AGREEMENT TO ASSIGN
AND OTHER MATTERS
THIS AGREEMENT is made and entered into as of January 16, 1996, by, among
and between TERRACE HOLDINGS, INC., a Delaware corporation ("THI") and
INTERNATIONAL TOURS AND CATERING BY AMBASSADOR, INC., a New Jersey corporation
("ITC"), Xxxxxxxx Xxxxxxx ("Xxxxxxx") and Xxxxx Xxxxxx ("Xxxxxx") (ITC, Xxxxxxx
and Xxxxxx sometimes collectively called "Transferors").
RECITALS:
Xxxxxx and Xxxxxxx collectively own all the issued and outstanding capital
stock of ITC and are its sole officers and directors;
ITC is the operator of Passover vacation operations at the Fontainebleau
Hilton, Rye Town Hilton and Tamiment Hotels (sometimes collectively called the
"Hotels") under valid and binding agreements with each of the Hotels;
Xxxx Xxxxxxxxxx ("Xxxxxxxxxx") is the former owner of the business operated
by ITC and is the owner or licensee and sub-licensor of certain assets used by
or useful to ITC in its operations, which matters, among other things, are the
subject of a separate agreement as of even date herewith between Xxxxxxxxxx and
THI, the execution and consummation of which is a condition precedent to the
Closing hereunder;
Transferors desire to transfer or assign certain assets and THI desires to
acquire and accept assignments of certain assets but no liabilities other than
those expressly assumed herein, from Transferors on the terms and conditions
hereinafter set forth;
NOW, THEREFORE, in consideration of the premises and the terms and
conditions in this Agreement set forth, the parties hereto agree as follows:
TERMS AND CONDITIONS
1. Assignment of Agreements.
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Subject to the express written approval of each of the Hotels at or prior
to Closing hereunder, ITC hereby irrevocably and unconditionally assigns,
transfers and sets over to THI all of its rights, titles and interests in and to
all of ITC's operations at each of the Hotels under the respective ITC
agreements therewith, true and correct copies of each of which as currently in
effect is attached hereto as Exhibits 1(a)-1, 1(a)-2 and 1(a)-3 (the "Hotel
Agreements"). In connection with the assignments of the Hotel Agreements, THI
shall have no obligation to report or consult with ITC, to utilize ITC employees
or assets or in any manner deal with ITC, it being the express understanding,
agreement and contemplation of the parties that THI shall replace ITC completely
under said Hotel Agreements and THI shall have unfettered control and
responsibility for the operations under the Hotel Agreements in
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lieu and in place of ITC. Notwithstanding the foregoing sentence, THI shall
assume the obligations of ITC and honor the contracts detailed or attached
hereto as Group Exhibit 1(a)-4, for Passover 1996, between ITC and the named
rabbis, staff persons and caterers, each of whom or which is an independent
contractor with ITC.
2. Acquisition of Certain Assets.
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(a) ITC, at Closing, shall transfer, bargain and convey, by warranty
Xxxx of Sale, free and clear of any encumbrances of any kind or nature
whatsoever, to THI all its right, title and interest in and to its
customer, past customer and prospective customer mailing lists, a paper or
computer-readable copy of which is attached hereto as Exhibit 2(a) (and a
computer-readable copy of which shall be delivered to THI at Closing) and
which contains the names, addresses, etc., of not less than 500 to 700 such
customers, past customers or prospective customers.
(b) Transferors, at Closing, shall grant, license and convey to THI
the perpetual non-exclusive right, without any further cost or fee
whatsoever to be paid by THI, to use, maintain, upgrade, enhance,
sublicense or discard the current "reservations software, programs and
systems" currently used by ITC. From and after Closing, and as soon
thereafter as possible, Transferors covenant to provide THI with three
days'
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"hands-on" instructions, one of which shall be at THI's designated offices
in Florida and two of which shall be at ITC's offices in New York, on how
to use said systems, all without further cost to THI. In addition, at
Closing ITC shall assign to THI any rights ITC may have to support for such
system from the system developers or others. From and after the completion
of the "hands-on" training provided for above, ITC shall have no further
obligations or liability to THI with respect to such systems, their use,
enhancements, modifications or sublicensure.
3. Representations and Warranties of THI. THI hereby represents and
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warrants to Transferors as follows:
(a) THI is a validly existing Delaware corporation with full power
and authority to enter into this Agreement and to be bound by the terms and
conditions herein contained. The execution and performance of this
Agreement and the consummation of the transaction contemplated hereby does
not breach or conflict with any term, covenant or condition of any
commitment, contract, or other agreement to which THI is a party.
(b) As soon after Closing as is practicable, THI shall be duly
qualified as a foreign corporation in each
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jurisdiction where the same shall be required for THI to carry out its
obligations under this Agreement.
4. Representations and Warranties of Transferors. Transferors hereby
---------------------------------------------
represent and warrant to THI as follows:
(a) ITC is a validly existing New Jersey corporation with full power
and authority to enter into this Agreement and to be bound by the terms and
conditions herein contained.
(b) Each of Xxxxxxx and Xxxxxx have the full power and authority to
enter into this Agreement and be bound by the terms and conditions herein
contained which may be applicable to either of them. The execution and
performance of this Agreement and the consummation of the transaction
contemplated hereby does not breach or conflict with any term, covenant or
condition of any commitment, contract, or other agreement to which any of
the Transferors is a party or by which any of the assets being transferred
is or may be bound.
(c) Each of the Hotel Agreements attached hereto as Exhibits 1(a)-1,
1(a)-2 and 1(a)-3 and the agreements detailed or attached as Group Exhibit
1(a)-4 are in full force and effect, current, valid and binding in
accordance with their respective terms and at Closing ITC is not in breach
under any of such agreements.
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(d) ITC is not delinquent in any payments due and owing any of its
suppliers or vendors listed on Exhibit 4(d), or if any such delinquency is
noted on said Exhibit 4(d), then ITC hereby covenants to remove such
delinquency at or prior to Closing.
(e) Transferors have the unqualified although non-exclusive right to
use, operate, upgrade, sublicense, modify and enhance the reservation
system (which is described in Exhibit 4(e) attached hereto) provided for in
paragraph 2(b) of this Agreement and that such system is fully usable in
the ordinary course to the extent ITC has used it and no further warranty
of fitness for purpose beyond the foregoing is intended hereby.
5. Consideration. In consideration of receipt of the Assignments of the
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Hotel Agreements in form satisfactory to THI and its counsel and the acquisition
of certain assets, all as described in this Agreement and all without the
assumption of any liabilities unless otherwise expressly assumed in this
Agreement, THI, upon Closing, shall provide the following consideration:
(a) THI shall pay to ITC or at its direction the sum of $675,000 by
certified or bank check or wired funds.
(b) THI shall reserve and provide two suites for Passover 1996 (one
two-bedroom and one three-bedroom) at the
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Fontainebleau Hilton to such persons as ITC shall designate, without room
charges or gratuities. All taxes, food charges (at $27 per day per person)
and incidental charges in connection therewith shall be paid by ITC or its
designee(s) to such suites.
(c) As additional consideration, THI shall reimburse ITC for those
expenses it has incurred and which are specifically listed on Exhibit 5(c)
attached hereto. THI has not agreed to and is not responsible or liable in
any manner whatsoever for any expenses of ITC or the Transferors except
those specifically listed on said Exhibit 5(c) and those required under
Exhibits 1(a)-1, 1(a)-2, 1(a)-3 and 1(a)-4. Similarly, Transferors have
not agreed to and are not responsible or liable in any manner whatsoever
for any expenses of THI except those specifically provided for in this
Agreement.
6. Closing and Conditions to Closing.
---------------------------------
(a) The Closing of this Agreement, at which time the matters
contemplated herein shall be fully consummated, shall take place at the
offices of ITC in Hackensack, New Jersey at 1:30 p.m. on Tuesday, January
16, 1996 or at such other time and place as the parties shall mutually
agree (the "Closing"). In addition to execution of this Agreement by all
the parties,
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the Closing shall be subject to the following conditions precedent:
(i) the approval and ratification of all of the transactions
contemplated herein by the Board of Directors of THI;
(ii) the receipt of the assignments of the Hotel Agreements
described in paragraph 5 above and the written acknowledgements,
acceptances and approvals of each of the Hotels to THI as assignee of
the Passover operations agreements of ITC at such Hotels satisfactory
to THI and its counsel and an opinion of ITC's counsel satisfactory to
THI and its counsel that none of such assignments in any way breaches
any of the Hotel Agreements attached hereto as Exhibits 1(a)-1, 1(a)-2
or 1(a)-3;
(iii) the agreement between Xxxxxxxxxx and THI referred to in
the Recitals at the head of this Agreement shall have been duly
executed by the parties thereto and the closing thereof takes place
concurrent with the Closing hereunder; and
(iv) the agreement between Xxxxxxx and THI referred to in
paragraph 7(b) of this Agreement shall have been executed by the
parties thereto.
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(b) At the Closing, all representations and warranties of all parties
hereto shall be true and correct as if made thereat.
7. Covenants of the Parties.
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(a) Each of the Transferors hereby agrees that he, she or it,
directly or indirectly, will not engage in or operate a Passover vacation,
business tour or venue, or attempt to do so, from the date hereof through
the end of Passover 1997 anywhere within the Xxxxxxxxxxx Xxxxxx Xxxxxx,
Xxxxxx, Xxxxxx or the Caribbean Islands, and through the end of Passover
1998 in Xxxxx Xxxxxxx xx xxx Xxxxxxxxxxxx Xxxxxx Xxxxxx.
(i) Excepted from the foregoing shall be:
(x) the hotels currently known as the Sans Souci of Miami
Beach, Miami Beach, Florida, the Tamarack Hotel in Greenfield
Park, New York and the Chateau Hotel in Camelback, Pennsylvania;
(y) any hotel or hotel-type operation controlled by
Xxxxxxxxxx or in which Xxxxxxxxxx has an equity ownership
interest of 5% or more; and
(z) any hotel or hotel-type operation in which Xxxxxxxxxx
in the future may acquire control or an equity interest of 5% or
more;
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(ii) the covenant not to compete contained herein shall apply to
the Hotels until the earlier of January 1, 2000 or the date Xxxxxxxxxx
is notified by THI or the subject Hotel either that THI will no longer
operate Passover vacations thereat or that the subject Hotel invites
"bids" from other than THI to operate future Passover vacations
thereat; and
(iii) for purposes of the covenants not to compete herein,
"control" shall mean any hotel or hotel-type facility leased by
Xxxxxxxxxx under a bona-fide lease for a period of months not less
than commencing in December and ending after the relevant immediately-
subsequent Passover.
(b) For the period from ten days prior to Passover 1996 through
twenty days after the end of the Passover vacation period, Xxxxxxx agrees
to be employed by THI on terms mutually agreed upon between THI and
Xxxxxxx. Prior thereto, Xx. Xxxxxxx covenants to be available on a
consultative basis as reasonably requested by THI on terms mutually agreed
upon between THI and Xxxxxxx. Such separate agreement is a condition
precedent to Closing hereunder.
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(c) From and after the Closing, the parties hereto agree to cooperate
fully and reasonably in the transition of operations from ITC to THI for
Passover 1996 and thereafter.
8. Additional Matters.
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(a) This Agreement shall be binding upon the parties hereto and their
respective successors, heirs, administrators, executors and assigns. This
Agreement shall not be assignable by any of the parties except that THI may
delegate or assign any or all of its rights or obligations hereunder to any
of its operating subsidiaries at any time.
(b) This Agreement shall be construed under the laws of the State of
New York.
(c) Except as may be required by applicable law, regulation or
judicial or administrative process, the parties hereby agree to maintain
the confidentiality of the terms of this Agreement and all constituent
matters between them. In this connection, to the extent reasonably
practicable, THI shall request confidential treatment by the Securities and
Exchange Commission and NASDAQ, to the extent allowable by law or
regulation, of the details of the terms of the transactions contemplated by
this Agreement. Any disclosure required by applicable law or regulation,
or disclosure of matters already
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in the public domain, shall not be deemed a breach by the disclosing party
of this covenant.
(d) Nothing in this Agreement shall be deemed to constitute the
parties as joint venturers, co-partners or to have any joint relationship
whatsoever other than as expressly provided for herein. Under no
circumstances shall the Transferors have any authority or right to act for
or bind THI, or THI have the authority or right to act for or bind any of
the Transferors, in any manner whatsoever and the same shall be
affirmatively communicated by the parties to the Hotels as may be necessary
to effectuate the intent of the parties hereunder.
IN WITNESS WHEREOF, the parties have hereunto caused this Agreement to be
executed as of this 16th day of January, 1996.
TERRACE HOLDINGS, INC.
By: /s/ Xxxxxx X. Xxxxx
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INTERNATIONAL TOURS AND
CATERING BY AMBASSADOR, INC.
By: /s/ Xxxxxxxx Xxxxxxx
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President
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/s/ Xxxxxxxx Xxxxxxx
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XXXXXXXX XXXXXXX
/s/ Xxxxx Xxxxxx
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XXXXX XXXXXX
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LIST OF EXHIBITS
EXHIBIT DOCUMENT
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1(a)-1 Hotel Agreement with Fontainebleau Hilton
1(a)-2 Hotel Agreement with Rye Town Hilton
1(a)-3 Hotel Agreement with Tamiment Hotel
1(a)-4 Agreements with Rabbis, Staff and Caterers for Passover 1996
2(a) Customer Mailing Lists
4(d) List of Suppliers or Vendors
4(e) Reservation System
5(c) List of Expenses
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