SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the
Securities Exchange Act of 1934
________
Date of Report (Date of earliest event reported) July 8, 1997
-------------------------------
HIREL HOLDINGS, INC.
- --------------------------------------------------------------------------------
(Exact name of registrant as specified in its charter)
Delaware 0-28524 65-0666239
- --------------------------------------------------------------------------------
(State or other jurisdiction (Commission File (IRS Employer
or incorporation) Number) Identification No.)
650 SW 16th Terrace, Pompano Beach, FL 33069
- --------------------------------------------------------------------------------
(Address of principal executive offices, including zip code)
Registrant's telephone number, including area code (954) 942-5390
------------------------------
- --------------------------------------------------------------------------------
(Former name or former address, if changed since last report)
<PAGE>
Other Events.
Item 5.
- -------
On July 8, 1997 Hirel Holdings, Inc. (the "Company") entered into an
agreement ("Agreement") to acquire all of the assets, liabilities and contracts
of Jerry's Marine Service of Fort Lauderdale, Inc., a Florida corporation, and
Jerry's Marine Services, Inc., a South Carolina corporation (collectively
"JMS"). JMS is a distributor of marine engines and pads. In consideration for
the assets of JMS, the Company will pay $8,000,000, payable $5,000,000 in cash
at closing, and the remaining purchase price represented by a promissory note
payable in $1,000,000 increments at 12, 24 and 36 months following closing,
together with interest thereon at the prime rate plus one percent. Various
liabilities of JMS will be assumed by the Company, including loans payable to
the shareholders of JMS totaling approximately $750,000. The Promissory note
will be secured by a security interest in the purchased assets, if the audited
net asset amount exceeds $4,500,000 the purchase price will be increased by an
amount of such excess, not to exceed two million ($2,000,000) dollars, which
will be paid in cash. The closing date and time will be mutually agreed upon by
both parties, but in all events not later than 60 days following the completion
of the audit. The Company anticipates the closing to occur in the beginning of
the fourth quarter. It is contemplated that the Agreement will be assigned to a
wholly-owned subsidiary of the Company prior to closing.
The Agreement also provides that the Company will enter into employment
agreements (anticipated to be short term) with Helen Lewis, Joe Lewis, and Bobby
LaBorde. The agreements are anticipated to be entered into and effective upon
closing of the Agreement.
Item 8. Financial Statements, Pro Forma Financial Information and Exhibits
- -------
Exhibits
- --------
(a) Asset Purchase Agreement by and among Hirel Holdings, Inc,; Jerry's
Marine Services, Inc.; Jerry's Marine Service of Fort Lauderdale, Inc.; and
Helen Lewis, Joe Lewis, Bobby LaBorde and Douglas Lewis dated July 8, t997.
(b) Sale and Purchase Agreement by and between Jerry's Marine Service of
Fort Lauderdale and Hirel Holdings, Inc.
2
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, as
amended, the Registrant has duly caused this report to be signed on its behalf
by the undersigned hereunto duly authorized.
HIREL HOLDINGS, INC.
By: /s/ Vincent Montelione
-----------------------------------------
Vincent Montelione, President
DATED: July 23, 1997
3
ASSET PURCHASE AGREEMENT
BY AND AMONG
HIREL HOLDINGS, INC., A DELAWARE CORPORATION,
JERRY'S MARINE SERVICE, INC., A SOUTH CAROLINA CORPORATION
JERRY'S MARINE SERVICE OF FORT LAUDERDALE, INC.,
A FLORIDA CORPORATION
AND
HELEN LEWIS, JOE LEWIS, BOBBY LA BORDE AND DOUGLAS LEWIS
JULY 8, 1997
<PAGE>
ASSET PURCHASE AGREEMENT
------------------------
THIS ASSET PURCHASE AGREEMENT (the "Agreement") is made and entered into
as of the 8th day of July, 1997, by and among HIREL HOLDINGS, INC., a Delaware
corporation ("Purchaser"), and JERRY'S MARINE SERVICE, INC., a South Carolina
corporation ("Jerry's, Inc."), JERRY'S MARINE SERVICE OF FORT LAUDERDALE, INC.,
a Florida corporation ("Jerry's Fort Lauderdale") (Jerry's, Inc. and Jerry's
Fort Lauderdale are sometimes hereinafter referred to collectively as
"Sellers"), and HELEN LEWIS, JOE LEWIS, BOBBY LA BORDE and DOUGLAS LEWIS
(hereinafter referred to individually as "Shareholder" and collectively as
"Shareholders"). The Sellers and Shareholders shall be jointly and severally
liable hereunder.
W I T N E S S E T H:
WHEREAS, Sellers are each engaged in the business of distributing and
selling marine parts, components and accessories (their respective businesses
and operations are hereinafter referred to collectively as the "Business"); and
WHEREAS, subject to the terms and conditions hereinafter set forth,
Purchaser desires to acquire from Sellers and Sellers desire to transfer to
Purchaser, all the Purchased Assets (as hereinafter defined), which constitute
substantially all of the assets of Sellers, in exchange for Purchase Price (as
hereinafter defined); and
WHEREAS, the Shareholders constitute all of the shareholders of Sellers,
and will materially benefit from the transactions contemplated hereby.
NOW, THEREFORE, in consideration of the premises and the mutual covenants
of the parties hereinafter expressed, it is hereby agreed as follows:
ARTICLE I
RECITALS, EXHIBITS, SCHEDULES
-----------------------------
The foregoing recitals are true and correct and, together with the
schedules and exhibits referred to hereafter, are hereby incorporated into this
Agreement by this reference. Certain capitalized terms used herein are defined
in EXHIBIT A hereof.
ARTICLE II
TRANSFER OF ASSETS
------------------
2.1 PURCHASE AND SALE. At Closing, in exchange for the payment of the
Purchase Price and the assumption of the Assumed Liabilities, and subject to the
terms and conditions hereof, Sellers hereby agrees to sell, transfer, convey and
deliver to Purchaser, and Purchaser hereby agrees to purchase from Sellers all
of the Purchased Assets, free and clear of all Encumbrances, except for the
1
<PAGE>
Assumed Liabilities (as hereinafter defined). Sellers further agree that, in
consideration of the Purchase Price, it shall cause all Contracts included in
the Purchased Assets to be assigned to Purchaser free and clear of all
Encumbrances, except for the Assumed Liabilities, effective as of the Closing
Date, on the same terms and conditions as stated therein, with all consents
required for their assignment, and without further consideration on the part of
Purchaser. The term "Purchased Assets" shall mean all Assets that are owned or
leased by either of Sellers or used in connection with the Business excluding
only the Excluded Assets. Without limiting the generality of the foregoing, the
Purchased Assets shall include, but are not limited to, the following property
of Sellers:
(a) All Cash and cash equivalents of Seller as of the Closing
Date;
(b) All Equipment;
(c) All Accounts receivable;
(d) All Inventory;
(e) The Business as a going concern;
(f) All goodwill and going concern value of Sellers;
(g) All customer lists, price lists, business surveys and other
valuable business information and business records;
(h) All Intangibles, including, but not limited to, all rights of
Sellers to the name "Jerry's Marine Service" and any other names and marks used
by Sellers and any derivatives thereof;
(i) All Motor vehicles;
(j) All prepaid and deferred items of Sellers including, but not
limited to, prepaid rentals, insurance, unbilled charges and deposits relating
to the operations of Sellers;
(k) All Contracts and Contract Rights;
(l) All Permits;
(m) All telephone and facsimile numbers, yellow page
advertisements, and white pages listings; and
(n) That certain real property and personal property referenced in
that certain Agreement of Sale and Purchase executed on even date herewith
between Jerry's Fort Lauderdale and Purchaser.
2
<PAGE>
2.2 EXCLUDED ASSETS. The Purchased Assets exclude, and Purchaser shall
not purchase, the following "Excluded Assets" of Seller:
(a) Seller's rights under this Agreement;
(b) Warehouse and property described on Schedule 2.2 attached
hereto;
(c) Life Insurance Policy described on Schedule 2.2 attached
hereto;
(d) The vehicle described on Schedule 2.2 attached hereto;
(e) Any shares of capital stock of Seller which are owned and held
by Seller as treasury shares; and
(f) The corporate minutes books and stock records of Seller and
any other corporate records which pertain to the corporate organization and
capitalization of Seller;
2.3 ASSUMPTION OF LIABILITIES. Effective as of the Closing, Purchaser
shall only assume Sellers' Obligations to the extent expressly identified on
Schedule 2.3 hereof (collectively, the "Assumed Liabilities"). The term Assumed
Liabilities excludes, and Purchaser does not and will not assume nor shall
Purchaser be deemed to have any Obligation for, to cure, or to otherwise remedy,
any breach, any other Obligations of Sellers, any Obligations as to which any
representation or warranty made pursuant to this Agreement (whether made as of
the date hereof or as of the Closing Date) is untrue, inaccurate or misleading
in any respect, or any Obligation for any sum due prior to Closing or arising
from any breach of or default under any Contract that arises from facts or
circumstances occurring prior to closing . At Closing, Purchaser shall indemnify
Sellers from and against any and all liability, costs or damages for the Assumed
Liabilities.
2.4 PURCHASE PRICE. The purchase price ("Purchase Price") to be paid by
Purchaser to Seller for the Purchased Assets shall be Eight Million Dollars
($8,000,000.00), subject to adjustment as hereinafter provided. Except as
provided below, the Purchase Price shall be payable Five Million Dollars
($5,000,000.00) in cash at Closing ("Closing Cash") and the balance in three
annual installments commencing on the first anniversary of the Closing Date
pursuant to a promissory note in the form of Exhibit B annexed hereto and made a
part hereof ("Promissory Note").
The Promissory Note shall be secured by a security interest in the
Purchased Assets (other than the real property referenced in Section 2.1(n)
hereof) pursuant to a security agreement in form reasonably satisfactory to
Sellers, which security interest shall be subject and subordinated to any
financing obtained by Purchaser solely for the continuing operations and
expansion of the Jerry's Marine Service Business exclusively. Purchaser
covenants that any and all proceeds from the sale of the real property
referenced in Section 2.1(n) hereof, together with the proceeds from any
financings secured by any assets of the Business, shall be used solely and
exclusively for the continuing operations and expansion of the Business. The
3
<PAGE>
Purchaser shall covenant that until the Promissory Note is paid in full to (i)
continue to use the name "Jerry's Marine Service" in the operation of the
Business, (ii) continue to operate out of locations in Broward County, Florida
and Charlston, South Carolina, and (iii) operate the Business as an independent
division or subsidiary. The security agreement shall further provide that Seller
shall have the right to conduct a quarterly audit of the inventory of the
Business at Seller's sole and exclusive expense and without disruption to the
business operations of the Business. Any overtime expense of employees of
Purchaser (including benefits) incurred in connection with such audit shall be
borne by Seller. Purchaser shall provide to Seller without expense the results
from an annual audit to be conducted by Purchaser.
To the extent of any shareholder loans assumed by Purchaser pursuant to
Section 2.3 hereof, the Promissory Note shall be increased by the amount of the
shareholder loans, with the repayment of the principal of the loans to be made
in equal annual installments.
Purchaser shall engage a firm of certified public accountants reasonably
acceptable to Sellers to complete an audit of the Sellers for the five (5)month
period ended May 31, 1997, which will include an audited balance sheet, prepared
in accordance with GAAP, of Sellers at May 31, 1997 ("May 1997 Balance Sheets").
If the aggregate amount of Sellers' total assets minus total liabilities
computed in accordance with GAAP ("Net Asset Amount"), determined based upon the
May 1997 Balance Sheets ("Audited Net Asset Amount") is less than Four Million
Five Hundred Thousand Dollars ($4,500,000.00), Purchaser shall have the option
to rescind this Agreement in its entirety and shall have no obligation to
Sellers whatsoever, by delivering written notice to Sellers of recision within
thirty (30) days following the receipt by Purchaser of written notice of the
Audited Net Asset Amount.
2.5 ADJUSTMENT OF PURCHASE PRICE. The Purchase Price shall be adjusted
as follows: If the Audited Net Asset Amount exceeds Four Million Five Hundred
Thousand Dollars ($4,500,000), the Purchase Price shall be increased by the
amount of such excess, not to exceed an increase of Two Million Dollars
($2,000,000.00), which amount shall be paid in cash to Sellers at closing.
2.6 ALLOCATION OF PURCHASE PRICE. For federal income tax purposes, the
parties agree that Purchase Price shall be allocated as set forth on Schedule
2.6 hereof.
2.7 CLOSING DATE. The closing of the transactions provided for herein
("Closing") shall take place at the offices of the law firm of Ruden, McClosky,
Smith, Schuster & Russell, P.A., 200 East Broward Boulevard, Fort Lauderdale,
Florida 33301, at such date and time as may be mutually agreed upon in writing
by Purchaser and Sellers, but in all events not later than 60 days following the
completion of the audit described in Section 2.4 hereof ("Closing Date").
ARTICLE III
REPRESENTATIONS AND WARRANTIES OF SELLERS AND SHAREHOLDERS
----------------------------------------------------------
The Sellers and Shareholders hereby make the following representations and
warranties to Purchaser, each of which Sellers and Shareholders represent to be
4
<PAGE>
true and correct on the date hereof and (except as the Sellers and Shareholders
may notify the Purchaser in writing prior to Closing) shall be deemed made again
as of the Closing Date and represented by the Sellers and Shareholders to be
true and correct on the Closing Date:
3.1 ORGANIZATION. Jerry's, Inc. is a corporation duly organized, validly
existing and in good standing under the Laws of the State of South Carolina.
Jerry's Fort Lauderdale is a corporation duly organized, validly existing and in
good standing under the Laws of the State of Florida. Sellers have no
subsidiaries or interest in any other Person, and are not required to be
qualified or licensed as a foreign corporation in any jurisdiction in which the
failure to be so qualified or licensed would have a materially adverse effect on
the Business. Each Seller has the full power and authority to own all its Assets
and to conduct the Business as and where the Business is conducted. Accurate,
current, and complete copies of the Articles of Incorporation and Bylaws of each
Seller and, if any, all fictitious name registrations of each Seller have been,
delivered to the Purchaser at or prior to the execution of this Agreement. The
Shareholders constitute all the shareholders of Sellers.
3.2 AUTHORITY AND APPROVAL OF AGREEMENT.
(a) The execution and delivery of this Agreement by each Seller
and the performance of all their respective obligations hereunder have been duly
authorized and approved by all requisite corporate action on the part of the
Sellers pursuant to applicable Law, which included unanimous approval by its
Board of Directors and all its shareholders, and said authorization and approval
has not been altered, amended or revoked. Pursuant to said authorization and
approval, each Seller has the power and authority to execute and deliver this
Agreement and to perform all its obligations hereunder.
(b) This Agreement and each of the other documents, instruments
and agreements executed by the Sellers or Shareholders in connection herewith
constitute the valid and legally binding agreements of such Person enforceable
against such Person in accordance with its terms, except that: (i)
enforceability may be limited by applicable bankruptcy, insolvency,
reorganization, moratorium or similar laws of general application affecting the
enforcement of the rights and remedies of creditors; and (ii) the availability
of equitable remedies may be limited by equitable principles.
3.3 NO VIOLATIONS. The execution, delivery or performance of this
Agreement or any other documents, instruments or agreements executed by the
Sellers or Shareholders in connection herewith, and the consummation of the
transactions contemplated hereby and thereby, do not and will not: (i)
constitute a violation of or default under (either immediately, upon notice or
upon lapse of time) the Articles of Incorporation or Bylaws of either Seller,
any provision of any Contract to which either Seller or the Purchased Assets may
be bound, any Judgment or any Law; or (ii) result in the creation or imposition
of any Encumbrance upon, or give to any third person any interest in or right
to, any of the Purchased Assets; or (iii) result in the loss or adverse
5
<PAGE>
modification of, or the imposition of any fine or penalty with respect to, any
Permit or franchise granted or issued to, or otherwise held by or for the use
of, either Seller.
3.4 FINANCIAL STATEMENTS. Attached hereto as Schedule 3.4 are financial
statements of each Seller ("Financial Statements"), including compiled balance
sheets and statements of operations for the fiscal years ended December 31, 1995
and December 31, 1996 and Balance Sheets of Sellers at March 31, 1997 ("Latest
Balance Sheets"). The Financial Statements are true, correct and complete, were
prepared in accordance with the accrual method of accounting, but not in
accordance with GAAP, and accurately reflect each Seller's financial condition
and the results of its operations for the periods and as of the dates which they
purport to cover. Sellers agree that Purchaser, at Purchaser's expense, shall
engage a firm of certified public accountants reasonably acceptable to Sellers
to complete an audit of Sellers for the fiscal years ended December 31, 1995 and
1996 which will include audited balance sheets, prepared in accordance with
GAAP, of Sellers at December 31, 1995 and 1996.
3.5 CONDUCT SINCE DATE OF UNAUDITED STATEMENTS. Except as disclosed in
Schedule 3.5 hereto, none of the following have occurred since March 31, 1997:
(a) Any change in the Purchased Assets, Obligations, Business,
financial condition, prospects or operations of either Seller which individually
or in the aggregate have had or may have any material adverse effect on the
Purchased Assets, the Assumed Liabilities, or the Businesses, financial
condition, prospects or operations of Sellers, nor are there any circumstances
known to Sellers which might result in such change or such an effect;
(b) Any damage, destruction or loss, whether or not covered by
insurance, adversely affecting the Purchased Assets or Businesses;
(c) Any disposition, lease or Encumbrance of the Businesses, the
Purchased Assets, or increase of indebtedness of or guaranteed by either Seller,
other than in the ordinary course of business consistent with past practices;
provided, however, that no such disposition, lease or Encumbrance, regardless of
the consideration therefor, has been made between each Seller, and any of its
shareholders, directors, officers, agents, contractors or employees (or any
member of their respective families);
(d) Any transaction entered into by each Seller other than in the
ordinary course of business consistent with past practices;
(e) Any notice received by each Seller of any actual or threatened
labor dispute or any event or condition of any character which has had or can
reasonably be expected to have a material adverse effect on the Businesses, the
Purchased Assets or the financial condition, operations or prospects of the
Sellers;
6
<PAGE>
(f) Any change in the accounting principles followed by each
Seller or the methods of applying such principles; or
(g) Any Contract binding each Seller to do or take any of the
actions referred to in this Section 3.5.
3.6 TITLE TO ASSETS. Except as set forth in Schedule 3.6 hereto, the
Sellers are the sole and unconditional owner of and has good, valid and
marketable title to all the Purchased Assets, free and clear of all
Encumbrances, except for the Assumed Liabilities, and there exists no
restriction on the transfer or use of the Purchased Assets. Schedule 3.6 hereto
also includes an accurate, current and complete list of each lease or sublease
of Equipment to which each Seller is a party or by which each Seller may be
bound and a description of all Equipment leased under each such lease or
sublease. All Equipment included in the Purchased Assets or leased by each
Seller, is in good working order and is free of any defects which might impair
its usefulness, and is adequate and sufficient for all current operations of
Sellers. There are no materially dangerous conditions with respect to any
Purchased Asset. Upon the execution hereof, legal and beneficial ownership of
the Purchased Assets will be vested in Purchaser free and clear of all
Encumbrances except as set forth in Schedule 3.6 hereto.
3.7 LEASE OF REAL PROPERTY. Schedule 3.7 hereto is an accurate,
complete, current, and complete list of each lease or sublease of Real Property
to which either Seller is a party or by which either Seller may be bound and a
description of the Real Property leased thereunder. With respect to each lease
or sublease of a Seller described on Schedule 3.7 hereto: (i) the Seller has
been in peaceful possession of the property leased thereunder and neither the
Sellers nor the landlord (to the knowledge of such Seller) is in default
thereunder; (ii) no waiver, indulgence or postponement of any of the Obligations
thereunder has been granted by the lessee or lessor thereunder; and (iii) there
exists no event, occurrence, condition, or act known to such Seller which upon
notice or lapse of time would be or become a default thereunder. No Seller has
violated or breached any provision of any such lease or sublease, and all
Obligations required to be performed by each Seller under any such lease or
sublease have been fully and properly performed. Except as set forth on Schedule
3.7 hereto, no Consent of any Person is required under any such lease or
sublease in order for such lease or sublease to continue to be valid and
subsisting and entitle Purchaser to come into and remain in possession of the
premises demised thereunder after the consummation of the transactions
contemplated by this Agreement.
3.8 ENVIRONMENTAL MATTERS.
(a) Each Seller has obtained all Permits which are required in
connection with the conduct of the Businesses under applicable Laws, and is in
full compliance with all Laws, relating to pollution or protection of the
environment including, but not limited to, Laws relating to emissions,
discharges, releases or threatened releases of pollutants, contaminants,
chemicals, or industrial, toxic or hazardous substances or wastes into the
environment (including without limitation ambient air, space water, groundwater,
7
<PAGE>
or land), or otherwise relating to the manufacture, processing, distribution,
use, treatment, storage, disposal, transport, or handling of pollutants,
contaminants, chemicals, or industrial, toxic or hazardous substances or wastes
("Environmental Matters").
(b) Each Seller is in full compliance in the conduct of the
Businesses with all terms and conditions of the required Permits and is also in
full compliance with all other limitations, restrictions, conditions, standards,
prohibitions, requirements, obligations, schedules and timetables contained in
those Laws or contained in any Judgment, notice or demand letter issued,
entered, promulgated or approved thereunder.
(c) Neither Seller is aware of, nor has either Seller received
notice of, any past, present or future events, conditions, circumstances,
activities, practices, incidents, actions or plans which may interfere with or
prevent compliance or continued compliance with those Laws or any Judgment,
notice or demand letter issued, entered, promulgated or approved thereunder, or
which may give rise to any common law or legal liability, or otherwise form the
basis of any Proceeding, based on or related to the manufacture, processing,
distribution, use, treatment, storage, disposal, transport, or handling, or the
emission, discharge, release or threatened release into the environment, of any
pollutant, contaminant, chemical, or industrial, toxic or hazardous substance or
waste.
(d) There is no civil, criminal or administrative Proceeding
pending or threatened against either Seller in connection with the conduct of
the Businesses relating in any way to those laws, or injunctions, notice or
demand letter issued, entered, promulgated or approved thereunder.
3.9 ASSETS REQUIRED FOR OPERATION. The Purchased Assets comprise all of
the Assets used in or required for the operation of the Businesses in the manner
and to the extent currently conducted. No Excluded Asset constitutes property or
rights material to the Businesses. All of the Purchased Assets are located at
one of the Premises.
3.10 CUSTOMERS. Attached as Schedule 3.10 is a accurate, current and
complete list of the names of each of the Seller's material customers as of date
hereof, their addresses and telephone numbers. Schedule 3.10 also includes a
copy of all Contracts with customers. Neither Seller has been notified nor has
any reason to believe, that any of its customers will not continue to do
business with Purchaser after the consummation of the transaction contemplated
hereby as and to the extent such customer is currently doing business with such
Seller.
3.11 OTHER CONTRACTS. Schedule 3.11 hereto is an accurate, current and
complete list and description of each of the Contracts to which either Seller is
a party or by which either Seller or any of their Assets are bound, excluding
any Contracts which are Excluded Assets. Each such Contract is a valid and
binding obligation of the parties thereto in accordance with the terms and
conditions thereof. No party to any such Contract is in default with respect to
any term or condition thereof, nor has any event occurred which, through the
passage of time or the giving of notice, or both, would constitute a default
thereunder or would cause the acceleration of any obligation of any party
thereto. Except as set forth on Schedule 3.11 hereto, no Contract described on
8
<PAGE>
Schedule 3.11 hereto: (a) is in excess of the normal, ordinary, usual, and
current requirements of the Businesses, or provides for expenditures by either
Seller in excess of the current reasonable market price for the particular goods
or services; (b) is a Contract: (i) that either Seller knows or has reason to
believe is likely to result in a loss to either Seller; (ii) that is pursuant to
terms or conditions which either Seller cannot reasonably expect to satisfy or
fulfill in their entirety; or (iii) that will not continue to be effective in
accordance with its terms subsequent to the transaction contemplated hereby
without additional consideration to or the consent or authorization of any third
party to this Agreement; or (c) is not cancelable by either Seller giving thirty
(30) days notice or less, without liability, penalty or premium. Except as
identified in Schedule 3.11 hereto, there are no outstanding offers, bids,
proposals or quotations made by either Seller which, if accepted, would create a
Contract with such Seller.
3.12 BOOKS AND RECORDS. Each Seller's books and records accurately
reflect all of such Seller's Assets, Obligations and accruals, and all
transactions (normally reflected in books and records in accordance with the
accrual method of accounting) to which such Seller is or was a party or by which
each Seller or any of its Assets are or were affected.
3.13 TAX RETURNS. Each Seller has duly and timely filed with the
appropriate governmental agencies all tax and other returns and reports required
by any Law to be filed by it and all such returns and reports have been
accurately prepared and properly completed. All such Tax Returns properly
reflect all material liabilities of such Seller for Taxes for the periods,
property or events covered thereby. Accurate and complete copies of all such
returns and reports filed by each Seller during the past three (3) years have
been delivered to Purchaser.
3.14 TAXES. All Taxes due, owing and payable by each Seller have been
fully paid. No claim for any Tax due from or assessed against any Seller is
being contested. Except as set forth on Schedule 3.14 hereto, none of either
Seller's Tax returns or reports have been audited by the Internal Revenue
Service or any state or local Tax authority, and neither Seller has received any
notice of deficiency or other adjustment from the Internal Revenue Service or
any state or local Tax authority. There are no agreements, waivers, or other
arrangements providing an extension of time with respect to the assessment of
any Tax against either Seller, nor are there any Tax Proceedings now pending or
threatened against either Seller. Each Seller has made all deposits required by
Law, to be made with respect to employees' withholding and other employment
taxes. No state of facts exists or has existed, nor has any event occurred,
which would constitute grounds for the assessment of any further Tax against
either Seller.
3.15 PROCEEDINGS. Neither Seller is a party to, the subject of, or
threatened with any Proceeding nor, to the best of each Seller's knowledge, is
there any basis for any Proceeding. Neither Sellers is contemplating the
institution of any Proceeding.
3.16 OTHER LIABILITIES. No claim of breach of Contract, tort, product
liability or other claim (whether arising from either Seller's Businesses or
otherwise), contingent or otherwise, has been asserted or threatened against
either Seller nor, to the best of either Seller's knowledge, is capable of being
9
<PAGE>
asserted by any employee, creditor, claimant or other Person against either
Seller, except for claims for warranty arising in the ordinary course of the
business of either Seller. No state of facts exists or has existed, nor has any
event occurred, which could give rise to the assertion of any such claim by any
Person.
3.17 PERMITS. Schedule 3.17 lists all Permits obtained by either Seller
to operate the Businesses. Each Seller has obtained and presently hold all
Permits which are required under applicable Law to conduct the Businesses as and
where currently conducted. All such Permits are in effect, are included in the
Purchased Assets and are transferable to Purchaser, and no Consent of any Person
is required in connection with any such Permit for the transactions contemplated
by this Agreement. Neither Seller is in default under, nor has it received any
notice of any claim of default or any other notice with respect to, any such
Permit.
3.18 CONSENTS. The execution, delivery and performance by each Seller of
this Agreement and the consummation by each Seller of the transactions
contemplated hereby do not require any Consent that has not been received prior
to the date hereof.
3.19 JUDGMENTS. There is no outstanding Judgment against either Seller or
against or affecting any of the Purchased Assets or the Businesses. There is no
health or safety problem involving or affecting either Seller or the Purchased
Assets. There are no open workmen's compensation claims against either Seller,
or any contingent liability of either Seller, or any other Obligation, fact or
circumstance which would give rise to any right of indemnification on the part
of any current or former shareholder, director, officer, employee or agent of
either Seller, or any heir or personal representative thereof, against either
Seller or any successor to the businesses of either Seller.
3.20 BROKERAGE FEES. There is no Person acting on behalf of either Seller
who is entitled to or has any claim for any brokerage or finder's fee or
commission in connection with the execution of this Agreement or the
consummation of the transactions contemplated hereby.
3.21 COMPLIANCE WITH LAWS. Each Seller, and the Businesses are in full
compliance with all Laws.
3.22 LABOR AGREEMENTS, EMPLOYEE BENEFIT PLANS AND EMPLOYMENT AGREEMENTS.
Except as reflected in Schedule 3.22 attached hereto, neither Seller is a party
to: (i) any union collective bargaining or similar agreement; (ii) any profit
sharing, pension, retirement, deferred compensation, bonus, stock option, stock
purchase, retainer, consulting, health, welfare or incentive plan or agreement
or other Employee Benefit Plan, whether legally binding or not; (iii) any plan
providing for "fringe benefits" to its employees, including, but not limited to,
vacation, disability, sick leave, medical, hospitalization and life insurance
and other insurance plans, or related benefits; or (iv) any employment
agreement, severance agreement, noncompete agreement or other Contract with any
of its employees.
10
<PAGE>
3.23 LABOR DISPUTES; UNFAIR LABOR PRACTICES. There is no pending or
threatened labor dispute, strike or work stoppage which affects or which may
affect the Businesses or which may interfere with the continued operation of the
Businesses. Neither of the Sellers nor any agent, representative or management
employee of either Seller has committed any unfair labor practice as defined in
the National Labor Relations Act of 1947, as amended. There is not now pending
or threatened any charge or complaint against the Sellers by the National Labor
Relations Board or any representative thereof.
3.24 OVERTIME, BACK WAGES, VACATION AND MINIMUM WAGES. No present or
former employee of either Seller has any claim (whether under federal or state
Law, any employment agreement or otherwise) on account of or for: (i) overtime
pay, other than overtime pay for the current payroll period; (ii) wages or
salary for any period other than the current payroll period; (iii) vacation,
time off or pay in lieu of vacation or time off, other than that earned in
respect of the current Calendar Year, or (iv) any violation of any statute
ordinance or regulation relating to minimum wages or maximum hours of work.
3.25 DISCRIMINATION AND OCCUPATIONAL SAFETY STATUTES AND REGULATIONS. No
Person or party (including, but not limited to, governmental agencies of any
kind) has any claim or basis for any Proceeding against either Seller arising
out of any Law relating to discrimination in employment or to employment
practices or occupation safety and health standards.
3.26 EMPLOYEES, CONTRACTORS AND AGENTS. Set forth on Schedule 3.26
annexed hereto is a complete list of each Seller's employees, contractors and
agents, their respective positions with the Sellers, and the compensation and
all vacation and other benefits they are entitled to receive from the Sellers.
Except as set forth on Schedule 3.26, neither Seller has any reason to believe
that any of its employees, contractors or agents will not continue their
employment/service with Purchaser following the consummation of the transactions
contemplated herein.
3.27 INSURANCE. The Assets, Businesses and operations of each Seller are
insured under various policies of general liability and other forms of
insurance, all of which are listed on Schedule 3.27. All such policies are in
full force and effect in accordance with their terms, no notice of cancellation
has been received, and there is no existing default or event which with the
giving of notice or lapse of time, or both, would constitute a default
thereunder. All premiums to date have been paid in full. No Seller has been
refused any insurance, nor has its coverage been limited, beyond the normal
scope of policy limitations, by any insurance carrier to which they have applied
for insurance or with which they have carried insurance during the past five (5)
years.
3.28 RELATED PARTIES TRANSACTIONS. Schedule 3.28 sets forth a complete
list of all contracts and business transactions between a Seller and any
shareholder, officer, director or employee or the spouse of any officer,
director or employee or shareholder of either Seller.
3.29 SUPPLIERS. Schedule 3.29 sets forth a true, correct and complete
list of the names and addresses of all of the material suppliers of each Seller.
11
<PAGE>
None of such suppliers has notified either Seller that it intends to discontinue
its relationship with Sellers or that it will not continue that relationship
with Purchaser following the consummation of the transactions contemplated
herein.
3.30 INTANGIBLES. Schedule 3.30 lists all patents, copyrights, trademarks
and other Intangibles owned or used by either Seller (specifying, as to each,
whether owned or licensed and, if the latter, the licensor). There are no
Proceedings pending or threatened with respect to any Intangible owned or used
by either Seller. Neither Seller has granted any license to any other Person
with respect to any Intangible. Neither Seller infringes upon or unlawfully or
wrongfully use any Intangible owned or claimed by any other Person. Except as
reflected in Schedule 3.30, no present or former employee of either Seller or
any other Person owns or has any proprietary, financial or other interest,
direct or indirect, in whole or in part, in any Intangible which either Seller
owns, possesses or uses in the Businesses. Neither Seller is a party to a
noncompetition, confidentiality or nondisclosure agreement, nor is any present
or former employee of either Seller a party to any such agreement, except for
such agreements between each Seller and its employees set forth in Schedule
3.26.
3.31 ACCOUNTS. Set forth on Schedule 3.31 attached hereto is an accurate
and complete list showing (a) the name and address of each bank and brokerage
firm in which either Seller has an account or safe deposit box, the number of
any such account or any such box and the names of all persons authorized to draw
thereon or to have access thereto; and (b) the names of all persons, if any,
holding powers of attorney from either Seller with respect to such bank or
brokerage account and a summary statement of the terms thereof.
3.32 ACCOUNTS RECEIVABLE. Schedule 3.32 contains a true and accurate
aging schedule of all Accounts Receivable of each Seller as of March 31, 1997.
Except as disclosed on Schedule 3.32, (a) each Account Receivable represents a
sale made in the ordinary course of business by a Seller which arose pursuant to
an enforceable written Contract for a bona fide sale of goods or for services
performed and such Seller has performed all its obligations to produce the goods
or perform the services to which such Account Receivable relates, and (b) to the
best of each Seller's knowledge and belief, no Account Receivable is subject to
any claim for reduction, counterclaim, setoff, recoupment or other claim for
credit, allowances or adjustments by the obligor thereof. Except as reserved
against in the Balance Sheet or as set forth on Schedule 3.32, all Accounts
Receivable are collectible in full within the terms under which such Accounts
Receivable arose.
3.33 ACCOUNTS PAYABLE. Schedule 3.33 hereto contains a true and accurate
aging schedule of all accounts payable of each Seller as of March 31, 1997.
Except as disclosed on Schedule 3.33, (a) each account payable represents an
obligation of each Seller incurred in the ordinary course of the Businesses for
goods sold to, or for bona fide services performed for, each Seller; and (b) no
claim for reduction, counterclaim, setoff, recoupment or other claim for credit,
allowances or adjustments has been made by each Seller with respect to any such
accounts payable.
3.34 IMPROPER PAYMENTS. Neither of Seller's, nor any of their current
shareholders, directors, officers, or employees or agents, nor any Person acting
12
<PAGE>
on behalf of either Seller, has directly or indirectly, made any bribe, kickback
or other payment of a similar or comparable nature, whether lawful or not, to
any person, public or private, regardless of form, whether in money, property or
services, to obtain favorable treatment for business secured or special
concessions already obtained for the benefit of either Seller. No funds or
Assets of either Seller were donated, loaned or made available directly or
indirectly for the benefit of, or for the purpose of supporting or opposing, any
government or subdivision thereof, political party, candidate or committee,
either domestic or foreign. Neither Seller has maintained and does not maintain
a bank account, or any other account of any kind, whether domestic or foreign,
or which account was not listed, titled or identified in the name of such
Seller.
3.35 NET ASSET AMOUNT AT CLOSING. The aggregate Net Asset Amount of
Sellers as of the date of Closing shall not be less than the Sellers' aggregate
Audited Net Asset Amount.
ARTICLE IV
PURCHASER'S REPRESENTATIONS AND WARRANTIES
------------------------------------------
Purchaser hereby makes the following representations and warranties to the
Sellers, each of which Purchaser represents to be true and correct on the date
hereof, and (except as the Purchaser may notify the Sellers in writing prior to
Closing) shall be deemed made again as of the Closing Date and represented by
the Purchaser to be true and correct on the Closing Date.
4.1 ORGANIZATION. Purchaser is a corporation. Purchaser has been duly
organized, is validly existing and in good standing under the laws of the State
of Delaware and has the full power and authority to own all its Assets and to
conduct its business as and where its business is presently conducted.
4.2 AUTHORITY AND APPROVAL OF AGREEMENT.
(a) The execution and delivery of this Agreement by Purchaser and
the performance of all Purchaser obligations hereunder have been duly authorized
and approved by all requisite corporate action on the part of Purchaser pursuant
to applicable Law. Purchaser has the power and authority to execute and deliver
this Agreement and to perform all its obligations hereunder.
(b) This Agreement and each of the other documents, instruments
and agreements executed by Purchaser in connection herewith constitute the valid
and legally binding agreements of Purchaser, enforceable against Purchaser in
accordance with their terms, except that: (i) enforceability may be limited by
applicable bankruptcy, insolvency, reorganization, moratorium or similar laws of
general application affecting the enforcement of the rights and remedies of
creditors; and (ii) the availability of equitable remedies may be limited by
equitable principles.
13
<PAGE>
4.3 NO VIOLATIONS. The execution, delivery or performance of this
Agreement or any other documents, instruments or agreements executed by the
Purchaser in connection herewith, and the consummation of the transactions
contemplated hereby, do not and will not constitute a violation of or default
under (either immediately, upon notice or upon lapse of time) the Articles of
Incorporation or Bylaws of the Purchaser, any provision of any Contract to which
the Purchaser may be bound, any Judgment or any Law.
4.4 BROKERAGE FEES. There is no Person acting on behalf of the Purchaser
who is entitled to or has any claim for any brokerage or finder's fee or
commission in connection with the execution of this Agreement or the
consummation of the transactions contemplated hereby.
4.5 CONSENTS. The execution, delivery, and performance by Purchaser of
this Agreement and the consummation by Purchaser of the transactions
contemplated hereby do not require any Consent that has not been received prior
to the date hereof.
4.6 FULL DISCLOSURE. All the representations and warranties made by
Purchaser herein or in any schedule hereto, and all of the statements, documents
or other information pertaining to the transaction contemplated herein made or
given by Purchaser, its agents or representatives are true and complete, and do
not omit any information required to make the statements or information
provided, in light of the transactions contemplated herein, true, complete and
non-misleading.
ARTICLE V
INTERPRETATION AND SURVIVAL OF
------------------------------
REPRESENTATIONS AND WARRANTIES
------------------------------
5.1 INTERPRETATION. Each warranty and representation made by a party in
this Agreement or pursuant hereto is independent of all other warranties and
representations made by the same party in this Agreement or pursuant hereto
(whether or not covering identical, related or similar matters) and must be
independently and separately satisfied. Exceptions or qualifications to any such
warranty or representation shall not be construed as exceptions or
qualifications to any other warranty or representation.
5.2 RELIANCE BY PURCHASER. Notwithstanding the right of Purchaser to
investigate the Sellers, its Business and the Purchased Assets, and
notwithstanding any knowledge of facts determined or determinable by them as a
result of such investigation or right of investigation, Purchaser has the
unqualified right to rely upon the representations and warranties made by the
Sellers in this Agreement and in the Schedules attached hereto or pursuant
hereto.
5.3 SURVIVAL. All representations and warranties made in this Agreement
or pursuant hereto shall survive the date hereof, the consummation of the
transactions contemplated hereby, and any investigation.
14
<PAGE>
ARTICLE VI
OBLIGATIONS PRIOR TO CLOSING
----------------------------
6.1 CONDUCT OF THE CORPORATION PENDING CLOSING. During the period from
the date hereof until the Closing Date, except with the express prior written
consent of the Purchaser, each Seller shall:
(a) maintain its existence in good standing in its state of
domicile and each other jurisdiction where it is required to be licensed or
qualified as a foreign corporation;
(b) duly and timely file all returns and reports it is required by
Law to file, promptly pay when due all Taxes assessed against it or any of its
Assets, and conform to and fully comply with all the Laws pertaining to the
Businesses;
(c) conduct the Businesses in a good and diligent manner
consistent with past practices, not make any change in its business practices
and in good faith use its best efforts to preserve the Business intact, keeping
available the services of its current officers, employees, salesmen, agents, and
representatives, and maintain the goodwill of its suppliers, customers and other
Persons having business relations with the Sellers;
(d) maintain all its tangible Assets in good working order and
repair and conform to and fully comply with all terms and conditions pursuant to
which any such Assets are held;
(e) maintain in full force and effect all insurance policies and,
if any of the Purchased Assets are damaged or destroyed by fire or other
casualty, whether or not insured, it shall promptly proceed with the repair,
restoration or replacement thereof;
(f) not alter or amend its Articles of Incorporation or Bylaws;
(g) not increase the compensation or rate of compensation or
extraordinary benefits payable or to become payable to, any of the its
directors, officers, employees, salesmen, agents, or representatives or pay any
of the foregoing Persons any bonus and not hire any new employees, agents or
representatives, except to replace positions existing as of the date hereof at
compensation comparable to that of the position being replaced, or otherwise
make any material changes in any of its employment arrangements;
(h) keep the Purchaser advised of all material aspects of the
operation of the Businesses;
(i) not adopt or enter into an Employee Benefit Plan or alter any
existing Employee Benefit Plan, if any;
15
<PAGE>
(j) not create any Obligation for borrowed money and not make any
loans or advances to, or assume, guarantee, endorse, or otherwise become liable
with respect to any Obligation of, any Person, or commit for any capital
expenditure whatsoever, or abandon or sell any of its Assets other than
Inventory sold in the ordinary course of Business;
(k) not perform or omit to perform any act which will cause a
breach of or default under any Contract to which it is a party or by which it or
its Assets may be bound and to take all action necessary to maintain the use and
value of all Permits and Intangibles;
(l) not waive any right of material value; and
(m) not take any action, or enter into any Contract which requires
or commits the Sellers to take any action, which would be inconsistent with any
of the foregoing provisions of this Section 6.1.
6.2 CONSENTS. Sellers shall obtain, on or before the Closing Date, all
Consents required to consummate the transactions contemplated hereby, without
causing any breach or failure of any warranty or representation made by the
Sellers in this Agreement or pursuant hereto, and without causing any breach or
default of any term or condition of this Agreement to be satisfied or performed
by the Sellers.
6.3 INVESTIGATION. From the date of this Agreement until Closing, unless
this Agreement is terminated in accordance with Article X hereof, each Seller
shall permit the Purchaser, their attorneys, accountants, and its other
advisors, authorized representatives and agents full access to each Seller and
its business and properties during normal business hours to observe and
investigate the Businesses and the Assets and Obligations of Seller, and to meet
with each Seller's officers, agents and contractors, and to audit, examine and
copy all each Seller's files, books and records, and other documents and papers.
Each Seller shall furnish the Purchaser, Parent and their authorized attorneys,
underwriters, representatives and agents with all information concerning each
Seller's Business, its Assets and Obligations, which they reasonably request.
6.4 COOPERATION. During the period from the date hereof until the
Closing Date, each Seller shall fully cooperate with the Purchaser and his
authorized representatives and agents, and shall promptly execute and deliver
all agreements, certificates, instruments, and documents and take such other
actions as are reasonably requested by the Purchaser. During the period from the
date hereof until the Closing Date, and from time to time thereafter as
Purchaser may reasonably request. each Seller shall cooperate with Purchaser in
connection with Purchaser's application for the transfer, renewal or issuance of
any Permits or its satisfaction of any regulatory requirements involving the
Businesses. The Parent intends to initiate and complete, subsequent to the date
hereof and prior to Closing, an underwritten public offering of its common stock
pursuant to an effective registration statement under the Securities Act
("Secondary Offering"). One of the purposes of the Secondary Offering is to
provide Purchaser with the amount of the Purchase Price. Seller shall promptly
provide, in written format, all information concerning Sellers and the
16
<PAGE>
Businesses as Parent or Purchaser may request in connection with the preparation
of the registration statement for the Secondary Offering ("Sellers'
Disclosures"). Sellers agree that all Sellers' Disclosures shall be true and
complete and shall not omit any information required to make the statements or
information provided, in light of the circumstances, true, complete and the not
misleading. Sellers shall provide all other cooperation reasonably requested in
connection with the Secondary Offering by Parent, Purchaser, their underwriters
or attorneys, including, but not limited to, the execution of appropriate
cross-indemnities and other documents and instruments.
6.5 NOTICE OF DEVELOPMENTS. Each Seller shall give Purchaser prompt
written notice of any material adverse development with respect to each Seller
that could cause any of Sellers' representations made in Article III hereof to
be untrue or misleading. No disclosure made pursuant to this Section 6.5,
however, shall be deemed to prevent or cure any misrepresentation, breach of
warranty or breach of contract so as to preclude Purchaser from exercising his
right to terminate this Agreement pursuant to Article X hereof.
6.6 EXCLUSIVITY. Neither Seller nor any Shareholder shall: (a) solicit,
initiate or encourage the submission of any proposal or offer from any Person
relating to the acquisition of the capital stock or other voting securities or
any substantial proportion of the Assets of either Seller including any
acquisitions structured as a merger, consolidation or share exchange; and (b)
participate in any discussions or negotiations regarding any information with
respect to, assist or participate in or facilitate in any other manner, any
effort or attempt by any Person to do or seek any of the foregoing. Sellers
shall notify Purchaser in writing if any Person makes any proposal, offer,
inquiry, or contact with respect to any of the foregoing.
6.7 CONFIDENTIALITY. The parties each agree not to disclose or use for
their own benefit or for the benefit of others, any confidential information of
a special and unique nature and value affecting and relating to either Seller,
the Purchaser, or the Businesses that are disclosed to or otherwise acquired by
either party in connection with this transaction, except for the purpose of
Purchaser's and its representatives' and agents' evaluation of the transactions
contemplated hereby or as may be required by Law, or in connection with any
Proceeding arising in connection with this Agreement. In the event of any breach
or threatened breach by either party of this provision, the parties recognize
that such breach could result in irreparable harm to the nonbreaching party and,
accordingly, in such event the same remedies as are available to Purchaser
pursuant to Section 12.2 hereof shall be available to the harmed party.
Notwithstanding the foregoing, Purchaser's parent corporation shall have the
right to issue a public statement that this Agreement has been executed with
respect to the acquisition of Purchased Assets, and to otherwise comply with its
disclosure obligations under the Securities Laws, and to use the Seller's
Disclosures in connection with the Secondary Offering.
17
<PAGE>
ARTICLE VII
CONDITIONS PRECEDENT TO PURCHASER'S OBLIGATIONS
-----------------------------------------------
Notwithstanding the execution and delivery of this Agreement or the
performance of any part hereof, Purchaser's obligations to consummate the
transactions contemplated by this Agreement shall be subject to the satisfaction
of each of the conditions set forth in this Article VII, except to the extent
that such satisfaction is waived in writing by Purchaser.
7.1 REPRESENTATIONS AND WARRANTIES OF THE SELLERS. All representations
and warranties made by the Sellers in this Agreement and the Schedules hereto
shall have been true and correct in all respects on the date of this Agreement,
and shall be true and correct in all respects on the Closing Date as though such
representations and warranties were again made, without exception or deviation,
on the Closing Date.
7.2 PERFORMANCE OF THIS AGREEMENT. Sellers and Shareholders shall have
duly performed or complied with all of their covenants and obligations under
this Agreement that are to be performed or complied with by the Sellers and
Shareholders on or prior to the Closing Date.
7.3 ABSENCE OF PROCEEDINGS. No Proceeding shall have been instituted or
threatened on or before the Closing Date by any Person, the result of which did
or could prevent or make illegal the consummation of all or any of the
transactions contemplated by this Agreement, or which had or could have a
material adverse effect on the Business or the Purchased Assets.
7.4 CONSENTS. Each Seller shall deliver to Purchaser, all Consents, in
form and substance reasonably acceptable to Purchaser, as the Purchaser
reasonably deems required under any of the Sellers's Contracts or Permits as a
result of the sale of the Purchased Assets to Purchaser and the other
transactions contemplated under this Agreement. Sellers shall be responsible to
pay for all costs and expenses incurred in obtaining all such Consents. Included
specifically in the foregoing shall be consents from all lessors of Real
Property to Sellers, if any, together with estoppel letters from such lessors,
in form reasonably acceptable to Purchaser, acknowledging that each applicable
lease is in full force and effect, all rent and other payments due thereunder
have been paid and no event of default has occurred.
7.5 MATERIAL ADVERSE CHANGE. There shall have not occurred any material
adverse change, actual or threatened, for whatever reason, in any of the
Purchased Assets, the Businesses or its financial condition or otherwise, or in
the results of operations of the Sellers, including, but not limited to, any
casualty loss, whether or not covered by insurance.
7.6 COMPLETION OF SECONDARY OFFERING. Hirel Holdings, Inc. shall have
successfully completed the Secondary Offering, resulting in net proceeds
therefrom to Purchaser in the amount of not less than Five Million Dollars
($5,000,000).
18
<PAGE>
7.7 DELIVERIES BY SELLERS. In addition to all other deliveries to be
made by Sellers hereunder, Sellers shall have delivered to Purchaser at Closing:
(a) Certificates signed by the President of each Seller, dated the
Closing Date, certifying that (a) all of the terms and conditions of this
Agreement to be satisfied or performed by it on or before the Closing Date have
been satisfied or performed; (b) all the representations and warranties of each
Seller made herein are true, correct and complete in all respects; (c) no
Proceedings have been instituted or, to the best of such President's knowledge,
threatened on or before the Closing Date by any Person, the result of which did
or could prevent or make illegal the consummation of all or any of the
transactions contemplated by this Agreement, or which had or could have a
material adverse effect on its business; and (d) there has not been any material
adverse change in or affecting it between the date of this Agreement and the
Closing Date; and
(b) An opinion of counsel rendered to Purchaser, in form,
substance, and by a law firm reasonably acceptable to Purchaser, and its
counsel, as to the matters set forth in EXHIBIT C attached hereto.
7.8 AUDIT NET ASSET AMOUNT REQUIREMENT. The Audited Net Asset Amount
shall be equal to an amount which is not less than Four Million Five Hundred
Thousand Dollars ($4,500,000.00).
ARTICLE VIII
CONDITIONS PRECEDENT TO THE SELLERS' OBLIGATIONS
------------------------------------------------
Notwithstanding the execution and delivery of this Agreement or the
performance of any part hereof, the Sellers' obligations to consummate the
transactions contemplated by this Agreement shall be subject to the satisfaction
of each of the conditions set forth in this Article VIII, except to the extent
that such satisfaction is waived by Sellers in writing.
8.1 REPRESENTATIONS AND WARRANTIES OF PURCHASER. All representations and
warranties of Purchaser contained in this Agreement and any Schedules hereto
shall have been true and correct in all respects on the date of this Agreement,
and shall be true and correct in all respects on the Closing Date as though such
representations and warranties were again made, without exception or deviation,
on the Closing Date.
8.2 PERFORMANCE OF THIS AGREEMENT. Purchaser shall have duly performed
or complied with all of the covenants and obligations under this Agreement to be
performed or complied with by him on or prior to the Closing Date.
8.3 ABSENCE OF PROCEEDINGS. No Proceeding shall have been instituted or
threatened on or before the Closing Date by any Person against Purchaser the
result of which did or could prevent or make illegal the consummation of all or
any of the transactions contemplated by this Agreement.
19
<PAGE>
8.4 DELIVERIES BY PURCHASER. In addition to all other deliveries to be
made by Purchaser hereunder, Purchaser shall have delivered to Sellers at
Closing:
(a) Certificates signed by the President of Purchaser, dated the
Closing Date, certifying that (a) all of the terms and conditions of this
Agreement to be satisfied or performed by it on or before the Closing Date have
been satisfied or performed; (b) all the representations and warranties of
Purchaser made herein are true, correct and complete in all respects; (c) no
Proceedings have been instituted or, to the best of such President's knowledge,
threatened on or before the Closing Date by any Person, the result of which did
or could prevent or make illegal the consummation of all or any of the
transactions contemplated by this Agreement, or which had or could have a
material adverse effect on its business; and (d) there has not been any material
adverse change in or affecting it between the date of this Agreement and the
Closing Date; and
(b) An opinion of counsel rendered to Sellers, in form, substance,
and by a law firm reasonably acceptable to Sellers, and Sellers' counsel, as to
the matters set forth in EXHIBIT C attached hereto.
ARTICLE IX
OBLIGATIONS AT CLOSING
----------------------
9.1 OBLIGATIONS OF THE SELLERS AND SHAREHOLDERS TO PURCHASER AT CLOSING.
In addition to the other deliveries to be made by Seller and the Shareholders as
set forth herein, the Sellers and Shareholders hereby covenant and agree to
deliver or cause to be delivered to Purchaser, at Closing, the following:
(a) The Purchased Assets;
(b) A duly executed Bill of Sale in the form of EXHIBIT D attached
hereto;
(c) All Consents referred to in Section 7.4 of this Agreement;
(d) Sellers shall deliver to Purchaser a Good Standing
Certificate, certifying that the Sellers are duly qualified and are currently in
good standing under the laws of the states of South Carolina or Florida, as the
case may be, dated no earlier than five (5) days before the Closing Date.
(e) The Employment Agreements of Helen Lewis, Joe Lewis, Bobby
LaBorde and Douglas Lewis with Purchaser in the form of composite EXHIBIT E
("Employment Agreements") duly executed and delivered by the "Employees"
identified therein.
(f) Such other documents and instruments as counsel to Purchaser
may reasonably request including, without limitation, such documents as
necessary to convey to Purchaser all rights to the Purchased Assets.
20
<PAGE>
9.2 OBLIGATIONS OF THE PURCHASER AT CLOSING. In addition to the other
deliveries to be made by Purchaser as set forth herein, the Purchaser hereby
covenants and agrees to deliver or cause to be delivered to Seller, at Closing,
the following:
(a) The Cash Amount and the Note, as provided in Article II
hereof; and
(b) The Employment Agreements, executed by Purchaser.
ARTICLE X
TERMINATION AND REMEDIES
------------------------
10.1 TERMINATION ON DEFAULT. If, prior to the Closing Date, a party
hereto shall materially breach or default in the full and timely performance and
satisfaction of any of his representations and warranties or obligations under
this Agreement, and such breach or default is not cured on or before the fifth
(5th) day after the date notice is given by the nondefaulting party to the
defaulting party specifying the nature of such breach or default (or on or
before the Closing Date if sooner), then the nondefaulting party may terminate
this Agreement immediately upon notice to the defaulting party.
10.2 TERMINATION AT CLOSING. If any of the conditions set forth in
Article VII hereof are not satisfied as of the Closing Date, then Purchaser may
terminate this Agreement by notifying the Sellers in writing on the Closing
Date. If any of the conditions set forth in Article VIII hereof are not
satisfied as of the Closing Date, then the Sellers may terminate this Agreement
by notifying Purchaser in writing on the Closing Date.
10.3 REMEDIES NOT EXCLUSIVE. The rights and remedies of the parties
pursuant to this Article X are not exclusive, and are in addition to all other
rights and remedies which they may have at law or in equity, and may be
exercised in any manner, order or combination.
ARTICLE XI
INDEMNIFICATION
11.1 OBLIGATION TO INDEMNIFY.
(a) In addition to, and not in lieu of, any right or remedy
available to Purchaser at law or in equity, each Seller and Shareholder hereby
indemnifies and holds harmless Purchaser, from and against any and all
Proceedings, Judgments, Obligations, losses, damages, deficiencies, settlements,
assessments, charges, costs and expenses (including without limitation
reasonable attorneys' fees, paralegals' fees, investigation expenses, court
costs, interest and penalties) arising out of or in connection with, or caused
by, directly or indirectly, any or all of the following:
(i) Any misrepresentation, breach or failure of any warranty
or representation made by any Seller or Shareholder in this Agreement or
21
<PAGE>
pursuant hereto, including, but not limited to, the failure of Sellers'
aggregate Net Asset Amount as of date of Closing to be equal to or greater than
the Sellers' aggregate Audited Net Asset Amount;
(ii) Any failure or refusal by any Seller to satisfy or
perform any covenant or agreement in this Agreement; and
(iii) Any claim, Obligation of or Judgment against Sellers or
affecting the Purchased Assets arising, or arising from facts or circumstances
occurring, prior to the date hereof including, but not limited to, any Taxes or
Environmental Matters, excluding only the Assumed Liabilities.
(b) For the remaining provisions of this Article XI, the Purchaser
shall be referred to as the "Indemnified Party," and each party against whom
such indemnity is sought is referred to as an "Indemnifying Party."
11.2 DEFENSE OF ACTIONS. The Indemnifying Party shall be solely
responsible, at its expense, for litigating, defending or otherwise attempting
to resolve any Proceeding against which the Indemnified Party is indemnified
under this Article XI, except that: (i) the Indemnified Party shall have the
right to participate in the defense of any such Proceeding at the Indemnified
Party's expense and through counsel of the Indemnified Party's choice; (ii) the
Indemnified Party may at its option, defend or otherwise attempt to resolve, or
cause the Indemnifying Party to defend or otherwise attempt to resolve, any
Proceeding against which the Indemnified Party is indemnified under this Article
XI if the Indemnifying Party does not promptly and diligently defend or
otherwise attempt to resolve any such Proceeding or if the Indemnified Party, in
good faith, believes that the defense or resolution of such proceeding might
adversely affect its relations with a customer or supplier, in which event the
Indemnifying Party shall continue to be obligated to indemnify the Indemnified
Party hereunder in connection with such Proceedings; and (iii) the Indemnifying
Party shall not agree to any settlement without the Indemnified Party's express
prior written consent which shall not be unreasonably withheld.
11.3 NOTICES AND PAYMENTS. With respect to each separate matter or series
of matters against which the Indemnified Party is indemnified under this Article
XI:
(a) Upon the Indemnified Party's receipt of written documents
pertaining to the Proceeding underlying such matter or series of matters, or, if
such matter or series of matters does not involve a third party claim, after the
Indemnified Party first learning of such matter or series of matters and the
amount demanded or claimed in connection therewith, the Indemnified Party shall
give notice to the Indemnifying Party of such documents and information as it
shall have so received.
(b) After a final agreement is reached or a final Judgment is
rendered with respect to such matter or series of matters or the amount owing by
the Indemnifying Party pursuant to this Article XI as a result of such matter or
22
<PAGE>
series of matters is otherwise determinable in whole or in part, the Indemnified
Party shall give notice to the Indemnifying Party of the amount owing by the
Indemnifying Party ("Indemnification Amount") with respect to such matter or
series of matters ("Indemnification Payment Notice").
(c) The Indemnifying Party shall pay the Indemnified Party the
Indemnification Amount within ten (10) days of the date the Indemnification
Notice is given.
11.4 OTHER RIGHTS AND REMEDIES NOT AFFECTED. The indemnification rights
of the Indemnified Party under this Article XI are independent of and in
addition to such rights and remedies as the Indemnified Party may have at law or
in equity or otherwise for any misrepresentations breach of warranty or failure
to fulfill any agreement or covenant hereunder on the part of any party hereto.
11.5 OFFSET. Purchaser shall be entitled to offset in full against all
payments of the Purchase Price, including, but not limited to, offset against
the Promissory Note, all amounts for which Purchaser is entitled to be
indemnified pursuant to this Article XI.
ARTICLE XII
CONFIDENTIALITY AND COMPETITION
-------------------------------
12.1 CONFIDENTIAL INFORMATION AND COMPETITION.
(a) CONFIDENTIAL INFORMATION. Sellers and Shareholders, jointly
and severally, (collectively, the "Covenantors") hereby acknowledge that they
possess confidential information of a special and unique nature and value
affecting and relating to the Businesses, the Purchased Assets and Sellers'
operations all of which information is included in the Purchased Assets,
including, but not limited to the identity of Sellers' customers and suppliers,
prices paid by Sellers for inventory, their business practices, marketing
strategies, expansion plans, Sellers' Contracts, business records and other
records, trade secrets, inventions, techniques used in Sellers' business,
know-how and technologies, whether or not patentable, and other similar
information relating to the Businesses (all the foregoing regardless of whether
same is or becomes known to third parties is hereinafter referred to
collectively as "Confidential Information"). The Covenantors further recognize
and acknowledge that, upon Closing, all Confidential Information is the
exclusive property of Purchaser, is material and confidential, and greatly
affects the legitimate business interests, goodwill and effective and successful
conduct of the Businesses and Purchaser. Accordingly, the Covenantors hereby
covenant and agree that they will use the Confidential Information only for the
benefit of the Businesses and shall not at any time, directly or indirectly,
divulge, reveal or communicate any Confidential Information to any person, firm,
corporation or entity whatsoever other than Purchaser, Parent or as otherwise
contemplated herein, or use any Confidential Information for their own benefit
or for the benefit of others.
23
<PAGE>
(b) NON-COMPETITION. The parties hereto hereby acknowledge and
agree that the Purchaser would suffer irreparable injury if the Covenantors
compete with the Purchaser. As a material inducement to the Purchaser to enter
into this Agreement, the Covenantors hereby covenant and agree that the
Covenantors shall not:
(i) during the period beginning on the Closing Date and
continuing until five (5) years following the Closing Date hereof, directly or
indirectly, operate, organize, maintain, establish, manage, own, participate in,
or in any manner whatsoever, individually or through any corporation, firm or
organization of which the Covenantors shall be affiliated in any manner
whatsoever, have any interest in, whether as owner, operator, partner,
stockholder, director, trustee, officer, lender, employee, principal, agent,
consultant or otherwise, any business or venture other than purchaser in any
county or city anywhere in the world where the Purchaser does business, which
engages in the business or is otherwise in competition with the Purchaser or any
assigns of the Purchaser, unless such activity shall have been previously agreed
to in writing by the Purchaser and its successors and assigns;
(ii) during the period beginning on the Closing Date and
continuing until five (5) years following the Closing Date, directly or
indirectly, divert business from the Purchaser or its successors or assigns, or
solicit business from, divert the business of, or attempt to convert to other
methods of using the same or similar services as are provided by the Purchaser,
any client or account of the Purchaser; or
(iii) during the period beginning on the Closing Date hereof
and continuing until five (5) years following the Closing Date hereof, directly
or indirectly, solicit for employment, employ or otherwise engage the services
of, any employees or consultants of the Purchaser or its successors or assigns.
The covenants set forth in this Section 12.1 are in addition to and
not in lieu of any other non-competition agreement to which the Purchaser and
the Covenantors are parties.
12.2 INJUNCTION AND ATTORNEYS' FEES. In view of the irreparable injury to
the Purchaser that would result from a breach or threatened breach by the
Covenantors of the covenants or agreements under Sections 12.1 hereof, and
because there is not an adequate remedy at law to protect the Purchaser from the
ongoing breach of those covenants, the Purchaser shall have the right to
receive, and the Covenantors hereby consent to the issuance of, a permanent
injunction enjoining the Covenantors from any violation of the covenants set
forth in Section 12.1 hereof. The Covenantors acknowledge that a permanent
injunction is an appropriate remedy for such a breach or threatened breach.
These remedies shall be in addition to and not in limitation of any other rights
or remedies to which the Purchaser is or may be entitled at law or in equity
under this Agreement. The Covenantors further agree that in the event the
Purchaser incurs any fees or costs in order to enforce the provisions of Section
12.1 hereof and the Purchaser prevails in such enforcement, the Covenantors
shall pay all fees and costs so incurred by the Purchaser, including, but not
limited to, reasonable attorneys' and paralegals' fees.
24
<PAGE>
12.3 REASONABLENESS OF RESTRICTIONS. The Covenantors have carefully read
and considered the provisions of Sections 12.1 and 12.2 hereof and, having done
so, agree that the covenants set forth in those sections are fair and reasonable
and are reasonably required to protect the legitimate business interests of the
Purchaser, including, but not limited to, protection of the goodwill included in
the Purchased Assets. The Covenantors agree that the covenants set forth in
Sections 12.1 and 12.2 hereof do not unreasonably impair the ability of the
Covenantors to conduct any unrelated business or to find gainful work in their
respective fields. The parties hereto agree that if a court of competent
jurisdiction holds any of the covenants set forth in Sections 12.1
unenforceable, the court shall substitute an enforceable covenant that
preserves, to the maximum lawful extent, the scope, duration and all other
aspects of the covenant deemed unenforceable, and that the covenant substituted
by the court shall be immediately enforceable against the Covenantors. The
foregoing shall not be deemed to affect the right of the parties hereto to
appeal any decision by a court concerning this Agreement. The provisions of
Sections 12.1, 12.2 and 12.3 hereof shall survive the execution of this
Agreement and the consummation of the transactions contemplated hereby.
ARTICLE XIII
MISCELLANEOUS
-------------
13.1 NOTICES. All notices, demands and other communications given
hereunder shall be in writing and shall be deemed to have been duly given: (a)
upon hand delivery thereof, (b) upon telefax and written confirmation of
receipt, (c) upon receipt of any overnight deliveries, or (d) on the third (3rd)
business day after mailing United States registered or certified mail, return
receipt requested, postage prepaid, addressed as set forth below, or at such
other address, or to such other person and at such address for that person, as
any party shall designate in writing to the other parties for such purpose in
the manner hereinabove set forth:
If to Purchaser: Hirel Holdings, Inc.
650 S.W. 16th Terrace
Pompano Beach, Florida 33069
Attn: Vincent Montelione, President
With a copy to: Ruden, McClosky, Smith, Schuster & Russell, P.A.
200 East Broward Boulevard
15th Floor
Ft. Lauderdale, Florida 33301
Attn: Thomas O. Katz, Esq.
If to Seller : Jerry's Marine Service, Inc.
Jerry's Marine Service of Fort Lauderdale, Inc.
100 S.W. 16th Street
Ft. Lauderdale, Florida
25
<PAGE>
If to Shareholders: Helen Lewis
Joe Lewis
Bobby LaBorde
Douglas Lewis
100 S.W. 16th Street
Ft. Lauderdale, Florida
With a copy to: B. Alan Dobbins III, Esq.
Niles, Dobbins and Meeks
P.O. Box 11799
Ft. Lauderdale, Florida 33339
13.2 ENTIRE AGREEMENT. This Agreement, including the Exhibits and
Schedules attached hereto and the documents delivered pursuant hereto, sets
forth all the promises, covenants, agreements, conditions and understandings
between the parties hereto with respect to the subject matter hereof, and
supersedes all prior and contemporaneous agreements, understandings, inducements
or conditions, expressed or implied, oral or written, except as herein
contained. No changes of or modifications or additions to this Agreement shall
be valid unless the same shall be in writing and signed by the parties hereto.
13.3 BINDING EFFECT; ASSIGNMENT. This Agreement shall be binding upon the
parties hereto, their beneficiaries, heirs and administrators. No party may
assign or transfer its interests herein, or delegate its duties hereunder,
without the written consent of the other parties; provided, however, that
Purchaser may assign its rights hereunder to any subsidiary or affiliated
entity, provided that Purchaser shall remain liable hereunder unless Sellers
otherwise agree in writing.
13.4 AMENDMENT. The parties hereby irrevocably agree that no attempted
amendment, modification, or change (collectively, "Amendment") of this Agreement
shall be valid and effective, unless the parties shall unanimously agree in
writing to such Amendment.
13.5 NO WAIVER. No waiver of any provision of this Agreement shall be
effective, unless it is in writing and signed by the party against whom it is
asserted, and any such written waiver shall only be applicable to the specific
instance to which it relates and shall not be deemed to be a continuing or
future waiver.
13.6 GENDER AND USE OF SINGULAR AND PLURAL. All pronouns shall be deemed
to refer to the masculine, feminine, neuter, singular or plural, as the identity
of the party or parties or their personal representatives, successors and
assigns may require.
13.7 COUNTERPARTS. This Agreement and any amendments may be executed in
one or more counterparts, each of which shall be deemed an original and all of
which together will constitute one and the same instrument.
26
<PAGE>
13.8 HEADINGS. The article and section headings contained in this
Agreement are inserted for convenience only and shall not affect in any way the
meaning or interpretation of the Agreement.
13.9 GOVERNING LAW. This Agreement shall be construed in accordance with
the laws of the State of Florida and any proceeding arising between the parties
in any manner pertaining or related to this Agreement shall, to the extent
permitted by law, be held in Broward County, Florida.
13.10 FURTHER ASSURANCES. The parties hereto will execute and deliver such
further instruments and do such further acts and things as may be reasonably
required to carry out the intent and purposes of this Agreement.
13.11 LITIGATION. If any party hereto is required to engage in litigation
or arbitration against any other party hereto, either as plaintiff or as
defendant, in order to enforce or defend any of its or his rights under this
Agreement, and such litigation results in a final judgment in favor of such
party ("Prevailing Party"), then the party or parties against whom said final
judgment is obtained shall reimburse the Prevailing Party for all direct,
indirect or incidental expenses incurred by the Prevailing Party in so enforcing
or defending its or his rights hereunder, including, but not limited to, all
attorneys' fees, paralegals' fees and all sales tax thereon, and all court costs
and other expenses incurred throughout all negotiations, trials or appeals
undertaken in order to enforce the Prevailing Party's rights hereunder.
13.12 CONSTRUCTION. Should any provision of this Agreement require
judicial interpretation, the parties hereto agree that the court interpreting or
construing the same shall not apply a presumption that the terms hereof shall be
more strictly construed against one party by reason of the rule of construction
that a document is to be more strictly construed against the party that itself
or through its agent prepared the same, it being agreed that the parties hereto
and their respective agents and legal counsel have participated in the
preparation hereto.
THIS SPACE INTENTIONALLY BLANK
27
<PAGE>
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
executed as of the date and year set forth above.
PURCHASER:
HIREL HOLDINGS, INC., a Delaware
corporation
____________________________ By: /S/ Vincent Montelione
------------------------------------
Vincent Montelione, Vice-President
____________________________
JERRY'S, INC.:
JERRY'S MARINE SERVICE, INC, a
South Carolina corporation
____________________________ By
---------------------------------------
____________________________
JERRY'S FORT LAUDERDALE:
JERRY'S MARINE SERVICE OF FORT
LAUDERDALE, INC., a Florida corporation
____________________________ By:
---------------------------------------
____________________________
28
<PAGE>
SHAREHOLDERS:
____________________________ /S/ Helen Lewis
----------------------------------------
Helen Lewis
____________________________
____________________________ /S/ Joe Lewis
----------------------------------------
Joe Lewis
____________________________
____________________________ /S/ Bobby Laborde
----------------------------------------
Bobby LaBorde
____________________________
____________________________ /S/ William Douglas Lewis
----------------------------------------
Douglas Lewis
____________________________
29
<PAGE>
SCHEDULES
Schedule 2.2 Excluded Assets
Schedule 2.3 Assumed Liabilities
Schedule 2.6 Allocation of Purchase Price
Schedule 3.4 Financial Statements
Schedule 3.5 Conduct since date of Financial Statements
Schedule 3.6 Encumbrances on Purchased Assets
Schedule 3.7 Leases and Subleases of Real Property
Schedule 3.10 Customers
Schedule 3.11 Other Contracts
Schedule 3.14 Taxes
Schedule 3.17 Permits
Schedule 3.22 Labor Agreements
Schedule 3.26 Employees, Contractors & Agents
Schedule 3.27 Insurance
Schedule 3.28 Transactions with Related Parties
Schedule 3.29 Suppliers
Schedule 3.30 Intangibles
Schedule 3.31 Accounts
Schedule 3.32 Accounts Receivable
Schedule 3.33 Accounts Payable
Any Schedules not attached hereto as of the date of execution of this Agreement
are agreed to be supplied as soon as reasonably practicable, but in no event
later than 90 days prior to Closing.
30
<PAGE>
EXHIBIT A
DEFINED TERMS
-------------
All defined terms used in this Agreement and not specifically defined in
context are as defined in this EXHIBIT A.
"ACCOUNTS RECEIVABLE" means any right to payment for goods sold, leased or
licensed or for services rendered whether or not it has been earned by
performance, any note receivable, and any other receivable or right to payment
of any nature whatsoever.
"PURCHASED ASSETS" shall have the meaning set forth in Section 2.1 of this
Agreement.
"ASSET" means any real, personal, mixed, tangible or intangible property
of any nature whatsoever, including, without limitation, Real Property, Leases,
Equipment, Accounts Receivable, Inventory, Permits, Intangibles and Contract
Rights.
"ASSUMED LIABILITIES" shall have the meaning set forth in Section 2.3 of
this Agreement.
"BALANCE SHEET" shall have the meaning set forth in Section 3.4 of this
Agreement.
"BUSINESS"shall have the meaning set forth in the recitals to this
Agreement.
"CLOSING" shall have the meaning set forth in Section 2.7 of this
Agreement.
"CONSENT" means any consent, approval, order or authorization of, or any
declaration, filing or registration with, or any application or report to, or
any waiver by, or any other action (whether similar or dissimilar to any of the
foregoing) of, by or with, any person, which is necessary in order to take a
specified action or actions, in a specified manner and/or to achieve a specific
result.
"CONTRACT" means any written or oral contract, agreement, order or
commitment of any nature whatsoever, including, without limitation, any sales
order, purchase order, lease, sublease, license agreement, loan agreement,
mortgage, security agreement, guarantee, management contract, employment
agreement, consulting agreement, partnership agreement, buy-sell agreement,
option, warrant, subscription, call or put.
"CONTRACT RIGHT" means any right, power or remedy under any Contract,
including, without limitation, any right to receive goods or services or
otherwise derive benefit from the payment, satisfaction or performance of
another party's Obligations, and right to demand that another party accept goods
or services or take any other action, and any right to pursue or exercise any
remedy or option.
Exhibit A- 1
<PAGE>
"DOCUMENTS" shall mean notes, bills of lading, date contracts, warehouse
receipts or order for delivery of goods and also any other documents which in
the regular course of business or financing is treated as adequately evidencing
that the person in possession of it is entitled to receive, hold and dispose of
the document and the goods its covers.
"EMPLOYEE BENEFIT PLAN" means any bonus, severance, hospitalization,
vacation, deferred compensation, pension, profit sharing, retirement, payroll
savings, stock option, group insurance, death benefit or welfare plan, or any
other employee benefit plan or fringe benefit arrangement of any nature
whatsoever, including, but not limited to, "employee benefit plans" within the
meaning of Section 3(3) of the Employee Retirement Income Security Act of 1974,
as amended from time to time, and the rules and regulations promulgated
thereunder.
"ENCUMBRANCE" means any lien, security interest, pledge, mortgage,
easement, leasehold, assessment, covenant, restriction, reservation, conditional
sale, prior assignment, or any other encumbrance, claim, burden or charge of any
nature whatsoever.
"EQUIPMENT" means any equipment, machinery, fixtures, furniture, leasehold
improvements, vehicles, vessels, office equipment, office supplies or other
tangible personal property of any nature whatsoever, but not any such item which
constitutes Inventory.
"EXCLUDED ASSETS" shall have the meaning set forth in Section 2.2 of this
Agreement.
"FINANCIAL STATEMENTS" shall have the meaning set forth in Section 3.4 of
this Agreement.
"FISCAL YEAR" shall mean the fiscal year for the applicable entity ended
December 31.
"INTANGIBLE" means any name, corporate name, partnership name, fictitious
name, trademark, trademark application, trade name, brand name, slogan, trade
secret, know-how, patent, patent application, copyright, copyright application,
design, formula, invention, blueprint, product right, software right, license,
franchise, authorization or any other intangible property of any nature
whatsoever.
"INVENTORY" means any raw materials, supplies, work in process, finished
goods, or any other inventory of any nature whatsoever, and other items held for
sale or lease in the ordinary course of business and all computer software and
data systems held for sale or license in the ordinary course of business.
"JUDGMENT" means any order, writ, injunction, fine, citation, award,
decree, or any other judgment of any nature whatsoever of any foreign, federal,
state or local court, any governmental, administrative or regulatory authority,
or any arbitration tribunal.
Exhibit A- 2
<PAGE>
"LAW" means any provision of any law, statute, ordinance, constitution,
charter, treaty, rule or regulation of any foreign, federal, state or local
governmental, administrative or regulatory authority.
"LEASES" means all leases for real or personal property.
"OBLIGATION" means any debt, liability or obligation of any nature
whatsoever, whether secured, unsecured, recourse, nonrecourse, liquidated,
unliquidated, accrued, absolute, fixed, contingent, ascertained, unascertained,
known, unknown or obligations under executory Contracts.
"PERMIT" means any license, permit, approval, waiver, order,
authorization, right or privilege of any nature whatsoever, granted, issued,
approved or allowed by any foreign, federal, state or local governmental,
administrative or regulatory authority.
"PERSON" means any individual, sole proprietorship, joint venture,
partnership, corporation, association, cooperation, trust, estate, government
(or any branch, subdivision or agency thereof), governmental, administrative or
regulatory authority, or any other entity of any nature whatsoever.
"PROCEEDING" means any demand, claim, suit, action, litigation,
investigation, study, arbitration, administrative hearing, or any other
proceeding of any nature whatsoever.
"REAL PROPERTY" means any real estate, land, building, structure,
improvement, fixture or other real property of any nature whatsoever, including,
but not limited to fee and leasehold interests.
"SECONDARY OFFERING" shall have the meaning as set forth in Section 7.6.
"SECURITIES ACT" means the Securities Act of 1933, as amended, and all
rules and regulations promulgated thereunder.
"SECURITIES LAWS" Means the Securities Act, the Securities Exchange Act of
1934, as amended, the Investment Parent Act of 1940, as amended, and all state
or other applicable securities laws, and all rules and regulations promulgated
under each of these laws, collectively.
"SELLERS' DISCLOSURES" shall have the meaning as set forth in Section 6.4.
"STOCK ISSUANCE AGREEMENTS" means any contracts which relate to the
issuance, sale, right to purchase, redemption, pledge or other disposition of
any capital stock of Sellers or any other securities or Obligations of Sellers.
"TAX" means (a) any foreign, federal, state or local income, profits,
gross receipts, franchise, sales, use, occupancy, general property, real
property, personal property, intangible property, transfer, fuel, excise,
accumulated earnings, personal holding Parent, unemployment compensation, social
security, withholding taxes, payroll taxes, or any other tax of any nature
Exhibit A- 3
<PAGE>
whatsoever, (b) any foreign, federal, state or local organization fee,
qualification fee, annual report fee, filing fee, occupation fee, assessment,
rent, or any other fee or charge of any nature whatsoever, or (c) any
deficiency, interest or penalty imposed with respect to any of the foregoing.
Exhibit A- 4
<PAGE>
EXHIBIT B
FORM OF PROMISSORY NOTE
$3,000,000 ____________, 1997
FOR VALUE RECEIVED, HIREL TECHNOLOGIES, INC., a Florida corporation
("Maker") promises to pay to JERRY'S MARINE SERVICE OF FT. LAUDERDALE, INC., a
Florida corporation ("Payee") having a mailing address of
_______________________________, Fort Lauderdale, Florida __________ the
principal sum of THREE MILLION DOLLARS ($3,000,000), with interest accruing
against the "Principal Balance" (as hereinafter defined) at the rate of nine
percent (9%) per annum, payable as follows:
(a) Interest shall be payable on _______________, 1997 and at the end of
each calendar quarter thereafter until the Principal Balance is paid
in full; and
(b) The Principal Balance on this Promissory Note ("Note") shall be paid
in three installments of ONE MILLION DOLLARS ($1,000,000) each on
___________, 1998, ______________, 1999, and ___________________,
2000.
The term "Principal Balance" for purposes of this Note shall mean the
amount that, at any given time, is equal to the principal amount set forth above
less all principal payments (whether by prepayment or otherwise) theretofore
paid pursuant to this Note.
All sums due hereunder shall be paid in lawful money of the United States
of America to the Payee at the address set forth above or at such other address
as the Payee may designate to Maker in writing. This Note may be prepaid in
whole or in part without premium or penalty.
The Payee may at its option declare the entire principal balance of this
Note to be immediately due and payable without presentment, demand, notice, or
protest (each of which is hereby waived) upon the occurrence of any one or more
of the following events ("Default"): (I) if Maker shall fail to pay any sum due
hereunder when due, provided that Payee shall provide Maker of five (5) days
written notice of such failure during which time Maker shall have the
opportunity to cure such failure to pay; or (ii) Maker shall fail, after ten
(10) days written notice, to perform, comply with or abide by any of the
stipulations, agreements, conditions and or covenants contained in this Note; or
(iii) the filing of a petition by Maker for relief under the United States
Bankruptcy Code, or other insolvency law; or (iv) the filing of a petition
against Maker, which remains unstayed for a period of at least ninety (90) days,
for adjudication of Maker as a bankrupt under the United States Bankruptcy Code,
or other insolvency law; or (v) the appointment of a receiver for all or any of
the assets of Maker and such receiver shall not have been dismissed within sixty
(60) days; or (vi) the making by Maker of a general assignment or similar
Exhibit B- 1
<PAGE>
arrangement for the benefit of its creditors; or (vii) Maker admitting in
writing its inability to pay its debts as they mature; or (viii) the
liquidation, dissolution, or winding up of Maker or the taking by Maker of any
action of furtherance of liquidation, dissolution or winding up.
Maker (i) severally waives presentment for payment, demand, notice of
non-payment or dishonor, protest and notice of protest of this Note, and all
other notices in connection with the delivery, acceptance, performance, default
or enforcement of the payment of this Note; (ii) expressly consents to all
extensions of time, renewals, postponements of time of payment of this Note or
other modifications hereof from time to time prior to or after the maturity of
this Note without notice, consent or further consideration to any of the
foregoing; (iii) expressly agrees that the holder hereof shall have the right,
without notice, to deal in any way at any time with any party hereto; and (iv)
expressly agrees that, notwithstanding the occurrence of any of the foregoing
(except the express written release by Payee of any such person), Maker shall be
and remain, directly and primarily liable for all sums due under this Note.
Maker further agrees to pay all costs of collection, including reasonable
attorneys' and paralegals' fees (inclusive of any appellate and administrative
proceedings), regardless of whether or not suit is brought, in the event that
any sum to be paid hereunder is not paid when due.
Time is of the essence hereof and if any payment of principal, interest or
any other sum payable hereunder is not paid when due, the amount thereof shall
thereafter bear interest at the highest nonusurious rate of interest permitted
under Florida law until paid.
The remedies of Payee as provided herein shall be cumulative and
concurrent and may be pursued singly, successively or together, at the sole
discretion of Payee, and may be exercised as often as occasion therefor shall
occur and the failure to exercise any such right or remedy shall in no event be
construed as a waiver or release thereof.
This Note has been made, executed and delivered by Maker in the State of
Florida. This Note shall be governed as to validity, interpretation,
construction, effect and all other respects by the laws and decisions of the
State of Florida. In the event Payee determines it necessary to institute suit
to collect on this Note, the action may be maintained by Payee in Broward
County, Florida, and Maker hereby consents to the institution of an action in
that jurisdiction and waive any and all defenses it may have to the maintenance
of the suit in Broward County, Florida.
Payee shall not be deemed by any act or omission to have waived any of its
rights or remedies hereunder, unless such waiver is in writing and signed by
Payee, and then only to the extent specifically set forth in the writing. A
waiver in one instance shall not be construed as continuing or as a bar to or
waiver of any right or remedy in any other instance.
This Note shall be subject to offset pursuant to and as set forth in that
certain Asset Purchase Agreement between Maker, Payee, Jerry's Marine Service,
Exhibit B- 2
<PAGE>
Inc., a South Carolina corporation, Helen Lewis, Joe Lewis, Bobby LaBorde and
Douglas Lewis, dated ___________, 1997. This Promissory Note may not be
negotiated or assigned without the prior written consent of Maker.
The provisions of this Note may be changed only by a written agreement
executed by Maker and Payee. This Note shall be binding upon Maker and the
successors and assigns of Maker and shall inure to the benefit of Payee and the
successors and assigns of Payee.
MAKER:
HIREL TECHNOLOGIES, INC., a Florida corporation
By:
-----------------------------------------------
, President
Exhibit B- 3
<PAGE>
EXHIBIT C
FORM OF OPINION OF COUNSEL
1. _____________________ are corporations duly organized, validly
existing and in good standing under the laws of the States of _________,
respectively, and are not required to be qualified or licensed as a foreign
corporation in any other jurisdiction. Each Seller has the full power and
authority to own all its Assets and to conduct the business of developing and
marketing software. To the best of such counsel's knowledge, neither Seller has
any subsidiary.
2. AUTHORITY AND APPROVAL.
(a) The execution and delivery of the Agreement by each Seller and
Shareholder and the performance of all of each Seller's obligations thereunder,
have been duly authorized and approved by all requisite corporate action on the
part of each Seller and Shareholder pursuant to applicable Law. Each Seller and
Shareholder has the power and authority to execute and deliver the Agreement and
to perform all its obligations thereunder.
(b) The Agreement and each of the other documents, instruments and
agreements executed by each Seller and Shareholder in connection with the
Agreement constitute the valid and legally binding agreements of each Seller and
Shareholder, enforceable against each Seller and Shareholder in accordance with
their respective terms, except that: (i) enforceability may be limited by
applicable bankruptcy, insolvency, reorganization, moratorium or similar laws of
general application affecting the enforcement of the rights and remedies of
creditors; and (ii) the availability of equitable remedies may be limited by
equitable principles.
3. NO VIOLATIONS. Neither the execution, delivery nor performance of
the Agreement nor any other documents, instruments or agreements executed by any
Seller or Shareholder in connection herewith or therewith, nor the performance
or consummation or occurrence of the transactions or other matters contemplated
by any of the foregoing constitutes a violation of or default under (either
immediately, upon notice or upon lapse of time) the Articles of Incorporation or
Bylaws of either Seller, any Judgment or any Law.
4. PROCEEDINGS. To the best of such counsel's knowledge after
investigation, neither Seller is a party to, the subject of, or threatened with
any Proceeding.
5. CONSENTS. To the best of such counsel's knowledge after
investigation, the execution, delivery and performance by each Seller of the
Agreement and the consummation by each Seller of the transactions contemplated
thereby do not require any Consent that has not been received prior to the date
hereof.
Exhibit C- 1
<PAGE>
EXHIBIT D
---------
FORM OF BILL OF SALE
KNOW ALL MEN BY THESE PRESENTS, that JERRY'S MARINE SERVICE OF FORT
LAUDERDALE, INC., a Florida corporation with its principal place of business in
the City of Fort Lauderdale, in the County of Broward and State of Florida,
party of the first part, for and in consideration of the sum of TEN DOLLARS
($10.00) lawful money of the United States, to it paid by HIREL HOLDINGS, INC.,
a Delaware corporation, party of the second part, the receipt whereof is hereby
acknowledged, has granted, bargained, sold, transferred and delivered, and by
these presents does grant, bargain, sell, transfer and deliver unto the said
party of the second part, its successors and assigns, the following goods and
chattels:
The "Purchased Assets" as defined in that certain Asset
Purchase Agreement dated as of June __, 1997 by and between
the party of the first part and JERRY'S MARINE SERVICE OF FT.
LAUDERDALE, INC., a Florida corporation, and the party of the
second part, including but not limited to the assets
identified in EXHIBIT A attached hereto.
TO HAVE AND TO HOLD the same unto the said party of the second part, its
successors and assigns forever.
AND the party of the first part does, for itself and its successors and
assigns, covenants to and with the said party of the second part, its successors
and assigns, that it is the lawful owner of the said assets; that they are free
from all encumbrances; that it has good right to sell the same aforesaid, and
that it will warrant and defend the sale of the said property, goods and
chattels hereby made, unto the said party of the second part and its successors
and assigns against the lawful claims and demands of all persons whomsoever.
Exhibit D- 1
<PAGE>
IN WITNESS WHEREOF, the party of the first part, by and through its
undersigned authorized representative, has hereunto set its hand and seal this
day of ____________, one thousand nine hundred and ninety-seven.
Signed, sealed and delivered in presence of:
JERRY'S MARINE SERVICE OF FT.
LAUDERDALE, INC., a Florida corporation
__________________________________ By: ___________________________________
Witness
Its: President
__________________________________
Printed Name
__________________________________
Witness
__________________________________
Printed Name
STATE OF ______________ )
) SS:
COUNTY OF _____________ )
I HEREBY CERTIFY that on this day, before me, an officer duly authorized
in the State aforesaid and in the County aforesaid to take acknowledgments, the
foregoing instrument was acknowledged before me by ________________, who is
personally known to me or who has produced as identification.
WITNESS my hand and official seal in the County and State last aforesaid
this _____ day of ___________, 199__.
____________________________________________
Notary Public
State of ____________
____________________________________________
Typed, printed or stamped name
of Notary Public
My Commission Expires:
Exhibit D- 2
<PAGE>
EXHIBIT E
---------
FORM OF EMPLOYMENT AGREEMENT
THIS EMPLOYMENT AGREEMENT ("Agreement") is made and entered into this____
day of January, 1997 by and between HIREL HOLDINGS, INC., a Florida corporation
("Company"), and ________________________ ("Employee").
WITNESSETH:
-----------
WHEREAS, the Company is engaged in the business of distributing and
selling marine parts, components and accessories ("Company's Business"); and
WHEREAS, subject to the terms and conditions hereinafter set forth, the
Company desires to employ Employee, and Employee desires to be employed by the
Company.
NOW, THEREFORE, in consideration of the mutual promises set forth herein,
and other good and valuable consideration, the receipt and sufficiency of which
is hereby acknowledged, the parties hereto hereby agree as follows:
1. RECITALS AND EXHIBITS. The foregoing recitals and any exhibits
referred to herein and attached hereto are true and correct and are incorporated
herein by this reference.
2. EMPLOYMENT. In exchange for the Compensation (as hereinafter
defined) and subject to the other terms and conditions hereinafter set forth,
the Company hereby employs Employee to render the Employee Duties (described in
Section 3 hereof) as an employee of the Company, and Employee hereby accepts
such employment.
3. EMPLOYEE DUTIES. For purposes of this Agreement, "Employee Duties"
shall mean ______________________________________ faithfully and diligently
under the supervision and direction of the Board of Directors of the Company.
Employee shall be required to devote all his business efforts, skill and
abilities to the business and affairs of the Company, and shall be a full-time
employee of the Company.
4. COMPENSATION. In exchange for the performance of Employee's duties
hereunder, the Company hereby agrees to pay Employee the following Compensation:
(a) BASE SALARY. The Company shall pay Employee a gross annual
base salary ("Salary") of ____________________ Thousand Dollars ($____________).
Salary shall be paid by the Company in accordance with the Company's regular
payroll practices, but not less often than once every two (2) weeks.
Exhibit E- 1
<PAGE>
(b) WITHHOLDING. The Company shall be entitled to deduct or
withhold from all Compensation payable hereunder all amounts required to be
deducted or withheld from Compensation pursuant to state or federal law.
(c) OTHER BENEFITS.
(i) FRINGE BENEFITS. Employee shall be eligible to
participate, on the same basis and subject to the same qualifications as the
other Employees of the Company, in all other employee benefits made available to
Employees of the Company, including any pension, profit-sharing plan, life,
health, medical, dental, hospitalization or surgical insurance plan or policy,
and any vacation or fringe benefit plans or programs, whether now existing or
hereafter established.
(ii) EXPENSE REIMBURSEMENT. It is contemplated that, in
connection with his employment hereunder, Employee may incur business,
entertainment and travel expenses. The Company agrees to reimburse Employee in
full for all reasonable, ordinary and necessary business, entertainment and
other related expenses, including travel expenses, incurred or expended by him
incident to the performance of his duties hereunder, and incurred or expended in
accordance with the Company's policies with respect to such expenses, upon
submission by Employee to the Company of such vouchers or expense statements
satisfactorily evidencing such expenses as may be reasonably required by the
Company or its independent certified public accountants.
(iii) VACATION. It is understood and agreed by the parties
hereto that during the term of Employee's employment hereunder he shall be
entitled to three weeks of paid annual vacation (taken consecutively or in
segments). Unused vacation time in any year shall not be carried over to any
subsequent year.
5. TERM. This Agreement shall commence on the date hereof and shall
continue to be in effect until December 31, 1997 ("Term"), unless terminated
prior to the end of the Term in accordance with Section 6 of this Agreement.
6. TERMINATION BY COMPANY.
(a) The Company shall have the right to terminate the employment
of Employee for cause immediately upon written notice to Employee. For purposes
of this Agreement, "cause" shall mean the occurrence of any of the following,
each of which shall be deemed a breach of this Agreement:
(i) Employee's failure (other than as a result of illness or
mental or physical disability), within fifteen (15) days after written notice
from the Company, to cure any material breach of the Employee Duties or his
other obligations under this Agreement;
(ii) Employee's death;
Exhibit E- 2
<PAGE>
(iii) Employee's negligence in the performance of the Employee
Duties or otherwise that has resulted in a material loss to the Company;
(iv) Employee's commission of any act of corporate theft,
misappropriation of funds, breach of duty as an officer of the Company or other
willful misconduct, act of dishonesty or intentional harm against or to the
Company;
(v) Employee's conviction of or pleading nolo contendere to
any felony;
(vi) Employee's failure to perform his duties hereunder on
account of an incapacitating physical or mental condition for one hundred twenty
(120) or more work days in any six (6) month period ("Permanent Disability"). If
there is any dispute as to whether the Employee has suffered a permanent
disability, the Employee shall submit to an examination by a physician whose
selection shall be agreed upon by both the Employee and the Company, and whose
determination shall be determinative of the issue; or
(vii) Employee's failure to abide by the Company's written
policies or procedures, including, but not limited to, the Company's policy
against sexual harassment and discrimination.
In the event the Company elects to terminate Employee's employment
hereunder as set forth above, the Company shall give written notice to such
effect to Employee, which notice shall describe in reasonable detail the actions
of Employee constituting cause.
(b) In the event that the Company shall terminate Employee for any
reason other than for cause as set forth in Section 6(a) above, Employee shall
be entitled to the compensation set forth in Section 4 hereof through the
remainder of the Term, notwithstanding that Employee shall no longer be employed
by the Company.
7. CONFIDENTIAL INFORMATION AND COMPETITION.
(a) CONFIDENTIAL INFORMATION. Employee hereby acknowledges that he
will or may be making use of, acquiring and adding to confidential information
of a special and unique nature and value affecting and relating to the Company
and its operations, including, but not limited to, the Company's Business, the
identity of the Company's customers and suppliers, prices paid by the Company
for inventory, its business practices, marketing strategies, expansion plans,
the Company's contracts, business records and other records, the Company's trade
secrets, inventions, techniques used in the Company's Business, know-how and
technologies, whether or not patentable, and other similar information relating
to the Company and the Company's Business (all the foregoing regardless of
whether same was known to Employee prior to the date hereof or is or becomes
known to third parties is hereinafter referred to collectively as "Confidential
Information"). Employee further recognizes and acknowledges that all
Confidential Information is the exclusive property of the Company, is material
and confidential, and greatly affects the legitimate business interests,
goodwill and effective and successful conduct of the business of the Company.
Exhibit E- 3
<PAGE>
Accordingly, Employee hereby covenants and agrees that he will use the
Confidential Information only for the benefit of the Company and shall not at
any time, directly or indirectly, either during the Term of this Agreement or
afterward, divulge, reveal or communicate any Confidential Information to any
person, firm, corporation or entity whatsoever, or use any Confidential
Information for his own benefit or for the benefit of others.
(b) COMPETITION. Employee hereby acknowledges and agrees that the
Company would suffer irreparable injury if Employee competes with the Company.
As a material inducement to the Company to enter into this Agreement, Employee
hereby covenants and agrees that, unless the Company and its successors and
assigns shall cease to engage in the Company's Business, he shall not:
(i) during the period beginning on the date hereof and
continuing until one (1) year following the date of the termination of
Employee's employment hereunder, directly or indirectly, operate, organize,
maintain, establish, manage, own, participate in, or in any manner whatsoever,
individually or through any corporation, firm or organization of which he shall
be affiliated in any manner whatsoever, have any interest in, whether as owner,
operator, partner, stockholder, director, trustee, officer, lender, employee,
principal, agent, consultant or otherwise, any other business or venture in any
county or city anywhere in the world where the Company does business at the time
of termination of employment, which engages in the Business or is otherwise in
competition with the Company or any assigns of the Company, unless such activity
shall have been previously agreed to in writing by the Company and its
successors and assigns;
(ii) during the period beginning on the date hereof and
continuing until three (3) years following the date of the termination of
Employee's employment hereunder, directly or indirectly, divert business from
the Company or its successors or assigns, or solicit business from, divert the
business of, or attempt to convert to other methods of using the same or similar
services as are provided by the Company, any client or account of the Company;
or
(iii) during the period beginning on the date hereof and
continuing until three (3) years following the date of the termination of
Employee's employment hereunder, directly or indirectly, solicit for employment,
employ or otherwise engage the services of, any employees or consultants of the
Company or its successors or assigns.
(c) INJUNCTION AND ATTORNEY'S FEES. In view of the irreparable
injury of the Company that would result from a breach or threatened breach of
Employee of the covenants or agreements under Sections 7 (a) or (b) hereof, and
because there is not an adequate remedy at law to protect the Company from the
ongoing breach of those covenants, Employee acknowledges that a permanent
injunction is an appropriate remedy for such a breach or threatened breach.
These remedies shall be in addition to and not in limitation of any other rights
or remedies to which the Company is or may be entitled at law or in equity under
this Agreement. Employee further agrees that in the event the Company incurs any
fees or costs in order to enforce the provisions of Sections 7 (a) and (b)
hereof and the Company prevails in such enforcement, Employee shall pay all fees
Exhibit E- 4
<PAGE>
and costs so incurred by the Company, including, but not limited to, reasonable
attorneys' and paralegals' fees at all trial and appellate levels.
(d) REASONABLENESS OF RESTRICTIONS. Employee has carefully read and
considered the provisions of Sections 7 (a), (b) and (c) hereof and, having done
so, agrees that the covenants set forth in those Sections are fair and
reasonable and are reasonably required to protect the legitimate business
interests of the Company. Employee agrees that the covenants set forth in
Sections 7 (a), (b) and (c) hereof do not unreasonably impair the ability of
Employee to conduct any unrelated business or to find gainful work in his field.
The parties hereto agree that if a court of competent jurisdiction holds any of
the covenants set forth in Sections 7 (a) or (b) unenforceable, the court shall
substitute an enforceable covenant that preserves, to the maximum lawful extent,
the scope, duration and all other aspects of the covenants deemed unenforceable,
and that the covenant substituted by the court shall be immediately enforceable
against Employee. The foregoing shall not be deemed to affect the right of the
parties hereto to appeal any decision by a court concerning this Agreement.
(e) SURVIVAL. This Section 7 shall survive the termination of this
Agreement and Employee's employment hereunder.
8. RIGHTS TO INVENTIONS, PATENTS AND COPYRIGHTS.
(a) Employee shall promptly disclose in writing to the Company:
all ideas, inventions, discoveries, devices, machines, apparatus, methods,
compositions, know-how, works, processes and improvements to any thereof,
whether or not patentable or copyrightable, that he may conceive, make, develop,
invent, reduce-to-practice, author or discover, whether solely or jointly or
commonly with others, during his employment with the Company, or within one
calendar year following the termination of his employment with the Company,
which relates to the business of the Company at the time of termination (the
items specified in this Section 8(a) are hereinafter collectively referred to as
"Inventions"). All Inventions are the sole and exclusive property of the
Company.
(b) Employee shall promptly assign, transfer and set over unto the
Company, its successors and assigns, all of his rights, title and interest in
and to all Inventions, all applications for Letters Patent or Copyrights,
foreign and domestic, which have or may be filed on such Inventions, all
divisionals, continuations, continuations-in-part, stream-line continuations,
substitutions, refiles, derivatives, and extensions thereof, all Copyrights, all
Letters Patent of the United States and its territorial possessions and all
Letters Patent of foreign countries which may be granted therefor, and all
reexaminations and reissues of said Letters Patent, including the subject matter
of any and all claims which may be obtained in every such domestic and foreign
patent, the same to be held and enjoyed by the Company for its own and exclusive
use and advantage, and for the exclusive use and advantage of its successors,
assigns and other legal representatives, to the full end of the term or terms
for which said Copyrights and Letters Patent of the United States, territories
and foreign countries are or may be granted, reexamined or reissued, as fully
and entirely as the same would have been held and enjoyed by Employee, if the
assignment had not been made.
Exhibit E- 5
<PAGE>
(c) During and subsequent to the Term hereof, Employee authorizes
and requests the Commissioner of Patents to issue to the Company all Letters
Patent of the United States on all Inventions and on all divisionals,
continuations, continuations-in-part, stream-line continuations, substitutions,
refiles, derivatives, extensions, reexaminations and reissues thereof, and
hereby covenants that he has not executed and will not execute any agreement in
conflict therewith.
(d) Employee further covenants and agrees that he will, during and
subsequent to the Term hereof, without demanding any further consideration
therefor, at any time, upon request, execute, or cause to be executed, and
deliver any and all papers that may be necessary or desirable to perfect the
title to any Invention and to such Letters Patent and Copyrights as may be
granted therefor, in the Company, its successors, assigns or other legal
representatives, and that if the Company, its successors, assigns, or other
legal representatives shall desire to file any divisional, continuation,
continuation-in-part, stream-line continuation, substitute, refile, extension,
reexamination, reissue, or derivative application, or to secure a reissue or
reexamine of such Letters Patent, or to file a disclaimer relating thereto,
Employee will upon request, sign, or cause to be signed, all papers, make or
cause to be made all rightful oaths, and do all lawful acts requisite for the
filing for reissue and procuring thereof, and for filing of such disclaimer.
(e) Employee does further covenant and agree, that he will, at any
time during and subsequent to the Term hereof, upon request, communicate to the
Company, its successors, assigns, or other legal representatives, such facts
relating to the Inventions, Letters Patent and Copyrights or to the history
thereof, as may be known to him, and testify, at the Company's expense, as to
the same in any interference or other litigation or proceeding in which Employee
is not a party and does not have an interest when requested to do so.
9. RESTRICTIONS ON CONFLICTS. Employee hereby agrees that except as set
forth herein or agreed to in writing by the Board of Directors of the Company,
the Company shall not transact any business with any entity in which either the
Employee, any relative of Employee or any spouse of such relative is a
shareholder, partner, officer, director or employee.
10. MISCELLANEOUS.
(a) NOTICES. All notices, demands or other communications given
hereunder shall be in writing and shall be deemed to have been duly given only
upon hand delivery thereof or upon the first business day after mailing by
United States registered or certified mail, return receipt requested, postage
prepaid, addressed as follows:
Exhibit E- 6
<PAGE>
To Company: Hirel Holdings, Inc.
650 Southwest 16th Terrace
Pompano Beach, FL 33069
To Employee: ____________________________
____________________________
____________________________
or to such other address or such other person as any party shall designate, in
writing, to the other for such purposes and in the manner hereinabove set forth.
(b) ENTIRE AGREEMENT. This Agreement sets forth all the promises,
covenants, agreements, conditions and understandings between the parties hereto
with respect to Employee's employment, and supersedes all prior and
contemporaneous agreements, understandings, inducements or conditions, expressed
or implied, oral or written, except as herein contained.
(c) BINDING EFFECT; NO ASSIGNMENT. This Agreement shall be binding
upon the parties hereto, their heirs, administrators, successors and assigns. No
party may assign or transfer its interests herein, or delegate its duties
hereunder, without the written consent of the other party. Any assignment or
delegation of duties in violation of this provision shall be null and void.
(d) AMENDMENT. The parties hereby irrevocably agree that no
attempted amendment, modification, termination, discharge or change
(collectively, "Amendment") of this Agreement shall be valid and effective,
unless the parties shall unanimously agree in writing to such Amendment.
(e) NO WAIVER. No waiver of any provision of this Agreement shall
be effective unless it is in writing and signed by the party against whom it is
asserted, and any such written waiver shall only be applicable to the specific
instance to which it relates and shall not be deemed to be a continuing or
future waiver.
(f) GENDER AND USE OF SINGULAR AND PLURAL. All pronouns shall be
deemed to refer to the masculine, feminine, neuter, singular or plural, as the
identity of the party or parties, or their personal representatives, successors
and assigns may require.
(g) COUNTERPARTS. This Agreement and any amendments may be
executed in one or more counterparts, each of which shall be deemed an original,
but all of which together will constitute one and the same instrument.
(h) HEADINGS. The article and section headings contained in this
Agreement are inserted for convenience only and shall not affect in any way the
meaning or interpretation of the Agreement.
Exhibit E- 7
<PAGE>
(i) GOVERNING LAW. This Agreement shall be construed in accordance
with the laws of the State of Florida, and agreed upon venue, to the extent
permitted by law, shall be Broward County, Florida.
(j) FURTHER ASSURANCES. The parties hereto will execute and
deliver such further instruments and do such further acts and things as may be
reasonably required to carry out the intent and purposes of this Agreement.
(k) NO THIRD PARTY BENEFICIARY. This Agreement is made solely and
specifically among and for the benefit of the parties hereto, and their
respective successors and assigns subject to the express provisions hereof
relating to successors and assigns, and no other person shall have any rights,
interest or claims hereunder or be entitled to any benefits under or on account
of this Agreement as a third-party beneficiary or otherwise.
(l) PROVISIONS SEVERABLE. This Agreement is intended to be
performed in accordance with, and only to the extent permitted by, all
applicable laws, ordinances, rules, and regulations of the jurisdiction in which
the parties do business. If any provision of this Agreement, or the application
thereof to any person or circumstances shall, for any reason or to any extent,
be invalid or unenforceable, the remainder of this Agreement and the application
of such provision to other persons or circumstances shall not be affected
thereby, but rather shall be enforced to the greatest extent permitted by law.
(m) LITIGATION. If any party hereto is required to engage in
litigation against any other party hereto, either as plaintiff or as defendant,
in order to enforce or defend any rights under this Agreement, and such
litigation results in a final judgment in favor of such party ("Prevailing
Party"), then the party or parties against whom said final judgment is obtained
shall reimburse the Prevailing Party for all direct, indirect or incidental
expenses incurred, including, but not limited to, all attorneys' fees, court
costs and other expenses incurred throughout all negotiations, trials or appeals
undertaken in order to enforce the Prevailing Party's rights hereunder.
(n) REPRESENTATION BY EMPLOYEE. Employee hereby represents and
warrants that he is not a party to any agreement, contract or understanding,
whether of employment or otherwise, which would in any way restrict or prohibit
him from undertaking or performing employment with the Company in accordance
with the terms and conditions of this Agreement.
Exhibit E- 8
<PAGE>
IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of
the date first above written.
WITNESSES: COMPANY:
HIREL HOLDINGS, INC., a
Delaware corporation
_______________________________ By:___________________________________
_______________________________
EMPLOYEE:
_______________________________ ______________________________________
_______________________________
Exhibit E- 9
AGREEMENT OF SALE AND PURCHASE
------------------------------
THIS AGREEMENT OF SALE AND PURCHASE ("Agreement") made as of the 8th day
of July, 1997, by and between JERRY'S MARINE SERVICE OF FORT LAUDERDALE, INC.
("Seller") Florida corporation, and HIREL HOLDINGS, INC., a Florida corporation
and/or its nominees or assigns ("Purchaser").
W I T N E S S E T H:
WHEREAS, Seller is the owner and holder of the fee simple title to that
certain parcel of real property legally described on EXHIBIT "A" attached hereto
and made a part hereof, together with all easements, rights-of-way, privileges,
appurtenances and rights to same, belonging to and inuring to the benefit of
said real property; all strips and gores, if any; all right title and interest,
if any, of Seller in and to any land lying in the bed of any street, road,
avenue, open or proposed, in front of or adjoining said property at the center
line thereof, and all right, title and interest of Seller in and to any awards
made or to be made in lieu thereof, and in and to any unpaid awards for damage
to said property by reason of change of grade of any street ("Land"); and
WHEREAS, Seller operates the Land with all structures and other
improvements located thereon, which has street address of 100 S.W. 16th Street,
Fort Lauderdale, Florida (hereinafter sometimes referred to as "Complex"); and
WHEREAS, Seller is the owner of the following "Personal Property," to-wit:
(i) all furniture, furnishings, fixtures, appliances, inventory, supplies,
equipment, chattels, heating, ventilating and air conditioning system(s) and
other articles of personal property placed on, attached to or used in connection
with the Complex; (ii) all licenses, franchises, certificates of occupancy and
other permits relating to the operation and maintenance of the Complex; and
(iii) all permits, licenses, soil tests, engineering plans, reports, studies and
any and all other documents which Seller may have or may have the right to
obtain pertaining to the "Subject Property," as hereinafter defined,
("Documents"); and
WHEREAS, the Land, Personal Property and all right, title and interest to
the Complex, together with all of the rights and appurtenances appertaining
thereto, are hereinafter collectively referred to as the "Subject Property;" and
WHEREAS, Seller and Buyer are parties to that certain Asset Purchase
Agreement of even date herewith ("Asset Agreement") whereby Buyer has contracted
to purchase from Seller and Jerry's Marine Service, Inc. certain assets (which
assets include the Subject Property),
WHEREAS, Purchaser desires to purchase the Subject Property from Seller
and Seller desires to sell the Subject Property to Purchaser, all for the price
and pursuant to the terms and conditions hereinafter set forth;
1
<PAGE>
NOW, THEREFORE, in consideration of the premises and other good and
valuable consideration, the receipt, adequacy and sufficiency of which are
hereby acknowledged, the parties hereto, each intending to be legally bound, do
hereby agree as follows:
1. RECITATION. The recitations set forth in the preamble of this
Agreement are true and correct and are incorporated herein by this reference.
2. SALE OF SUBJECT PROPERTY. Seller shall sell, transfer, assign and
convey to Purchaser at the "Closing," as hereinafter defined, the Subject
Property, and Purchaser shall accept such conveyance, subject to the conditions
hereof and upon the representations and warranties herein made.
3. PURCHASE PRICE.
3.1 The Purchase Price to be paid by Purchaser to Seller for the
Subject Property ("Purchase Price") is part of and included within the purchase
price to be paid pursuant to the Asset Agreement. 3.2 At the closing, the
Purchaser shall pay to the Seller the entire Purchase by wire transfer, subject
to prorations, adjustments and credits as hereinafter set forth.
4. PERMITTED ENCUMBRANCES. At Closing, Seller shall deliver the Land by
Statutory Warranty Deed ("Deed") in proper form for recording, together with all
documentary stamps attached thereto, conveying good, marketable and insurable
title to the Subject Property, free and clear of all liens, claims, easements,
limitations, restrictions or encumbrances whatsoever, except for the following
"Permitted Encumbrances," to wit:
(a) Ad valorem real estate taxes for the year of Closing and
subsequent years not yet due and payable; and
(b) Zoning restrictions and prohibitions imposed by governmental
authority; and
(c) Restrictions and other matters appearing on the plat or
otherwise common to the subdivision.
5. TITLE. Within fifteen (15) days following the date of the execution
of this Agreement, ("Title Delivery Date"), Seller shall, at its expense, cause
to be delivered to Purchaser's counsel, John L. Shiekman, Esquire, of the law
firm of Ruden, McClosky, Smith, Schuster & Russell, P.A., a copy of Seller's
existing title insurance policy, if available, covering the Subject Property and
a complete abstract of title covering the Subject Property brought current to
the date hereof ("Abstract") (Seller's existing title insurance policy and the
Abstract being hereinafter collectively referred to as the "Seller's Title
Evidence"). Seller represents and Seller's Title Evidence will show Seller's
title to the Subject Property to be good, marketable and insurable (and will
show that the Subject Property has direct ingress and egress from a paved
publicly dedicated right-of-way).
2
<PAGE>
On or prior to the Title Delivery Date, Seller shall pay for and deliver
to the Purchaser an up-to-date survey of the Land ("Survey") prepared and signed
under seal by a surveyor licensed by the State of Florida in accordance with the
Minimum Technical Standards set forth in rules adopted by the Florida Board of
Land Surveyors pursuant to Florida Statutes 472.027 dated not more than thirty
(30) days prior to the Title Delivery Date. Said Survey shall show the number of
net acres contained in the Land, and a legal description thereof. In addition,
such Survey shall overlay all easements (temporary or permanent), rights-of-way
and other matters affecting title to the Land as of the date of execution of
this Agreement. If the Survey reveals any encroachments upon the Land or that
any improvements on the Land encroach onto adjacent property, said encroachments
shall be treated as a title defect hereunder.
Purchaser shall have twenty (20) business days from receipt of the last of
the Seller's Title Evidence in which to examine same ("Initial Title Review
Period"). In the event that Purchaser is not satisfied with the status of title
with respect to the Land for any reason (including an objection as to any of the
Permitted Encumbrances), Purchaser shall have the right to terminate this
Agreement upon delivery of written notice to Seller prior to the end of the
Initial Title Review Period, whereupon the parties shall be released of all
further obligations each to the other under this Agreement. Additionally, if
Purchaser does not elect to terminate this Agreement as provided in the
preceding sentence and if title is found to be subject to any matters other than
the Permitted Encumbrances, Purchaser shall within said Initial Title Review
Period, notify Seller in writing specifying the defects. Seller shall have sixty
(60) days from receipt of such notice to cure the defect and if after said sixty
(60)-day period Seller shall not have cured such defect after a diligent and
good faith effort to do so, then the provisions of Paragraph 16.2 shall be
applicable.
6. REPRESENTATIONS AND WARRANTIES. As a material inducement to
Purchaser to execute this Agreement and to close the transaction contemplated
hereby and to pay the Purchase Price therefor, Seller covenants, represents and
warrants to Purchaser as follows, to wit:
(a) Seller has the full right, power and authority to own, operate
and convey the Subject Property, and does not need any further consents,
joinders or other authorization from any governmental or private entity,
corporation, partnership, firm individual or other entity to execute,
deliver and perform its obligations under this Agreement, and to
consummate the transactions contemplated hereby.
(b) To the best of Seller's knowledge and belief, neither the
entering into this Agreement nor the Closing will constitute a violation
or breach by Seller of any contract, agreement, understanding or
instrument to which it is a party or by which Seller or the Subject
Property is subject or bound; of any judgment, order, writ, injunction or
decree issued against or imposed upon them; or will result in the
violation of any applicable law, order, rule or regulation of any
governmental or quasi-governmental authority.
3
<PAGE>
(c) At Closing, no work shall have been performed or be in progress
and no materials or services shall be furnished with respect to the
Subject Property or any portion thereof which could give rise to any
mechanic's, materialmen or other liens. At Closing, Seller shall furnish
to Purchaser an affidavit attesting to the absence of any such liens or
potential liens (if there are no such liens) to permit the Title Company
to delete the mechanic's lien standard preprinted exception.
(d) Seller is not a party to and the Subject Property is not
affected by any service, maintenance, property management or any other
contracts or other agreements of any kind in connection with the Subject
Property, except as set forth on EXHIBIT "B" attached hereto and made a
part hereof ("Service Contracts").
(e) There is no condemnation or eminent domain proceeding pending
with respect to any portion of the Subject Property and Seller has
received no notice, nor has any knowledge of, any pending or contemplated
condemnation proceeding which could affect any portion of the Subject
Property.
(f) Seller is neither a "foreign person" nor a "foreign corporation"
(as those terms are defined in Section 7701 of the Internal Revenue Code
of 1954, as amended).
(g) Subsequent to the execution of this Agreement through and
including the Closing, the Subject Property will be kept in its present
condition and all reasonable repairs and maintenance required with respect
to the Subject Property will be made.
(h) There are no legal actions, suits or other legal or
administrative proceedings pending or, to the best of Seller's knowledge
and belief, threatened against the Subject Property or Seller and Seller
is not aware of any facts which might result in any such action, suit or
other proceeding.
(i) There are no leases, use rights or other rights of occupancy
which affect the Subject Property, and there will be no leases, use rights
or other rights of occupancy affecting the Subject Property at Closing.
(j) Seller owns good, marketable and insurable fee simple title to
the Subject Property and shall be conveyed to Purchaser, free and clear of
all liens, claims and encumbrances, subject to the Permitted Encumbrances.
(k) To the best of Seller's knowledge and belief, except for the
right of Purchaser to acquire the Subject Property pursuant to this
Agreement, no other person, firm or entity has any right to acquire all or
any portion of the Subject Property or any interest therein.
4
<PAGE>
The representations, warranties and agreements made in this
Agreement shall be deemed to apply as of the date of execution of this
Agreement and shall be construed as continuing warranties, representations
and agreements which shall survive the Closing.
7. COVENANTS OF SELLER. As a material inducement to Purchaser entering
into this Agreement, Seller hereby covenants unto Purchaser the following, to
wit:
(a) Immediately after executing this Agreement, Seller will furnish,
or cause to be furnished, to Purchaser any documents and other information
requested by Purchaser with respect to the Subject Property which Seller
has in its possession or has a right to possess (without payment of
additional fees therefor), including, but not limited to, the Documents;
and
(b) Purchaser, its agents, employees and representatives shall have
access to the Subject Property at all times subsequent to the date of
execution of this Agreement with full right to: (i) inspect the Subject
Property; (ii) review, inspect, copy and analyze all books, records and
other financial information and data of Seller with respect to the Subject
Property and the operation thereof, and (iii) to conduct all tests thereon
including, but not limited to, soil borings and hazardous waste studies,
and to make such other examinations with respect thereto as Purchaser, its
counsel, licensed engineers, surveyors or other representative may deem
necessary or desirable. Any entry on or to the Subject Property by
Purchaser or its authorized representatives pursuant to the provisions
hereof shall be at the risk of Purchaser and Purchaser hereby agrees to
indemnify and hold harmless Seller from all damage to the Subject Property
or resulting from Purchaser's inspections. Notwithstanding anything
contained herein to the contrary, in the event during the course of the
inspections performed by, through or under Purchaser, environmental
contamination is discovered, then in that event the indemnification of
Purchaser to Seller as contemplated by this Paragraph 7(b) shall not
include any costs associated with the clean-up of such environmental
contamination; and
(c) Seller agrees to promptly furnish Purchaser with all necessary
authorizations to make searches of records of applicable governmental
authorities; and
(d) Seller shall not enter into any contracts for sale with regard
to the Complex during the term of this Agreement.
8. CONDITION OF PURCHASER'S OBLIGATIONS. The parties hereto acknowledge
that Purchaser, as of the date of the execution of this Agreement, has not yet
had an opportunity to review, examine, evaluate or otherwise satisfy itself with
respect to the soil condition, environmental condition, engineering inspections
of the Complex and the terms and provisions of the Service Contracts. In that
regard, Purchaser shall have a period of time ("Inspection Period") which is the
latter of: (a) sixty (60) days following the date of the execution of this
Agreement; or (b) thirty (30) days following Purchaser's receipt of the Title
5
<PAGE>
Evidence; or (c) twenty (20) business days following Purchaser's receipt of
true, complete and correct copies of the Service Contracts, in which to conduct
any and all inspections, examinations, due diligence and other inquiries deemed
necessary or desirable by Purchaser, its agents, employees and professionals.
If, prior to 5:00 p.m. on a date ("Inspection Completion Date") which is the end
of the Inspection Period, Purchaser determines that the Subject Property is
unacceptable to Purchaser, Purchaser shall have the unconditional right to give
notice to Seller electing to terminate this Agreement, provided such notice is
delivered no later than 5:00 p.m. on the Inspection Completion Date.
Notwithstanding the foregoing however, in the event Purchaser has not completed
its environmental inspections or finds the environmental inspections of the
Complex to be unacceptable and Purchaser does not elect to terminate this
Agreement as contemplated by this Paragraph 8, then in that event the terms and
provisions of Paragraph 9 hereof shall control. Seller shall not be entitled to
and is hereby estopped from objecting to the good faith determination of the
Purchaser with respect to its evaluation as set forth in this Paragraph 8. In
the event that such written notice is given by the Purchaser prior to 5:00 p.m.
on the Inspection Completion Date, then, in that event, this Agreement shall
terminate, and neither party shall have any further rights or obligations each
to the other under this Agreement. In the event the Purchaser does not elect, in
writing, to terminate this Agreement pursuant to this Paragraph 8 on or before
5:00 p.m. on the Inspection Completion Date, then the condition set forth herein
shall be deemed satisfied and the remainder of this Agreement shall remain in
full force and effect according to its terms. The provisions of this Paragraph 8
shall prevail over any other Section or Paragraph of this Agreement in the event
of any conflict or ambiguity.
9. ENVIRONMENTAL INSPECTIONS. In the event a Phase I environmental
report obtained by Purchaser in connection with its environmental inspections of
the Subject Property indicates that additional testing is required in order to
quantify the status of the environmental condition of the Subject Property
(including a Phase II environmental audit), then in that event the Inspection
Completion Date shall be the earlier to occur of: (i) ten (10) business days
following receipt of a report evidencing the additional testing performed; or
(ii) sixty (60) days following the Inspection Completion Date.
10. THE CLOSING. The closing of title hereunder ("Closing") shall take
place at the office of Ruden, McClosky, Smith, Schuster & Russell, P.A., 200
East Broward Boulevard, Fort Lauderdale, Florida 33302 ("Closing Location")
commencing at 10:00 a.m. on the later to occur of (i) the "Closing Date" under
the Asset Agreement (as such term is defined therein) ("Asset Closing Date"), or
(ii) ninety (90) days following the date of execution of this Agreement (unless
extended by other provisions of this Agreement). The later of (i) and (ii) shall
be defined hereunder as the Closing Date. Unless the Seller provides the
documents and instruments in proper form and content required by the Title
Company which will enable the Title Company to issue at Closing an ALTA Form B
owner's title insurance policy ("Title Policy") with respect to the Subject
Property, subject only to the Permitted Encumbrances, deleting: (i) all matters
arising between the effective date of the Commitment and recordation of the Deed
vesting fee simple title to the Subject Property in Purchaser; (ii) all
preprinted exceptions contained in the Commitment issued to Purchaser with
respect to the Subject Property; and (iii) all Schedule B Section 1 requirements
set forth in the Commitment, there shall be an escrow closing ("Title Escrow").
6
<PAGE>
Pursuant to the Title Escrow, the Deed shall be recorded and evidence of title
continued at Seller's expense, to show title in Purchaser, subject only to the
Permitted Encumbrances and the Purchase Price and other closing documents (other
than the Deed) shall be held in escrow by Escrow Agent for a period of not
longer than seven (7) business days following the Closing ("Review Period"). If
title is found not to be good, marketable and insurable subject only to the
Permitted Encumbrances, then Purchaser's attorney shall notify Seller or
Seller's attorney in writing, within said Review Period specifying the
defect(s). Seller shall have sixty (60) days from receipt of such notice to cure
such defect and if after said sixty (60) day period Seller shall not have cured
such defect after a diligent and good faith effort to do so, then the provisions
of Paragraph 16.2(b) shall be applicable. In the event Purchaser elects to
terminate this Agreement (as provided in Paragraph 16.(b) and to receive the
return of any monies paid into the Title Escrow, then simultaneously with such
return to Purchaser, Purchaser shall vacate and reconvey the Subject Property to
Seller by special warranty deed. Seller agrees to execute, acknowledge and
deliver any instrument or affidavit as shall be required by the Title Company in
order for it to issue the Title Policy subject only to the Permitted
Encumbrances.
11. PRORATIONS AND ADJUSTMENTS. Special assessment liens which have been
certified and physically commenced (certified liens) as of the Closing shall be
paid in full by Seller (and discharged such that the Subject Property is free of
same) at the Closing. Special assessment liens which have been authorized, but
where work has not been commenced and are pending (pending liens) as of the
Closing shall be assumed by Purchaser.
Real property taxes are to be prorated on a daily basis between Seller and
Purchaser as of midnight on the date of the Closing. Real property taxes shall
be prorated on the basis of the then current year's tax, if known. If the
Closing shall occur at a date when the then current year's taxes are not fixed,
and the current year assessment is available, taxes will be prorated based upon
such assessment and the prior year's millage. If the current year's assessment
is not available, then taxes will be prorated upon the basis of the taxes for
the most recent calendar year; provided, however, any tax proration based upon
an estimate may at the request of either party be promptly readjusted when the
current taxes are ascertained, and a statement to that effect is to be set forth
on the Closing statement.
All insurance (if not short rated by the Purchaser), water and sewer
charges and all other apportionable operating costs, revenues, charges and
expenses with respect to the Subject Property shall be prorated on a daily basis
as of the Closing Date. Utilities shall be read on the Closing Date and the
bills to such date paid by Seller. Seller shall be responsible for all operating
expenses for the period prior to Closing. All prepaid deposits for insurance,
utilities, etc. shall, at Purchaser's option, either be: (i) refunded to Seller
at the Closing; or (ii) transferred to Purchaser in which event the
proportionate amount thereof shall be credited to Seller. In the event Purchaser
shall elect not to continue the present insurance coverage on the Subject
Property, such coverage shall be terminated as of the Closing and there shall be
no proration of the insurance premium.
The provisions of this Paragraph 11 shall survive the Closing.
7
<PAGE>
12. BROKERAGE. The parties hereto each represent to the other that there
are no brokers that are or were instrumental in the negotiation and/or
consummation of this transaction. Seller and Purchaser hereby indemnify and hold
each other harmless from and against any costs, fees, damages, claims and
liabilities, including, but not limited to, reasonable attorneys' and
paralegals' fees arising out of any claim or demand or threats of claim made by
any broker or salesmen claiming by reason of its relationship with the offending
party or its representatives, employees or agents, whether incurred by
settlement and whether or not litigation results in all trial, arbitration and
appellate levels. The provisions of this Paragraph shall survive the Closing or
earlier termination of this Agreement.
13. CLOSING COSTThe costs of recording any corrective instruments, the
costs of all documentary stamps on the deed of conveyance and all costs incurred
with respect to the Seller's Title Evidence shall be paid by Seller. The cost of
recording the Deed and the cost of the Title Policy shall be paid by Purchaser.
Except in the event of a default hereunder, the parties shall each bear
their own respective attorneys fees.
14. DOCUMENTS TO BE DELIVERED.
(a) At the Closing, simultaneously with the payment of the Purchase
Price by Purchaser to Seller, Seller shall deliver or cause to be
delivered to Purchaser the following, to-wit:
i. A Warranty Deed conveying the fee simple title to the
Subject Property to Purchaser, subject only to the Permitted
Encumbrances in proper statutory form for recording together with
documentary stamps affixed thereto.
ii. A standard No-Lien Affidavit executed by Seller which
shall be in recordable form and otherwise satisfactory to the Title
Company in order to delete the standard printed exceptions relating
to mechanics' liens and parties-in-possession.
iii. A duly executed Bill of Sale assigning and conveying to
Purchaser title to the Complex and all of the Personal Property
covered by this Agreement free and clear of all liens and
encumbrances, except the Permitted Encumbrances.
iv. A duly executed assignment or assignments, assigning to
the Purchaser all subsisting assignable guaranties and warranties
issued or made in connection with the construction, improvement,
alteration or repair of any improvement comprising a part of the
Subject Property and with respect to the Personal Property, together
with copies of each such guaranty and warranty, if any.
8
<PAGE>
v. All original Certificates of Occupancy, licenses, permits,
authorizations and approvals required by law and issued by all
governmental and/or quasi-governmental authorities having
jurisdiction and copies of all certificates of insurance and all
other documents required pursuant to this Agreement, if, as and to
the extent Seller has any of same within its possession.
vi. An affidavit requested by the Title Company as may be
necessary to insure the gap between the effective date of the
Commitment to and through the date of the recordation of the Deed.
vii. The State of Florida Documentary Stamp Tax Return on Form
DR219 ("Clerk's Certificate").
viii. Such other documents as shall be reasonably required by
the Title Company as called for or required under the terms of any
title policy obtained or issued to the Purchaser. If any instrument,
affidavit or deposit is required by the Title Company in order to
obviate a defect in or objection or exception to title or that may
be required to enable the Title Company to issue its title
insurance, the following shall apply: (1) all such instruments and
affidavits shall be in such form and contain such terms and
conditions as may be required by said Title Company to satisfy said
company sufficiently for it to specifically insure or omit any
defect in or objection or exception to title; (2) any such deposit
shall be made with the Title Company; and (3) Seller agrees to
execute, acknowledge and deliver any such instrument and/or
affidavit and to make any such deposit.
(b) Purchaser shall deliver to Seller the Purchase Price adjusted
for all appropriate prorated items, credits and adjustments provided for
herein.
(c) At the Closing, Seller and Purchaser shall mutually execute and
deliver to each other a Closing Statement in customary form.
15. ASSIGNMENT. Purchaser shall have the right to assign this Agreement
without the prior written consent of Seller. In that regard, Seller agrees to
accept such assignment upon receipt of a document evidencing same and agrees to
acknowledge such assignee as the purchaser hereunder thereby releasing the
Purchaser hereunder.
16. DEFAULT.
16.1. In the event that Seller has complied with all terms and
provisions required to be complied with by Seller hereunder and Seller is ready,
willing and able to close but for the default of Purchaser and such default is
not cured within ten (10) days after written notice by Seller to Purchaser
specifying such default, then and upon the occurrence of all of the foregoing
events, this Agreement shall be null, void and of no further force and effect
9
<PAGE>
and neither party shall have any further liability or obligation to the other
hereunder. The parties acknowledge that this provision is the sole and only
remedy of Seller.
16.2. If: (1) Seller is unable to deliver good, insurable and
marketable title to the Subject Property, subject only to the Permitted
Encumbrances, as provided by this Agreement; or (ii) Seller shall have failed to
comply with any obligations of Seller in this Agreement; or (iii) any of the
representations and warranties made by Seller herein shall be in any material
respect inaccurate; or (iv) Seller shall otherwise be in default of this
Agreement, Purchaser shall have the right:
(a) to cancel this Agreement by giving notice to Seller and this
Agreement shall be deemed to be terminated as of the date of such notice;
or
(b) to take title subject to the defect, exception, objection,
inaccuracy or failure (i) without diminution of the Purchase Price to the
extent of a title defect arising prior to the effective date of the
Commitment, and (ii) receive a credit against the Purchase Price in an
amount equal to the cost of removing the defect, exception, objection or
inaccuracy and any costs incurred by Purchaser in curing any such failure
with respect to any defect arising after the effective date of the
Commitment.
If the provisions of Paragraph 16.2 are operative, Seller shall have
the right to receive notice from Purchaser of the facts involved and Seller
shall have an opportunity to cure the matter in question as follows: If the
matter in question can be cured by the payment of money, Seller shall have ten
(10) days to effect such curing and if the matter in question cannot be cured by
the payment of money, Seller shall have a reasonable time to use its best
efforts to effectuate such curing not to exceed sixty (60) days. The Closing
shall be extended during the period which Seller is attempting to cure any
default as provided in this Agreement.
In case of a lien or encumbrance affecting the Subject Property
which can be removed prior to or at the time of Closing by payment of a
liquidated amount, Seller covenants and agrees at Purchaser's request, to remove
such lien or encumbrance prior to or at Closing so that the Subject Property can
be conveyed to Purchaser free of same (or such lien can be satisfied out of
Closing proceeds).
None of the foregoing provisions of this Paragraph are intended to
nor shall they limit or affect the Purchaser's right to an action for specific
performance in the event of a refusal or failure by Seller to convey title to
the Subject Property to Purchaser or otherwise comply with the terms and
provisions of this Agreement.
16.3. The parties further agree that in the event it becomes
necessary for either party to litigate in order to enforce its rights under the
terms of this Agreement, then, and in that event, the prevailing party shall be
entitled to recover reasonable attorneys' and paralegal fees and the costs of
such litigation, through and including all trial and appellate litigation.
10
<PAGE>
17. RISK OF LOSS. All risk of loss, damage or destruction of the Subject
Property or any improvement thereon by fire, act of God or other casualty prior
to the Closing shall be on Seller. Seller agrees to maintain existing fire and
extended coverage insurance on the Subject Property and improvements thereon to
and through the date of the Closing. If the improvements on the Subject Property
are damaged by fire, act of God, or other casualty before the Closing and the
same can be restored to substantially the same condition as now existing within
a period of sixty (60) days following the Closing Date set forth herein, Seller
may restore the improvements (at the Seller's expense) and the Closing shall be
extended accordingly. If Seller elects not to restore the improvements within
said sixty (60) day period, Purchaser shall have the option of: (i) taking the
Subject Property as is, together with Seller assigning to Purchaser all rights
under its insurance policies and all insurance proceeds, if any, without
reduction in Purchase Price; or (ii) canceling this Agreement whereupon the
parties shall be released of any further liability hereunder.
18. CONDEMNATION OR EMINENT DOMAIN. In the event of any condemnation or
eminent domain proceedings for any public or quasi-public purposes at any time
prior to Closing resulting in a taking of any part or all of the Subject
Property, Seller shall immediately provide written notice thereof to Purchaser
and, Purchaser shall have the option: (i) to cancel this Agreement, in which
event this Agreement shall be terminated and the parties released of any further
obligation hereunder; or (ii) to close the transaction contemplated by this
Agreement, in which event the Purchase Price shall not be abated; provided,
however, Seller shall cause any condemnation or eminent domain award to be
assigned to Purchaser. Purchaser shall notify Seller of its election of (i) or
(ii) above within ten (10) business days of Purchaser's receipt of notice of any
such condemnation or eminent domain proceedings. Seller agrees that it shall not
enter into any settlement of any condemnation proceedings or eminent domain
award without the prior written consent of the Purchaser.
19. NOTICES. All notices of request, demand and other communications
hereunder shall be addressed to the parties as follows:
As to Seller: Jerry's Marine Service of Fort Lauderdale, Inc.
100 S.W. 16th Street
Fort Lauderdale, Florida
Attn: Joe Lewis
With a copy B. Alan Dobbins, III, Esquire
2601 E. Oakland Park Boulevard
Fort Lauderdale, Florida 33304
As to Purchaser: Hirel Holdings, Inc.
650 S.W. 16th Terrace
Pompano Beach, Florida 33069
Attn: Michael Duggan
11
<PAGE>
With a copy to: Ruden, McClosky, Smith, Schuster &
Russell, P.A.
200 East Broward Boulevard
Post Office Box 1900
Fort Lauderdale, Florida 33302
Attn: John L. Shiekman, Esquire
unless the address is changed by the party by like notice given to the other
parties. Notice shall be in writing, mailed certified mail, return receipt
requested, postage prepaid and shall be deemed delivered when mailed or upon
hand delivery to the address indicated. Notwithstanding the foregoing, notices,
requests or demands or other communications referred to in this Agreement may be
sent by Federal Express or other reputable overnight courier, but shall only be
deemed to have been given when received.
20. CONDITIONS. The occurrence of the following events or conditions or
the written waiver thereof by Purchaser shall be conditions precedent to
Purchaser's obligation to close the transaction contemplated by this Agreement,
to-wit:
i. At Closing, the Subject Property and its present uses shall
comply and shall have at all times prior to complied with all laws
and requirements pertaining to environmental matters relating to the
ownership, use and operation of the Subject Property, including but
not limited to, the Clean Air Act, the Federal Water Pollution
Control Act, the Comprehensive Environmental Response Compensation
and Liability Act of 1980, the Toxic Substance Control Act and
Florida Statutes, all as amended and/or modified (collectively
referred to as "Environmental Requirements").
ii. At Closing, there shall be no violations of law or any
other governmental and/or quasi-governmental ordinances, codes,
orders, development or subdivision permits or requirements noted in,
issued or threatened by any departments of building, fire, labor,
health or other federal, state, county, municipal and/or other
departments and/or governmental and/or quasi-governmental agencies
having jurisdiction with respect to the Subject Property.
iii. The Closing of the transaction contemplated by the Asset
Agreement shall have occurred prior to or simultaneously with the
Closing hereunder.
iv. At Closing, the representations and warranties set forth
herein shall remain true and correct in all respects.
The Purchaser shall, however, have the right to waive in writing, the
conditions set forth in this Paragraph 20, in whole or in part. If such
12
<PAGE>
conditions have not been satisfied or waived, in whole or in part, on or prior
to Closing, Purchaser shall have the right to (a) terminate this Agreement by
giving written notice to Seller, whereupon the parties shall be released of all
further obligations each to the other under this Agreement, or (b) proceed to
Closing, whereby the condition not otherwise satisfied shall be deemed waived.
21. EXECUTION DATE. The "date of the execution of this Agreement" shall
mean the last day upon which it becomes fully executed by Seller and Purchaser.
22. SURVIVAL. The representations, warranties, covenants and agreements
set forth in and made pursuant to this Agreement shall survive the Closing and
the execution and delivery of the documents described herein and shall not be
merged therein, nor shall they be affected by any investigation or verification
by any party hereto or by anyone on behalf of any party hereof.
23. FURTHER ASSURANCES. Each of the parties hereto agree to execute,
acknowledge and deliver and cause to be done, executed, acknowledged and
delivered all such further acts, assignments, transfers and assurances as shall
reasonably be requested of it in order to carry out this Agreement and give
effect thereto. The parties hereto acknowledge that it is to their mutual
benefit to have an orderly and efficient transfer of ownership as contemplated
hereby. Accordingly, without in any manner limiting the specific rights and
obligations set forth in this Agreement, the parties declare their intention to
cooperate each with the other in effecting the terms of this Agreement.
24. TIME IS OF THE ESSENCE. For purposes herein, the parties agree that
time shall be of the essence of this Agreement and the representations and
warranties made are all material and of the essence of this Agreement.
25. CAPTIONS AND PARAGRAPH HEADINGS. Captions and paragraph headings
contained in this Agreement are for convenience and reference only and in no way
define, describe, extend or limit the scope or intent of this Agreement, nor the
intent of any provision hereof.
26. NO WAIVER. No waiver of any provision of this Agreement shall be
effective unless it is in writing, signed by the party against whom it is
asserted and any such written waiver shall only be applicable to the specific
instance to which it relates and shall not be deemed to be a continuing or
future waiver.
27. COUNTERPARTS. This Agreement may be executed in one or more
counterparts, each of which shall be deemed to be an original, but all of which
shall constitute one and the same Agreement.
28. BINDING EFFECT. This Agreement shall inure to the benefit of and
shall be binding upon the parties hereto and their respective heirs, personal
representatives, successors and assigns.
13
<PAGE>
29. GOVERNING LAW. This Agreement shall be construed and interpreted
according to the laws of the State of Florida and venue with respect to any
litigation shall be Broward County, Florida.
30. GENDER. All terms and words used in this Agreement regardless of the
number and gender in which used, shall be deemed to include any other gender or
number as the context or the use thereof may require.
31. ENTIRE AGREEMENT. This Agreement contains and sets forth the entire
understanding between Seller and Purchaser, and it shall not be changed,
modified or amended except by an instrument in writing and executed by the party
against whom the enforcement of any such change, modification or amendment is
sought. This Agreement shall be binding upon the parties hereto and their
respective heirs, personal representatives, successors and assigns.
32. RELATIONSHIP. Nothing contained in this Agreement shall constitute
or be construed to be or create a partnership, joint venture or any other
relationship between Seller and Purchaser other than the relationship of a buyer
and seller of real and personal property as set forth in this Agreement.
33. POSSESSION. Possession of the Subject Property shall be delivered to
Buyer at the Closing, free and clear of all tenancies, use agreements and
possessory rights.
34. MODIFICATION. This Agreement shall not be modified (and no purported
modification thereof shall be effective) unless in writing and signed by the
party to be charged.
35. JOINT PREPARATION. The preparation of this Agreement has been a
joint effort of the parties and the resulting documents shall not, solely as a
matter of judicial construction, be construed more severely against one of the
parties than the other.
36. RECORDING. The parties hereby agree that neither party shall record
this Agreement or any memorandum of its terms without the prior written consent
of the other party.
37. RADON GAS. Radon gas is naturally occurring radioactive gas that,
when it has accumulated in a building in sufficient quantities, may present
health risks to persons who were exposed to it over a time. Levels of radon that
exceed federal and state guidelines have been found in buildings in Florida.
Additional information concerning radon and radon testing may be obtained from
your public health unit.
38. TERMINATION. In the event of the termination of the Asset Agreement
by any party thereto pursuant to the terms thereof, this Agreement shall be
automatically terminated and of no further force and effect.
14
<PAGE>
IN WITNESS WHEREOF, the parties hereto have duly executed this Agreement
as of the day and year first above written.
WITNESS: SELLER:
_______________________________ JERRY'S MARINE SERVICE OF FORT
Signature LAUDERDALE, INC.
_______________________________ By: /S/ Joseph E. Lewis, Jr.
Print Name -----------------------------------------
Its:
----------------------------------------
Printed Name: Joseph E. Lewis, Jr.
_______________________________ -------------------------------
Signature
_______________________________
Print Name
PURCHASER:
_______________________________ HIREL HOLDINGS, INC., a Florida
Signature corporation
_______________________________ By: /S/ Vincent Montelione
Print Name -----------------------------------------
Its: President
----------------------------------------
Printed Name: Vincent Montelione
-------------------------------
_______________________________
Signature
_______________________________
Print Name
15
<PAGE>
EXHIBIT "A"
LEGAL DESCRIPTION
16
<PAGE>
EXHIBIT "B"
SERVICE CONTRACTS
17
