Item C34BOARD OF COUNTY COMMISSIONERS
AGENDA ITEM SUMMARY
Meeting Date: April 16, 2014
Bulk Item- Yes XX No
Division- Airports
Staff Contact Person: Peter Horton
AGENDA ITEM WORDING: Approval of Consent of Assignment of Lease from Conch Flyer, Inc.,
to Conch Flyer Concessions LLC.
ITEM BACKGROUND: John Richmond, the owner of the Conch Flyer has completed negotiations
for the sale of the business entity known as Conch Flyer, Inc. The new business entity will benamed
Conch Flyer Concessions LLC and its managing director is Jose Alberni. The parties are scheduled to
close on or before April 3 01h and have provided the county with a copy of the Asset Purchase
Agreement (attached).
PREVIOUS RELEVANT BOCC ACTION:
None
CONTRACT/AGREEMENT CHANGES:
N/A
STAFF RECOMMENDATIONS:
Approval
TOTAL COST: N/A
BUDGETED: Yes XX No
COST TO COUNTY: $0 SOURCE OF FUNDS: N/A
REVENUE PRODUCING: Yes No AMOUNT PER MONTH Year
APPROVED BY: County Attyy_ Z' OMB/Pur'c&-sing Risk Management
DOCUMENTATION: Included XX Not Required
DISPOSITION: AGENDA ITEM #
CONSENT TO ASSIGNMENT OF LEASE
This Consent to Assignment is entered into this 16th day of April, 2014, by and between
Monroe County, a political subdivision of the State of Florida, hereafter County, Conch Flyer Inc.
a Florida Corporation, joined by John Richmond (Shareholder), hereafter Assignor, and Conch
Flyer Concessions, LLC, hereafter Assignee, the parties agreeing as follows:
The County leases retail spaces 216, 219, 221 and 221 A located within the passenger
ticketing terminal and retail spaces 143, 144 and 144A located within the secure
passenger departure area at Key West International Airport through a Contract of
Lease dated April 18, 1983, and amended on January 23, 1985, October 7, 1992,
April 8, 1998, May 19, 2004 and April 19, 2006.
2, Article XIX of the Original Lease Agreement provides that the Lessee may assign the
Lease with written approval of the Board of County Commissioners for Monroe
County.
Assignor and Assignee have entered into an Agreement for Purchase and Sale of
Assets, attached as Exhibit A which contract includes an assigninent to Assignee of
all the Assignor's right, title and interest in the Lease.
4. In consideration of its consent to the assignment from the Board of County
Commissioners for Monroe County, the Assignee agrees to be bound by all the terms
and conditions of the original Agreement and Lease Renewals.
(SEAL) BOARD OF COUNTY COMMISSIONERS
ATTEST: AMY HEAVILIN OF MCI OE COUNTY, FLORIDA
CLERK
By
WITNESSES:
By: ............................ ,,
..........................
Mayor'Chairman
ASSIGNQI� CONC -LygRINC.
�n. chmond
ASSIG CONCH FLYER CONCESSIONS, LLC_
A erni
W:
ASSET PURCHASE AGREEMENT
by and among
CONCH FLYER, INC.
(" L "
("SHAREHOLDER")
CONCH FLYER CONCESSIONS, LLC
("PURCHASER"')
Dated as of march 2014
ASSET PURCHASE AGREEMENT
This Asset Purchase Agreement ("Agreement") is made as of this _ day ofMarch,
2014, by and on Conch Flyer, Inc., a Florida corporation, (hereinafter "Seller "), joined
by John Richmond (hereinafter "Shareholder") and Conch Flyer Concessions, LLC, a
Florida limited liability company (hereinafter referred to as the "Purchaser")
WHEREAS, the Seller desires to sell to the Purchaser substantially all of the assets,
properties and rights owned by the Seller and used by the Seller exclusively in connection
with the Seller's food and beverage business (the "Business") operating at the Key West
International Airport (the "Premises");
WHEREAS, the Purchaser is an airport food, beverage and retail operator acquiring
substantially all of the assets, properties and rights owned by the Seller and used by the Seller
exclusively in connection with the Business, but none of the liabilities of Seller (including
liabilities of the Business), except as specifically provided for herein, and the Purchaser
desires topurchase such assets, properties and rights, all upon the terms and conditions
hereinafter set forth;
NOW, THEREFORE, for good and valuable consideration, the receipt and adequacy
of which are hereby acknowledged, the parties hereto agree as follows:
DEFINED TERMS
Intentionally Omitted
SALE OF ASSETS
2A Sale of Purchased Assets. Subject to the terms and conditions hereinafter stated, the
Seller hereby agrees to sell, assign, transfer and deliver to the Purchaser and the Purchaser
hereby agrees topurchase and accept from the Seller, effective as of the Closing Date, all
right, title and interest of the Seller in and to the Purchased Assets. For all purposes of this
Agreement, "Purchased Assets" refers to all of the following items, in each case as in
existence on the Closing Date:
(a) All transferrable governmental permits related to the Business and/or the Purchased
Assets, including, but not limited to, those governmental permits listed on Exhibit A attached
hereto;
(b) The lease and amendments thereto for the Business (the "Lease') by and between
Seller and the Key West International Airport Authority (the "Authority');
(c) Intentionally omitted;
(d) All material sales support and promotional materials, advertising materials and
production, sales and marketing files solely related to the Business;
(e) All supplier lists, production records, sales records, and available credit records
maintained solely in connection with the Business, to the extent that such records may be
transferred in accordance with applicable law;
(f) All intangible assets solely related to the Business, including, but not limited to, oral
and written contracts, including, but not limited to, the contracts listed on Exhib AhL it Cm
the
ongoing cornmercial relationships with the customers identified in Exhibit B attached hereto,
Ssinchisee rights pursuant to state and/or federal law, including, but -not lin-Ated to, franchise
rights pursuant to Florida laws, licenses and sublicenses, intellectual property, proprietary
knowledge, technical information, know-how, trade secrets, specifications for materials,
quality control data, processes (whether secret or not), methods and other similar know-how
or rights related solely to the Business and effective as of the Closing Date, all common law
and registered trademarks of the Seller, including, without limitation, those registered
trademarks listed on EEghijbit D, and any trade names and domain names of the Seller shall be
sold, assigned, transferred and delivered by the Seller to Purchaser;
(g) All other tangible assets, which assets are used regularly in the conduct of the
Business; and
fir) The Business as a going concern.
2.2 Excluded Assets. Notwithstanding anything to the contrary herein, Seller shall not
contribute, convey, assign, or transfer to Purchaser, and Purchaser shall not acquire, any assets
(the "Excluded Assets") of Seller other than those specifically set forth in Section 2. L
Without limiting the generality of the foregoing, unless specifically set forth in Section 2. 1,
the following shall constitute Excluded Assets:
(i) All cash, cash equivalents and securities of Seller;
(ii) All bank and other depository accounts and safe deposit boxes of Seller;
(iii) All corporate records and minute books of Seller; and
(iv) Reftards of income, franchise, employee and tangible property taxes; and
(v) Tax loss carry forwards relating to any period or portion thereof ending on or
prior to the Closing Date.
2.3 Retention of Liabilities. Seller shall be liable for all of the liabilities of the Business
arising and/or accruing prior to the Closing Date including, but not limited, to the following:
(i) Claims made by customers for discounts, volume incentives or rebates,
tailored customer sponsorships or consumer promotions occurring prior to the Closing
Date, whether or not an accrual was maintained by Seller in the ordinary and usual
course of the operation of the Business against sales which have occurred prior to the
Closing Date. In addition, except as otherwise specifically provided in this
Agreement, it is understood that the Seller shall be liable to the providers thereof for
all services actually performed and for all deliveries of materials and Inventory
actually received, in each case prior to the Closing Date and that the Purchaser shall be
liable to the providers thereof for all services actually performed and for all deliveries
of materials and inventory actually received, in each case on or after the Closing Date;
(ii) Liabilities related to any equitable, contractual, tort or statutory claims against
Seller accruing prior to the Closing;
(iii) Liabilities related to any claim against Seller for acts and/or omissions which
occurred prior to the Closing even if the cause of action arose after Closing; and
(iv) Liabilities for taxes seeming prior to the Closing, except as otherwise provided
in Section 2.5 hereof.
The parties agree that all trade accounts payable which accrue on or prior to the Closing Date
shall be the sole responsibility of Seller, Purchaser shall be solely responsible for any and all
trade accounts payable, which relate to transactions that arise after the Closing Date.
2.4 Purchase Price.
The total consideration to be paid by Purchaser for the Purchased Assets shall be the payment
by Purchaser of an aggregate amount equal to four million nine hundred thousand dollars
($4,900,000) (the "Purchase Price"), payable as follows:
Deposit due within two (2) business days of the approval by the Monroe
County Board of Commissioners of the lease assignment from Seller to
Purchaser which Deposit will held in escrow by Stones & Cardenas,
Attorneys at Law ....... .............................. $150,000-00
Balance to close, by cashier's check or wire transfer, subject to adjustments
or prorations ............. ...... ........... ...... $4 750 000-00
TOTAL: $4,900,000.00
2.5 Personal Prone rtv Taxes.
(a) All state, county and local ad valorem taxes on personal property shall be apportioned
between Purchaser and Seller as of 11:59 p.m° on the Closing Date, computed on the basis of
the fiscal year for which the same are levied, In the event the Purchaser shall receive bills
after the Closing Date for expenses incurred prior to the Closing Date that were not prorated
in accordance with this Section 2.5(a), then Purchaser shall promptly notify the other party as
to the amount of the expense subject to proration and the responsible party shall pay its
portion of such expense (or, in the event such expense has been paid on behalf of the
responsible party, reimburse the other party for its portion of such expenses).
(b) Seller shall have the right (at its own expense) to prosecute and continue to prosecute
subsequent to the Closing any pending tax certiorari proceedings [for the intangible personal
property subject] for the tax year in which the Closing occurs and all prior tax years. Any
refunds obtained for such claims for any tax years prior to the tax year in which the Closing
occurs, net of the expenses incurred in obtaining such refunds, shall be paid to Seller.
2.6 Internal Revenue Code Allocation. The Seller and Purchaser hereby agree that, prior
to Closing, they shall agree upon the allocation to be given to the Purchase Price in their
respective tax returns reporting the transactions contemplated by this Agreement, in
accordance with the provisions of Section 1060 of the Internal Revenue Code and will not
take any actions inconsistent with such allocation:
Class H $2,000,000 (furniture, fixture and equipment)
Class IV & V $2,900,000 (goodwill)
2.7 The following expenses related to the Business have been
prepaid by Seller and shall accrue to the benefit of the. Purchaser at closing without proration
or refund to Seller:
(a) Public liability insurance for the period September 15, 2013 to September 15, 2014, in
the total amount of $13,106.20 (paid 9-9-2013 by check no. 3830); and
(b) Annual fees for the period April 1, 2014 through March 31, 2015 in the total amount
of $1,350.00 (paid 3-10-14 by credit card) for renewal of State of Florida 6COP Alcoholic
Beverage License No, BEV 54-00515 (including tobacco sales); and
(c) Annual fees for the period September 30, 2013 to October 1, 2014, in the total amount
of $646.00 for renewal of State of Florida Food Service License No. SEA 54-28063 (Conch
Flyer); and License No. SEA 54-01459 (Last Call Beach Bar).
(d) Annual business license fees for the period October 1, 2013 to September 30,2014, in
the total amount of $369.75 paid to Monroe County, Florida, and to the City of Key West,
Florida, for the Conch Flyer and Last Call Beach Bar.
(e) Pinnacle Hospitality Systems POS terminal service contracts: (i) for the period
February 1, 2014 to February 1, 2015, in the amount of $1,800.00 (Conch Flyer); and (ii) for
the period July 1, 2013 to July 1, 2014, in the amount of $1,400.00 (Last Call Beach Bar).
D) Food, beverage and supplies inventory of no less than Twenty Thousand Dollars and
No Cents ($20,000.00).
WORKING CAPITAL
Intentionally omitted
4.1 Time and Place. The Closing ofthe transactions contemplated by this Agreement shall
take place on or before April 30 , 2014 at the offices of Vila, Padron & Diaz, P.A., 201
Alhambra Circle, Suite 702, Coral Gables, Florida 33134 unless another date and place is
mutually accepted (the actual date of the Closing, the "Closing Date"). If the Closing Date
falls on a holiday, Saturday or Sunday, the Closing Date shall be moved to the next business
day.
42 Deliveries by the Seller. At the Closing, the Seller shall deliver (or cause to be
delivered) to the Purchaser the following:
(a) With respect to the Purchased Assets to be sold by the Seller, a Bill of Sale in the form
set forth in Exhibit E attached hereto, that has been executed by the Seller;
(b) With respect to the transfer of the Seller's rights in the trademarks listed on Exhibit D
to Purchaser, a Trademark Assignment in favor Purchaser in substantially the same form as
Exhibit F.
(c) copies of resolutions duly adopted by the Board of Directors of the Seller and Seller's
shareholder(s), authorizing and approving the execution and delivery of this Agreement by
Seller and the consummation of the transactions contemplated hereby, certified by an
executive officer of Seller;
(d) An Assignment of Contracts in substantially the same form as Exhibit Q attached
hereto;
(e) Evidence, in form and substance reasonably satisfactory to Purchaser and its secured
lenders, that any Liens encumbering all of any portion of the Purchased Assets have been, or
concurrently with the Closing, will be released; and
0) An assignment and assumption of the Lease duly acknowledged and accepted by the
Authority and the Monroe County Board of Commissioners wherein the Board acknowledges
that Seller has met all of its obligations under the Lease, including capital improvements of
$1,000,000.
4.3 Deliveries b y -Purchaser. At the Closing, the Purchaser shall deliver (or cause to be
delivered) to the Purchaser the following
(a) The entire balance of the Purchase Price made payable to the Seller by wire transfer;
and
(b) Copies of resolutions duly adopted by the Board of Directors of the Purchaser and
Purchaser's shareholders)/ member(s), authorizing and approving the execution and delivery
of this Agreement by Purchaser and the consummation of the transactions contemplated
hereby, certified by an executive officer of Purchaser.
4A 1T1h1ikrd_CaML_Consents. The Seller agrees to cooperate in good faith with Purchaser's
efforts to obtain any third party consents required for the valid assignment and transfer of
Seller's rights and interest in any permits from and contracts with any third parties, including,
but not limited to, the governmental permits listed on Exhibit A and the contracts listed on
Exhibit C. The Purchaser acknowledges and understands that no representations have been
made by the Seller as to whether such permits and/or third party contracts are assignable.
REPRESENTATIONS AND WARRANTIES
OF THE SELLER AND SHAREHOLDER
The Seller and the Shareholder hereby represents and warrants to the Purchaser as of the date
hereof as follows:
5.1 Other Ventures,
(a) Seller is duly organized, validly existing and in good standing under the laws of the
jurisdiction of its organization, with all requisite corporate power and authority to own, lease
and operate its properties and assets and to conduct its business as now being conducted.
Seller is duly qualified or licensed to do business as a foreign organization in, and is in good
standing in, each jurisdiction in which the nature of the Business or the ownership of the
Purchased Assets requires it to be so qualified or licensed.
(b) All of the issued and outstanding capital stock of each Seller is owned by Shareholder
and in the respective amounts set forth on Schedule 1. Seller does not owns of record or
beneficially any equity interest in any other Person (other than a Seller), nor is it a partner or
member of any partnership, limited liability company, joint venture or similar arrangement or
agreement.
5.2 AAugghlarni . Seller has full power and authority to enter into this Agreement and each of
the other agreements, certificates, instruments and other documents to be executed and
delivered in connection with this Agreement (collectively the "Transaction Documents")
to which it is a party and to consummate the transactions contemplated hereby and thereby.
The execution and delivery of this Agreement and the other Transaction Documents by
Seller and the performance by Seller of its obligations hereunder and thereunder have been
duly authorized, and no other proceedings on the part of Seller are necessary to authorize
such execution, delivery and performance. This Agreement and the other Transaction
Documents to which Seller is a party have been or will be duly and validly executed and
delivered by Seller and, assuming the due execution and delivery of this Agreement and
the Transaction Documents by Purchaser, constitutes or will constitute valid and binding
legal obligations of Seller that is a party thereto, enforceable against Seller in accordance
with their respective terms, except to the extent enforceability may be limited by
bankruptcy, insolvency, reorganization, moratorium or other similar laws affecting the
enforcement of creditors' rights in general and subject to general principles of equity and
the discretion of courts in granting equitable remedies. There are no claims pending or, to
Seller's knowledge, threatened against Seller which seek to enjoin or rescind the
transactions contemplated by this Agreement or otherwise prevent Seller from complying
with the terms and provisions of this Agreement.
5.3 No Violation. The execution, delivery and performance by Seller of this
Agreement and the other Transaction Documents to which it is a party do not and will not,
(a) conflict with or result in any violation of, or constitute a breach of any provision of the
organizational documents of Seller, (M except for the authority consent and approvals,
conflict with, or result in a violation of or constitute a breach or default under, or permit
the termination of, or entitle any other Person to accelerate any obligation, or result in the
loss of any benefit, or give rise to the creation of any lien upon any of the Purchased
Assets under the terms, conditions or provisions of any license, IF License, the Lease or
any Material Contract, (c) violate any applicable law, or M) constitute an event which,
after notice or lapse of time or both, could result in any of the foregoing.
5.4 Financial Statements and Condition. Attached hereto as Schedule 2
are true and complete copies of (i) the unaudited, consolidated balance sheets of Seller for
the fiscal years ended September 30, 2010, 2011, and 2012 and the related unaudited
statements of income for each of the twelve (12) month periods then ended and (ii) the
unaudited, consolidated balance sheets of Seller as of September 30, 2012 (collectively,
the " "Financial Statements"), The Financial Statements have been prepared in
conformity with US GAAP consistently applied, during the periods presented, and are
derived from Sellers' books and records (which books and records are accurate and
complete), and the Financial Statements present fairly, in all material respects, the
financial position and results of operations of Sellers as of the date and for the time
periods specified therein.
5.4 Absence of Certain Chnnapq or Events,
(a) Intentionally omitted.
(b) Except with respect to matters relating to the proposed sale of the Purchased Assets
and the Business and except as contemplated by this Agreement and the Transaction
Documents, Seller has conducted the Business in the ordinary course of business and, without
limiting the foregoing, no Seller has:
(I) Incurred any liabilities, other than liabilities incurred in the ordinary course of
business, or discharged or satisfied any lien, or paid any liabilities, other than in the
ordinary course of business, or failed to pay or discharge when due any liabilities of
which the failure to pay or discharge has caused or is reasonably likely to cause any
material damage or risk of material loss to it or any of its assets or properties;
(ii) (A) other than in the ordinary course of business, including normal merit and
cost of living increases, increased or committed to increase the rate or terms of
compensation (including bonus, termination and severance pay) payable or to become
payable to any of the hired personnel, or (B) entered into any employment agreement
with any hired personnel;
(iii) Executed, amended, cancelled or terminated any Material Contract;
(iv) Executed any lease (for real or personal property) involving annual payments
in excess of $5,000;
(v) (A) changed any tax reporting or accounting policies or practices of the
Business, including practices with respect to (i) depreciation or anicatization polices or
rates, or (ii) the payment of accounts payable or the collection of accounts receivable;
or (B) settled or compromised any tax liability or made or rescinded any tax election;
(vi) (A) created or incurred any indebtedness, (B) assumed, guaranteed, or
endorsed the indebtedness of any other person, or (C) canceled any debt owed to it or
released any claim possessed by it, other than in the ordinary course of business;
(vii) Created or suffered to exist any liens on the Purchased;
(viii) Changed in any material respect any of the business policies, including,
without limitation, credit, advertising, licensing, investment, marketing, pricing,
purchasing, production, personnel, sales, returns, budget and product acquisition
policies, related to the Business;
(ix) Made or authorized any capital expenditures or commitment for capital
expenditures in an amount more than Five Thousand Dollars ($5,000) individually or
Ten Thousand Dollars ($10,000) in the aggregate for additions to properties, plant,
equipment, or intangible capital assets;
9
(a) Engaged in any transactions with, or entered into any contract with, any
affiBates of any Seller or any shareholder or equity holder of any Seller (other than
another Seller), except to the extent required by law or any then existing agreements;
(xi) Made any loans, advances or capital contributions to, or investments in, any
person or paid any fees or expenses to any shareholder, director, officer, partner, or
affiBate of any Seller, except with respect to payments to, and reimbursement of, fees
and expenses of employees, directors and officers of any Seller in the ordinary course
of business;
(xii) Granted any license or sublicense of any rights under or with respect to any
Company Intellectual Property;
(xiii) Instituted or settled any claim that involved more than Fifty Thousand Dollars
($50,0(g0);
(xiv) Without limiting the foregoing, entered into any material transaction affecting
the Business or any of its assets, operations or financial condition other am
transactions in the ordinary course of business; or
(xv) Agreed, in writing or orally, to do any of the foregoing.
5e6 Compliance with Laws. The Business is being, and in the past three (3) years has
been, conducted in compliance in all material respects with all applicable laws and (b) in the
past three (3) years, no Seller has received any notice from any governmental authority or
person alleging any noncompliance with any applicable laws. Seller has not received any
written, or to Seller's knowledge, oral, claims, notices, orders or directives issued by any
governmental authority with respect to the Business or any of the Purchased Assets, Seller
has nor any of its officers, executives, representatives, agents or employees (i) has used or is
using any corporate funds for any illegal contributions, gifts, entertainment or other unlawful
expenses relating to political activity, (ii) has used or is using any corporate funds for any
direct or indirect unlawful payments to any foreign or domestic government officials or
employees, (iii) has violated or is violating any provision of the United States Foreign Corrupt
Practices Act of 1977, as amended or any similar law under any jurisdiction, fiv) has
established or maintained, or is maintaining, any unlawful final of corporate monies or other
properties, (v) has made any bribe, unlawful rebate, payoff, influence payment, kickback or
other unlawful payment of any nature or (vi) has violated any anti -boycott provisions of any
applicable law or other applicable laws relating to exports and embargos.
5.7 Payment of Taxes.
(a) All taxes due and payable in connection with the operation of the Business or the
Purchased Assets, or asserted by any governmental authority to be due and payable in
connection with the operation of the Business or the Purchased Assets (whether or not shown
on any tax return) have been timely paid other than taxes which are not yet due or owing or
that are being contested in good faith by appropriate proceedings. All tax returns required to
10
be filed in connection with the operation of the Business in all jurisdictions in which such tax
returns are required to be filed (after giving effect to any duly obtained extensions of time in
which to make such filings) have been duly and timely filed and are true and complete. Each
Seller has properly and timely withheld and paid all taxes required to have been withheld and
paid in connection with amounts paid or owing to any person and has complied with the rules
and regulations relating to the withholding and remittance of taxes.
(b) There are no tax claims pending or, to Seller's knowledge, threatened in connection
with the Business or the Purchased Assets. No Seller has received from any governmental
authority (including jurisdictions where such Seller has not filed Tax returns) in the past three
(3) years any (i) notice indicating an intent to open an audit or other review, (ii) request for
information related to tax matters, or (iii) notice of deficiency or proposed adjustment for any
amount of tax proposed, asserted, or assessed by any governmental authority against such
Seller. No claim has been made by any governmental authority in the past three (3) years in a
jurisdiction where any Seller does not file tax returns that such Seller is or may be subject to
taxation by, or required to file any tax return in, that jurisdiction.
(c) There are no liens for taxes on any of the Purchased Assets.
5.8 Assets- Condition.
(a) Seller has good and marketable title to, or a valid leasehold interest in, the Purchased
Assets, free and clear of all liens.
(b) The tangible personal property included in the Purchased Assets in good working
condition and repair (reasonable wear and tear excepted) and free from material defects. No
person other than Seller owns or utilizes any of the Purchased Assets or operates the Business.
5.9 mIn vy Len t o My
(a) All items of inventory of the Business reflected on the Seller's balance sheet(s) are
carried at amounts which reflect valuations pursuant to Sellers' normal inventory valuation
policy of stating inventory at cost on a first -in first -out basis. None of the inventory is subject
to any write -down or write-off. Subject to the reserves reflected on the balance sheet(s), the
inventory is in good and marketable condition, is not obsolete or defective, and is of a quality
and quantity useable or saleable in the ordinary course of business, and the quantities of
inventory are sufficient, consistent with the past practices of the Business, to operate the
Business. All inventory is located at or on the Premises.
(b) To Seller's knowledge, all of the inventory is, to the extent applicable: (i) in
compliance in all material respects with (A) the Federal Food, Drug, and Cosmetic Act (the
"FDA"), all acts amending or supplementing the FDA and any other Applicable Laws, and (B)
the pure food and drug laws of Florida, (ii) will not be adulterated or misbranded within the
meaning of the FDA or such state laws, (iii) will not be prohibited from being introduced into
interstate commerce in the United States under the provisions of the FDA, and (iv) will not
contain a hazardous substance or a harmed substance within the meaning of the FDA or such
state laws.
5.10 Brokers' Fees and Commissions. Neither Seller nor any other person by or on behalf
of any Seller has engaged any investment banker, broker or finder in connection with the
transactions contemplated hereby.
511 Intellectual Property. Schedule 3 sets forth a complete and correct list of registered
intellectual property and pending applications for registration of intellectual property,
material unregistered marks, registered copyrights and Internet domain names (the
"Company Intellectual Property'), All fees due as of the date hereof associated with
maintaining any Company Intellectual Property have been paid in full in a timely manner
to the proper governmental authority, and all actions required as of the date hereof
associated with maintaining any Company Intellectual Property have been taken, and no
such fees are due, and no such actions are required, within the three (3) month period after
the Closing Date.
(a) Seller owns and possesses all right, title and interest to, or has a valid and enforceable
right or license to use, all of the Company Intellectual Property;
(b) Except pursuant to the terms of an IF License, no Seller pays or receives any royalty
from anyone under any of the Company Intellectual Property, nor have any of them licensed
anyone to use any of the Company Intellectual Property;
5.12 Contracts,
Schedule 4 lists all of the following contracts to which any Seller is a party or is bound and
that relate to the Business (collectively, "Material Contracts"):
(a) Any contract pursuant to which Seller (a) grants to any third party any right, license or
right to license, option or right of first refusal or negotiation with respect to any Company
Intellectual Property or (b) except with respect to off -the -shelf software, receives from a third
party any right, license or right to license, option or right of first refusal or negotiation with
respect to Company Intellectual Property, including, without limitation, the IF Licenses;
(b) Any contract that involves expenditures (or commitments to make expenditures) ofthe
Business in excess of $5,000 annually, including, without limitation, contracts for the
purchase of goods or services by Seller;
(c) Any contract that involves a sharing of profits, losses, costs, or liabilities by the
Business with any other person;
(d) Any contract that contains covenants that in any way purport to restrict the business
activity of the Business (or any part thereof) or limit the freedom of the Business (or any part
thereof) to engage in any line of business or to compete with any person;
UN
(e) Any contract for capital expenditures in excess of $5,000 annually;
(0 Any contract which involves supply or requirements obligations;
(g) Any contract for which indemnification obligations exist on the part of any Seller
(other than customer contracts in the ordinary course of business and IP Licenses);
(h) Any contract which provides for warranties or return of product (other than in the
ordinary course of business), rebates, sharing of fees, grant of discounts, "most favored
nations clauses", grant of exclusivity or similar arrangements;
(i) Any contract which provides for consignment or similar arrangement;
0) Any contracts relating to Indebtedness or to the granting by Seller of a Lien on any of
the Purchased Assets, or any guaranty by any Seller of any obligation in respect of borrowed
money or otherwise;
(k) Any employment, confidentiality and non -competition contracts with any employee,
officer, consultant, or management advisor which involve annual payments by any Seller in
excess of $5,000;
(1) Any contracts pursuant to which Seller is a lessor or a lessee of any personal property,
or holds or operates any personal property owned by another Person which involves annual
payments by Seller in excess of $1,000;
(m) Any contracts providing for severance, retention, change in control or other similar
payments;
(n) Contracts with any current or former officer, director, shareholder or affiliate of Seller;
or
(a) Any contract that is an amendment, supplement or modification (whether oral or
written) in respect of any of the foregoing.
Complete copies of each Material Contract required to be identified on Schedule 4 , including
amendments, waivers, or other changes thereto, have been made available to Buyer, In the
case of each oral Material Contract, Schedule 4 also includes a brief description of such
Material Contract. All Material Contracts are in full force and effect and are legal, valid and
binding upon Seller which is a party thereto, and, to Seller's knowledge, except as set forth in
Schedule 4 enforceable against the other parties thereto in accordance with their respective
terms. Except as set forth in Schedule 4 no Seller is in material breach or default under any
Material Contract to which it is a party. Except as set forth in Schedule 4 to Seller's
knowledge, no other party to any Material Contract is in default thereunder, nor does any
condition exist or has any event occurred which, with notice or lapse of time or both, would
constitute a material breach or default by Seller under any Material Contract to which it is a
UK
party, or, to the knowledge of Seller, by any other party thereunder. Seller has not received
any notice of any Person's intent to terminate or materially amend any Material Contract.
5.13 Litigation Except as set forth in Schedule 5, there are no, and in the past three (3)
years there have been no, claims, actions, demands, audits, investigations, arbitrations,
judgments, suits or proceedings, of any kind whatsoever, at law or in equity (collectively,
"Claims") pending or, to Seller's knowledge, threatened, by or against any Seller
involving, affecting or relating to the Business or the Purchased Assets, which involve or
involved more than Five Thousand Dollars ($5,000), Seller nor any of the Purchased
Assets is subject to any Judgment.
5.14 Licenses. Seller possesses all of the material licenses, permits, quotas, authorizations,
franchises, registrations, consents, waivers, variances, certifications and other approvals
from any governmental authority ("Licenses") necessary for the conduct of the Business,
which Licenses are listed in Schedule 6. The Business is and in the past three (3) years has
been in compliance in all material respects with the Licenses. All Licenses are currently in
bill force and effect and except as set forth on Schedule 6, none of the Licenses will lapse,
terminate, expire or otherwise be impaired as a result of the cons nation of the
transactions contemplated hereby. Seller has not received during the past three years any
written notice alleging any noncompliance with any License, except as set forth in
Schedule 6.
5.15 Errs oyee Plans.
1 _
(a) Identification. Set forth in Schedule 7 is a true and complete list of all (i) employee
benefit plans (as defined in Section 3(3) of ERISA) and (ii) bonus (including transaction
bonus), incentive compensation, equity or equity -based, stock appreciation right, phantom
stock, restricted stock, restricted stock it, performance stock, performance stock it,
employee stock ownership, stock purchase, equity or equity -based, deferred compensation,
change in control, employment, noncompetition, nondisclosure, vacation, holiday, sick leave,
retention, severance, retirement, savings, pension, money purchase, target benefit, cash
balance, excess benefit, supplemental executive retirement, profit sharing, life insurance,
cafeteria (Section 125), adoption assistance, dependent care assistance, voluntary employees
beneficiary, multiple employer welfare, medical, dental, vision, severance, change in control,
multiple employer welfare, supplemental unemployment compensation, accident, disability,
fringe benefit, welfare benefit, paid time off, employee loan, and salary continuation plans,
programs, policies, agreements, arrangements, commitments, practices, contracts, associations
and understandings (written or unwritten) including without limitation, any trust, escrow or
other agreement related thereto and any similar plans, programs, policies, agreements,
arrangements, commitments, practices, contracts and understandings (written or unwritten), in
each of the foregoing cases which cover, are maintained for the benefit of, or relate to any or
all of the hired personnel (the "Employee Plans").
(b) Documentation, True and complete copies of the following documents with respect to
each Employee Plan have been provided to Buyer, as applicable: (i) the plans and related trust
RN
documents, insurance contracts or other hauling arrangements and all amendments thereto,
(ii) the Forms 5500s and all schedules thereto for the most recent two (2) years, (iii) the most
recent valuation report, including any PAS 106 report; (iv) the most recent IRS determination
or opinion letter, (v) the most recent summary plan description and subsequent summaries of
material modifications, (vi) the most recent financial statements, and (vii) written summaries
of all material terms of unwritten Employee Plans.
5.16 Labor and EmDlnVPP afters.
(a) Seller is not a party to, or otherwise bound by, a collective barn aimig agreement (or
any other agreement with any labor organization), which covers any of the Hired Personnel,
except to the extent constituting the Excluded Assets. During the past three years, the
Business has not experienced any material work stoppage, labor dispute, grievance,
slowdown, lockout or strike, and to Sellers' knowledge, none has been threatened against
Seller. Except as set forth in Schedule 8 there is no, and in the past three (3) years there has
been no, controversies, grievances or claims, or to Sellers' knowledge, threatened
controversies, grievances or claims, by any employee or former employee of any Seller with
respect to his or her employment, termination of employment, compensation or benefits (other
than routine claims for benefits under the Employee Plans in the ordinary course of business).
(M Except as set forth in Schedule 9 urrently a party to, nor bounby any
-, Seller is not c d
Contract for the employment of any hired personnel which involves annual payments (salary
and bonus) in excess of $5,000,
(a) Schedule 10 sets forth a list of all employees of Seller who perform services
exclusively for the Business as of March 15, 2014.
(d) Seller has provided Purchaser with access to copies of all manuals, written policies or
similar documents of any Seller which are material to Business and the Purchased Assets
regarding compensation, benefits, perquisites, and personnel matters (except to the extent
constituting part of Excluded Assets hereunder).
(a) Seller currently has completed and maintains in its files Form 1-9s with respect to each
of its employees that it is required by applicable law to have I-9s for. In the past three (3)
years, no Seller has received any notice, judgment or other communication from any
governmental authority that any of its employees has a name or social security number that
does not match the name or Social Security Number maintained by such governmental
authority. All employees of Seller working in the United States are legally authorized to work
in the United States.
5°17 Hazardous Substances
(a) The Business is in compliance in all material respects with all environmental laws,
including, without limitation, laws relating to emissions, discharges, releases or threatened
releases of toxic or hazardous substances or hazardous wastes or other pollutants,
contaminants, petroleum products or chemicals, including, without limitation, gasoline, diesel
15
fuel or other petroleum hydrocarbons, polychlorinated biphenyls or asbestos (collectively,
"Hazardous Substances") into the environment (including, without limitation, ambient air,
surface water, ground water, land surface or sub surface strata) or otherwise relating to the
manufacture, processing, distribution, use, treatment, storage, disposal, transport or handling
of Hazardous Substances.
(b) To Seller's knowledge, there are no polychlorinated bipheryls, area formaldehyde or
asbestos generated, treated, stored, disposed of, or otherwise deposited in, incorporated into or
located on the premises where the Business is operated (including the buildings and
improvements a part thereof).
(c) All Hazardous Substances not in current, usable inventory has been removed from the
Business premises and disposed of in compliance with Applicable Laws;
(d) In the past five (5) years, Seller has not received, any notice, order or other
communication from any governmental authority, citizens' group, employee or other person
claiming that it is or may be liable for personal injury or property damage related to any
release, treatment, storage or disposal of, or exposure to, any Hazardous Substance.
5.18 Sufficie ff J—ncy of Assets. Except for the Excluded Assets and the products and services
which Seller obtains from third parties as disclosed herein, the Purchased Assets constitute
0 of the assets used by Sellers to conduct the Business as is presently conducted. All of
the equipment is located at the Premises.
5.19 So her we (5) largest suppliers in terms of purchases
Schedule I I sets forth the f
(collectively, "Material Suppliers") of Business on a consolidated basis, in each case for
the twelve (12) months ended March 15, 2014. To Seller's knowledge, there will be no
material adverse change in a relationship with any Material Supplier as a result of the
transactions contemplated by this Agreement.
5.20 Insurance. Schedule 12 contains an accurate and complete list of all material
insurance policies owned, held by or applicable to Seller or the Business (including its
respective assets or business). All such policies are in full force and effect, all premiums
that are due and payable with respect thereto have been paid, and no written notice of
denial of coverage, cancellation or to nation has been received with respect to such
policies. Following the Closing, all such material insurance policies will remain in full
force and effect with respect to periods prior to Closing. To Sellers' knowledge, no event
has occurred, including, without limitation, the failure by any Seller to give any notice or
information or any Seller giving any inaccurate or erroneous notice or information, which
limits or impairs the rights of any Seller under any such material insurance policies.
5.21 Indebtedness Schedule 13 sets forth a listing of all indebtedness of Seller and the
contracts and instruments under which such indebtedness exists,
16
5.22 Related Parts Transaction . No employee, officer, director, or shareholder or equity
holder of any Seller, any member of his or her immediate family or any beneficiary of any
shareholder or equity holder of any Seller (each a "Related Person"): (i) owes any amount
to any Seller nor does any Seller owe any amount to, or has any Seller committed to make
any to or extend or guarantee credit to or for the benefit of any Related Person (other
than any participant to under any Employee Plan and any payments to, and
reimbursement of fees and expenses of, employees, directors and officers of such Seller in
the ordinary course of business); (ii) owns any property or right, tangible or intangible, that
is used by any Seller in the operation of the Business; or (iii) has any claim or cause of
action against any Seller relating to the Business, other than claims for accrued
compensation or benefits arising in the ordinary course of employment or under any
Employee Plans,
COVENANTS OF SELLER
6.1. Covenants of Seller. During the period prior to the Closing, the Seller will comply
with all covenants of Sections 6. 1 (a) and (b), and during the period at and after the Closing,
the Seller will comply with the covenants of Section 6.2 (a) and (b), except to the extent the
Purchaser may otherwise consent in writing.
(a) Conduct of Business. From the date of this Agreement until Closing and except for the
transactions specifically contemplated by this Agreement, Seller shall, with respect to the
Business:
(i) (A) conduct the Business in the ordinary course of business, (B) use
reasonable efforts to retain in its employ all of its key and other employees and
(C) use reasonable efforts to preserve its goodwill and relationships with
suppliers, customers, brokers and others having business relations;
(ii) not: (A) except in the ordinary course of business, sell, assign, lease or
otherwise transfer or dispose of any of the Purchased Assets, (B) except in the
ordinary course of business, forgive or compromise any obligations of others
or claims against others, or (C) mortgage, pledge or subject any of the
Purchased Assets to a lien;
(iii) (A) not amend, renew, terminate or enter into or become a party to any
contract or agreement under which the value of services to be performed by or
for it or the cost of goods and services to be sold to or by it under any one such
contract or agreement may exceed $ 1,000; (B) not enter into or become a party
to any loan, letter of credit or other debt agreement (other than extensions of
credit in relation to purchases of inventory in the ordinary course of business
consistent with prior practices), or incur, assume or guarantee any obligation
for borrowed money, other than any such which are not to be assumed by
Purchaser and which do not impose Liens on any of the Purchased Assets;
17
(iv) not make any alteration in the manner of keeping its books, accounts or
records or in the accounting practices therein reflected, unless required by
generally accepted accounting principles; and
(v) not make any change in the Business, or enter into any transaction,
which is not in the ordinary course of business.
(b) Access and Information Prior to Closing. Seller and its directors, officers, employees
and agents shall cooperate fully with Purchaser and its directors, officers, employees and
agents to ensure the prompt and complete availability of all records and information of Seller
(including any periodic internal financial statements prepared in the ordinary course) that
Purchaser may reasonably request. Seller, subject to existing confidentiality agreements,
shall, upon the request of the Purchaser, provide written authorizations to all parties having
information regarding Seller, authorizing them to release such information to Purchaser for
review and/or copying, and requesting that they cooperate fully with Purchaser.
6.2 Post -Closing Renuirement. The Seller agrees that it shall take or shall cause to
be taken, the following post -closing:
(a) Continuing Assistance. Subsequent to the execution of this Agreement and the
Closing, Seller will provide to Purchaser whatever reasonable assistance the Purchaser
reasonably requests in connection with the transfer of ownership and control of the Purchased
Assets and the consummation of the transactions contemplated by this Agreement. After the
Closing, the Seller will provide such cooperation as Purchaser may request in connection with
any proceeding, investigation, examination, audit, action or other similar matter involving
such Purchaser which may require information relating to the Business and its operations prior
to the Closing. Seller will not, and will cause its affiliates not to, dispose of, alter or destroy
any books and records and other materials for a period of three (3) years after the Closing.
Seller will provide Purchaser with six (60) days prior written notice of any disposition,
alteration or destruction of such records. Within 60 days following the receipt of such notice
by Purchaser, Purchaser may elect, at its expense, to examine, duplicate or repossess such
books and records and similar material,
(b) Internet Domain Names. Within twenty (20) days after the Closing, the Seller
shall take (or cause to be taken) whatever action is necessary to properly and validly assign
to the Purchaser any and all rights, title and interests the Seller may have in any domain
names, or to otherwise assist the Purchaser in obtaining the exclusive ownership interest in
such domain names.
E
BMW
SURVIVAL; INDEMNIFICATION BY SELLER AND SHAREHOLDER
7.1 Survival of Renresentations and Warranties. No party or other person entitled to
rode nnification under this Article 7 shall cominence any suit or proceeding alleging an
indemnity claim ("Indemnity Claim") under Section 7.2 or Section 7.3 below due to a breach
of any representation or warranty in this Agreement after the twelve-month anniversary of the
Closing Date, except (i) that there shall be no limits on the time form an indemnity
claim relating to a breach of the representations and/or warranties relating to a party's
authority, the Assets, and/or broker's fees and commissions, (ii) an indemnity claim relating to
a breach of the representations and warranties relating to the payment oftaxes] and Hazardous
Substances may be made until the date that is ninety days after the expiration ofthe applicable
statute of limitations period, and (iii) insofar as any party or other person entitled to
indemnification under this Article 7 shall have asserted in writing a specific Indemnity Claim
prior to the expiration of such twelve-month period (or longer period as described in this
Section 7. 1), in which event the representations or warranties alleged to have been breached in
such Indemnity Claim shall continue in effect and remain a is for indemnity solely with
respect to each such asserted claim until such claim is finally resolved.
7.2 Seller and Shareholder's Indemnification. Subject to the limitations contained in this
Aftisle 7 orally, defend an
, Seller and Shareholder shall jointly and severally rode d hold
harmless Purchaser and its affiliates and their respective officers, directors, agents, affiliates,
successors and assigns (collectively, "Buyer Indemnified Parties"), from and against and in
respect of any and all demands, claims, causes of action, administrative orders and notices,
losses, costs, fines, liabilities, penalties, damages, judgments, deficiencies, awards and
expenses (including, without limitation, reasonable attorney fees) (hereinafter collectively
called "Losses") resulting from, in connection with or arising out of, or any Claim relating to:
(a) Any inaccuracy or breach of any representation or warranty made by Seller and/or
Shareholder in this Agreement (provided, that for purposes of calculating Losses hereunder,
any materiality, Material Adverse Effect or similar qualification in such representations and
warranties shall be disregarded); and
(b) The failure of Seller or Shareholder to comply with any of the covenants in this
Agreement.
7.3 Purchaser's Indemnification. Subject to the limitations contained in this AArficle 7,
Purchaser shall indemnify, defend and hold harmless Seller and its affiliates and their
respective officers, directors, agents, affiliates, successors and assigns (collectively, "Seller
Indemnified Parties"), from and against and in respect of any and all demands, claims, causes
of action, administrative orders and notices, losses, costs, fines, liabilities, penalties, damages,
judgments, deficiencies, awards and expenses (including, without limitation, reasonable
attorney fees) (hereinafter collectively called "Losses") resulting from, in connection with or
arising out of, or any claim relating to:
E
(a) Any inaccuracy or breach of any representation or warranty made by Purchaser in this
Agreement (provided, that for purposes of calculating Losses hereunder, any materiality,
Material Adverse Effect or similar qualification in such representations and warranties shall
be disregarded); and
(b) The failure of Purchaser to comply with any of the covenants in this Agreement;
7.4 Indemnification Procedures, In the event that a third party files a lawsuit,
enforcement action or other proceeding against a party entitled to indemnification under this
Article 7 (an "Indemnified ParV') or the Indemnified Party receives notice of, or becomes
aware of a condition or event which otherwise entities such party to the benefit of any
indemnity hereunder in connection with a claim by a third party (a "Third Party Claim"), the
Indemnified Party shall give written notice thereof (the "Claim Notice") promptly to each
party obligated to provide indemnification pursuant to this Article 7 (an "Indemnifying
Parly"). All claims for indemnification by the Indemnified Party shall be bona fide. The
Claim Notice shall describe in reasonable detail the nature ofthe claim, including an estimate,
if practicable, of the amount of damages that have been or may be suffered or incurred by the
Indemnified Party attributable to such claim and the basis of the Indemnified Party's request
for indemnification under this Agreement. Notwithstanding the foregoing, failure by an
Indemnified Party to provide notice on a timely basis of a Third Party Claim shall not relieve
the Indemnifying Party of its obligations hereunder, unless, and then solely to the extent that,
the Indemnifying Party is prejudiced thereby.
(a) Conduct of Defense. The Indemnifying Party shall have the right upon written notice
to the Indemnified Party (the "Defense Notice") within fifteen Business Days of its receipt
from the Indemnified Party of the Claim Notice, to conduct at its expense the defense against
such Third Party Claim in its own name, or, if necessary, in the name of the Indemnified
Party; provided, however, that if the Indemnifying Party is Sellers and (A) the potential
aggregate amount of a Third Party Claim, together with all other pending claims hereunder, is
or is reasonably expected to be less than the Basket, or (B) Seller and/or Shareholder has
failed to acknowledge in writing their unconditional indemnification obligation with respect to
such Third Party Claim, or (C) such claim seeks injunctive or other equitable relief involving
Buyer, any of its Affiliates or the Business, Seller and/or Shareholder shall not be entitled to
conduct the defense against such claim. When the Indemnifying Party conducts the defense,
the Indemnified Party shall have the right to approve the defense counsel representing the
Indemnifying Party in such defense, which approval shall not be unreasonably withheld or
delayed, and in the event the Indemnifying Party and the Indemnified Party cannot agree upon
such counsel within ten Business Days after the Defense Notice is provided, then the
Indemnifying Party shall propose an alternate defense counsel, which shall be subject again to
the Indemnified Party's approval, which approval shall not be unreasonably withheld or
delayed.
(b) Conduct by Inc fled ° In the event that the Indemnifying Party shall fail to
give the Defense Notice within the time and as prescribed by Section 7.4, or if the
Indemnifying Party does not have the right to defend such Third Party Claim pursuant to
W
Section 7.4, then in either such event, the Indemnified Party shall have the sole right and
authority to conduct such defense. Failure at any time of the Indemnifying Party to diligently
defend a Third Party Claim as required herein shall entitle the Indemnified Party to assume the
defense and settlement of such Third Party Claim as if the Indemnifying Party had never
elected to do so as provided in this Section,
(c) Coo eration, In the event that the Indemnifying Party does deliver a Defense Notice
and thereby elects to conduct the defense of such Third Party Claim in accordance with
Section 7.4, the Indemnified Party will cooperate with and make available to the Indemnifying
Party such assistance, personnel, witnesses and materials as the Indemnifying Party may
reasonably request, all at the expense of the Indemnifying Party, Regardless of which party
defends such Third Party Claim, the other party shall have the right at its expense to
participate in the defense assisted by counsel of its own choosing; provided, that should the
Indemnified Party's counsel reasonably conclude that a conflict or potential conflict exists
between the Indemnifying Party and the Indemnified Party, the costs of such counsel may be
an indemnified Loss pursuant to this Article 7. Each Indemnified Party shall reasonably
consult and cooperate with each Indemnifying Party with a view towards mitigating Losses, in
connection with claims for which a party seeks indemnification under this Article 7.
(d) Settlements. Without the prior written consent of the Indemnified Party (which shall
not be unreasonably withheld or delayed), the Indemnifying Party (or any insurance carrier
defending such Third Party Claim on the Indemnifying Party's behalf) will not enter into any
settlement of any Third Party Claim if, pursuant to or as a result of such settlement, such
settlement (i) could lead to liability or create any financial or other obligation on the part of
the Indemnified Party for which the Indemnified Party is not entitled to indemnification
hereunder; (ii) does not release the Indemnified Party from any liability in connection with
such Third -Party Claim without cost or expense and without any admission of violation,
in unction or agreement to take or restrain from taking any action; and (iii) does not imposes
any expense, obligation or restriction upon the Indemnified Party or requires the Indemnified
Party to admit or acknowledge to any fact or event, including any violation of Law. If the
Indemnifying Party receives a fu-rn offer to settle a Third Party Claim, which offer the
Indemnifying Party is permitted to settle under this Section 7.4 and the Indemnifying Party
desires to accept such offer, the Indemnifying Party will give written notice to the Indemnified
Party to that effect, If the Indemnified Party objects to such firm offer within ten days after its
receipt of such notice, the Indemnified Party may continue to contest or defend such Third
Party Claim and, in such event, the maximum liability of the Indemnifying Party as to such
Third Party Claim will not exceed the amount of such settlement offer, plus costs and
expenses paid or incurred by the Indemnified Party up to the point such notice had been
delivered,
(e) Bindin Obligations. Anyjudgment entered or settlement agreed upon in the manner
Z_
provided herein shall be binding upon the Indemnifying Party, and shall be conclusively
deemed to be an obligation with respect to which the Indemnified Party is entitled to prompt
indemnification hereunder, subject to the Indemnifying Party's right to appeal an appealable
judgment or order.
M
7.5 Nature of Other Liabilities In the event any Indemnified Party should have a claim
against any Indemnifying Party hereunder which does not involve a Third Party Claim, the
Indemnified Party shall transmit to the Indemnifying Party a written notice (the "Indemnity
Notice") describing in reasonable detail the nature of the claim and the basis of the
Indemnified Party's request for indemnification under this Agreement. If the
Indemnifying Party does not notify the Indemnified Party within 45 days from its receipt of
the Indemnity Notice that the Indemnifying Party disputes such claim (a "Dispute
Notice"), the claim specified by the Indemnified Party in the Indemnity Notice shall,
subject to the Rather provisions of this Article 7, be deemed a liability of the Indemnifying
Party under this Article 7.
7.6 Exclusive Remedv. Except with respect to claims or causes of action arising from
criminal activity, intentional misrepresentation or fraud or claims of or causes of action
arising for which the sole remedy sought is equitable relief, the rights and obligations of
the parties under this Article VII are the exclusive rights and obligations of the parties with
respect to any breach of any representation, warranty, covenant or agreement in this
Agreement or any Transaction Docurnent and shall be in lieu of any other rights or
remedies to which the party entitled to indemnification hereunder would otherwise be
entitled as a result of such breach.
ARTICLE 8
TERMINATION
8.1 Termination. Purchaser may terminate the Agreement at any time prior to Closing if,
after notice of breach and opportunity to cure, Seller breaches any warranty or covenant
identified in Article 5 and/or Article 6 contained herein.
8.2 Effect of Termination. If this Agreement is validly terminated pursuant to Section 8.1
hereof, this Agreement will thereupon become null and void, and there will be no fiarther
liability or obligation on the part of the parties hereto (or any of their respective affiliates) in
connection with this Agreement except with respect to a failure by a Party to close after all
conditions to closing for his, her or its benefit have been satisfied or waived.
8.3 Terminating b Seller. In the event of Purchaser's breach of its obligation to Seller
hereunder, including but not limited to Purchaser's failure to close in accordance with Article
4 hereof, then Seller shall be entitled to terminate this Agreement.
9.1 Notices. All notices and other communications under this Agreement must be in
writing and will be deemed to have been duly given if delivered personally against written
receipt, sent by confirmed facsimile, sent by certified mail, return receipt requested, or sent by
a nationally recognized overnight courier service to the parties at the following addresses:
W
John Richmond
20 Calle Uno
Key West, FL 3340
Susan M. Cardenas, Esq.
Stones & Cardenas
221 Simonton Street
Key West, Fl, 33040
If to the Purchaser to:
Oscar J. Vila, III
Vila, Padron & Diaz, P.A.
201 Alhambra Circle, Ste. 702
Coral Gables, FL 33134
Fax: (305) 461-0261
All notices and other communications required or permitted under this Agreement that are
addressed and delivered as provided in this Article 9 will, if delivered personally, be deemed
given when delivered, against written receipt; will, if delivered by facsimile, be deemed
delivered when confirmed; will, if delivered by mail, be deemed delivered four (4) days after
deposit into the mail, and will, if sent by overnight courier, be deemed given when received.
Any party from time to time may change its address for the purpose of notices to that party by
giving a similar notice specifying a new address, but no such notice will be deemed to have
been given until it is actually received by the party sought to be charged with the contents
thereof.
MISCELLANEOUS
10.1 Entire Agree m=. This Agreement embodies the entire agreement and
understanding between the Seller and the Purchaser and supersedes all prior agreements,
understandings and documents relating to the subject matter hereof, This Agreement may
not be modified or amended or any to or provision hereof waived or discharged except
in writing signed by the party against whom such amendment, modification, waiver or
discharge is sought to be enforced.
10.2 Ex enses. Except as otherwise provided in this Agreement, the Seller and the
S_
Purchaser shall each pay their own expenses relating to or arising out of this transaction,
Im
including but not limited to legal and accounting expenses incident to the negotiation,
investigation and execution of this Agreement and the consurnmation of the transactions
contemplated hereby and whether or not such transactions shall be consummated.
10.3 mWaiver, Except as otherwise provided in this Agreement, any failure or delay on
the part of any party in exercising any power or right hereunder shall not operate as a
waiver thereof, nor shall any single or partial exercise of any such right or power preclude
any other or ffit-ther exercise thereof or the exercise of any other right or power hereunder
or otherwise available at law or in equity.
10.4 !Co�unte s. This Agreement may be executed in several counterparts, including
facsimiles, each of which shall be deemed an original, but all of which counterparts
collectively shall constitute one instrument.
10.5 No Third Pqrtv Rene - .The terms and provisions of this Agreement are
intended solely for the benefit of the parties hereto, and their respective successors, or
permitted assigns, and it is not the intention of the parties to confer third -party beneficiary
rights upon any other person.
10.6 Govern* ir Law/Forurn Selection. This Agreement shall be governed by the laws
of the State of Florida as such laws apply to transactions made and fully performed within
that state, without reference to conflicts of law principles. Purchaser and Seller agree that
any claims or defenses relating in any manner to this Agreement shall be filed and litigated
in a Federal or State of Florida Court within Miami -Dade County, Florida.
10.7 Binding Effect. All of the terms of this Agreement shall be binding upon each
party's successors and permitted assigns and shall inure to the benefit of and be
enforceable by such successors and permitted assignees; provided, however, that no party
may assign this Agreement, other than to one of their respective wholly -owned
subsidiaries (in which case, however, the assigning party shall remain bound under this
Agreement as a primary obligor with respect to such subsidiary's obligations), without the
prior written consent of (i) the Seller with respect to an assignment by a Purchaser, or (ii)
the Purchaser with respect to an assignment by the SellerlO.8. Headi ss Gender etc.
The headings used in this Agreement have been inserted for convenience and do not
constitute matter to be construed or interpreted in connection with this Agreement. Unless
the context of this Agreement otherwise requires, (a) words of any gender are deemed to
include each other gender; (b) the terms "hereof," "herein," "hereby," "hereto," and
derivative or similar words refer to this entire Agreement; (c) the terms "Article" or
"Section" refer to the specified Article or Section of this Agreement; (d) all references to
"dollars" or "S" refer to currency of the United States of America; and (a) the to
"including" is deemed to mean "including, without limitation."
10.8 Head.a Gender etc. The headings used in this Agreement have been inserted for
convenience and do not constitute matter to be construed or interpreted in connection with
24
this Agreement. Unless the context of this Agreement otherwise requires, (a) words of any
gender are deemed to include each other gender; (b) the terms "hereof," "herein,"
"hereby," "hereto," and derivative or similar words refer to this entire Agreement; (a) the
terms "Article" or "Section" refer to the specified Article or Section of this Agreement; (d)
all references to "dollars" or 'T' refer to currency of the United States of America; and (a)
the to "including" is deemed to one "including, without limitation."
10.9. Invalid Provisions. If any provision of this Agreement is held to be illegal, invalid,
or unenforceable under any present or future Law, and if the rights or obligations of the
Seller or the Purchaser under this Agreement will not be materially and adversely affected
thereby, (a) such provision will be fully severable; (b) this Agreement will be construed
and enforced as if such illegal, invalid, or unenforceable provision had never comprised a
part hereof, (c) the remaining provisions of this Agreement will remain in full force and
effect and will not be affected by the illegal, invalid, or unenforceable provision or by its
severance herefrom; and (d) in lieu of such illegal, invalid, or unenforceable provision,
there will be added automatically as a part of this Agreement a legal, valid, and
enforceable provision as similar in terms to such illegal, invalid, or unenforceable
provision as may be possible,
10.10 Schedules, The Schedules referred to herein are attached hereto and incorporated
by this reference. Disclosures included in any Schedule shall be considered disclosures for
all Schedules,
10.11 TiMLng. Time is of the essence in meeting the obligations and responsibilities of
this Agreement.
10.12. Mutual Product, The parties acknowledge that this Agreement is a product of
negotiation between sophisticated parties and individuals. Accordingly, the interpretation
of any ambiguity in language in this Agreement shall not be construed against any party.
SIGNATURE PAGE TO FOLLOW
M
IN WITNESS WHEREOF, the parties hereto have duly executed this Agreement as
oft e date Son above written,
CONCH FLYER, INC, a Florida
corporation
By:
Name: John Richmond
Title: President
SHAREHOLDEM
John Richmond
Purchaser.
COIN CONCESSIONS, LLC
By:
Q-Z-S ig
Title: A^
M
IN WITNESS WHERE, OF, the parties hereto have duly executed this Agreement as
of the date first above written,
SELLER:
CONCH FLY R9 INC
corporatipw
By, -
,'a e: dWn Richmend
M Title-
u President
Purchaser:
MASTER CONCESSIONAIR, ITC
By: _
Name:
Title:
26