Asset Purchase Agreement
AND
ASSET PURCHASE AGREEMENT, dated as of this _________day of _________ _____________________corporations (collectively the "Seller"), and _________________(the "Buyer").
WITNESSETH: WHEREAS, the Seller and _________, (collectively the "Shareholder") are engaged in __________________________________in the United States, Canada and Internationally (the "Business"); and WHEREAS, the Buyer desires to purchase the assets of the Business from the Seller, and the Seller desires to sell such assets to the Buyer, in each case upon the terms and subject to the conditions set forth in this Agreement; NOW, THEREFORE, in consideration of the foregoing and the respective covenants and agreements hereinafter contained, the parties hereby agree as follows:
SECTION 1. DEFINITIONS As used in this Agreement, the following terms shall have the following meanings: "Accounts Receivable" shall mean all accounts and notes receivable of the Seller relating to the Business, existing on the Closing Date; "Affiliates" shall mean ___________________; "Assigned Contracts" shall mean the rights of the Seller under, collectively, the Leased Real Property and the Contracts as set forth on Schedule 5.10 and Schedule 5.16, respectively; "Assumed Liabilities" -- See Section 2.4; “Business” shall mean electrical repair, contracting, design, sales, rewind and manufacture service business in the United States, Canada and Internationally "Next Business Day" shall mean days other than Saturdays, Sundays and other legal holidays or days on which the principal office of Bank of the Bahamas, is closed; "Buyer" -- See the Recitals hereto; "Buyer's Event of Breach" See Section 9.4; "Buyer Indemnitees" -- Section 9.1; "Closing" -- See Section 4;
"Closing Balance Sheet" -- See Section 5.5; "Closing Date" -- See Section 4; "COBRA" shall mean the provisions of the Code, ERISA and the Public Health Service Act enacted by Sections 10001 through 10003 of the Consolidated Omnibus Budget Reconciliation Act of 1985 (P.L.99-272), including any subsequent amendments to such provisions. "Code" shall mean the Internal Revenue Code of 1986, as amended; "Contracts" shall mean, collectively, the Leases, Purchase Orders, Employment and Labor Agreements and Other Contracts, including, without limitation, those described in Section 5.16 hereto; "Effective Date" -- See Section 2.2 "Equipment and Machinery" shall mean (i) all the equipment, machinery, furniture, fixtures and improvements, spare parts, supplies and vehicles owned or leased by the Seller with respect to the operations of the Business on the Closing Date (including, without limitation, all such items as set forth on the Closing Balance Sheet), (ii) all the replacements for any of the foregoing owned or leased by the Seller, (iii) any rights of the Seller to the warranties (to the extent assignable) and licenses received from manufacturers and sellers of the aforesaid items and (iv) any related claims, credits, rights of recovery and set-off with respect thereto; amended; "ERISA" shall mean the Employee Retirement Income Security Act of 1974, as "Excluded Liabilities" -- See Section 2.4; "Files and Records" shall mean all files and records, whether in hard copy or magnetic or optical format, of the Seller specifically relating to the Business or the Purchased Property, including, without limitation, the following types of files and records specifically relating to the Business: student (including, but not limited to student applications and medical records) and vendor files, equipment maintenance records, equipment warranty information and all files relating to employees of the Business employed by the Buyer following the Closing, correspondence with national, state, provincial and local governmental agencies relating to the operation of the Business and related files and records of the Seller, except that Seller shall maintain ownership of all accounting, business and tax records prior to Closing Date and Buyer shall have reasonable access to those records;
"Government" shall mean any agency, division, subdivision, audit group or procuring office of the Government of the United States or Canada or any foreign government, including the employees or agents thereof; "Intangible Assets" shall mean all intangible personal property rights, including, without limitation the name "____________", all rights on the part of the Seller to proceeds of any insurance policies and all claims on the part of the Seller for recoupment, reimbursement and coverage under any insurance policies, in each case in connection with the Business, and all goodwill of the Seller relating to the Business, and including, without limitation, those items listed in Schedule 5.12; "Intellectual Property" shall mean all letters patents, patent qualifications, trademarks, service marks, trade names, brands, private labels, copyrights, know-how, trade secrets and licenses and rights with respect to the foregoing that the Seller owns or possesses the rights to
2
use relating to the Purchased Property or the operations of the Business, including, without limitation, those items listed in Schedule 5.12 hereto; "Inventory" means (i) all the inventoriable supplies owned by the Seller on the Closing Date (including, without limitation, all such items as set forth on the Closing Balance Sheet) specifically for use in the operations of the Business, (ii) any supplies delivered to the Business after the Closing Date which the Seller has agreed to purchase in accordance with Section 5.17 and (iii) any and all rights of the Seller to the warranties received from its suppliers with respect to such inventory (to the extent assignable) and related claims, credits, rights of recovery and set-off with respect thereto; "Leased Real Property" -- See Section 5.10; "Leases" -- See Section 5.10; "Licenses and Permits" -- See Section 5.13; "Lien" means any mortgage, pledge, security interest, encumbrance, lien (statutory or other) or conditional sale agreement. "Losses" -- See Section 9.1; "Obsolete Inventory" -- See Section 5.17; "Occurrences" -- See Section 5.20(b); "Operating Income" -- shall mean, with respect to a specified period of time, the aggregate revenue from operations of the Business for services rendered post Closing Date during such period minus all expenses directly incurred during such period in operating the Business including, but not limited to, Business expenses, Business salaries, fees and expenses of outside services and support services, accounting expenses, legal expenses, administrative expenses, insurance expenses, administrative salaries (all as computed under the accrual method of accounting), and general corporate overhead in an amount equal to 5 % of the Business' aggregate revenue. "Other Contracts" shall mean all Equipment and Machinery leases, and all loan agreements, security agreements, partnership or joint venture agreements, license agreements, service contracts, employment, commission and consulting agreements, suretyship contracts, letters of credit, reimbursement agreements, distribution agreements, contracts or commitments limiting or restraining the Seller with respect to the Business from engaging or competing in any lines of business or with any person, firm or corporation, documents granting the power of attorney with respect to the affairs of the Seller, agreements not made in the ordinary course of business of the Business, options to purchase any assets or property rights of the Business, working capital maintenance or other form of guaranty agreements, and all other agreements to which the Seller is a party and which are related to the operation of the Business, but excluding Leases; "Person" shall mean any individual, corporation, partnership, joint venture, association, joint-stock company, trust, unincorporated organization or Government; "Premises" shall mean the Leased Real Property; "Purchase Orders" shall mean all the Seller's outstanding purchase orders, contracts or other commitments to suppliers of goods and services for materials, supplies or other items used in the Business; "Purchase Price" -- See Section 3.1; "Purchased Property" shall mean the Assigned Contracts, Equipment and Machinery, Files and Records, Intangible Assets, customers, client and students, Telephone
3
Numbers, Intellectual Property, Inventory, Licenses and Permits (to the extent transferable by the Seller), Premises, any prepaid expenses and other assets relating to the operations of the Business on the Closing Date (including, without limitation, all such items as are set forth on the Closing Balance Sheet) and all software, software systems, databases and all other information systems used in the Business and includes all the tangible and intangible assets of the Seller used in the Business and related thereto; "Seller" shall have the meaning set forth in the Recitals hereto; "Seller's Event of Breach" -- See Section 9.1; "Seller Indemnitees" -- See Section 9.4; "Surplus Inventory" -- See Section 5.17; "Taxes" shall mean for all purposes of this Agreement all taxes however denominated, including any interest, penalties or additions to tax that may become payable in respect thereof, imposed by any governmental body, which taxes shall include, without limiting the generality of the foregoing, all income taxes, payroll and employee withholding taxes, unemployment insurance, social security, sales and use taxes, excise taxes, franchise taxes, gross receipts taxes, occupational taxes, real and personal property taxes, stamp taxes, transfer taxes, workmen's compensation taxes and other obligations of the same or a similar nature, whether arising before, on or after the Closing Date; and "Tax" shall mean any one of them; and "Tax Returns" shall mean any return, report, information return or other document (including any related or supporting information) filed or required to be filed with any governmental body in connection with the determination, assessment, collection or administration of any Taxes.
SECTION 2. PURCHASE AND SALE OF THE PURCHASED PROPERTY Section 2.1. Transfer of Assets. Subject to the terms and conditions herein set forth, the Seller shall sell, convey, transfer, assign and deliver to the Buyer, and the Buyer shall purchase and accept from the Seller, on the Effective Date, all right, title and interest of the Seller and its Affiliates in and to the Purchased Property, wherever located, except as listed on Schedule 2.1. Section 2.2. Effective Date. The sale, transfer, assignment and delivery by the Seller of the Purchased Property to the Buyer, as herein provided, shall be on the Closing Date by deeds, bills of sale, endorsements, assignments and other instruments of transfer and conveyance reasonably satisfactory in form and substance to counsel for the Buyer, and shall be effective the 15th day of February, 1999 ("Effective Date"). Section 2.3. Subsequent Documentation. The Seller shall, at any time and from time to time after the Closing Date, upon the request of the Buyer and at the expense of the Seller, do, execute, acknowledge and deliver, or cause to be done, executed, acknowledged and delivered, all such further deeds, assignments, transfers and conveyances as may be reasonably required for the better assigning, transferring, granting, conveying and confirming to the Buyer or its successors and assigns, or for aiding and assisting in collecting and reducing to possession, any or all of the Purchased Property. The Seller hereby constitutes and appoints, effective as of the Closing Date, the Buyer, its successors and assigns as the true and lawful attorney of the Seller with full power of substitution in the name of the Buyer or in the name of the Seller but for the benefit of the Buyer (a) to collect for the account of the Buyer any item of
4
Purchased Property, and (b) to institute and prosecute all proceedings which the Buyer may in its discretion deem proper in order to assert or enforce any right, title or interest in, to or under the Purchased Property and to defend or compromise (subject to Section 9, if applicable) any and all actions, suits or proceedings in respect of any of the Purchased Property. The Buyer shall be entitled to retain for its own account any amounts collected pursuant to the foregoing powers, including any amounts payable as interest in respect thereof. Section 2.4. Assumption of Liabilities. From and after the Closing, the Buyer shall assume and the Buyer hereby agrees to pay, perform and discharge when due all liabilities of the Seller created after the Effective Date and directly related to the Business (i) arising pursuant to the terms of the Leases, (ii) arising pursuant to the terms of Contracts referred to in Schedule 5.16 or, (iii) arising after the Closing Date (the "Assumed Liabilities"), provided, however, that the Buyer shall not assume (and the term "Assumed Liabilities" shall not be deemed to include) (a) any liabilities with respect to Taxes retained by Seller pursuant to Section 8 hereof, (b) any liability relating to the Plans (as such term is defined in Section 5.18), (c) any liabilities with respect to Other Contracts arising prior to the Closing Date or (d) any other liability not expressly assumed pursuant to this Agreement notwithstanding the inclusion of any such liability on the Closing Balance Sheet. All the liabilities and obligations of the Seller other than the Assumed Liabilities are hereinafter referred to as the "Excluded Liabilities."
SECTION 3. PURCHASE PRICE Section 3.1. Purchase Price. The purchase price for the sale and transfer of the Purchased Property is Sixty Thousand ($60,000.00) consisting of: Twenty Thousand and 00/100 Dollars ($20,000.00) and approx. Forty Thousand ($40,000.00) dollars in equipment less any registration fees and prepaid tuition collected by Seller prior to Closing and allocable to Buyer (collectively, the "Purchase Price"). Section 3.2. Payment of Purchase Price. In payment for the Purchased Property, the Buyer will pay the balance as follows: $5,000.00 on Effective Date $10,000.00 30days after the Effective Date and reconciliation set forth in section 3.3 $5,000.00 45 days after the Effective Date and reconciliation set forth in section 3.3 Section 3.3 Reconciliation of Purchase Price. The parties agree that within thirty (30) days of the Closing Date to perform a reconciliation of accounts payable and accounts receivable and to make payment to the respective party accordingly.
SECTION 4. CLOSING The closing hereunder (the "Closing") shall take place at the offices of Buyer at Mississauga, Ontario on or about February 15th 1999, or at such other place and time as may be mutually agreed to by the parties hereto (the "Closing Date").
SECTION 5. REPRESENTATIONS AND WARRANTIES OF THE SELLER
5
The Seller hereby represents and warrants to the Buyer as follows: Section 5.1. Corporate Organization. The Seller is a corporation duly organized, validly existing and in good standing under the laws of the Province of Ontario, Canada, and has all requisite corporate power and authority to own its properties and assets and to conduct its businesses as now conducted. Copies of the Certificate or Articles of Incorporation and By-laws (or equivalent documents) of the Seller, with all amendments thereto to the date hereof, have been furnished to the Buyer or its representatives, and such copies are accurate and complete as of the date hereof. Section 5.2. Authorization and Validity of Agreement. The Seller has all requisite corporate power and authority to enter into this Agreement and to carry out its obligations hereunder. The execution and delivery of this Agreement and the performance of the Seller's obligations hereunder have been duly authorized by all necessary corporate action by the Board of Directors and stockholders of the Seller, and no other corporate proceedings on the part of the Seller are necessary to authorize such execution, delivery and performance. This Agreement has been duly executed by the Seller and constitutes its valid and binding obligation, enforceable against it in accordance with its terms. Section 5.3. No Conflict or Violation. The execution, delivery and performance by the Seller of this Agreement (a) does not and will not violate or conflict with any provision of the Certificate or Articles of Incorporation or Bylaws (or equivalent documents) of the Seller, (b) to the best knowledge of the Seller, does not and will not violate any provision of law, or any order, judgment or decree of any court or other governmental or regulatory authority, (c) does not violate or result in a breach of or constitute (with due notice or lapse of time or both) a default under any contract, lease, loan agreement, mortgage, security agreement or other agreement or instrument to which the Seller is a party or by which it is bound or to which any of its properties or assets is subject, and (d) will not result in the creation or imposition of any Lien upon any of the Purchased Property, or result in the cancellation, modification, revocation or suspension of any of the licenses, franchises, permits, authorizations or approvals referred to in Section 5.13. Section 5.4. Consents and Approvals. Schedule 5.4 sets forth a true and complete list of each consent, waiver, authorization or approval of any governmental or regulatory authority, domestic or foreign, or of any other person, firm or corporation, and each declaration to or filing or registration with any such governmental or regulatory authority, that is required in connection with the execution and delivery of this Agreement by the Seller or the performance by the Seller of its obligations hereunder. Section 5.5. Balance Sheet. The Seller has delivered to the Buyer copies of (a) the accrual basis balance sheet of the Business as of January 29th ,1999 (the "Closing Balance Sheet" and attached hereto as Schedule 5.5), (b) a federal tax return relating to the Business for the most recent tax year and (c) a statement of assets and liabilities and a statement of operations of the Business dated as of a recent date, compiled by Seller's certified public accountant, a form of which is reasonably satisfactory to the Buyer (collectively, the "Interim Financial Statements" and together with the Closing Balance Sheet, the "Financial Statements"). The Financial Statements (i) are accurate and do not omit any information with respect to the financial condition of the Business as of their respective dates necessary to not them misleading, (ii) are complete, correct and in accordance with the books of account and records of the Seller, and (iii) can be legitimately reconciled with the financial statements and the financial
6
records maintained and the accounting methods applied by the Seller for federal income tax purposes. Section 5.6. Absence of Certain Changes or Events. (a) Except as set forth in Schedule 5.6, since January 29th ,1999, there has not been:
(i) any material adverse change in the business, operations, properties, assets or condition (financial or other) of the Business, or any event that has had a material adverse effect on the foregoing, and no factor or condition exists and no event has occurred that would reasonably be likely to result in any such change; (ii) any material loss, damage, destruction or other casualty to the Purchased Property (other than any for which insurance awards have been received or guaranteed); (iii) any change in any method of accounting or accounting practice of the Business or the Seller relating to the Business; or (iv) any loss of the employment, services or benefits of any key employee. (b) Since January 29th ,1999, the Seller has operated the Business in the ordinary course of its business consistent with past practice and, except as set forth in Schedule 5.6 hereto, has not: (i) incurred any obligation or liability (whether absolute, accrued, contingent or otherwise) relating to the operations of the Business except trade or business obligations in the ordinary course of business consistent with past practice; (ii) failed to discharge or satisfy any Lien or pay or satisfy any obligation or liability (whether absolute, accrued, contingent or otherwise) arising from the operation of the Business, other than liabilities being contested in good faith and for which adequate reserves have been provided and Liens arising in the ordinary course of business that do not, individually or in the aggregate, interfere materially with the use, operation, enjoyment or marketability of any of the Purchased Property; (iii) mortgaged, pledged or subjected to any Lien any of the Purchased Property, except for mechanics' liens and Liens for taxes not yet due and payable and Liens arising in the ordinary course of business that do not, individually or in the aggregate, interfere materially with the use, operation, enjoyment or marketability of any of the Purchased Property; (iv) sold or transferred any of the assets of the Business material to the Business or canceled any debts or claims, or waived or released any rights material to the Business relating to the operations of the Business, except in the ordinary course of business consistent with past practice which in the aggregate are not material; (v) defaulted on any material obligation relating to the operations of the Business; (vi) entered into any transaction material to the Business or relating to the Business, except in the ordinary course of business consistent with past practice; (vii) granted any increase in the compensation or benefits of employees of the Business other than increases in accordance with past practice not exceeding ten percent (10%) of said compensation or benefits, or entered into any employment or severance agreement or arrangement with any of them; (viii) made any capital expenditure or additions to the property and equipment used in the operations of the Business other than ordinary repairs and maintenance;
7
(ix) issued, granted or sold any common stock or other equity securities, debt securities, rights or other securities of the Seller; (x) deferred the payment of any expense or Liability, or prepaid any expense or Liability, in anticipation of the consummation of the transactions contemplated hereby; (xi) decreased by a material amount the quantity of Equipment and Machinery or Inventory maintained for use in the Business; or foregoing. (xii) entered into any agreement or made any commitment to do any of the
(c) Except as set forth in Schedule 5.6(c), since January 29th ,1999, Seller has not received, deposited or liquidated any receivables, prepaids or other assets or funds received. Seller and Shareholder will pay any amounts which are, or pursuant to this Section should have been, set forth on Schedule 5.6(c) to Buyer within thirty (30) days of the Closing Date. Section 5.7. Tax Matters. Except as set forth in Schedule 5.7, all Tax Returns required to be filed before the Closing Date in respect of the Seller have been filed, and the Seller has paid, accrued or otherwise adequately reserved for the payment of all Taxes required to be paid in respect of the periods covered by such returns and has adequately reserved for the payment of all Taxes with respect to periods ended on or before the Closing Date for which tax returns have not yet been filed. All Taxes of the Seller have been paid or adequately provided for and the Seller knows of no proposed additional tax assessment against it not adequately provided for in the Closing Balance Sheet. In the ordinary course, the Seller makes adequate provision on its books for the payment of Taxes (including for the current fiscal period) owed by the Seller.
Section 5.8. Absence of Undisclosed Liabilities. The Seller does not have any indebtedness or liability, absolute or contingent, known or unknown, relating to the Business which is not shown or provided for on the Closing Balance Sheet. Except as shown in the Closing Balance Sheet, the Seller is not directly or indirectly liable upon or with respect to (by discount, repurchase agreements or otherwise), or obliged in any other way to provide funds in respect of, or to guarantee or assume, any debt, obligation or dividend of any person in connection with the Business, except endorsements in the ordinary course of business in connection with the deposit, in banks or other financial institutions, of items for collection. Section 5.9. Real Property. The Seller does not own any real property that is used in the Business. Section 5.10. Leases. (a) Schedule 5.10 sets forth a list of all properties in which the Seller has a leasehold interest and which is used in connection with the Business (each, a "Lease" and collectively, the "Leases"; the property covered by such Leases is referred to herein as the "Leased Real Property"). (b) Except as set forth in Schedule 5.10, no Lease has been modified or amended in writing. No party to any Lease has given the Seller written notice of or made a claim with respect to any breach or default the consequences of which, individually or in the aggregate, would have a material adverse effect on the Business.
8
(c) Except as set forth in Schedule 5.10, none of the Leased Real Property is subject to any sublease, license or other agreement granting to any person or entity any right to the use, occupancy or enjoyment of such property or any portion thereof. (d) To the Seller's best knowledge, the plumbing, electrical, heating, air conditioning, elevator, ventilating and all other mechanical or structural systems for which the Seller is responsible under the Leases in the buildings or improvements are, in good working order and condition, and the roof, basement and foundation walls of such buildings and improvements for which the Seller is responsible under the Leases are in good condition and free of leaks and other defects. To the Seller's best knowledge, all such mechanical and structural systems and such roofs, basement and foundation walls for which others are responsible under said Leases are in good working order and condition and free of leaks and other defects. Section 5.11. Equipment and Machinery. Schedule 5.11 sets forth a complete and correct list and brief description of each item of Equipment and Machinery having an original purchase cost or aggregate lease cost exceeding $1,000. The Seller has good title, free and clear of all title defects and objections, Liens (other than the Lien of current property taxes and assessments not in default, if any and the lien of any equipment lease assumed by Buyer not in default) to the Equipment and Machinery owned or leased by it. The Seller holds good and transferable leaseholds by it, in each case under valid and enforceable leases. The Seller is not in default with respect to any item of Equipment and Machinery purported to be leased by it, and no event has occurred that constitutes or with due notice or lapse of time or both may constitute default under any lease thereof. The Equipment and Machinery is sufficient and adequate to carry on the Business as presently conducted, and all items thereof are in good operating condition and repair. Section 5.12. Intellectual Property; Intangible Assets. (a) Schedule 5.12 sets forth a complete and correct listing of the Intellectual Property. Except as described in Schedule 5.12, all Intellectual Property listed therein is owned by the Seller, free and clear of all Liens and is in good standing and is not known to be the subject of any challenge. As of the date hereof, except as described in Schedule 5.12 there are no unresolved claims made and there has not been communicated to the Seller the threat of any claim that the holder of such Intellectual Property is in violation or infringement of any service mark, patent, trademark, trade name, trademark or trade name registration, copyright or copyright registration of any other Person. The Seller is the owner of the patents, patent licenses, trade names, trademarks, service marks, brand marks, brand names, copyrights, know-how, formula and other proprietary and trade rights necessary for the conduct of the Business as now conducted, and without any known conflict with the rights of others, and the Seller has not knowingly forfeited or otherwise relinquished any such patent, patent license, trade name, trademark, service mark, brand mark, brand name, copyright, know-how, formula or other proprietary right necessary for the conduct of the Business as conducted on the date hereof. The Seller owns or has the right to use all computer software, software systems and databases and all other information systems included in the Purchased Property. (b) Schedule 5.12 sets forth a true and complete list of all of the Intangible Assets and a summary description of each such item. There is no restriction affecting the use of any of the Intangible Assets, and no license has been granted with respect thereto. Each of the Intangible Assets is valid and in good standing, is not currently being challenged, is not involved in any pending or threatened administrative or judicial proceeding, and does not conflict with any rights of any other person, firm or corporation. The Seller's rights in and to the Intangible Assets are sufficient and adequate in all respects to permit the conduct of the Business as now conducted and none of the products or operations of the Business involves any infringement of any proprietary right of any other Person.
9
Section 5.13. Licenses and Permits. (a) Schedule 5.13(a) sets forth a true and complete list of all licenses, permits, franchises, authorizations and approvals issued or granted to the Seller with respect to the Business by the Government of the United States or Canada, any state or provincial or local government, any foreign, national or local government, or any department, agency, board, commission, bureau or instrumentality of any of the foregoing (the "Licenses and Permits"), and all pending applications therefor. Such list contains a summary description of each such item and, where applicable, specifies the date issued, granted or applied for, the expiration date and the current status thereof. Each License and Permit has been duly obtained, is valid and in full force and effect, and is not subject to any pending or threatened administrative or judicial proceeding to revoke, cancel, suspend or declare such License and Permit invalid in any respect. The Licenses and Permits are sufficient and adequate in all respects to permit the continued lawful conduct of the Business in the manner now conducted and none of the operations of the Business are being conducted in a manner that violates any of the terms or conditions under which any License and Permit was granted. Except as set forth in Schedule 5.13(a), no such License and Permit will in any way be affected by, or terminate or lapse by reason of, the transactions contemplated by this Agreement. (b) Neither Shareholder nor, to the best of Seller's knowledge, any other individual employed by or acting as an independent contractor for Sellers ever has (a) had its child care license in any jurisdiction, denied, surrendered, limited, suspended, revoked or subject to probationary conditions or is subject to any pending proceedings regarding any of the foregoing, (b) had its membership in any local state, provincial or national electrical society or organization revoked, suspended or not renewed or is subject to any pending proceedings regarding any of the foregoing, (c) received treatment for alcoholism, drug abuse, sexual misconduct or psychiatric disorders, or (d) been the subject of administrative sanctions or been suspended from or lost eligibility for participating in any governmental or non-governmental insurance or other programs or is subject to any pending proceedings regarding any of the foregoing. Section 5.14. Compliance with Law. To the best of Seller's knowledge, the operations of the Business have been conducted in accordance with all applicable laws, regulations, orders and other requirements of all courts and other governmental or regulatory authorities having jurisdiction over the Seller and its assets, properties and operations, including, without limitation, all such laws, regulations, orders and requirements promulgated by or relating to consumer protection, equal opportunity, health, environmental protection, architectural barriers to the handicapped, fire, zoning and building and occupation safety. The Seller has not received notice of any violation of any such law, regulation, order or other legal requirement, and is not in default with respect to any order, writ, judgment, award, injunction or decree of any national, state, provincial or local court or governmental or regulatory authority or arbitrator, domestic or foreign, applicable to the Business or any of the assets, properties or operations with respect thereto. The Seller does not have knowledge of any proposed change in any such laws, rules or regulations other than laws of general applicability) that would materially and adversely affect the transactions contemplated by this Agreement or all or a material part of the Business or the Purchased Property. None of the Business is dependent upon or results from any payments, direct or indirect, in the nature of bribes, kick-backs, or similar payments to any government or agency thereof or any other Person or in the nature of contributions to any domestic or foreign political party or candidate. Section 5.15. Litigation. Except as set forth in Schedule 5.15, there are no claims, actions, suits, proceedings, labor disputes or investigations pending or, to the best knowledge of the Seller, threatened, before any national, state, provincial or local court or governmental or regulatory authority, domestic or foreign, or before any arbitrator of any nature, brought by or against the Seller or any of its officers, directors,
10
employees, agents or Affiliates involving, affecting or relating to the Business, the Purchased Property or the transactions contemplated by this Agreement, nor is any basis known to the Seller or any of its directors or officers for any such action, suit, proceeding or investigation. Schedule 5.15 sets forth a list and a summary description of all such pending actions, suits, proceedings, disputes or investigations. Neither the Business nor the Purchased Property is subject to any order, writ, judgment, award, injunction or decree of any national, state, provincial or local court or governmental or regulatory authority or arbitrator, domestic or foreign, that affects the Business or the Purchased Property, or that would or might interfere with the transactions contemplated by this Agreement. Section 5.16. Contracts. (a) Schedule 5.16 sets forth a complete and correct list and a summary description of all Contracts (as in effect on the date hereof). (b) To the Seller's best knowledge, each Contract is valid, binding and enforceable against the parties thereto in accordance with its terms, and in full force and effect on the date hereof. The Seller has performed all obligations required to be performed by it to date hereunder, and is not in default or delinquent in performance, status or any other respect (claimed or actual) in connection with, any Contract, and no event has occurred which, with due notice or lapse of time or both, would constitute such a default. To the best knowledge of the Seller, no other party to any Contract is in default in respect thereof, and no event has occurred which, with due notice or lapse of time or both, would constitute such a default. The Seller has delivered to the Buyer or its representatives true and complete originals or copies of all the Contracts.
(c) Except as set forth in Schedule 5.16, with respect to each Contract, the Seller has complied with and expects to comply with all material terms thereof, all certifications and representations of the Seller with respect thereto and all statutes and regulations applicable thereto. Section 5.17. Inventories. The Inventories are carried at not more than cost and do not include any Obsolete Inventory or Surplus Inventory. As used herein, "Obsolete Inventory" is Inventory which, at the Closing Date was not usable in the lawful and ordinary course of business of the Business as now conducted and has been proposed by the Seller to be conducted because of legal restrictions, damage, physical deterioration or for any other cause in each case net of reserves provided therefor on the Closing Balance Sheet; and "Surplus Inventory" is Inventory that, at the Closing Date exceeded known or anticipated requirements in the reasonable business judgment of the Seller. To the extent any Inventory is delivered to the Business after the Closing Date with respect to purchase orders entered into prior to the Closing Date in accordance with Section 5.6, the Buyer may, in its sole discretion, agree to accept any such delivery and to assume responsibility for any amounts due to the supplier of such Inventory. Section 5.18. Employee Plans and Benefits. (a) The Seller has complied in all material respects with the requirements of Section 4980B of the Code and Sections 601 to 608 of ERISA relating to continuation coverage for group health plans. Schedule 5.18(a) lists every pension, savings, retirement, severance, health, insurance or other employee benefit or fringe benefit plan which Seller maintains, or has any obligation to contribute to, with respect to the Business (collectively referred to herein as the "Plans"). (b) For each of the employees of the Business listed on Schedule 5.18(b), the Seller has either paid or adequately provided for the payment of all benefits such employees are entitled to receive as of the Effective Date, including, without limitation, all accrued vacation, sick or personal
11
time and benefits due under any Plans other than accrued vacation and sick pay from January 29th ,1999 to the Effective Date which obligation Buyer assumes. Seller represents that other than vacation and sick pay since January 29th ,1999, there are no such accruals. (c) All contributions (including all employer contributions and employee salary reduction contributions) required to have been made under any of the Plans or by law (without regard to any waivers granted under Section 412 of the Code) to any funds or trusts established thereunder or in connection therewith have been made by the due date thereof (including any valid extension), and all contributions for any period ending on or before the Closing Date which are not yet due will have been paid or accrued on or prior to the Closing Date. (d) True, correct and complete copies of each of the Plans have been delivered to the Buyer by the Seller. (e) The Plans have been maintained, in all material respects, in accordance with their terms and with all provisions of ERISA (including rules and regulations thereunder) and other applicable federal and state, provincial laws and regulations, and the Business has no liability in respect of any such Plans as a result of ERISA or other applicable law. Section 5.19. Insurance. Schedule 5.19 lists the fidelity bonds and the aggregate coverage amount and type and generally applicable deductibles of all policies of general and professional liability and other forms of insurance insuring the Business and the Purchased Property. The Seller has furnished a true, complete and accurate copy of all such policies and bonds to the Buyer. Except as set forth in Schedule 5.19, all such policies and bonds are in full force and effect and sufficient for all applicable requirements of law. Except as set forth in Schedule 5.19, all premiums on such policies and bonds are current and will remain current through the Closing Date. The Seller is not in material default under any provisions of any such policy of insurance nor has received notice of cancellation of any such insurance. There is no claim by the Seller pending under any of such policies or bonds as to which coverage has been questioned, denied or disputed by the underwriters of such policies or bonds. Since January 29th ,1999, except as set forth in Schedule 5.19, the Seller has not received any written notice from or on behalf of any insurance carrier issuing such policies, that insurance rates will hereafter be substantially increased (except to the extent that insurance rates may be increased for all similarly situated risks), that there will hereafter be a cancellation, or an increase in a deductible (or an increase in premiums in order to maintain an existing deductible) or non-renewal of existing policies, or that alteration of any Equipment and Machinery or any improvements to Leased Real Property, the purchase of additional Equipment and Machinery, or modification of any of the methods of doing business of the Business, will be required or suggested. The insurance maintained by the Seller in connection with the Business is adequate in accordance with the requirements of any applicable leases and is in at least the minimum amount required by currently applicable environmental regulations. After the Closing the Seller will provide the Buyer with all reasonable assistance and information necessary to enable the Buyer to obtain and maintain insurance coverage for the Business and the Purchased Property. Section 5.20. Accuracy of Information. None of the Seller's representations, warranties or statements contained in this Agreement, or in the schedules or exhibits hereto, contains any untrue statement of a material fact or omits to state any material fact necessary in order to make any of such representations, warranties or statements in light of the circumstances under which they were made not misleading. All information relating to the Business that is known or would on reasonable inquiry be known to the Seller and that may be material to a purchaser for value of the Purchased Property has been disclosed in writing to the Buyer.
12
Section 5.21. Survival. Each of the representations and warranties set forth in this Section 5 shall survive the Closing, notwithstanding any investigation on the part of the Buyer, for a period terminating on the fourth anniversary of the Closing Date, provided, however, that the representations and warranties contained in Sections 5.7 shall survive indefinitely.
SECTION 6. REPRESENTATIONS AND WARRANTIES OF THE BUYER The Buyer hereby represents and warrants to the Seller as follows: Section 6.1. Corporate Organization. The Buyer is a Bahamas corporation duly formed and validly existing under the laws of the country of The Bahamas and has all requisite power and authority to own its properties and assets and to conduct its businesses as now conducted. Section 6.2. Authorization and Validity of Agreement. The Buyer has all requisite power and authority to enter into this Agreement and to carry out its obligations hereunder. The execution and delivery of this Agreement and the performance of the Buyer's obligations hereunder have been duly authorized by all necessary action by the partners of the Buyer, and no other proceedings on the part of the Buyer are necessary to authorize such execution, delivery and performance. This Agreement has been duly executed by the Buyer and constitutes its valid and binding obligation, enforceable against it in accordance with its terms. Section 6.3. No Conflict or Violation. The execution, delivery and performance by the Buyer of this Agreement does not and will not violate or conflict with any provision of law, or any order, judgment or decree of any court or other governmental or regulatory authority, nor violate nor will result in a breach of or constitute (with due notice or lapse of time or both) a default under any contract, lease, loan agreement, mortgage, security agreement, trust indenture or other agreement or instrument to which the Buyer is a party or by which it is bound or to which any of its properties or assets is subject. Section 6.4. Consents and Approvals. The execution, delivery and performance of this Agreement on behalf of the Buyer does not require the consent or approval of, or filing with, any government, governmental body or agency or other entity or person except: (i) as may be required to transfer any Licenses and Permits; and (ii) such consents, approvals and filings, of which the failure to obtain or make would not, individually or in the aggregate, have a material adverse effect on the ability of the Buyer to consummate the transactions contemplated hereby. Section 6.5. Survival. Each of the representations and warranties set forth in this Section 6 shall survive the Closing, notwithstanding any investigation on the part of the Seller, for a period terminating on the fourth (4th) anniversary of the Closing Date.
SECTION 7. COVENANTS OF THE SELLER The Seller covenants as follows: Section 7.1. Consents and Approvals.
13
The Seller shall diligently assist and cooperate with the Buyer in preparing and filing all documents required to be submitted by the Buyer to any governmental or regulatory authority, domestic or foreign, in connection with obtaining any governmental consents, waivers, authorizations or approvals listed on Schedule 5.4 (which assistance and cooperation shall include, without limitation, timely furnishing to the Buyer all information concerning the Seller that counsel to the Buyer determines is required to be included in such documents or would be helpful in obtaining any such required consent, waiver, authorization or approval). Section 7.2. Further Assurances. (a) Upon the request of the Buyer at any time after the Closing Date, the Seller shall forthwith execute and deliver such further instruments of assignment, transfer, conveyance, endorsement, direction or authorization and other documents as the Buyer or its counsel may request to perfect title of the Buyer and its successors and assigns to the Purchased Property or otherwise to effectuate the purposes of this Agreement. (b) Upon the request of the Buyer, the Seller shall provide the Buyer with true and complete copies of the plan documents, related trust agreements (where applicable) and summary plan descriptions relating to any of the Plans (as defined in Section 5.18).
Section 7.3. Covenant Not To Compete. (a) The Seller and Shareholder have agreed that, for a period of seven (7) years after the Closing Date so long as Buyer is not in material default of this Agreement, they shall not provide or have any interest, directly or indirectly, in any Person that provides, whether as employee, officer, director, shareholder, partner, contractor, consultant or advisor, electrical services or related administrative or management services to electrical client or company or office within five hundred (500) miles of the Business. (b) The Seller agrees that a monetary remedy for a breach of the agreement set forth in Section 7.3(a) hereof will be inadequate and impracticable and further agrees that such a breach would cause the Buyer irreparable harm, and that the Buyer shall be entitled to temporary and permanent injunctive relief without the necessity of proving actual damages. In the event of such a breach, the Seller agrees that the Buyer shall be entitled to such injunctive relief, including temporary restraining orders, preliminary injunctions and permanent injunctions as a court of competent jurisdiction shall determine. (c) If any provision of this Section 7.3 is invalid in part, it shall be curtailed, both as to time and location, to the minimum extent required for its validity under the laws of The Bahamas and shall be binding and enforceable with respect to the Seller as so curtailed. (d) Additionally, the Nondisclosure and Noninterference Agreement entered into by and between the Shareholder and the Buyer on February 12th , 1999 and attached to the Asset Purchase Agreement of even date shall survive the expiration, transfer or termination of the Asset Purchase Agreement and shall survive the closing of this Agreement. Section 7.4. Non-Solicitation of Employees. The Seller and its Affiliates agree, for the seven-year period commencing on the Closing Date, not to make, offer, solicit or induce to enter into, directly or indirectly, any written or oral arrangement, agreement or understanding regarding employment or retention as a consultant with any person who was, on the date hereof, a full-time employee of the Seller and employed in the Business, without the written consent of the Buyer. Section 7.5. Assignment of Contracts and Warranties.
14
The Seller hereby assigns to the Buyer all its rights under the Assigned Contracts. Notwithstanding the foregoing, no Assigned Contract shall be assigned contrary to law or the terms of such Assigned Contract and, with respect to Assigned Contracts that cannot be assigned to the Buyer, the performance obligations of the Seller thereunder shall, unless not permitted by such Assigned Contract, be deemed to be subleased or subcontracted to the Buyer until such Assigned Contract has been assigned. The Buyer shall assist the Seller in obtaining any necessary approvals to such subleases and subcontracts. The Seller shall use its best efforts to obtain all necessary consents and the Buyer shall take all necessary actions to perform and complete all Assigned Contracts in accordance with their terms if neither assignment, subleasing nor subcontracting is permitted by the other party, and the Seller shall pay over to the Buyer any amounts received by the Seller after the Effective Date as a result of performance by the Buyer of such Assigned Contracts. Section 7.6. Licensing. For a period of the earlier of ninety (90) days or until Buyer becomes properly licensed by all the necessary governmental entities, Seller agrees to allow Buyer to operate the Business under its then existing licenses, without any claim against the Buyer for compensation therefor.
Section 7.7. Instruction of Buyer. For a period of thirty (30) days from the Closing Date, Seller shall be available during normal business hours to instruct the Buyer and acquaint the Buyer with the conduct and operation of the Business and to familiarize Buyer with the operation of the Business without compensation.
SECTION 8. TAXES The parties hereto hereby covenant and agree as follows: Section 8.1. Taxes. The Seller shall be responsible for the preparation and filing of all required tax returns and shall be liable for the payment of any and all Taxes relating to all periods through the Effective Date, except as otherwise provided pursuant to the proration provisions of Section 8.2 hereof. The Buyer shall be responsible for the preparation and filing of any and all required tax returns and shall be liable for the payment of any and all Taxes relating to any and all periods after the Effective Date except as otherwise provided pursuant to the proration provisions of Section 8.2 hereof. Section 8.2. Proration of Taxes. All real and personal property taxes with respect to the tangible assets of the Business being transferred to the Buyer pursuant to this Agreement shall be prorated as of the Effective Date on the Closing Balance Sheet in accordance with payments made before the Effective Date. Such prorations shall be based on the most recent tax statements received by the owner of such property as of the Effective Date, without later adjustment, All sales and use taxes and payroll taxes with respect to the Business being transferred to the Buyer pursuant to this Agreement shall be prorated based on the period to which they relate and shall be reflected on the Closing Balance Sheet in accordance with payments made prior to the Effective Date. The Seller shall be responsible for all such taxes allocable to all times through the Effective Date and the Buyer shall be responsible for all such taxes allocable to all times after the Effective Date. Following the Closing Date, each party shall, upon request of the other party, immediately reimburse the other party for any such taxes or other expenses for which said party is responsible but have been paid by the other party and for collections made by one party on behalf of the other party.
15
Section 8.3. Cooperation on Tax Matters. The Buyer and the Seller agree to furnish or cause to be furnished to each other, as promptly as practicable, such information and assistance relating to the Business as is reasonably necessary for the preparation and filing of any return, claim for refund or other required or optional filings relating to tax matters, for the preparation for and proof of facts during any tax audit, for the preparation for any tax protest, for the prosecution or defense of any suit or other proceeding relating to tax matters and for the answer to any governmental or regulatory inquiry relating to tax matters. The Seller agrees to retain possession of all accounting, business, financial and tax records and information which relate to the Business before the Effective Date, for the period not to exceed six years from the Closing Date. In addition, from and after the Closing Date, the Buyer agrees that it will not unreasonably withhold access by the Seller and its attorneys, accountants and other representatives (after reasonable notice and during normal business hours and with reasonable charge), to such personnel, books, records, documents and any or all other information relating to the Business as the Seller may reasonably deem necessary to properly prepare for, file, prove, answer, prosecute and/or defend any such return, filing, audit, protest, claim, suit, inquiry or other proceeding. Such access shall include, without limitation, access to any computerized information retrieval systems relating to the Business.
SECTION 9. INDEMNIFICATION Section 9.1. Indemnification by the Seller. Notwithstanding the Closing or the delivery of the Purchased Property and regardless of any investigation at any time made by or on behalf of the Buyer or of any knowledge or information that the Buyer may have, the Seller and Shareholder agree to indemnify and fully defend, save and hold the Buyer, any Affiliate of the Buyer and their respective directors, officers and employees (the "Buyer Indemnitees"), harmless if any Buyer Indemnitee shall at any time or from time to time suffer any damage, liability, loss, cost, expense (including all reasonable attorneys' fees), deficiency, interest, penalty, impositions, assessments or fines (collectively, "Losses") arising out of or resulting from, or shall pay or become obliged to pay any sum on account of, any Seller's Event of Breach. As used herein, "Seller's Event of Breach" shall be and mean any one or more of the following: (a) any untruth or inaccuracy in any representation of the Seller or the breach of any warranty of the Seller, (including, without limitation, (i) any misrepresentation in, or omission from, any statement, certificate, schedule, exhibit, annex or other document furnished pursuant to this Agreement by the Seller (or any of its representatives) to the Buyer (or any representative of the Buyer) and any misrepresentation in or omission from any document furnished to the Buyer in connection with the Closing; (ii) any and all liabilities of or claims against the Business, the Purchased Property, or any Buyer lndemnitee arising out of any action, suit, proceeding, dispute or investigation or order, writ, judgment, award, injunction or decree of the character described in Section 5.15 or out of any Contract to the extent not set forth in Schedule 5.16; (b) any failure of the Seller duly to perform or observe any term, provision, covenant, agreement or condition contained in this Agreement on the part of the Seller to be performed or observed; and (c) any claim or cause of action by any party against any Buyer lndemnitee, with respect to the Excluded Liabilities, provided, however, that the Seller and Shareholder shall have no obligation to make any payment under Section 9.1 (a) with respect to any representation or warranty made in good faith without actual knowledge or notice of falsity unless the aggregate amount to which all Buyer lndemnitees are entitled by reason of all such claims exceeds $1,000, it being
16
understood that once such amount is exceeded, the aggregate of all such claims shall be payable jointly and severally by the Seller and Shareholder on demand by the Buyer. Section 9.2. Procedures for Indemnification by the Seller. If a Seller's Event of Breach occurs or is alleged and a Buyer lndemnitee asserts that the Seller or Shareholder has become obligated to such Buyer lndemnitee pursuant to Section 9.1, or if any suit, action, investigation, claim or proceeding is begun, made or instituted as a result of which the Seller or Shareholder, may become obligated to a Buyer lndemnitee hereunder, such Buyer lndemnitee shall give written notice to the Seller. The Seller and Shareholder agree to defend, contest or otherwise protect the Buyer lndemnitee against any such suit, action, investigation, claim or proceeding at their sole cost and expense. The Buyer lndemnitee shall have the right, but not the obligation, to participate at its own expense in the defense thereof by counsel of the Buyer lndemnitee's choice and shall in any event cooperate with and assist the Seller to the extent reasonably possible. If the Seller and Shareholder fail timely to defend, contest or otherwise protect against such suit, action, investigation, claim or proceeding, the Buyer lndemnitee shall have the right to do so, including, without limitation, the right to make any compromise or settlement thereof, and the Buyer Indemnitee shall be entitled to recover the entire cost thereof from the Seller or Shareholder, including, without limitation, reasonable attorneys' fees, disbursements and amounts paid as the result of such suit, action, investigation, claim or proceeding. Section 9.3. Buyer's Right of Set-Off. In the event the Buyer has a claim against the Seller or Shareholder for indemnification pursuant to this Section 9, the Buyer may set-off the amount of such claim(s) against any amounts payable by the Buyer to the Seller pursuant to this Agreement or the agreements and documents referenced herein, provided that Buyer shall provide Seller with written notice of any such claim and Seller shall fail to cure any such claim within thirty (30) days from the date such notice is mailed. Neither the exercise of nor the failure to exercise such right of set-off shall constitute an election of remedies nor limit the Buyer in any manner in the enforcement of any other remedies that may be available to it.
SECTION 10.
MISCELLANEOUS
Section 10.1. Successors and Assigns. Except as otherwise provided in this Agreement, no party hereto shall assign this Agreement or any rights or obligations hereunder without the prior written consent of the other party hereto and any such attempted assignment without such prior written consent shall be void and of no force and effect, provided, that the Buyer may assign its rights hereunder to an affiliate, provided further, that no such assignment shall reduce or otherwise vitiate any of the obligations of the Seller or Buyer hereunder. This Agreement shall inure to the benefit of and shall be binding upon the successors and permitted assigns of the parties hereto. Section 10.2. Governing Law, Jurisdiction. This Agreement shall be construed, performed and enforced in accordance with, and governed by, the laws of The Bahamas, without giving effect to the principles of conflicts of laws thereof. The parties hereto irrevocably elect as the sole judicial forum for the adjudication of any matters arising under or in connection with this Agreement, and consent to the jurisdiction of, the courts of The Bahamas. Section 10.3. Expenses.
17
Except as otherwise provided herein, each of the parties hereto shall pay its own expenses in connection with this Agreement and the transactions contemplated hereby, including, without limitation, any legal and accounting fees, whether or not the transactions contemplated hereby are consummated. The Seller shall pay all state, provincial and local sales, transfer, excise, value-added or other similar taxes and all recording and filing fees that may be imposed by reason of the sale, transfer, assignment and delivery of the Purchased Property. Section 10.4. Broker's and Finder's Fees. Each of the parties represents and warrants that it has dealt with no broker or finder in connection with any of the transactions contemplated by this Agreement, and, insofar as it knows, no other broker or other person is entitled to any commission or finder's fee in connection with any of these transactions. Section 10.5. Severability. In the event that any part of this Agreement is declared by any court or other judicial or administrative body to be null, void or unenforceable, said provision shall survive to the extent it is not so declared, and all of the other provisions of this Agreement shall remain in full force and effect. Section 10.6. Notices. All notices, requests, demands and other communications under this Agreement shall be in writing and shall be deemed to have been duly given (i) on the date of service if served personally on the party to whom notice is to be given; (ii) on the day of transmission if sent via facsimile transmission to the facsimile number given below, and telephonic confirmation of receipt is obtained promptly after completion of transmission; (iii) on the day after delivery to Federal Express or similar overnight courier or the Express Mail service maintained by the United States or Canadian Postal Service; or (iv) on the fifth day after mailing, if mailed to the party to whom notice is to be given, by first class mail, registered or certified, postage prepaid and properly addressed, to the party as follows: If to the Seller: ___________________________ ___________________________ With Copy to: _______________________________ _______________________________ _______________________________ If to the Buyer:
With a Copy to:
Any party may change its address for the purpose of this Section by giving the other party written notice of its new address in the manner set forth above. Section 10.7. Amendments; Waivers.
18
This Agreement may be amended or modified, and any of the terms, covenants, representations, warranties or conditions hereof may be waived, only by a written instrument executed by the parties hereto, or in the case of a waiver, by the party waiving compliance. Any waiver by any party of any condition, or of the breach of any provision, term, covenant, representation or warranty contained in this Agreement, in any one or more instances, shall not be deemed to be nor construed as further or continuing waiver of any such condition, or of the breach of any other provision, term, covenant, representation or warranty of this Agreement. Section 10.8. Public Announcements. The parties agree that after the signing of this Agreement, neither party shall make any press release or public announcement concerning this transaction without the prior written approval of the other party unless a press release or public amendment is required by law. If any such announcement or other disclosure is required by law, the disclosing party agrees to give the nondisclosing party prior notice and an opportunity to comment on the proposed disclosure. Section 10.9. Entire Agreement. This Agreement contains the entire understanding between the parties hereto with respect to the transactions contemplated hereby and supersedes and replaces all prior and contemporaneous agreements and understandings, oral or written, with regard to such transactions. All schedules hereto and any documents and instruments delivered pursuant to any provision hereof are expressly made a part of this Agreement as fully as though completely set forth herein. Section 10.10. Parties in Interest. Nothing in this Agreement is intended to confer any rights or remedies under or by reason of this Agreement on any persons other than the Seller, and the Buyer and their respective successors and permitted assigns. Nothing in this Agreement is intended to relieve or discharge the obligations or liability of any third persons to the Seller or the Buyer. No provision of this Agreement shall give any third persons any right of subrogation or action over or against the Seller or the Buyer. Section 10.11. Scheduled Disclosures. Disclosure of any matter, fact or circumstance in a Schedule to this Agreement shall not be deemed to be disclosure thereof for purposes of any other Schedule hereto, Section 10.12. Section and Paragraph Headings. The section and paragraph headings in this Agreement are for reference purposes only and shall not affect the meaning or interpretation of this Agreement. Section 10.13. Counterparts. This Agreement may be executed in counterparts, each of which shall be deemed an original, but both of which shall constitute the same instrument. Section 10.14. Arbitration. The parties reaffirm the right of the Buyer to obtain injunctive relief or other equitable remedies in connection with the enforcement of Paragraphs 7.3 and 7.4; any and all other disputes arising out of, under, or in connection with or relating to this Agreement shall be settled by arbitration in The Bahamas, in accordance with the rules and procedures of the International Arbitration Association. Section 10.15. Attorneys' Fees.
19
The prevailing party in any litigation or arbitration arising under or in any way related to this Agreement shall be entitled to recover from the losing party its/his/her reasonable attorneys' fees and court costs, including those related to appeals. Section 10.16. Consequential Damages. Neither party shall be liable to the other party for consequential damages arising outside of the operations of the Business. Section 10.17. Rescission. Both parties agree that the remedy of rescission is hereby waived, except in the event of fraud of a party.
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be executed by their respective officers thereunto duly authorized as of the date first above written. "SELLER"
_____________________________ By: Title: Date:
"BUYER"
_____________________________ By: Title: Date:
20
Schedule to be added and listed Schedule 2.1 Schedule 5.4 Schedule 5.5 Schedule 5.6 Schedule 5.7 Schedule 5.10 Schedule 5.11 Schedule 5.12 Schedule 5.13 Schedule 5.15 Schedule 5.16 Schedule 5.18 Schedule 5.19
21