Exhibit 99.1
AGREEMENT FOR PURCHASE AND SALE OF ASSETS
by and among
INVICTA GROUP INC.
as the "Buyer",
and
JAMAICAN TRAVEL SPECIALIST, INC.
as the "Seller"
Dated: June 10, 2004
AGREEMENT FOR PURCHASE AND SALE OF ASSETS
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THIS AGREEMENT FOR PURCHASE AND SALE OF ASSETS ("Agreement") is entered
into this 10th day of June 2004, by and among JAMAICAN TRAVEL SPECIALIST, INC.
(the "Corporation and/or "Seller"), Denise Frances Peterson and Carolyn Ann
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Wright, individuals and sole shareholders of the Corporation ( "Seller's Sole
Shareholders"), and INVICTA GROUP INC., a Nevada Corporation ("Buyer").
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BACKGROUND
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Seller desires to sell, and Buyer desires to purchase, substantially all of
the assets of Seller's travel company which, among other things, owns (i) domain
names www.jamaicantravel.com and www.caribbeanisles.com; (ii) rights under
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certain airline and hotel contracts; (iii) database of customers and 3,000
travel agents; (iv) tradenames; and (v) telephone numbers (vi) Sabre Pseudo
71X2 ("Business"), on the terms and conditions hereinafter set forth.
TERMS OF AGREEMENT
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In consideration of the mutual covenants, agreements, representations, and
warranties contained in this Agreement, and other good and valuable
consideration, the receipt and adequacy of which is hereby acknowledged by
Seller and Buyer, the parties agree as follows:
1. PURCHASE AND SALE OF ASSETS.
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1.1 Purchase and Sale. Subject to the terms and conditions set
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forth in this Agreement, at the Closing, as hereinafter defined, Seller will
transfer, sell, and convey to Buyer, and Buyer will purchase and acquire from
Seller, substantially all of the assets (the "Assets") of Seller's Business,
free and clear of any and all claims, liens, and encumbrances, except as set
forth on Exhibit 1.3 hereto. A detailed list of the Assets to be acquired from
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Seller is set forth on Exhibit 1.1 hereto. Seller retains cash in banks and
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accounts receivable.
1.2 Title and Risk of Loss. Title to the Assets and risk of loss
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and damage to the Assets on hand on the Closing Date (as hereinafter defined) by
casualty (whether or not covered by insurance) or by condemnation or other
taking, will remain with Seller until the Closing has occurred and will pass to
Buyer only upon the Closing.
1.3 Assumption of Liabilities. Buyer shall not assume any
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liabilities or obligations of Seller, the Assets, or the Business, except those
liabilities or obligations set forth on Exhibit 1.3 attached hereto ("Assumed
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Liabilities"). Except as otherwise set forth on Exhibit 1.3, the Assumed
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Liabilities shall include only such obligations, duties, and liabilities that
are due and payable or required to be performed on or after the Closing Date,
but not for or with respect to the period prior to the Closing Date. Except as
expressly set forth on Exhibit 1.3, Buyer is not assuming any obligation to pay
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for any of the debts, liabilities or obligations of Seller, the Assets, or the
Business, whether now or hereafter existing, accrued or contingent, or arising
out of or related to consummation of the transactions herein contemplated
(including, without limitation, all taxes of any kind or description and any
employee claims). Seller covenants and agrees that Seller shall pay promptly
when due or within the ordinary course of business all of the debts, liabilities
and obligations relating to the Business and the Assets to all creditors, as of
the Closing Date and to all employees for services performed as of the Closing
Date, except as otherwise specifically set forth on Exhibit 1.3. Specifically,
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Seller will keep all furniture and equipment and be responsible for all
liabilities including client deposits and Seller's office lease. Notwithstanding
the foregoing, Buyer agrees to facilitate Seller's transactions with Sabre,
which will result in the termination of Seller's current agreement with Sabre,
and release of Seller by Sabre prior to Closing. Moreover, Buyer agrees to
obtain a release of Seller for any merchant account agreements prior to use and
implementation of said accounts by Buyer. Assumption of Liabilities will be
completed thirty (30) days from the execution of this Agreement. Denise Frances
Peterson shall remain as the the sole signator on the merchant account.
2 PURCHASE PRICE. As full payment for the sale and transfer of the
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Assets, Buyer shall issue and deliver to Seller authorized but unregistered
shares of Buyer's common stock, par value $.001 per share, ("Buyer Stock" and,
together with the cash payment the "Purchase Price"), as follows:
2.1 Stock Payment. Buyer shall issue to Seller 100,000 shares of
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Buyer Stock (the "Compensation Stock"). All shares of Compensation shall be
fully paid and nonassessable upon issuance. Compensation Stock will be
restricted, and will be eligible for piggy-back registration rights on Buyer's
next Registration Statement to be filed with the SEC.
2.2 Earn-Out Payment. Buyer shall pay to Seller for a period of
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twenty four (24) months an Earn Out in the amount of three percent (3%) of all
monthly Barbados, Antigua, St. Lucia, Grenada, and Jamaica sales (excluding
taxes), including overrides. Payment will be made on all travelers that are
paid in full, paid 15 days after the close of each month, commencing - July 15,
2004.
2.3 Bonus. If the Barbados, Antigua, St. Lucia, Grenada, and
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Jamaica sales (excluding taxes) exceed four million dollars ($4,000,000) during
the first 24 months following the Closing, Buyer shall issue to Seller as a
bonus additional 50,000 shares of Buyer Stock.
2.4 Commissions.
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(i) The Buyer will pay Sellers' employees hired by Buyer
according to terms and conditions as negotiated between
Buyer and said employees and outside sales representatives.
(ii) Buyer will pay Seller within ten (10) business days after
the Closing an amount equal to 100% of commission received
from the travelers listed in Exhibit 2.4 , which include
travelers under deposit, travlers having paid in full for
future travel, and pending reservations, when the travelers
complete their travel
3. REPRESENTATIONS AND WARRANTIES OF SELLER. Seller hereby
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represents and warrants to Buyer as follows:
3.1 Seller has the right, power, legal capacity, and authority to
enter into and perform his obligations under this Agreement, and this Agreement
constitutes, and each document or instrument to be executed by pursuant to the
terms hereof upon its execution and delivery will have been duly executed and
delivered and will constitute, the valid and legally binding obligation of
Seller enforceable in accordance with its terms, except as such enforceability
may be limited by bankruptcy, moratorium and other laws relating to creditors'
rights generally and the application by a court of general principles of equity.
3.2 Except as set forth in Exhibit 3.2, Seller is transferring the
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Assets to Buyer free and clear of any and all claims, liens, and encumbrances,
and no other person or entity has or will have any right, title, or interest in
or to any of the Assets. Except as set forth in Exhibit 3.2, none of the Assets
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is held under any lease, security agreement, conditional sales contract, or
other title retention or security arrangement, or is located other than in the
possession of Seller.
3.3 This Agreement will not result in the violation or breach of
any agreement, contract, or indenture to which Selleris a party or by which the
Assets are bound; nor is any consent or approval of any person to the
consummation of the transactions described herein necessary or required which
has not, on or prior to the date hereof, been obtained.
3.4 Seller has filed or will cause to be filed all federal, state,
and local tax returns required by law and (a) has paid all taxes, assessments,
and penalties due and payable, including, without limitation, all income, ad
valorem, franchise, import duty, sales, use, value added, occupation,
withholding (including income, social security, and unemployment compensation
taxes), excise and other taxes, (b) there are no present disputes as to taxes of
any nature payable by Seller with respect to the Business and the Assets, (c) no
agreement for extension of time or waiver of any statute of limitation has been
given or is in effect with respect to the assessment or payment of any tax
against or by Seller, (d) there is no unpaid tax deficiency that has been
assessed or that is proposed, threatened, or in process against the Seller by
any taxing authority, and (e) no audit of any tax return of any of the Seller by
any taxing authority is pending, in progress, threatened or in process.
3.5 Exhibit 3.5 to this Agreement is a schedule of all patents,
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trade names, trademarks, service marks, copyrights, and their registrations
owned by Seller or in which they have any rights or licenses, together with a
brief description of each and a listing of which, if any, are pledged as
collateral. None of the Seller has infringed, and is not now infringing, any
trade name, trademark, trade dress, service mark, or copyright belonging to any
other person, firm, or corporation. Except as set forth on Exhibit 3.5, Seller
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is not a party to any license, agreement, or arrangement, whether as licensor,
or otherwise, with respect to any trademarks, service marks, trade names,
copyrights, or applications for them. Seller owns, or holds adequate licenses
or other rights to use all trademarks, service marks, trade names, and
copyrights necessary for the Business as now conducted by him (including,
without limitation, those listed in Exhibit 3.5, and that use does not, and will
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not, nor has anyone asserted that it does, conflict with, infringe on, or
otherwise violate any rights of others.
3.6 Exhibit 3.6 to this Agreement is a true and complete list,
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without extensive or revealing descriptions, of Seller's trade secrets,
including secret processes, customer lists, know-how, and other data with
respect to the Business and the Assets. The specific location of each trade
secret's documentation, including its complete description, specifications,
procedures, and other material relating to it, is also set forth with it in that
exhibit. Each trade secret's documentation is current, accurate, and sufficient
in detail and content to identify and explain it, and to allow its full and
proper use by Buyer without reliance on the special knowledge or memory of
others. Seller is the sole owner of each of these trade secrets, free and
clear of any liens, encumbrances, restrictions, or legal or equitable claims of
others. Seller has taken all reasonable security measures to protect the
secrecy, confidentiality, and value of these trade secrets. Any of Seller's
employees and any other persons who, either alone or in concert with others,
developed, invented, discovered, derived, or designed these secrets, or who have
knowledge of or access to information relating to them, have been put on notice
and, if appropriate, have entered into agreements that these secrets are
proprietary to Seller and not to be divulged or misused. All these trade
secrets are presently valid and protectible and are not part of the public
knowledge or literature nor, to Seller'sknowledge, have they been used,
divulged, or appropriated for the benefit of any past or present employees or
other persons, or to the detriment of Seller.
3.7 Sellerhas good and marketable title to all of the Assets and
interest therein, whether real, personal, mixed, tangible, or intangible. All
Assets that are tangible personal property are in good operating condition and
repair, ordinary wear and tear excepted. No employee of Seller, nor any spouse,
child, or other relative of any of these persons, owns, or has any interest,
directly or indirectly, in any of the Assets.
3.8 Sellerhas furnished to Buyer true and correct copies of all of
Seller's contracts concerning or affecting the Business or the Assets. There is
no default or event that, with notice or lapse of time, or both, would
constitute a default by any party to any of these agreements. Sellerhas not
received notice that any party to any of these agreements intends to cancel or
terminate any of these agreements or to exercise or not exercise any options
under any of these agreements. Seller is not a party to, nor is it or any of
its property bound by, any agreement that is materially adverse to the Business,
or the properties, or financial condition of Seller.
3.9 Sellerhas complied with, and is not in violation of,
applicable federal, state, or local statutes, laws, regulations, and decrees
(including without limitation, any applicable environmental, safety and health,
building, zoning, or other law, ordinance, or regulation) affecting the Assets
or the operation of the Business.
3.10 There is no suit, action, arbitration, or legal,
administrative, or other proceeding or governmental investigation pending or
threatened against or affecting Seller or any of the Assets, or any judgment
existing, or any threatened or anticipated claims or liabilities of any nature,
absolute, contingent or otherwise, which directly or indirectly relate to or
impact the Assets or the Business, or which might prevent, impede or impair the
transfer, delivery or use of the Assets. Selleris not presently engaged in any
legal action to recover monies due to it or damages sustained by Seller.
3.11 The consummation of the transactions contemplated by this
Agreement will not constitute an event that would permit any party to terminate
any agreement or to accelerate the maturity of any indebtedness or other
obligation of Seller.
3.12 None of the representations and warranties made by Seller, or
made in any certificate or memorandum furnished or to be furnished by Seller, or
on Seller's behalf, contains or will contain any untrue statement of a material
fact, or omit any material fact the omission of which would be misleading.
There is no fact known to Seller which might adversely affect, or in the future
may adversely affect, the Business or any of the Assets, which has not been
disclosed to Buyer in writing.
3.13 Exhibit 3.13 to this Agreement sets forth the Balance Sheets
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of Seller respecting the Business for the fiscal year ended December 31, 2003,
12/31/02 and for the interim period ending March 31, 2004, and the related
statements of Income and Retained Earnings for the Business as of and for the
same periods. These financial statements are herein referred to as the
"Financial Statements." The Financial Statements fairly present the financial
condition of the Business as of the respective dates of the Financial Statements
and the results of its operations. Seller maintains in his files copies of all
records and documents relating to all income tax returns of the Business since
its date of inception.
3.14 Except as set forth in Exhibit 3.14, since March 31, 2004,
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there has not been any:
(i) transaction by Seller except in the ordinary course of
business;
(ii) capital expenditure by Seller;
(iii)material, adverse change in the financial condition,
liabilities, assets, business, or prospects of Seller, the
Business;
(iv) destruction, damage to, or loss of any of the Assets
(whether or not covered by insurance) that materially or
adversely affects the financial condition, business, or
prospects of Seller or the Business;
(v) labor trouble or other event or condition of any character
materially or adversely affecting the financial condition,
business, assets, or prospects of Seller or the Business;
(vi) change in accounting methods or practices (including,
without limitation, any change in depreciation or
amortization policies or rates) by Seller;
(vii)revaluation by Seller of any of the Assets;
(viii)increase in the salary or other compensation payable or to
become payable by Seller to any of its employees or the
declaration, payment, or commitment or obligation of any
kind for the payment, by Seller, of a bonus or other
additional salary or compensation to any such person, except
for changes in the ordinary course of the Business;
(ix) sale or transfer of any of the Assets, except in the
ordinary course of business;
(x) amendment or termination of any oral or written material
contract, agreement, or license to which Seller is a party
and by which Seller, the Assets or the Business is bound,
except in the ordinary course of business;
(xi) loan by Seller to any person or entity, or guaranty by
Seller of any loan;
(xii)waiver or release of any right or claim of Seller, except
in the ordinary course of business;
(xiii)other event or condition of any character that has or
might reasonably have a material or adverse effect on the
financial condition, business, assets, or prospects of
Seller, the Assets or the Business;
3.15 Since March 31, 2004, there has not been any change in the
financial condition or operations of the Business, except changes in the
ordinary course of business, which changes have not in the aggregate been
materially adverse.
3.16 Exhibit 3.16 to this Agreement is a complete and accurate
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schedule describing and specifying the location of all of the Assets.
3.17 Exhibit 3.17 to this Agreement is a complete and accurate
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schedule of the accounts receivable of the Business together with an accurate
aging of these accounts. These accounts receivable, and all accounts receivable
of the Business created after that date, arose from valid sales in the ordinary
course of business. These accounts are collectible at their full amounts and
are not pledged as collateral.
3.18 Exhibit 3.18 to this Agreement is a complete and accurate
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schedule of the accounts payable of the Business. All such accounts payable are
current in their respective payment cycles and are not delinquent or in default.
3.19 Exhibit 3.19 to this Agreement is a description of all
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insurance policies held by Seller concerning the Business and the Assets. All
of these policies are in the respective principal amounts set forth in Exhibit
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3.19. Seller has maintained and now maintains (a) insurance on all of the
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Assets of a type customarily insured, covering property damage and loss of
income by fire or other casualty, and (b) adequate insurance protection against
all liabilities, claims, and risks of the Business against which it is customary
to insure. Each of the insurance policies referred to in Exhibit 3.19 is in
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good standing, and the premiums with respect thereto fully paid through the
dates indicated thereon.
3.20 All licenses and permits issuable by any governmental
authority necessary for or used in connection with the operation of the Business
or the ownership, possession, and use of the Assets, have been duly and validly
issued and are in full force and effect. Sellerhas not committed any act or
failed to act in a manner or under circumstances which could result in the
revocation or suspension of any such licenses or permits or in any other
disciplinary action relating thereto. No one has claimed and Seller has not
received any notice that it has committed any such act or failed to so act. The
consummation of the transactions provided for in this Agreement will not impair
or adversely affect any of the rights, powers, or privileges granted pursuant to
any such licenses or permits.
3.21 No consent, approval, or authority of any nature, or other
formal action, by any person, firm, or corporation, or any agency, bureau, or
department of any government or any subdivision thereof, is required in
connection with the execution and delivery of this Agreement by Seller and the
consummation by Seller of the transactions provided for herein.
4. BUYER'S REPRESENTATIONS AND WARRANTIES. Buyer represents and
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warrants as follows:
4.1 Buyer is a corporation duly organized and validly existing
under the laws of the State of Nevada.
4.2 Buyer has the right, power, legal capacity, and authority to
enter into and perform its obligations under this Agreement, and this Agreement
constitutes, and each document or instrument to be executed by Buyer pursuant to
the terms hereof upon its execution and delivery will have been duly executed
and delivered and will constitute, the valid and legally binding obligation of
Buyer enforceable in accordance with its terms, except as such enforceability
may be limited by bankruptcy, moratorium and other laws relating to creditors'
rights generally and the application by a court of general principles of equity.
4.3 None of the representations and warranties made by Buyer in
this Agreement contains or will contain any untrue statement of a material fact,
or omit any material fact the omission of which would be misleading.
5. SELLER'S' OBLIGATIONS BEFORE CLOSING. Seller covenant and agrees
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that, from the date of this Agreement until the Closing Date:
5.1 Buyer and Buyer's counsel, accountants, and other
representatives shall have full access to all properties, books, accounts,
records, contracts, and documents of or relating to Seller, the Business, and
the Assets. Seller shall furnish or cause to be furnished to Buyer and its
representatives all data and information concerning Seller, the Business, and
Assets that may be requested by Buyer. Buyer, at its cost, shall have the right
to cause its agents to conduct such appraisals, valuations, reviews and
investigations as Buyer deems necessary or advisable, including an audit of the
financial condition and results of operations of Seller, the Business and the
Assets. If Buyer's audit reveals a material discrepancy or misstatement in any
of Seller' Financial Statements, then, at Buyer's option, an appropriate
adjustment shall be made to the terms of this Agreement or the Purchase Price,
or Buyer shall have the option to terminate this Agreement without liability to
Seller.
5.2 Seller will carry on the Business diligently and in
substantially the same manner as it previously has been carried out and shall
not make or institute any unusual or novel methods of manufacture, service,
purchase, sale, lease, management, accounting, or operation that will vary
materially from those methods used by Seller in the Business as of the date of
this Agreement.
5.3 Seller will use their best efforts to preserve the Assets and
Business intact (including, without limiting the generality of the foregoing,
preserving any confidential information and trade secrets), to keep available
and on payroll its present employees, and to preserve his present relationships
with suppliers, customers, government officials, and others having business
relationships with him respecting the Business.
5.4 Seller will continue to carry the existing insurance on the
Business and Assets.
5.5 Seller shall not modify, amend, cancel, or terminate any of
the existing contracts or agreements of the Business, or agree to do any of
those acts without Buyer's prior written permission.
5.6 Seller shall not: (a) transfer, sell, assign, or otherwise
dispose of any of the Assets other than in the ordinary course of the Business;
(b) create, incur, assume, or suffer to exist upon any of the Assets any liens,
claims, encumbrances, or security interests whatsoever; or (c) create, incur,
assume, or suffer to exist any indebtedness, liability, or obligation in the
Business except liabilities created prior to the date hereof and disclosed
herein and except current liabilities incurred in the ordinary course of
business.
5.7 Seller shall do all of the following:
(a) do or cause to be done all things necessary to preserve and
keep in full force and effect the existence of the Business
and all franchises, rights, and privileges necessary for the
conduct of the Business, including, without limiting the
generality of the foregoing, all licenses and permits, and
comply with the requirements of all applicable laws and all
rules, regulations, and orders of all regulatory agencies
and authorities having jurisdiction over the Business and
Assets;
(b) pay and discharge, or cause to be paid and discharged, all
lawful taxes, assessments, and governmental charges or
levies imposed upon the Business or Assets or upon the
income or property of the Business, prior to the date upon
which penalties attach thereto;
(c) promptly notify Buyer in writing of any threatened
investigation, action, suit, or proceeding, and of any
investigation, action, suit, or proceeding commenced against
the Business or Assets before any court or any governmental
department, commission, board, bureau, agency, or
instrumentality; and
(d) refrain from doing any act or omitting to do any act, or
permitting any act or omission to act, which will cause a
breach of any of the contracts, commitments, or obligations
affecting the Business or Assets.
6. CONDITIONS PRECEDENT TO BUYER'S PERFORMANCE. The obligation of
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Buyer to purchase the Assets under this Agreement is subject to the
satisfaction, at or before the Closing, of all the conditions set out below, in
Buyer's sole discretion. Buyer may waive any or all of these conditions in
whole or in part without prior notice; provided, however, that no such waiver of
a condition shall constitute a waiver by Buyer of any other condition or of any
of its other rights or remedies, at law or in equity, if Seller shall be in
default of any of its representations, warranties, or covenants under this
Agreement.
6.1 All representations and warranties by Seller in this Agreement
or in any Exhibit or any written statement that shall be delivered to Buyer by
Seller in connection with this Agreement shall be true in all material respects
on and as of the Closing Date as though made at that time.
6.2 Seller shall have substantially performed, satisfied, and
complied with all covenants, agreements, and conditions required by this
Agreement to be performed or complied with by Seller on or before the Closing
Date.
6.3 During the period from the date of this Agreement to the
Closing Date, there shall not have been any material adverse change in the
Business, and there shall not have been any material loss or damage to the
Assets, whether or not insured, that materially affects the conduct of the
Business.
6.4 No action, suit, or proceeding before any court or any
governmental body or authority which, in the opinion of Buyer's counsel pertains
to the transaction contemplated by the Agreement or to its consummation, shall
have been instituted or threatened on or before the Closing Date.
6.5 All necessary agreements and consents of any parties to the
consummation of the transactions contemplated by this Agreement, or otherwise
pertaining to the matters covered by it, shall have been obtained by Seller and
delivered to Buyer, subject to the approval of Buyer.
6.6 The form and substance of all Exhibits to be provided
hereunder, certificates, instruments, opinions, and other documents delivered to
Buyer under this Agreement shall be reasonably satisfactory in all respects to
Buyer and its counsel.
6.7 Buyer shall have received a bill of sale, assignment, and
other documents of transfer satisfactory to Buyer and its counsel transferring
title and ownership of the Assets to Buyer.
6.8 Buyer shall be satisfied, in its sole discretion, with its due
diligence examination of the Business and the Assets and that the
representations and warranties of Seller are materially accurate.
6.9 The Assets and Business shall not have been adversely affected
in any material way, whether by fire, casualty, act of God, governmental action,
or otherwise, nor shall there have been any other changes that would have a
material adverse effect on the value or transferability of the Assets or
Business, it being the understanding of the parties that all risk of loss for
damage, destruction, or loss to the Assets and Business shall be and remain with
Seller until the Closing Date and the completion of the transfer of the Assets
to Buyer.
6.10 Buyer shall be satisfied, in its sole discretion, with the
results of the independent audit of the Assets and Business conducted by Buyer's
auditors.
6.11 Buyer shall -enter into an employment agreement with
Denise Frances Peterson as Director of the Caribbean Division of Invicta Travel
Group operating under the name of Caribbean Travel Specialists, and pay her an
initial annual salary of $38,400/year for the initial period of two (2) years.
After three months, the parties agree to negotiate salary. Benefits will
include full medical, dental, and vision for Ms. Peterson, and her minor son,
four (4) weeks annual vacation, paid holidays, sick leave for the management and
operation of the Business as further developed by Buyer. At present, Buyer
agrees to retain Lois Walker at the current salary of $2,000/month and
$500/month expense reimbursement for use of her home as an office and Protour
Administration, and Sonia Burke at $12/hour based upon a 40 hour workweek, no
employment contracts will be issued for Ms. Walker or Ms. Burke.
6.12 Buyer shall have received from counsel for Seller an opinion
dated the Closing Date, in form and substance satisfactory to Buyer and its
counsel, that:
(a) Seller has all necessary authority to own the Assets as now
owned and to operate the Business as now operated;
(b) To the best of counsel's knowledge, Seller's Sole
Stockholders and spouses with community property interest
are the owners of the Assets, free and clear of any and all
claims, liens, and encumbrances (except as set forth on
Exhibit 1.3 hereto), and Seller have full power to transfer
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the Assets to Buyer without obtaining the consent or
approval of any other person, entity, or governmental
authority;
(c) Sellerdoes not own, directly or indirectly, any interest or
investment (whether equity or debt) in any corporation,
partnership, business, trust, or other entity relevant to
this transaction, except Seller's sole stockholders own an
interest in Rondel Village, Negril, and Luxor Corporation;
(d) this Agreement, upon execution by Seller, will be validly
executed and valid and binding on Seller and enforceable in
accordance with its terms, except as limited by bankruptcy
and insolvency laws and by other laws affecting the rights
of creditors generally;
(e) counsel does not know of any suit, action, arbitration, or
legal, administrative, or other proceeding, or governmental
investigation pending or threatened against or affecting
Seller or any of the Assets, the Business, or its properties
or financial or other condition;
(f) neither the execution nor delivery of this Agreement nor the
consummation of the transactions contemplated in this
Agreement will constitute, to the best of counsel's
knowledge based upon reasonable investigation: (i) a default
or an event that would, with notice or lapse of time or
both, constitute a default under, or violation or breach of,
any indenture, license, lease, franchise, mortgage,
instrument, or other agreement to which Seller is a party or
by which Seller or the Assets may be bound, or (ii) an event
that would permit any party to any agreement or instrument
that has been submitted to counsel for review to terminate
it or to accelerate the maturity of any indebtedness or
other obligation of Seller, or (iii) an event that would
result in the creation or imposition of any lien, charge, or
encumbrance on any Asset;
(g) on the transfer and delivery of the Assets to Buyer in
accordance with this Agreement, Buyer will become the owner
of all of the Assets free and clear of any and all liens,
encumbrances, pledges, claims, charges, and security
interests, except as set forth on Exhibit 1.3; and
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(h) there is no "bulk sales" requirement to be complied with
under applicable law or fraudulent transfer issue pursuant
to applicable law with respect to the transfer and sale of
the Assets of Buyer.
7. THE CLOSING.
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7.1 The closing of this transaction (the "Closing"), upon
satisfaction of all conditions and covenants, will take place on June 10th ,
2004 ("Closing Date"). The parties, by mutual agreement, may establish an
earlier or later Closing Date. The Closing shall take place at a location
reasonably designated by Buyer.
7.2 At the Closing, Seller shall deliver to Buyer physical
possession and control of the Assets and the following instruments, in form and
substance satisfactory to Buyer and its counsel:
(a) a bill of sale absolute, assignments of contracts or other
intangible rights, and such other documents necessary to
transfer all title and ownership interest in the Assets to
Buyer;
(b) all financial records pertaining to the Business, except tax
records related to the Seller Corporation; and
(c) all other previously undelivered documents, instruments, and
writings required to be delivered by Seller at or prior to
the Closing pursuant to this Agreement or as otherwise
required by Buyer in connection herewith.including:; Sabre
Pseudo 71X2 will be transferred to Buyer.
7.3 At the Closing, Buyer shall deliver or cause to be delivered
to Seller the shares of Compensation Stock, and an employment agreement to the
satisfaction of Denise Frances Peterson and counsel.
7.4 At the Closing, Seller and Buyer shall mutually agree to the
allocation of the Purchase Price to the Assets and shall complete and timely
file all necessary federal and state tax forms consistent with such allocation
as follows: $80,000 to goodwill, $80,000 to covenant not to compete of Denise
Frances Peterson and Carolyn Ann Wright, $20,000 to customer database, and any
remainder to the covenant not to compete.
8. POST-CLOSING COVENANTS. Seller agrees not to divulge, communicate,
-----------------------
use to the detriment of Buyer or Buyer or for the benefit of any other person or
persons, or misuse in any way any confidential information or trade secrets of
the Business, including personnel information, processes, know-how, customer
lists, or other data. In addition, Seller shall maintain its product liability
insurance on the Business for a reasonable period of time after the Closing
until Buyer is able either to assume such insurance or obtain suitable
replacement coverage.
9. PUBLICITY. All notices to third parties and all other publicity
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concerning the transactions contemplated by this Agreement shall be planned,
coordinated, and made solely by Buyer with Seller's consent as to the contents
of announcements. Seller may not make any announcement or undertake any
publicity concerning this transaction without Buyer's prior, written consent.
10. COSTS.
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10.1 Each of the parties represents and warrants that Seller has
dealt with a broker Innovative Acquisitions, Inc. in connection with this
transaction contemplated by this Agreement, and, insofar as it knows, the broker
is entitled to commission and is the responsibility of the Seller. Seller and
Buyer each agree to indemnify and hold harmless one another against any loss,
liability, damage, cost, claim, or expense incurred by reason of any brokerage
commission or finder's fee alleged to be payable because of any act, omission,
or statement of the indemnifying party.
10.2 Except as otherwise set forth in this Agreement, 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, including attorneys' fees and due
diligence expenses.
11. FORM OF AGREEMENT.
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11.1 The subject headings of the Sections and paragraphs of this
Agreement are included for purposes of convenience only and shall not affect the
construction or interpretation of any of its provisions.
11.2 This Agreement, together with the Exhibits hereto,
constitutes the entire agreement between the parties pertaining to the subject
matter contained in it and supersedes all prior and contemporaneous agreements,
representations, and understandings of the parties. No supplement, modification,
or amendment of this Agreement shall be binding unless executed in writing by
all the parties. No waiver of any of the provisions of this Agreement shall be
deemed or shall constitute a waiver of any other provisions of this Agreement,
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.
11.3 This Agreement may be executed simultaneously in one or more
counterparts, each of which shall be deemed an original, but all of which,
together, shall constitute one and the same instrument. Signatures by facsimile
transmission shall be acceptable as original signatures.
11.4 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 successors and
permitted 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 against any party to this Agreement.
11.5 This Agreement shall be binding on, and shall inure to the
benefit of, the parties to it and their respective heirs, legal representative,
successors, and permitted assigns.
11.6 If any part of this Agreement is contrary to, prohibited by,
or deemed invalid under any applicable law or regulation, such provision shall
be inapplicable and deemed omitted to the extent so contrary, prohibited or
invalid, but the remainder hereof shall not be invalidated thereby and shall be
given full force and effect so far as possible.
11.7 This Agreement shall be governed by and construed in
accordance with the laws of the State of Florida, without regard to Florida's
choice of law decisions.
11.8 All exhibits to this Agreement shall be satisfactory in both
form and substance to Buyer and its counsel. In addition, copies of all
relevant agreements relating to the information described on the Exhibit shall
be attached to such Exhibit.
12. NATURE AND SURVIVAL OF REPRESENTATIONS AND OBLIGATIONS. All
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representations, warranties, covenants, and agreements of the parties contained
in this Agreement, or in any instrument, certificate, opinion, or other writing
provided for in it, shall survive the Closing for a period of three (3) years.
13. NOTICES. All notices, requests, demands, and other communications
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under this Agreement shall be in writing and shall be deemed to have been duly
given on the date of service. Notices may be served (i) personally on the party
to whom notice is to be given, (ii) by first class mail, registered or
certified, postage prepaid, or (iii) by international express courier (such as
Federal Express), and properly addressed as follows:
IF TO SELLER : JAMAICAN TRAVEL SPECIALIST, INC.
33576 Alvarado Niles Rd.
Union City, CA. 94587
Frances Peterson
Tel: 510-489-9553
With a copy to
Seller's attorney: Rose A. Hach , Attorney at Law
3050 Post Oak Blvd., Suite 1690
Houston, Texas 77056
Voice# 713.621.7253
Fax# 713.871.2044
Email: Hachelaw@aol.com
IF TO BUYER: INVICTA GROUP INC.
9553 Harding Avenue
Miami Beach, Florida 33154
Bill Forhan
Tel: 954 784 8280
With a copy to
Buyer's attorney: J. Bennett Grocock, Esquire
255 South Orange Ave; Suite 1201
Orlando, Florida 32801
14. REMEDIES.
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14.1 If any legal action or other proceeding is brought for the
enforcement of this Agreement, or because of an alleged dispute, breach,
default, or misrepresentation in connection with any provisions of this
Agreement, the successful or prevailing party or parties shall be entitled to
recover reasonable attorney's fees and other costs incurred in that action or
proceeding, in addition to any other relief to which it or they may be entitled.
14.2 If Seller fails to perform any of the covenants to this
Agreement or if all of the conditions precedent set forth in Article 6 are not
satisfied, Buyer, at its option, may terminate this Agreement without any
liability to Seller, or Buyer shall have the right of specific performance as
hereinbefore set forth.
15. INDEMNIFICATION.
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15.1 Seller's Indemnification. Subject to all terms and conditions
of this Section, hereby agree to indemnify, defend, and hold harmless Buyer from
and against all demands, claims, actions or causes of action, assessments,
losses, damages, liabilities, costs and expenses, including, without limitation,
interest, penalties, attorneys' fees and expenses (collectively, "Damages"),
asserted against, resulting to, imposed upon or incurred by Buyer by reason of
or resulting from (i) liabilities or obligations of, or claims against, Seller,
the Business, or Assets (whether absolute, accrued, contingent or otherwise),
existing as of the Closing Date or arising out of facts or circumstances
existing at or prior thereto (excluding only those specific liabilities and
obligations expressly assumed by Buyer as set forth in Exhibit 1.3) whether or
-----------
not such liabilities or obligations were known at the time of the Closing; (ii)
a breach of any representation, warranty, or agreement of Seller contained in or
made pursuant to this Agreement or any facts or circumstances constituting such
a breach; or (iii) any tax or related claim asserted against Buyer with respect
to any taxes relating to the operations or properties of Seller on or prior to
the Closing Date (collectively, "Claims"). Such right of indemnification shall
include the right of Buyer to rescind the purchase of the Assets and recover the
full purchase price paid for them together with all costs, expenses, and
attorney and accounting fees incurred in connection with the examination of
Seller and the Assets and the negotiation and consummation of the transaction
contemplated by this Agreement, and/or to offset the damages or amounts of the
Claims against amounts owed Seller pursuant to the Compensation Stock by
effecting a reduction in the number of shares of Compensation Stock equal to the
value of the offset. In the event that the foregoing right of setoff is
insufficient to compensate Buyer for losses or damages incurred or monies so
paid out, Seller agrees to indemnify and hold harmless Buyer from and against
any and all other amounts, damages, or losses paid or suffered by Buyer from any
such occurrence, including reasonable attorneys' fees and related expenses.
15.2. Buyer's Indemnification. Subject to all terms and
------------------------
conditions of this Section, Buyer hereby agree to indemnify, defend, and hold
harmless Seller from and against all demands, claims, actions or causes of
action, assessments, losses, damages, liabilities, costs and expenses,
including, without limitation, interest, penalties, attorneys' fees and expenses
(collectively, "Damages"), asserted against, resulting to, imposed upon or
incurred by Seller by reason of or resulting from (i) liabilities or obligations
of, or claims against, Buyer, the Business, or Assets (whether absolute,
accrued, contingent or otherwise), existing as of or after the Closing Date or
arising out of facts or circumstances existing at or prior thereto (including
those specific liabilities and obligations expressly assumed by Buyer as set
forth in Exhibit 1.3) whether or not such liabilities or obligations were known
-----------
at the time of the Closing; (ii) a breach of any representation, warranty, or
agreement of Buyer contained in or made pursuant to this Agreement or any facts
or circumstances constituting such a breach; or (iii) any tax or related claim
asserted against Seller with respect to any taxes relating to the operations or
properties of Buyer on or after the Closing Date (collectively, "Claims"). Such
right of indemnification shall include the right of Seller to rescind the
purchase of the Assets and recover the balance due pursuant to this Agreement,
and the Employment Agreement of Denise Frances Peterson, together with all
costs, expenses, and attorney and accounting fees incurred in connection with
the examination of Buyer and the Assets and the negotiation and consummation of
the transaction contemplated by this Agreement. Buyer agrees to indemnify and
hold harmless Seller from and against any and all other amounts, damages, or
losses paid or suffered by Seller from any such occurrence, including reasonable
attorneys' fees and related expenses.
16. TERMINATION OF AGREEMENT. This Agreement may be terminated only
--------------------------
upon the occurrence of the following:
(a) by mutual written agreement of Seller and Buyer;
(b) by Buyer, on or before the Closing Date, if any of the
conditions provided in Section 6 of this Agreement have not
been met and have not been waived in writing by Buyer prior
to such date or if any of the representations or warranties
of Seller are determined to have been materially false; or
(c) by Buyer if there has been a material and non-curable
violation or breach by Seller of any of the material
agreements contained in this Agreement which have not been
waived in writing by Buyer; or
(d) by Buyer if Seller fails to enter into an mutally agreeable
Employment Agreement with Denise Frances Peterson for the
operation of the Business as developed by Buyer upon and
after Buyer's acquisition of the Assets.
17. PERSONAL PROPERTY TAXES. Seller shall pay a pro rata portion of
-------------------------
any tangible or intangible personal property taxes which have or will become due
on the Assets during the current tax year. Such proration shall be as of the
Closing Date.
18. NONCOMPETITION AND NONINTERFERENCE.
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18.1 For a period of three (3) years after the Closing Date,
Seller's Sole Shareholders for themselves and their employees, affiliates and
agents (collectively, "Restricted Parties"), except in affiliation with Buyer,
or as approved by Buyer, and Buyer understands and agrees Carolyn Ann Wright
shall continue in her position as General Manager of Rondel Village, Negril,
Jamaica, shall not engage, directly or indirectly, whether as owner, partner,
employee, officer, director, joint venturer, consultant, or shareholder (except
for the ownership of not more than 1% of the outstanding securities of a
corporation whose securities are actively traded on a national securities
exchange), nor lend assistance (financial or otherwise) or cooperation to anyone
else, anywhere in the State of Florida, to an agreement with Buyer.
18.2 During the term of this Agreement and for a period of five
(5) years after any termination of this Agreement, Restricted Parties shall not:
(a) purposefully interfere or attempt to interfere with any of
the contracts (regardless of whether these contracts are in
writing or verbal) or business relationships or advantages
of Seller or the Business existing and in effect as of the
Closing Date;
(b) solicit for employment, either directly or indirectly, for
Restricted Parties or for another, any of the technical or
professional employees employed by the Buyer at the Closing
Date or at any time thereafter;
(c) purposefully interfere with the business relationship of or
solicit the business or orders of a customer or supplier of
the Seller existing as of the Closing Date; or
(d) use the Seller's internal business or operations data or
information in a damaging or derogatory manner that would
potentially hinder the Buyer's business.
18.3 In the event of any breach of the provisions of this Article
18, Buyer shall have any or all of the following remedies:
(a) to obtain an injunction from a court of competent
jurisdiction to enjoin Restricted Parties' wrongful conduct;
(b) to recover damages from Restricted Parties;
(c) to set off damages against amounts Buyer may owe Seller; and
(d) to recover all of its expenses and costs, including
attorneys' fees. DROP
19. DEFAULT BY BUYER. In the event of default by Buyer due to
------------------
non-payment, Seller shall have the option to regain possession, ownership, and
control of the Assets of Jamaican Travel Specialist, Inc., including but not
limited to rights to deposits and group commissions sold pursuant to this
Agreement. Buyer agrees to exercise best efforts to revert ownership of said
Assets in order to effect such termination. All right, title, and interest in
the names and domains transferred to Buyer pursuant to this Agreement will
revert to Seller, deposits, commissions due from vendors , accounts receivable
shall be delivered to Seller, and the Covenant Not To Compete of Sole
Shareholders contained in Article 18 of this Agreement shall be deemed void.
20. SELLER'S RIGHT TO AUDIT. Seller, at its cost, shall have the right
------------------------
to cause its agents to conduct such an audit of Buyer's financial records
relevant to the Earn-out, and if it's audit reveals a material discrepancy or
misstatement in any of Buyer's payments to Seller, then, an appropriate
adjustment shall be made by payment to Seller, or Seller shall have the option
to terminate this Agreement without liability to Seller.
21. CONDUCT OF BUSINESS DURING EARN-OUT PAYMENT PERIOD. Buyer agrees
----------------------------------------------------
that for (24) twenty four months after the Closing Date, during the Earn-Out
payment period, the Business will be conducted as follows:
(i) Buyer will use best efforts to preserve the Business and its
clientele intact, and to maintain Seller's 800 number(s)
andother telephone and facsimile number(s);
(ii) Buyer will not commit any act or omission which will
endanger the status of Buyer's appointment by ARC and/or
IATAN as an authorized travel agency.
(iii)Buyer agrees that Seller will remain in control of its
airline plates and ticket stock pursuant to the rules of ARC
until the ARC Closing Date;
(iv) Buyer shall protect Seller's travel agency business assets,
including but not limited to airline plates, validators, and
tickets, from misuse, theft, damage or destruction and
agrees to indemnify Seller from and against any and all
losses and expenses incurred by Seller from the damage,
destruction, misuse, theft or any other cause of loss of
such assets.
(v) Buyer and Seller agree that Seller's current employees hired
by Buyer will not be dismissed until receipt of ARC change
of ownership approval without the prior consent of Seller.
(vi) Seller will be responsible for ARC debit memos (for
travelers through June 10,2004) that may become a cost in
the future, and any refunds prior to June 10 will remain the
property of Seller.
22. ARC AND IATAN TRANSFERS.
--------------------------
(i) FILING WITH ARC AND IATAN. Following twenty (20) days of the
-------------------------
execution of this Asset Purchase Agreement, Buyer and Seller
shall file the requisite change of ownership applications
with ARC (Type IV or V) and IATAN. Buyer understandsthat
Seller's ARC bond terminated on June 1, 2004, and has agreed
to provide the additional financial support either by letter
of credit, bond, or under its' own bond in order to maintain
the number held by Luxor Travel, Inc., if acceptable to ARC.
Buyer shall pay all the requisite application fees. Buyer
further agrees to diligently pursue any procedures and to
furnish all information that may be required for approval by
either ARC or IATAN. Seller agrees to provide, immediately
upon Buyer's request, all of such information and
documenta-tion required of it for such approval. Buyer and
Seller agree to use their best efforts to expedite such
filings and completion of the approval process. Buyer agrees
to promptly provide and maintain all information, financial
means, capitalization and personnel require-ments necessary
to obtain approval as an ARC and IATAN travel agency. In the
event that change of ownership approval by ARC is not
received by November 30, 2004, then the parties agree that
the Seller has the right to terminate this Agreement, and
this Agreement will continue. Buyer agrees to provide a
Certified Agent Specialist.
(ii) AGREEMENTS PRIOR TO ARC APPROVAL. DENISE FRANCES PETERSON
-----------------------------------
SHALL REMAIN IN CONTROL OF THE ARC AND IATAN NUMBERS,
AIRLINE PLATES, TICKET STOCK, AND TICKETING, AND ANY AND ALL
BANK ACCOUNTS. Buyer shall deliver to Seller by Noon on
Wednesday of each week throughout such period, a copy of the
ARC Sales Report generated by Buyer, reflecting all airline
sales for the previous week and prepared as of the close of
business on Sunday of each such week. Buyer shall permit
Denise Frances Peterson, Lois Walker, and Sonia Burke, or
any other designated representa-tive of Seller to prepare
the weekly ARC Sales Report. It is agreed that Lois Walker
and Sonia Burke are to be retained as employees of Buyer
until the receipt of the change of ownership letter.
(iii)REMOVAL OF ASSETS. Buyer shall not, without the consent of
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Seller, which consent shall not be unreasonably withheld,
remove from the Seller's business premises any assets or
inventory used in it, except in the normal course of its
business;
[Signatures on next page]
IN WITNESS WHEREOF, the parties have duly executed this Agreement as of the
day and year first above written.
BUYER:
INVICTA GROUP INC.
By: /s/ William Forhan
--------------------
William Forhan, President
SELLER'S SOLE SHAREHOLDERS
Denise Frances Peterson, Sole Shareholder
____________________________________
Thomas Peterson,
Spouse of Denise Frances Peterson
Carolyn Ann Wright, Sole Shareholder
SELLER:
JAMAICAN TRAVEL SPECIALIST, INC.
By: /s/ Denise Frances Peterson
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Denise Frances Peterson, President
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