1
EXHIBIT 2.2
================================================================================
================================================================================
ASSET PURCHASE AGREEMENT
by and among
LAMALIE ASSOCIATES, INC.,
CHARTWELL PARTNERS INTERNATIONAL, INC.
and
DAVID M. DEWILDE
December 29, 1997
================================================================================
================================================================================
2
TABLE OF CONTENTS
1. PURCHASE AND SALE OF ASSETS; CLOSING.................................1
(a) Purchase and Sale of Assets -- Generally....................1
(b) Assets......................................................1
(i) Generally..........................................1
(ii) Specified Items....................................2
(c) Excluded Assets.............................................3
(d) Procedure for Closing.......................................3
(e) Closing Costs...............................................3
2. PURCHASE PRICE; ASSUMPTION OF LIABILITIES............................4
(a) Purchase Price..............................................4
(b) Payment of Purchase Price...................................4
(c) Legend on Note..............................................5
(d) Acceleration of Note........................................5
(e) Tangible Book Value; Proration of Certain Expenses..........5
(f) Assumption of Liabilities...................................5
(g) Allocation of Purchase Price................................6
3. REPRESENTATIONS AND WARRANTIES OF THE SELLER AND THE STOCKHOLDER.....6
(a) Organization and Standing...................................6
(b) Stock Ownership.............................................6
(c) Authority Relative to this Agreement........................6
(d) No Violations...............................................6
(e) Compliance with Agreements..................................7
(f) Tax Matters.................................................7
(g) Litigation..................................................7
(h) Title to and Condition of Assets............................7
(i) Client List; Engagement Letters.............................8
(j) Real Property Leases........................................8
(k) Customers/Clients...........................................8
(l) Employees...................................................8
(m) Employee Benefits...........................................9
(n) Owned Personal Property.....................................9
(o) Leased Personal Property....................................9
(p) Financial Statements.......................................10
(q) Insurance..................................................10
(r) Absence of Certain Changes or Events.......................10
(s) Compliance With Applicable Laws............................10
(t) Approvals and Consents.....................................11
(u) Disclosure.................................................11
(v) No Undisclosed Changes.....................................11
i
3
(w) Investment Representations.................................11
4. REPRESENTATIONS AND WARRANTIES OF THE PURCHASER ....................12
(a) Organization and Standing..................................12
(b) Authority Relative to this Agreement.......................12
(c) No Violations..............................................12
(d) LAI Stock..................................................12
(e) Financial Statements.......................................12
(f) Compliance with Agreements.................................13
(g) Compliance With Applicable Laws............................13
(h) Nasdaq.....................................................13
(i) Disclosure.................................................13
5. DUE DILIGENCE INVESTIGATION.........................................13
6. TRANSACTIONS PENDING CLOSING........................................13
(a) Business in the Ordinary Course............................13
(b) Notification of Change.....................................14
(c) Corporate Action; Approvals and Consents...................14
(d) Other Transactions Prohibited..............................14
(e) Disclosure of Transactions.................................14
7. CONDITIONS PRECEDENT TO THE OBLIGATIONS OF THE PURCHASER............14
(a) Accuracy of Representations and Warranties.................15
(b) Employment Agreement.......................................15
(c) Lock-Up Agreement..........................................15
(d) Barnett Consent............................................15
(e) Compliance.................................................15
(f) No Material Adverse Change Prior to Closing................15
(g) Consents and Waivers.......................................15
(h) Active Status Certificate; Certified Copy of Articles......16
(i) Certificate................................................16
(j) Instruments of Transfer....................................16
(k) Opinion of Seller's Counsel................................16
(l) Litigation.................................................16
(m) Casualty...................................................16
(n) Termination of Financing Statements........................16
(o) Actions, Proceedings, Etc..................................17
8. CONDITIONS PRECEDENT TO THE OBLIGATIONS OF THE
SELLER AND THE STOCKHOLDER..........................................17
(a) Accuracy of Representations and Warranties.................17
(b) Compliance.................................................17
(c) Certificate of the Purchaser...............................17
ii
4
(d) Employment Agreement.......................................18
(e) Opinion of Purchaser's Counsel.............................18
9. SURVIVAL OF REPRESENTATIONS, WARRANTIES,
OBLIGATIONS, COVENANTS AND AGREEMENTS...............................18
10. INDEMNIFICATION.....................................................18
(a) Indemnifications by the Seller and the Stockholder.........18
(b) Indemnification by the Purchaser...........................19
(c) Claims for Indemnification.................................19
(d) Right to Defend; Third-Party Claims, Etc...................19
(e) Cooperation................................................20
(f) Offset.....................................................20
11. OBLIGATIONS AFTER THE CLOSING.......................................20
(a) Distribution of Consideration..............................20
(b) Transition of Business.....................................21
(c) Post Closing Access to Financial Records...................21
(d) Employment of Employees; Benefit Plans.....................21
12. RESTRICTIVE COVENANTS...............................................21
(a) Noncompetition.............................................21
(b) Nonsolicitation of Clients and Employees...................21
(c) Extension of Time..........................................22
(d) Essential Elements.........................................22
(e) Severability...............................................22
(f) Termination Without Good Cause.............................23
13. GENERAL.............................................................23
(a) No Brokers.................................................23
(b) Waivers....................................................23
(c) Remedies...................................................23
(i) General...........................................23
(ii) Mandatory Arbitration.............................23
(d) Expenses...................................................24
(e) Press Releases.............................................24
(f) Confidentiality............................................24
(g) Notices....................................................25
(h) Entire Agreement; Amendment................................25
(i) Assignability..............................................25
(j) Venue; Process.............................................25
(k) Further Assurances.........................................25
(l) Counterparts...............................................25
(m) Section and Other Headings.................................25
(n) Governing Law..............................................26
iii
5
ASSET PURCHASE AGREEMENT
THIS prevailing ASSET PURCHASE AGREEMENT is made and entered into this
29th of December, 1997, by and among LAMALIE ASSOCIATES, INC., a Florida
corporation, (the "Purchaser"); CHARTWELL PARTNERS INTERNATIONAL, INC., a
California corporation, (the "Seller"); and DAVID M. DEWILDE, an individual
resident of the State of California (the "Stockholder").
WITNESSETH:
WHEREAS, the Seller is engaged in the executive search business (the
"Business"); and
WHEREAS, the Stockholder is the owner of one hundred percent (100%) of
the issued and outstanding stock of the Seller; and
WHEREAS, the Purchaser desires to purchase certain of the assets used
in the operation of the Business of the Seller, and the Seller desires to sell
such assets, all upon the terms and subject to the conditions hereinafter set
forth.
NOW, THEREFORE, in consideration of the premises and the mutual
covenants and agreements contained in this Agreement, and in order to consummate
the purchase and sale of the property aforementioned, it is hereby agreed as
follows:
1. PURCHASE AND SALE OF ASSETS; CLOSING.
(a) Purchase and Sale of Assets -- Generally. In reliance
upon the warranties, representations and covenants contained in this Agreement
and on the terms and subject to the conditions of this Agreement, Seller hereby
agrees that at the Closing (as defined below) it will, in the manner specified
in this Agreement, sell, convey, transfer, assign and deliver to Purchaser, and
Purchaser hereby agrees that at the Closing it will purchase from Seller, the
Business as a going concern and all of the right, title and interest of Seller
in and to all of the "Assets" (as defined below), free and clear of all
liabilities (fixed or contingent), obligations, security interests, liens,
claims or encumbrances of any nature or kind whatsoever except "Assumed
Liabilities" (as defined below).
(b) Assets.
(i) Generally. For purposes of this Agreement,
"Assets" shall mean all of the right, title and interest of Seller in and to any
and all of the assets, properties, and rights (of every type, kind, nature and
description whatsoever, tangible and intangible, real and personal, wherever
located and whether or not reflected on the books of Seller) that, as of the
date of this Agreement (the "Effective Date") or at any time between the
Effective Date and the "Closing Date" (as defined below), constitute the
Business or part thereof or are used by Seller in the operation of the Business.
Notwithstanding the foregoing, Seller shall not sell and Purchaser shall not
purchase
1
6
or acquire and the Assets shall not include any "Excluded Assets" (as defined
below) or any other assets, properties and rights specifically excluded from the
Assets by this Agreement.
(ii) Specified Items. By way of explanation and
not in limitation of the foregoing, the "Assets" shall include all of the right,
title and interest of Seller in and to any and all of the following (other than
Excluded Assets) that, as of the Effective Date or at any time between the
Effective Date and the "Closing Date" (as defined below), constitute the
Business or part thereof or are used by Seller in the operation of the Business:
(1) the name "Chartwell Partners
International" and all rights and benefits associated therewith;
(2) all rights as lessee in, to, and
under all real estate leases to which Seller is a party as lessee (the "Real
Property Leases"), together with all of Seller's right, title and interest in
the fixtures and improvements, including construction-in-progress, and
appurtenances thereto, located on the real property subject to such leases (all
such parcels of real property being collectively referred to as the "Leased Real
Property"), and any and all assignable warranties of third parties with respect
thereto;
(3) all machinery, equipment (including
office equipment and machines), tools, computers, telephones and telephone
systems, parts, accessories, and the like and any and all assignable warranties
of third parties with respect thereto (the "Equipment");
(4) all of the contracts, personal
property leases, warranties, commitments, agreements, arrangements, and credit
guaranties, whether oral or written, pursuant to which Seller enjoys any right
or benefit or undertakes any liability or obligation, together with the right to
receive income in respect of such contracts, leases, warranties, commitments,
agreements, and arrangements on and after the "Closing Date" (as defined below)
(the "Assigned Contracts");
(5) all rights of Seller pursuant to
engagement letters, contracts, agreements or otherwise, whether written or oral,
to perform searches on behalf of clients or prospective clients, together with
all rights of Seller against clients to collect fees for work-in-process billed
after the Closing Date, excluding those items of work-in-process which are
specifically designated in writing by the parties hereto as Excluded Assets (as
defined below) (the "Work-in-Process");
(6) all designs, trademarks, trade
names, trade styles, service marks, and copyrights; all registrations and
applications therefor, both registered and unregistered, foreign and domestic;
all trade secrets or processes; all confidential or proprietary information; and
all computer software and any modifications thereof, both source and object
code, together with all documentation, manuals, flow charts and logic diagrams
related thereto, all to the extent either owned or licensed by Seller (the
"Intellectual Property");
(7) all data and data bases,
correspondence, business plans and projections, client lists, client records,
historical personnel records of each of the employees of
2
7
Seller, manuals and printed instructions related to the Assets and the Business,
and all other books, records, files and papers of Seller relating to the Assets
and to the operation of the Business (the "Books and Records");
(8) to the extent permitted under
applicable law or regulation, all licenses, permits, certificates, and
governmental authorizations of Seller (the "Permits");
(9) all fixtures and leasehold
improvements owned by Seller and located at or on the Leased Real Property and
any and all assignable warranties covering such fixtures and leasehold
improvements, owned by Seller (the "Fixtures"), and all furniture and
furnishings other than Fixtures and any and all assignable warranties covering
such furniture and furnishings (the "Furniture"); and
(10) all causes of action, claims and
demands of Seller related to other Assets (the "Assigned Claims").
(c) Excluded Assets. The Assets being purchased and sold
hereunder shall not include the items identified on EXHIBIT A to this Agreement
(collectively, the "Excluded Assets").
(d) Procedure for Closing.
(i) The closing of the transactions contemplated
by this Agreement (the "Closing") shall be held on January 2, 1998 commencing at
9:00 a.m., at the offices of Greene, Radovsky, Maloney & Share LLP, Four
Embarcadero Center, Suite 4000, San Francisco, California 94111-4100, or at such
other place or time as the parties to this Agreement may agree (the "Closing
Date").
(ii) At the Closing, in accordance with the terms
of this Agreement, the Seller shall deliver to the Purchaser a bill or bills of
sale, assignments and all other documents or instruments necessary or
appropriate in the opinion of counsel to the Purchaser to convey all right,
title and interest in or to the Assets to the Purchaser and to effectuate the
terms of this Agreement, and the Purchaser shall deliver the consideration for
the purchase of the Assets as provided in Section 2 of this Agreement.
(e) Closing Costs. The Seller shall be responsible for
and shall pay all the fees, taxes (including sales taxes), expenses and other
costs, including any documentary or intangible taxes or stamps, on any documents
required to effect transfer of title to the Assets, or any other item or amount
required to be paid on account of or in connection with the transfer of title to
the Assets to the Seller pursuant to this Agreement, excluding the payment of
any legal and accounting fees of the Purchaser and any State of Florida
documentary stamp taxes due and payable upon the issuance of the Note (as
defined below).
3
8
2. PURCHASE PRICE; ASSUMPTION OF LIABILITIES.
(a) Purchase Price. In consideration of the purchase,
sale, conveyance, transfer and delivery of the Assets, and upon the terms and
subject to the conditions of this Agreement, the Purchaser shall pay to the
Seller at the Closing the sum of Three Million Dollars ($3,000,000), plus the
Tangible Book Value of the Assets (as defined below)(the "Purchase Price").
(b) Payment of Purchase Price. The Purchase Price shall
be paid at the Closing, as follows:
(i) One Million Two Hundred and Fifty Thousand
Dollars ($1,250,000), plus the Tangible Book Value of the Assets (as defined
below), shall be paid in cash, by wire transfer or check;
(ii) One Million Two Hundred and Fifty Thousand
Dollars ($1,250,000) shall be paid in the form of a note (the "Note"), the
principal balance of which shall be payable in three equal annual installments
of $416,667 each, bearing interest payable annually at the rate of 6.75% on the
unpaid principal balance thereof, and the unpaid principal balance and accrued
interest of which shall be convertible at the election of the Stockholder on
each of the first three anniversary dates of its delivery, into common stock of
Purchaser (the "LAI Stock"), at the following conversion prices:
(1) on the first anniversary date, if
the Stockholder elects to convert the Note, the unpaid principal balance and
accrued interest then due thereon shall be converted into a number of shares of
LAI Stock which shall be equal in value (as hereinafter determined) to the
unpaid principal balance and accrued interest then due, and the LAI Stock shall
be valued for this purpose at One Hundred and Fifteen Percent (115%) of its fair
market value (defined as the average of the closing price of LAI common stock as
reported by the NASDAQ National Market System for the ten trading days
immediately preceding the Closing Date);
(2) on the second anniversary date, if
the Stockholder elects to convert the Note, the unpaid principal balance and
accrued interest thereon then due shall be converted into a number of shares of
LAI Stock which shall be equal in value (as hereinafter determined) to the
unpaid principal balance and accrued interest then due, and the LAI Stock shall
be valued for this purpose at One Hundred and Thirty-two Percent (132%) of its
fair market value (defined as the average of the closing price of LAI common
stock as reported by the NASDAQ National Market System for the ten trading days
immediately preceding the Closing Date); and
(3) on the third anniversary date, if
the Stockholder elects to convert the Note, the unpaid principal balance and
accrued interest thereon then due shall be converted into a number of shares of
LAI Stock which shall be equal in value (as hereinafter determined) to the
unpaid principal balance and accrued interest then due, and the LAI Stock shall
be valued for this purpose at One Hundred and Fifty-two Percent (152%) of its
fair market value (defined as the average of the closing price of LAI common
stock as reported by the NASDAQ National Market System for the ten trading days
immediately preceding the Closing Date).
4
9
(iii) Five Hundred Thousand Dollars ($500,000)
shall be paid in LAI Stock, which shall be valued for this purpose at fair
market value (defined as the average of the closing price of LAI common stock as
reported by the NASDAQ National Market System for the ten trading days
immediately preceding the Closing Date).
(c) Legend on Note. The Note shall be substantially in
the form of EXHIBIT A(1) hereto and shall be imprinted with a legend
substantially in the following form:
The payment of principal and interest on this Note is subject
to certain recoupment provisions set forth in an Asset
Purchase Agreement dated December __, 1997 (the "Agreement")
among the issuer of this Note, the person to whom this Note
originally was issued, and certain other persons. This Note
was originally issued on January __, 1998, and has not been
registered under the Securities Act of 1933, as amended. The
issuer of this Note will furnish a copy of these provisions to
the holder hereof without charge upon written request.
(d) Acceleration of Note. In the event that the
Stockholder is terminated by the Purchaser without good cause as defined in the
Employment Agreement between the Purchaser and the Stockholder referred to in
Section 7(b) hereof, the Note shall become immediately due and payable in full
on the date of such termination. The Note shall also become immediately due and
payable in full on the death of the Stockholder.
(e) Tangible Book Value; Proration of Certain Expenses.
The phrase "Tangible Book Value of the Assets" for purposes of this Section 2
shall mean the net book value of the tangible Assets being purchased hereunder
as shown on the Seller's October 31, 1997 balance sheet: $126,484.98. All
expenses and charges related to the Business, including all expenses and charges
falling under the categories specified in the Seller's Profit and Loss Statement
for the period ended October 31, 1997 and attached hereto as Exhibit H, shall be
prorated as of the Closing Date. Purchaser shall bear all such expenses from and
after the Closing Date. The parties shall use their best efforts to have all
contracts and accounts related to the Business assigned to the Purchaser and to
have the Seller and Stockholder released from obligations thereunder at the
Closing Date or promptly thereafter.
(f) Assumption of Liabilities. At the Closing, as
additional consideration for the sale, conveyance, transfer and delivery of the
Assets, the Purchaser shall assume and become obligated for, commencing and
effective from the Closing Date, the Assumed Liabilities, but shall not and does
not assume any Excluded Liabilities. The assumption of the Assumed Liabilities
will occur only to the extent that the Assumed Liabilities are current according
to their terms as of the Closing Date and monthly payments thereunder do not
materially exceed in amount those amounts estimated on EXHIBIT B hereto, and
that, after such assumption, such liabilities are on terms and subject to
conditions no less favorable to the Purchaser than the terms and conditions
thereof as of the date of this Agreement. The Excluded Liabilities shall remain
the sole obligation of the Seller. For purposes of this Agreement, the Term
"Assumed Liabilities" shall mean the liabilities set forth on EXHIBIT B to this
Agreement, and the "Excluded Liabilities" shall mean all liabilities and
obligations of the Seller other than the Assumed Liabilities.
5
10
(g) Allocation of Purchase Price. The Purchaser and the
Seller agree that the Purchase Price shall be allocated among the Assets in such
manner as the parties shall agree, as set forth on EXHIBIT C hereto. Neither
party will take a position contrary to such Exhibit for state or federal income
tax purposes except to the extent required by Section 1060 of the Internal
Revenue Code of 1986, as amended.
3. REPRESENTATIONS AND WARRANTIES OF THE SELLER AND THE
STOCKHOLDER.
The Seller and the Stockholder hereby jointly and severally
represent and warrant to the Purchaser the following:
(a) Organization and Standing. The Seller is a
corporation duly organized, validly existing and in active status under the laws
of the State of California, and has the corporate power and authority to carry
on its business as it is now being conducted. The Seller is subject to no
material liability, and will not become subject to any material liability, by
reason of its failure to qualify to do business as a foreign corporation in any
state. The Seller has no subsidiaries.
(b) Stock Ownership. The Stockholder owns 100% of the
outstanding capital stock of the Seller.
(c) Authority Relative to this Agreement. The execution,
delivery and performance of this Agreement by the Seller have been duly
authorized by the Board of Directors of the Seller and by the Stockholder. No
further corporate or other action is necessary on their part to make this
Agreement valid and binding upon the Seller or upon the Stockholder and
enforceable against each of them in accordance with the terms hereof or to carry
out the transactions contemplated hereby, except as may be limited by
bankruptcy, insolvency, reorganization, moratorium, and other laws and equitable
principles relating to or limiting creditors' right generally and by general
principles of equity.
(d) No Violations. The execution, delivery and
performance of this Agreement by the Seller and the Stockholder do not and will
not: (i) constitute a breach or a violation of the Seller's Articles of
Incorporation or by-laws, or of any material law, rule or regulation, agreement,
indenture, deed of trust, mortgage, loan agreement or other material instrument
to which the Seller or the Stockholder is a party or by which either of them is
bound; (ii) constitute a violation of any material order, judgment or decree to
which the Seller or the Stockholder is bound or by which any of the Seller's
assets or properties are bound or affected; or (iii) result in the creation of
any material lien, charge or encumbrance upon any of the Seller's assets or
properties.
(e) Compliance with Agreements. The Seller is not a party
to any agreement, indenture, deed of trust, instrument, judgment, order,
obligation or decree which materially and adversely affects the Business or the
Assets. The Seller is not in default under any agreement, indenture, deed of
trust or other instrument to which it is a party or by which it may be bound,
nor is it in violation of any applicable law or regulation, ordinance, order,
injunction, decree or
6
11
requirement of any governmental body or court which might materially and
adversely affect the Business or the Assets.
(f) Tax Matters. The Seller has prepared and filed all
federal, state and local tax returns and reports as are or have been required to
be filed, all taxes owed (whether or not shown on any tax return) have been
timely paid in full, and all such tax returns and reports filed are true,
correct, complete and accurate in all material respects. The Seller has not
executed or filed with the Internal Revenue Service or any other taxing
authority any agreement extending the period for assessment or collection of any
income or other taxes, and the Seller is not a party to any pending audit
examination, deficiency, or other action or proceeding by any governmental
authority for assessment or collection of taxes, and no claim for assessment or
collection of taxes has been asserted against the Seller. No accrued and unpaid
taxes of any kind exist, and no formal claims have been made or asserted by the
United States Government or by any state or foreign country or local government
for income or any other taxes, except such as have been paid or (whether or not
disputed) are disclosed pursuant to this Agreement. True and complete copies of
all federal, state and local tax returns filed by the Seller during the past
five years have previously been delivered to the Purchaser. Adequate provision
for any taxes (including any deferred taxes) due or to become due for the Seller
through October 31, 1997 has been made and is reflected on the financial
statements included on EXHIBIT H hereto. All taxes which the Seller is required
by law to withhold or collect for payment have been duly withheld and collected,
and have been paid to the proper governmental authority or are being withheld by
the Seller. The Seller is in compliance with, and its records contain all
information and documents necessary to comply with, all applicable information
reporting and tax withholding requirements under federal, state and local law.
There are no liens with respect to taxes upon any of the Assets.
(g) Litigation. The Seller is not a party to any
litigation, proceeding or administrative investigation and none is pending or,
to the knowledge of the Seller or the Stockholder, threatened against the
Seller, its properties, or any property used in its business or any of the
Assets, and, to the knowledge of the Seller or the Stockholder, other than the
letter dated December 15, 1997 from Craig J. Zinda of First American Real Estate
Information Services, Inc. to Glen S. Corso, there is no basis for any such
litigation, proceeding or investigation which might have a material adverse
effect, financial or otherwise, on the Seller, its business, property,
operations or prospects, or any of the Assets. There is no outstanding material
order, writ, injunction or decree of any court, government, governmental
authority or arbitration against or affecting the Seller, its properties or
business, or any of the Assets.
(h) Title to and Condition of Assets. The Seller has good
and marketable title to all of the Assets, except the Assigned Contracts. The
Assets are subject to no guaranty, judgment, execution, pledge, lien,
conditional sales agreement, security agreement, encumbrance or charge, or other
liability (whether accrued, absolute, contingent or otherwise) which would have
a material adverse effect, financial or otherwise, on the Seller, its business,
property, operations or prospects, or any of the Assets, other than as disclosed
in this Agreement and in the Exhibits hereto, whether or not such liabilities
are customarily reflected in a corporate balance sheet prepared in accordance
with generally accepted accounting principles. In addition, to the knowledge of
the Seller or the Stockholder, there are no facts in existence on the date
hereof that might reasonably serve as the
7
12
basis now in or in the future for the Assets becoming subject to any such
liability or obligation. The Assets that constitute tangible property are in
good condition and repair, ordinary wear and tear excepted, are in the
possession of the Seller, and are operated in conformity with all applicable
laws, ordinances and regulations.
(i) Client List; Engagement Letters. A list of all of the
existing clients of the Seller as of the date of this Agreement, certified by
the Seller and the Stockholder as true, complete and correct, has been delivered
to the Purchaser prior to the execution of this Agreement (the "Client List").
An updated certified Client List shall be delivered to the Purchaser on the
Closing Date. True and correct copies of all engagement letters of the Seller
for searches which are or will be in progress on the Effective Date and prior to
the Closing Date have been delivered to the Purchaser prior to the execution of
this Agreement, (or, if entered into between the date of this Agreement and the
Closing Date, will be delivered to the Purchaser on the Closing Date). The
Seller and the Stockholder will take all reasonable and necessary steps to
ensure that a good relationship is maintained with each of its clients or
prospective clients after the Effective Date, whether or not listed on the
Client List, and will also take all reasonable and necessary steps to encourage
its clients and prospective clients to do business with Purchaser after the
Closing Date. Neither the Seller nor the Stockholder make any representation or
warranty as to the assignability of the engagement letters or their
enforceability following the consummation of the transactions contemplated
hereby, or as to whether the client will make payments thereunder.
(j) Real Property Leases. Attached hereto as EXHIBIT D is
a true and correct list of all Leased Real Property. True and correct copies of
all Real Property Leases have been delivered to the Purchaser prior to the
execution of this Agreement. Each Real Property Lease is in full force and
effect and there is no existing default or event of default, real or claimed, or
event which with notice or lapse of time or both would constitute default
thereunder the enforcement of which would materially adversely affect the Assets
or the Business. Except as described on EXHIBIT D, the assignment of any Real
Property Lease does not require the consent of the lessor thereunder, and such
assignment will not cause a breach, default, or event of default thereunder.
(k) Customers/Clients. Except as disclosed to the
Purchaser in writing on or before the Closing Date, to the knowledge of the
Seller or the Stockholder, there has been no termination, cancellation or
material limitation, modification or change since October 31, 1997 in the
business relationship of the Seller with any client.
(l) Employees. To the knowledge of the Seller or the
Stockholder, no executive, key employee, or group of employees has any plans to
terminate employment with the Seller prior to the Closing Date, or to decline to
accept any offer of employment made by the Purchaser on or after the Closing
Date. Notwithstanding the foregoing, the Seller and the Stockholder believe that
some executives believe that they have insufficient information to make a
decision with respect to any offer of employment by the Purchaser, and may make
plans not to accept any such offer.
(m) Employee Benefits. EXHIBIT E hereto contains a true
and complete list of all the following agreements, plans or other arrangements,
covering any employee of the Seller, which are presently in effect or were in
effect at any time prior to the Closing Date: (i) employee benefit
8
13
plans within the meaning of ERISA Section 3(3); and (ii) any other employee
benefit plan, program, policy or arrangement, whether written or unwritten,
formal or informal, which Seller has maintained, currently maintains, or to
which it has any outstanding present or future obligations to contribute or
other liability, whether voluntary, contingent or otherwise (collectively, the
"Employee Benefit Plans"). The Assets are not, and Seller does not reasonably
expect them to become, subject to a lien imposed under ERISA Section 4068.
Seller never has had and currently has no obligation to contribute to any
multi-employer plan, as defined in ERISA Section 3(37), with respect to the
Business. Seller has not completely or partially withdrawn from any
multi-employer plan, within the meaning of ERISA Section 3(37). The Business has
not suffered a seventy percent decline in "contribution base units," within the
meaning of ERISA Section 4205(b)(1)(A), in any plan year beginning after 1979.
There are no actions, audits or claims pending or, to the knowledge of the
Seller or the Stockholder, threatened against the Assets or the Business with
respect to the Business's maintenance of the Employee Benefit Plans, other than
routine claims for benefits. Seller has complied with any applicable
continuation coverage requirements of Section 1001 of the Consolidated Omnibus
Budget Reconciliation Act of 1985, as amended, and ERISA Sections 601 through
608 ("COBRA"). The Purchaser has no COBRA obligation, or obligation under any
state statute of similar import, with respect to current or former employees,
and the Seller and the Stockholder promise to indemnify the Purchaser and hold
it harmless for any costs or expenses relating to any allegations or findings of
liability with respect to such current or former employees for "qualifying
events" (as defined in Section 4980 B(f)(3) of the Internal Revenue Code)
occurring on or before the date such individual becomes a participant in the
Purchaser's group health plans.
(n) Owned Personal Property. EXHIBIT F contains a true
and correct list and a brief description of all Equipment owned by Seller and
included in the Assets (excluding items of equipment having a fair market or net
book value of less than $5,000). The Equipment is and at Closing will be in good
operating condition (normal wear and tear excepted). EXHIBIT F contains a true
and correct list and a brief description of all Furniture, Fixtures and other
items of tangible personal property (excluding items of Furniture, Fixtures and
other personal property owned by Seller and having a fair market or net book
value of less than $5,000) owned by Seller and included in the Assets. The
Furniture, Fixtures and other items of tangible personal property included in
the Assets are and at Closing will be in good operating condition (normal wear
and tear excepted).
(o) Leased Personal Property. EXHIBIT G contains a true
and correct list and brief description of all items of tangible personal
property leased by Seller. True, correct and complete copies of all documents
evidencing the leases described on EXHIBIT G are attached hereto. Each of the
leases described on EXHIBIT G is now, and will be on the Closing Date, in full
force and effect and there are not now, and will not be on the Closing Date, any
existing defaults or events of default, real or claimed, or events which with
notice or lapse of time or both would constitute defaults, the consequence of
which would have a material adverse effect on the Assets or the Business. Except
as shown on EXHIBIT G, all such leases are fully assignable without the consent
of any third party, and such assignment will not cause a breach, default, or
event of default thereunder.
(p) Financial Statements. Attached to this Agreement as
EXHIBIT H are financial statements of the Seller for the years ended December
31, 1994, 1995 and 1996, and for the ten
9
14
month period ended October 31, 1997, which statements: (i) include the Seller's
balance sheet as of December 31, 1994, 1995 and 1996, and as of October 31,
1997, and income statement for the years ended December 31, 1994, 1995 and 1996
and the ten month period ended October 31, 1997; (ii) are in accordance with the
books and records of the Seller; (iii) are true and accurate statements and
fairly set forth the financial condition and results of operations of the Seller
as of the dates thereof; (iv) have been prepared in accordance with generally
accepted accounting principles, applied on a consistent basis except as set
forth on EXHIBIT H; and (v) contain and reflect all necessary adjustments for a
fair presentation of the financial condition and results of operations for the
periods covered by the statements.
(q) Insurance. EXHIBIT I contains a true, complete and
correct list of all insurance policies maintained by Seller and Stockholder in
connection with the Business, including, but not limited to, professional
malpractice, life, casualty, fire, general liability, employers' liability,
title, business interruption, errors and omissions, and all other forms of
insurance, in each case indicating the insurer and the amount, scope and
coverage of such policies (effective dates, deductibles, and any aggregate
limits). All such policies are in full force and effect, and all premiums
payable pursuant thereto for all periods up to and including the Closing Date
have been or will be fully paid by the Seller. The Seller has not received any
notice from any insurance carrier or otherwise that (i) such insurance will be
cancelled or terminated or that coverage thereunder will be reduced or
eliminated, or (ii) premium costs will be substantially increased. Except as
disclosed on EXHIBIT I, there are no claims pending under such policies of
insurance and no notices have been given by the Seller under such policies.
(r) Absence of Certain Changes or Events. Other than as
disclosed in exhibits to this Agreement and in the ordinary course of its
business or in connection with effecting the transactions contemplated by this
Agreement, and other than bonus payments or dividends made to certain employees
of the Seller, a schedule of which bonus payments has been provided to the
Purchaser prior to the execution of this Agreement, since October 31, 1997,
there has not been (i) any material adverse change in the financial condition,
Assets or results of operations of the Business; or (ii) any damage, destruction
or loss, whether or not covered by insurance, materially adversely affecting the
Assets or the Business.
(s) Compliance With Applicable Laws. The conduct of its
business by the Seller and the Closing of the transactions contemplated by this
Agreement do not violate or infringe any federal, state, local or foreign law,
statute, ordinance, license or regulation that is presently in effect or that to
the knowledge of the Seller or the Stockholder is proposed to be adopted
(including, without limitation, laws relating to environmental liability) that
would materially and adversely affect the Business or the Assets. Such conduct
and Closing do not violate or infringe any right or concession, copyright,
trademark, trade name, patent, know-how or other proprietary right of others,
the enforcement of which would materially and adversely affect the Business or
the value of the Assets. The Seller has and has maintained all material licenses
and permits required by all local, state and federal authorities and regulating
bodies.
(t) Approvals and Consents. Except as set forth on
EXHIBIT J, no consent, approval or authorization is required in connection with
the execution or delivery of this Agreement
10
15
by the Seller and the Stockholder or the consummation by either of them of the
transactions contemplated hereby.
(u) Disclosure. No representation or warranty made by the
Seller or the Stockholder in this Agreement, the exhibits hereto or any of the
documents and papers required to be delivered pursuant to this Agreement or in
connection with the consummation of the transactions contemplated hereby
contains or will contain any untrue statement of a material fact or omits or
will omit to state a material fact necessary to make the statements contained
herein or therein not misleading.
(v) No Undisclosed Changes. The representations and
warranties made by the Seller and the Stockholder pursuant to this Section 3 of
this Agreement are and will be true and complete as of not only the date of this
Agreement, but also as though again made on the Closing Date, except to the
extent that such representations and warranties are incorrect as of such later
date by reason of events occurring after the date of this Agreement in
compliance with the terms hereof.
(w) Investment Representations. Seller (i) understands
that the Note and the LAI Stock acquired by it as part of the Purchase Price
pursuant to this Agreement have not been, and will not be, registered under the
Securities Act of 1933 or under any state securities laws, and are being offered
and sold in reliance upon federal and state exemptions for transactions not
involving any public offering, (ii) is acquiring the Note and the LAI Stock
solely for its own account for investment purposes, and not with a view to the
distribution thereof (except to the Stockholder), (iii) is a sophisticated
investor with knowledge and experience in business and financial matters, (iv)
has received certain information concerning the Purchaser and has had the
opportunity to obtain additional information as desired in order to evaluate the
merits and the risks inherent in investing in the Note and the LAI Stock, (v) is
able to bear the economic risk and lack of liquidity inherent in holding the
Note and the LAI Stock, (vi) is an Accredited Investor as defined in the
Securities Act of 1933 and the rules and regulations promulgated thereunder, and
(vii) is aware that all shares of the LAI Stock acquired as part of the Purchase
Price will be subject to the Lock-Up Agreement (as hereinafter defined).
4. REPRESENTATIONS AND WARRANTIES OF THE PURCHASER.
The Purchaser hereby represents and warrants the following:
(a) Organization and Standing. The Purchaser is a
corporation duly organized, validly existing, and in active status under the
laws of the State of Florida, and has the corporate power and authority to carry
on its business as it is now being conducted. The Purchaser is subject to no
material liability, and will not become subject to any material liability, by
reason of its failure to qualify to do business as a foreign corporation in any
state.
(b) Authority Relative to this Agreement. The execution,
delivery and performance of this Agreement and the transactions contemplated
hereby by the Purchaser have been duly authorized by the Board of Directors of
the Purchaser. No further corporate or other action is necessary on the part of
the Purchaser to make this Agreement valid and binding upon the Purchaser
11
16
and enforceable against it in accordance with the terms hereof or to carry out
the transactions contemplated hereby, except as may be limited by bankruptcy,
insolvency, reorganization, moratorium, and other laws and equitable principles
relating to or limiting creditors' right generally and by general principles of
equity.
(c) No Violations. Except with respect to the Purchaser's
existing credit arrangements with Barnett Bank, N.A., the execution, delivery
and performance of this Agreement by the Purchaser do not and will not: (i)
constitute a breach or a violation of the Purchaser's Articles of Incorporation
or by-laws, or of any material law, rule or regulation, agreement, indenture,
deed of trust, mortgage, loan agreement or other material instrument to which
the Purchaser is a party or by which it is bound; (ii) constitute a violation of
any material order, judgment or decree to which the Purchaser is bound or by
which any of the Purchaser's assets or properties are bound or affected; or
(iii) result in the creation of any lien, charge or encumbrance upon any of the
Purchaser's assets or properties.
(d) LAI Stock. Upon the delivery of the LAI Stock and any
of the Purchaser's stock issued pursuant to the Note to the Seller, the Seller
will acquire good and marketable title to such Stock, free and clear of any
liens, encumbrances, or restrictions, except as imposed by law or contemplated
by this Agreement, and the shares of such Stock, when issued in accordance with
the provisions of this Agreement, will be fully paid and nonassessable. Upon the
delivery of the Note to the Seller, the Seller will acquire good and marketable
title to the Note, free and clear of any liens, encumbrances, or restrictions,
except as imposed by law or contemplated by this Agreement.
(e) Financial Statements. The financial statements that
are included as part of the Purchaser's Form 10-Q filed for the quarter ended
August 31, 1997, (the Financial Statements") were prepared in accordance with
generally accepted accounting principles consistently applied throughout the
periods involved, were prepared in accordance with the books and records of the
Purchaser and present fairly the financial position of the Purchaser as of the
respective dates thereof and the results of operations of Purchaser for the
respective periods then ended.
(f) Compliance with Agreements. The Purchaser is not a
party to any agreement, indenture, deed of trust, instrument, judgment, order,
obligation or decree which materially and adversely affects its business or its
assets. The Purchaser is not in default under any agreement, indenture, deed of
trust or other instrument to which it is a party or by which it may be bound,
nor is it in violation of any applicable law or regulation, ordinance, order,
injunction, decree or requirement of any governmental body or court which might
materially and adversely affect its business or its assets.
(g) Compliance With Applicable Laws. The conduct of its
business by the Purchaser and the Closing of the transactions contemplated by
this Agreement do not violate or infringe any federal, state, local or foreign
law, statute, ordinance, license or regulation that is presently in effect or
that to the knowledge of the Purchaser is proposed to be adopted (including,
without limitation, laws relating to environmental liability) and that would
materially and adversely affect its business or its assets. Such conduct and
Closing do not violate or infringe any right or concession, copyright,
trademark, trade name, patent, know-how or other proprietary right of others,
12
17
the enforcement of which would materially and adversely affect the business or
the assets of the Purchaser. The Purchaser has and has maintained all material
licenses and permits required by all local, state and federal authorities and
regulating bodies.
(h) Nasdaq. The LAI Stock shall be listed for quotation
on Nasdaq effective upon the Closing.
(i) Disclosure. No representation or warranty made by the
Purchaser in this Agreement, the exhibits hereto or any of the documents and
papers required to be delivered pursuant to this Agreement or in connection with
the consummation of the transactions contemplated hereby contains or will
contain any untrue statement of a material fact or omits or will omit to state a
material fact necessary to make the statements contained herein or therein not
misleading.
5. DUE DILIGENCE INVESTIGATION.
Between the Effective Date and the Closing Date, the Seller and the
Stockholder shall (i) give to the Purchaser's designated representatives full
and complete access, from time to time, during normal business hours, and upon
reasonable advance notice, to the Seller's business offices, premises, books,
records and business information, (ii) permit the Purchaser's designated
representatives to make such examinations of the foregoing, and conduct such
other investigations, as they consider appropriate to determine and verify the
condition (financial or otherwise) of the Business and the Assets and to
consummate the transactions contemplated by this Agreement, and (iii) furnish to
the Purchaser's designated representatives such additional information with
respect to the Business and the Assets as they may reasonably request from time
to time.
6. TRANSACTIONS PENDING CLOSING.
(a) Business in the Ordinary Course. Except as otherwise
expressly required or permitted by this Agreement and except as otherwise
authorized or approved by the Purchaser between the Effective Date and the
Closing Date, the Stockholder and the Seller agree that the Seller shall conduct
the Business in the ordinary course and shall (i) use reasonable efforts to
maintain and preserve the Business and the Assets intact, to keep available the
services of its present employees and to preserve the goodwill of clients,
customers and others having business relations with it; (ii) meet all
obligations of the Seller under each agreement assigned hereunder; (iii) keep in
force at no less than their present limits all existing policies of insurance;
and (iv) bill all of the clients of the Seller in accordance with the terms of
any engagement letters applicable to them and consistent with the past practices
of the Seller.
(b) Notification of Change. The Seller and the
Stockholder will each immediately notify the Purchaser, in writing, of any event
or condition known to either Seller or the Stockholder which occurs prior to
Closing hereunder and causes a change in the facts relating to, or the truth of
any of the representations set forth in Section 3 of this Agreement or that
otherwise adversely affects or that is reasonably likely to affect the Assets or
the operation of the Business. Between the date of this Agreement and the
Closing, the Seller and the Stockholder will promptly advise the Purchaser
13
18
in writing of any fact which, if existing or known at the date of this
Agreement, would have been required to be set forth in or disclosed pursuant to
this Agreement.
(c) Corporate Action; Approvals and Consents. The Seller
and the Stockholder will each take all corporate and other action and use their
best efforts to obtain in writing as promptly as possible all approvals and
consents required to be obtained by any of them in order to effectuate the
consummation of the transactions contemplated hereby.
(d) Other Transactions Prohibited. Between the date of
this Agreement and the Closing, neither the Stockholder, the Seller nor any of
its officers, directors, employees or stockholders will enter into any
negotiations or agreements with any person or entity other than the Purchaser
with respect to the sale of all or any part of the Assets or the sale of all or
any portion of the capital stock of the Seller.
(e) Disclosure of Transactions. From and after the date
of this Agreement and regardless of whether or not the transactions contemplated
by this Agreement are ever consummated, all of the parties to this Agreement,
and their respective agents, employees, contractors and representatives, shall
treat as confidential all information with respect to the Purchase Price and all
other material terms and conditions of the transactions contemplated by this
Agreement (collectively the "Price and Terms"), and shall not make, or permit to
be made, any public announcement or other disclosure whatsoever of the Price and
Terms (except as such disclosure may be compelled by law) without the prior
consent of all other parties.
7. CONDITIONS PRECEDENT TO THE OBLIGATIONS OF THE PURCHASER.
The obligations of the Purchaser under this Agreement are
subject to the satisfaction, at or prior to the Closing, of each of the
following conditions (the fulfillment of any of which may be waived in writing
by the Purchaser):
(a) Accuracy of Representations and Warranties. Each of
the representations, warranties and statements of the Seller and the Stockholder
contained in this Agreement, all exhibits hereto and any documents delivered in
connection herewith shall not only have been true and complete as of the date of
this Agreement but shall also be true and complete in all material respects as
though again made on the Closing Date, except (i) to the extent that such
representations and warranties and statements are incorrect as of such later
date by reason of events occurring after the date of this Agreement in
compliance with the terms hereof or (ii) to the extent that such inaccuracies do
not, in the aggregate, constitute a material adverse change in the Assets or the
Business or the results of operations of the Seller.
(b) Employment Agreement. The Stockholder shall have
entered into an Employment Agreement with the Purchaser, substantially in the
form of that Employment Agreement attached hereto as EXHIBIT K (the "Employment
Agreement").
14
19
(c) Lock-Up Agreement. The Seller and the Stockholder
shall have entered into a Lock-Up Agreement with respect to the LAI Stock
received as part of the Purchase Price, substantially in the form of that
Lock-Up Agreement attached hereto as EXHIBIT L, containing certain restrictions
on the ability of the Seller and the Stockholder to sell, convey, assign or
otherwise transfer the LAI Stock (the "Lock-Up Agreement"). The Lock-Up
Agreement shall provide, in pertinent part, that the Stockholder shall not, for
a period of two (2) years after the Closing Date, directly or indirectly, offer,
sell, transfer, pledge, contract to sell or otherwise dispose of, or cause or in
any way permit to be offered, sold, transferred, pledged or otherwise disposed
of, or grant any options, warrants or other rights to acquire, any shares of the
LAI Stock owned by the Stockholder as of the Closing Date. The Lock-Up Agreement
shall terminate in the event of the death, permanent disability or termination
without good cause of the Stockholder as defined in the Employment Agreement.
(d) Barnett Consent. The Purchaser shall have received
the consent of Barnett Bank, N.A. to the transactions contemplated pursuant to
this Agreement; provided, however, that the Purchaser shall use its reasonable
best efforts to obtain that consent.
(e) Compliance. The Seller and the Stockholder shall each
have performed and complied with all agreements, covenants and conditions
required by this Agreement and all exhibits hereto to be performed and complied
with by each of them at or prior to the Closing.
(f) No Material Adverse Change Prior to Closing. Seller
shall not have suffered any material adverse change in the Assets or the
Business or the results of operation thereof, nor shall there have occurred any
event that has had or is reasonably expected to have a materially adverse effect
on the Assets or the Business or the results of operation thereof.
(g) Consents and Waivers. Purchaser shall have received
any required consents or waivers for the consummation of the transactions
described herein.
(h) Active Status Certificate; Certified Copy of
Articles. The Purchaser shall have received a certificate executed by the
Secretary of State of the State of California dated within 14 days prior to the
Closing Date certifying that the Seller is a corporation in active status under
the laws of the State of California and a certificate executed by the Secretary
of State of the State of California dated within 14 days prior to the Closing
Date certifying to a true and complete copy of the Seller's Articles of
Incorporation.
(i) Certificate. The Purchaser shall have received a
certificate executed by the President of the Seller, attested to by the
Secretary of such corporation under its corporate seal, and executed by the
Stockholder, dated the Closing Date, satisfactory in form and substance to the
Purchaser and its counsel, certifying as to:
(i) the fulfillment of the matters set forth in
Sections 7(a) through (g) of this Agreement,
15
20
(ii) the resolutions adopted by the Board of
Directors of the Seller and the Stockholder approving the execution of
this Agreement and the consummation of the transactions contemplated
hereby; and
(iii) the incumbent officers of the Seller and the
authenticity of the signatures of each.
(j) Instruments of Transfer. The Seller shall have
delivered to the Purchaser such bills of sale, endorsements, assignments,
licenses and other good and sufficient instruments of conveyance and transfer
and any other instruments reasonably necessary or appropriate to vest in the
Purchaser all of the Seller's right, title and interest in and to the Assets,
free and clear of all liens, charges, encumbrances, pledges or claims of any
nature which would have a material adverse effect on the Business all in form
and substance satisfactory to counsel to the Purchaser.
(k) Opinion of Seller's Counsel. The Purchaser shall have
received an opinion of Greene Radovsky Maloney & Share LLP, counsel to the
Seller, dated the Closing Date, satisfactory in form and substance to the
Purchaser and its counsel, to the effect of that set forth in EXHIBIT M.
(l) Litigation. There shall not be any litigation or
proceeding to restrain or invalidate the consummation of the transactions
contemplated hereby, the defense of which would, in the sole discretion of the
Purchaser, involve expense to the Purchaser or a lapse of time that would be
materially adverse to its interests with respect hereto.
(m) Casualty. Since the date of this Agreement, and prior
to the completion of the Closing on the Closing Date, no material portion of the
Assets shall have been destroyed or damaged (whether or not there exists
insurance against such loss).
(n) Termination of Financing Statements. No financing
statements shall be of record with any state or any subdivision thereof, or in
the public records of any county thereof, with respect to any of the Assets
which shall have a material adverse effect on the value of the Assets. The
Seller shall have furnished evidence satisfactory to counsel to the Purchaser of
the termination of any financing statements previously on record with respect to
any of the Assets, but if any such financing statements shall be of record with
any state or any subdivision thereof or of any other state or in the public
records of any county thereof, with respect to the Assets (whether or not such
financing statements have a material adverse effect on the value of the Assets),
the Seller shall deliver termination statements, releases or other documents
satisfactory to counsel to the Purchaser which will be effective upon recording
or filing to terminate or release all such filings of record with respect to the
Assets.
(o) Actions, Proceedings, Etc. All actions, proceedings,
instruments, agreements and documents required to carry out the transactions
contemplated by this Agreement or incidental thereto and all other related legal
matters shall have been reasonably satisfactory to and approved by Trenam,
Kemker, Scharf, Barkin, Frye, O'Neill & Mullis, Professional Association,
counsel to the
16
21
Purchaser; and, such counsel shall have been furnished with such copies
(certified if requested) of all such actions, proceedings, instruments,
agreements and documents as they shall have reasonably requested.
8. CONDITIONS PRECEDENT TO THE OBLIGATIONS OF THE SELLER AND THE
STOCKHOLDER.
The obligations of the Seller and the Stockholder under this
Agreement are subject to the satisfaction at or prior to the Closing of each of
the following conditions (the fulfillment of any one of which may be waived in
writing by such parties):
(a) Accuracy of Representations and Warranties. The
representations and warranties and statements of the Purchaser contained in this
Agreement shall not only have been true and complete on the date of this
Agreement and when made but shall also be true and complete as though again made
on the Closing Date, except to the extent that they are incorrect as of the
Closing Date by reason of events occurring after the date of this Agreement in
compliance with the terms hereof.
(b) Compliance. The Purchaser shall have performed and
complied with all agreements, covenants and conditions required by this
Agreement and all exhibits hereto to be performed and complied with by it at or
prior to the Closing.
(c) Certificate of the Purchaser. The Seller shall have
received a certificate exe cuted by the President of the Purchaser and attested
to by its Secretary under its corporate seal, dated the Closing Date, certifying
as to:
(i) the fulfillment of the matters mentioned in
Sections 8(a) and (b) of this Agreement;
(ii) the resolutions adopted by the Board of
Directors of the Purchaser approving the execution of this Agreement
and the consummation of the transactions con templated hereby; and
(iii) the incumbent officers of the Purchaser and
the authenticity of the signatures of each.
(d) Employment Agreement. The Purchaser shall have
entered into an Employment Agreement with the Stockholder, substantially in the
form of the Employment Agreement attached hereto as EXHIBIT K (the "Employment
Agreement).
(e) Opinion of Purchaser's Counsel. The Seller shall have
received an opinion of Trenam, Kemker, Scharf, Barkin, Frye, O'Neill & Mullis,
P.A., counsel to the Purchaser, dated the Closing Date, satisfactory in form and
substance to the Seller and its counsel.
17
22
9. SURVIVAL OF REPRESENTATIONS, WARRANTIES, OBLIGATIONS,
COVENANTS AND AGREEMENTS.
Each of the representations, warranties, obligations, covenants and
agreements of the Seller, the Stockholder and the Purchaser included or provided
for in this Agreement or in any Exhibit to this Agreement or in any certificate
delivered pursuant to this Agreement shall survive the execution and delivery of
this Agreement and the consummation of the transactions contemplated by this
Agreement for a period of eighteen (18) months after the Closing Date, except
for (i) the representation and warranty of the Seller and the Stockholder set
forth in Sections 3(f) and (m) hereof, which shall survive the Closing Date and
continue in full force and effect up to and including the applicable statute of
limitations, and (ii) the Restrictive Covenants set forth in Section 12 hereof,
which shall survive the Closing Date for the periods set forth therein.
10. INDEMNIFICATION.
(a) Indemnifications by the Seller and the Stockholder.
The Seller and the Stockholder jointly and severally agree to indemnify and hold
harmless the Purchaser in respect of any and all claims, losses and expenses
which may be incurred by the Purchaser arising out of:
(i) any material breach by either the Seller or
the Stockholder of any of the representations, warranties, covenants or
agreements made by either of them in this Agreement, the exhibits
hereto or any document or paper delivered in connection with the
transactions contemplated hereby;
(ii) any attempt (whether or not successful) by
any person to cause or require the Purchaser to pay or discharge any
debt, obligation, liability or commitment of the Seller other than an
Assumed Liability; or any action, suit, proceeding, assessment or
judgment arising out of or incident to any of the matters indemnified
against in this Section 10, including reasonable fees and disbursements
of counsel;
provided, however, that the Seller and the Stockholder shall not have any
obligation to indemnify the Purchaser hereunder: (A) until the Purchaser has
suffered claims, losses and expenses arising out of the events set forth in (i)
through (iii) above in excess of a $50,000 aggregate deductible, or (B)
thereafter to the extent the claims, losses and expenses the Purchaser has
suffered arising out of the events set forth in (i) through (iii) above exceeds
an aggregate dollar amount equal to Three Million Dollars ($3,000,000).
(b) Indemnification by the Purchaser. The Purchaser
agrees to indemnify and hold harmless the Seller and the Stockholder in respect
of any and all claims, losses and expenses which may be incurred by the Seller
or the Stockholder arising out of:
(i) any material breach by the Purchaser of any
of the representations, warranties, covenants or agreements made by it
in this Agreement, the exhibits hereto or any document or paper
delivered in connection with the transactions contemplated hereby;
18
23
(ii) any action, suit, proceeding, assessment or
judgment arising out of or incident to any of the matters indemnified
against in this Section 10, including reasonable fees and disbursements
of counsel;
provided, however, that the Purchaser shall not have any obligation to indemnify
the Seller or the Stockholder hereunder, except as to any of the Assumed
Liabilities: (A) until the Seller or the Stockholder have suffered claims,
losses and expenses arising out of the events set forth in (i) and (ii) above in
excess of a $50,000 aggregate deductible, or (B) thereafter to the extent the
claims, losses and expenses the Seller and the Stockholder have suffered arising
out of the events set forth in (i) and (ii) above exceeds an aggregate dollar
amount equal to Three Million Dollars ($3,000,000).
(c) Claims for Indemnification. Whenever any claim shall
arise for indemnification under this Section 10, the indemnified party shall
notify the party or parties (as the case may be) against whom indemnification is
sought (whether one party or more, the "Indemnifying Party") in writing of the
facts constituting the basis for such claim. Such notice shall specify all facts
known to the indemnified party giving rise to such indemnification right and the
amount or an estimate of the amount of the liability arising therefrom. The
right to indemnification hereunder and the amount or the estimated amount
thereof, as set forth in such notice, shall be deemed agreed to by the
Indemnifying Party unless, within 45 days after the receipt of such notice, the
Indemnified Party is notified in writing that the Indemnifying Party disputes
the right to indemnification as set forth or estimated in such notice.
(d) Right to Defend; Third-Party Claims, Etc.
(i) If the facts giving rise to any such
indemnification right shall involve any actual or threatened claim or demand by
any third party against the indemnified party or any possible claim by the
indemnified party against any third party, such claim by or against a third
party shall be referred to as a "Third-Party Claim." If the Indemnifying Party
gives the indemnified party an agreement in writing, in form and substance
reasonably satisfactory to counsel to the indemnified party confirming the
agreement to indemnify and save the indemnified party harmless from all costs
and liability arising from any Third-Party Claim, the Indemnifying Party may at
its own expense undertake full responsibility for the defense or prosecution of
such Third-Party Claim and may contest or settle it on such terms as it may
choose. If the Indemnifying Party fails to deliver such an agreement of
indemnity to the indemnified party:
(1) the Indemnifying Party at its own
expense may nevertheless participate with the indemnified party in the defense
or prosecution of the Third-Party Claim and in any and all settlement
negotiations relating thereto, and
(2) the indemnified party may contest
or settle the Third-Party Claim on such terms at it may choose, although the
indemnified party shall not reach a settlement until it has consulted in good
faith with the Indemnifying Party.
Any such participation shall not relieve the Indemnifying Party of its
obligations to indemnify the indemnified party under this Section 10.
19
24
(ii) If by reason of any Third-Party Claim a
lien, attachment, garnishment or execution is placed upon any of the property or
assets of the indemnified party, the Indemnifying Party, if it desires to
exercise its right to defend or prosecute such suit, shall furnish a
satisfactory indemnity bond to obtain the prompt release of such lien,
attachment, garnishment or execution.
(e) Cooperation. The parties to this Agreement shall
execute such powers of attorney as may be necessary or appropriate to permit
participation of counsel selected by any party hereto and, as may reasonably be
related to any such claim or action, shall provide access to the counsel,
accountants and other representatives of each party during normal business hours
to all properties, personnel, books, tax records, contracts, commitments and all
other business records of such other party and will furnish to such other party
copies of all such documents as may reasonably be requested (certified, if
requested).
(f) Offset. With respect to any claims by the Purchaser
against the Seller or the Stockholder for indemnification under this Section 10,
in furtherance and not in limitation of its rights under this Agreement, the
Purchaser, at its option, shall be entitled to an immediate right of offset
against any amounts owed by the Purchaser to either the Seller or the
Stockholder, specifically excluding any payments to be paid to Stockholder as
compensation under the Employment Agreement.
11. OBLIGATIONS AFTER THE CLOSING.
(a) Distribution of Consideration. The Seller and the
Stockholder hereby covenant that on and after the Closing, they shall pay and
distribute any and all consideration paid by the Purchaser to the Seller
pursuant hereto in accordance with all applicable laws and shall indemnify and
hold the Purchaser harmless from any liability arising by virtue of any failure
on the part of the Seller or the Stockholder to comply in all respects with this
covenant.
(b) Transition of Business. The Seller and the
Stockholder agree to assist as requested to effect an orderly transition of the
Business to the Purchaser.
(c) Post Closing Access to Financial Records. There may
be circumstances from time to time hereafter, whether in connection with the
preparation of historical audited financial statements or otherwise, where the
Purchaser may need to have access to the financial records retained by the
Seller and/or the Stockholder, or their respective agents, with respect to the
Assets or the Business. The Seller and the Stockholder agree to provide to the
Purchaser and its counsel, accountants and other representatives full access
during normal business hours for inspection of such financial records of the
Seller and/or the Stockholder relating to the Assets or the Business as the
Purchaser or its counsel or accountants may from time to time reasonably
request.
(d) Employment of Employees; Benefit Plans. On the
Closing Date, Purchaser shall offer employment to such employees of Seller as
Purchaser, in its sole discretion, shall deem to be in its best interest.
Purchaser will assume no responsibility with regard to any Employee Benefit
Plans of Seller. Purchaser agrees to give each employee of Seller hired by
Purchaser credit
20
25
for prior years of service with Seller for purposes of participation and vesting
in Purchaser's employee benefit plans. Effective at the Closing Date, all
employees of Seller hired by Purchaser shall be entitled to participate in
Purchaser's employee benefit plans. The Seller will adopt appropriate
resolutions of its Board of Directors terminating its Employee Benefit Plans
(except for the cafeteria plan) as of the Closing Date (or in the case of its
health insurance plan, as of the close of business on the date immediately prior
to the Closing Date). If and to the extent that the Seller obtains an
appropriate determination letter from the Internal Revenue Service with respect
to its money purchase pension plan and 401(k) profit sharing plan, the Seller's
former employees who become participants in the Purchaser's profit sharing plan
will be entitled to rollover their balances from the Seller's plans to the
Purchaser's plan.
12. RESTRICTIVE COVENANTS.
(a) Noncompetition. For the period commencing on the
Closing Date and continuing through and including the three (3) years following
the Closing Date, neither the Seller, the Stockholder, nor any officer or
director of the Seller, will, without the prior written consent of the
Purchaser, directly or indirectly, enter into, engage in, be employed by or
consult with any business in any county in any state in which either the Seller
or the Purchaser does or has done business, in competition with the Business,
whether as an individual, independent contractor, partner or joint venturer, or
as an officer, director, stockholder, agent, employee or salesman for any
person, firm, partnership, corporation or other entity.
(b) Nonsolicitation of Clients and Employees. For the
period commencing on the Closing Date and continuing through and including three
(3) years following the Closing Date, the Stockholder shall not, directly or
indirectly, either as an individual, partner, officer, director, stockholder,
advisor, independent contractor, joint venturer, consultant, agent, employee,
representative or salesman for any person, firm, partnership, corporation or
other entity, or otherwise, (i) solicit or counsel any third person,
partnership, joint venture, company, corporation, association or other
organization that is or was a client or prospective client (including any
individual who is or was an employee, principal, partner, officer or director of
a client or prospective client) of Purchaser or Seller with whom Stockholder had
a substantial relationship within the preceding three (3) year period,
regardless of such person's or entity's location, to terminate any business
relationship with Purchaser and/or to commence a similar business relationship
with any other individual or entity; (ii) accept, with or without solicitation,
any business from any third person, partnership, joint venture, company,
corporation, association or other organization that is or was a client or
prospective client (including any individual who is or was an employee,
principal, partner, officer or director of a client or prospective client), of
Purchaser or Seller with whom Stockholder had a substantial relationship within
the preceding three (3) year period, regardless of such person's or entity's
location; or (iii) solicit any of the employees, consultants, agents, or
independent contractors of Purchaser to terminate any business relationship with
Purchaser. The restrictions of this Section 12(b) shall not be violated by the
ownership of no more than 2% of the outstanding securities of any company whose
stock is traded on a national securities exchange or is quoted in the Automated
Quotation System of the National Association of Securities Dealers (NASDAQ).
21
26
(c) Extension of Time. The period of time during which
the Seller or the Stockholder is prohibited from engaging in certain business
practices pursuant to Sections 12(a) and (b) shall be extended by any length of
time during which the Seller or the Stockholder (or either one of them) is in
breach of such covenant.
(d) Essential Elements. It is understood by and between
the parties hereto that the foregoing restrictive covenants set forth in
Sections 12(a) and (b) are essential elements of this Agreement, and that, but
for the agreement of the Seller and the Stockholder to comply with such
covenants, the Purchaser would not have agreed to enter into this Agreement.
Such covenants by the Seller and the Stockholder shall be construed as an
agreement independent of any other provision in this Agreement. The existence of
any claim or cause of action of the Seller or the Stockholder against the
Purchaser, whether predicated on this Agreement, or otherwise, shall not
constitute a defense to the enforcement by the Purchaser of such covenant.
(e) Severability. It is agreed by the parties to this
Agreement that if any portion of the restrictive covenants set forth in Sections
12(a) and (b) is held to be unreasonable, arbitrary or against public policy,
then each such portion of such covenants shall be considered divisible both as
to time and geographical area. The parties agree that, if the specified time
period or the specified geographical area applicable to Sections 12(a) and/or
(b) is determined to be invalid, unreasonable, arbitrary or against public
policy, a lesser period of time or geographical area shall be enforced so long
as the same is not unreasonable, arbitrary or against public policy. The parties
to this Agreement agree that, if a specified time period or a specified
geographical area is determined to be unreasonable, arbitrary or against public
policy, a lesser time period or geographical area which is determined to be
reasonable, nonarbitrary and not against public policy may be enforced against
the Seller and/or the Stockholder.
(f) Termination Without Good Cause. In the event of the
termination without good cause of the Stockholder by the Purchaser as defined in
the Employment Agreement referred to in Section 7(b), the Restrictive Covenants
set forth in Sections 12(a) and (b) above shall extend only for a period of one
year from the date of such termination.
13. GENERAL.
(a) No Brokers. Each of the parties to this Agreement
represents and warrants, each to the others, that it has not utilized the
services of any finder, broker or agent. Each of the parties agrees to indemnify
the other parties against and hold them harmless from any and all liabilities to
any person, firm or corporation claiming any broker's or finder's fee or
commission of any kind on account of services rendered on behalf of such
corporation in connection with the transactions contemplated by this Agreement.
(b) Waivers. No action taken pursuant to this Agreement,
including any investigation by or on behalf of any party, shall be deemed to
constitute a waiver by the party taking such action of compliance with any
representation, warranty, covenant or agreement contained herein, therein or in
any document delivered in connection herewith or therewith. The waiver by any
22
27
party to this Agreement of a breach of any provision of this Agreement shall not
operate or be construed as a waiver of any subsequent breach.
(c) Remedies.
(i) General. The parties to this Agreement
acknowledge that the performance of their respective obligations hereunder is
essential to the consummation of the transactions contemplated by this
Agreement. Each of them further acknowledges that the Assets are unique and that
no party will have an adequate remedy at law if any other party fails to perform
its or his obligations hereunder. The parties further agree that damages at law
will be an insufficient remedy to the Purchaser in the event that the
restrictive covenants of Sections 12(a) and (b) are violated. In any such event,
each party shall have the right, in addition to any other remedies or rights it
may have, upon application to a court of competent jurisdiction, to obtain
injunctive relief to compel specific performance of this Agreement. The other
party agrees to pay to the prevailing party all costs and expenses incurred by
the prevailing party relating to the enforcement of this Agreement, including
reasonable fees and disbursements of counsel (before, during or after
arbitration or trial and in appellate proceedings). The right to seek specific
performance by way of injunctive relief provided in this Section 13(c)(i) and
the right to indemnification provided in Section 10 shall be the exclusive
remedies of the parties pursuant to this Agreement.
(ii) Mandatory Arbitration. Should any dispute
arise among or between one or more of the parties to this Agreement relating to
this Agreement, the interpretation of any provision hereof, or any of the rights
or obligations hereunder of any of the parties to this Agreement, then at the
election of any party involved in such dispute, such dispute shall be resolved
finally by a single arbitrator in an arbitration proceeding conforming to the
rules of the American Arbitration Association applicable to commercial
arbitrations. The arbitrator shall be appointed as follows: the party not
electing to submit the matter to arbitration (the "Non-Electing Party") shall
provide to the other (the "Electing Party") a list of three proposed
arbitrators, each of whom shall be knowledgeable as to matters that are the
subject of the dispute and each of whom shall be completely independent of and
with no prior affiliation or direct or indirect relationship with any party or
any of their affiliates. The Electing Party shall then select the arbitrator
from such list or, if all such proposed arbitrators are reasonably unacceptable
to such party, so advise the Non-Electing Party, whereupon such party shall
prepare a new list of three proposed arbitrators and the selection process shall
begin anew. The arbitration shall take place in a state which shall be agreed to
by the parties, other than the state where the Stockholder resides or where the
Purchaser is incorporated; provided, however, that if the parties cannot agree
upon a state, the arbitration shall take place in Denver, Colorado. The decision
of such arbitrator shall be final and binding upon the parties, and such
decision shall be enforceable as a judgment in a court of competent
jurisdiction. Other than the right to seek specific performance by way of
injunctive relief to enforce the provisions of Sections 12(a) and (b) set forth
in Section 13(c)(i) above, each party to this Agreement covenants not to
institute any suit or other proceeding in any court with respect to any matter
arising under or pursuant to or directly or indirectly relating to this
Agreement, the subject matter hereof or the other agreements, documents and
instruments delivered or required to be delivered hereunder or in connection
herewith unless the intended subject matter thereof has first been submitted for
arbitration in accordance with the foregoing procedure and such arbitration
proceeding has been
23
28
completed. In order to maintain the confidentiality of the dispute intended to
be resolved by arbitration as provided in this Agreement as well as the
information adduced and contentions asserted in any such arbitration, the
parties agree to maintain in strict confidence and agree to neither make nor
suffer any public disclosure of the fact of, contentions or evidence,
discovered, developed or introduced in and the result of any such arbitration;
provided, however, the foregoing to the contrary notwithstanding, that the
Purchaser may make public disclosures regarding the existence of the
arbitration, the nature of the dispute and the results thereof as may be
necessary or appropriate to satisfy the Purchaser's disclosure obligations under
applicable securities or other laws.
(d) Expenses. Each of the parties to this Agreement shall
pay its own expenses in connection with this Agreement and the transactions
contemplated hereby, including the fees and expenses of its counsel and its
certified public accountants and other experts.
(e) Press Releases. The Purchaser and the Seller shall
consult with each other and shall mutually agree as to the form and substance of
any press release or other public disclosure of matters related to this
Agreement prior to the distribution or documentation of any such release;
provided however, that nothing herein shall be deemed to prohibit any party from
making any disclosure which its counsel deems necessary in order to fulfill such
party's disclosure obligations imposed by law.
(f) Confidentiality. If the transactions contemplated by
this Agreement are not consummated, then each of the parties to this Agreement
agrees to keep confidential and to not use for its own benefit any of the
information (unless in the public domain) obtained from any other party and to
promptly return to such other parties all schedules, documents or other written
information (without retaining copies thereof) previously obtained from such
other parties. If the transactions contemplated in this Agreement are
consummated, each of the parties agrees to keep confidential and not to disclose
to any person or entity, whether orally or in writing, any of the terms of the
transactions or any of the specific provisions of this Agreement or any of the
Exhibits hereto.
(g) Notices. All notices, requests, demands and other
communications which are required or may be given under this Agreement shall be
in writing and shall be deemed to have been duly given when received if
personally delivered; when transmitted if transmitted by telecopy or similar
electronic transmission method; the day after it is sent, if sent by recognized
expedited delivery service; and five days after it is sent, if mailed, first
class mail, postage prepaid. In each case notice shall be sent to the parties at
the addresses set forth on EXHIBIT N.
(h) Entire Agreement; Amendment. This Agreement
(including the exhibits hereto and all documents and papers delivered pursuant
hereto and any written amendments hereof executed by the parties to this
Agreement) constitutes the entire agreement, and supersedes all prior agreements
and understandings, oral and written, among the parties to this Agreement with
respect to the subject matter hereof, other than the agreements and
understandings set forth in the Confidentiality Agreement dated August 26, 1997
between the parties hereto, which shall remain in full force and effect in
accordance with the terms thereof. This Agreement may not be modified or
otherwise amended except by an instrument in writing executed by the parties to
this Agreement.
24
29
(i) Assignability. This Agreement shall not be assignable
by any of the parties to this Agreement without the prior written consent of all
other parties to this Agreement.
(j) Venue; Process. The parties to this Agreement agree
that jurisdiction and venue of any action brought pursuant to this Agreement, to
enforce the terms hereof or otherwise with respect to the relationships between
the parties created or extended pursuant hereto, shall properly lie in Denver,
Colorado, unless another state is agreed to by the parties. The parties further
agree that the mailing by certified or registered mail, return receipt
requested, of any process required by any such Court shall constitute valid and
lawful service of process against them, without the necessity for service by any
other means otherwise provided by statute or rule of Court.
(k) Further Assurances. The parties to this Agreement
will execute and deliver, or cause to be executed and delivered, such additional
or further transfers, assignments, endorsements or other instruments as any
party or its counsel may reasonably request for the purpose of carrying out the
transactions contemplated by this Agreement.
(l) Counterparts. This Agreement may be executed in
several counterparts, each of which shall be deemed an original, but all of
which together shall constitute one and the same instrument.
(m) Section and Other Headings. The section and other
headings contained in this Agreement are for reference purposes only and shall
not affect the meaning or interpretation of this Agreement.
(n) Governing Law. The validity, construction and
enforcement of, and the remedies under, this Agreement shall be governed in
accordance with the laws of the State of Florida (except any choice of law
provision of Florida law shall not apply if the law of a state or jurisdiction
other than Florida would apply thereby).
IN WITNESS WHEREOF, this Agreement has been signed by the individual
parties hereto and signed by an officer thereunto duly authorized and attested
under the corporate seal by the Secretary of each of the corporate parties
hereto, all on the date first above written.
ATTEST: CHARTWELL PARTNERS
INTERNATIONAL, INC.
(CORPORATE SEAL)
By:
- --------------------------------- ------------------------------
Secretary President
"SELLER"
25
30
WITNESSES:
- --------------------------------- ------------------------------
DAVID M. DEWILDE
- --------------------------------- ------------------------------
As to Stockholder "STOCKHOLDER"
ATTEST: LAMALIE ASSOCIATES, INC.
(CORPORATE SEAL)
By:
- --------------------------------- ---------------------------
Secretary Jack P. Wissman, Executive
Vice President
"PURCHASER"
26
31
EXHIBITS
Exhibit Section Description
============================================================================
A 1.5(b), 1.(c) Excluded Assets
A(1) 2(c) Form of Note
B 2.(f) Assumed Liabilities
C 2.(g) Allocation of Purchase Price
D 3.(j) Leased Real Property
E 3.(m) Employee Benefits Plan of Seller
F 3.(n) Owned Personal Property
G 3.(o) Leased Personal Property
H 3.(e), 3.(f) Seller's Financial Statements
3,(p)
I 3.(q) Insurance Policy List
J 3.(t) Consents and Approvals to be Obtained
by Seller
K 7.(b), 8.(d) Form of Employment Agreement
L 7.(c) Form of Lock-Up Agreement
M 7.(j) Opinion of Seller's Counsel
N 13.(g) List of Party Addresses for Notices
27