EXHIBIT 10.1
ASSET PURCHASE AGREEMENT
This Agreement is entered into this 1st day of April 2005, by and between
Service America Network, Inc., a Florida corporation ("Seller") and Service
America Enterprise, Inc., a Florida corporation, Federal Employer Identification
Number 20-2099014 ("Buyer").
RECITALS:
A. Seller is in the business of providing air conditioning and home appliance
service warranty and replacement services as a Service Warranty Association and
a Home Warranty Association licensed by the Florida Department of Insurance (the
"Business").
B. Seller also provided home warranty contracts in the State of Arizona.
However, Buyer is only purchasing the assets related to the Florida operations
of the Seller. Seller's operation in the State of Arizona has been closed. The
term "Business" as used in this Agreement shall only apply to the Florida
operations of the Seller.
C. Seller wishes to divest itself of the Business. It determined that it was in
the best interests of both the Seller and the customers of the Seller to offer
the Business to the senior executives and some long term employees of the Seller
("Principals of the Buyer").
D. The Principals of the Buyer have negotiated with the Seller to purchase the
assets used by the Seller in the Business and to assume the responsibility to
fulfill the Seller's obligations under the service contracts entered into
between the Seller and its Florida customers ("Contract Liabilities").
E. Seller desires to sell, transfer, and assign to Buyer the Assets (described
below) which constitute all of the assets used by Seller in the Florida
operations of its Business and Buyer wishes to purchase the Assets and assume
the Contract Liabilities.
NOW, THEREFORE, for good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, the parties, intending to be
legally bound, hereby agree as follows:
ARTICLE 1
PURCHASE AND SALE OF ASSETS
1.1 The Assets. At the closing of the purchase and sale contemplated by
this Agreement (the "Closing"), Seller shall sell, assign, transfer, convey, and
deliver to Buyer, and Buyer shall purchase and accept from Seller, all of the
tangible and intangible assets and all rights and interests which are owned by
Seller and used in the operation of the Business (the "Assets"). The Assets
shall consist of all property and assets described in the following categories:
(a) All tangible personal property, including without limitation,
vehicles, rolling stock, furniture, fixtures, computer hardware, tools,
equipment and inventory of every description
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and kind owned by Seller or used in the operation of the Business and as listed
on Exhibit 1(a) ("Tangible Personal Property").
(b) All of Seller's rights, titles, and interests under all Service
Contracts and Commercial Service Agreements as well as other contracts,
agreements, and leases relating to the operation of the Business to which Seller
is a party and which Buyer is willing to assume ("Contracts"). The Service
Contracts are listed on Exhibit 1(c).
(c) Customer, supplier, vendor, and advertiser information, data and
files; and all brochures, advertising materials, manuals, and computer
documentation and software (to the extent it will not infringe on any trademark
or copyright protection for such software).
(d) All assignable licenses, permits, certificates, authorizations,
agent or license agreements applicable to the operation and conduct of the
Business.
(e) All copyrights, trademarks, trade names, fictitious names, and
service marks used or useful or intended to be used in the operation of the
Business, which are listed on Exhibit 1(f) ("Copyrights, Trademarks, Etc.").
(f) All electronic mail addresses, "URL's", domain names, websites,
telephone and fax numbers associated with or pertaining to the Business.
(g) The real property described on Exhibit 1(g) (the "Building").
(h) All accounts receivable, and all statutory deposit and reserve
accounts, but not cash in bank accounts.
1.2 No Assumption of Obligations. The Assets shall not be subject to any
encumbrances, easements, charges, adverse claims, liens, hypothecations,
mortgages, security interests, or liabilities whatsoever, except those set forth
in Exhibit 1.2 (the "Permitted Obligations").
1.3 Lease. Seller presently operates the Business in two buildings in
Broward County, Florida. One building is described on Exhibit 1 (g) and will be
sold as part of the Assets. The administrative offices and call center are in
another building located at 2755 NW 63rd Court, Fort Lauderdale, FL 33309 (the
"Main Office"). The building housing the Main Office is owned by Chemed
Corporation, the parent company of the Seller. At or prior to the Closing,
Chemed Corporation and the Buyer will enter into a mutually acceptable lease for
the Main Office ("Lease").
ARTICLE 2
PURCHASE PRICE
2.1 Price. Subject to the provisions for adjustment set forth in this
Agreement, the purchase price for the Assets shall be the value of the Assets as
agreed upon by the Seller and the Buyer as of the Closing Date (the "Purchase
Price"). As of January 31, 2005, the agreed upon value
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of the Assets was $12,933,021. The agreed upon value of the Assets will be
adjusted as of the Closing Date to reflect any changes in the assets and a more
recent inventory of parts and supplies. The Purchase Price shall be paid as
follows:
(a) Buyer will assume the Seller's liability for performance of the
Contract Liabilities. The precise amount shall be determined as of the Closing
Date, but it is presently estimated at $15,221,663.
(b) Buyer will assume the Seller's liability for its accounts
payable and liabilities accrued in the ordinary course of business shown on the
lines entitled Accounts & Acceptances Payable (line 10); Accrued - Salaries,
Wages and Bonuses - Pension and Profit Sharing - Insurance - Income Taxes -
Other Expense (lines 12 - 16); and Other Liabilities (line 20) of its balance
sheet as of the date of closing ("Ordinary Liabilities"). The line number
references are to the ProForma Balance Sheet attached as Exhibit 2.1 (b). The
precise amount shall be determined as of the Closing Date, but it is presently
estimated at $2,409,543.
(c) Since the liabilities being assumed by the Buyer exceed the
value of the Assets being purchased, Seller will pay to Buyer in cash an amount
equal to the difference between the agreed value of the Assets as of the Closing
Date and the sum of the Contract Liabilities and the Ordinary Liabilities plus
an amount in recognition of Buyer's performance of the Contract Liabilities.
This total amount is presently estimated to be $4.7 million. The first $1
million of this amount shall be paid to Buyer at closing and the balance shall
be payable in 11 equal monthly installments commencing 30 days after the
closing. This requirement shall survive the closing of this transaction.
2.2 Allocation of Purchase Price. The Purchase Price shall be allocated as
provided in Exhibit 2.2 attached and both parties agree to use only those
allocations in reporting this transaction for tax purposes.
ARTICLE 3
SELLER'S REPRESENTATIONS AND WARRANTIES
As an inducement to Buyer to execute this Agreement, and to enter into the
transactions contemplated by this Agreement, Seller represents and warrants to
Buyer as follows:
3.1 Authorization. The execution, delivery, and performance of this
Agreement and the other documents to be executed and delivered pursuant to this
Agreement constitute the valid and binding obligation of Seller, enforceable in
accordance with their terms.
3.2 No Violation or Conflict. The execution, delivery, and performance of
this Agreement does not, and will not, breach any statute, law, ruling, or
regulation of any governmental authority to the extent that such breach would
affect Buyer's ownership, possession, use, or operation of, the Assets or the
consummation of the transactions contemplated under this Agreement.
3.3 Authorizations. Seller has, and on the Closing Date will have all
required licenses,
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certifications, approvals, and permits from all State, Federal, and local
government agencies in connection with the operation of the Business. There is
not now pending nor, to the best knowledge of Seller, threatened any action by
or before any governmental or regulatory authority to revoke, cancel, rescind,
modify, or refuse to renew in the ordinary course any licenses, certifications,
approvals, or permits to carry on the Business.
3.4 Other Contracts. Except as set forth on Exhibit 3.4 (which is not
intended to include the Service Contracts), Seller is not a party to any
contract, whether or not made in the ordinary course of business, which is
material to the Assets or the operation of the Business the existence or status
of which will materially affect the Buyer's use and enjoyment of the Assets.
3.5 No Litigation or Claims. Other than lawsuits brought against Seller in
the ordinary course of business such as negligence claims or claims for damages
arising due to allegedly faulty repairs or other actions of a repairman employed
by the Seller which are either covered by insurance or for which Seller will
bear any responsibility arising from the suit, there is no action, suit,
arbitration, litigation, proceeding, or claim of any kind threatened or being
prosecuted with respect to the Assets or the Business and, to the best of
Seller's knowledge, there is no basis for such an action, suit, arbitration,
litigation, proceeding, or claim other than the case involving Ronald Kohn which
is described on Exhibit 3.5.
3.6 Taxes. Seller has, and by the Closing Date will have, timely paid when
due and discharged all taxes, assessments, fees, penalties, expenses, and other
levies related to the Business and the Assets except for those taxes,
assessments, fees, penalties, expenses and levies which are being disputed in
good faith and which are not and on the Closing Date will not be a lien or other
claim against the Assets.
3.7 Insurance. Seller agrees to maintain its existing casualty and
liability insurance through the Closing Date.
3.8 Title to Assets. Seller now has, and on the Closing Date will have,
good, marketable, and indefeasible ownership, right, title, and interest in and
to the Assets. The transfer of the Assets to Buyer shall vest such Assets in
Buyer free and clear of any mortgage, conditional sale agreement, security
interest, lease, lien, encumbrance, charge, restriction, hypothecation,
liability, condition, or adverse claim whatsoever.
3.9 Compliance with Laws. Seller's use of the Assets do not violate any
law, ordinance, order, regulation, restrictive covenant, or other agreement
which will affect the Buyer's use and enjoyment of the Assets. Seller has not
violated, has not been charged or, to the best of its knowledge, threatened with
the charge of violation, and, to the best of its knowledge, is not under any
investigation with respect to a possible violation, of any provision of any
federal, state, or local law or administrative ruling or regulation relating to
the Assets.
3.10 Condition of Assets. Seller shall maintain the Assets in the ordinary
course of business between the execution of this Agreement and the Closing Date.
However, the Assets are being purchased in their "AS-IS" condition as of the
date of the Closing.
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3.11 Employment Contracts. Except as may be listed on Exhibit 3.11 hereto,
there are no written or oral contracts for employment of any personnel of the
Business, and all employees of the Business are employed on an "at will" basis.
3.12 Employees. Seller shall indemnify, defend, and hold Buyer harmless
from and against any and all claims, demands, judgments, or expenses of any kind
incurred by Buyer arising out of any claims by employees arising or accruing
prior to the Closing Date hereunder or relating to any pre-Closing time period
event or omission.
3.13 Worker's Compensation. Seller is in compliance with all worker's
compensation laws with respect to its employees and has worker's compensation
insurance coverage in full force and effect with respect to its employees,
through the date of closing.
3.14 No Misrepresentations. None of the representations and warranties of
Seller set forth in this Agreement or on the attached exhibits or schedules, or
any information or statements contained in any of the attached exhibits or
schedules contains any untrue statement of a material fact or omits the
statement of any material fact necessary to render the same not misleading, to
the best knowledge and belief of Seller.
3.15 Reliance upon Principals of the Buyer. In making these
representations and warranties, Seller has relied, in part, upon information
provided by Principals of the Buyer with respect to the representations and
warranties contained in sections 3.4, 3.5, 3.8, 3.9, 3.10 and 3.11.
3.16 Survival. The representations and warranties made in this Article
shall survive the Closing.
ARTICLE 4
BUYER'S REPRESENTATIONS AND WARRANTIES
As an inducement to Seller to execute this Agreement, and to enter into
the transactions contemplated by this Agreement, Buyer represents and warrants
to Seller that:
4.1 Corporate. Buyer is a corporation duly organized, validly existing,
and in good standing under the laws of the State of Florida. Buyer has full
power and authority to make and perform this Agreement according to its terms.
The execution, delivery, and performance of this Agreement have been and shall
be duly authorized by Buyer, and this Agreement constitutes the valid and
binding obligation of Buyer enforceable in accordance with its terms. The
officers, directors and shareholders of the Buyer are listed on Exhibit 4.1.
4.2 No Violation or Conflict. The execution, delivery, and performance of
this Agreement does not and will not breach any statute or regulation of any
governmental authority, and at the Closing will not conflict with or result in a
breach of or default under any of the terms, conditions, or provisions of
Buyer's Articles of Incorporation or Bylaws, or any order, judgment, writ,
injunction, decree, or instrument to which Buyer is a party, or by which it is
or may be bound, or any applicable law, ruling or regulation.
4.3 Survival. The representations and warranties made in this Article
shall survive the
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Closing.
4.4. No Broker. No broker, finder or other person acting in a similar
capacity has been employed or retained by Buyer in connection with the
transactions contemplated by this Agreement, and no broker, finder or other
person is entitled to receive any brokerage, finders' or similar fee or
commission in connection with this Agreement and the transactions contemplated
hereby.
ARTICLE 5
SELLER'S COVENANTS
5.1 Conduct of Business. From the date of this Agreement until the Closing
Date, Seller will operate the Business and otherwise conduct its Business only
in the ordinary course of business, and will enter into no material purchase,
contract, lease, agreement, or other transaction relating to the Business
without prior notice in writing to Buyer. Between the date hereof and the
Closing Date, Seller will use reasonable efforts to retain its present employees
and preserve the Assets and the good will and business of its customers,
suppliers, and others having business relations with it.
5.2 Access to Personnel and Records. From the date of this Agreement until
the Closing Date, Seller will give Buyer, and Buyer's counsel, accountants,
consultants, and other agents and representatives, reasonable access, upon
reasonable request, to the Assets and Seller's properties, books, contracts,
commitments, and records which relate to the Business.
5.3 Licensing. Buyer has already filed a (i) Statement of Acquisition,
Merger and Consolidation of a Specialty Insurer, (ii) Application for
Certificate of Authority as a Service Warranty Association and (iii) Application
for Certificate of Authority as a Home Warranty Association with the Florida
Department of Financial Services, Department of Insurance Regulation. To the
extent necessary, Seller will assist Buyer in obtaining the approvals and
consents necessary from the Department of Insurance Regulation to conduct the
Business.
5.4 Consents. Seller will assist Buyer to the extent reasonably necessary
to procure the consents of any third parties necessary for the assignment to
Buyer of any contract, agreement, or lease which Buyer is willing to assume
hereunder.
5.5. No Broker. No broker, finder or other person acting in a similar
capacity has been employed or retained by Seller in connection with the
transactions contemplated by this Agreement, and no broker, finder or other
person is entitled to receive any brokerage, finders' or similar fee or
commission in connection with this Agreement and the transactions contemplated
hereby.
ARTICLE 6
ACCESS TO RECORDS
After the Closing Date, Buyer shall give Seller, and Seller's counsel,
attorneys or accountants, access upon reasonable request, to any records of the
Business prior to the Closing Date delivered to Buyer at closing for the purpose
of responding to any claims of customers,
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lawsuits, investigation by government authority, audit or insurance carrier.
ARTICLE 7
TITLE AND SURVEY
7.1 Title Evidence. Within fifteen days after execution of this Agreement,
the Seller shall provide Buyer with the following "Title Evidence": (i) a prior
owner's title insurance policy or a title report issued by a title insurance
company acceptable to Buyer ("Title Company") enabling a title agent selected by
Buyer to issue an ALTA Form B title insurance commitment ("Commitment") covering
the Building, whereby the Title Company agrees to issue an ALTA Form B owners
policy of title insurance ("Title Policy") in the amount of the Purchase Price
allocated to the Building at Closing, subject only to the matters ("Acceptable
Exceptions") which do not adversely affect marketability (as determined by the
standards adopted by the Florida Bar) of title to the Building or affect the
ability of Buyer to utilize the property, (ii) hard copies of all exceptions to
title set forth in the Report, and (iii) a prior survey of the Building showing
all improvements located thereupon ("Survey") and overlay all matters affecting
title to the Building.
7.2 Buyer shall review the Title Evidence and shall, within 10 days of
receipt of the Title Evidence notify Seller in writing ("Title Objection
Notice") of any matters in the Title Evidence adversely affecting the
marketability (as determined by the standards adopted by the Florida Bar) of
title to the Building or affecting the ability of Buyer to utilize the Property
("Title Defects"). Upon receipt of the Title Objection Notice, Seller shall use
its best efforts to cure such Title Defects. Correction of Title Defects shall
not delay the closing of the sale of the Assets unless agreed to by the Seller
and the Buyer. Instead, Seller shall continue to take whatever actions are
necessary to cure the Title Defects until the cure has been accomplished or
other arrangements have been made between the Seller and the Buyer. At Closing,
Seller shall provide Buyer with a gap affidavit in form reasonably acceptable to
the Title Company to permit the Title Company to insure against adverse matters
first appearing in the Public Records on a date subsequent to the effective date
of the Commitment and prior to the recording of a general warranty deed required
by the terms of this Agreement. The Seller agrees that it will not take any
action after the Effective Date of the Commitment which shall adversely affect
the status of title to the Building.
ARTICLE 8
CONDITIONS TO BUYER'S OBLIGATION TO CLOSE
Buyer's obligation to close shall be subject to the satisfaction of the
following conditions before or at the Closing, unless waived by Buyer:
8.1 Representations and Warranties True at Closing. The representations
and warranties made by Seller in this Agreement shall be true and correct in all
material respects at and as of the Closing with the same effect as though such
representations and warranties had been made or given on and as of the Closing.
8.2 Compliance with Agreement. Seller shall have performed and complied
with all of its obligations under this Agreement in all material respects which
are to be performed or complied with by it before or at the Closing.
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8.3 No Adverse Change. There has been no event or occurrence at or
relating to the Assets or the Business which has not been cured which could
reasonably be considered to have a material adverse effect on the Assets except
those caused by Principals of the Buyer.
8.4 Adverse Proceedings. No suit, action, claim, or governmental
proceeding shall be pending against, and no order, decree or judgment of any
court, agency, or other governmental authority shall have been rendered against
the parties or any party hereto which would render it unlawful, as of the
Closing Date, to effect the transactions contemplated by this Agreement in
accordance with its terms, and no litigation or other proceeding shall have been
commenced against Seller or Buyer that would have a material adverse effect on
Buyer's ownership, use, or enjoyment of the Assets.
8.5 Approvals. All necessary approvals, licenses, certificates of
authority and written consents shall have been obtained in order to sell,
transfer, assign, and convey to Buyer the Assets and the Service Contracts,
other contracts, leases, and agreements which Buyer is willing to assume.
Specifically, Buyer shall have obtained Certificates of Authority to operate as
both a Service Warranty Association and a Home Warranty Association from the
Florida Department of Insurance ("Regulatory Approvals").
ARTICLE 9
CONDITIONS TO SELLER'S OBLIGATION TO CLOSE
Seller's obligation to close shall be subject to the satisfaction of the
following conditions prior to or at the Closing, unless waived by Seller:
9.1 Representations and Warranties True at Closing. The representations
and warranties made by Buyer in this Agreement shall be true and correct in all
material respects at and as of the Closing with the same effect as though such
representations and warranties had been made or given on and as of the Closing.
9.2 Compliance with Agreement. Buyer shall have performed and complied
with all its obligations under this Agreement in all material respects which,
are to be performed or complied with by it before or at the Closing.
ARTICLE 10
CLOSING, TERMINATION, POST CLOSING
10.1 Closing.
(1) Schedule. The Closing shall take place upon the later of (i)
April 30, 2005 or (ii) within 10 business days of obtaining the Regulatory
Approvals (unless extended by mutual agreement of the parties) at such place,
date and time as Buyer and Seller may mutually determine (the "Closing Date").
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(2) Termination. At any time before the Closing, this Agreement may
be terminated by mutual consent of the parties. Except for the circumstance
described in Section 12.2, each party shall pay for its own costs and fees.
(3) Right to Proceed. If any of the conditions set forth in Article
7 have not been satisfied as of the Closing Date, Buyer shall have the right to
terminate this Agreement by a notice in writing to Seller. Buyer shall also have
the right, but not the obligation, to proceed with the Closing. If any of the
conditions set forth in Article 8 have not been satisfied as of the Closing
Date, Seller shall have the right, but not the obligation, to proceed with the
Closing. If the closing has not occurred within 180 days of the execution of
this Agreement, and the time for closing has not been extended by the Seller and
the Buyer, then Seller shall also have the right to terminate this Agreement by
a notice in writing to Buyer.
10.2 Seller's Deliveries. At the Closing, Seller shall deliver to Buyer:
(1) The Assets.
(2) Bills of sale, deed, closing statement, affidavits,
certificates, certificates of title, assignments, and other
instruments of transfer and conveyance provided in this
Agreement, in form and content acceptable to Buyer,
transferring to Buyer the Assets and the rights and interests
under the leases, Service Contract, other contracts, and
agreements to which Buyer is willing to become a party.
(3) All contracts, leases, forms, brochures, and other documents
described in Article 1.
(4) A Lease for the Main Office in a form acceptable to Buyer.
(5) The cash payment described in Article 2.
10.3 Buyer's Deliveries. At the Closing, Buyer shall deliver:
(1) The Purchase Price
(2) Documents evidencing the assumption of the Service Contracts,
other contracts, and leases.
(3) A Lease for the Main Office in a form acceptable to Buyer.
10.4 Post-Closing Deliveries. After the Closing, each party to this
Agreement shall, at the request of the other, furnish, execute, and deliver such
documents, instruments, certificates, notices, or other further assurances as
the requesting party shall reasonably request as necessary or desirable to
effect complete consummation of this Agreement and the transactions contemplated
hereby.
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ARTICLE 11
INDEMNIFICATION, REMEDIES
11.1 Indemnification of Buyer. Seller shall indemnify and hold Buyer, and
its shareholders, directors, officers, employees, and agents harmless from and
against, and reimburse Buyer on demand for, any actual damage, loss, cost, or
expense (including reasonable attorneys' fees) incurred by Buyer, its
shareholders, directors, officers, employees, and agents resulting from (a) any
breach of Seller's representations, warranties, or covenants in this Agreement,
or from any misrepresentation in, or omission from, any information, survey,
certificate, license, report, or other instrument provided by Seller to Buyer
other than representations, warranties or covenants made by Principals of the
Buyer or for which the Seller relied on information provided by Principals of
the Buyer in order to make the representations, warranties and covenants; (b)
any audit or investigation by any federal, state or local governmental
authorities (including their agents or intermediaries) concerning the operation
of the Business by Seller before the Closing or any amounts paid to Seller
before the Closing; (c) any assessment, adjustments, or offsets made against
Buyer or the Assets as a result of such an audit or investigation; (d) any costs
of defense of, and any judgment against Buyer with respect to, any litigation
relating to the operation of the Business before the Closing; (e) any mortgage,
security interest, lease, obligation, claim, liability, debt, lien, charge or
encumbrance relating to matters prior to the Closing asserted against Buyer or
the Assets; and (f) any other liability, property damage, personal injury, cost,
claim, expense, or assessment asserted against Buyer or the Assets, as a result
of, or with respect to, the operation of the Business by Seller before the
Closing. Notwithstanding the provisions above, (x) Seller shall not be
responsible for indemnification for any matter for which the claim does not
exceed $25,000; (y) in the aggregate, the maximum amount for which Seller shall
be responsible to indemnify Buyer is the Purchase Price; and (z) the
indemnification provisions contained in this section shall not apply to any
claim made or event occurring more than two years after the Closing Date.
11.2 Indemnification of Seller. Buyer shall indemnify and hold Seller, and
its shareholders, directors, officers, employees, and agents harmless from and
against, and reimburse Seller on demand for, any actual damage, loss, cost, or
expense (including reasonable attorneys' fees) incurred by Seller, its
shareholders, directors, officers, employees, and agents resulting from (a) any
breach of Buyer's representations, warranties, or covenants in this Agreement,
or from any misrepresentation in, or omission from, any information,
certificate, license, report, or other instrument provided by Buyer to Seller;
(b) any audit or investigation by any federal, state or local governmental
authorities (including their agents or intermediaries) concerning the operation
of the Business by Buyer after the Closing or any amounts paid to Buyer after
the Closing; (c) any assessment, adjustments, or offsets made against Seller as
a result of such an audit or investigation; (d) any costs of defense of, and any
judgment against Seller with respect to, any litigation relating to the
operation of the Business after the Closing; (e) any mortgage, security
interest, lease, obligation, claim, liability, debt, lien, charge or encumbrance
relating to matters after the Closing asserted against Seller; and (f) any other
liability, property damage, personal injury, cost, claim, expense, or assessment
asserted against Seller, as a result of, or with respect to, the operation of
the Business by Buyer after the Closing.
11.3 Notice. If either party has a claim for indemnification or other
rights under this subarticle, that party shall give the other party written
notice of any claim with respect to the subject
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matter of this indemnification prior to attempting to defend or settle such
claims or taking such other action as it in good faith deems necessary. If the
party from which indemnification is being demanded has not commenced defense of
any such claim within ten days of receipt of notice from the party seeking
indemnification, the party seeking indemnification shall, without further notice
to other party, have the right to undertake the defense of such claim,
compromise or settle the claim according to its best judgment.
ARTICLE 12
MISCELLANEOUS
12.1 Notices. Any notice or other communication requested or permitted to
be given shall be in writing and shall be deemed to have been properly given
when sent by recognized overnight carrier such as Federal Express or DHL, when
deposited in the U.S. mail, if mailed by certified mail, postage prepaid, return
receipt, or hand delivered with receipt, addressed as follows (or to such other
addresses as the parties may specify by due notice to the others) or by
facsimile followed by a hard copy delivered in one of the other methods
provided:
If to Seller: Service America Network, Inc.
c/o Thomas Reilly
255 E. 5th Street Ste 2600
Cincinnati, Ohio 45202-4725
Copy to: Naomi Dallob, Esq.
255 E. 5th St Ste 2600
Cincinnati, OH 45202-4725
Fax: (513) 287-6216
If to Buyer: Service America Enterprise, Inc.
2755 NW 63rd Court
Fort Lauderdale, FL 33309
Attn: Christopher Heaney, Pres.
Copy to: Richard H. Breit, Esq.
BreitGrossman LLP
150 North University Dr Ste 200
Plantation, FL 33324-2008
Fax: (954) 452-3311
12.2 Expenses. Each party shall bear its own expenses in the performance
of this Agreement. However, if the transaction does not close due to failure to
obtain Regulatory Approval, then the Seller shall pay the attorneys fees and
other expenses of the Buyer related to preparation and filing for the Regulatory
Approval and the purchase not to exceed $30,000.
12.3 Headings. The headings in this Agreement are intended solely for
convenience or reference and shall be given no effect in the construction or
interpretation of this Agreement.
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12.4 Governing Law. This Agreement shall be governed by the laws of the
State of Florida, and venue for any action between the parties with respect to
this Agreement shall be in Broward County, Florida.
12.5 Exclusivity. This Agreement embodies all of the representations,
warranties, and agreements of the parties hereto with respect to the subject
matter hereof, and all prior understandings, representations, and warranties
(whether oral or written) with respect to such matters are superseded and may
not be amended, modified, waived, discharged, or orally terminated except by an
instrument in writing signed by the party or an executive officer of a corporate
party against whom enforcement of the change, waiver, discharge, or termination
is sought.
12.6 Severability. The invalidity or unenforceability of any particular
provision of this Agreement shall not affect the other provisions hereof, and
this Agreement shall be construed in all respects as if such invalid or
unenforceable provisions were omitted. Furthermore, in lieu of such illegal,
invalid, or unenforceable provision, there shall be added automatically as a
part of this Agreement a provision as similar in terms to such illegal, invalid,
or unenforceable provision as may be possible and be legal, valid, and
enforceable.
12.7 Exhibits. The Exhibits, together with all documents incorporated by
reference therein, form an integral part of this Agreement and are hereby
incorporated into this Agreement.
12.8 Interpretation: This is a negotiated Agreement, and each party has
had its own counsel review and revise this Agreement as desired, and therefore
the rule construing Agreements against the drafting party shall not apply.
IN WITNESS WHEREOF, the parties have executed this Agreement as of the date
first written above.
Service America Enterprise, Inc. Service America Network, Inc.
By: /s/ Christopher J. Heaney By: /s/ Edward L. Hutton
--------------------------- --------------------------
Attest: /s/ Vivian M. Psinakis Attest: /s/ Naomi C. Dallob
----------------------- ----------------------
12
Exhibit 1 (a)
To Asset Purchase Agreement
Between Service America Network, Inc. and
Service America Enterprise, Inc.
Tangible personal property as follows:
12/31/04 ADDITIONS DEPRECIATION DISPOSALS 02/28/05
------------ --------- ------------ --------- -----------
ASSETS AT COST
(1) MACHINERY & EQUIPMENT 3,076,992 9,715 - - 3,086,707
(2) AUTOS & TRANSPORTATION 7,387,271 - - (463,072) 6,924,199
(3) FURNITURE & FIXTURES 738,930 - - - 738,930
(4) COMPUTER HARDWARE 3,022,986 - - - 3,022,986
(5) CAPITALIZED SOFTWARE 1,649,760 4,463 - - 1,654,223
(6) OTHER PROPERTY - - - - -
----------- ------ ------------ -------- -----------
(7) TOTAL 15,875,939 14,178 - (463,072) 15,427,045
----------- ------ ------------ -------- -----------
ACCUMULATED DEPRECIATION
(8) MACHINERY & EQUIPMENT (2,966,311) - - - (2,966,311)
(9) AUTOS & TRANSPORTATION (7,055,951) - - 447,170 (6,608,781)
(10) FURNITURE & FIXTURES (574,145) - - - (574,145)
(11) COMPUTER HARDWARE (2,417,226) - - - (2,417,226)
(12) CAPITALIZED SOFTWARE (1,369,109) - - - (1,369,109)
(13) OTHER PROPERTY - - - - -
----------- ------ ------------ -------- -----------
(14) TOTAL (14,382,742) - - 447,170 (13,935,572)
----------- ------ ------------ -------- -----------
NET FIXED ASSETS
(15) MACHINERY & EQUIPMENT 110,681 9,715 - - 120,396
(16) AUTOS & TRANSPORTATION 331,320 - - (15,902) 315,418
(17) FURNITURE & FIXTURES 164,785 - - - 164,785
(18) COMPUTER HARDWARE 605,760 - - - 605,760
(19) CAPITALIZED SOFTWARE 280,651 4,463 - - 285,114
(20) OTHER PROPERTY - - - - -
----------- ------ ------------ -------- -----------
(21) TOTAL 1,493,197 14,178 - (15,902) 1,491,473
----------- ------ ------------ -------- -----------
Exhibit 1 (c)
To Asset Purchase Agreement
Between Service America Network, Inc. and
Service America Enterprise, Inc.
Report Date 02/28/05 Service America Network, Inc.
573150 Active Contracts Summary By Age and Dev Type
All Branches
Active Active Dollars Past Due Past Due Dollars Total Total Dollars
------ -------------- -------- ---------------- ------ ---------------
Total Regular And Escrow- 67,250 $ 27,321,805.67 2,263 $ 278,805.40 69,513 $ 27,600,611.07
Total Commercial 180 $ 140,856.00 15 $ 11,214.82 195 $ 152,070.82
------ --------------- ----- ------------ ------ ---------------
Total Regular, Escrow, And
Commercial- 67,430 $ 27,462,661.67 2,278 $ 290,020.22 69,708 $ 27,752,681.89
------ --------------- ----- ------------ ------ ---------------
Active Paid 1-30 Days Past Due 31 - 60 Days Past Due Over 60 Days Past Due
67,430 1,148 271 859
**Common Areas (1000 o 7999) Are (Total Common- 19 $ )
Excluded From This Report**
**Deleted/Detected Contracts Are
Excluded From This Report**
**Unwanted Accounts Are Excluded From
This Report**
**Test Account Numbers Are Excluded
From This Report**
**New Pending Contracts Are Excluded
From This Report** (Total New/Pending - $ )
Exhibit 1 (f)
To Asset Purchase Agreement
Between Service America Network, Inc. and
Service America Enterprise, Inc.
Seller will transfer ownership of the following intellectual property:
Service America trademark
Service America trade name
Amira trade name
Encore trade name
Exhibit 1 (g)
To Asset Purchase Agreement
Between Service America Network, Inc. and
Service America Enterprise, Inc.
Legal Description of building located at 3081 McNab Road, Pompano, Florida
33069:
Lot 1, Gateway Industrial Center No. 2, according to the Plat thereof, recorded
in Plat Book 84, at Page 1, in the Public Records of Broward County, Florida.
Exhibit 1.2
To Asset Purchase Agreement
Between Service America Network, Inc. and
Service America Enterprise, Inc.
None
Exhibit 2.1 (b)
To Asset Purchase Agreement
Between Service America Network, Inc. and
Service America Enterprise, Inc.
PRO FORMA BALANCE SHEET
BALANCES
Accounts Receivable $ 990
Inventories 961
Statutory Deposits 7,135
Prepaid Expenses 256
Property Plant and Equipment 3,591
---------
Total Assets $ 12,933
=========
Accounts Payable $ 892
Deferred Contract Revenue 15,340
Accrued Expenses 1,146
Other Liabilities 284
---------
Total Liabilities $ 17,662
=========
Net Assets/(Liabilities) $ (4,729)
=========
Exhibit 2.2
To Asset Purchase Agreement
Between Service America Network, Inc. and
Service America Enterprise, Inc.
The allocation of purchase price shall be completed at closing.
Exhibit 3.4
To Asset Purchase Agreement
Between Service America Network, Inc. and
Service America Enterprise, Inc.
Buyer will assume the liability for the following contracts:
Monthly Original Remaining Expiration
Vendor Amount Term Term Date Account No. Description
- ----------------------- --------- -------- --------- ------------- ---------- -----------
Neopost $ 676.25 69 mos. 43 mos. October 2008 02121684 Digital Mail Machine
Aimed $ 538.20 60 mos. 46 mos. January 2009 200414624 Mailcrafter #9800 inserter
Citicorp Del-Lease Inc. $1,017.72 48 mos. 20 mos. November 2006 1 Caterpillar NRR30 216" Pallet forks
1 Mitsubishi EOP30 188" Pallet Forks
1 Mitsubishi 188" Pallet Fork /sideshifter
Maroone Dodge of
Pembroke Pine $ 575.92 38 mos. 13 mos. April 2006 2003 Dodge Durango
Margate Lincoln-Mercury $ 420.93 36 mos. 2 mos. May 2005 2002 Lincoln LS
Exhibit 3.5
To Asset Purchase Agreement
Between Service America Network, Inc. and
Service America Enterprise, Inc.
Seller will bear responsibility for the case captioned Ronald Kohn v.
Service America Network, Inc., Case No. 502004CA009504XXXXMB filed in the
Circuit Court of the Fifteenth Judicial Circuit in and for Palm Beach County,
Florida alleging unlawful cancellation of home and warranty service contracts.
Exhibit 3.11
To Asset Purchase Agreement
Between Service America Network, Inc. and
Service America Enterprise, Inc.
None
Exhibit 4.1
To Asset Purchase Agreement
Between Service America Network, Inc. and
Service America Enterprise, Inc.
The officers, directors, and shareholders of the Buyer are listed as follows:
Christopher J. Heaney Officer, director, and shareholder
Vivian M. Psinakis Officer, director, and shareholder
Peter J. Lieber Officer, director, and shareholder
James Gallo Officer and shareholder
Nancy Donegan Officer and shareholder
William Falconio Shareholder
Dean Prosper Shareholder
Steve Morrin Shareholder
Klaus Leitzsch Shareholder
Elizabeth Decker Shareholder
Marie Bieniek Shareholder
Evelyn Muller Shareholder
Terry Cuzzort Shareholder
Joseph Daly Shareholder