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ASSET PURCHASE AGREEMENT
THIS ASSET PURCHASE AGREEMENT ("Agreement") dated as of July 2010 is by
and between Farache Enterprises, Inc., a Florida corporation (the
"Company") and those individuals and entities named on Exhibit A hereto
(herein referred to individually and collectively as "Seller") and Iron
Eagle Group, Inc., a Delaware corporation (herein referred to as
"Buyer").
WITNESSETH:
WHEREAS, Company is a privately owned construction company with
its principal place of business located at Boca Raton, Florida that
primarily involves site development projects for the construction of
buildings, parking structures, streets, highways and utility systems
(the "Business");
WHEREAS, Company presently conducts the Business;
WHEREAS, Buyer desires to purchase and acquire from Seller, and
Seller desires to sell, transfer and assign to Buyer all of the assets
and rights associated with the Business, upon and subject to the terms
and conditions hereinafter set forth;
NOW, THEREFORE, in consideration of the representations,
warranties, covenants, conditions and agreements contained herein and
for other good and valuable consideration, the receipt and sufficiency
of which are hereby acknowledged, the parties hereto agree as follows:
1 PURCHASE AND SALE
1.1 Purchased Assets. On the terms and subject to the conditions set
forth in this Agreement, at the Closing (hereinafter defined), Seller
will sell, convey, transfer, assign and deliver to Buyer, and Buyer
will purchase and accept, free and clear of all liens, claims, charges,
assessments, or encumbrances of any nature, all of the following assets
and rights, wherever situated (the "Assets"):
a) Intentionally Omitted.
b) all Contracts of the Company as defined under Section 2.03
Contracts including any licenses, bids, engineering drawings, employee
work product, or similar materials shall be assigned to Buyer at
closing. All such contracts shall be set forth on Schedule 1.01(b), as
may be updated from time to time in accordance with this Agreement;
c) all equipment of the Company relating to or arising out of the
Business ("Equipment"). All material Equipment (defined as Equipment
worth over $200) shall be set forth on Schedule 1.01(c), as may be
updated from time to time in accordance with this Agreement;
d) all other tangible property owned and used by the Company in
connection with the Business, including without limitation, inventory,
supplies, materials, and other personal property related to or used in
connection with the Assets, including any furniture, computer hardware,
software, tools, spare parts, manuals, signage, forms, fixtures,
brochures, and sales, promotional and marketing materials (the
"Supplies"). All material Supplies (defined as Supplies worth over
$500) shall be set forth on Schedule 1.01(d), as may be updated from
time to time in accordance with this Agreement;
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e) all rights of Company under non-disclosure or confidentiality,
non-compete, or non-solicitation agreements with employees and agents
of such Company or with third parties to the extent relating to the
Assets ("Confidential Agreements"). All such Confidential Agreements
shall be listed on Schedule 1.01(e);
f) all Permits (including business licenses), and pending
applications for Permits used in, held for use in or intended to be
used in connection with the Assets. Seller and Company will maintain
all Permits in good standing through Closing and such Permits are fully
transferable to Buyer; all rights and licenses and all copyrights,
patents, trademarks, trade names, service marks, trade dress, logos,
domain name registrations and applications, trade secrets, and other
proprietary rights of every kind and nature associated with or owned or
used in connection with the Business, including the name Farache
Enterprises, Inc., together with all renewals, translations,
adaptations, derivatives and combinations thereof and all goodwill with
respect thereto (the "IP Rights"). All IP Rights shall be set forth on
Schedule 1.01(f), as may be updated from time to time in accordance
with this Agreement;
g) All of Company's goodwill and other intangible assets
associated with the Business, including without limitation (i) all
permits, licenses, approvals, and authorizations of governmental or
regulatory authorities used or held for use in connection with the
Business that are assignable by Company; (ii) all lists of customers,
customer mailing lists, and customer files of the Business; (iii) any
market studies, market surveys and/or customer surveys relating to the
Business; and (iv) all of Company's rights under the Assumed Contracts
(as defined in Section 2.03) (the "Other Intangible Assets").
The Assets, together with the respective business represented by and
conducted in connection with are herein referred to collectively as the
"Purchased Business."
1.2 Excluded Assets. The following properties, assets, rights and
interests of Company are expressly excluded from the purchase and sale
contemplated hereby and as such are not included in the Purchased
Assets (the "Excluded Assets"):
a) Cash. All cash as of the Closing Date.
b) Accounts Receivable. All accounts receivable, costs in excess of
billings, and billings in excess of costs of the Company relating to or
arising out of the Business as of the Closing Date ("Accounts
Receivable"). The billing and collection of the accounts receivable
shall be conducted in normal working manner of the Company. The
Accounts Receivable shall be set forth on Schedule 1.02(b), as may be
updated from time to time in accordance with this Agreement;
c) Taxes. All refunds, credits, or overpayments with respect to
Taxes;
d) Other Assets. All advances to stockholders of the Company,
advances from stockholders of the Company, and life insurance policies,
as set forth in Schedule 1.02(d).
e) Organizational Documents. All organizational documents, minute
books, and records which Seller is required by law to retain, subject
to Seller providing true and correct copies thereof to Buyer at the
Closing; and
f) Transactions. All rights of Company or Seller under this
Agreement or any document executed in connection herewith.
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1.3 Assumed Liabilities. Buyer is not assuming or agreeing to pay or
perform any debts, liabilities, accounts payable, billings in excess of
costs, accrued expenses, contracts, commitments or obligations of
Company, regardless of whether such debt, liability, contract,
commitment or obligation accrued prior to, on, or after the Closing if
it was incurred prior to closing and regardless of when the liability
becomes known and accrued, including without limitation any
liabilities, claims, Liens or indebtedness relating to or arising out
of (a) failure to pay or perform any obligation owed; (b) federal,
state, or local tax claims or liabilities; (c) hiring, employment,
contractual relationships with or termination of Staff, including
without limitation any obligation or liability of Company in respect of
accrued salaries, accrued profit sharing or severance pay, or any
obligation or unfunded liability arising from any pension or other
employee benefit plan; (d) obligations or liabilities to customers,
suppliers; (e) environmental liabilities; (f) health and safety
liabilities; (g) accounts payable, accrued expenses, or obligations
under assumed contracts other than Assumed Accounts Payable; or (h) any
other debt, liability, contract, commitment or obligation arising out
of or in any manner incident, relating or attributable to any fact,
circumstance, event or occurrence relating to any period prior to
Closing, including without limitation the operation and management of
the Purchased Business prior to Closing (all of the foregoing,
individually and collectively, herein referred to as "Company
Liabilities"). Seller shall fully pay, perform and discharge all
Company Liabilities when and as due in accordance with their respective
terms. All Company Liabilities shall be set forth on Schedule 1.03, as
may be updated from time to time in accordance with this Agreement.
However, for purposes of absolute clarity, all debts, liabilities,
commitments and obligations incurred after the Closing related to a
period of time post-Closing shall be the responsibility of Buyer;
1.4 Closing. On the terms and subject to the conditions of this
Agreement, and subject to completion of all requirements, the
conveyance of the Assets by Company to Buyer (the "Closing") shall take
place at Company's place of business in Boca Raton, Florida or at such
other place as is mutually agreed upon by Buyer and Seller, on
__________, 2010 (the "Closing Date") unless this Agreement shall have
theretofore terminated as herein provided. Each party hereto agrees to
use all reasonable efforts to cause the Closing to be consummated by
the Closing Date and, if not closed on such date, as soon as reasonably
practicable thereafter.
1.5 Purchase Price. Subject to satisfaction of all Conditions to
Closing, as described below, Buyer will purchase the Purchased Business
on the Closing Date (hereinafter defined) for a purchase price of
$3,385,000 (the "Purchase Price"), payable as follows:
a) Cash Consideration. $1,750,000 by wire transfer of immediately
available funds into an account designated by Seller at Closing ("Cash
Consideration"),
b) Shareholder Note. $325,000 in the form of a shareholder's note
due in two years at an 8.0% interest rate, with interest payable no
less than semi-annually ("Shareholder Note"). The Shareholder Note
will be subordinated to 1) other debt that might be obtained and 2)
surety bonds, but missed interest or principal payments will convert to
a penalty rate of interest (18.0%) if not paid upon their respective
due date. The agreement for the Shareholder Note shall be listed on
Schedule 1.05(b).
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c) Equity Consideration. $650,000 shall be paid at 40 days after
Closing in Common Stock shares of the Buyer based upon the thirty day
volume weighted average price of the Purchaser thirty days after the
Closing Date, pursuant to a 12 month lock up and a Board Approved leak
out provision ("Equity Consideration").
d) Earn-out. $660,000 shall be paid in cash in equal installments of
$220,000 per year over a three year period ("Earn-out"). The Earn-out
shall be based upon exceeding the below EBITDA targets for the Company
i) $1,800,000 EBITDA for year ending December 2010 ("Year 1
Target")
ii) $2,200,000 EBITDA for year ending December 2011 ("Year 2
Target")
iii) $2,500,000 EBITDA for year ending December 2012 ("Year 3
Target")
iv) EBITDA shall be defined as Earnings before Interest and Income
Taxes ("EBIT") plus Depreciation and Amortization for the time periods
referenced.
These shall be in accordance with US Generally Accepted Accounting
Principles (GAAP).
1.5 Allocation of Purchase Price. The Purchase Price shall be
allocated among the Assets as set forth on Exhibit B, which the parties
agree is a reasonable allocation in accordance with the requirements of
Section 1060 of the Internal Revenue Code of 1986, as amended (the
"Code"), and each party agrees that it will to file all tax reports,
returns, and other statements consistent with such allocation, and not
make any inconsistent written statement or take any inconsistent
position on any returns, in any refund claim, during the course of any
tax audit, for any financial or regulatory purpose, in any litigation
or investigation or otherwise. Upon any adjustment of the Purchase
Price pursuant to this Agreement, the allocation set out on Exhibit B
shall be adjusted accordingly by mutual agreement. Each party shall
notify the other if the United States Internal Revenue Service or any
other taxing authority proposes any allocation different from the
allocation agreed upon in accordance with this Section.
1.6 Other Closing Deliveries At the Closing, Seller shall deliver to
Buyer:
a) All transfer or assignment documentation required to transfer the
Purchased Business and Assets and required Licenses to Buyer; and
b) Physical possession and control of, or arrangements to obtain
immediate possession and control of, all System Software, Equipment,
Inventory and Supplies.
1.7 Transfer Fees and Costs. Regardless of whether the transactions
contemplated by this Agreement are consummated, each of the parties
hereto shall pay all fees and expenses incurred by such party in
connection herewith, including all fees, commissions and expenses of
its own counsel, consultants, accountants, advisors, brokers, finders,
and/or bankers retained or consulted in connection with the negotiation
of this Agreement and the transactions contemplated herein. Seller
shall be responsible for payment of all transfer, sales, or other
similar taxes, fees and expenses incurred in connection with the
transfer the Purchased Business to Buyer, as well as the prepayment,
release, satisfaction or removal of any liens or encumbrances affecting
the Assets. The cost of the 2008 and 2009 audit, as well as the 2010
review, shall be the responsibility of the Company; however, all such
costs, up to a maximum of twenty thousand dollars ($20,000) shall be
reimbursed by Buyer at the Closing Date.
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1.8 Conditions Precedent to Obligations of Buyer. Buyer's obligation
to pay the purchase price and consummate the purchase of the Purchased
Business as contemplated by this Agreement shall be subject to the
following conditions precedent:
a) All consents, permits and approvals required from third parties
or governmental authorities for (i) the sale, transfer and assignment
of the Purchased Business, (ii) the assignment of all Assumed
Contracts, and (iii) the continued validity and effectiveness of all
Assumed Contracts immediately after the Closing, shall have been duly
obtained, in form and substance reasonably satisfactory to Buyer, and
no modification to any Assumed Contract shall have been made in
connection with the obtaining of such consents without the written
consent of Buyer.
b) Buyer shall have completed its due diligence review of the
Businesses, the results of which shall be satisfactory to Buyer in its
sole and absolute discretion.
c) Company shall have delivered to Buyer reviewed financials for six
month period ended June 30, 2010, audited financials for the years
ended 2008 and 2009, none of which shall be materially different than
the financials for this period presented to Buyer from Company.
d) Buyer shall have received adequate funding to consummate this
Agreement.
e) Buyer shall have received approval from its board of directors to
consummate the transaction prior to Closing.
f) All representations and warranties of Seller made in or pursuant
to this Agreement, any Transaction Document, or any other document or
instrument delivered to Buyer hereunder shall be correct and complete
in all material respects on and as of the Closing Date as if made on
and as of that date, Seller shall have complied in all material
respects with all of their obligations under this Agreement, all
Exhibits shall have been satisfactorily completed and there shall not
have been any material error, misstatement or omission in any Exhibit,
statement or other document delivered in connection herewith.
g) No suit, action, or proceeding shall be pending or threatened
before any court or governmental agency seeking to restrain, prohibit
or obtain damages or other relief in connection with this Agreement or
the consummation of the transactions contemplated herein, there shall
not be in effect any statute, rule or regulation which makes it illegal
for Buyer to consummate the transactions contemplated hereby or any
order, decree or judgment which enjoins Buyer or any Seller from
consummating the transactions contemplated hereby, and there shall have
been no investigation or inquiry made or commenced by any governmental
agency in connection with this Agreement or the transactions
contemplated herein.
h) During the period from the date hereof to the Closing Date, there
shall have been no material adverse change, either individually or in
the aggregate, in the general affairs, business, prospects, Assets,
financial position, or operations of the Purchased Business. Seller
will notify the Buyer of any adverse or material change in the business
as soon as it is known by the Seller or Company.
Buyer may waive in writing any condition precedent contained herein
and, upon the exercise of such right of waiver, the transactions
contemplated hereby shall be consummated in accordance with the terms
contained in this Agreement as modified by said writing.
1.9 Conditions Precedent to Obligations of Seller. Seller's obligation
to consummate the purchase of the Purchased Business as contemplated by
this Agreement shall be subject to the following conditions precedent:
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a) Compliance with Agreement. Buyer shall have performed and
complied in all respects with all of its obligations under this
Agreement which are to be performed or complied with by Buyer prior to
or on the Closing Date.
b) Representations, Warranties and Covenants. All representations
and warranties of Buyer made in or pursuant to this Agreement, any
Transaction Document, or any other document or instrument delivered to
Seller hereunder shall be correct and complete in all material respects
on and as of the Closing Date as if made on and as of that date, Buyer
shall have complied in all material respects with all of their
obligations under this Agreement and there shall not have been any
material error, misstatement or omission in any statement or other
document delivered in connection herewith. At the signing of this
Agreement and through Closing, Buyer shall be in full compliance with
all required Securities and Exchange Commission ("SEC") and financial
reporting regulations.
c) Third-Party Action. No action, proceeding, investigation,
inquiry or objection by any Governmental Authority or other Person
shall have been instituted or threatened which could enjoin, restrain
or prohibit, or could result in substantial damages in respect of, any
provision of this Agreement or the consummation of the transactions
contemplated hereby.
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d) During the period from the date hereof to the Closing Date, there
shall have been no material adverse change, either individually or in
the aggregate, in the general affairs, business, prospects, Assets,
financial position, or operations of Buyer's business. Buyer will
notify the Seller of any adverse or material change in the business as
soon as it is known by the Buyer.
Seller may waive in writing any condition precedent contained herein
and, upon the exercise of such right of waiver, the transactions
contemplated hereby shall be consummated in accordance with the terms
contained in this Agreement as modified by said writing.
2. REPRESENTATIONS AND WARRANTIES
Representation and Warranties of Seller
Seller represents and warrants to Buyer that the statements
contained in this Section II are correct and complete as of the date of
this Agreement, and will be correct and complete as of the Closing
Date:
2.1 Ownership; Existence and Good Standing. Company is a Florida
corporation duly organized, validly existing and in good standing under
the laws of its state of organization, good standing with all
applicable licenses and permits, with full power and authority to own
the Assets held by such Company and to carry on the Purchased Business
as now conducted. Except as set out on Exhibit A, there are no other
persons or entities having any ownership interest in, or rights with
respect to, the Purchased Business.
2.2 Assets. The Assets constitute all of the assets and rights
owned by Seller and used in or useful to the conduct of the Purchased
Business. All Equipment and Supplies included in the Assets are in good
repair and good operating condition, free from any known material
defect, ordinary wear and tear excepted. All System Software is fully
functional, without any known errors or bugs, and includes all
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necessary updates. Company has good and marketable title to all Assets
held by such Company, free and clear of all liens, encumbrances, claims
or other conditions affecting title or use (collectively, "Liens"),
except for Liens for non-delinquent ad valorem taxes. Seller has
complete and unrestricted power to sell, assign and deliver to Buyer
good and unencumbered marketable title to the Assets, and at the
Closing, such title will vest in Buyer, free of all Liens.
2.3 Contracts. Seller and Company have fully disclosed to Buyer all
contracts, bids, commitments, and agreements relating to the Purchased
Business, whether written or unwritten, including all supply contracts,
labor or employment agreements, leases, guarantee or loan agreements,
pension, stock option, stock purchase, bonus, profit sharing, health
and other employee or executive welfare or benefit plans or agreements,
sales representation and distribution agreements, purchase orders and
commitments, customer agreements, software agreements, licenses,
leases, warranties, and powers of attorney ("Contracts"). Buyer will
assume all these Contracts hereunder ("Assumed Contracts") and these
are listed on Schedule 1.01(b), and Seller has provided true, complete
and correct copies thereof to Buyer on or prior to the date hereof. The
Assumed Contracts are valid and binding, and have not been modified or
amended from the forms provided to Buyer, and no material breach,
default or alleged breach or default of any Company or, to the
knowledge of Seller or Company, any other party thereto exists under
any Assumed Contract. Seller, at Seller's sole expense, shall take all
steps necessary to use best efforts to properly assign all Assumed
Contracts to Buyer, with Seller's best efforts that all Assumed
Contracts remain valid and in full force and effect for the benefit of
Buyer prior to or at the Closing, including obtaining all consents,
permits, approvals, authorizations, and waivers of, making all filings
with, and providing all notifications and notices to, governmental
authorities and other parties. All such consents, permits, approvals,
authorizations, ratifications, waivers, filings, notifications and
notices shall be in writing and executed counterparts thereof shall be
delivered to Buyer at or prior to Closing. In the event that any
individual contract is found to not be Assignable, all economic benefit
derived from the Company from such Contract shall be immediately
remitted to Buyer as received or earned by Seller or the Company.
Between the date hereof and the Closing Date, Seller and Company shall
not agree to any material modification of any Assumed Contract without
the written consent of Buyer. Seller has provided Buyer with a list of
the top 20 customers for 2008, 2009, and 2010, including the main
contact person and contact information for each.
2.4 Customers and Suppliers. Company has received no written
complaint from any significant customer or supplier and no notice of
breach or of termination under any written contract with any
significant customer or supplier. For the entire Agreement, Company
knowledge shall be defined as knowledge of Moshe Farache and his direct
reports. Company has no knowledge or notice of any information which
might indicate that any customer or supplier intends to cease dealing
with Company, or intends to alter in any material respect the amount of
such customer's or supplier's dealings with Company, or would alter in
any material respect such dealings in the event of the consummation of
the transactions contemplated hereby.
2.5 No Material Adverse Change. Since June 1, 2010, (a) there has
been no material adverse change, either individually or in the
aggregate, in the general affairs, business, prospects, properties,
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financial position, or results of operations of the Purchased Business
or any of its individual operations, and (b) Seller and Company has
operated the Purchased Business only in the ordinary course of business
and have not made any material changes in the manner of conducting
business.
2.6 Staff. To the reasonable knowledge and understanding of the
Company and Seller, Company has provided to Buyer a complete and
correct list of all persons currently performing services relating to
the Purchased Business ("Staff"), whether such persons are employees or
independent contractors, and their total compensation, including all
fringe benefits and bonus opportunities to which any such Staff are or
may be entitled. Except as disclosed to Buyer in Appendix 2.06,
Company has no written employment, consulting or other Contracts with
any Staff. Company has also provided to Buyer copies of all Contracts
applicable to such Staff. No employees of Company are represented by a
union or other labor organization and no representation question exists
respecting the employees of any Company. All senior staff members shall
have remained with Company between the signing of this Agreement and
the Closing. Seller with notify Buyer as soon as reasonably possible
of any employees that have left the Company or wish to leave the
Company. If Seller or Company has knowledge that a senior member of
management wishes to leave the company post Closing, it shall be deemed
a material adverse change. Company has complied with all applicable
laws affecting employment and employment practices, terms and
conditions of employment, and wages and hours, and has not engaged in
any unfair labor practice. Company has not experienced any labor
strike, dispute, slowdown, work stoppage, or other labor difficulty.
There are no employee benefit plans of Company which are subject to the
provisions of the Employee Retirement Income Security Act of 1974, as
amended ("ERISA"). Company has no knowledge that any key member of
Seller's Staff is considering termination of his or her relationship
with Company.
2.7 Arms Length Transactions. All of the transactions of Company
relating to the Purchased Business have been entered into and conducted
on an arms-length basis or,
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in the case of transactions involving current or former officers,
directors, owners, or affiliates of Company, have been on terms no less
favorable than those which would have prevailed in an arms-length
transaction. No material portion of the Purchased Business is
dependent upon the friendship or the personal relationships (other than
those customary within business generally) of Company's owners,
officers, directors or Staff. To the knowledge of Seller or Company,
no member of Company's Staff has violated the published business
policies of any third party with respect to gifts, services or
corporate business practices.
2.8 Compliance with Laws. Company has complied with all applicable
laws, regulations, orders and other requirements of governmental
authorities with respect to the Purchased Business. Company is not
subject to any judicial, governmental, or administrative order,
judgment or decree. There is no pending or threatened claim,
investigation, proceeding, or litigation of any kind or nature relating
to the Purchased Business, and Seller and Company are not aware of any
facts, circumstances or conditions existing at any time as of or prior
to the Closing. Company has provided to Buyer a complete list of all
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licenses, permits, approvals, authorizations, exemptions,
classifications and certificates necessary to conduct the Purchased
Business and to own and operate the Assets.
2.9 Authority to Consummate Transactions. Seller has full power and
authority to enter into this Agreement and all certificates,
instruments of transfer and other documents or agreements to be
executed by such Seller in connection with this Agreement
(collectively, the "Transaction Documents") and to consummate the
transactions contemplated herein and therein. This Agreement has been
duly executed and delivered by Seller, all Transaction Documents, upon
execution by the Seller that are parties thereto, will have been duly
executed and delivered by such Seller, and each such agreement is or
upon execution will be a valid and legally binding obligation of the
Sellers that are parties thereto, enforceable in accordance with its
terms. Neither the execution, delivery and performance of this
Agreement or the other Transaction Documents, nor the consummation of
the transactions contemplated herein or therein, will (i) constitute or
cause a breach, default or violation of any Seller's charter or
operating agreement, or any contract, license, lease, permit, approval
or agreement to which it is a party, (ii) cause a Lien to attach to any
of the Assets, (iii) result in acceleration of or the right to
accelerate any obligation under or the termination of or the right to
terminate any Assumed Contract, or (iv) require a consent of any person
to prevent such breach, default, violation, Lien, acceleration, right
or termination. No approval of or filing with any federal, state, local
or foreign court, authority or administrative or regulatory agency is
necessary to authorize the execution and delivery of this Agreement and
the Transaction Documents or the consummation of the transactions
contemplated herein and therein by Seller.
2.10 No Misstatements of Material Facts. To the reasonable knowledge
of the Company and Seller, Neither this Agreement nor any Exhibits or
other documents to be furnished to Buyer pursuant to this Agreement
contain or will contain any untrue statement of a material fact or omit
or will omit to state a material fact necessary to make the factual
statements contained herein or therein, in light of the circumstances
under which they were made, not misleading. None of the Seller or
Company has knowledge of any events, transactions or other facts which,
either individually or in the aggregate, may give rise to circumstances
or conditions which could have a material adverse effect on the general
affairs, business, prospects, properties, financial position, and
results of operations or net worth of the Purchased Business or Assets.
Seller and Company shall not take any action or omit to take any
action that might result in any of the representations or warranties
contained in this Agreement being inaccurate or incomplete on and as of
the Closing Date.
2.11 Revenues and Accounts Receivable. Seller and Company have no
knowledge that its projected revenues, for the balance of the current
fiscal year will be materially less than such revenues disclosed via
written materials to Purchaser. Seller and Company have not received
any notification, directly or indirectly, from any of their respective
customers, and Seller and Company have no knowledge, that any of the
accounts receivable will not be collectible in the ordinary course or
that any of the products referenced therein will be returned for
credit.
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2.12 Environmental.
a) To the knowledge of Seller and Company, there are no conditions,
facilities, procedures or any other facts or circumstances which could
reasonably be expected to give rise to material claims, expenses,
losses, liabilities or governmental action or require remediation;
b) Company has furnished to Buyer copies of all environmental
assessments or audits in their possession or under their control that
relate to Company's compliance with applicable environmental laws.
Representation and Warranties of Buyer
Buyer represents and warrants to Seller that the statements contained
in this Section III are correct and complete as of the date of this
Agreement, and will be correct and complete as of the Closing Date:
2.13 Existence and Good Standing. Buyer is a Delaware corporation
duly organized, validly existing and in good standing under the laws of
its state of organization.
2.14 Full Power and Authority. Buyer has full power and authority to
execute and deliver this Agreement and to perform its obligations
hereunder. This Agreement has been duly executed and delivered by
Buyer and constitutes, assuming due authorization, execution and
delivery of this Agreement by Seller and any other agreements to be
executed by Seller pursuant hereto, when fully executed and delivered,
will constitute a valid and binding obligation of Buyer, enforceable
against Buyer in accordance with their terms, except to the extent that
enforcement thereof may be subject to (i) applicable bankruptcy,
insolvency, reorganization, moratorium, fraudulent conveyance and
similar laws now or hereafter affecting the enforcement of creditors'
rights generally and (ii) general principles of equity (regardless of
whether enforceability is considered in a proceeding at law or in
equity.
2.15 No Conflict or Violation. Neither the execution and delivery by
Buyer of this nor the performance by Buyer of its obligations hereunder
will (i) conflict with or result in any breach of any provision of the
Certificate of Incorporation of Buyer or (ii) violate any order,
injunction, decree, statute, rule or regulation of any governmental
authority to which Buyer is subject.
2.16 Compliance with Banking Covenants. Buyer is in full compliance
of all banking covenants and stipulations now and at Closing.
2.17 Compliance with SEC. Buyer is in full compliance with all
required SEC and financial reporting regulations both currently and at
Closing.
2.18 Absence of Any Litigation. Buyer has not been a named defendant
in any actual or threatened litigation, civil or criminal, since its
last public filing. Furthermore, all material litigation involving
Buyer as of the time of its last public filing has been fully disclosed
in said filing.
3. EXAMINATION PERIOD AND TERMINATION
The following provisions shall apply during the period prior to the
Closing:
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3.1 Examination Period. At the date hereof Buyer has not yet had an
opportunity to complete its investigation and analysis of the Purchased
Business and Assets or to receive and review the Exhibits and other
documents to be delivered pursuant to this Agreement. Seller shall
complete the preparation of all such Exhibits, information and other
documents as soon as possible after the date hereof, and use its best
efforts to cause such Exhibits, information and documents to be
delivered to Buyer not later than August 15, 2010. Once Seller has
delivered all such Exhibits, information and documents, Buyer shall
have 45 days in which to investigate all of the facts, information and
other matters contained or referenced therein and otherwise to
investigate, in any manner which it may choose, the Purchased Business
and Assets. This date may be extended by mutual agreement.
3.2 Operation in Ordinary Course. From the date hereof until the
Closing Date, Seller will operate the Purchased Business only in the
ordinary course of business. Without limiting the foregoing, until the
Closing Date, unless Buyer otherwise consents in writing, Seller and
Company will not:
a) Grant, issue, modify, or allow the transfer of or licenses for
any territory;
b) Execute, terminate or modify any Contracts relating to the
Purchased Business, except in the ordinary course of business;
c) Sell, transfer, lease or dispose of any Assets, or permit or
allow any Lien thereon;
d) Increase any compensation or benefits to, or enter into any new
oral or written agreements of any nature with, any Staff performing
services for the Purchased Business, except in the ordinary course of
business; or
e) Take or omit any action that would violate the representations
and warranties contained in this Agreement or render them inaccurate as
of the date hereof or as of the Closing Date.
Company will confer on a regular and frequent basis with one or more
designated representatives of Buyer regarding material operational
matters and ongoing operations, and review with Buyer any business
initiatives which would constitute a diversion from the ordinary course
of business. Seller and Company will promptly notify Buyer in writing
of (a) any material adverse change in the Purchased Business or Assets,
(b) any pending or threatened claim, litigation or proceeding
applicable to the Purchased Business or Assets, and (c) the occurrence
of any event which could result in any condition to Closing not being
satisfied by Seller or Company, and Seller and Company will keep Buyer
reasonably informed as to the status of such reported events.
3.3 Preservation of Relationships. Seller will use all reasonable
efforts to assist Buyer in retaining the services of any key Staff
members that Buyer indicates it may wish to employ or engage, and to
preserve for Buyer its good relations with, customers, suppliers, and
others having business relationships with it in connection with the
Purchased Business; provided, however, that nothing herein shall
require Buyer to hire any Staff or to conduct or continue any business
with any customer, supplier, or third party.
3.4 Access to Facilities and Records. Seller will afford Buyer and
its representatives with full access to Company's books, records,
assets and employees in order for Buyer to complete its due diligence
with respect to the Purchased Business and the transaction contemplated
hereby, with reasonable access during normal business hours on
reasonable notice to the physical locations at which Seller conducts
12
the Business in order to inspect and review Company's business records
and accounts and any Assets located at such facilities. Seller will
furnish documents and all such other information concerning the
Business as Buyer may reasonably request; provided, however, that any
investigation or inquiry made by Buyer, or knowledge obtained by Buyer,
shall not in any way limit or otherwise affect the representations and
warranties contained in this Agreement or their survival of the
Closing.
3.5 Exclusive Dealing. For so long as this Agreement shall continue
in effect, but in no case no longer than 60 days after execution of
this Agreement, unless extended in writing by both Buyer and Seller,
neither Company nor any of their officers, directors, managers, owners,
or representatives will directly or indirectly offer, or solicit or
entertain offers for, the purchase, sale or disposition of, or engage
in any substantive discussions or enter into any agreement or
understanding with respect to, or furnish information to any other
party with regard to, the Purchased Business or Assets or any business
arrangement, transaction, or disposition relating thereto, in whole or
in part.
3.6 Financial Statements. Company shall cause to be delivered to
Buyer the following prepared in accordance with GAAP:
a) audited financial statements and related footnotes as of and for
the fiscal years ended December 2008 and December 2009, and an audit
report of the Company's Independent Registered Accounting Firm ("IRAF")
thereon;
b) reviewed interim financial statements as of and for the period
ending June 2010, and review report of the IRAF thereon.
Seller and Company acknowledge and agree that Buyer may be required to
include financial statements of Seller or combined financial statements
of the Purchased Business in reports that Buyer is required to file
pursuant to applicable securities laws. With the exception of 3.06(a)
& 3.06(b), such reporting will be at Buyer's sole cost and expense.
3.7 Termination.
a) This Agreement may be terminated by either the Buyer or the
Seller at any time prior to Closing if that party, in its good faith
judgment, determines that there is any inaccuracy or incompleteness in
any representation or breach of any warranty contained herein, or any
failure of the offending party to perform or satisfy, or cause to be
performed or satisfied, any of the terms or conditions of this
Agreement or any other Transaction Document, or any error, misstatement
or omission with regard to any of the Exhibits, information or other
documents referred to herein, or if Buyer, in its sole judgment, is not
satisfied with the contents of any of the Exhibits, information or
documents, or with the results of its investigation of the Purchased
Business and Assets.
b) This Agreement may be terminated at any time prior to the
Closing: (a) by mutual written consent of Buyer and Seller; or (b) by
either Buyer or Seller, if the Closing shall not have occurred on or
prior to 75 days from the signing of this Agreement (or such later date
as shall have been consented to by all parties hereto), unless failure
of such occurrence shall be due to the failure of the party seeking to
terminate this Agreement to perform or observe any agreements and
conditions to be performed or observed by such party or to use its
reasonable efforts to obtain any third party consents or actions
required as a condition to Closing.
13
c) If this Agreement has not been terminated and the Closing shall
not have taken place on or prior to 90 days after this agreement has
been signed, this Agreement shall automatically terminate.
d) Should Purchaser decide to terminate this agreement due to either
(i) a failure to secure adequate financing based on reasonable terms,
(ii) a financial or operational concern raised during due diligence
that is immaterial to the future performance of the Company and / or
the post-transaction combined entity based on the reasonable judgment
of Buyer, or
(iii) any other reason not in good faith compliance with the spirit of
this Letter of Intent, Buyer will reimburse the Seller upon termination
an amount equal to one-half (1/2) of expenses incurred in obtaining the
2008 and 2009 audits and reviewed six (6) months 2010 financial
statements, subject to a maximum amount of ten thousand dollars
($10,000). Such reimbursement must be made to Seller within thirty
(30) days of Buyer's written termination of this Agreement. No such
reimbursement is required if the Seller decides not to move forward and
close upon the existing terms of this Agreement.
4. POST CLOSING OBLIGATIONS
4.1 Names. As soon as practicable following the Closing Date, Seller
will assist Buyer in obtaining the full and exclusive right to use such
name(s) in connection with the Purchased Business.
4.2 Further Assurances. Following the Closing Date, Sellers shall,
for no further consideration, perform all such other actions and
execute and deliver, or cause to be executed and delivered, such
further assignments, transfers, instruments, certificates and other
documents as Buyer or its counsel may reasonably request to vest in
Buyer full and complete title to and protect Buyer's rights, title and
interest in and to the Purchased Business and the Assets and to affirm
and protect Buyer's rights and interests under this Agreement. Buyer
and the right to use the Purchased Business and Assets hereby agreed to
be conveyed by Seller to Buyer. In the event that Seller receives any
payments, notices, or communications after the Closing Date from any
customers, suppliers or ________ relating to the Purchased Business,
such items shall be delivered promptly to Buyer in the same form
received.
4.3 The cost of the 2008 and 2009 audit, as well as the 2010
review, shall be the responsibility of the Company; however, all such
costs, up to a maximum of twenty thousand dollars ($20,000) shall be
reimbursed by Buyer at the Closing Date.
4.4 Survival of Representations, Warranties, and Agreements. The
representations, warranties, and agreements contained in this Agreement
and the other Transaction Documents shall expire on the first
anniversary of the Closing Date except that (i) Seller's obligation to
pay, perform and discharge all Company Liabilities pursuant to Section
1.02 shall survive indefinitely; (ii) the representations and
warranties contained in Article 2 and the Exhibits referenced therein
shall survive the Closing and shall remain in full force and effect
until expiration of the statute of limitations period applicable to the
subject matter thereof (or, if a claim has been asserted prior to such
expiration, until after the date of its final resolution), and (iii) if
a claim or notice is given under Section 4.06 (Indemnification) with
respect to any representation, warranty, covenant or agreement prior to
14
the applicable expiration date, such representation, warranty, covenant
or agreement shall continue indefinitely until the applicable claim is
finally resolved.
4.5 Indemnification.
a) Seller shall indemnify, defend and hold harmless Buyer and its
owners, officers, managers, employees, attorneys, agents, affiliates,
successors and assigns ("Buyer Parties") from and against all claims,
liabilities, obligations, losses, damages, liabilities, costs and
expenses, including reasonable attorneys' fees and disbursements,
interest, penalties, court costs, and all costs and expenses reasonably
incurred in investigating, preparing, defending against or prosecuting
any litigation, claim, action, suit, proceeding or demand ("Losses") of
any kind or character arising out of or relating or attributable to:
i) any inaccuracy, misrepresentation, breach, or failure to fulfill
any agreement, representation or warranty on the part of Company or
Seller pursuant to this Agreement (including the Exhibits hereto) or
any of the other Transaction Documents;
ii) the operation of the Purchased Business, the ownership, use,
possession or operation of the Assets, or any other action, omission or
transaction of Seller, Company, or their owners, officers, managers,
employees, attorneys, agents, affiliates, predecessors, successors and
assigns ("Company Parties"), or any of them, prior to the Closing Date,
including without limitation any Company Liabilities, whether such
claims are asserted by one of the Buyer Parties or by third persons;
iii) reliance by Buyer on any books or records of Company, Seller, or
on any information furnished to Buyer by or on behalf of any of the
Company Parties pursuant to this Agreement or any of the other
Transaction Documents;
iv) any agreements, contracts, negotiations or other dealings by any
of the Company Parties with any third party concerning the sale or
transfer of any portion of the Purchased Business or Assets; or
v) any claim, demand or allegation by any third party relating to
any of the foregoing.
Unless the aggregate of all Losses relating hereto for which Sellers
would, but for this proviso, be liable exceeds on a cumulative basis an
amount equal to $50,000, at which time Sellers shall be fully liable
for the full amount of all such Losses from and including the first
dollar of any Losses. Further, Sellers' aggregate liability under this
Agreement shall never exceed the Cash Consideration of the Purchase
Price as defined in 1.05(a) received to date by Seller; however nothing
in this limiting sentence shall restrict any of Buyer's rights to
maintain or recover any Loss amounts in connection with any action or
claim based upon fraudulent misrepresentation or deceit made in this
Agreement.
a) If any of the Buyer Parties (the "Indemnitee"), has a claim or
potential claim or receives notice of any claim or potential claim or
the commencement of any action or proceeding that could give rise to an
indemnification claim under this Section, Buyer shall promptly give
Seller notice thereof describing the claim in reasonable detail and
accompanied by supporting documentation, if any. Seller shall respond
to each such claim within thirty (30) days of receipt of such notice,
unless the claim (a) relates to a suit, claim or proceeding filed by a
third party, in which case Seller shall respond no later than ten (10)
days prior to the date a responsive pleading or filing is due (even if
such response date is earlier than the expiration date of the
aforementioned 30-day period), or (b) requires an immediate response,
as in the case of a cease and desist demand by a third party or a
notice to show cause, in which case Seller shall respond in a prompt,
15
timely manner. If Seller's response is not timely made, the Indemnitee
may respond to such third party claim as it sees fit and seek
indemnification thereafter pursuant to the terms hereof. If Seller
elect to assume the defense of such claim or potential claim, the
Indemnitee shall have the right to be represented by counsel,
accountants and other advisors, at its own expense, and shall be kept
reasonably informed as to such claim at all stages. Seller may not
settle or compromise any claim over the objection of the Indemnitee,
unless required by the law. If Seller does not assume the defense of
the claim, the Indemnitee may assume the defense and seek
indemnification from time to time as the amount of the claim for which
it is entitled to be indemnified becomes liquidated.
b) Buyer shall indemnify, defend and hold harmless Seller from and
against all claims, liabilities, obligations, losses, damages,
liabilities, costs and expenses, including reasonable attorneys' fees
and disbursements, interest, penalties, court costs, and all costs and
expenses reasonably incurred in Buyer not properly fulfilling assumed
contracts properly, unless Seller or Company was directly or indirectly
responsible for the non-fulfillment of such assumed contracts.
c) Notwithstanding the foregoing, the Indemnitee shall have the
right to employ separate counsel at Indemnitee's expense and to control
its own defense of such asserted claim if (a) there are or may be legal
defenses available to such Indemnitee or to other Indemnitees that are
different from or additional to those available to Seller, or (b) in
the opinion of counsel to such Indemnitee, a conflict or potential
conflict exists between such Indemnitee and any of the Company Parties
that would make such separate representation advisable.
d) To the extent that any of the Buyer Parties is entitled to be
indemnified by any of the Company Parties for any Loss pursuant to this
Section, Buyer shall have the right, in addition to any other rights it
may have pursuant to this Agreement or otherwise, to offset or cause
the offset of such Loss against any amount payable by Buyer or any of
its affiliates to any of the Company Parties pursuant to this Agreement
or any other Transaction Document or otherwise, including without
limitation the final Purchase Price payment due hereunder.
e) The provisions of this Section shall survive termination of this
Agreement and shall survive the Closing.
5. GENERAL
5.1 Confidentiality. Buyer, Company, and Seller each agree that they
will not, and shall cause their respective affiliates, representatives
and advisors not to, use or to disclose to any person other than the
parties hereto and their respective affiliates, representatives and
advisors, any information set forth in this Agreement, the Exhibits
hereto, or any of the other Transaction Documents for any purpose
unrelated to the consummation of the transactions contemplated by this
Agreement. Subject to the requirements of applicable law, each party
agrees to keep confidential, and cause its affiliates, representatives
and advisors to keep confidential, all information and documents
obtained in connection with the entering into of this Agreement and the
other Transaction Documents unless such information (i) was already
known to such Person and not subject to a confidentiality obligation,
(ii) becomes available to such party from other sources not known by
such party to be bound by a confidentiality obligation, (iii) is
disclosed with the prior written approval of the party providing such
information (a "Providing Party"), or (iv) is or becomes readily
ascertainable from publicly available sources. A public announcement
regarding the proposed transaction and / or its terms shall be made
16
soon after the signing of this Agreement that will be pre-approved by
both parties prior to such announcement. If this Agreement is
terminated or the transactions contemplated by this Agreement shall
otherwise fail to be consummated, each party shall promptly cause all
documents and all copies thereof or extracts therefrom containing
information and data as to a providing party to be returned to the
providing party. The obligations of the parties under this Section
shall be in addition to, and shall not supersede or replace, any other
confidentiality agreements now in place between the parties, such as
the confidentiality agreement mutually executed between the parties
dated April 12, 2010, a copy of which is attached to this agreement as
Exhibit 5.01.
5.2 Governing Law and Jurisdiction. This Agreement, its construction
and the determination of any rights, duties or remedies of the parties
hereunder, shall be governed by and construed in accordance with the
domestic laws of the State of Delaware without giving effect to any
choice or conflict of law provision or rule (whether the State of
Florida or any other jurisdiction) that would cause the application of
the laws of any jurisdiction other than the State of Delaware. Any
action or proceeding seeking to enforce any provision of, or based on
any right arising out of, this Agreement or any of the Transaction
Documents may be brought against any of the parties in the courts of
the State of New York or Florida, and each of the parties consents to
the jurisdiction of such courts (and of the appropriate appellate
courts) in any such action or proceeding, and waives any objection to
venue laid therein. Process in any action or proceeding referred to in
the preceding sentence may be served on any party anywhere in the
world.
5.3 Entire Agreement. This Agreement (including all Exhibits and
attachments and any future amendments thereto) together with the other
Transaction Documents to be delivered pursuant hereto, constitutes the
parties' entire agreement and understandings on the subject matter
hereof and supersedes all prior and contemporaneous agreements,
understandings, negotiations and discussions, whether oral or written,
express or implied, relating to the subject matter hereof.
5.4 Remedies Nonexclusive; Severability. Buyer's rights and remedies
under this Agreement are not exclusive but are in addition to all other
rights and remedies to which Buyer may be entitled under applicable law
or in equity. In the event any term or provision of this Agreement
shall for any reason be invalid, illegal or unenforceable in any
respect, it shall be deemed separate and shall not affect any other
provisions hereof or the validity hereof. The parties agree to re-
negotiate in good faith any term or provision held invalid and to be
bound by the mutually agreed substitute term or provision.
5.5 Modification & Waiver. This Agreement may not be amended or
modified in any respect except by written agreement duly executed by
authorized officers or representatives of each party. No waiver of any
of the terms and conditions of this Agreement shall be binding or
effectual for any purpose unless in writing and signed by the party
against whom such waiver is sought to be enforced, and any such waiver
shall be effective only in the specific instance and for the specific
purpose given. No failure of delay on the part of either party hereto
in exercising any right, power or privilege hereunder shall operate as
17
a waiver thereof, nor shall any single or partial exercise of any
right, power or privilege preclude any other or further exercise
thereof or the exercise of any other right, power or privilege.
5.6 Counterparts. This Agreement has been prepared in two (2)
original counterparts, each of which when duly executed by the parties
shall be deemed an original but all of which shall constitute one and
the same Agreement.
5.7 Binding Effect. All of the terms and provisions of this
Agreement shall be binding upon and inure to the benefit of the parties
hereto and their respective successors, permitted assignees, heirs and
personal representatives. The rights and obligations provided by this
Agreement shall not be assignable by Seller or Company without Buyer's
prior written consent and such consent shall not be unreasonably
withheld. The rights and obligations provided by this Agreement shall
not be assignable by Buyer without Seller's prior written consent and
such consent shall not be unreasonably withheld. Nothing expressed or
referred to in this Agreement is intended or will be construed to
confer upon any person, other than the parties hereto and their
successors, any rights or remedies under or by reason of this Agreement
or any of the Transaction Documents.
5.8 Construction. This Agreement is a product of negotiation among
competent business parties and shall be interpreted fairly in
accordance with its terms, without strict construction in favor of
either party as the drafter hereof. Headings are for convenience of
reference only, and shall not affect the construction or interpretation
hereof. The term "including" shall mean including without limitation.
The parties intend that each representation, warranty, and covenant
contained herein shall have independent significance. If any party has
breached any representation, warranty or covenant contained herein in
any respect, the fact that there exists another representation,
warranty or covenant relating to the same subject matter (regardless of
the relative levels of specificity) which the party has not breached
shall not detract from or mitigate the fact that the party is in breach
of the first representation, warranty or covenant. Notwithstanding any
other sentence in this paragraph, a party cannot sue twice and receive
double penalties for a single cause of damage. Any term or provision of
this Agreement that is invalid or unenforceable in any situation in any
jurisdiction shall not affect the validity or enforceability of the
remaining terms and provisions hereof or the validity or enforceability
of the offending term or provision in any other situation or in any
other jurisdiction.
5.9 Injunctive Relief. It is acknowledged that any breach of this
Agreement would cause Buyer irreparable harm that could not be
adequately compensated for by damages. Accordingly, in the event of
any threatened or actual breach of this Agreement, Buyer may, in
addition to any other specific remedy for relief, enforce the
performance of this Agreement by injunction or specific performance
upon application to a court of competent jurisdiction. Seller agrees
that Buyer shall have the right to seek and obtain an injunction or
specific performance under this section even if monetary damages are
available and readily quantifiable, and without proof of actual damage.
5.10 Notices. All notices, requests, demands, claims and other
communications hereunder shall be in writing and shall be deemed to
have been duly given when received by the addressee by hand delivery,
18
telecopy, or nationally recognized overnight delivery service, with
written confirmation of receipt, sent in each case to the appropriate
addresses and fax numbers set forth in the signature lines below (or to
such other addresses or fax number as either party may designate from
time to time by written notice to the other).
5.11 Publicity. Neither Buyer nor Seller shall issue any press
release or public announcement concerning this Agreement or the
transactions contemplated hereby without obtaining the prior written
approval of the other party hereto, which approval will not be
unreasonably withheld or delayed, unless, in the sole judgment of
Buyer, disclosure is otherwise required by applicable Law or by the
applicable rules of any stock exchange on which Buyer lists securities,
provided that the party intending to make such release shall use its
best efforts consistent with such applicable Law to consult with the
other party with respect to the text thereof.
5.12 Non Compete Agreement. As of the Closing Date, Moshe Farache
shall have executed and delivered a non-compete agreement. A copy of
the standard non-compete agreement is included on Schedule 5.12.
5.13 Employment Agreement. As of the Closing Date, Buyer and Seller
shall have executed a mutually employment agreeable agreement with an
annual compensation package for Mr. Moshe Farache in the amount of
$150,000. In addition, the Company will provide Mr. Farache with health
insurance, a cell phone, and a car allowance to be mutually agreed
upon. Mr. Farache's wife and daughter will be eliminated from the
payroll post-closing, and all personal travel and perquisite related
expenses of the Farache family will be discontinued post-closing.
5.14 Rental Agreement. As of the Closing Date, Buyer and Seller
shall enter into a lease for the premises currently occupied by the
Seller. Specifically, Buyer agrees to rent from Seller the 5,700 square
foot office space and 11 acre yard in Parkland, Florida for a monthly
rent of $5,100 plus annual escalators at PPI for a minimum of at least
2 years post-closing.
5.15 Financial Documents. The Seller and Management represent that
the 2009 audit and 2008 reviewed financial statements attached hereto
are the most accurate financial statements furnished with to date.
[THE REMAINDER OF THIS PAGE LEFT INTENTIONALLY BLANK]
19
IN WITNESS WHEREOF, THE PARTIES HAVE READ, DISCUSSED, UNDERSTOOD, AND
AGREED TO THE TERMS HEREOF, AND HAVE EXECUTED THIS AGREEMENT, EFFECTIVE
AS OF THE DATE FIRST ABOVE WRITTEN.
IN ADDITION, EACH OF THE OWNERS HAS CAREFULLY AND COMPLETELY READ ALL
OF THE TERMS AND PROVISIONS OF THE AGREEMENT. THIS AGREEMENT IS FREELY
AND VOLUNTARILY GIVEN BY EACH OF THE OWNERS, WITHOUT ANY DURESS OR
COERCION AND AFTER EACH OF THE OWNERS HAS CONSULTED WITH COUNSEL OR HAD
AN OPPORTUNITY TO DO SO.
BUYER: SELLER:
IRON EAGLE GROUP, INC. FARACHE ENTERPRISES,
INC.
By: /s/Michael Bovalino By:/s/Moshe Karache
-------------------------- --------------------
------
Name: Michael Bovalino Name: Moshe Karache
Title: Chief Executive Officer Title: President
Address for Notices: Address for Notices:
448 West 37th Street, Suite 9G 6560 W Rogers Circle,
Suite B-26
New York, NY 11023 Boca Raton, Florida
33487
Fax: (917) 591- 6227 Fax: (561) 999-1959
20
Exhibit A
SELLER
Moshe Farache is the sole shareholder of Farache Enterprises, Inc.
21
Exhibit B
PURCHASE PRICE ALLOCATION
Total Purchase Price $ 3,385,000
Customer Lists $ 1,267,250
Equipment & Supplies $ 2,117,750
System Software $ 0.00
IP Rights $ 0.00
Other Intangible Assets (including Goodwill) $ 0.00
22
Schedule 1.01(b)
ASSUMED CONTRACTS
Leases
1. Commercial Gross Office Condo Lease executed on June 1, 2007.
2. Commercial Gross Office Land Lease
Insurance
3. Workers Compensation Policy
4. Health Insurance Policy
Financing
5. Wachovia Loan
6. Equipment Financing Agreement- 2000 John Deere Dozer Model 550H
LGP (Serial #-T0550HX879300)
7. FCC Loan Document Ford F550 4x4 Mechanics Truck VIN-
IFDAF57R08EA62254
8. Security Agreement- 2006 John Deere Model 554J Wheel Loader
(Serial #-DW544JZ608022)
9. Schedule of Indebtedness and Collateral- John Deere 792D LC
Hydraulic Excavator (Serial #- FF792DX010102)
10. Schedule of Indebtedness and Collateral- Tesab 1012 Track-Mounted
Rotocrusher (Serial #-71092381)
Projects
11. Subcontract Agreement with Tri-C Construction Company for CVS
#3109, executed on November 30, 2009.
12. Subcontract Agreement with Turner Construction Company for FAU
Temporary Parking Lot P5542, executed on May 11, 2010.
13. Subcontract Agreement with Hooks Construction Co., LLC for
Walgreens #12808, executed on June 11, 2009.
14. Subcontract Agreement with R.A. Rodgers Construction Company, LLC
for TD Bank, 969 SE 5th Avenue Delray Beach, FL executed on July
19, 2010.
15. Subcontract Agreement with DC Construction Associates, Inc. for
Turtle Crossing Out Parcel, 4220-4240 State Road 7, Coral
Springs, FL, executed on March 10, 2010.
16. Subcontract Agreement with Itasca Construction Associates, Inc.
for Pet Supermarket, 801 East Sunrise Boulevard, Fort
Lauderdale, FL, executed on May 5, 2010.
17. Subcontract Agreement with Kellog & Kimsey, Inc. for Element
Hotel by Westin, 2515 N.W. 36th Avenue, executed on February 19,
2010.
18. Subcontract Agreement with Double P Construction, Inc. for Best
Western, 132 Fairway Drive, Miami Springs, FL 33136, executed on
May 27, 2010.
19. Subcontract Agreement with Coastal Construction of Monroe, Inc.
for Shepherd's Court, 336 NW 5th Street, Miami, FL 33128,
executed on April 28, 2010.
20. Subcontract Agreement with Cogun, Inc. for Shepherd of the Court
Lutheran Church and School, 1901 E. Commercial Blvd., Fort
Lauderdale, FL 33308.
21. Subcontract Agreement with Cummings-Balfour Beatty-A Joint
Venture (Balfour Beatty Construction, LLC and James A.
Cummings, Inc.) for FAU Stadium, 777 Glades Road, Boca Raton, FL
33431, executed October 19, 2009.
22. Subcontract Agreement with Gates Butz Institutional Construction,
LLC for Fort Lauderdale Executive Airport, 2020 Executive
23
Airport Way, Fort Lauderdale, FL 33309, executed on March 30,
2010.
23. Subcontract Agreement with Gryphon Contactors, LLC for Church by
the Glades, 400 Lakeview Drive, Coral Springs, FL, 33071,
executed on November 30, 2009.
24. Subcontract Agreement with Coastal Construction of Monroe, Inc.
for New Camillus House Center, 1603 NW 7th Avenue, Miami, FL
33127, executed on May 28, 2010.
25. Subcontract Agreement with Butters Construction & Development,
Inc. for 2200 Butts Road Office Building, 2200 Butts Road, Boca
Raton, FL 33431, executed on December 30, 2009.
26. Subcontract Agreement with Premier Turnpike Park, LLP for Premier
Turnpike Park, 2901 NW 27th Avenue, Pompano Beach, FL 33073,
executed on February 4, 2008.
27. Subcontract Agreement with James A. Cummings, Inc. for Blanche
Ely High School, 1400 N.W. 14 Court, Fort Lauderdale, FL 33311.
Licenses
28. Broward County Certificate of Competency 4A Excavating-License
#:07-4A-13959-X
29. Broward County Certificate of Competency 4B Clearing and Grading-
License#: 07-4B-139060-X
30. State of Florida Department of Business and Professional
Regulation Cert Underground & Excav Cntr- License#: CUC056820
31. State of Florida Department of Financial Services Division of
State Fire Marshall Contractor V Certificate of Competency-
License#: 17021500012009
32. City of Boca Rata Raton Local Business Tax Receipt #100004413
33. Palm Beach County Local Tax Receipt Account #: 2008-07306
34. State of Florida Department of Business and Professional
Regulation Construction Industry Licensing Board Certified
General Contractor-License# CGC15122866
35. State of Florida Department of State Corporation
Certificate-Document #: P98000035027
24
Schedule 1.01(c)
EQUIPMENT
Please reference the appraisal dated July 27, 2010 by Ronald
Lichtinger, Jr.
Schedule 1.01(d)
SUPPLIES
Please reference Fixed Asset Leadsheet (6.30.2010).
25
Farache Enterprises, Inc. Review
Fixed Asset Leadsheet
Code Acct Description Report Report
6/30/2009 6/30/2010
1500 Fixed Assets
1500,10 Machinery and Equipment
1509 2009 Fixed Assets: Pump 3 in Trash 1,165.00 1,165.00
1510 Attachments Heavy Equipments 52,500.00 52,500.00
1515 2000 New Holland LS180 Dozer 0.00 7,500.00
1520 Bobcat: 2004 CAT DMA #02519 EX MODEL303 0.00 7,500.00
1521 Bobcat: BC1 NEW HOLLAND 5962 11,500.00 11,500.00
1522 Bobcat: BC2 YR 2002 RTL200t 12,000.00 12,000.00
1523 Bobcat: BC3 NEW HOLLAND 181583 13,515.00 13,515.00
1524 Bobcat: BC4 2005 Bobcat series 785S 5,000.00 5,000.00
1525 Bobcat: BC5 2006 Miller Attachment 0.00 5,000.00
1526 Bobcat: BC6 2005 CAT Serial # 267B-CYC0 0.00 29,059.00
1527 Bobcat: Bobatcat 262 0.00 6,000.00
1530 Cargo Container Blue 1,500.00 1,500.00
1540 Cargo Container White 1,500.00 1,500.00
1550 Combination CB1 NEW HOLLAND 20,500.00 20,500.00
1560 COMPUTERS & OFFICE EQUIPMENT 4,876.00 4,876.00
1561 COMPUTERS & OFFICE EQUIPMENT: COMPUTERS/SOFTWARE 4,813.00 4,813.00
1570 Crawler Dozer:D1 VIN#T0750CX943403 05 JD 750C 181,000.00 188,758.00
1571 Crawler Dozer:D2 VIN#T0550HX879300 2000 JD 43,460.00 43,460.00
1572 Crawler Dozer:D3 VIN#T0700HX928297 JD 700H 58,185.00 58,185.00
1573 Crawler Dozer:D4 VIN#T0650HX934769 04JD650H 72,000.00 72,000.00
1580 Excavators:EX1 VIN#A84347Komats PC300LC-6 85,000.00 32,500.00
1581 Excavators:EX2 VIN#FF330CX804425 05JD33DCLC 185,000.00 185,000.00
1582 Excavators:EX3 VIN#FF230CX603663 JD 230CLC 176,000.00 176,000.00
1583 Excavators:EX4 VIN#FF330CX804084 05JD330CLC 180,000.00 180,000.00
1584 Excavators:EX5 2005 JD 330C-LC 134,675.00 134,675.00
1585 Excavators:EX6 2005 JD 330C-LC Hydraulic 137,825.00 137,825.00
1586 Excavators:EX7 96 792D LC Hydraulic 0.00 7,315.00
1590 Front End Loaders:2006 J. DEERE MODEL 544J LOADER 0.00 7,315.00
1591 Front End Loaders:FEL1 VIN#A70237 1998 Komatsu 65,000.00 65,000.00
1592 Front End Loaders:FEL2 04 JD644 VIN#DW644JX59379 141,050.00 141,050.00
1593 Front End Loaders:FEL4 KOMATSU 68099 25,000.00 25,000.00
1594 Front End Loaders:FEL5 IN#DW544G561107 JD 544G 49,820.00 49,820.00
1595 Front End Loaders:FEL6 04 JD544H VIN#DW544HX58769 59,971.00 59,971.00
1596 Front End Loaders:FEL8 Komatsu WA250L-5 55,964.00 55,964.00
1597 Front End Loader: T0410GX941607 0.00 98,676.00
1600 Graders:GR1 Komatsu Motor Grader GD605A 25,000.00 25,000.00
1601 Graders:John Deere 670CH Motor Grade 0.00 66,086.00
1610 GRINDERS:G1 VIN#14520 99 Bandit Wood 200 6,000.00 6,000.00
1611 GRINDERS:G2 CRUSHER 03 Power 800EXC 66,000.00 66,000.00
1612 GRINDERS:G3 POWER SCREEN Titan 1800 156,350.00 156,350.00
1613 GRINDERS:G4 04 Tesab 1012 Track-Mounte 0.00 132,098.00
1620 Laser Machine 5,000.00 5,000.00
1640 Paving:TM1 Tack Machine 12,000.00 22,000.00
1650 Power Generators: P1 MMD Power Pro 65 VIN#5DG655 36,000.00 36,000.00
1660 Rollers: 2 Ingram 12 ton static roller 0.00 4,500.00
1661 Rollers:R1 VIN# Bomag RollerModel W212D2 35,000.00 35,000.00
1662 Rollers:R2 97 INGERSOL 3994 14,000.00 14,000.00
1663 Rollers:R3 INGRAM 3 Wheel Roller (12T) 14,000.00 14,000.00
1664 Rollers:R4 DYNAPAC CA 251 D VIBRATORY 40,000.00 40,000.00
1665 Rollers:R5 -09 Bomag Model MW 100AD-4 15,900.00 15,900.00
1666 Rollers:R6 2002CAT ROLLER 224EC22498016 0.00 5,000.00
1669 Trailers:2005/ASPT 0.00 100.00
1670 Trailers:TR1 1985 Custom Trailer VIN#1YB 7,500.00 7,500.00
26
1671 Trailers:TR2 KAUF TL 12,000 TON 5,000.00 5,000.00
1672 Trailers:TR3 96 LowBoy Fontaine 4769 45,050.00 45,050.00
1673 Trailers:TR4 New Holland 9268 34,500.00 34,500.00
1674 Trailers:TR5 2006 Contr TL 4545 500.00 500.00
-------------------------
1500,10 Total 2,296,619.00 2,659,860.00
-------------------------
1500,50 Vehicles
1630 Off Road Truck:DT 1 2005 JD MODEL 250D 241,000.00 241,000.00
1631 Off Road Truck:DT 2 2005 JD MODEL 250D 251,000.00 251,000.00
1678 Trucks:Water Trucks:WT1 Rio Water Truck 20,043.00 20,043.00
1679 Trucks:Water Trucks:WT2 '89 American General Tande 8,500.00 8,500.00
1680 Trucks:Fuel Trucks & Tanks: FT1 Rio Hercules 6000 G 35,000.00 35,000.00
1681 Trucks:Fuel Trucks & Tanks: FT2 Fuel Tank 1000 Gall 12,500.00 12,500.00
1682 Trucks:Service Trucks: ST1 04 Ford F350 VIN#1FTWW33 37,000.00 37,000.00
1683 Trucks:Service Trucks: ST2 pp Ford F350 VIN#1FDEF37 18,900.00 18,900.00
1684 Trucks:Service Trucks: ST3 00 Ford F-450 VIN#1FDAF5 25,000.00 25,000.00
1685 Trucks:Service Trucks: ST4 08 Ford F550 S/N 62254 72,739.00 72,739.00
1686 Trucks:Service Trucks: Tools Service Trucks 95,000.00 95,000.00
1687 Trucks:Truck:T1 91 FRHT FLD VIN#V399268 25,000.00 25,000.00
1688 Trucks:Truck:T2 98 Ford Tractor 20,000.00 20,000.00
1689 Trucks:Truck:T3 1984 MACK TR BHP 16380 2,500.00 2,500.00
1690 Vehicles & SUV Trucks:2000 FORD F-450 UTILITY TRK 0.00 (4,500.00)
1691 Vehicles & SUV Trucks:2000 Red Ford F-250 4,500.00 4,500.00
1692 Vehicles & SUV Trucks:2003 White Ford F-250 6,795.00 6,795.00
1693 Vehicles & SUV Trucks:2005 Dodge 17,900.00 17,900.00
1694 Vehicles & SUV Trucks:2005 HUMMER 48,866.00 48,866.00
1696 Vehicles & SUV Trucks:2010 FORD RANGER 0.00 19,773.45
1697 Vehicles & SUV Trucks:Chevrolet Truck Tahoe 0.00 51,805.00
1698 Vehicles & SUV Trucks:Polaris 0.00 2,450.00
1699 Vehicles & SUV Trucks:Polaris Hawkeye 300 0.00 2,450.00
-----------------------
1500,50 Total 942,243.00 1,014,221.45
-----------------------
1500,60 Computer and Office Equip
1500,70 Accumulated Depreciation
1500 ACCUMULATED DEPRECIATION 542,644.00 547,144.00
1501 Accumulated Dep - Vehicles (1,077,960.00)(1,120,619.00)
1502 Accumulated Dep - Machinery (537,257.00)(1,198,858.00)
1503 Accumulated Dep - Computers (683,561.00) (750,384.00)
---------------------------
1500,70 Total (1,756,134.00)(2,522,717.00)
---------------------------
1500, No Subcode
1500 Total 1,482,728.00 1,151,364.45
---------------------------
Fixed Asset Leadsheet Total 1,482,728.00 1,151,364.45
===========================
------------
Total Fixed Assets 3,674,081.45
============
27
Schedule 1.01(e)
CONFIDENTIAL AGREEMENTS
1. Nondisclosure Agreement with Black Eagle Partners, LLC executed
4.26.10.
2. Nondisclosure Agreement with Blackstreet Capital Management, Inc.
executed 4.26.10.
3. Nondisclosure Agreement with CMF Associates, LLC executed
3.11.10.
4. Nondisclosure Agreement with Burke Construction Group, Inc.
executed 3.11.10.
5. Nondisclosure Agreement with Focus Management Group USA, Inc.
executed 4.15.10.
6. Nondisclosure Agreement with Gateway City Capital Investors, LLC
executed 4.22.10.
7. Nondisclosure Agreement with H.I.G. Capital Management, Inc.
executed 4.21.10.
8. Nondisclosure Agreement with Hammond Kennedy Whitney & Co., Inc.
executed 2.19.10.
9. Nondisclosure Agreement with Kaufman Lynn, Inc. executed 4.20.10.
10. Nondisclosure Agreement with Kimmins Contracting Corporation.
executed 2.22.10.
11. Nondisclosure Agreement with Plexus Capital, LLC. executed
3.11.10.
12. Nondisclosure Agreement with Sunrock Equity Partners, LLC.
executed 2.25.10.
13. Nondisclosure Agreement with John Sruba, an individual, executed
4.20.10.
14. Nondisclosure Agreement with US Capital, executed 8.5.2010.
28
Schedule 1.01(f)
IP RIGHTS
No intellectually property rights exist.
Schedule 1.02(b)
ACCOUNTS RECEIVABLE
$3,484,212 as of July 22, 2010.
Schedule 1.02(d)
OTHER ASSETS
No stockholder advances or life insurance policies exist.
Schedule 1.03
COMPANY LIABILITIES
As of June 30, 2010
Accounts Payable: $965,804
Accrued Expenses: $28,650
Line of Credit: $464,374
Due to Shareholder: $100,240
Current Portion of Debt: $170,056
Billings in excess of costs and estimated earnings on uncompleted
contracts: $287,877
Debt, Less Current Portion: $237,419
TOTAL CURRENT LIABILITIES: $2,264,410
29
Schedule 1.05(b)
SHAREHOLDER NOTE
This Note has not been registered under the Securities Act of 1933 (the
"Securities Act"), or under the provisions of any applicable state
securities laws, but has been acquired by the registered holder hereof
for purposes of investment and in reliance on statutory exemptions under
the Securities Act, and under any applicable state securities laws. This
Note may not be sold, pledged, transferred or assigned except in a
transaction which is exempt under provisions of the Securities Act and
any applicable state securities laws or pursuant to an effective
registration statement; and in the case of an exemption, only if the
Company has received an opinion of counsel satisfactory to the Company
that such transaction does not require registration of this Note.
[September 1, 2010]
$325,000 8% TERM NOTE
IRON EAGLE GROUP, INC, a Delaware corporation or its subsidiaries (the
"Company"), with offices located at 448 West 37th Street, Suite 9G, New
York, NY 10018, for value received, hereby promises to pay to Moshe
Farache, a resident of Florida or registered assigns (the "Holder"), the
principal sum of Three Hundred Twenty-Five Thousand ($325,000) Dollars.
The date of issuance is [September 1, 2010] ("Date of Issuance"). The
term of the note shall be two years from the Date of Issuance.
This Note shall bear a simple interest rate of eight percent (8%)
("Initial Interest Rate"). However, if the Company misses an interest or
principal payment, the Initial Interest Rate will convert to a penalty
rate of interest (18.0%) until the all missed payments are paid.
Principal shall be due and payable to the Holder on the two year
anniversary of the Issuance Date. Interest shall be due and payable to
the Holder on the six month, twelve month, eighteen month, and twenty-
four month anniversary of the Issuance Date. Payment shall be made to the
Holder by wire or check.
This Shareholder Note will be subordinated to 1) other debt that might be
obtained for the Company and 2) surety and other performance bonds.
Borrower may at any time or from time to time make a voluntary
prepayment, whether in full or in part, of this Note, without premium or
penalty.
Borrower waives presentment for payment, notice of dishonor, protest and
notice of protest of this Note. No delay or omission on the part of the
holder in exercising any right hereunder shall operate as a waiver of
such right or of any right of such holder, nor shall any delay, omission
or waiver on any one occasion be deemed a bar to or waiver of the same or
any other right on any future occasion.
This Note shall be binding upon the undersigned and its successors. Any
notice, demand or communication in respect of this Note shall be validly
given, or made on, the undersigned if in writing and delivered or sent by
registered mail, postage prepaid, addressed to the undersigned at the
address set forth above or any subsequent business address of the
undersigned.
30
If any term or provision of this Note or the application thereof to any
person or circumstances shall, to any extent, be invalid or
unenforceable, the remainder of this Note or the application of such term
or provision to persons or circumstances other than those as to which it
is held invalid or unenforceable, shall not be affected thereby, and each
such term and provision of this Note shall be valid and be enforced to
the fullest extent permitted by law.
This Note may not be modified, changed, supplemented or terminated, nor
may any obligations hereunder be waived, except by written instrument
signed by the party to be charged or by his agent duly authorized in
writing or as otherwise expressly permitted herein. No extension of time
for performance of any obligation or act shall be deemed an extension of
the time for performance of any other obligation or act.
By:
---------------------------
Name: Michael J. Bovalino
Title: Chief Executive Officer
Company: Iron Eagle Group, Inc.
31
Schedule 5.12
NON COMPETE AGREEMENT
IRON EAGLE GROUP
448 West 37th Street, Suite 9G, New York, NY
CONFIDENTIALITY, NONCOMPETITION, NONSOLICIATION, NON DISCLOSURE
AGREEMENT
This Agreement is made between Moshe Farache ("Employee") and Iron
Eagle Group, Inc. a Delaware Corporation (defined as the "Company"
herein). In consideration of the purchase of Farache Enterprises, Inc.
and the employment of Employee and the compensation paid to Employee by
the Company, the adequacy of which are hereby acknowledged, both
parties agree as follows:
1. Definitions:
a. "Company" means Iron Eagle Group, Inc., along with its managed
cooperatives subsidiaries, parents, affiliated entities, and includes
the successors and assigns of the Company or any such related entities.
b. "Business of the Company" means the following businesses:
commercial, industrial, and residential construction including site
development, but shall exclude general contracting for residential
single-family home construction
c. "Material Contact" means personal contact or the supervision
of the efforts of those who have direct personal contact with a vendor,
supplier or customer.
d. "Confidential Information" means information about Company and
its employees, customers, vendors and/or suppliers which is not
generally known outside of the Company, which Employee learns of in
connection with Employee's employment with the Company, and which would
be useful to competitors of the Company. Confidential Information
includes, but is not limited to: (1) business and employment policies,
marketing methods and the targets of those methods, financial data,
business plans, promotional materials, price lists, price books, order
guides, pricing and pricing strategies, profit and loss statements, and
sales and account records; (2) present and prospective customer lists,
customer classes, customer preferences and buying patterns, and
customer credit information; (3) the terms upon which the Company
obtains products from its vendors and/or suppliers and sells them to
customers; and (4) the manner in which the Company provides products
and services to its customers; and (5) the nature, origin, composition
and development of the Company's brands and products.
e. "Trade Secrets" means Confidential Information which meets the
additional requirements of the Uniform Trade Secrets Act or similar
state law.
2. Duty of Confidentiality. To assist Employee in the performance
of his or her duties for the Company, the Company has provided and will
provide to Employee certain Confidential Information. Employee agrees
that during employment with the Company and for a period of three (3)
years following the cessation of that employment for any reason,
Employee shall not directly or indirectly divulge or make use of any
Confidential Information or Trade Secrets without prior written consent
of the Company. Employee further agrees that if Employee is questioned
about information subject to this Agreement by anyone not authorized to
receive such information, Employee will promptly notify Employee's
supervisor(s) or an officer of the Company.
32
IRON EAGLE GROUP
448 West 37th Street, Suite 9G, New York, NY 10018
Phone (917) 969-4845 Fax (917) 591-6227
3. Return of Property and Information. Employee agrees not to
remove any Company property from the Company's premises, except when
authorized by the Company. Employee agrees to return all the Company's
property within five (5) days following the cessation of Employee's
employment for any reason. Such property includes, but is not limited
to, the original and any copy (regardless of the manner in which it is
recorded) of all information provided by the Company to Employee or
which Employee has developed or collected in the scope of Employee's
employment, as well as all Company-issued equipment, supplies,
accessories, computers and computer disks, computer files, vehicles,
keys, instruments, tools, devices, cellular telephones, pagers,
materials, documents, plans, records, notebooks, drawings, or papers.
4. Assignment of Work Product and Inventions. Employee hereby
assigns and grants to the Company (and will upon request take any
actions needed to formally assign and grant to the Company and/or
obtain patents, trademark registrations or copyrights belonging to the
Company) the sole and exclusive ownership of any and all inventions,
information, reports, computer software or programs, writings,
technical information or work product collected or developed by
Employee, alone or with others, during the term of Employee's
employment that relates to the Business of the Company. This duty
applies whether or not the foregoing inventions or information are made
or prepared in the course of employment with the Company, so long as
such inventions or information relate to the Business of Employer and
have been developed in whole or in part during the term of Employee's
employment. Employee agrees to advise the Company in writing of each
invention that Employee, alone or with others, makes or conceives
during the term of Employee's employment.
5. Non-Competition Covenant. Employee agrees that during employment
with the Company and for a period of five (5) years following the date
of this Agreement, or two (2) years following cessation of employment
for any reason, or two (2) years from the date a court of competent
jurisdiction enforces the terms of this Agreement, whichever is later,
Employee will not compete with the Company by performing activities of
the type performed by Employee for the Company within the two (2) year
period prior to Employee's termination for any business or entity which
is engaged in a same or similar business as the Business of the Company
at the time Employee's employment ceases. In addition, Employee will
not perform activities of the type which in the ordinary course of
business would involve the utilization of Confidential Information or
Trade Secrets protected from disclosure by Part 2 of this Agreement.
This paragraph restricts competition within Florida or a 100-mile
radius of any Company facility where the employee has worked or
performed services within the last three (3) years of Employee's
employment.
6. Non-Solicitation Covenant. Employee agrees that during
employment with the Company and for a period of two (2) years following
the cessation of employment for any reason, or two (2) years from the
date a court of competent jurisdiction enforces the
33
IRON EAGLE GROUP
448 West 37th Street, Suite 9G, New York, NY 10018
Phone (917) 969-4845 Fax (917) 591-6227
terms of the Agreement, whichever is later, Employee will not directly
or indirectly solicit, attempt to solicit, divert from the Company or
transact business with any of the Company suppliers, or customers with
whom Employee had Material Contact during the last twelve (12) months
of Employee's employment with the Company if the purpose of the
solicitation, attempted solicitation, diversion or transaction is to
offer products which are the same as or similar to those offered or
provided by Employee on behalf of the Company at the time Employee's
employment ceased, so long as the Company is continuing to provide
those services or products.
7. Non-Recruitment of Company Employees. While employed by the
Company, and for a period of three (3) years following the cessation of
employment for any reason, Employee will not directly or indirectly
solicit or attempt to solicit any employee of the Company, or any
individual who, when Employee's employment ceased, had been an employee
of the Company within a six-month period preceding the date Employee's
employment cased, for the purpose of encouraging, enticing, or causing
said employee to terminate employment with the Company.
8. Other Employment After Termination. Employee acknowledges and
represents that Employee has substantial experience and knowledge such
that Employee can readily obtain subsequent employment which does not
violate this Agreement.
9. Remedies. Employee agrees that a breach of any of the covenants
set forth in paragraphs 2, 3, 4, 5, 6 or 7 or their subparts would
result in irreparable injury and damage to the Company for which the
Company would have no adequate remedy at law. Employee further agrees
that in the event of such a breach, that the Company shall be entitled
to an immediate injunction to prevent such violations and to all costs
and expenses incurred as a result, including reasonable attorney's
fees, in addition to any other remedies, including damages, to which
the Company may be entitled.
10. Non-disparagement. Employee agrees that while Employee is
employed by the Company and for the 24-month period thereafter,
Employee will not make any disparaging comments about, the Company, its
parent, any current or former employee, and contractor, officer,
director of the Company or its parent or any products or services of
the Company or its parent.
11. Reasonable of Restrictions. Employee has carefully read and
considered the provisions of paragraphs 2, 3, 4, 5, 6, and 7 and their
subparts and agrees that the restrictions set forth are fair and
reasonable and are reasonably required for the protection of the
interests of the Company, its officers, directors, and employees. If
notwithstanding the foregoing, any of the provisions of paragraphs 2,
3, 4, 5, 6 or 7, or their subparts shall be held to be invalid or
unenforceable, the remaining provisions of this Agreement shall
nevertheless continue to be
34
IRON EAGLE GROUP
448 West 37th Street, Suite 9G, New York, NY 10018
Phone (917) 969-4845 Fax (917) 591-6227
valid and enforceable as though the invalid or unenforceable parts had
not been included. If any provision of paragraphs 2, 3, 4, 5, 6 or 7
or their subparts shall be declared by a court to be unreasonable and
unenforceable, the parties agree that the court may modify the
provision so that the restrictions are made reasonable and enforceable.
12. Miscellaneous.
a. This Agreement will be governed by and construed in
accordance with the laws of the State of Delaware, except for such
Delaware laws as would result in the application of the substantive law
of another jurisdiction. With respect to any suit, action or proceeding
arising hereunder or in connection herewith (i) each party irrevocably
submits and consents to the exclusive jurisdiction of the federal or
state court in the county of Palm Beach, Florida or New York; and (ii)
each party irrevocably waives any objection to the laying of venue of
any suit, action or proceeding arising out of or relating to this
Agreement which is brought in either such court in such states,
irrevocably waives any claim that any such suit, action or proceeding
brought in either such court in such states has been brought in an
inconvenient forum and irrevocably waives the right to object, with
respect to any such claim, action or proceeding brought in either such
court in such states, that such court does not have jurisdiction over
such party.
b. No modification, amendment or waiver of any provision of
this Agreement, nor consent to any departure by the Employee therefrom,
shall in any event be effective unless the same shall be in writing and
signed by both parties and the waiver or consent shall be effective
only in the specific instance and for the purpose for which it is
given.
c. This Agreement constitutes the entire agreement of the
Employee and the Company with respect to the subject matter hereof and
supersedes all prior and contemporaneous agreements, whether oral or
written.
d. This Agreement shall be binding upon and shall inure to the
benefit of the Employee and the Company, and their respective heirs,
personal and legal representatives, successors and assigns.
e. The waiver by either the Employee or the Company of a breach
of any provision of this Agreement shall not operate to waive or be
construed as a waiver of any subsequent breach.
35
IRON EAGLE GROUP
448 West 37th Street, Suite 9G, New York, NY 10018
Phone (917) 969-4845 Fax (917) 591-6227
Employee has carefully read and understands the provisions of this
Agreement, and understands that he or she has the right to seek
independent advice or to propose modifications prior to signing the
Agreement.
Agreed and Accepted
Farache Enterprises, Inc.
By: Date:
---------------------- --------------------
Name: Moshe Farache
Title: Founder and President
Agreed and Accepted
Iron Eagle Group, Inc.
By: Date:
---------------------- --------------------
Name: Michael J. Bovalino
Title: Chief Executive Officer
