, address and nature of
claim. Thereafter, it shall be Seller's and/or R/E Owner's responsibility to
resolve, settle or defend said claim. Should Seller and/or R/E Owner fail to
promptly respond to the claim or should the claim ultimately result in a
judgment or decree against the Buyer, Buyer may defend or satisfy same and
setoff the any amounts due Seller and/or R/E Owner by that amount, provided
Seller and/or R/E Owner had received the above specified notice of the pending
claim. Similarly, any costs, losses or attorney's fees realized by Buyer as the
result of Seller's and/or R/E Owner's non-payment of Seller's liabilities shall
be deducted from any amounts due Seller and/or R/E Owner.
29. INDEMNITIES.
a. Except provided by the remedies provisions of this
Agreement, Seller and R/E Owner hereby indemnify and hold Buyer harmless from
and against any liability, loss, damage, cost or expense, including reasonable
attorney's fees and expenses, suffered by Buyer as a result of:
(1) Any breach of this Agreement by Seller and/or R/E Owner;
(2) Any inaccuracy in or breach of any of the
representations, warranties or covenants
made by Seller and/or R/E Owner herein; and
b. Except as otherwise provided by the remedy provisions of
this Agreement, Buyer hereby indemnifies and holds Seller and/or R/E Owner
harmless from and against any liability, loss, damage, cost or expense,
including reasonable attorney's fees and expenses, suffered by Seller and/or R/E
Owner as a result of:
(1) Any breach of this Agreement by Buyer; and
(2) Any inaccuracy in or breach of any
representations, warranties or covenants
made by Buyer herein.
(3) Any liability resulting from Buyer's failure
to perform under a service contract, lease,
franchise agreement, or other obligation
assumed herein.
c. Each party shall promptly notify the other party of any
claim or demand for payment of any debt, liability or other claim by it for
misrepresentation, breach of warranty, breach of covenant, or right of
indemnification under this Agreement. Seller and/or R/E Owner and Buyer shall
15
also promptly notify each other of any claim or demand for the payment of any
debt or liability asserted against the other party under this Agreement. Seller
and/or R/E Owner and Buyer shall have the right to contest any claim or demand
asserted against them and shall cooperate in the defense of any claim against
them. Either party shall make available to the other party or its
representatives all records and other materials required by them for their use
in contesting any such liability.
30. LITIGATION/ATTORNEY'S FEES. In connection with any litigation
arising out of the enforcement of this Agreement, or for its interpretation, the
prevailing party shall be entitled to recover its costs, including reasonable
attorney's fees, from the other party hereto if such party was an adverse party
to such litigation.
IN WITNESS WHEREOF, the parties have executed or have caused this
Agreement to be executed by a duly authorized officer as of the date first
written above.
WITNESSES: SELLER: XXXXXXXX & XXXXX, INC.,
a Florida corporation d/b/a The G&L
Group
/s/ Xxxxx Xxxxx 8/20/99
_____________________________ By __________________________________
Xxxxx Xxxxx, ________________ Date
_____________________________
BUYER: QUIKBIZ INTERNET GROUP, INC.,
a Nevada corporation, authorized to
transact business in Florida
/s/ Xxxxx Xxxxxxxx 8/20/99
_____________________________ By __________________________________
Xxxx Xxxxxxxx, CEO Date
_____________________________
R/E OWNER: XXXXX XXXXX AND XXXXX
X. XXXXXX
/s/ Xxxxx Xxxxx 8/20/99
_____________________________ By __________________________________
Xxxxx Xxxxx, Date
_____________________________
_____________________________ By __________________________________
Xxxxx X. Xxxxxx, Date
_____________________________
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ADDENDUM TO ASSET PURCHASE AGREEMENT
THIS ADDENDUM dated August 31, 1999 modifies that certain Asset
Purchase Agreement dated August 20th , 1999 (the "APA"), by and between
XXXXXXXX & XXXXX, INC., a Florida corporation doing business as G&L GROUP (the
"Seller" or "G&L"), QUIKBIZ INTERNET GROUP, INC., a Nevada corporation,
publically authorized to trade and do business in Florida and/or assigns (the
"Buyer" or "QBIZ"), and XXXXX XXXXX and XXXXX X. XXXXXX (collectively the "R/E
Owner").
1. Paragraph 4(a)ii Is Amended to: Delete the word "affiliates" from
the first sentence.
2. Paragraph 4(a) Is Amended to: Add the following sub-paragraphs.
(iv) B's delivery of the Remaining Shares to Seller shall be
conditioned upon the following: (a) B's receipt of properly
executed and recorded (State and County) lien releases from
Gateway and Xxxxxx for UCC document numbers 980000006039,
930000094100, and 930000062964 and any amendments thereto.
(v) The term "restricted stock" or "restricted shares" shall
be as defined in rule 144 promulgated under the Securities Act of 1933, as
amended.
3. Paragraph 6 Is Amended to: Reflect the current status of the
documentation Seller was to bring to Closing. See table below.
ITEM DESCRIPTION PARTIES AGREE TO STATUS
------------ ---------------------------------------------------------- ----------------------------- --------------
a. Xxxx of sale, assignments, mortgage deed and promissory Seller to provide at closing
note
------------ ---------------------------------------------------------- ----------------------------- --------------
b. Updated list of Clients Seller to provide at Same as one
closing and attach to attached to
Assignment APA
------------ ---------------------------------------------------------- ----------------------------- --------------
c. Updated list of Receivables Seller to provide at
closing and attach to
Assignment
------------ ---------------------------------------------------------- ----------------------------- --------------
d. Documentation acceptable to Buyer which confirm the Seller to provide at closing Exh. "d"
approximate principle balance of the first and second
mortgages on the Real Estate
------------ ---------------------------------------------------------- ----------------------------- --------------
Page 1 of 4
ITEM DESCRIPTION PARTIES AGREE TO STATUS
------------ ---------------------------------------------------------- ----------------------------- --------------
e. All the Leases and Service Contracts together with all Provided before APA
addendums or modifications thereto, to be signed on 8/20/99
delivered to Buyer within 2 days before Closing
------------ ---------------------------------------------------------- ----------------------------- --------------
f. Corporate resolutions Seller to provide at closing
------------ ---------------------------------------------------------- ----------------------------- --------------
g. Satisfactions, releases and/or terminations of any lien Gateway and Xxxxxx
or encumbrance upon the Assets in favor of Gateway, Financial satisfactions
Xxxxxx Financial, any governmental entity or any to follow within 30 days
other party after closing -
Seller's responsibility
------------ ---------------------------------------------------------- ----------------------------- --------------
h. Closing statement Seller to provide at closing
------------ ---------------------------------------------------------- ----------------------------- --------------
i. A payroll ledger and attached letter attesting to the Seller to provide at closing Exh. "i"
amount of regular compensation paid to Seller's
employees, to be signed or initialed by each employee.
Seller's most recently filed monthly sales tax return
and proof of payment.
------------ ---------------------------------------------------------- ----------------------------- --------------
j. Copies of all non-compete agreements signed by any of None exist
the Seller's employees
------------ ---------------------------------------------------------- ----------------------------- --------------
k. Written consents from any creditors, or other personal None required.
or entities, whose consent is required for the transfer
and assignment of the Assets other than mortgage holders
------------ ---------------------------------------------------------- ----------------------------- --------------
l. All records and other documents in control or possession Seller to leave all such
of Seller relating to the Business other than Seller's records on the Leased
accounting books which will be retained by Seller but premises for Buyer's access
made available to Buyer or its agents or accountants for for at least 2 yrs
inspection from time to time hereafter upon reasonable following Closing
notice to Seller
------------ ---------------------------------------------------------- ----------------------------- --------------
m. Current state and county lien search (to be paid by State search provided
Buyer) showing no liens or encumbrances against the before closing, County
Assets or Real Estate except for those Seller will be search will be provided in
satisfying at Closing or those that Buyer has explicitly opinion letter from
agreed to assume in this Agreement Seller's attorney at closing
------------ ---------------------------------------------------------- ----------------------------- --------------
Page 2 of 4
ITEM DESCRIPTION PARTIES AGREE TO STATUS
------------ ---------------------------------------------------------- ----------------------------- --------------
n. A written Employment Contract, Non-Compete and Seller to provide at
Confidentiality Agreement from Xxxxx Xxxxx closing
------------ ---------------------------------------------------------- ----------------------------- --------------
o. Sublease with attachments: A)Lease and B)Modification of Seller to provide at closing
Lease.
------------ ---------------------------------------------------------- ----------------------------- --------------
p. Written estoppel information from any other (other than Seller to provide at closing Exh. "p"
Seller) tenants, subtenants, assignees in the Real
Estate (other than Seller) confirming that rent is
current, that no advanced rent and security deposits
have been paid, that there are no set-offs or claims and
that the term is month-to-month
------------ ---------------------------------------------------------- ----------------------------- --------------
q. A right of first refusal agreement relative to the sale Seller to provide at closing
of the Real Estate
------------ ---------------------------------------------------------- ----------------------------- --------------
r. A mortgagee title insurance commitment (with a policy to An opinion letter from Both Exh. "r"
follow at Buyer's election and expense) showing title to Seller's attorney will be
the Real Estate vested in the R/E Owner subject only to acceptable instead and will
the first and second mortgages described in this Asset be provided at closing.
Purchase Agreement. Buyer will pay the cost of the Xxxx to record Satisfaction
Commitment of Mortgage on O.R. 27517,
Page 57.
------------ ---------------------------------------------------------- ----------------------------- --------------
s. Such other documents, instruments or certificates
as shall be reasonably requested by Buyer or its counsel
------------ ---------------------------------------------------------- ----------------------------- --------------
t. A recitation from the R/E Owner and Xxxxxx Studios, Inc. Provide at closing
disclaiming any interest in the Assets
------------ ---------------------------------------------------------- ----------------------------- --------------
u. Updated list of Payables Provided at closing Exh. "u"
------------ ---------------------------------------------------------- ----------------------------- --------------
4. Paragraph 9 is amended to: Add the following subparagraph:
y. Seller has not assigned a certain receivable to Buyer, a
receivable that will be used exclusively to pay Seller's
payables (out-of-pocket expenses). This receivable is Papa
John's Media for the June TV flight (Tampa).
Page 3 of 4
IN WITNESS WHEREOF, the parties have executed or have caused this
Agreement to be executed by a duly authorized officer as of the date first
written above.
WITNESSES: SELLER: XXXXXXXX & XXXXX, INC.,
a Florida corporation d/b/a The G&L
Group
/s/ Xxxxx Xxxxx 8/31/99
_____________________________ By __________________________________
Xxxxx Xxxxx, President Date
_____________________________
BUYER: QUIKBIZ INTERNET GROUP, INC.,
a Nevada corporation, authorized to
transact business in Florida
/s/ Xxxxx Xxxxxxxx 8/31/99
_____________________________ By __________________________________
Xxxx Xxxxxxxx, CEO Date
_____________________________
R/E OWNER: XXXXX XXXXX AND XXXXX
X. XXXXXX
/s/ Xxxxx Xxxxx 8/31/99
_____________________________ By __________________________________
Xxxxx Xxxxx, Date
_____________________________
/s/ Xxxxx X. Xxxxxx 8/31/99
_____________________________ By __________________________________
Xxxxx X. Xxxxxx, Date
_____________________________
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