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EXHIBIT 2.2
AGREEMENT FOR PURCHASE AND SALE OF ASSETS
between
JAYCOR MULTIMEDIA SERVICES, INC., a Delaware Corporation,
as Buyer,
XXXX XXXX PRODUCTIONS, INC., a Florida Corporation,
as Seller
and
XXXX XXXXXX, AN INDIVIDUAL,
as Shareholder
October 24, 1995
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AGREEMENT FOR PURCHASE AND SALE OF ASSETS
TABLE OF CONTENTS
Page
I THE TRANSACTION...................................................... .-1-
1.1 Assets...................................................... .-1-
1.1.1 Tangible Personal Property............. .-2-
1.1.2 Real Property.......................... .-2-
1.1.3 Contracts.............................. .-2-
1.1.4 Intangible Rights...................... .-2-
1.1.5 Files and Records...................... .-2-
1.1.6 Claims................................. .-2-
1.1.7 Prepaid Items.......................... .-3-
1.1.8 Goodwill............................... .-3-
1.1.9 Accounts Receivable.................... .-3-
1.2 Excluded Assets......................................... .-3-
1.2.1 Securities....................................... .-3-
1.2.2 Insurance........................................ .-3-
1.2.3 Certain Assets................................... .-3-
1.2.4 Duplicate Records................................ .-3-
1.2.5 Corporate Records................................ .-3-
1.2.6 Excluded Contracts............................... .-3-
1.2.7 Claims........................................... .-3-
1.2.8 Shareholder's Personal Items..................... .-3-
1.3 Liabilities............................................. .-3-
1.4 Purchase Price and Method of Payment.................... .-5-
1.5 Adjustments............................................. .-5-
1.5.1 Adjustment Procedure................... .-6-
1.6 Non-Competition Agreement............................... .-6-
1.7 Closing................................................. .-6-
II SELLER'S REPRESENTATIONS............................................. .-6-
2.1 Corporate Existence......................................... .-6-
2.2 Authorization........................................... .-6-
2.3 No Violation............................................ .-7-
2.4 Financial Statements.................................... .-7-
2.5 Absence of Undisclosed Liabilities...................... .-7-
2.6 Accounts Receivable..................................... .-8-
2.7 Absence of Certain Changes.............................. .-8-
2.8 Title to Assets......................................... .-9-
2.9 Condition of Tangible Assets............................ .-9-
2.10 Real Property........................................... .-9-
2.11 Compliance with Environmental Laws...................... -10-
2.12 Inventory............................................... -10-
2.13 Taxes................................................... -10-
2.14 Litigation.............................................. -00-
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0.00 Xxxx Sales................................................. -11-
2.17 Compliance with Laws.................................... -11-
2.18 Complete Copies of Materials............................ -12-
2.19 Disclosure.............................................. -12-
III BUYER'S REPRESENTATIONS.............................................. -12-
3.1 Corporate Organization and Authority........................ -12-
3.2 Agreement Will Not Cause Breach or Violation................ -12-
3.3 Buyer's Authority and Consents.............................. -12-
3.4 Full Disclosure............................................. -12-
IV CONDITIONS PRECEDENT TO BUYER'S PERFORMANCE.......................... -13-
4.1 Representations and Warranties True
as of the Closing Date...................................... -13-
4.2 Compliance with this Agreement.............................. -13-
4.3 No Threatened or Pending Litigation......................... -13-
4.4 Xxxxxx Employment Agreement................................. -13-
4.5 Opinions of Counsel for Seller.............................. -13-
4.6 No Material Adverse Change.................................. -13-
4.7 Seller's Corporate Documents................................ -13-
4.8 Board Approval.......................................... -14-
4.10 Non-Competition Agreement............................... -14-
4.11 Seller's Deliveries..................................... -14-
4.12 Due Diligence Review.................................... -14-
V CONDITIONS PRECEDENT TO SELLER'S PERFORMANCE......................... -14-
5.1 Accuracy of Buyer's Representations and Warranties.......... -15-
5.2 Performance by Buyer........................................ -15-
5.3 Absence of Litigation....................................... -15-
5.4 Buyer's Deliveries...................................... -15-
VI INDEMNIFICATION...................................................... -15-
6.1 Indemnity by Seller and the Shareholder................. -15-
6.2 Indemnity by Buyer...................................... -15-
6.3 Limitation of Indemnification Liability
of Seller and the Shareholder........................... -16-
6.4 Limitation of Indemnification Liability
of Buyer................................................ -16-
6.5 Survival................................................ -16-
6.6 Indemnification Procedures.............................. -16-
VII THE CLOSING.......................................................... -17-
7.1 Seller's Deliveries at Closing.............................. -17-
7.1.1 Xxxx of Sale..................................... -17-
7.1.2 Possession of the Assets......................... -17-
7.1.4 Non-Competition Agreement........................ -17-
7.1.5 Xxxxxx Employment Agreement...................... -17-
7.1.6 Corporate Documents.............................. -17-
7.1.7 Third-Party Consents............................. -17-
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7.1.8 Opinion of Seller's Counsel...................... -17-
7.2 Bills of Sale and Other Instruments of Transfer......... -18-
7.3 Buyer's Deliveries at Closing............................... -18-
7.3.1 Closing Purchase Price........................... -18-
7.4 Further Documents........................................... -18-
VIII TERMINATION.......................................................... -18-
8.1 Termination of Agreement.................................... -18-
8.2 Remedies.................................................... -18-
IX GENERAL PROVISIONS................................................... -18-
9.1 Effect of Headings; Exhibits................................ -19-
9.2 Entire Agreement; Modification; Waiver...................... -19-
9.3 Counterparts................................................ -19-
9.4 Parties in Interest......................................... -19-
9.5 Assignment.................................................. -19-
9.6 Recovery of Litigation or Arbitration Costs................. -19-
9.7 Nature and Survival of Representations and Covenants........ -19-
9.8 Severability................................................ -20-
9.9 Necessary Acts.............................................. -20-
9.10 Time of Essence............................................ -20-
9.11 Notices.................................................... -20-
9.12 Arbitration................................................ -21-
9.12.1 Location........................................ -21-
9.12.2 Selection of Arbitrators........................ -21-
9.12.3 Discovery....................................... -21-
9.12.4 Case Management................................. -21-
9.12.5 Remedies........................................ -22-
9.12.6 Expenses........................................ -22-
9.12.7 Confidentiality ............................... -22-
9.13 Governing Law.............................................. -22-
9.14 Construction............................................... -22-
EXHIBITS:
A Assignment and Assumption of Contracts
B Non-Competition Agreement
C Disclosure Schedule
X Xxxxxx Employment Agreement
E Opinion of Counsel of Seller
F Opinion of Counsel of Buyer
SCHEDULES:
1.1.1 Tangible Personal Property
1.1.2 Real Property
1.1.3 Contracts
1.1.4 Intangible Rights
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1.1.9 Accounts Receivable
1.2.8 Shareholder's Personal Items
1.3.4 Assumed Contracts
1.3.5 Accounts Payable
1.3.6 Special Liabilities
1.4 Creditor Payments
2.10.5 Exceptions to Title
2.16 Agreements, Contracts and Commitments
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AGREEMENT FOR PURCHASE AND SALE OF ASSETS
This Agreement for Purchase and Sale of Assets (this "Agreement") is
entered into as of October 24, 1995 by and among Jaycor Multimedia Services,
Inc., a Delaware corporation doing business as Xxxx Xxxx Productions ("Buyer"),
Xxxx Xxxx Productions, Inc., a Florida corporation ("Seller"), and Xxxx Xxxxxx,
an individual ("Shareholder"), with respect to the following facts:
RECITALS
A. Seller is a corporation engaged in the business of providing
video production services to its customers (the "Business").
B. Buyer is a newly-formed corporation possessing animation and
simulation technologies and capabilities, which it believes are complementary to
the Business.
C. Shareholder is the beneficial owner of all of the issued and
outstanding capital stock of Seller.
D. Seller desires to sell Buyer substantially all of the assets
used in the Business.
E. Buyer desires to purchase certain specified assets from Seller
and to assume certain specified liabilities of Seller, all as set forth in this
Agreement.
F. Shareholder is willing to enter this Agreement for the
purposes of making the representations and warranties and related indemnities
contained herein.
AGREEMENT
NOW, THEREFORE, for and in consideration of the mutual agreements set
forth herein and for other good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, and subject to the terms and
provisions set forth herein, the parties hereto mutually agree as follows:
ARTICLE I
THE TRANSACTION
1.1 Assets. Subject to and in reliance upon the
representations, warranties and agreements herein set forth, and subject to the
terms and conditions herein contained, Seller agrees to grant, convey, sell,
assign, transfer and deliver to Buyer on the Closing Date (as hereinafter
defined), and Buyer agrees on the Closing
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Date to purchase, accept and assume, all properties and assets, real and
personal, tangible and intangible, of every type and description owned by Seller
and used or held for use in connection with the Business (except for Excluded
Assets as defined in Section 1.2 hereof), including its business and goodwill
(collectively, the "Assets"). Without limiting the foregoing, the Assets shall
include the following, except to the extent that any of the following are
Excluded Assets:
1.1.1 Tangible Personal Property. All equipment,
electrical devices, antennas, cables, vehicles, furniture, fixtures, office
materials and supplies, hardware, tools, spare parts, films, records, tapes,
discs, carts and other tangible personal property of every kind and description
owned, used or held for use by Seller as of the date of this Agreement in
connection with the Business, including without limitation those listed and
described on Schedule 1.1.1 attached hereto (collectively, the "Tangible
Personal Property").
1.1.2 Real Property. All land, leaseholds,
licenses, rights-of-way and other interests of every kind and description in and
to all of the real property and buildings thereon, owned or held by Seller as of
the date hereof and used or held for use in connection with the Business,
including without limitation those listed and described on Schedule 1.1.2
attached hereto (collectively, the "Real Property").
1.1.3 Contracts. All contracts in connection with
the Business listed and described on Schedule 1.1.3 attached hereto
("Contracts").
1.1.4 Intangible Rights. All trademarks, trade
names, service marks, franchises, patents, jingles, slogans, logotypes and other
intangible rights, owned, used or held for use by Seller as of the date of this
Agreement in connection with the Business, including without limitation those
listed and described on Schedule 1.1.4 attached hereto (collectively, the
"Intangible Property").
1.1.5 Files and Records. All files and records of
Seller relating to the Business (other than duplicate copies of such files,
hereinafter "Duplicate Records" which Seller may elect to retain) other than the
contents of files and other records that refer to operations of Seller (other
than the Business or that are privileged), including without limitation all
available schematics, blueprints, engineering data, customer lists, reports,
specifications, projections, statistics, promotional graphics, original art
work, mats, plates, negatives and other advertising, marketing or related
materials, and all other technical and financial information concerning Seller
and the Assets.
1.1.6 Claims. Any and all claims, choses in
action, and rights against third parties if and to the extent that they relate
to the condition of the Assets, including, without limitation, all rights under
manufacturers' and vendors' warranties, or the operation of the Business prior
to the Closing (collectively, the "Claims").
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1.1.7 Prepaid Items. All deposits, reserves and
prepaid expenses relating to the Business and prepaid ad valorem taxes relating
to the Business or the Assets (which shall be prorated as provided in Section
1.5).
1.1.8 Goodwill. All of Seller's goodwill in, and
going concern value of, the Business.
1.1.9 Accounts Receivable. All accounts
receivable, and any notes or written obligations reflecting accounts receivable,
of Seller relating to the Business (collectively, the "Receivables") existing as
of the Closing Date which are listed on Schedule 1.1.9 attached hereto.
1.2 Excluded Assets. There shall be excluded from the
Assets and retained by Seller, to the extent in existence on the Closing Date,
the following assets (collectively, the "Excluded Assets"):
1.2.1 Securities. Any securities owned or held by
Seller.
1.2.2 Insurance. All contracts of insurance.
1.2.3 Certain Assets. Pension, profit sharing and
savings plans and trusts and any assets thereof.
1.2.4 Duplicate Records. All Duplicate Records and
other files and records not acquired by Buyer pursuant to Section 1.1.5.
1.2.5 Corporate Records. The minute books, stock
books, shareholder lists and similar corporate records of Seller.
1.2.6 Excluded Contracts. Any Contracts not being
assumed by Buyer pursuant to Section 1.3.4 hereof.
1.2.7 Claims. Any and all claims, choses in
action, and rights against third parties other than the Claims as defined in
Section 1.1.6.
1.2.8 Shareholder's Personal Items. All items
belonging to Shareholder which have been used from time to time in connection
with the Business which are listed on Schedule 1.2.8 attached hereto.
1.3 Liabilities.
1.3.1 The Assets shall be sold and conveyed to
Buyer free and clear of all mortgages, liens, deeds of trust, security
interests, pledges, restrictions, prior assignments, charges, claims, defects in
title and encumbrances of any kind or type whatsoever (collectively, the
"Security Interests") except: (i) those exceptions to title appearing on a title
report issued on each item of Real Property to which Buyer does not object and
which are not released at Closing; (ii) for liens for taxes not yet
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due and payable or that are being contested in good faith by appropriate
proceedings; and (iii) for the obligations of Seller, under leases and contracts
which Buyer hereby agrees to assume as described in Section 1.3.4 of this
Agreement. The Security Interests referred to in the foregoing clauses (i)-(iii)
are collectively referred to herein as "Permitted Encumbrances."
1.3.2 Except as otherwise specifically provided
herein, or as otherwise specifically agreed by Seller and Buyer, Buyer shall not
assume or be liable for, and does not, and does not undertake to attempt to,
assume or discharge:
a. any liability or obligation of Seller
arising out of or relating to any contract or agreement;
b. any liability or obligation of Seller
arising out of or relating to any pension, retirement or profit-sharing plan or
trust;
c. any liability or obligation of Seller
arising out of or relating to any lease of Tangible Personal Property or
Intangible Property;
d. any liability or obligation of Seller
arising out of or relating to any litigation, proceeding or claim by any person
or entity relating to the business or operations of or otherwise relating to the
Business or the Assets before the Closing Date, whether or not such litigation,
proceeding or claim is pending, threatened or asserted before, on or after the
Closing Date;
e. any and all other liabilities,
obligations, debts or commitments of Seller whatsoever, whether accrued now or
hereafter, whether fixed or contingent, whether known or unknown, arising prior
to the Closing Date, or any claims asserted against the Seller or any of the
Assets or other items transferred to Buyer by Seller relating to any event
(whether act or omission) prior to the Closing Date, including without
limitation, the payment of all taxes; and
f. any liability or obligation of Seller
arising out of or relating to any employment agreement, including the payment of
severance pay, if any, to present or former employees of Seller. No employee of
Seller who becomes an employee of Buyer shall have any entitlement to severance
pay by virtue of this provision.
1.3.3 Seller retains and shall hereafter pay,
satisfy, discharge, perform and fulfill all such obligations and liabilities not
expressly assumed by Buyer hereunder as they become due, without any charge or
cost to Buyer, and Seller agrees to indemnify and hold Buyer and its successors
and assigns harmless from and against any and all such liabilities in accordance
with the terms of Article VI below.
1.3.4 Buyer agrees to execute and assume, at the
Closing, the obligations arising, and expressly provided to be performed by
Seller, after the
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Closing Date under those Contracts listed on Schedule 1.3.4 hereto. All such
Contracts will be assigned and assumed pursuant to the form of Assignment and
Assumption of Contracts attached hereto as Exhibit A. Notwithstanding the
foregoing, Buyer shall not be obligated to assume any obligations under any
contract as to which Seller fails to deliver the written consent of all other
parties thereto.
1.3.5 Buyer agrees to assume the accounts payable
listed on Schedule 1.3.5. hereto (the "Accounts Payable").
1.3.6 Buyer agrees to assume those liabilities
listed on Schedule 1.3.6 hereto (the "Special Liabilities").
1.4 Purchase Price and Method of Payment. The purchase
price to be paid for the Assets (the "Purchase Price") shall be comprised of (i)
One Hundred Ninety-One Thousand Four Hundred Thirteen Dollars ($191,413) (the
"Cash Payment")], (ii) Buyer's payoff, on or before the Closing Date, of the
creditors listed on Schedule 1.4 hereto in the amounts set forth opposite each
such creditor's name (the "Creditor Payment") and (iii) the Common Stock
Payment, as defined below. Buyer shall pay or cause to be paid by check or bank
wire transfer of immediately available federal funds, as instructed by Seller
(i) to Seller, as the Closing Date, an amount equal to the Cash Payment, and
(ii) to the creditors listed on Schedule 1.4 attached hereto, on the Closing
Date, the amounts set forth each such creditor's name on Schedule 1.4 attached
hereto. Buyer shall further pay or cause to be paid to Seller the Common Stock
Payment pursuant to Section 1.4.1 below.
1.4.1 As an element of the Purchase Price, Buyer
agrees to issue to Seller twenty seven thousand three hundred twenty-one
(27,321) shares of the common stock of Jaycor, a California corporation ("Common
Stock"), payable as follows: a certificate representing nine thousand one
hundred and seven (9,107) shares of Common Stock shall be delivered to Seller in
the name of Shareholder on each of October 24, 1996, October 24, 1997 and
October 24, 1998 (the "Common Stock Payment").
1.5 Adjustments. The operation of the Business and the
income and normal operating expenses attributable thereto through the date
preceding the Closing Date shall be for the account of Seller and thereafter for
the account of Buyer, and any income or expense shall be allocated, charged or
prorated accordingly. Expenses for goods or services received both before and
after the Closing Date, power and utilities charges, wages, payroll taxes, and
rents and similar prepaid and deferred items shall be prorated between Seller
and Buyer as of the Closing Date. All special assessments and similar charges or
liens imposed against the Real Property and Tangible Personal Property in
respect of any period of time through the Closing Date, whether payable in
installments or otherwise, shall be the responsibility of Seller, and amounts
payable with respect to such special assessments, charges or liens in respect of
any period of time after the Closing Date shall be the responsibility of Buyer,
and such charges shall be adjusted as required hereunder.
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1.5.1 Adjustment Procedure. Within thirty (30)
days after the Closing, Seller shall deliver to Buyer a Certificate ("Seller's
Adjustment Certificate") dated the Closing Date and signed by Seller's chief
financial officer, setting forth the adjustments provided for in Section 1.5, if
any, certified to be true and correct on the basis of the then most recently
available financial statements of the Business, with the supporting
documentation as to how such amount was derived annexed to the Seller's
Adjustment Certificate. Within sixty (60) days after the Closing Date, Seller
and Buyer will use their good faith efforts to agree upon a final Closing
Statement setting forth the final proration adjustments required under Section
1.5, and any required refund or payment shall be made on the basis of such
Closing Statement. Any payment due hereunder shall be paid by check to the party
to which such refund or payment is due within sixty (60) days after the Closing
Date.
1.6 Non-Competition Agreement. On the Closing Date,
Seller and Shareholder shall enter into to enter into a Non-Competition
Agreement with Buyer substantially in the form attached hereto as Exhibit B.
1.7 Closing. The closing (the "Closing") of the sale and
purchase of the Assets shall take place at the offices of Xxxxx Xxxxx Xxxxxxx &
Green, One University Park, 00000 Xxxxxxxxxx Xxxxx, Xxxxx 000, Xxxx Xxxxx,
Xxxxxxx, xx October 24, 1995, or on such other date as maybe mutually agreed
upon in writing by Purchaser and Seller. The date of the Closing is sometimes
herein referred to as the "Closing Date."
ARTICLE II
SELLER'S REPRESENTATIONS AND WARRANTIES
Seller and Shareholder, hereby jointly and severally
represent and warrant to Buyer and covenant and agree with Buyer that, except as
set forth on the Disclosure Schedule attached hereto as Exhibit C, each of which
exceptions shall specifically identify the relevant subsection hereof to which
it relates and shall be deemed to be representations and warranties as if made
hereunder:
2.1 Corporate Existence. Seller is a corporation duly
organized, validly existing and in good standing under the laws of the State of
Florida, and has the requisite corporate power to own and operate its properties
and assets, and to carry on its business as presently conducted. Seller does not
now and has not at any time in the past used any name in its business operations
other than Xxxx Xxxx Productions, Inc. Seller is not required to be qualified to
do business as a foreign corporation in any state of the United States or any
other jurisdiction where the failure to be so qualified would have a material
adverse effect on the Business or the Assets.
2.2 Authorization. Seller has the sole corporate power,
authority and legal right to execute, deliver, and perform this Agreement. The
execution, delivery
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and performance of this Agreement shall have been duly authorized, prior to the
Closing, by all necessary shareholder and corporate action. This Agreement has
been, and the other agreements, documents and instruments required to be
delivered by Seller in accordance with the provisions hereof (the "Seller's
Documents") will be, duly executed and delivered on behalf of Seller, and this
Agreement constitutes, and the Seller's Documents when executed and delivered on
behalf of Seller will constitute, the legal, valid and binding obligations of
Seller, enforceable against Seller in accordance with their respective terms.
2.3 No Violation. Neither the execution and delivery of
this Agreement nor the consummation of the transactions contemplated hereby, nor
compliance with the terms hereof, will (i) conflict with or result in a breach
of any of the terms, conditions or provisions of the articles of incorporation
or bylaws of Seller, or (ii) violate, conflict with or result in a breach of or
default under any of the terms, conditions or provisions of any agreement,
understanding, arrangement, indenture, contract, lease, sublease, loan
agreement, note, restriction, obligation or liability to which Seller is a party
or by which it is bound or to which it or its assets are subject (individually,
an "Instrument" and collectively, the "Instruments"), or (iii) accelerate or
give to others any interests or rights, including rights of acceleration,
termination, modification or cancellation, under any Instrument or in or with
respect to the Business or the Assets, or the capital stock or properties of
Seller, or (v) conflict with, violate or result in a breach of or constitute a
default under any law, statute, rule, judgment, order, decree, injunction,
ruling or regulation of any government, governmental agency, authority or
instrumentality, court or arbitration tribunal to which Seller or any of the
Seller's assets or properties are subject, or (vi) require Seller to give notice
to, or obtain an authorization, approval, order, license, franchise, declaration
or consent of, or make a filing with, any foreign, federal, state, county, local
or other governmental or regulatory body.
2.4 Financial Statements. Seller has delivered to Buyer
an unaudited income statement of Seller for the period ended September 30, 1995,
an unaudited balance sheet of Seller as of September 30, 1995, (the "Balance
Sheet") (collectively, the "Financial Statements"). The Financial Statements are
complete and correct in all material respects and have been prepared in a manner
acceptable to Buyer applied on a consistent basis throughout the periods
indicated. The Financial Statements fairly present the results of operations and
financial condition of Seller for the periods, and at the dates, to which they
relate. The books and records of Seller upon which the Financial Statements are
based accurately reflect all transactions of Seller. As of September 30, 1995,
Seller owned all property, equipment, and assets shown on the Financial
Statements to and through such date, subject to no lien, charge, mortgage or
other encumbrance, except as (a) therein noted and (b) items leased under valid
and subsisting leases.
2.5 Absence of Undisclosed Liabilities. Seller has no
liabilities or obligations with respect to the Business, either direct or
indirect, matured or unmatured or absolute, contingent or otherwise, except:
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a. those liabilities or obligations set forth
on the Balance Sheet and not heretofore paid or discharged;
b. liabilities arising in the ordinary course of
business under any agreement, contract, commitment, lease or plan specifically
disclosed on the Disclosure Schedule or not required to be disclosed because of
the term or amount involved; and
c. those liabilities or obligations incurred,
consistently with past business practice, in or as a result of the normal and
ordinary course of business since September 30, 1995.
For purposes of this Agreement, the term
"liabilities" shall include, without limitation, any direct or indirect
indebtedness, guaranty, endorsement, claim, loss, damage, deficiency, cost,
expense, obligation or responsibility, fixed or unfixed, known or unknown,
asserted or unasserted, xxxxxx or inchoate, liquidated or unliquidated, secured
on unsecured.
2.6 Accounts Receivable. The accounts receivable of
Seller arising from the Business as set forth on the Balance Sheet or arising
since the date thereof (i) are valid and genuine; (ii) have arisen solely out of
bona fide sales and deliveries of goods, performance of services and other
business transactions in the ordinary course of business consistent with past
practice; (iii) are not subject to valid defenses, set-offs or counterclaims;
and (iv) are collectible within ninety (90) days after billing at the full
recorded amount thereof less, the recorded allowance for collection losses on
the Balance Sheet. The allowance for collection losses on the Balance Sheet has
been determined in a manner acceptable to Buyer consistent with past practice.
2.7 Absence of Certain Changes. Since September 30, 1995,
there has not been (i) any change in the assets, liabilities, financial
condition or operations of Seller from that reflected in the Balance Sheet other
than changes in the ordinary course of business, none of which individually or
in the aggregate have had a material adverse effect on such assets, liabilities,
financial condition or operations or business prospects of Seller, (ii) any
damage, destruction or loss, whether or not covered by insurance, materially and
adversely affecting the Assets or the Business; (iii) any mortgage, pledge or
subjection to lien, charge or encumbrance of any kind of any of the Assets; (iv)
any sale, transfer or assignment of any Assets, including any intangible assets,
except sales for fair value in the ordinary course of business; (v) any material
amendment or termination of any contracts or commitments or licenses, except in
the ordinary course of business; (vi) any issuance of securities, rights to
purchase securities or any agreement concerning securities of Seller; (vii) any
amendment of the articles of incorporation or bylaws of Seller; or (viii) any
other event or condition of any character, materially and adversely affecting
the Assets or the Business; provided, however, that Seller has made expenditures
of cash to fund Seller's continuing operating expenses in the ordinary course of
Seller's business as conducted to date.
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2.8 Title to Assets. Seller has good, valid and
marketable title to all of its properties and assets, real, personal and mixed,
which would be included in the Assets if the Closing took place on the date
hereof, which it purports to own, including without limitation all properties
and assets reflected in the Balance Sheet free and clear of all mortgages,
liens, pledges, security interests, charges, claims, restrictions and other
encumbrances and defects of title of any nature whatsoever, except for Permitted
Encumbrances.
2.9 Condition of Tangible Assets. All buildings,
structures, facilities, equipment and other material items of tangible property
and assets which would be included in the Assets if the Closing took place on
the date hereof are in good operating condition and repair, subject to normal
wear and maintenance, are usable in the regular and ordinary course of business
and conform to all applicable laws, ordinances, codes, rules and regulations,
and authorizations relating to their construction, use and operation. No person
other than Seller owns any equipment or other tangible assets or properties
situated on the premises of Seller or necessary to the operation of the
Business, except for leased items disclosed in the Disclosure Schedule and for
items of immaterial value.
2.10 Real Property.
2.10.1 Schedule 1.1.2 contains descriptions of all
the Real Property owned or leased by Seller and used or held for use in
connection with the Business and leases or licenses or other rights to
possession of any Real Property so used or held.
2.10.2 Seller's interests in the Real Property are
as follows: (i) Seller has fee simple title to the Real Property described on
Schedule 1.1.2 as being so owned (the "Owned Property"); and (ii) Seller leases,
as a tenant, the premises described on Schedule 1.1.2 as being so leased (the
"Leased Property"). As to the Owned Property, all buildings, improvements and
fixtures thereon owned or leased by Seller, and all heating and air conditioning
equipment, plumbing, electrical and other mechanical facilities, and the roof,
walls and other structural components of the Real Property which are part of, or
located in, such buildings or improvements, are in good operating condition and
repair, and do not require any repairs other than normal maintenance.
2.10.3 The leases listed in Schedule 1.1.2 hereto
constitute all the real property leases to which Seller is a party (either as
lessor or lessee) which are material and required or useful in the conduct of
the Business as it is presently being conducted. True and complete copies of
such leases and all amendments thereto and modifications thereof are included in
such Schedule. To the best of Seller's knowledge, all buildings, structures,
improvements, fixtures, and appurtenances used by Seller on such leased property
are in good maintenance, operating condition, and repair, and do not require any
repairs other than normal maintenance.
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2.10.4 With respect to the Real Property, Seller has
good and marketable title to its interest in such real property, free and clear
of all liens, claims, and encumbrances, except for Permitted Encumbrances and
liens to be released at Closing. With respect to each lease, except as otherwise
disclosed in the Disclosure Schedule, (i) the leases are in full force and
effect, and are valid, binding and enforceable in accordance with their
respective terms, (ii) all accrued and currently payable rents and other
payments required by such leases have been paid, (iii) neither Seller nor any
other party is in default in any respect under any such leases and no notice of
default or termination has been given or received, and (iv) neither Seller nor
any other party has violated any term or condition under any such lease in any
material respect. No third-party consent or approval is required for the
assignment of any such lease to Buyer, or for the consummation of the
transactions contemplated herein.
2.10.5 Seller holds valid, marketable and insurable
fee interest in the owned Real Property, subject only to the Permitted
Encumbrances and liens to be released at Closing. Attached as Schedule 2.10.5
hereto is a listing of all encumbrances and exceptions to title either (i) known
to Seller relating to the Real Property or (ii) which are expected to be
included as exceptions in any title policy issued to Buyer.
2.11 Compliance with Environmental Laws. Seller is in
compliance with all applicable federal, state and local environmental health and
safety laws, regulations, orders, standards and permits. During the period of
Seller's ownership or lease of its properties, (i) there have been no disposals,
releases or threatened releases of Hazardous Materials by Seller on, from or
under such properties and (ii) to the best of Seller's knowledge, there have
been no disposals, releases or threatened releases of Hazardous Materials by any
entity other than Seller on, from or under such properties. To Seller's
knowledge, without any independent investigation, there were no disposals,
releases or threatened releases of Hazardous Materials on, from or under any of
Seller's properties, which occurred prior to Seller purchasing or leasing any of
such properties. For purposes of this Agreement, the terms "disposal,"
"release," and "threatened release" shall have the definitions assigned thereto
by CERCLA. Also, as used in this Agreement, the term "Hazardous Material" shall
mean any substance or material which is deemed hazardous, toxic, a pollutant or
contaminant, including, but not limited to, petroleum or petroleum products,
under any federal, state or local statute, law, ordinance, rule, regulation or
judicial or administrative order or decision, now or hereafter in effect.
2.12 Inventory. Seller's principal business is not the
sale of inventory from stock and the Assets do not include any inventory.
2.13 Taxes. Seller has timely filed within the time
period required for filing or any extension granted with respect thereto all
federal, state, local and other returns and reports relating to any and all
taxes or any other governmental charges, obligations or fees for taxes and any
related interest or penalties ("Tax" or "Taxes") required to be filed by it and
such returns and reports are true and correct. Seller
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has paid all Taxes, if any, shown to be due and payable on said returns and
reports and has withheld with respect to employees all federal and state income
Taxes, FICA, FUTA and other Taxes required to be withheld and has timely paid
all sales, use and similar Taxes. No income, sales, use or similar Tax return or
report of Seller has been examined or audited by the Internal Revenue Service or
any state taxing authority. There are no pending or threatened audits,
examinations, assessments, asserted deficiencies or claims for additional Taxes.
There are (and as of immediately following the Closing there will be) no liens
or similar encumbrances relating to or attributable to Taxes on the Assets,
other than liens for Taxes not yet due.
2.14 Litigation. There is no claim, action, proceeding or
investigation pending or threatened against or by the Seller, or which questions
or challenges the validity of this Agreement or any action taken by the Seller
pursuant to this Agreement or in connection with the transactions contemplated
hereby or which could be reasonably expected to have a material adverse effect
on Seller's ability to perform its obligations hereunder or on Buyer's use and
enjoyment of the Assets; and, to the best of Seller's knowledge, there is no
valid basis for any such claim, action, proceeding or investigation. The Seller
is not subject to any judgment, order or decree entered in any lawsuit or
proceeding which has had or may have a material adverse effect on the business
or its business practices or which could materially adversely affect Buyer's use
and enjoyment of the Assets.
2.15 Bulk Sales. Seller agrees to take all steps necessary
to comply with any applicable bulk transfer laws in Florida. Neither the sale
and transfer of the Assets pursuant to this Agreement, nor Buyer's possession
and use thereof from and after the Closing Date because of such sale and
transfer, will: (a) violate any law pertaining to bulk sales or transfers or to
the effectiveness of bulk sales or transfers as against creditors of Seller; or
(b) result in the imposition of any liability upon Buyer for appraisal rights or
other liability owing to any shareholder of Seller.
2.16 Agreements, Contracts and Commitments. Schedule 2.16
hereto truly and accurately lists all material licenses, agreements and
undertakings of the Seller to which any of its properties or assets are or will
be subject, Seller has performed in all material aspects all obligations
required to be performed by Seller under any and all such agreements listed in
Schedule 2.16 to which it is a party or to which any of its property or assets
is subject, and neither it nor, to the best of its knowledge, any other party
thereto is in default under any such agreement or obligation.
2.17 Compliance with Laws. Seller is not in violation of
any federal, state or local statute, law, rule or regulation with respect to or
affecting the Assets. Seller has obtained all licenses, orders, approvals, and
authorizations required in connection with the conduct of the Business.
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2.18 Complete Copies of Materials. Seller has made
available to Buyer true and complete copies of each contract, agreement,
license, lease and similar document referred to in any exhibit hereunder or
included in the Assets.
2.19 Disclosure. No representation or warranty by Seller
in this Agreement or the Exhibits attached hereto, nor any document, written
information, statement or certificate furnished or to be furnished by Seller to
Buyer pursuant hereto or in connection with the transactions contemplated
hereby, notwithstanding any investigation by Buyer, contains or will contain any
untrue statement of a material fact, or omits or will omit to state a material
fact necessary to make the statement contained herein or therein not misleading.
ARTICLE III
BUYER'S REPRESENTATIONS
Buyer hereby represents as follows:
3.1 Corporate Organization and Authority. Buyer is a
corporation duly organized, validly existing, and in good standing under the
laws of Delaware. Buyer has all necessary corporate powers, authority, and
approvals to purchase the Assets and consummate the transactions contemplated
pursuant to this Agreement.
3.2 Agreement Will Not Cause Breach or Violation. The
consummation of the transactions contemplated by this Agreement will not result
in or constitute a default or an event that, with notice or lapse of time or
both, would be a default, breach, or violation of the certificate of
incorporation or bylaws of Buyer or any lease, license, promissory note,
conditional sales contract, permit, license, commitment, indenture, mortgage,
deed of trust, or other agreement, instrument, or arrangement to which Buyer is
party.
3.3 Buyer's Authority and Consents. Buyer has the right,
power, legal capacity and authority to enter into, and perform its obligations
under this Agreement, and no approvals or consents of any person are necessary
in connection with it.
3.4 Full Disclosure. None of the representations made
by Buyer contains or will contain any untrue statement of a material fact, or
omit any material fact the omission of which would be misleading.
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ARTICLE IV
CONDITIONS PRECEDENT TO BUYER'S PERFORMANCE
The obligation of Buyer to consummate the transactions
contemplated by this Agreement is subject to the satisfaction, at or before the
Closing of all the conditions set out below in this Article IV. Buyer may waive
in writing any or all of these conditions, in whole or in part, without prior
notice; provided, however, that no such waiver of a condition shall constitute a
waiver by Buyer of any of its other rights or remedies, at law or in equity, if
Seller shall be in default of any of the representations or covenants under this
Agreement.
4.1 Representations and Warranties True as of the Closing
Date. The representations and warranties of Seller contained in this Agreement
or in any schedule, certificate or document delivered by Seller to Purchaser
pursuant to the provisions hereof shall have been true on the date hereof and
shall be true on the Closing Date with the same effect as though such
representations and warranties were made as of such date.
4.2 Compliance with this Agreement. Seller shall have
performed and complied with all agreements and conditions required by this
Agreement to be performed or complied with by it prior to or at the Closing.
4.3 No Threatened or Pending Litigation. On the Closing
Date, no suit, action or other proceeding, or injunction or final judgment
relating thereto, shall be threatened or be pending before any court or
governmental or regulatory official, body or authority in which it is sought to
restrain or prohibit or to obtain damages or other relief in connection with
this Agreement or the consummation of the transactions contemplated hereby, and
no investigation that might result in any such suit, action or proceeding shall
be pending or threatened.
4.4 Xxxxxx Employment Agreement. Buyer and Xxxx Xxxxxx
shall have executed and delivered an employment agreement in the form of Exhibit
D hereto.
4.5 Opinions of Counsel for Seller. Xxxxx Xxxxx Xxxxxxx &
Green, counsel for Seller, shall have delivered to Buyer a written opinion,
dated the Closing Date, in the form of Exhibit E hereto with only such changes
as shall be in form and substance reasonably satisfactory to Buyer and its
counsel.
4.6 No Material Adverse Change. The business, operations,
assets, properties or prospects of the Business shall not have been and shall
not be threatened to be materially adversely affected in any way as a result of
any event or occurrence.
4.7 Seller's Corporate Documents. Seller shall have
delivered to Buyer the following items:
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a. a good standing certificate dated
October 24, 1995 from the Secretary of
the State of Florida;
b. certified copy of the articles of
incorporation of Seller dated October
24, 1995 from the Secretary of the State
of Florida;
c. copy of the bylaws of Seller certified
by the President or Secretary of Seller;
d. copies of all corporate actions duly
taken by the directors and
shareholders of Seller, certified by
the President or Secretary of
Seller, authorizing the execution,
delivery and performance of this
Agreement and the Seller's
Documents, which actions shall be in
full force and effect at the time of
delivery on the Closing Date.
4.8 Board Approval. The Board of Directors of Jaycor
shall have authorized and approved this Agreement and the transactions
contemplated hereby.
4.9 Consents and Proceedings. Seller shall have obtained
all of the consents (including third party consents), authorizations, orders and
approvals required in order to execute and deliver this Agreement and to perform
its obligations hereunder and all actions, proceedings, instruments and
documents deemed necessary or appropriate by Buyer and its counsel to effectuate
this Agreement and the consummation of the transactions contemplated hereby, or
incidental thereto, shall have been obtained and all other related legal matters
shall have been approved by such counsel.
4.10 Non-Competition Agreement. Seller and Shareholder
shall have executed and delivered to Buyer a Non-Competition Agreement
substantially in the form attached hereto as Exhibit A.
4.11 Seller's Deliveries. Seller shall have delivered to
Buyer all the items set forth in Section 7.1 hereof.
4.12 Due Diligence Review. Buyer shall have completed its
due diligence review of Seller and be satisfied in its sole discretion with the
results thereof.
ARTICLE V
CONDITIONS PRECEDENT TO SELLER'S PERFORMANCE
The obligation of Seller to consummate the transactions
contemplated by this Agreement is subject to the satisfaction, at or before the
Closing of all the
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conditions set out below in this Article V. Seller may waive in writing any or
all of these conditions, in whole or in part, without prior notice; provided,
however, that no such waiver of a condition shall constitute a waiver by Seller
of any of its other rights or remedies, at law or in equity, if Buyer shall be
in default of any of the representations or covenants under this Agreement.
5.1 Accuracy of Buyer's Representations and Warranties.
Except as otherwise permitted by this Agreement, all representations by Buyer in
this Agreement or in any written statement that shall be delivered to Seller
under this Agreement shall be true on and as of the Closing as though made at
that time.
5.2 Performance by Buyer. Buyer shall have performed,
satisfied, and complied with all covenants, agreements, and conditions required
by this Agreement to be performed or complied with by Buyer on or before the
Closing.
5.3 Absence of Litigation. No action, suit, or proceeding
before any court or any governmental body or authority, pertaining to the
transaction contemplated by this Agreement or to its consummation, shall have
been instituted or threatened on or before the Closing.
5.4 Buyer's Deliveries. Buyer shall have delivered to
Seller all the items set forth in Section 7.2 hereof.
ARTICLE VI
INDEMNIFICATION
6.1 Indemnity by Seller and the Shareholder. Seller and
Shareholder shall, jointly and severally, indemnify Buyer, and its affiliates,
directors, officers, stockholders, employees, agents, representatives,
successors and assigns against any and all claims, losses, liabilities, damages,
expenses (including reasonable attorneys' fees and costs of suit) which may be
asserted against, incurred or required to be paid by Buyer or its affiliates,
directors, officers, stockholders, employees, agents, representatives,
successors and assigns by reason or on account of (i) any representation or
warranty made by Seller or Shareholder herein being untrue or incorrect; or (ii)
any failure by Seller or Shareholder to observe or perform their covenants and
agreements set forth herein or in any agreement entered into pursuant to this
Agreement; or (iii) any liabilities of Seller or Shareholder incurred in
connection with the Business prior to the Closing Date.
6.2 Indemnity by Buyer. Buyer shall indemnify Seller and
its affiliates, directors, officers, shareholders, employees, agents,
representatives, successors and assigns against any and all claims, losses,
liabilities, damages, expenses (including reasonable attorneys' fees and costs
of suit) which may be asserted against, incurred or required to be paid by
Seller or its affiliates, directors, officers, shareholders, employees, agents,
representatives, successors and assigns by
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reason or on account of (i) any representation or warranty made by Buyer herein
being untrue or incorrect or (ii) any failure by Buyer to observe or perform its
covenants and agreements herein or in any agreement entered into pursuant to
this Agreement.
6.3 Limitation of Indemnification Liability of Seller and
the Shareholder. Seller and Shareholder shall have no liability for
indemnification hereunder with respect to any claim resulting from a breach of
their representations and warranties set forth in this Agreement unless Seller
has been notified of the claim, in the manner provided under Section 9.11
hereof, within the survival period specified in Section 6.5 hereof.
6.4 Limitation of Indemnification Liability of Buyer.
Buyer shall have no liability for indemnification hereunder with respect to any
claim resulting from a breach of its representations and warranties set forth in
this Agreement unless it has been notified of the claim, in the manner provided
under Section 9.11 hereof, within the survival period specified in Section 6.5
hereof.
6.5 Survival. All representations and warranties
contained in or made pursuant to this Agreement or in any agreement,
certificate, document or statement delivered pursuant hereto shall survive the
Closing for a period of three (3) years; provided, however, that,
notwithstanding the foregoing, the representations and warranties set forth in
Section 2.11 shall survive the Closing for a period of seven (7) years, and (ii)
Section 2.13 shall survive the Closing for the applicable tax statute of
limitations plus ninety (90) days.
6.6 Indemnification Procedures. Any party making a claim
for indemnification under this Article VI (the "Indemnitee") shall notify the
indemnifying party (the "Indemnitor") of the claim in writing promptly after
discovering the claim or receiving written notice of a claim against it if by a
third party), describing the claim, the amount thereof (if known and
quantifiable), and the basis thereof. The obligations and liabilities of the
Indemnitor with respect to claims resulting from the assertion of liability by
any third party shall be subject to the following terms and conditions:
a. In the event any action, suit or
proceeding is brought against the Indemnitee, with respect to which the
Indemnitor may have liability under the indemnity agreements contained herein,
the action, suit or proceeding shall be defended including all proceedings on
appeal or for review which counsel for the Indemnitee shall deem appropriate) by
the Indemnitor. The Indemnitee shall have the right to employ its own counsel in
any such case, but the fees and expenses of such counsel shall be at the
Indemnitee's own expense unless the employment of such counsel and the payment
of such fees and expenses both shall have been specifically authorized by the
Indemnitor in connection with the defense of such action, suit or proceeding. In
such case only that portion of such fees and expenses reasonably related to
matters covered by the indemnity agreements contained herein shall be borne by
the Indemnitor. The Indemnitee shall be kept fully informed of
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such action, suit or proceeding at all stages thereof whether or not it is so
represented. The Indemnitee shall make available to the Indemnitor and its
attorneys and accountants all books and records of the Indemnitee relating to
such proceedings or litigation and the parties hereto agree to render to each
other such assistance as they may reasonably require of each other in order to
ensure the proper and adequate defense of any such action, suit or proceeding.
b. The Indemnitee shall not make any
settlement of any claims without the written consent of the Indemnitor, which
consent shall not be unreasonably withheld or delayed.
ARTICLE VII
THE CLOSING
The Closing shall occur at the place and time as specified
in Section 1.7 unless extended as set forth in Section 1.7 or the Agreement is
terminated earlier in accordance with Article VIII.
7.1 Seller's Deliveries at Closing. At the Closing,
Seller shall deliver or cause to be delivered to Buyer:
7.1.1 Xxxx of Sale. A signed xxxx of sale for the
Assets.
7.1.2 Possession of the Assets. Possession of the
Assets.
7.1.3 Assignment and Assumption of Contracts. A
signed Assignment and Assumption of Contracts substantially in the form attached
hereto as Exhibit A.
7.1.4 Non-Competition Agreement. A signed Non-
Competition Agreement substantially in the form attached hereto as Exhibit B.
7.1.5 Xxxxxx Employment Agreement. A signed Xxxxxx
Employment Agreement substantially in the form attached hereto as Exhibit D.
7.1.6 Corporate Documents. Seller's corporate
documents discussed in Section 4.7 hereof.
7.1.7 Third-Party Consents. The consents discussed
in Section 4.9 hereof.
7.1.8 Opinion of Seller's Counsel. Signed legal
opinion of Seller's counsel, dated as of the Closing Date, substantially in the
form attached hereto as Exhibit E.
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7.2 Bills of Sale and Other Instruments of Transfer. Any
bills of sale, deeds, assignments, receipts, or other instruments of transfer
reasonably requested by Buyer to effectuate the transactions contemplated by
this Agreement.
7.3 Buyer's Deliveries at Closing. At the Closing, Buyer
shall deliver to Seller:
7.3.1 Closing Purchase Price. The Closing Purchase
Price, which shall be paid in the manner specified in Section 1.4, in return for
Seller's delivery of the items specified in Section 7.1.
7.3.2 Opinion of Buyer's Counsel. Xxxx Xxxx Xxxx &
Freidenrich, counsel for Buyer, shall have delivered to Seller a written
opinion, dated the Closing Date, in the form of Exhibit E hereto with only such
changes as shall be in form and substance reasonably satisfactory to Buyer and
its counsel.
7.4 Further Documents. At any time before or after the
Closing, Seller will execute, acknowledge, and deliver any further deeds,
assignments, conveyances, and other assurances, documents, and instruments of
transfer, reasonably requested by Buyer, and will take any other action
consistent with the terms of this Agreement that may reasonably be requested by
Buyer, for the purpose of assigning, transferring, granting, conveying, and
confirming to Buyer, or reducing to possession, any of the Assets to be conveyed
and transferred by this Agreement.
ARTICLE VIII
TERMINATION
8.1 Termination of Agreement. This Agreement may be
terminated at any time prior to the Closing (i) by Buyer in its sole discretion,
without cause, (ii) by the mutual consent of Seller and Buyer, or (iii) by
either party as long as such party is not in default if the Closing has not
taken place by the scheduled Closing Date (including the permissible extensions
of the Closing, if applicable) as set forth in Sections 1.7 hereof, or (iv) by
Seller if Buyer is in default of its obligations or representations under this
Agreement.
8.2 Remedies. Subject to the controlling provisions in
Section 8.2, in the event of a material breach of this Agreement, the
non-breaching party shall have the right to pursue all remedies available to it
under this Agreement or otherwise at law or in equity.
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ARTICLE IX
GENERAL PROVISIONS
9.1 Effect of Headings; Exhibits. The subject headings
of the sections of this Agreement are included for purposes of convenience only,
and shall not affect the construction or interpretation of any of its
provisions. All Exhibits and Schedules to this Agreement are incorporated herein
in their entirety.
9.2 Entire Agreement; Modification; Waiver. This
Agreement constitutes the entire agreement between the parties pertaining to the
subject matter contained in it, except for any other agreements referenced
herein. This Agreement supersedes all prior and contemporaneous agreements
(other than those entered into in writing simultaneously with this Agreement),
representations, and understandings of the parties. No supplement, modification,
or amendment of this Agreement shall be binding unless executed in writing by
all the parties. No waiver of any of the provisions of this Agreement shall be
deemed, or shall constitute, a waiver of any other provisions, whether or not
similar, nor shall any waiver constitute a continuing waiver. No waiver shall be
binding unless executed in writing by the party making the waiver.
9.3 Counterparts. This Agreement may be executed in one
or more counterparts, each of which shall be deemed an original, but all of
which together shall constitute one and the same instrument. Counterparts of
this Agreement may be signed and the signature pages transmitted by facsimile.
9.4 Parties in Interest. Nothing in this Agreement,
whether express or implied, is intended to confer any rights or remedies under
or by reason of this Agreement on any persons other than the parties to it and
their respective successors and assigns. Nothing in this Agreement is intended
to relieve or discharge the obligation or liability of any third person to any
party to this Agreement, nor shall any provision give any third person any right
of subrogation or action over against any party to this Agreement.
9.5 Assignment. Neither party may assign its rights or
obligations under this Agreement without the prior written consent of the other
party. Subject to the foregoing, this Agreement shall be binding on and shall
inure to the benefit of the parties to it and their respective permitted
successors and assigns.
9.6 Recovery of Litigation or Arbitration Costs. If any
legal action, arbitration or other proceeding is brought for the enforcement of
this Agreement, or because of an alleged dispute, breach, default, or
misrepresentation in connection with any of the provisions of this Agreement,
the successful or prevailing party or parties shall be entitled to recover
reasonable attorneys' fees and other costs incurred in that action or
proceeding, in addition to any other relief to which it or they may be entitled,
as may be decided by the arbitrators pursuant to Section 9.12.6 hereof.
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9.7 Nature and Survival of Representations and Covenants.
Subject to any limitations set forth in Article VI, all representations,
covenants, and agreements of the parties contained in this Agreement, or in any
instrument, certificate, opinion, or other writing provided for in it, shall
survive the Closing.
9.8 Severability. Each term, covenant, condition or
provision of this Agreement shall be viewed as separate and distinct, and in the
event that any such term, covenant, condition or provision shall be held by a
court of competent jurisdiction to be invalid, the remaining provisions shall
continue in full force and effect, so long as the essential benefits of this
Agreement will still be realized by the parties.
9.9 Necessary Acts. Each party to this Agreement agrees
to perform any further acts and execute and deliver any further documents that
may be reasonably necessary to carry out the provisions of this Agreement.
9.10 Time of Essence. Time is of the essence in the
performance of all obligations under this Agreement.
9.11 Notices. All notices to be given with respect to this
Agreement shall be given in writing to the party, at the appropriate address
listed below. Each notice shall be deemed delivered whenever it arrives at the
party's address, by any written means, including without limitation, facsimile,
telegraph, teletype personal delivery, express delivery, or mail.
9.11.1 If to Buyer, then to:
Jaycor Multimedia Services, Inc.
0000 Xxxxx Xxxxxx Xxxxx
Xxx Xxxxx, XX 00000
Attn: P. Xxxxx Xxxxxxx,
Chief Financial Officer
Telephone: (000) 000-0000
Facsimile: (000) 000-0000
with a copy to:
Cameron Xxx Xxxxx, Esq.
Xxxx Xxxx Xxxx & Freidenrich
0000 Xxxxxxxxx Xxxxx, Xxxxx 0000
Xxx Xxxxx, XX 00000
Telephone: (000) 000-0000
Facsimile: (000) 000-0000
9.11.2 If to Seller or Shareholder, then to:
Xxxx Xxxx Productions, Inc.
00000-0 Xxxxx Xxxxxxx
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00
Xxxx Xxxxx, Xxxxxxx 00000
Attn: Xxxx Xxxxxx
Telephone: (000) 000-0000
Facsimile: (000) 000-0000
with a copy to:
Xxxxx X. Xxxxx, Esq.
Xxxxx Xxxxx Xxxxxxx & Green
One University Park
00000 Xxxxxxxxxx Xxxxx, Xxxxx 000
X.X. Xxx 00000
Xxxx Xxxxx, XX 00000-0000
Telephone: (000) 000-0000
Facsimile: (000) 000-0000
9.12 Arbitration. Any controversy or claim arising out of
or relating to this Agreement, or the breach thereof, shall be settled by
binding arbitration in accordance with the Commercial Arbitration Rules of the
American Arbitration Association ("AAA"), and the procedures set forth below. In
the event of any inconsistency between the Rules of AAA and the procedures set
forth below, the procedures set forth below shall control. Judgment upon the
award rendered by the arbitrators may be enforced in any court having
jurisdiction thereof.
9.12.1 Location. The location of the arbitration
shall be in Xxx County, Florida.
9.12.2 Selection of Arbitrators. The arbitration
shall be conducted by a panel of three neutral arbitrators who are independent
and disinterested with respect to the parties, this Agreement, and the outcome
of the arbitration. Each party shall appoint one neutral arbitrator, and these
two arbitrators so selected by the parties shall then select the third
arbitrator. If one party has given written notice to the other party as to the
identity of the arbitrator appointed by the party, and the party thereafter
makes a written demand on the other party to appoint its designated arbitrator
within the next ten days, and the other party fails to appoint its designated
arbitrator within ten days after receiving said written demand, then the
arbitrator who has already been designated shall appoint the other two
arbitrators.
9.12.3 Discovery. Unless the parties mutually agree
in writing to some additional and specific pre-hearing discovery, the only
pre-hearing discovery shall be (a) reasonably limited production of relevant and
non-privileged documents, and (b) the identification of witnesses to be called
at the hearing, which identification shall give the witness's name, general
qualifications and position, and a brief statement as to the general scope of
the testimony to be given by the witness. The arbitrators shall decide any
disputes and shall control the process concerning these
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pre-hearing discovery matters. Pursuant to the Rules of AAA, the parties may
subpoena witnesses and documents for presentation at the hearing.
9.12.4 Case Management. Prompt resolution of any
dispute is important to both parties; and the parties agree that the arbitration
of any dispute shall be conducted expeditiously. The arbitrators are instructed
and directed to assume case management initiative and control over the
arbitration process (including scheduling of events, pre-hearing discovery and
activities, and the conduct of the hearing), in order to complete the
arbitration as expeditiously as is reasonably practical for obtaining a just
resolution of the dispute.
9.12.5 Remedies. The arbitrators shall follow and
apply applicable law. The arbitrators shall grant such legal or equitable
remedies and relief in compliance with applicable law that the arbitrators deem
just and equitable, to the same extent that remedies or relief could be granted
by a state or federal court, provided however, that no punitive damages may be
awarded. No court action may be maintained seeking punitive damages. The
decision of any two of the three arbitrators appointed shall be binding upon the
parties.
9.12.6 Expenses. The expenses of the arbitration,
including the arbitrators' fees, expert witness fees, and attorney's fees, may
be awarded to the prevailing party, in the discretion of the arbitrators, or may
be apportioned between the parties in any manner deemed appropriate by the
arbitrators. Unless and until the arbitrators decide that one party is to pay
for all (or a share) of such expenses, both parties shall share equally in the
payment of the arbitrators' fees as and when billed by the arbitrators.
9.12.7 Confidentiality. Except as set forth below,
the parties shall keep confidential the fact of the arbitration, the dispute
being arbitrated, and the decision of the arbitrators. Notwithstanding the
foregoing, the parties may disclose information about the arbitration to persons
who have a need to know, such as directors, trustees, management employees,
witnesses, experts, investors, attorneys, lenders, insurers, and others who may
be directly affected. Additionally, if a party has stock which is publicly
traded, the party may make such disclosures as are required by applicable
securities laws. Further, if a party is expressly asked by a third party about
the dispute or the arbitration, the party may disclose and acknowledge in
general and limited terms that there is a dispute with the other party which is
being (or has been) arbitrated. Once the arbitration award has become final, if
the arbitration award is not promptly satisfied, then these confidentiality
provisions shall no longer be applicable.
9.13 Governing Law. This Agreement and all questions
relating to its validity, interpretation, performance and enforcement shall be
governed by and construed in accordance with the laws of the State of Florida
without giving effect to principles of conflict of laws.
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9.14 Construction. This Agreement shall be construed and
interpreted in accordance with the plain meaning of the entirety of the
provisions of this Agreement, consistent with the overall intent and spirit of
the parties and the entire Agreement. As both parties and their legal counsel
have participated in the negotiations and the drafting for this Agreement, any
ambiguity or inconsistency in any of the provisions of this Agreement shall not
be construed against either party as the draftsman of this Agreement.
IN WITNESS WHEREOF, the parties to this Agreement have duly executed it
as of the date set forth above.
JAYCOR MULTIMEDIA SERVICES, INC.,
A DELAWARE CORPORATION
By: /s/ XXXX X. XXXXXX
------------------------------------
XXXX X. XXXXXX, President
and Chief Executive Officer
XXXX XXXX PRODUCTIONS, INC.,
A FLORIDA CORPORATION
By: /s/ XXXX XXXXXX
------------------------------------
XXXX XXXXXX, President
XXXX XXXXXX, AN INDIVIDUAL
By: /s/ XXXX XXXXXX
------------------------------------
XXXX XXXXXX
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