EXHIBIT 10.7
INTEREST PURCHASE AGREEMENT
THIS AGREEMENT is dated for reference the 31st day of March, 1999 between
Neptune Management Corp., a company incorporated under the laws of the State of
California (the "Purchaser") and the limited partners as described in Schedule
"A" and in Schedule "E" attached to this Agreement (collectively, the "Vendors")
of Neptune-Los Angeles, Ltd., a limited partnership under the laws of the State
of California ("Neptune LA"), Neptune-Santa Barbara, Ltd., a limited partnership
under the laws of the State of California ("Neptune SB"), Neptune-Miami, Ltd., a
limited partnership under the laws of the State of Florida ("Neptune MI"),
Neptune-St. Petersburg, Ltd., a limited partnership under the laws of the State
of California ("Neptune SP"), Neptune-Ft. Lauderdale, Ltd., a limited
partnership under the laws of the State of Florida ("Neptune "FT"),
Neptune-Nassau, Ltd., a limited partnership under the laws of the State of
California ("Neptune NA"), and Neptune-Westchester, Ltd., a limited partnership
under the laws of the State of California ("Neptune WT") (Neptune LA, Neptune
SB, Neptune MI, Neptune SP, Neptune FT, Neptune NA and Neptune WT are
collectively referred to as the "Partnerships"), Lari Acquisition Company, Inc.,
a company incorporated under the laws of the State of California ("Lari Co.")
and Lari Corp., a company incorporated under the laws of the State of Florida
("Lari").
WHEREAS:
A. The Purchaser is the general partner and a 50% owner of each of the
Partnerships;
B. Each of the Vendors is the registered and beneficial owner of those number
limited partnership units in one or more of the Partnerships as set forth
beside each of their names in Schedule "A" and in Schedule "E"
(collectively, the "Interests");
C. Each of the Partnerships have been established pursuant to limited
partnership agreements (the "Partnership Agreements") which set forth,
among other things, the manner in which the Interests may be sold, assigned
or transferred;
D. The Purchaser is being purchased by Lari Co. and Lari pursuant to two
purchase agreements dated March 31, 1999 (the "Share Purchase Agreements");
and
E. The Vendors have agreed to sell their respective Interests to the Purchaser
and the Purchaser has agreed to purchase the Interests from the Vendors.
NOW THEREFORE, in consideration of the mutual covenants and agreements contained
in this Agreement and other good and valuable consideration, the receipt and
sufficiency of which is hereby acknowledged, the parties agree as follows:
1. PURCHASE AND SALE OF INTERESTS
Each of the Vendors hereby sells and transfers to Lari through the Purchaser,
and Lari through the Purchaser hereby purchases and acquires from each of the
Vendors, all of each of the Vendors' right, title and interest in and to the
Interests.
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2. PURCHASE PRICE
The Purchaser hereby agrees to pay to the Vendors $9,022,626.00 (the "Purchase
Price") for the Interests,
3. PAYMENT OF PURCHASE PRICE
3.1 The Purchaser will pay the Purchase Price on March 31, 1999, or such
other date as the parties may agree (the "Closing Date"), as follows:
(a) the sum of $361,874.00 byway of wire transfer to City National
Bank, 400 North Roxbury Drive, Beverly Hills, CA, 90210 (the
"Escrow Agent"), in trust for the Vendors (the "Escrow Agent");
(b) 357,025 shares of common stock of Lari (the "Lari Shares") issued
by Lari to each of the Vendors and delivered to the Escrow Agent,
in trust for the Vendors; and
(c) the sum of $6,875,627.00 by way of an undivided 36.1875105%
interest to the Vendors in a promissory note ("Note"), in the
form attached as Schedule "B" to this Agreement, delivered to the
Escrow Agent, in trust for the Vendors.
3.2 The Purchase Price payable to each of the Vendors is set out in
Schedule "A" and Schedule "E" of this Agreement.
4. ACKNOWLEDGMENT UNDER THE PARTNERSHIP AGREEMENTS
The parties acknowledge that all conditions required in each of the Partnership
Agreements for the sale, assignment or transfer of the Interests as contemplated
herein, including, but not limited to, any right of first refusal offerings and
any consents, have been satisfied or hereby waived and that any sale, assignment
or transfer of the Interests as contemplated herein does not violate any
provision of any of the Partnership Agreements.
5. VENDORS' WARRANTIES AND REPRESENTATIONS
5.1 Each of the Vendors represent, warrant and covenant on behalf of each
of themselves only and on behalf of no other partners, limited or
general, to the Purchaser, Lari and Lari Co. as follows:
(a) each of the Vendors is the registered and beneficial owner of
those number of limited partnership units of one or more of the
Partnerships as set forth beside each of their names in Schedule
A and Schedule `E";
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(b) all of the Interests are validly issued and outstanding as fully
paid and non-assessable in the limited partnership units of the
Partnerships and are free and clear of all liens, charges and
encumbrances;
(c) the Purchaser is not indebted to any of the Vendors and none of
the Vendors is indebted to the Purchaser;
(d) each of the Vendors has good and sufficient right and authority
to enter into this Agreement and to transfer legal and beneficial
title and ownership of the Interests to the Purchaser;
(e) none of the Vendors has previously entered into a binding
agreement for the sale of, or the granting of an option to
purchase their respective Interests;
(f) none of the Vendors has relied on any representations,
understandings or other inducements not expressly set forth in
this Agreement;
(g) each of the Vendors has been fully advised by independent legal
counsel concerning the terms and effect of this Agreement;
(h) each of the Vendors enter into this Agreement voluntarily,
without duress or undue influence;
(i) each of the Vendors has the legal capacity, power and authority
to hold the Lari Shares and the Note to be owned by them on the
Closing Date (the "Securities");
(j) each of the Vendors acknowledge that Lari Co. and Lari are newly
formed companies which were formed in part for the purpose of
acquiring the Interests and that the Vendors have not been
provided with any offering memorandum or similar disclosure
document, including financial information, in respect of the
current or proposed business activities of Lari Co. and Lari;
(k) each of the Vendors is accepting the Securities as the Purchase
Price as set out in subsection 3 only for investment purposes on
their own account and not for the purpose of selling the
Securities in connection with any distribution of the Securities.
Each of the Vendors acknowledge that the Securities are subject
to resale restrictions and, for this reason, the Securities shall
display the legend, substantially in the form as follows:
"THE SECURITIES REPRESENTED HEREBY HAVE NOT BEEN AND WILL NOT BE
REGISTERED UNDER THE UNITED STATES SECURITIES ACT OF 1933, AS
AMENDED (THE "SECURITIES ACT"). THE HOLDER HEREOF, BY PURCHASING
SUCH
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SECURITIES, AGREES FOR THE BENEFIT OF THE CORPORATION THAT SUCH
SECURITIES MAY BE OFFERED, SOLD OR OTHERWISE TRANSFERRED ONLY (A)
TO THE CORPORATION, (B) OUTSIDE THE UNITED STATES IN ACCORDANCE
WITH RULE 904 OF REGULATION S UNDER THE SECURITIES ACT, (C)
INSIDE THE UNITED STATES IN ACCORDANCE WITH RULE 144A UNDER THE
SECURITIES ACT OR RULE 144 UNDER THE SECURITIES ACT, IF
APPLICABLE, OR (D) IN A TRANSACTION THAT IS OTHERWISE EXEMPT FROM
REGISTRATION UNDER THE SECURITIES ACT AND APPLICABLE STATE
SECURITIES LAWS, PROVIDED THAT PRIOR TO SUCH SALE THE CORPORATION
SHALL HAVE RECEIVED AN OPINION OF COUNSEL OF RECOGNIZED STANDING,
IN FORM AND SUBSTANCE SATISFACTORY TO IT, AS TO THE AVAILABILITY
OF AN EXEMPTION."
(l) each of the Vendors acknowledge that the Securities to be
received by them on the Closing Date were not advertised in
printed media of general and regular paid circulation, radio or
television;
(m) each of the Vendors is an "accredited investor" as such term is
defined in Rule 501 of Regulation D promulgated by the Securities
and Exchange Commission under the Securities Act of 1933, as
amended (U.S.); and
(n) the Vendors are resident at the addresses set forth beside their
names in Schedule "A" and Schedule "E".
5.2 Each of the Vendors indemnify the Purchaser against any loss or damage
sustained by the Purchaser, directly or indirectly, by reason of a
breach of their respective warranties or representations (and not the
warranties and representations of others) set forth in this Section 5.
Each of the Vendors acknowledge that the Purchaser has entered into
this Agreement relying on the warranties and representations and other
terms and conditions of this Agreement and that no information which
is now known or which may hereafter become known to the Purchaser or
its professional advisers will limit or extinguish the obligation to
indemnify hereunder.
5.3 The respective representations, warranties, covenants and agreements
of the parties hereto, which are contained in this Agreement and in
any certificates and documents delivered in connection herewith will
be true at and as of the Closing Date and will survive the Closing
Date, the purchase and sale contemplated herein and any reorganization
or amalgamation of any party hereto.
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6. CONDITIONS OF CLOSING
The obligation of the Purchaser, Lari Co. and Lari to complete the sale and
purchase of the Interests is subject to the following terms and conditions for
the exclusive benefit of the Purchaser, Lari Co. and Lari, to be fulfilled on
performed at or prior to the Closing Date or said terms and conditions may be
waived by the Purchaser, Lari Co. and Lari at their sole discretion:
(a) The transactions contemplated in the Share Purchase Agreements
have been completed and Lari Co. is the registered and beneficial
owner of all the issued and outstanding shares of the Purchaser;
(b) Each of the Vendors has entered into an escrow arrangement with
the Escrow Agent on terms and conditions which are satisfactory
to the Purchaser, Lari Co. and Lari;
(c) Each of the Vendors has executed a Certificate of Accredited
Investor in the form attached as Schedule "C" to this Agreement;
and
(d) Each of the Vendors listed in Schedule "A" has executed a release
agreement in the form attached as Schedule "D" to this Agreement.
(e) Each of the Vendors listed in Schedule "F" has executed release
agreements attached as Schedule "F" to this Agreement.
7. MISCELLANEOUS
7.1 This Agreement shall be governed by and construed in accordance with
the laws of the State of California. Any dispute arising out of or in
connection with this Agreement, including any question regarding its
existence, validity or termination, shall be referred to and finally
resolved by arbitration under the rules of the American Arbitration
Association which rules are deemed to be incorporated by reference
into this clause. The number of arbitrators shall be one. The place of
arbitration shall be Los Angeles. The language of arbitration shall be
English. This provision is not intended to apply to any award of
arbitration costs to a party to compensate for dilatory or bad faith
conduct in the arbitration pursuant to this paragraph. The prevailing
parties shall also be entitled to an award of reasonable attorneys'
fees. Any such arbitration shall permit, and the parties hereto
expressly reserve their rights to conduct discovery pursuant to and in
accordance with the discovery rules set forth in the California Code
of Civil Procedure and other applicable state laws, to the same extent
as if the parties were not agreeing to arbitration.
7.2 The Vendors will execute and deliver all such further documents and
instruments and do all acts and things the Purchaser may require to
carry out the full intent and meaning of this Agreement and to assure
the Purchaser the transfer of the Interests.
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7.3 This Agreement, and other written agreements associated herewith,
constitute the entire agreement and understanding of the parties
hereto with respect to the subject matter hereof and supersedes all
prior agreements and understandings of the parties with respect to the
subject matter hereof.
7.4 This agreement will be binding upon and inure to the benefit of, and
be enforceable by, the parties hereto and their respective permitted,
where applicable, successors, assigns, heirs, executors and
administrators.
7.5 The Vendors will not assign their rights or obligations provided by
this Agreement without the prior written consent of the Purchaser.
Prior to payment of the Purchase Price in full, the Purchaser will not
be entitled to assign any of its respective rights and obligations
provided by this Agreement without prior written consent of the
Vendors.
7.6 Any notice or other communication required or permitted to be given
hereunder shall be in writing and delivered or sent by telefax and, if
telefaxed, shall be deemed to have been received on the next business
day following transmittal and acknowledgment of receipt by the
recipients telefax machine or if delivered by hand shall be deemed to
have been received at the time it is delivered. Notices addressed to
an individual shall be validly given if left on the premises indicated
below. Notice of change of address shall also be governed by this
Subsection 7.6. Notices shall be delivered or addressed as follows:
If to the Purchaser, Lari Co. and Lari, to:
2424 North Federal Highway
Boca Raton, Florida 33431
Fax: (561) 367-9763
If to the Vendors:
At the addresses set forth in Schedule 'A' and Schedule 'E'.
With a copy to:
Keith Zimmet, Esq.
Lewitt, Hackman, Hoefflin
Shapiro, Marshall & Harlan
16633 Ventura Blvd., Eleventh Floor
Encino, CA 91436-1870
Fax: (818) 981-4764
And to:
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Mark S. Novak, Esq.
Novak & Bases, LLP
16633 Ventura Blvd., Suite 1200
Encino, CA 91436
Fax: (818) 905-1864
7.7 In the event that any one or more of the provisions of this Agreement
should be invalid, illegal or unenforceable in any respect, the
validity, legality and enforceability of the remaining provisions
contained herein will not in any way be affected or impaired thereby
7.8 Time will be of the essence of this Agreement.
7.9 The captions and headings of the sections and the subsections in this
Agreement have been inserted as a matter of convenience and reference
only.
7.10 Whenever the singular or the masculine are used in this Agreement the
same will be deemed to include the plural or the feminine or the
corporate where the context or the parties so require.
7.11 This Agreement may be executed in any number of counterparts, each of
which will be treated as an original but all of which, collectively,
will constitute a single instrument. This Agreement will be binding
once signed and delivered and a signature by facsimile, will be deemed
to be execution and delivery.
IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of the
date first herein above written.
LARI ACQUISITION COMPANY, INC.
Per: /s/ Suzanne L. Wood
------------------------------------
Authorized Signatory
LARI CORP.
Per: /s/ Suzanne L. Wood
------------------------------------
Authorized Signatory
NEPTUNE MANAGEMENT CORP.
Per: /s/ Suzanne L. Wood
------------------------------------
Authorized Signatory
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/s/ Emanuel Weintraub
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EMANUEL WEINTRAUB as attorney-in-fact
for each of the vendors listed
in Schedule "A" attached hereto
/s/ Marvin Falikoff /s/ Stuart M. Solomon
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MARVIN FALIKOFF (an individual) STUART M. SOLOMON (an individual)
/s/ Mervyn K. Kalman /s/ Marcia Deifik
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MERVYN K. KALMAN (an individual) MARCIA DEIFIK (an individual)
