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Exhibit 10.1
ASSET PURCHASE AND SALE AGREEMENT
THIS ASSET PURCHASE AND SALE AGREEMENT (the "Agreement") is entered
into to be effective as of the 1st day of May, 1998, by and between MARKETING
PROJECTS, INC., a California corporation ("MPI" or "Seller") and FLORAFAX
INTERNATIONAL, INC., a Delaware corporation ("Florafax" or "Buyer"), with
reference to the following facts:
A. MPI is in the business of soliciting floral and gift orders through
mass marketing to, among others, Soliciting Entities listed on EXHIBIT "B"
hereto (the "Business");
B. In connection with operating the Business, MPI has developed and
maintains certain creative specifications, artwork, design concepts,
presentation materials, electronic and other files, historical records and
processes (collectively, the "Proprietary System and Know-How"), all as more
specifically set forth in the Bill of Sale attached hereto as EXHIBIT "A" and
incorporated herein by this reference;
C. Florafax operates a system through which floral and gift orders may
be fulfilled and also owns certain trade names, trademarks and telephone numbers
used in the Business and certain computer technology and assets used in
conjunction with the Business that facilitate and assist MPI in the Business;
D. MPI and Florafax have for years worked together to generate and fill
floral and gift orders;
E. MPI and Florafax entered into a written agreement memorializing
their arrangement dated as of July 29, 1994 (the "Servicing Agreement"),
pursuant to which (A) Florafax agreed, in general, to (i) pay for printing of
all soliciting materials for the Business, (ii) pay for and arrange all shipping
of soliciting materials for the Business, (iii) reconcile and handle all credit
card clearing transactions for the Business and (iv) fill and complete all
orders through the "Floranet" network or otherwise; (B) MPI agreed, in general,
to solicit certain orders for the Business by (i) creating the design of all
advertisements and solicitations and coordinating the scheduling, delivery,
proof approval, quality check and all other matters relating to the printing,
(ii) developing relationships with third parties through which solicitations are
made, (iii) developing mailings and advertising campaigns; and (iv) providing
customer relations, servicing, maintaining contacts, customer service, renewing
agreements and being responsible for maintaining and continuing relationships
with the Soliciting Entities; and (C) MPI and Florafax agreed to share the
revenue from the Business in the manner set forth in the Servicing Agreement;
F. By letters dated September 11, 1997 and September 28, 1997, MPI and
Florafax agreed to terminate the Servicing Agreement as of September 24, 1997,
but to continue conducting the Business with each other on a non-exclusive
basis;
G. Florafax now wishes to purchase from MPI and MPI wishes to sell to
Florafax its portion of the Business, including, but not limited to all of its
right, title and interest in and to the Proprietary System and Know-How, which
is essential for Florafax
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to operate the Business, and its right, title and interest in and to the
Servicing Agreement, on the terms and conditions set forth below.
NOW, THEREFORE, in consideration of the mutual premises, covenants and
representations made in this Agreement, the receipt and sufficiency of which are
hereby acknowledged and accepted, the parties agree as follows:
1. RECITALS. The parties acknowledge and agree that the recitals set
forth above are true and correct.
2. DESCRIPTION OF ASSETS. Subject to the terms and conditions set forth
in this Agreement, Seller shall sell to Buyer, and Buyer shall purchase from
Seller all of Seller's right, title, and interest in and to the Proprietary
System and Know-How, and the Servicing Agreement and all right, title and
interest which Seller may have, or hereafter acquire, or hereafter be entitled
to acquire, in and to the Business (hereinafter referred to as the "Acquired
Assets") as the same shall exist as of the Closing Date (defined below):
3. NO ASSUMED LIABILITIES. Buyer shall assume no liabilities of Seller,
other than the obligations imposed upon Seller to service the Acquired Assets,
as described in the Servicing Agreement.
4. PURCHASE PRICE.
a) Buyer shall purchase all of Seller's
right, title and interest in and to the Proprietary
System and Know-How for $2,450,000, payable in cash
on the Closing Date as set forth below in Section 5.
b) Buyer shall pay $100,000 in cash on the
Closing Date, as set forth below in Section 5, for
delivery of a fully-executed Noncompetition and
Nondisclosure Agreement in the form attached hereto
as EXHIBIT "C".
c) Buyer shall purchase all of Seller's
right, title and interest in and to the Servicing
Agreement for $1,150,000 in cash on the Closing Date,
as set forth below in Section 5, plus contingent
payments that may total up to $1,000,000, as
described in Section 6(a)(ii) hereof.
d) Buyer and Seller agree that they shall
each file Internal Revenue Service Form 8594 with
their respective income tax returns, reflecting the
acquisition and sale of assets for the prices set
forth above.
5. CLOSING DATE. The closing of the sale and purchase of the Acquired
Assets shall occur on May 29, 1998, unless otherwise agreed in writing by the
parties (the "Closing Date").
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a) On the Closing Date, Three Million Seven
Hundred Thousand Dollars ($3,700,000.00) shall be
payable (for the portions of the Purchase Price
described in Section 4. above) by transfer and
deposited in an escrow account in accordance with the
terms of the Escrow Agreement (defined below).
b) On the Closing Date, Seller shall deliver
or cause to be delivered to Buyer the following:
i) A duly executed bill of sale and
assignment ("Bill of Sale") for the Acquired
Assets in the form of EXHIBIT "A", attached
hereto and incorporated herein;
ii) All of Seller's records which
establish rights relating to the Acquired
Assets to be transferred hereby;
iii) Certified resolution of the
stockholders and board of directors of
Seller approving the transaction
contemplated by this Agreement;
iv) A duly executed noncompetition
and nondisclosure agreement ("Noncompetition
Agreement"), in the form attached hereto and
incorporated herein as EXHIBIT "C", executed
by Seller, Buyer, David Appell, Robert
Bourdon, Randolph Commans and Phyllis
Hooker;
v) A duly executed escrow agreement
("Escrow Agreement"), in the form attached
hereto and incorporated herein as EXHIBIT
"D", executed by Seller, Buyer and First
Union National Bank of Florida, Escrow
Agent.
c) On the Closing Date, Buyer shall deliver
the following:
i) To Escrow Agent, a transfer in
the amount of $3,700,000.00;
ii) To Seller, a duly executed,
countersigned Noncompetition Agreement; and
iii) To Seller, a duly executed
Escrow Agreement.
6. POST-CLOSING ADJUSTMENTS TO PURCHASE PRICE BASED UPON EARN OUT
AGREEMENT.
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a) Provided Buyer does not exercise its cancellation right
described in Section 7 below:
(i) on June 30, 1998, or earlier if
directed by Buyer, the Escrow Agent shall
deliver to Seller from the escrow account
the sum of Three Million Seven Hundred
Thousand Dollars ($3,700,000.00) less the
payments previously paid to Seller after the
effective date hereof;
(ii) (A) Each month for 24 months
after the Closing Date, Buyer shall provide
Seller with a copy of that month's "Daily
Sale by Campaign" report (the "Report"), as
it did before the Closing Date. The report
shall accurately display Buyer's gross
monthly revenues from Buyer's floral and
gift sales (or such sales of Buyer's
subsidiaries or affiliates) to the
Soliciting Entities listed on EXHIBIT "B"
hereto.
(B) Based upon the Report,
within 10 days of each quarter ending August
31, November 30, February 29, and May 31,
Buyer shall make the following calculations
and deliver to Seller a written copy of the
calculations, together with money owed, if
any:
(1) Buyer shall calculate
a fraction, the numerator of which
is the respective quarter's gross
revenue, as indicated in the
Reports and the denominator of
which is $3,229,946 for August 31,
$3,941,468 for November 30,
$6,916,655 for February 29 and
$6,025,181.59 for May 31,
(respectively, the "Quarterly
Fractions").
(2) For each quarter,
Buyer shall multiply the Quarterly
Fraction by $125,000. The product
of that calculation (the "Quarterly
Product") shall be paid to Seller;
provided that Seller shall never
receive more than $125,000 in any
quarter, except as provided below
in subparagraph (3).
(3) For the fourth and
eight quarters after the Closing
Date (the "Anniversary Quarters"),
Buyer
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shall calculate a fraction, the
numerator of which is that year's
gross revenue, as indicated in the
Reports, and the denominator of
which is $20,113,302.35 (the
"Yearly Fraction"). Buyer shall
then multiply the Yearly Fraction
by $500,000 and subtract from the
resulting product the sum of the
three previous Quarterly Products.
The difference, if a positive
number, shall be paid by Buyer to
Seller; if the difference is a
negative number, be paid by Seller
to Buyer.
b) In no event shall the total amount payable to Seller, if
any, under the terms of Sections 6(a)(ii) exceed Five Hundred Thousand
Dollars ($500,000.00) for each of the annual periods (i.e., May 31,
1998 - May 31, 1999, and June 1, 1999 - May 31, 2000) covered by such
subsections. With respect to all reports and calculations, Seller will
promptly review and promptly advise Buyer of whether it agrees or
disagrees (and if it disagrees, a specific reason why) with the Report
and calculations contained therein. Buyer and Seller will use good
faith efforts to agree to settle any disputes concerning the Reports
and the calculations contained therein.
7. BUYER'S CANCELLATION RIGHT. Seller hereby agrees that, Buyer shall
have the right, by written notice given to Seller and Escrow Agent on or before
June 30, 1998, to cancel this transaction if Buyer is not satisfied, in the sole
and absolute discretion, with the status of the Acquired Assets after Buyer's
review of such assets. In such event,
(i) Buyer shall be entitled to withdraw
immediately from the escrow account the sum of Three
Million Seven Hundred Thousand Dollars
($3,700,000.00) plus any and all interest accrued
thereon, less the unpaid payments that would
otherwise have been earned by Seller if not for
termination of payments as described in Section 8
below, from the effective date of this Agreement
through June 30, 1998 (i.e., deducted from said
payments are any amounts previously paid to Seller
for payments after the effective date). The balance
of the escrow account, after the deductions
contemplated by the immediately preceding sentence
shall be delivered to Seller by Escrow Agent.
(ii) the Bill of Sale automatically will be
canceled, ab initio and of no further force and
effect; and
(iii) the Noncompetition Agreement
automatically will be canceled ab initio and of no
further force and effect.
8. TERMINATION OF PAYMENTS. As of the effective date of this Agreement,
Seller agrees to the termination of all payments due to Seller in connection
with the
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Business or pursuant to Paragraph 3(b)(1) of the Servicing Agreement,
unless Buyer exercises its cancellation right pursuant to Section 7 above.
9. ASSISTANCE BY MPI. From the effective date of this Agreement through
June 30, 1998, David Appell, Robert Bourdon, Randolph Commans and Phyllis
Hooker, at the sole cost and expense of Seller, shall accompany a
representative(s) of Buyer to any and all sites of Soliciting Entities, as
requested by Buyer, for the purpose of analyzing, assessing and solidifying such
relationships or for any other purpose reasonably requested by Buyer. Seller
shall also train and assist Buyer to effect an orderly transfer of the
Proprietary System and Know-How from Seller to Buyer.
10. COMMISSIONS TO SELLER ON NEW ACCOUNTS. Provided Buyer does not
exercise its cancellation right pursuant to Section 7 above, then from and after
the effective date of this Agreement, Buyer shall pay to Seller a four percent
(4%) commission on all floral sales or gift orders consummated by any and all
new customers solicited by Seller and approved by Buyer. Seller acknowledges
that Buyer has no obligation to approve any order solicited by Seller, and that
Buyer may refuse to approve any such order, for any reason or no reason, in
Buyer's sole and absolute discretion.
11. ACCESS AND INVESTIGATION. Between the effective date of this
Agreement and June 30, 1998, and upon reasonable advance notice received from
Buyer, Seller shall (a) afford Buyer and its representatives (collectively,
"Buyer's Advisors") access, without payment of additional consideration to
Seller, during regular business hours, to Seller' personnel, properties,
contracts, books and records, and other documents and data relating to the
Acquired Assets, such rights of access to be exercised in a manner that does not
unreasonably interfere with the operations of Seller, (b) furnish Buyer and
Buyer's Advisors with copies of all such contracts, books and records, and other
existing documents and data as Buyer may reasonably request relating to the
Acquired Assets, (c) furnish Buyer and Buyer's Advisors with such additional
financial, operating, and other relevant data and information as Buyer may
reasonably request, and (d) otherwise cooperate and assist, to the extent
reasonably requested by Buyer, with Buyer's investigation of the properties,
assets and financial condition related to the Acquired Assets of Seller. Except
as may be necessary to conduct the Business and fully utilize the Acquired
Assets, or as otherwise required by law, Buyer shall use its best efforts to
keep confidential any proprietary information relating to Seller (unless readily
available from public or published information or sources or required to be
disclosed by any legal requirement or order) obtained from Seller or any of
their representatives. If Buyer cancels this Agreement, Buyer, as soon as
reasonably practicable after such cancellation, shall return to Seller all
documents, work papers and other written material (including all copies thereof)
obtained from Seller or any of its representatives in connection with this
transaction.
12. REPRESENTATIONS, WARRANTIES AND COVENANTS OF SELLER. Seller
warrants, represents and covenants to Buyer that as of the Closing Date:
a) Seller shall have taken all action necessary to authorize
the execution, delivery and performance of this Agreement and has and
shall have, from and after the date of this Agreement, with respect to
the Acquired Assets,
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full right, power and authority to sell, transfer and convey to Buyer
the Acquired Assets. This Agreement and all other agreements referred
to herein and executed by Seller are legal, valid and binding
obligations of Seller, enforceable in accordance with their terms,
except (i) that enforceability may be limited by general principles of
equity, (ii) that courts may award money damages rather than specific
enforcement of contractual provisions involving matters other than or
in addition to the payment of money, and (iii) as may be limited by
bankruptcy, reorganization, insolvency and similar laws of general
application relating to or affecting the enforcement of rights of
creditors, excluding however, the application of any "bulk sales" or
"bulk transfer" laws. Unless otherwise disclosed herein, the
performance hereof by Seller does not require the consent of or
approval of any person, agency or court, and will not conflict with,
result in a breach of any term of, or constitute a default under any
material agreement or instrument to which Seller is a party or any
judgment, decree, order, statute, rule or regulation to which Seller is
subject and will not result in the creation of any lien, charge or
encumbrance on the Seller or the Acquired Assets. The execution,
delivery and performance of this Agreement in accordance with its
terms, do not violate the articles of incorporation or bylaws of
Seller.
b) Seller is the owner of and has good and marketable title to
the Acquired Assets, free and clear of all mortgages, pledges, claims,
liens, charges, easements, restrictions, encroachments or other
encumbrances other than the obligations of Seller thereunder.
c) All records of Seller are current and accurate.
d) Seller shall use commercially reasonable efforts to assist
Buyer in obtaining from each person, firm, association, corporation,
partnership and governmental authority, any and all consents and
approvals to the sale, conveyance, transfer and assignment of the
Acquired Assets, which is required by the terms of any statute,
ordinance, regulation, lease or contract to which Seller is a party, or
otherwise. In furtherance of the foregoing, Buyer hereby agrees to
cooperate with Seller to the extent reasonably necessary to obtain any
such consents or approvals.
e) To the best of Seller's knowledge, after due inquiry and
investigation, there is no pending or threatened suit, action or
litigation, or administrative, arbitration or other proceeding or
governmental inquiry or investigation threatened against or affecting
the Acquired Assets (i) which may result in any material adverse effect
upon the Acquired Assets or Seller's business associated therewith,
(ii) which may result in any material liability accruing to Buyer as a
result of execution, delivery and/or performance of this Agreement or
any of the transactions contemplated hereby, or (iii) which seeks to
enjoin, prohibit or challenge the validity of this Agreement or any of
the transactions contemplated hereby.
f) Other than payroll taxes due and owing in the ordinary
course of business (all of which have been timely paid up to the
Closing Date), all taxes of every kind and description (whether
incurred in respect of, or measured by,
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income, sales or otherwise) relating to the business of Seller and to
any date or period of time prior to the Closing Date and payable to the
United States, the states thereof, and any other taxing authority,
which are due prior to the Closing Date, have been paid in full (or
will be paid in full prior to the Closing Date), and Seller is not
delinquent, in any material respect, with respect to any tax payment or
assessment. There are no audits or material claims pending or
threatened, concerning taxes or assessments asserted against Seller by
any taxing authority or agent thereof, nor are there outstanding any
requests by Seller or its agents for any extension of time relating to
the filing, reporting, declaration, assessment or payment of any tax.
On or prior to the Closing Date, Seller, at Seller's expense, shall
discharge any and all such tax liens and encumbrances.
g) Seller has duly filed all tax returns and other reports
required to be filed by it with all proper taxing authorities and has
paid or accrued all taxes, interest, penalties, assessments or
deficiencies called for by such returns and reports or claimed to be
due by any such taxing authority. There are no agreements, waivers or
other arrangements providing for extensions of time with respect to the
assessment or collection of any unpaid tax against Seller, nor are
there any actions, suits, proceedings, investigations or claims now
pending against Seller in respect of any material unpaid tax, or any
matters under discussion with any Federal, state or local authority
relating to any unpaid taxes.
h) No broker or finder has acted for Seller in connection with
the transactions contemplated by this Agreement.
i) Seller represents and warrants to Buyer that: (A) Seller is
not now, nor as a result of the transaction contemplated by this
Agreement will be, insolvent or unable to pay its debts or other
obligations as they become due; (B) Seller's assets, at a fair
valuation, are, and after consummation of the transaction contemplated
by this Agreement will continue to be, greater than all of said
Seller's debts; (C) Seller is generally paying its debts as they become
due; (D) the sale and transfer of the Acquired Assets has not been
contemplated to, nor will it be consummated with the intent to,
defraud, hinder, or delay Seller's creditors; and (E) the transfer of
the Acquired Assets has not been concealed from any of Seller's
creditors.
j) Seller is not a party to any contracts or agreements with
any Soliciting Entity. Further, Seller knows of no fact or occurrence
which would create and/or constitute a default on the part of either
The Flower Club International, Inc. or any Soliciting Entity under any
such contract.
13. AFFIRMATIVE COVENANTS OF SELLER.
a) Between the effective date of this Agreement and June 30,
1998, Seller shall:
(i) conduct the business of Seller
only in the ordinary course of business;
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(ii) except as otherwise directed
by Buyer in writing, and without making any
commitment on Buyer's behalf, use its best
efforts to preserve intact Seller's current
business organization, keep available the
services of the current officers, employees,
and agents of Seller, and maintain the
relations and good will of Seller with the
Soliciting Entities;
(iii) confer with Buyer prior to
implementing Seller operational decisions of
a material nature which may affect the
Acquired Assets;
(iv) otherwise report to Buyer, at
Buyer's request, concerning the status of
the business, operations and finances of
Seller as they concern the Acquired Assets;
(v) keep in full force and effect,
without amendment, all material rights
relating primarily or exclusively to the
Acquired Assets;
(vi) materially comply with all
legal requirements and contractual
obligations applicable to the operations of
Seller's business;
(vii) upon request from time to
time, execute and deliver all documents,
make all truthful oaths, testify in any
proceedings and do all other acts that may
be reasonably necessary or desirable, in the
opinion of Buyer, to consummate the
transactions contemplated herein, all
without further consideration, but at the
expense of Buyer unless arising out of the
default of Seller; and
(viii) maintain all books and
records of Seller relating to Seller's
business in the usual, regular and ordinary
manner.
b) Between the effective date of this Agreement and June 30,
1998, Seller shall promptly notify Buyer in writing if Seller shall
become aware of (i) any fact or condition that causes or constitutes a
breach of any of Seller's representations and warranties made as of the
effective date of this Agreement, or (ii) the occurrence after the
effective date of this Agreement of any fact or condition that would or
be reasonably likely to (except as expressly contemplated by this
Agreement) cause or constitute a breach of any such representation or
warranty had that representation or warranty been made as of the time
of the occurrence of, or Seller's discovery of, such fact or condition.
c) Seller will refer to Buyer all inquiries relating to the
Acquired Assets of Seller's business from customers and all such other
persons. Seller
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will not take any action designed or intended to have the effect of
discouraging any Soliciting Entity from continuing or maintaining the
same such business with Buyer after the Closing Date.
14. REPRESENTATIONS AND WARRANTIES OF BUYER. Buyer warrants and
represents to Seller that as of the Closing Date:
a) Buyer has the full right and power, corporate and
otherwise, to enter into this Agreement and to carry out the
transactions contemplated herein; the execution, delivery and
performance of this Agreement and the consummation of the transactions
contemplated hereby have been duly authorized by all requisite
corporate action of the Buyer; and this Agreement and all other
agreements referred to herein represent legal, valid and binding
obligations of Buyer and are enforceable in accordance with their
terms, except (i) that enforceability may be limited by general
principles of equity, (ii) that courts may award money damages rather
than specific enforcement of contractual provisions involving matters
other than or in addition to the payment of money, and (iii) as may be
limited by bankruptcy, reorganization, insolvency and similar laws of
general application relating to or affecting the enforcement of rights
of creditors, excluding however the application of any "bulk sales" or
"bulk transfer" laws.
b) The transactions contemplated by this Agreement will not
violate or be in conflict with (i) any existing provision of applicable
law, or any existing order, rule, regulation, judgment or decree of any
court, arbitrator or agency of government, or (ii) any existing
provision of the articles of incorporation or bylaws of Buyer; nor will
those transactions violate, be in conflict with, result in a breach of,
or constitute (with or without notice or lapse of time or both) a
default under any material agreement or other instrument to which Buyer
is a party or by which Buyer is bound.
c) No broker or finder has acted for Buyer in connection with
the transactions contemplated by this Agreement.
15. AFFIRMATIVE COVENANT OF BUYER. Between the effective date of this
Agreement and June 30, 1998, Buyer shall promptly notify Seller in writing if
Buyer shall become aware of (i) any fact or condition that causes or constitutes
a breach of any of Buyer's representations and warranties made as of the
effective date of this Agreement, or (ii) the occurrence after the effective
date of this Agreement of any fact or condition that would or be reasonably
likely to (except as expressly contemplated by this Agreement) cause or
constitute a breach of any such representation or warranty had that
representation or warranty been made as of the time of the occurrence of, or
Buyer's discovery of, such fact or condition.
16. SUBROGATION. If Buyer becomes liable for or suffers any damage with
respect to any matter for which insurance coverage is available under policies
maintained by Seller at or before the Closing Date, Buyer shall be and is hereby
subrogated to any rights of Seller under the insurance coverage.
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17. SURVIVAL OF REPRESENTATIONS, WARRANTIES AND COVENANTS. All
covenants, representations and warranties made in this Agreement shall be deemed
to be material and to have been relied upon by Seller or Buyer, as the case may
be, notwithstanding any investigation heretofore or hereafter made by or on
behalf of any party, and the indemnification provision, and other provisions of
this Agreement which by their terms are to be performed or observed after the
Closing Date and the several covenants, warranties and representations of the
parties herein contained, shall survive the Closing Date for two (2) years. Any
applicable statute of limitations with reference to any actual or alleged breach
or violation hereunder shall not commence to run until the Closing Date or from
the date of a notice or demand asserting such breach or violation, whichever is
later.
18. INDEMNIFICATION.
a) Each party hereby indemnifies and agrees to hold the other
party (including, but not limited to, its directors, officers, agents,
insurers, attorneys and affiliates) harmless from and against, and to
pay and reimburse the other party for any and all liability, claim,
cause of action, damage, demand, loss, cost or expense, including legal
and accounting fees, incurred by reason of or arising out of:
(i) misrepresentations by either
party in connection with transactions
contemplated by this Agreement; and
(ii) breaches by either party of
any representations, warranties, covenants
or provisions of this Agreement not waived
in writing by the other party.
The right to indemnification is in addition to any other right
available to the party or parties entitled to indemnification
hereunder, including, without limitation, the right to sue at law
and/or in equity for misrepresentation, breach of warranty, or breach
of covenant under the Agreement.
b) If any action, suit or proceedings shall be commenced
against, or any claim or demand be asserted against a party (including,
but not limited to, its directors, officers, agents, insurers,
attorneys, employees and affiliates) ("Indemnified Party") with respect
of which the Indemnified Party proposes to demand indemnification, the
other party, or parties, as the case may be ("Indemnifying Party")
shall, within thirty (30) days after receipt of demand for
indemnification from the Indemnified Party, have the right to assume
the entire control of the defense, compromise or settlement thereof,
including the right of the selection of counsel, subject to the right
of the Indemnified Party to participate and, to the extent the
Indemnified Party shall wish, to direct the defense at its expense and
with counsel of its choice. In connection therewith, the Indemnified
Party shall cooperate fully in all respects with the Indemnifying Party
in any such defense, compromise or settlement, including, without
limitation, making available to the Indemnifying Party all pertinent
information
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under the control of the Indemnified Party. The Indemnifying Party will
not compromise or settle any such action, suit, proceeding, claim or
demand without the prior written consent of the Indemnified Party.
19. CONFIDENTIALITY. Except to the extent otherwise required by law or
compelled by a court or other body having jurisdiction over the matter, the
parties agree to keep the terms of this Agreement, including but not limited to
the Purchase Price, confidential and to disclose the terms thereof only to the
board of directors and senior officers of each respective party, and attorneys
and accountants of each respective party. The terms of this Section shall
survive the Closing.
20. MISCELLANEOUS.
a) Buyer shall pay all sales, use and transfer taxes, filing
and recording fees, if any, arising out of the transfer of the Acquired
Assets and shall hold harmless and indemnify Seller from and against
any and all loss, liability, cost or expense, including reasonable
attorney's fees, arising out of Buyer's failure to pay the same. Seller
shall prepare and file all appropriate returns and reports. Each party
shall be responsible for its pro rata share of state and local personal
property taxes, if any, of the Acquired Assets, prorated as of the
Closing Date. Buyer shall not be responsible for any taxes of any kind
related to any period before the Closing Date. Each of the parties
shall pay all costs and expenses incurred or to be incurred by it in
negotiating and preparing this Agreement and in closing and carrying
out the transactions contemplated by this Agreement.
b) This Agreement shall be controlled, construed and enforced
in accordance with the internal laws of the State of Florida without
regard to the conflict-of-laws principles of that state.
c) This Agreement shall be binding upon and inure to the
benefit of the heirs, successors and assigns of the parties; but
nothing in this Agreement, express or implied, is intended to confer on
any party the right to assign its rights or obligations hereunder.
d) This Agreement, the exhibits hereto and other documents
referenced herein and delivered pursuant hereto (which are hereby
collectively incorporated herein by this reference), together set forth
the entire understanding of the parties with respect to the subject
matter hereof, and supersede any prior and contemporaneous oral or
written communications, agreements, representations and understandings
of the parties. No supplement, modification or amendment of this
Agreement shall be binding unless executed in writing by all of the
parties. No waiver of any of the provisions of this Agreement shall be
deemed, or shall constitute, a waiver of any other provision, whether
or not similar, nor shall any waiver constitute a continuing waiver. No
waiver shall be binding unless executed in writing by the party making
the waiver.
e) The covenants contained herein are independent and
separate, and if any provision is declared invalid or illegal, the
other provisions shall not be
13
affected or impaired and shall remain valid and enforceable. It is also
the intention of the parties hereto that in lieu of each clause or
provision of this Agreement that is illegal or unenforceable, there be
added by a court of competent jurisdiction, as a part of this
Agreement, a clause or provision similar in effect to such illegal,
invalid or unenforceable clause or provision as may be possible to be
legal, valid or enforceable.
f) Nothing in this Agreement, whether express or implied, is
intended to confer any rights or remedies under or by reason of this
Agreement on any persons other than the parties to it and their
respective, permitted successors and assigns, nor is anything in this
Agreement intended to relieve or discharge the obligation or liability
of any third persons to any party to this Agreement, nor shall any
provision give any third persons any right of subrogation or action
over or against any party to this Agreement.
g) All notices, requests, demands, and other communications
under this Agreement shall be in writing and shall be deemed to have
been duly given on the date of service if served personally or by
messenger on the party to whom notice is to be given, or on the third
day after mailing if mailed to the party to whom notice is to be given,
by first-class mail, registered or certified, postage prepaid, or when
received via telecopy, telex or other electronic transmission, in all
cases addressed to the party for whom intended at its address as
follows:
Buyer: Florafax International, Inc.
8075 20th Street
Vero Beach, Florida 32966
Attention: Mr. James H. West
With a copy to: Drew R. Fuller, Jr.
Cauthorn Hale Hornberger
Fuller Sheehan & Becker, Inc.
700 North St. Mary's St., Suite 620
San Antonio, Texas 78205
Seller: Marketing Projects, Inc.
2899 Agoura Road, Suite 555
Westlake Village, California 91361
Attention: Mr. David Appell
With a copy to: David Wohlberg
Troy & Gould
1601 Century Park East, 16th Floor
Los Angeles, California 90067-2367
Any party may change its address for purposes of this Section by giving
the other party written notice of the new address in the manner set
forth above.
14
h) Headings in this Agreement are for reference purposes only
and shall not be deemed to have any substantive effect.
i) This Agreement may be executed concurrently in two or more
counterparts, each of which shall be deemed an original, but all of
which together shall constitute one and the same instrument.
j) This Agreement is the product of joint drafting by the
parties hereto and shall not be construed against either such party as
the drafter hereof.
IN WITNESS WHEREOF, the parties hereto have executed this Agreement to
be effective as of the day and year first above written.
SELLER:
MARKETING PROJECTS, INC.,
A CALIFORNIA CORPORATION
BY:
------------------------------------
DAVID APPELL, PRESIDENT
BUYER:
FLORAFAX INTERNATIONAL, INC.,
A DELAWARE CORPORATION
BY:
------------------------------------
JAMES H. WEST, PRESIDENT
FOR THE SOLE PURPOSE OF ACKNOWLEDGING AND AGREEING TO THE TERMS OF SECTION 8 OF
THIS AGREEMENT, THE UNDERSIGNED HAS PLACED ITS SIGNATURE IN THE SPACE PROVIDED
BELOW.
THE FLOWER CLUB INTERNATIONAL, INC.
BY:
----------------------------------
JAMES H. WEST, PRESIDENT
15
EXHIBIT "A"
-----------
[insert form of Bill of Sale]
16
EXHIBIT "B"
-----------
[insert list of Soliciting Entities]
17
EXHIBIT "C"
-----------
[insert form of Noncompetition Agreement]
18
EXHIBIT "D"
-----------
[insert form of Escrow Agreement]