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SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
SCHEDULE 13D
UNDER THE SECURITIES EXCHANGE ACT OF 1934
L. LURIA & SON, INC.
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(Name of Issuer)
Common Stock
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(Title of Class of Securities)
550484 10 9
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(CUSIP Number)
Ocean Reef Management, Inc.
One Turnberry Place
Aventura, Florida 33180
Rachmil Lekach, Chief Executive Officer
(954) 316-9008
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(Name, Address and Telephone Number of Person
Authorized to Receive Notices and Communications)
July 15, 1996
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(Date of Event which Required Filing of this Statement)
If the filing person has previously filed a statement on Schedule 13G to report
the acquisition which is the subject of this Schedule 13D, and is filing this
schedule because of Rule 13d-1(b)(3) or (4), check the following box [ ].
Check the following box if a fee is being paid with this statement [X]. (A fee
is not required only if the reporting person: (1) has a previous statement on
file reporting beneficial ownership of more than five percent of the class of
securities described in Item 1; and (2) has filed no amendment subsequent
thereto reporting beneficial ownership of five percent or less of such class.)
(See Rule 13d-7.)
PAGE 1 OF 21 PAGES
INDEX TO EXHIBITS APPEARS AT PAGE 8
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CUSIP NO. 550484 10 9
1. Name of Reporting Person S.S. or I.R.S. Identification No. of Above
Person Ocean Reef Management, Inc.
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2. Check the Appropriate Box if a Member of a Group
(a) X (b)
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3. SEC Use Only
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4. Source of Funds WC .
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5. Check Box if Disclosure of Legal Proceedings is Required Pursuant to
Items 2(d) or 2(E)
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6. Citizenship or Place of Organization Florida .
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Number of 7. Sole Voting Power 1,320,105
Shares
Beneficially 8. Shared Voting Power -0-
Owned by Each
Reporting 9. Sole Dispositive Power 1,320,105
Person With
10. Shared Dispositive Power -0-
11. Aggregate Amount Beneficially Owned by Each Reporting Person 1,320,105.
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12. Check Box if the Aggregate Amount in Row (11) Excludes Certain Shares
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13. Percent of Class Represented by Amount in Row (11) 24.2% .
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14. Type of Reporting Person CO .
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CUSIP NO. 550484 10 9
1. Name of Reporting Person S.S. or I.R.S. Identification No. of Above
Person Ilia Lekach.
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2. Check the Appropriate Box if a Member of a Group
(a) X (b)
--------------------- ------------------------.
3. SEC Use Only
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4. Source of Funds PF, OO .
---------------------------------------------
5. Check Box if Disclosure of Legal Proceedings is Required Pursuant to
Items 2(d) or 2(E)
--------------------------------.
6. Citizenship or Place of Organization United States.
Number of 7. Sole Voting Power 15,000.
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Shares
Beneficially 8. Shared Voting Power -0- .
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Owned by Each
Reporting 9. Sole Dispositive Power 15,000.
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Person With
10. Shared Dispositive Power -0- .
11. Aggregate Amount Beneficially Owned by Each Reporting Person
15,000 .
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12. Check Box if the Aggregate Amount in Row (11) Excludes Certain Shares
- ---------------------------------------------------------------------.
13. Percent of Class Represented by Amount in Row (11) 0.4% .
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14. Type of Reporting Person IN.
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This statement on Schedule 13D (the "Schedule 13D") is filed on behalf
of Ocean Reef Management, Inc., a Florida corporation ("Ocean Reef"), and Ilia
Lekach (individually, the "Reporting Person" and collectively, the "Reporting
Persons"). Ocean Reef and Mr. Lekach may be deemed to be acting together in
connection with the acquisition and holding of the Common Stock, par value $.01
per share (the "Common Stock"), of L. Luria & Son, Inc., a Florida corporation
(the "Issuer"). Nothing contained in this Schedule 13D, however, shall be
construed as an admission that any of the Reporting Persons is the beneficial
owner of the other Reporting Person's Common Stock and each Reporting Person
expressly disclaims the beneficial own ership of the Common Stock beneficially
owned by the other Reporting Person.
Rachmil Lekach, Ilia Lekach and Joel Eidelstein are the only persons
for whom information must be provided pursuant to Instruction C to Schedule
13D. Mr. R. Lekach and Mr. Eidelstein do not own any shares of Common Stock.
Accordingly, only information under Item 2 is provided with respect to Mr. R.
Lekach and Mr. Eidelstein in compliance with Instruction C to Schedule 13D.
ITEM 1. SECURITY AND ISSUER.
This Schedule 13D relates to the common stock, par value $.01 per
share (the "Common Stock"), of L. Luria & Son, Inc., a Florida corporation (the
"Issuer"). The Issuer's principal executive offices are located at 5770 Miami
Lakes Drive, Miami Lakes, Florida 33014.
ITEM 2. IDENTITY AND BACKGROUND.
1. (a) Ocean Reef Management, Inc.
(b) One Turnberry Place, Aventura, Florida 33180.
(c) Ocean Reef is engaged in various investment activities.
(d) Ocean Reef has not been convicted in a criminal proceeding
(excluding traffic violations or similar misdemeanors) in the last 5 years.
(e) During the last 5 years, Ocean Reef has not been a party to a
civil proceeding of a judicial or administrative body of competent jurisdiction
and as a result of such proceeding was or is subject to a judgment, decree or
final order enjoining future violations of, or prohibiting or mandating
activities subject to, Federal or state securities laws or finding any
violation with respect to such laws.
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2. (a) Ilia Lekach.
(b) 3725 S.W. 30th Avenue, Fort Lauderdale, Florida 33312.
(c) Mr. I. Lekach's principal occupation is Chairman of the Board
and Chief Executive Officer of Parlux Fragrances, Inc., a publicly traded
manufacturer and global marketer of prestige fragrances and related beauty
products. Mr. I. Lekach is also the President, sole director and sole
shareholder of Pacific Investments Group, Inc., a Florida corporation
("Pacific"). Pacific is engaged in various investment activities.
(d) Mr. I. Lekach has not been convicted in a criminal proceeding
(excluding traffic violations or similar misdemeanors) in the last 5 years.
(e) During the last 5 years, Mr. I. Lekach has not been a party to
a civil proceeding of a judicial or administrative body of competent
jurisdiction and as a result of such proceeding was or is subject to a
judgment, decree or final order enjoining future violations of, or prohibiting
or mandating activities subject to, Federal or state securities laws or finding
any violation with respect to such laws.
(f) United States of America.
3. (a) Rachmil Lekach.
(b) One Turnberry Place, Aventura, Florida 33180.
(c) Mr. R. Lekach's principal occupation is Chairman of the Board
and Chief Executive Officer of Ocean Reef.
(d) Mr. R. Lekach has not been convicted in a criminal proceeding
(excluding traffic violations or similar misdemeanors) in the last 5 years.
(e) During the last 5 years, Mr. R. Lekach has not been a party to
a civil proceeding of a judicial or administrative body of competent
jurisdiction and as a result of such proceeding was or is subject to a
judgment, decree or final order enjoining future violations of, or prohibiting
or mandating activities subject to, Federal or state securities laws or finding
any violation with respect to such laws.
(f) United States of America.
4. (a) Joel Eidelstein.
(b) One Turnberry Place, Aventura, Florida 33180.
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(c) Mr. Eidelstein's principal occupation is President of
Ocean Reef.
(d) Mr. Eidelstein has not been convicted in a criminal proceeding
(excluding traffic violations or similar misdemeanors) in the last 5 years.
(e) During the last 5 years, Mr. Eidelstein has not been a party
to a civil proceeding of a judicial or administrative body of competent
jurisdiction and as a result of such proceeding was or is subject to a
judgment, decree or final order enjoining future violations of, or prohibiting
or mandating activities subject to, Federal or state securities laws or finding
any violation with respect to such laws.
(f) United States of America.
ITEM 3. SOURCE AND AMOUNT OF FUNDS OR OTHER CONSIDERATION.
Ocean Reef has entered into a stock purchase agreement (the "Stock
Purchase Agreement") entitling it to purchase, in accordance with terms
thereof, 1,320,105 shares of Issuer's Class B Stock, par value $.01 per share
(the "Class B Stock"), which, upon purchase, will be converted into Common
Stock in accordance with the Issuer's articles of incorporation. The Stock
Purchase Agreement is more fully described in Item 6 below. The aggregate
purchase price of 15,000 shares of Common Stock beneficially owned by Mr. I.
Lekach was approximately $67,500, excluding commissions. The source of funds
for acquiring the shares of Common Stock beneficially owned by Mr. I. Lekach
was the working capital of Pacific and borrowings pursuant to a standard margin
account maintained by the Reporting Person with his stockbroker.
ITEM 4. PURPOSE OF TRANSACTION.
This Schedule 13D reports the beneficial ownership by the Reporting
Persons of over 5 percent of the Issuer's outstanding Common Stock. The
purpose of each Reporting Person's acquisition of Common Stock was to acquire a
significant equity interest in the Issuer as an investment. If the closing of
the Stock Purchase Agreement occurs, all outstanding shares of the Class B
Stock will be converted into Common Stock in accordance with the Issuer's
articles of incorporation, at which time 5,446,908 of Common Stock would be
outstanding based on the 4,106,380 shares of Common Stock and 1,340,528 shares
of Class B Stock outstanding on May 31, 1996, as reported in the Issuer's
Quarterly Report on Form 10-Q for the Thirteen Weeks ended May 4, 1996. In the
event the Stock Purchase Agreement is consummated, Ocean Reef will be the
Issuer's largest shareholder. Under the terms of the Stock Purchase Agreement,
on or before the closing, two of the selling shareholders shall cause the
election of a sufficient number of directors selected by Ocean Reef so that the
directors selected by Ocean Reef will consist of
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a majority of all the directors of the Issuer. If the transaction is
consummated, Ocean Reef has agreed to use its best efforts to call and hold a
meeting of the Issuer's shareholders as soon as reasonably possible but in no
event later than 90 days after the closing to elect the directors of the
Issuer.
Each Reporting Person intends to review its or his investment in the
Common Stock on a regular basis and, depending upon changes in such Reporting
Person's analysis of the Issuer, general economic and market conditions,
investment opportunities and other factors, including applicable legal
constraints, a Reporting Person may at any time determine to increase or
decrease the amounts of such Reporting Person's investment in Common Stock.
Each Reporting Person reserves the right to acquire additional Common Stock or
to dispose of some or all of the Common Stock beneficially owned by such
Reporting Person either in the open market, in privately negotiated
transactions or otherwise, or to take such other action or actions with respect
to the Common Stock as such Reporting Person deems advisable. The
determination of a Reporting Person to seek to acquire additional shares of
Common Stock will depend on various factors including, but not limited to, the
availability of additional Common Stock for purchase at what such Reporting
Person considers to be reasonable prices, the terms and conditions available
for such purchases and other investment opportunities.
Except as described above, the Reporting Persons have no plans or
proposals that would result in any actions specified in clauses (a) through (j)
of Item 4 of Schedule 13D.
ITEM 5. INTEREST IN SECURITIES OF THE ISSUER.
(a) As of the close of business on July 23, 1996, Ocean Reef
beneficially owned an aggregate of 1,320,105 shares of Common Stock, which
would constitute approximately 24.2 percent of the 5,446,908 shares of Common
Stock that would be outstanding upon the closing of the Stock Purchase
Agreement (based on the conversion of all outstanding Class B Stock into Common
Stock). As of the close of business on July 23, 1996, Mr. I. Lekach, through
Pacific, beneficially owned 15,000 shares of Common Stock, which constituted
approximately 0.4 percent of the 4,106,380 shares of Common Stock outstanding
on May 31, 1996, as reported in the Issuer's Quarterly Report on Form 10-Q for
the Thirteen Weeks ended May 4, 1996.
(b) Until the closing of the Stock Purchase Agreement, Ocean Reef
has no power to vote or direct the vote, and no power to dispose or to direct
the disposition of, the shares of Common Stock beneficially owned it. Mr. I.
Lekach has the sole power to vote or direct the vote, and the sole power to
dispose or to direct the disposition of, all the shares of Common Stock
beneficially owned by him.
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(c) The following table sets forth all transactions in Common
Stock effected by each Reporting Person during the past 60 days. All of such
transactions were open market purchases effected through brokers.
<TABLE>
<CAPTION>
APPROXIMATE PRICE
NUMBER OF PER SHARE
NAME DATE SHARES PURCHASED (EXCLUDING COMMISSIONS)
---- ---- ---------------- -----------------------
<S> <C> <C> <C>
I. Lekach 06/27/96 5,000 $4 1/2
I. Lekach 07/01/96 5,000 $4 1/2
I. Lekach 07/01/96 5,000 $4 1/2
</TABLE>
(d) Not applicable.
(e) Not applicable.
ITEM 6. CONTRACTS, ARRANGEMENTS, UNDERSTANDINGS OR RELATIONSHIPS WITH RESPECT
TO SECURITIES OF THE ISSUER.
On July 15, 1996, Ocean Reef entered into the Stock Purchase with
members of the Luria family and trusts and foundations controlled by such
persons, who together own approximately all of the Class B Stock. A copy of
the Stock Purchase Agreement is attached as Exhibit B. Ocean Reef has the
right to terminate the Stock Purchase Agreement at any time prior to closing
for any reason. The Reporting Persons may be deemed to be acting together in
connection with the acquisition and holding of the Common Stock. The
relationship among the Reporting Persons with respect to the Common Stock is an
informal one and there are no written contracts, arrangements or understandings
among the Reporting Persons related thereto. As set forth in Item 4 of this
Schedule 13D, each Reporting Person will continue to evaluate independently
such Reporting Person's investment in the Common Stock, although each Reporting
Person may consult with the other Reporting Person when doing so. Other than
the informal relationship among the Reporting Persons described in this Item 6,
the Stock Purchase Agreement and the standard margin agreement entered into by
Mr. I. Lekach, the Reporting Persons have no contracts, arrangements, or
understandings with any person with respect to any securities of the Issuer.
ITEM 7. MATERIALS TO BE FILED AS EXHIBITS.
<TABLE>
<CAPTION>
Sequential
Page Number
<S> <C> <C>
Exhibit A Statement of Joint Schedule 13D Filings 10
Exhibit B Stock Purchase Agreement by and between 11
the individuals and entities listed in
Schedule I to the agreement and Ocean Reef Management,
Inc.
</TABLE>
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SIGNATURE
After reasonable inquiry and to the best of my knowledge and belief, I
certify that the information set forth in this statement is true, complete and
correct.
July 24, 1996
OCEAN REEF MANAGEMENT, INC.
By: /s/RACHMIL LEKACH
-------------------------------
Rachmil Lekach,
Chief Executive Officer
/s/ILIA LEKACH
-----------------------------------
Ilia Lekach
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EXHIBIT A
STATEMENT OF JOINT SCHEDULE 13D FILINGS
The undersigned acknowledge and agree that the Statement on Schedule
13D with respect to the Common Stock, par value $.01 per share, of L. Luria &
Son, Inc., a Florida corporation, and any amendments thereto, shall be filed
jointly on behalf of each of the undersigned.
July 24, 1996
OCEAN REEF MANAGEMENT, INC.
By: /s/RACHMIL LEKACH
--------------------------------
Rachmil Lekach,
Chief Executive Officer
/s/ILIA LEKACH
------------------------------------
Ilia Lekach
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EXHIBIT B
STOCK PURCHASE AGREEMENT
THIS AGREEMENT ("Agreement") is made and entered into as of this 15th
day of July, 1996, by and between the individuals and entities listed in
Schedule I to this Agreement (each a "Seller" and collectively the "Sellers")
and Ocean Reef Management, Inc., a Florida corporation ("Buyer").
RECITALS
Sellers desire to sell to Buyer, and Buyer desires to purchase from
Sellers, the shares of Class B Common Stock, $.01 par value (the "Class B
Stock"), of L. Luria & Son, Inc. (the "Company") set forth opposite such
Seller's name on Schedule I to this Agreement, upon the terms and subject to
the conditions contained herein.
For and in consideration of the premises, covenants, and agreements
contained herein, the parties do covenant, agree, represent, warrant, and
stipulate as follows:
ARTICLE 1.
PURCHASE AND SALE OF STOCK
Section 1.1 B Shares to be Acquired. Subject to the terms and
conditions contained herein, each Seller agrees to sell, assign, transfer, and
convey to Buyer, free and clear of all pledges, liens, security interests,
encumbrances, or other restrictions arising from such Seller (except
restrictions on resale under state or federal securities laws) and, Buyer shall
purchase from the Sellers all, but not less than all of the shares of Class B
Stock owned by the Sellers as set forth in Schedule I to this Agreement
(collectively the "B Shares") at a price of $6 per share (the "Purchase
Price"). The B Shares constitute all the B Shares owned by the Sellers.
Section 1.2 Closing. The closing of the purchase and sale of
the B Shares herein described (the "Closing") shall occur, subject to the terms
and conditions of this Agreement, on July 31, 1996, provided that this date may
be extended by Buyer to a date not later than 11:59 p.m. on August 2, 1996.
Time is of the essence and may not be extended beyond August 2, 1996, except as
otherwise provided in Section 6.1 hereof.
Section 1.3 Delivery of B Shares. On or prior to the Closing,
(i) each Seller shall tender to the Company's transfer agent the stock
certificates representing the B Shares, accompanied by a duly endorsed stock
power, (ii) the Company's transfer agent shall issue to Buyer, in such
denominations as Buyer may reasonably request, stock certificates representing
the shares of common stock, $.01 par value (the "Common Stock"), of the Company
into which such B Shares have been converted pursuant to the Company's charter
documents, and (iii) Buyer shall deliver to the Sellers the Purchase Price.
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ARTICLE 2.
PURCHASE PRICE AND PAYMENT
The Purchase Price for each B Share shall be $6.00 per share. The
Purchase Price shall be payable on the date of the Closing by wire transfer of
immediately available funds to a bank or banks designated by each of the
Sellers.
ARTICLE 3.
REPRESENTATIONS AND WARRANTIES OF SELLERS
As an inducement to Buyer to enter into this Agreement and to
consummate the transactions contemplated hereby, each Seller severally (and not
jointly) represents, warrants, covenants, and agrees as follows:
Section 3.1 SEC Filings. The Sellers will deliver to Buyer
copies of all filings made by the Company with the Securities and Exchange
Commission since January 1, 1996 and the 1996 Annual Report to Shareholders
(collectively "1996 SEC Filings"). As of their respective dates, to the best
knowledge of such Seller, the 1996 SEC Filings did not contain any untrue
statement of a material fact or omit to state a material fact required to be
stated therein or necessary to make the statements therein, in light of the
circumstances under which they were made, not misleading. Buyer is aware of
the significant financial difficulties of the Company and acknowledges that
none of the Sellers has made any representation or warranty whatsoever
regarding the future prospects of the Company or the likelihood or possibility
of success of the Company's current plans for a financial turn-around of the
Company.
Section 3.2 Share Ownership. The B Shares to be transferred
to Buyer, when so transferred and delivered, will be free and clear of any
pledge, security interest, lien, encumbrance, right or restriction whatsoever
arising from such Seller (except restrictions on resale under state or federal
securities laws).
Section 3.3 Organization and Good Standing. Each Seller that
is not an individual is duly organized, validly existing and in good standing
under applicable laws of its creation.
Section 3.4 Authorization; Validity. Each Seller has full
power and authority to enter into this Agreement and to perform all of Seller's
covenants and undertakings herein set forth, including, without limitation, the
full power and authority to sell the B Shares to Buyer free and clear of any
pledges, security interests, liens, encumbrances, rights, or restrictions
arising from such Seller. The execution and delivery of this Agreement and the
consummation of the transactions contemplated hereby have been duly authorized
by all necessary action on the part of such Seller. This Agreement is the
legal, valid, and binding obligation of each Seller, enforceable in accordance
with its terms, except as such enforcement may be limited by applicable
bankruptcy, insolvency, moratorium, or similar laws affecting the enforcement
of creditors' rights generally, and except as enforcement of any particular
remedy may be limited by the application of equitable principles. Neither the
execution and delivery of this Agreement
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nor the consummation of the transactions contemplated hereby will (i) violate
any obligation of such Seller, or for any Seller that is not an individual, any
document, instrument, agreement, or similar instrument creating or governing
such entity; (ii) violate or constitute a default under any provision of, or
conflict with, or result in acceleration of any obligation under, any mortgage,
deed of trust, note, loan, lease, or agreement to which such Seller is a party
or by which it or any of its properties or assets may be bound, which
violation, default, or conflict would result in a material adverse effect on
the business, assets, operations, or condition (including, without limitation,
financial) of such Seller; or (iii) violate any order, ruling, decree,
judgment, arbitration award, or stipulation to which such Seller is subject,
which violation would result in a material adverse effect on the business,
assets, operations or condition (including, without limitation, financial) of
such Seller.
Section 3.5 Election of Directors. On or before the Closing,
Leonard Luria and Peter Luria shall cause the election of a sufficient number
of directors selected by Buyer so that the directors selected by Buyer will
consist of a majority of all the directors of the Company. The directors
selected by Buyer must not have any legal impediment or regulatory problems
that the directors of the Company would reasonably deem such person to be an
inappropriate person to serve as a director of a public company.
Section 3.6 Brokers. Seller has not dealt with any broker,
finder, commission agent, or other person in connection with the purchase of
the B Shares and the transactions contemplated by this Agreement and is under
no obligation to pay any broker's fee or commission in connection with such
transactions.
Section 3.7 Options. Any options or rights to acquire shares
of Common Stock or B Shares owned by any Seller will be deemed cancelled at the
Closing and of no force and effect.
Section 3.8 Representations and Warranties; Survival. The
representations, warranties and covenants of each Seller shall survive for a
period of 12 months after the date of the Closing except for those contained in
Section 3.2, which shall survive without any time limitation. No
representation, warranty, or covenant contained in this Agreement or in any
written statement delivered pursuant hereto contains any untrue material
statement, nor shall such representations, warranties, and covenants omit any
statement necessary in order to make any material statement not misleading in
light of the circumstances in which they were made.
ARTICLE 4.
REPRESENTATIONS, WARRANTIES AND AGREEMENTS OF BUYER
As an inducement to each Seller to enter into this Agreement and to
consummate the transactions contemplated hereby, Buyer represents, warrants,
covenants, and agrees as follows:
Section 4.1 Investment. The B Shares are being acquired by
Buyer hereto not with a view to any distribution or resale thereof in any
transaction which would be in violation of the Securities Act of 1933, as
amended (the "1933 Act"), and rules promulgated thereunder, or any
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<PAGE> 14
state securities statute. Buyer can bear the economic risk of losing its
investment in the B Shares and is presently able to afford the complete loss of
such investment. Buyer has such knowledge and experience in financial and
business matters so as to be capable of evaluating the merits and risks of an
investment in the B Shares. Buyer will be furnished with the 1996 SEC Filings
and acknowledges, if Buyer closes the transaction, that it has been afforded
the opportunity (i) to ask such questions as it has deemed necessary of, and to
receive answers from, representatives of Sellers concerning the merits and
risks of investing in the B Shares and (ii) to obtain such additional
information which Sellers possess or can acquire without unreasonable effort or
expense that is necessary to verify the accuracy and completeness of the
information contained in the 1996 SEC Filings or other written information
given to Buyer. If Buyer closes the transaction, Buyer acknowledges that
Sellers have answered all questions and responded to all inquiries and requests
for information to Buyer's satisfaction. Buyer acknowledges that it has made,
independently and without reliance upon the Sellers (other than the
representations and warranties of the Sellers set forth in Article 3 hereof) or
any agent or representative of the Sellers and based on its own independent
analysis of the Company and such other documents and information as it has
deemed appropriate, its own investment analysis and its own business decision
to enter into and consummate this Agreement and the transactions contemplated
hereby.
Section 4.2 Legend on B Shares. The Buyer understands that
the B Shares have not been registered under the 1933 Act or any state
securities laws, and that it must therefore bear the economic risk of such
investment indefinitely, unless a subsequent disposition thereof is registered
under the 1933 Act or is exempt from registration, and that the Common Stock
into which such B Shares shall be converted pursuant to the Company's charter
documents will bear, substantially the following legend:
"The shares represented by this certificate are "Restricted
Securities". As such they may not be transferred unless (i) such
transfer is effected pursuant to a registration statement which has
been filed under the Securities Act of 1933 (the "1933 Act") and any
other applicable securities law and declared effective by the
Securities and Exchange Commission and any other required authority,
or (ii) in the written opinion of counsel, acceptable to the issuer of
these shares, such transfer may be effected under and is in compliance
with Rule 144 under the 1933 Act, as in effect on the date of such
transfer, or is otherwise exempt from the registration requirements of
the 1933 Act."
Section 4.3 Brokers. Buyer has not dealt with any broker,
finder, commission agent, or other person in connection with the purchase of
the B Shares and the transactions contemplated by this Agreement and is under
no obligation to pay any broker's fee or commission in connection with such
transactions.
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Section 4.4 Class B Shares. Buyer understands that the
super-voting rights of the B Shares will be eliminated upon their transfer to
Buyer. Additionally, super-voting rights of all B Shares, including those not
being acquired by Buyer, will be eliminated upon consummation of this Agreement
if the B Shares constitute less than 12.5% of the total outstanding Common
Stock and B Shares.
Section 4.5 Affiliated Transaction with the Company. Buyer
agrees that, prior to the next shareholders meeting of the Company, neither
Buyer, nor any of its affiliates, will do any business transaction with the
Company unless such business transaction (i) is approved by a majority of the
non-interested members of the Board of Directors or (ii) is on terms and
conditions that are not materially less favorable to the Company than the
Company could obtain from unaffiliated third parties.
Section 4.6 Buyer's Intentions. Buyer represents and warrants
to each of the Sellers that neither Buyer nor any of its affiliates have in the
past used control of a corporation to loot or unlawfully misuse corporate
assets, and Buyer represents and warrants to each of the Sellers that it will
not loot or unlawfully misuse the corporate assets of the Company.
Section 4.7 Control of Buyer. Buyer is controlled by Rachmil
Lekach and his family.
Section 4.8 Shareholders' Meeting. Buyer agrees that it will
use its best effort to call and hold a meeting of shareholders of the Company
as soon as reasonably possible but in no event later than 90 days after the
Closing to elect the directors of the Company. Each shareholder of the Company
owning more than 100 shares of Common Stock or Class B Shares will be a
third-party beneficiary of this provision; provided that Sellers reserve the
right to amend or waive the provisions of Section 4.9 without the consent or
agreement of any other shareholder of the Company.
Section 4.9 D&O and Professional Insurance. Buyer will use
its best efforts so that the Company keeps in effect the current D&O Policy and
the professional liability policy and, if such policies are cancelled or not
renewed, in the discretion of the Board of Directors, to purchase similar
coverage or other similar policies.
ARTICLE 5.
TERMINATION BY BUYER PRIOR TO CLOSING
Buyer shall not be obligated to purchase any B Shares under this
Agreement if, at any time prior to Closing, Buyer notifies Leonard Luria in
writing that it does not wish to proceed with the transaction for any reason or
for no reason whatsoever. In such an event, this Agreement shall be deemed
terminated and no party shall have any liability to any other party.
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ARTICLE 6.
ADDITIONAL PROVISIONS
Section 6.1 Break-Up Fee. In the event that Buyer is ready
and able to perform under this Agreement and Sellers refuse to sell to Buyer,
other than (collectively, the "Exceptions") (i) as a result of the issuance of
a preliminary or permanent injunction or other order by any governmental
authority which prohibits the consummation of the Agreement, (ii) if any suit,
action or other proceeding is pending or threatened (other than proceedings
instituted by the Sellers) before any governmental authority seeking to
restrain the Sellers or prohibit the Closing or seeking damages against the
Sellers or the Company or their assets as a result of the consummation of this
Agreement), or (iii) if such consent is required, if Foothill Capital
Corporation has not consented to the transfer of the B Shares, then, Sellers
agree that Buyer, in order to cover the expenses of Buyer and its other lost
opportunities for pursuing the transactions contemplated by this Agreement,
shall be entitled to receive a fee (the "Break-Up Fee"), from each Seller that
refuses to sell to Buyer (each a "Breaching Seller"), equal to the product of
(x) $1,500,000 times (y) a fraction, the numerator of which is the number of
shares that such Breaching Seller was required to sell to Buyer under this
Agreement and the denominator of which is the total number of shares that all
Sellers were required to sell to Buyer under this Agreement; provided, that, if
Leonard Luria is a Breaching Seller, the Break-Up Fee shall be $1,500,000. The
obligations of the Breaching Sellers shall be several and not joint; provided
that, if Leonard Luria is a Breaching Seller, then the payment of the Break-Up
Fee shall be the obligation of Leonard Luria, unless all Sellers are Breaching
Sellers, in which case the obligation of the Breaching Sellers shall be several
and not joint. In the event that one or more of the Sellers breach this
Agreement and refuse to consummate the transactions as contemplated by this
Agreement, Buyer shall have the right, but not the obligation, to close with
the Sellers that are willing to close and to seek from the Breaching Seller or
Sellers the Break-Up Fee in accordance with the provisions of this Section 6.1.
In the event the Closing does not occur as a result of the Exceptions, Buyer
shall have the option, but not the obligation, to extend the Closing for an
additional 60 days from August 2, 1996, by notifying Leonard Luria in writing
by no later than August 5, 1996 of its desire to extend the Closing. Sellers
shall use their reasonable efforts to eliminate the Exceptions.
Section 6.2 Assignment. Buyer may assign its rights, but not
its obligations, under this Agreement to any entity controlled by Buyer or its
affiliates. Sellers may not assign their rights or obligations under this
Agreement without the prior written consent of Purchaser.
Section 6.3 Publicity and Filings. Buyer will not make any
public announcement regarding this Agreement without the prior written consent
of Leonard Luria. Buyer and Sellers, however, may make whatever regulatory
filings are necessary under applicable law.
Section 6.4 Access. Sellers agree to use their best efforts
to provide access for Buyer and its representatives to the Company so as to
permit Buyer to conduct a due diligence investigation of the Company. Buyer
will be required to execute a confidentiality agreement
- 6 -
<PAGE> 17
satisfactory to the Company. Sellers shall have no liability if the Company
refuses to provide any non-public information under the confidentiality
agreement.
Section 6.5 Notices. All notices, requests, demands, and
other communications required or permitted hereunder shall be in writing and
shall be deemed to have been duly given if delivered by hand or by electronic
transmission. If sent by reliable overnight delivery service and sent to the
address set forth below, or at such other addresses as the parties hereto may
from time to time designate in writing, such notices, requests, demands, and
other communications shall be deemed delivered the next business day after
being so duly sent:
To the Sellers: c/o Leonard Luria c/o
L.Luria & Son, Inc.
5770 Miami Lakes Drive
Miami Lakes, FL 33014
PERSONAL AND CONFIDENTIAL
Peter Luria
L.Luria & Son, Inc.
5770 Miami Lakes Drive
Miami Lakes, FL 33014
PERSONAL AND CONFIDENTIAL
With a copy to: Greenberg, Traurig, Hoffman,
Lipoff, Rosen & Quentel, P.A.
1221 Brickell Avenue
Miami, FL 33131
Attention: Cesar L. Alvarez,
Esq.
To the Buyer: Ocean Reef Management, Inc.
c/o Montello & Kenney, P.A.
701 Brickell Avenue
Suite 1200
Miami, FL 33131
Section 6.6 Prior Agreements. This Agreement supersedes all
prior discussions and agreements between Buyer and Sellers with respect to the
sale and purchase of the B Shares, and this Agreement and the agreements
referred to herein contain the sole and entire agreement between the parties
hereto with respect to the sale and purchase of the B Shares between Sellers
and Buyer.
Section 6.7 Modifications. This Agreement may be modified or
amended only by a written instrument executed by all parties hereto.
- 7 -
<PAGE> 18
Section 6.8 Counterparts, Headings, Etc. This Agreement may
be executed simultaneously in any number of counterparts, each of which shall
be deemed an original, but all of which shall constitute one and the same
instrument. The headings herein set out are for convenience of reference only
and shall not be deemed a part of this Agreement.
Section 6.9 Binding Effect. This Agreement shall be binding
upon and shall inure to the benefit of the parties hereto and their respective
successors and assigns.
Section 6.10 Governing Law; Prevailing Party Fees. The
validity and effect of this Agreement and the rights and obligations of the
parties hereto shall be governed by and construed and enforced in accordance
with the laws of the State of Florida. The prevailing party in any dispute
relating to this Agreement shall be entitled to reasonable legal fees and
expenses from the non-prevailing party.
Section 6.11 Further Assurances. From time to time Sellers and
Buyer will execute and deliver to each other such further instruments of
conveyance and transfer and will take such other action as either Buyer or
Sellers may reasonably request in writing in order to give effect to this
Agreement and the transactions contemplated hereby.
Section 6.12 Severability. Whenever possible, each provision
of this Agreement will be interpreted in such a manner as to be effective and
valid under applicable law, but if any provision of this Agreement is held to
be prohibited by or invalid under applicable law, such provision will be
ineffective only to the extent of such prohibition or invalidity, without
invalidating the remainder of this Agreement.
Section 6.13 Affiliates. The term "affiliate" or "affiliates"
shall have the meaning attributed to these terms by the rules and regulations
of the Securities and Exchange Commission.
Section 6.14 Other Agreements. Buyer understands and agrees
that one or more of the Sellers are planning to enter into one or more
agreements to sell their B Shares to other parties ("Other Agreements"). Each
Seller represents, warrants and agrees that any such Other Agreements will be
subject to the rights of Buyer under this Agreement and will only be
consummated if Buyer fails to close the transactions contemplated by this
Agreement for any reason other than the breach of this Agreement by one or more
of the Sellers.
Section 6.15 Duties as Directors. Buyer understands that one
or more of the Sellers are directors and/or officers of the Company and that
nothing in this Agreement shall in any manner prevent them from exercising
their duties as directors and/or officers of the Company; provided, however,
that exercising their duties as directors and/or officers will not excuse their
obligation to pay the Break-Up Fee.
- 8 -
<PAGE> 19
IN WITNESS WHEREOF, this Agreement has been executed as of the date
first written above.
SELLERS:
/s/GLORIA LURIA
--------------------------------
Gloria Luria
/s/LEONARD LURIA
--------------------------------
Leonard Luria
/s/NANCY LURIA-COHEN
--------------------------------
Nancy Luria-Cohen
LEONARD LURIA TRUST
By:/s/GLORIA LURIA
--------------------------------
Gloria Luria, Trustee
By:/s/EDWIN D. MARKS
-----------------------------
Edwin D. Marks, Trustee
Trust created by that certain Trust
Agreement made March 29, 1990 between
Gloria Luria, as Grantor, and Henry
Luria and Nancy Luria-Cohen, as
Trustees
By:/s/NANCY LURIA-COHEN
-----------------------------
Name: Nancy Luria-Cohen
Title: Trustee
By:/s/HENRY S. LURIA
-----------------------------
Name: Henry S. Luria
Title: Trustee
9
<PAGE> 20
Trust created by that certain Trust
Agreement made March 29, 1990 between
Leonard Luria, as Grantor, and Gloria
Luria and Henry S. Luria, as Trustees
By:/s/NANCY LURIA-COHEN
----------------------------------
Name: Nancy Luria-Cohen
Title: Trustee
By:/s/HENRY S. LURIA
----------------------------------
Name: Henry S. Luria
Title: Trustee
PETER P. LURIA TRUST
By:/s/PETER P. LURIA
----------------------------------
Peter P. Luria, Trustee
/s/HENRY LURIA
-------------------------------------
Henry Luria
/s/CORRINE LURIA
-------------------------------------
Corrine Luria
LURIA FAMILY FOUNDATION, INC.
By:/s/LEONARD LURIA
----------------------------------
Leonard Luria, President
BUYER:
OCEAN REEF MANAGEMENT, INC.
By:/s/JOEL EIDELSTEIN
----------------------------------,
Joel Eidelstein, President
10
<PAGE> 21
SCHEDULE I
SELLER B SHARES
- ------ --------
Gloria Luria 100,000
Leonard Luria 419,800
Nancy Luria-Cohen 202,094
Leonard Luria Trust 127,457
Trust created by
Gloria Luria 29,000
Trust created by
Leonard Luria 28,954
Peter P. Luria Trust 290,000
Henry Luria 110,400
Corinne Luria 1,800
Luria Family Foundation 10,600
---------
Total 1,320,105
=========
