UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, DC 20549
FORM 8-K
CURRENT REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934
Date of Report (Date of earliest event reported): August 9, 2002
Commission File Number 001-15977
Tiger Telematics, Inc.
(Exact name of registrant as specified in its charter)
Delaware 13-4051167
(State or other jurisdiction of (IRS Employer
Incorporation or organization) Identification Number)
4190 Belfort Rd Suite 200 32216
Jacksonville, FL 32216
(Address of principal executive offices) (Zip Code)
(904) 279-9240
(Registrant's telephone number, including area code)
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Item 2. Acquisition or Disposition of assets.
On August 9, 2002 the company sold the assets of its flooring segment operated
by its wholly-owned subsidiary, Floor Decor LLC,. to M.I.N.I.M.E., INC., a
privately held corporation whose principal officer is a former Director of the
company. The company sold assets with a book value of $1,152,698 in exchange for
the assumption of $1,243,135 of liabilities. The Company retained a security
interest in the assets that reduces pro rata as the liabilities are paid by the
acquirer.
Item 5. OTHER EVENTS AND REGULATION FD DISCLOSURE.
Michael Jonas resigned as a Director and CEO on July 24, 2002. On August 20,
2002 Michael W. Carrender a director, EVP and CFO was named to the additional
post of CEO. On August 9, 2002 Mathew Sailor resigned as a Director of the
Company. On July 24, 2002, AJ Nassar and Ed Kenny resigned as Directors of the
company.
(c) Exhibits
(2) Plan of Acquisition, Reorganization, Arrangement, Liquidation or Succession.
2.3 Asset Purchase Agreement dated August 9, 2002 between Company and
MINIME, Inc. and related Assignment and Assumption, Security Agreement, 2 Lease
and Assignment and Assumption Agreements.
(99) Other
The Press Release dated August 20, 2002 is attached hereto as Exhibit
99.2.
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf by the
undersigned, thereunto duly authorized.
TIGER TELEMATICS, INC.
September 10, 2002
/S/ Interim Chief Executive Officer & Chief
Michael W. Carrender Financial Officer (Principal Financial and
Accounting Officer) for the Registrant and
as CFO
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(99.2)
TIGER TELEMATICS, INC. ANNOUNCES SALE OF ITS FLOORING ASSET.
FORT LAUDERDALE, FL.--(BUSINESS WIRE)--August 20, 2002--Tiger Telematics
Inc.,OTCBB:TIGR Tiger Telematics, Inc. announced today that it has completed the
sale of the assets and liabilities of its flooring business segment that
operated as Floor Decor.
Tiger Telematics, Inc. further announced that the company's CFO Michael W.
Carrender has been appointed to the additional post of interim chief executive
officer. This move will provide continuity while the company is completing a
search for a new CEO who possesses the global experience and the relevant the
criteria required by the restructured company that is now totally focused on
telematics." Michael Jonas is no longer President and CEO.
Mr.Carrender indicated, "With the sale of the unprofitable flooring business,
where the liabilities exceeded assets, the company is strategically positioned
to complete its business plan of growth in the fast growing telematics industry.
It removes a cash drain at the same time as Tiger is using working capital to
launch products. The company recently added four key executives with expertise
in wireless communications, wireless business contracts, engineering and
telematics operations to strengthen the management of its business to business
unit based in London."
About Tiger
Tiger Telematics, Inc., provides telematics products and services in Europe and
in North America. Tiger's mission is to bridge the gap that exists between the
telecommunications, computing and automotive industries by delivering a
comprehensive telematics solution to the consumer, business and fleet markets.
Tiger provides mobile telematics services that add value to subscribers by
helping them safely connect to the wireless world.
Except for historical matters contained herein, the matters discussed in this
press release are forward-looking and are made pursuant to the safe harbor
provisions of the Private Securities Litigation Reform Act of 1995. Investors
are cautioned that these forward-looking statements reflect numerous assumptions
and involve risks and uncertainties that may affect Tiger Telematics, Inc. and
its subsidiary businesses and prospects and cause actual results to differ
materially from these forward-looking statements. Among the factors that could
cause actual results to differ are Tiger Telematics, Inc.'s operating history;
competition; low barriers to entry; reliance on strategic relationships; rapid
technological changes; inability to complete transactions on favorable terms;
and those risks discussed in the Company's filings with the SEC.
Contact: Mike Carrender Tiger Telematics, Inc. 954-351-9833
Geoff Mitchell Tiger Telematics, Ltd. 011-44-20-7491-1444
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================================================================================
ASSET PURCHASE AGREEMENT
By and Among
FLOOR DECOR, LLC,
TIGER TELEMATICS, INC.
And
M.I.N.I.M.E., INC.
Dated August 9, 2002
================================================================================
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ASSET PURCHASE AGREEMENT
This ASSET PURCHASE AGREEMENT (the "Agreement"), is made and entered into
this 9th day of August, 2002, by and among FLOOR DECOR, LLC, a Delaware limited
liability company ("Seller"), TIGER TELEMATICS, INC., a Delaware corporation
("Stockholder"), and M.I.N.I.M..E., INC., a Florida corporation ("Buyer").
BACKGROUND:
Seller is engaged in the business of selling and installing floor covering
products (the "Business"), operating from its facility located at 6001 Powerline
Road, Ft. Lauderdale, Florida 33309 (the "Facility"). Buyer desires to purchase
and Seller desires to sell, transfer and deliver to Buyer, substantially all of
the assets and liabilities of Seller in exchange for cash consideration and
assumption of certain liabilities, on the terms and conditions of this
Agreement.
All capitalized (and as noted herein, uncapitalized) words or expressions used
in this Agreement (including the Schedules and Exhibits annexed hereto) and not
otherwise defined herein have the meanings specified in Exhibit A hereto (such
meanings to be equally applicable to both the singular and plural forms of the
terms defined).
In consideration of the foregoing, the mutual representations, warranties and
covenants set forth in this Agreement, and for the good and valuable
consideration, the sufficiency of which is hereby acknowledged, the parties
hereto agree as follows:
ARTICLE I
PURCHASE OF ASSETS AND ASSUMPTION OF LIABILITIES
1.1 Sale and Purchase of the Assets. Upon the terms and subject to the
conditions contained in this Agreement, at the Closing, Seller shall sell,
transfer, assign, convey and deliver to Buyer, and Buyer shall purchase, acquire
and accept, all of Seller's right, title and interest in and to, all of the
assets of Seller that are used or useful in the Business and that are set forth
on Schedule I attached hereto, and any and all contracts (the "Assumed
Contracts") to which Seller is a party and that are set forth on Schedule I,
including without limitation the leases pursuant to which Seller leases certain
premises used in the Business, as more fully described on Schedule I (the "Real
Property Leases") (collectively, the "Acquired Assets").
1.2 Excluded Assets. The Acquired Assets shall exclude those assets that
are used or useful in the Business and that are not set forth on Schedule I,
including without limitation the assets set forth on Schedule II attached
hereto.
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1.3 Assumed Liabilities. Buyer shall assume and discharge all of the
liabilities of Seller set forth on Schedule III attached hereto, including
without limitation accrued liabilities for Retained Employees and liabilities
arising in respect of the Assumed Contracts (collectively, the "Assumed
Liabilities").
It is the intent of the parties that the value of the Assumed
Liabilities, excluding all amounts owed to Joe Jillson under a promissory note
in the principal amount of $250,000 which is included in the Assumed Liabilities
(the "Jillson Debt"), not exceed the value of the Acquired Assets. The
respective values of the Assumed Liabilities and the Acquired Assets as of the
date of this Agreement are set forth on Schedules I and III. Such values shall
be adjusted immediately prior to Closing to reflect the values as of the Closing
Date, which shall be determined in accordance with GAAP and consistent with
Seller's past practices and Books and Records. If the value of the Assumed
Liabilities as of the Closing Date excluding the Jillson Debt would exceed the
value of the Acquired Assets, then the amount of accounts payable included in
the Assumed Liabilities shall be reduced to the extent necessary so that the
value of the Acquired Assets exceeds by not more than One Dollar the value of
the Assumed Liabilities excluding the Jillson Debt. Any accounts payable
eliminated from the Assumed Liabilities as a result of this adjustment shall be
Retained Liabilities (as defined below). To secure Buyer's obligation to
discharge in full all of the Assumed Liabilities in a timely manner and
otherwise in accordance with their respective terms, Buyer will grant to Seller
a first priority perfected security interest in certain assets of Seller
pursuant to a Security Agreement in the form of Exhibit B attached hereto,
together with customary UCC-1 financing statements.
1.4 Retained Liabilities. Except for the Assumed Liabilities, Buyer shall
not assume, become liable for or obligated for any of Seller's obligations,
liabilities or indebtedness whatsoever, whether known or unknown, direct,
contingent or otherwise, including any liability or obligation of Seller to its
Affiliates, employees, customers, creditors or brokers, or to any governmental
authority, or in respect of the Excluded Assets (all such liabilities and
obligations of Seller, other than the Assumed Liabilities, the "Retained
Liabilities").
1.5 Transfer of Title to the Assets. The sale, assignment, conveyance,
transfer, and delivery by Seller of the Acquired Assets shall be made at the
Closing by appropriate instruments of transfer sufficient to vest in Buyer as of
the Closing Date title to the Acquired Assets that are owned, and a valid and
assignable leasehold interest in the Acquired Assets that are leased by Seller.
Such instruments of transfer shall include without limitation an Assignment and
Assumption in the form of Exhibit C hereto (the "Assignment and Assumption").
Risk of loss of the Acquired Assets shall pass from Seller to Buyer at Closing.
1.6 Assumption of Liabilities. Buyer's assumption of the Assumed
Liabilities shall be effected at Closing by Buyer's execution and delivery of
the Assignment and Assumption. Buyer will also execute and deliver to Seller at
the Closing an Assignment and Assumption of Lease Agreement substantially in the
form of Exhibit D hereto (the "Lease Assumption Agreement") with respect to each
of the Real Property Leases.
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ARTICLE II
PURCHASE PRICE; CLOSING
2.1 Purchase Price. In consideration for the Acquired Assets, Buyer shall
(i) pay to Seller One Dollar ($1.00) in cash and (ii) assume the Assumed
Liabilities, including the Jillson Debt, pursuant to the Assignment and
Assumption.
2.2 Closing Time and Place. The closing of the transactions contemplated by
this Agreement (the "Closing") will take place at the offices of Seller on
August 9, 2002, or as soon as practicable thereafter on such date as Seller,
Stockholder and Buyer shall agree. The date on which the Closing occurs is
hereinafter referred to as the "Closing Date."
2.3 Deliveries at the Closing.
(a) Items to be Delivered by Seller. At the Closing, Seller will deliver to
Buyer the various certificates, instruments and documents referred to in Section
7.1 below, and Seller will execute and deliver to Buyer:
(i) the Assignment and Assumption; and
(ii) the Lease Assumption Agreement for each Real Property Lease.
(b) Items to be Delivered by Buyer. At the Closing, Buyer will deliver to
Seller the various certificates, instruments and documents referred to in
Section 7.2 below, and Buyer will execute and deliver to Seller:
(i) the Assignment and Assumption;
(ii) the Lease Assumption Agreement for each Real Property Lease; and
(iii) the cash consideration specified in Section 2.1 above.
This Agreement and the agreements and instruments to be executed and delivered
at Closing are referred to collectively herein as the "Transaction Agreements"
and the transactions contemplated by the Transaction Agreements are referred to
as the "Transactions".
2.4 Employees. Attached hereto as Schedule IV is a list of all
employees of Seller that will be employed by Buyer post-closing (the "Retained
Employees"). All expenses, including without limitation accrued vacation, unpaid
expense reimbursement and accrued salary (collectively, the "Employment
Expenses") that will be owed as of the Closing Date with respect to the Retained
Employees are listed on Schedule III. Buyer shall be responsible for all
Employment Expenses incurred prior to the Closing Date for the Retained
Employees, which shall be deemed to be Assumed Liabilities for all purposes of
this Agreement. Seller shall update Schedule IV at Closing to provide definitive
lists of Retained Employees and Employment Expenses.
2.5 Proration of Expenses. At the Closing, the parties will make
appropriate allocations of and payments for prepaid and accrued expenses related
to the operation of the Business.
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ARTICLE III
REPRESENTATIONS AND WARRANTIES OF SELLER AND STOCKHOLDER
Seller and Stockholder hereby represent and warrant to Buyer, as of the
date hereof and as of the Closing Date, as follows:
3.1 Organization. Seller is a limited liability company duly organized,
validly existing, and in good standing under the laws of the State of Florida.
3.2 Capitalization and Ownership. All of the ownership interests of Seller
are held by Stockholder and have been duly authorized, validly issued, are fully
paid and nonassessable, and were not issued in violation of the terms of any
agreement or other understanding binding upon Seller or any other Person. There
are no outstanding securities, options, warrants, rights, agreements, calls,
subscription commitments, demands, or understandings of any character
whatsoever, fixed or contingent, that directly or indirectly (i) call for the
issuance, sale or other disposition of any ownership interests of Seller and
there are no securities convertible into or exchangeable for ownership interests
of Seller or (ii) obligate Seller to grant, offer or enter into any of the
foregoing or (iii) relate to the voting or control of any ownership interests of
Seller.
3.3 Subsidiaries. Seller has no interests, direct or indirect, in any other
Person.
3.4 Authorization and Enforceability. Seller and Stockholder each has all
requisite limited liability company power and authority and corporate power and
authority, respectively, to execute and deliver this Agreement and all of the
other Transaction Agreements to which it is a party and to perform its
obligations hereunder and thereunder. Seller's and Stockholder's execution and
delivery of, and the performance of their respective obligations under, this
Agreement and the Transaction Agreements to which each of them is a party have
been duly and validly authorized by all necessary limited liability company
action and corporate action, respectively. This Agreement has been duly executed
and delivered on behalf of Seller and Stockholder and constitutes the legal,
valid, and binding obligations of Seller and Stockholder, enforceable against
Seller and Stockholder in accordance with its terms subject to general equitable
principles and except as the enforceability of this Agreement may be limited by
applicable bankruptcy, insolvency, reorganization, moratorium or other similar
laws of general application relating to creditors' rights. When executed and
delivered, each of the Transaction Agreements other than this Agreement to which
Seller and Stockholder is a party will be duly executed and delivered on behalf
of Seller and Stockholder and will constitute the legal, valid, and binding
obligation of Seller and Stockholder, enforceable against Seller and Stockholder
in accordance with its terms subject to general equitable principles and except
as the enforceability of this Agreement may be limited by applicable bankruptcy,
insolvency, reorganization, moratorium or other similar laws of general
application relating to creditors' rights.
3.5 No Conflict; No Violation of Laws or Agreements. The execution and
delivery of this Agreement does not, the execution and delivery of the
Transaction Agreements other than this Agreement will not, and the consummation
of the Transactions and the
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compliance with the terms, conditions, and provisions of the Transaction
Agreements by Seller and Stockholder will not:
(a) contravene any provision of Seller's Articles of Organization or
operating agreement, or Stockholder's Charter or Bylaws, or any other
organizational document of Seller or Stockholder;
(b) conflict with, constitute or result in any breach, default or violation
of (or an event which might, with or without the passage of time or the giving
of notice or both, constitute or result in a breach, default or violation of)
(i) any of the terms, conditions, or provisions of any indenture, mortgage,
loan, credit agreement, or any other instrument, contract, agreement or
commitment to which Seller or Stockholder is a party, or by which any Seller or
Stockholder, or any of the Acquired Assets may be bound or affected, (ii) any
judgment or order of any Governmental Authority, or (iii) any law, rule or
regulation;
(c) result in the creation or imposition of any Lien upon any Acquired
Assets or give to others any interests or rights therein;
(d) result in the acceleration of any liability or obligation of Seller or
Stockholder (or give others the right to cause such acceleration); or
(e) result in the termination of or loss of any right (or give others the
right to cause such a termination or loss) under any Assumed Contract.
3.6 No Undisclosed Liabilities. Seller does not have any material liability
or obligation of any nature, whether due or to become due, absolute, contingent,
or otherwise, whether direct or indirect, other than liabilities incurred in the
ordinary course of business (and not in violation of this Agreement) that are
fully reflected as liabilities on the appropriate books of account of Seller.
3.7 Brokerage. Neither Seller, Stockholder nor anyone acting on behalf of
Seller or Stockholder has engaged, retained or incurred any liability to any
broker, investment banker, finder or agent, made any agreement or taken any
other action which might cause anyone to become entitled to a broker's fee or
commission or agreed to pay any brokerage fees, commissions, finder's fees or
other fees with respect to or as a result of the Transactions.
3.8 Litigation and Claims. There are no Claims pending or, to the knowledge
of Seller or Stockholder, threatened which seek to delay or prevent the
consummation of the Transactions or which would be reasonably likely to
adversely affect or restrict Seller's or Stockholder's ability to perform their
respective obligations under this Agreement.
3.9 Title to Assets; Liens. Seller has good and marketable title to the
Acquired Assets that are owned and a valid and assignable leasehold interest in
the Acquired Assets that are leased. The Acquired Assets are free and clear of
all mortgages, liens, security interests, pledges, charges and other
encumbrances, except for liens for current taxes not yet due and payable or
being contested in good faith by appropriate proceedings, and such imperfections
of title, easements and encumbrances as do not materially detract from the value
of the properties subject thereto or affected thereby or otherwise do not
materially interfere with their present or future use in a manner consistent
with present practices or materially impair the operation of the Business.
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3.10 Trade Payables All of the trade payables have been incurred in the
ordinary course of the Business and are current in accordance with their
respective terms and conditions.
3.11 Accounts Receivable. A complete and accurate listing of all accounts
receivable of Seller included in the Acquired Assets as of the date hereof
accurately reflecting the aging thereof is set forth in Schedule I. All such
accounts receivable are valid and enforceable claims, are subject to no set off
or counterclaim and are fully collectible in the ordinary course of business.
3.12 Contracts. Except for contracts, commitments or agreements that (i)
are described in Schedule I attached hereto or (ii) relate exclusively to the
Excluded Assets and are not to be assigned to or assumed by Buyer, the Seller is
not a party to or subject to any contract, commitment or agreement that is
material to the operation of the Business. Copies of all contracts, commitments,
plans, agreements or licenses described in Schedule I have been provided to
Buyer or its counsel prior to the execution of this Agreement and are true,
correct and complete, and have not been subject to any amendment, extension or
other modification as of the date hereof. Each contract, commitment, plan
agreement and license described in Schedule I is binding and enforceable in
accordance with its terms and is in full force and effect without any default
thereunder by Seller or, to the knowledge of Seller or Stockholder, by any other
party thereto (a "default" being defined for purposes hereof as an actual
default or any set of facts that would, upon receipt of notice or passage of
time, constitute a default).
3.13 Employee Benefit Plans. All employee benefit plans, as that term is
defined in Section 3(3) of the Employee Retirement Income Security Act of 1974,
as amended, ("ERISA"), currently maintained by Seller or to which Seller has an
obligation to contribute (the "Employee Benefit Plans") are described in
Schedule III. No event has occurred nor has there been any omission which would
result in violation of any laws, rulings or regulations applicable to any
Employee Benefit Plan. There are no claims pending or, to the knowledge of
Seller or Stockholder, threatened with respect to any Employee Benefit Plan,
other than claims for benefits by employees, beneficiaries or dependents arising
in the normal course of the operation of any such plan. All contributions
(including all employer contributions and employee salary reduction
contributions) that are due have been paid to each such Employee Benefit Plan.
All premiums or other payments for all periods ending on or before the Closing
Date have been paid with respect to each such Employee Benefit Plan.
3.14 Labor Relations; Employees. Seller employs approximately 12 employees
and generally enjoys a good employer-employee relationship. Seller is not
delinquent in payments to any of its employees for any wages, salaries,
commissions, bonuses or other direct compensation for any services performed for
it to the date hereof or amounts required to be reimbursed to such employees.
Upon termination of the employment of Seller's employees, neither the Seller nor
the Buyer will by reason of anything done prior to the Closing be liable to any
of such employees for so-called "severance pay" or any other payments. The
Seller has not implemented any written or oral policy that would contravene or
contradict the "employment at will" policy. The Seller is in compliance with all
applicable laws and regulations respecting labor, employment, fair employment
practices, terms and conditions of employment, and wages and hours.
3.15 Regulatory Actions or Investigations. Seller is not now a party to,
and has not been apprised or notified of, any regulatory investigation or
proceeding contemplated, pending or initiated by any federal or state agency or
governmental unit.
3.16 Copies of Documents. Seller has made available for inspection and
copying by Buyer and its counsel true and correct copies of all documents
referred to in this Section 3 including, without limitation, those referred to
in Schedules I and III.
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ARTICLE 4
REPRESENTATION AND WARRANTIES OF BUYER
Buyer represents and warrants to Seller and Stockholder, as of the date
hereof and as of the Closing Date, as follows:
4.1 Organization. Buyer is a corporation duly incorporated, validly
existing and in good standing under the laws of the State of Florida and has all
requisite corporate power and authority (a) to do business in the jurisdictions
wherein the character of the properties owned or leased or the nature of the
activities by it make such qualification necessary, (b) to execute and deliver
this Agreement and the other Transaction Agreements, and (c) to perform its
obligations hereunder and thereunder.
4.2 Subsidiaries. Buyer does not have any direct or indirect interest in
any other Person.
4.3 Authorization and Enforceability. The execution and delivery of this
Agreement and each of the other Transaction Agreements, and the performance of
Buyer's obligations hereunder and thereunder, have been duly authorized by all
necessary corporate action on the part of Buyer. This Agreement has been duly
executed and delivered by Buyer and constitutes the legal, valid and binding
obligation of each of Buyer, enforceable against Buyer in accordance with its
terms subject to general equitable principles and except as the enforceability
thereof may be limited by applicable bankruptcy, insolvency, reorganization,
moratorium or other similar laws of general application relating to creditors'
rights. Each of the Transaction Agreements to which Buyer is a party other than
this Agreement when execute and delivered by Buyer will be duly executed and
delivered by Buyer and will constitute the legal, valid and binding obligation
of Buyer, enforceable against Buyer in accordance with its terms subject to
general equitable principles and except as the enforceability thereof may be
limited by applicable bankruptcy, insolvency, reorganization, moratorium or
other similar laws of general application relating to creditors' rights.
4.4 No Conflict; No Violation of Laws or Agreements. The execution and
delivery of this Agreement does not, the execution and delivery of the
Transaction Agreements other than this Agreement will not, and the consummation
of the Transactions and the compliance with the terms, conditions and provisions
of the Transaction Agreements by Buyer will not: (a) contravene any provision of
Buyer's Charter or Bylaws, or (b) conflict with, or constitute, or result in any
breach, default, violation of (or an event which might, with or without the
passage of time or the giving of notice or both constitute or result in a
breach, default or violation of) (i) any of the terms, conditions, or provisions
of any indenture, mortgage, loan, credit agreement, or any other instrument,
contract, agreement or commitment to which either of them is a party, or by
which any of their assets may be bound or affected or (ii) any judgment or order
of any Governmental Authority, or (iii) any law, rule, or regulation.
4.5 Consents. No consent, approval, or authorization of, or registration or
filing with, any Person, including any Governmental Authority, is required in
connection with Buyer's execution and delivery of this Agreement of the other
Transaction Agreements or the consummation of the Transactions by Buyer.
4.6 No Undisclosed Liabilities. Buyer does not have any material liability
or obligation of any nature, whether due or to become due, absolute, contingent,
or otherwise, whether direct or indirect.
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4.7 Litigation and Claims. There are no Claims pending or, to the knowledge
of Buyer, threatened which (i) seek to delay or prevent the consummation of the
Transactions, (ii) would be reasonably likely to adversely affect or restrict
Buyer's ability to perform its obligations under the Transaction Agreements, or
(iii) would be reasonably likely to have a material adverse effect on Buyer's
business, assets, financial condition, results of operations or prospects.
4.8 Brokers. Neither Buyer nor anyone acting on its behalf has engaged,
retained or incurred any liability to any broker, investment banker, finder or
agent, made any agreement or taken any other action which might cause anyone to
become entitled to a broker's fee or commission or agreed to pay any brokerage
fees, commissions, finder's fees or other fees with respect to the purchase of
the Acquired Assets or as a result of the Transactions.
4.9 Truth and Accuracy of Disclosures. No disclosure made by Buyer or its
representatives to Seller or Stockholder about Buyer's business, operations,
financial condition, results of operations or prospects contains or will contain
any untrue statement of a material fact, or omits or will omit to state a
material fact necessary to make the statements of facts contained therein not
misleading or necessary to provide Seller and Stockholder with adequate and
complete information as to Buyer's business, operations, financial condition,
results of operations or prospects.
ARTICLE 5
PRE-CLOSING COVENANTS OF SELLER AND STOCKHOLDER
5.1 Authorization from Others. Prior to the Closing Date, Seller and
Stockholder will obtain all authorizations, consents and permits of others
required to permit the consummation by Seller and Stockholder of the
Transactions.
5.2 Breach of Representations and Warranties. Neither Seller nor
Stockholders shall not take any action that would result in any of the
representations and warranties contained in Article 3 hereof being untrue in any
material respect. Promptly upon the occurrence of, or promptly upon Seller or
Stockholder becoming aware of the impending or threatened occurrence of, any
event that would cause or constitute a breach or default, or would have caused
or constituted a breach or default had such event occurred or been known to
Seller or Stockholder prior to the date hereof, of any of the representations
and warranties of the Seller and Stockholder contained in this Agreement, Seller
and Stockholder shall give detailed written notice thereof to Buyer and shall
use their respective best efforts to prevent or promptly cure the same.
5.3 Consummation of Agreement. Seller and Stockholder shall use their
respective best efforts to perform and fulfill all conditions and obligations on
their parts to be performed and fulfilled under this Agreement.
5.4 Confidentiality. Seller and Stockholder agree that (a) Seller and
Stockholder and their respective officers, directors, agents and representatives
will hold in strict confidence, and will not use, any data and information
obtained in connection with this transaction or Agreement with respect to the
business of Buyer, except for the purpose of Seller's and Stockholder's internal
evaluation of the Transactions; (b) if such Transactions are not
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consummated, Seller and Stockholder will return to Buyer all copies of such
data and information, including but not limited to worksheets, test reports,
manuals, lists, memoranda, and other documents prepared by or made available to
Seller and Stockholder in connection with this transaction; and (c) they will
treat the existence of this Agreement and the transactions contemplated hereby
as strictly confidential and will not disclose them to any Person without the
prior written consent of Buyer. Nothing in this Agreement shall be construed to
prevent Seller and Stockholder from, or in any way subject Seller and
Stockholder to liability for, making such disclosures regarding this Agreement
or the negotiation of the transactions contemplated herein as Seller and
Stockholder shall reasonably determine are necessary or appropriate under
applicable securities rules or for investor relations purposes.
ARTICLE 6
PRE-CLOSING COVENANTS OF BUYER
6.1 Consummation of Agreement. Buyer shall use its best efforts to perform
and fulfill all conditions and obligations on its part to be performed and
fulfilled under this Agreement. The Buyer will obtain prior to the Closing all
necessary authorizations or approvals of its Board of Directors or stockholders,
in accordance with the laws of the State of Delaware
6.2 Confidentiality. Buyer agrees that, unless and until the Closing has
been consummated, (a) Buyer and its officers, directors, agents and
representatives will hold in strict confidence, and will not use, any data and
information obtained in connection with this transaction or Agreement with
respect to the business of Seller or Stockholder, except for the purpose of
Buyer's internal evaluation of this transaction or the consummation of the
Transactions; and (b) if such Transactions are not consummated, Buyer will
return to Seller or Stockholder all copies of such data and information,
including but not limited to worksheets, test reports, manuals, lists,
memoranda, and other documents prepared by or made available to Buyer in
connection with this transaction.
6.3 Authorization from Others. Prior to the Closing Date, the Buyer will
obtain all authorizations, consents and permits of others required to permit the
consummation by Buyer of the Transactions.
6.4 Breach of Representations and Warranties. Buyer shall not take any
action that would result in any of the representations and warranties contained
in Article 4 hereof being untrue in any material respect. Promptly upon the
occurrence of, or promptly upon Buyer becoming aware of the impending or
threatened occurrence of, any event that would cause or constitute a breach or
default, or would have caused or constituted a breach or default had such event
occurred or been known to Buyer prior to the date hereof, of any of the
representations and warranties of Buyer contained in or referred to in this
Agreement, Buyer shall give detailed written notice thereof to Seller and
Stockholder and shall use its best efforts to prevent or promptly cure the same.
ARTICLE 7
CONDITIONS TO CLOSING
7.1 Conditions Precedent to Obligations of Buyer. The obligations of Buyer
to proceed with the Closing under this Agreement are subject to the fulfillment
prior to or at Closing of the following conditions (any one or more of which may
be waived in whole or in part by Buyer in Buyer's sole discretion):
(a) Representations, Warranties and Covenants. The representations and
warranties of Seller and Stockholder set forth in Section 3 that are not
qualified as to materiality shall be true and correct in all material respects,
and such the representations and warranties that are qualified as to materiality
shall be true and correct in all respects, at and as of the Closing Date.
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Seller and Stockholder shall have performed and complied with all of their
covenants hereunder in all material respects through the Closing.
(b) Litigation. No order of any Governmental Authority shall be in effect
which restrains or prohibits the Transactions shall not be threatened, nor shall
there be pending, any action or proceeding (i) challenging any of the
transactions contemplated by this Agreement or seeking monetary relief by reason
of the consummation of such transactions, or (ii) which would likely have a
Material Adverse Effect.
(c) Closing Certificate. Seller shall have delivered to Buyer a certificate
to the effect that each of the conditions specified above in Subsections 7.1(a),
(b) and (c) is satisfied in all respects;
(d) Transaction Agreements. Seller and Stockholder shall have entered into,
executed, acknowledged and delivered to Buyer the certificates, documents,
instruments and agreements described in Section 2.3(a) of this Agreement, and
all of the same shall be in full force and effect; and
(e) Satisfactory Instruments. All instruments and documents required of
Seller to effectuate and consummate the Transactions shall be in form and
substance reasonably satisfactory to Buyer and its counsel.
7.2 Conditions Precedent to the Obligations of Seller and Stockholder. The
respective obligations of Seller and Stockholder to proceed with the Closing is
subject to the fulfillment prior to or at Closing of the following conditions
(any one or more of which may be waived in whole or in part by Seller and
Stockholder in their sole discretion):
(a) Representations, Warranties and Covenants. The representations and
warranties of Buyer set forth in Section 4 that are not qualified as to
materiality shall be true and correct in all material respects, and such the
representations and warranties that are qualified as to materiality shall be
true and correct in all respects, at and as of the Closing Date. Buyer shall
have performed and complied with all of their covenants hereunder in all
material respects through the Closing.
(b) Litigation. No order of any Governmental Authority shall be in effect
which restrains or prohibits the transactions contemplated by this Agreement.
There shall not be threatened, nor shall there be pending, any action or
proceeding (i) challenging any of the Transactions or seeking monetary relief by
reason of the consummation of such Transactions, or (ii) which would likely have
a Material Adverse Effect.
(c) Closing Certificate. Buyer shall have delivered to the Seller and
Stockholder a certificate to the effect that each of the conditions specified
Subsections 7.2(a) and (b) is satisfied in all respects;
(d) Transaction Agreements. Buyer shall have entered into, executed,
acknowledged and delivered to Seller and Stockholder the certificates,
documents, instruments and agreements
14
described in Section 2.3(b) of this Agreement, and all of the same shall be
in full force and effect; and
(e) Satisfactory Instruments. All instruments and documents required of
Buyer to effectuate and consummate the transactions contemplated hereby shall be
in form and substance reasonably satisfactory to Seller, Stockholder and their
counsel.
ARTICLE 8
TERMINATION
8.1 Termination of Agreement. This Agreement and the Transactions may be
terminated at any time on or prior to the Closing Date:
(a) Mutual Consent. By mutual written consent of Buyer, Seller and
Stockholder.
(b) Termination by Buyer. By Buyer upon notice to Seller and Stockholder if
there has been a material misrepresentation, inaccuracy or breach by Seller and
Stockholder of any of their representations, warranties or covenants, or if any
of the conditions specified in Section 7.1 hereof shall not have been
substantially fulfilled by the time required and not have been waived by Buyer,
or if the Closing shall not have occurred on or before August 30, 2002; or
(c) Termination by Seller and Stockholder. By Seller and Stockholder upon
notice to Buyer if there has been a material misrepresentation, inaccuracy or
breach by Buyer of any of its representations, warranties or covenants, or if
any of the conditions specified in Section 7.2 hereof shall not have been
substantially fulfilled by the time required and not have been waived by Seller
and Stockholder, or if the Closing shall not have occurred on or before August
30, 2002.
8.2 Effect of Termination. In the event of termination of this Agreement by
either Seller or Buyer, as provided above, this Agreement shall terminate as of
the date of the written notice or consent described in Section above, and there
will be no liability on the part of Seller or Buyer or their respective
Affiliates, except for liabilities arising from a breach of this Agreement prior
to such termination.
ARTICLE 9
CERTAIN ADDITIONAL COVENANTS
9.1 Costs, Expenses, and Transfer Taxes. Each party hereto will pay its own
costs and expenses, including legal and accounting fees, in connection with the
negotiation, execution, performance of and compliance with this Agreement.
9.2 Employee Matters. Immediately prior to the consummation of the
Transactions, Seller will terminate all of the Retained Employees, and Buyer
shall offer employment to all Retained Employees at the same place of employment
and on terms
15
no less favorable than the terms of employment that existed at Seller.
9.3 Payment of Assumed Liabilities. Buyer will pay all Assumed Liabilities
in accordance with their terms or, in the absence of express payment terms, as
they become due in the ordinary course of business; provided, however, that if
not paid sooner, all Assumed Liabilities other than the Jillson Debt shall be
paid within 130 days after Closing.
ARTICLE 10
MISCELLANEOUS
10.1 Notices. All notices, requests, demands, and other communications
hereunder shall be in writing and shall be deemed to have been duly given if
personally delivered by courier, or if mailed, when mailed by United States
first-class, certified or registered mail, postage prepaid, to the other party
at the following addresses or by telecopy, receipt confirmed (or at such other
address as shall be given in writing by any party to the other):
16
If to Buyer, to:
M.I.N.I.M.E., INC.
6001 Powerline Road
Fort Lauderdale, Florida 33309
Fax: (954) 351-9947
Attention: Matt Sailor
With a copy to:
Frazier, Hotte & Associates, PA
2400 East Commercial Road - Suite 826
Fort Lauderdale, Florida 33308
Fax: (954) 928-1865
Attention: John Hotte
If to Seller or Stockholder, to:
Tiger Telematics, Inc.
c/o Tiger Telematics, Ltd.
105 Piccadilly
London WIJ 7JN
Fax: (011-4420-7491-1965)
Attention: Michael W. Carrender
With a copy to:
LeClair Ryan, a Professional Organization
707 East Main Street - 11th Floor
Richmond, Virginia 23219
Fax: (804) 783-7615
Attention: J. Benjamin English
10.2 Successors and Assigns. This Agreement, and all rights and powers
granted hereby, will bind and inure to the benefit of the parties hereto and
their respective successors and assigns, but neither this Agreement nor any of
the rights, interests, or obligations hereunder shall be assigned by any of the
parties hereto without the prior written consent of the other parties hereto.
10.3 Construction. The parties have participated jointly in the negotiation
and drafting of this Agreement. In the event an ambiguity or question of intent
or interpretation arises, this Agreement shall be construed as if drafted
jointly by the parties and no presumption or burden of proof shall arise
favoring or disfavoring any party by virtue of the authorship of any of the
provisions of this Agreement. Any reference to any federal, state, local, or
foreign statute or law shall be deemed also to refer to all rules and
regulations promulgated thereunder, unless the
17
context requires otherwise. The word "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. All pronouns and any variations thereof refer to the
masculine, feminine or neuter, singular or plural, as the identity of the Person
or Persons may require. All references herein to Articles, Sections (other than
Sections of the Code or any other statute) and subsections shall be deemed to be
references to Articles, Sections and subsections of this Agreement unless the
context shall otherwise require.
10.4 Governing Law. With respect to corporate governance matters concerning
a corporation of any jurisdiction, this Agreement shall be governed by and
construed in accordance with the laws of such jurisdiction. With respect to all
other matters, this Agreement shall be governed by and construed in accordance
with the laws of State of Florida, without regard to the conflicts of law
provisions thereof.
10.5 Headings. The headings preceding the text of the sections and
subsections hereof are inserted solely for convenience of reference and shall
not constitute a part of this Agreement, nor shall they affect its meaning,
construction, or effect.
10.6 Counterparts. This Agreement may be executed in two or more
counterparts, each of which shall be deemed an original, but which together
shall constitute one and the same instrument.
10.7 Further Assurances. Both before and after Closing hereunder, each
party shall cooperate and take such action as may be reasonably requested by
another party in order to more fully carry out the provisions and purposes of
this Agreement and the transactions contemplated hereby.
10.8 Course of Dealing. No course of dealing and no delay on the part of
any party hereto in exercising any right, power, or remedy conferred by this
Agreement shall operate as a waiver thereof or otherwise prejudice such party's
rights, powers and remedies. The failure of any of the parties to this Agreement
to require the performance of a term or obligation under this Agreement or the
waiver by any of the parties to this Agreement of any breach hereunder shall not
prevent subsequent enforcement of such term or obligation or be deemed a waiver
of an subsequent breach hereunder. No single or partial exercise of any rights,
powers or remedies conferred by this Agreement shall preclude any other or
further exercise thereof or the exercise of any other right, power or remedy.
10.9 Severability. This Agreement shall be deemed severable, and the
invalidity or unenforceability of any term or provision hereof shall not affect
the validity or enforceability of this Agreement or of any other term or
provision hereof. Furthermore, in lieu of any such invalid or unenforceable term
or provision, the parties hereto intend that there shall be added as a part of
this Agreement a provision as similar in terms to such invalid or unenforceable
provision as may
18
be valid and enforceable, so as to effect the original intent of the
parties to the greatest extent possible.
10.10 Entire Agreement. This Agreement and the Schedules, Exhibits and
Certificates hereto, each of which is hereby incorporated herein, set forth all
of the promises, covenants, agreements, conditions, and undertakings between the
parties hereto with respect to the subject matter hereof and supersede all prior
and contemporaneous agreements and understandings, inducements, or conditions,
express or implied, oral or written. This Agreement may not be amended except by
an instrument in writing signed by the party sought to be charged with effect of
such amendment.
IN WITNESS WHEREOF, the parties hereto have executed this Agreement the day and
year first above written.
M.I.N.I.M.E., INC.
By:____________________________________
Name:
Title:
FLOOR DECOR, L.L.C.
By:____________________________________
Name: Michael W. Carrender
Title: Executive Vice President
and Chief Financial Officer
TIGER TELEMATICS, INC.
By:____________________________________
Name: Michael W. Carrender
Title: Executive Vice President
and Chief Financial Officer
19
Exhibit A
DEFINITIONS
"Affiliate" means, when used with respect to any Person, (a) if such Person is a
corporation, any officer or director thereof and any Person which is, directly
or indirectly, beneficial owner (by itself or as part of any group) of more than
fifty percent (50%) of any class of any voting security thereof, (b) if such
Person is an LLC, any officer or manager thereof and any Person which is,
directly or indirectly, beneficial owner (by itself or as part of any group) of
more than fifty percent (50%) of any class of any voting interest therein, (c)
if such Person is a partnership, any general partner thereof and any Person
which is, directly or indirectly, beneficial owner (by itself or as part of any
group) of more than fifty percent (50%) of any limited partnership interest
thereof, and (d) any other Person which directly or indirectly, through one or
more intermediaries controls, is controlled by, or is under common control with,
such Person. For purposes of this definition: (i) any "beneficial owner" that is
a partnership shall be deemed to include any general or limited partner thereof,
any "beneficial owner" that is an LLC shall be deemed to include any Person
controlling, controlled by or under common control with such beneficial owner,
or any officer, manager or member of such beneficial owner or of any LLC
occupying any such control relationship, and any "beneficial owner" that is a
corporation shall be deemed to include any Person controlling, controlled by or
under common control with such beneficial owner, or any officer or director of
such beneficial owner or of any corporation occupying any such control
relationship; and (ii) "control" (including the correlative terms "controlling,"
"controlled by" and "under common control with"), with respect to any Person,
shall mean possession, directly or indirectly, of the power to direct or cause
the direction of the management and policies of such Person, whether through the
ownership of voting securities or by contract or otherwise.
"Books and Records" includes the original and all copies of reports, books,
manuals, financial statements, or reports, price books, confirmations,
telegrams, receipts, inventory books, contracts, printed matters, computer
printouts, teletypes, invoices, transcripts, analyses, Returns, minutes,
accounts, estimates, projections, comparisons, press releases, reviews,
opinions, studies and investigations, graphic representations of any kind
(including photographs, charts, graphs, videotape and motion pictures,
electronic and mechanical records, tapes, cassettes, discs, and recordings,
whether preserved in writing, phone record, film, tape, videotape, or computer
record).
"Bylaws" means the bylaws of any corporation organized under the laws of any
State of the United States of America and any equivalent document of any
corporation or entity organized under the laws of another jurisdiction, as
amended or restated through the date hereof or the Closing Date, as the case may
be.
"Charter" means the Certificate of Incorporation or Formation, Articles of
Incorporation or Organization or other organizational document of a corporation
or an LLC organized under the laws of any State of the United States of America
and any equivalent document of a corporation, LLC or other similar entity
organized under the laws of another jurisdiction, as amended or restated through
the date hereof or the Closing Date, as the case may be.
"Code" means the Internal Revenue Code of 1986 and valid interpretations
thereof, as reflected in Treasury regulations, published IRS rulings and court
decisions.
"GAAP" means United States generally accepted accounting principles set forth in
the opinions and pronouncements of the Accounting Principles Board and the
American Institute of Certified Public Accountants and statements and
pronouncements of the Financial Accounting Standards Board or in such other
statements by such other entity as may be approved by a significant segment of
the accounting profession, which are applicable to the circumstances as of the
date of determination, consistently applied.
"Governmental Authority" means all agencies, instrumentalities, departments,
commissions, courts, tribunals, or boards of any government, whether foreign,
federal, state, or local.
"Lien" means, with respect to any asset or right, any mortgage, deed of trust,
pledge, hypothecation, assignment, security interest, lien, charge, restriction,
adverse claim or right whatsoever, title defect or encumbrance of any kind
20
(including any conditional sale or other title retention agreement, any lease in
the nature thereof, any assignment or other conveyance of any right to receive
income and any assignment of receivables with recourse against assignor), any
filing of any financing statement as debtor under the Uniform Commercial Code or
comparable law of any jurisdiction and any agreement to give or make any of the
foregoing except with respect to securities, restrictions on transferability
imposed by federal and state securities laws.
"Material Adverse Effect" means an occurrence or event which has or is
reasonably likely to have a material adverse impact or effect on the Business,
operations, financial condition or prospects of the applicable companies, taken
as a whole.
"Person" means any natural person, corporation, business trust, trust, estate,
partnership, limited partnership, LLC, limited liability partnership,
association, joint venture, or other entity.
"Taxes" or "Tax" means all taxes, however, denominated, including any interest,
penalties or other additions to tax that may become payable in respect thereof,
imposed by any federal, territorial, state, local or foreign government or any
agency or political subdivision of any such government, which taxes shall
include, without limiting the generality of the foregoing, all income or profits
taxes (including federal income taxes and state income taxes), real property
gains taxes, payroll and employee withholding taxes, unemployment insurance
taxes, social security taxes, sales and use taxes, ad valorem taxes, excise
taxes, franchise taxes, occupation taxes, real and personal property taxes,
stamp taxes, environmental taxes, transfer taxes and other governmental charges,
and other obligations of the same or of a similar nature to any of the
foregoing, which any person or entity is required to pay, withhold or collect.
SECURITY AGREEMENT
THIS SECURITY AGREEMENT ("Agreement") is made as of the 9th day of August
2002, by and among M.I.N.I.M.E., INC., a Florida corporation ("Obligor"), FLOOR
DECOR, LLC, a Delaware limited liability company ("Seller"), TIGER TELEMATICS,
INC., a Delaware corporation formerly know as Floor Decor, Inc. ("Stockholder").
Seller and Stockholder are referred to collectively herein as the "Secured
Party".
RECITALS:
WHEREAS, pursuant to an Asset Purchase Agreement among the parties
dated as of August 9, 2002 (the "Purchase Agreement") and an Assignment and
Assumption among the parties dated as of August 9, 2002, the Obligor has agreed
to assume and discharge in accordance with the terms of the Purchase Agreement
and the Assignment and Assumption certain liabilities referred to in the
Purchase Agreement and the Assignment and Assumption as the "Assumed
Liabilities." Capitalized terms not otherwise defined herein shall have their
respective meanings set forth in the Purchase Agreement; and
WHEREAS, in connection with Obligor's agreement to discharge the
Assumed Liabilities in accordance with the Purchase Agreement and the Assignment
and Assumption, Secured Party desires to obtain from Obligor and Obligor desires
to grant to Secured Party a security interest in certain collateral more
particularly described below.
21
AGREEMENT:
NOW, THEREFORE, in consideration of the foregoing premises and other
good and valuable consideration, the receipt and sufficiency of which are hereby
acknowledged, the parties hereto agree as follows:
1. Grant of Security Interest. Obligor hereby grants to Secured Party a
first priority, perfected security interest in the following described property
that is included within the Acquired Assets as such term is defined in the
Purchase Agreement and as such assets are enumerated on Schedule I attached
hereto and incorporated herein (collectively, the "Collateral"):
(a) all inventory, including goods held for sale or lease or
to be furnished under a contract of service and all of the raw
materials, work in process, finished goods, and packing and shipping
materials, wherever located, and any documents of title representing
any of the above, and Obligor's Books relating to any of the foregoing
(collectively, "Inventory");
(b) all machinery, machine tools, motors, equipment,
furniture, furnishings, fixtures, vehicles (including motor vehicles
and trailers), tools, parts, dies, jigs, goods (other than consumer
goods or farm products), and any interest in any of the foregoing, and
all attachments, accessories, accessions, replacements, substitutions,
additions, and improvements to any of the foregoing, wherever located
(collectively, "Equipment"); and
(c) all substitutions, replacements, additions, accessions,
proceeds, products to or of any of the foregoing, including, but not
limited to, proceeds of insurance covering any of the foregoing, or any
portion thereof, and any and all proceeds, money, deposits, accounts,
or other tangible or intangible property resulting from the sale or
other disposition of any of the foregoing, or any portion thereof or
interest therein and the proceeds thereof.
2. Secured Obligations. The security interest granted hereby shall
secure the prompt payment of the Assumed Liabilities in accordance with the
Purchase Agreement and the Assignment and Assumption and the prompt performance
of each of the covenants and duties of Obligor under the Purchase Agreement and
the Assignment and Assumption (the "Obligations").
3. Representations and Warranties of Obligor. Obligor represents, warrants
and agrees as follows:
(a) After giving effect to the Closing, Obligor will be the
owner of the Collateral free and clear of any liens and security
interests. Obligor will defend the Collateral against the claims and
demands of all persons other than the Secured Party.
(b) The address set forth on the signature page hereof is
Obligor's principal place(s) of business and the location of all
tangible Collateral and the place where the records concerning all
intangible Collateral are kept and/or maintained.
22
(c) Obligor will pay all costs of filing of financing,
continuation and termination statements with respect to the security
interests created hereby, and Secured Party is authorized to do all
things that it deems necessary to perfect and continue perfection of
the security interests created hereby and to protect the Collateral.
4. Agreements With Respect to the Collateral. Obligor covenants and agrees
with Secured Party as follows:
(a) Obligor will not permit any of the Collateral to be
removed from the location specified herein, except for temporary
periods in the normal and customary use thereof, without the prior
written consent of Secured Party.
(b) Obligor shall notify Secured Party in writing of any
change in the location of Obligor's principal place of business (or
residence) or the location of any tangible Collateral or the place(s)
where the records concerning all intangible Collateral are kept or
maintained.
(c) Obligor will keep the Collateral in good condition and
repair and will pay and discharge all taxes, levies and other
impositions levied thereon as well as the cost of repairs to or
maintenance of same, and will not permit anything to be done that may
impair the value of any of the Collateral. If Obligor fails to pay such
sums, Secured Party may do so for Obligor's account and add the amount
thereof to the Obligations.
(d) Until the occurrence of an Event of Default, Obligor shall
be entitled to possession of the Collateral and to use the same in any
lawful manner, provided that such use does not cause excessive wear and
tear to the Collateral, cause it to decline in value at an excessive
rate, or violate the terms of any policy of insurance thereon.
23
(e) Obligor will not sell, exchange, lease or otherwise
dispose of any of the Collateral or any interest therein without the
prior written consent of Secured Party. Notwithstanding the foregoing,
so long as an Event of Default has not occurred, Obligor shall have the
right to process and sell Obligor's inventory in the ordinary course of
business of the Business. Secured Party's security interest hereunder
shall attach to all proceeds of all sales or other dispositions of the
Collateral. If at any time any such proceeds shall be represented by
any instruments, chattel paper or documents of title, then such
instruments, chattel paper or documents of title shall be promptly
delivered to Secured Party and subject to the security interest granted
hereby. If at any time any of Obligor's inventory is represented by any
document of title, such document of title will be delivered promptly to
Secured Party and subject to the security interest granted hereby.
(f) Obligor will not allow the Collateral to be attached to
real estate in such manner as to become a fixture or a part of any real
estate.
(g) Obligor will at all times keep the Collateral insured
against all insurable hazards in amounts equal to the full cash value
of the Collateral. Such insurance shall be in such companies as may be
acceptable to Secured Party, with provisions satisfactory to Secured
Party for payment of all losses thereunder to Secured Party as its
interests may appear. If required by Secured Party, Obligor shall
deposit the policies with Secured Party. Any money received by Secured
Party under said policies may be applied to the payment of the
Obligations, whether or not due and payable, or at Secured Party's
option may be delivered by Secured Party to Obligor for the purpose of
repairing or restoring the Collateral. Obligor assigns to Secured Party
all right to receive proceeds of insurance not exceeding the amounts
secured hereby, directs any insurer to pay all proceeds directly to
Secured Party, and appoints Secured Party Obligor's attorney-in-fact to
endorse any draft or check made payable to Obligor in order to collect
the benefits of such insurance. If Obligor fails to keep the Collateral
insured as required by Secured Party, Secured Party shall have the
right to obtain such insurance at Obligor's expense and add the cost
thereof to the Obligations.
(h) Obligor will not permit any liens or security interests
other than those created by this Agreement to attach to any of the
Collateral, nor permit any of the Collateral to be levied upon under
any legal process, nor permit anything to be done that may impair the
security intended to be afforded by this Agreement, nor permit any
tangible Collateral to become attached to or commingled with other
goods without the prior written consent of Secured Party.
5. Remedies Upon Default. For all purposes of this Agreement, any
failure of Obligor to (i) satisfy and discharge each of the Assumed Liabilities
in accordance with the Purchase Agreement and the Assignment and Assumption, and
(ii) promptly perform each of the other covenants and duties of Obligor under
the Purchase Agreement and the Assignment and Assumption, shall constitute an
Event of Default. Upon the occurrence of an Event of Default, Secured Party may
pursue any or all of the following remedies, without any notice to Obligor
except as required below:
24
(a) Secured Party may give written notice of default to
Obligor, following which Obligor shall not dispose of, conceal,
transfer, sell or encumber any of the Collateral (including, but not
limited to, cash proceeds) without Secured Party's prior written
consent, even if such disposition is otherwise permitted hereunder in
the ordinary course of business. Any such disposition, concealment,
transfer or sale after the giving of such notice shall constitute a
wrongful conversion of the Collateral. Secured Party may obtain a
temporary restraining order or other equitable relief to enforce
Obligor's obligation to refrain from so impairing Secured Party's
Collateral.
(b) Secured Party may take possession of any or all of the
Collateral. Obligor hereby consents to Secured Party's entry into any
of Obligor's premises to repossess Collateral, and specifically
consents to Secured Party's forcible entry thereto as long as Secured
Party causes no significant damage to the premises in the process of
entry (frilling of locks, cutting of chains and the like do not in
themselves cause "significant" damage for the purposes hereof) and
provided that Secured Party accomplishes such entry without a breach of
the peace.
(c) Secured Party may dispose of the Collateral at private or
public sale in accordance with the Uniform Commercial Code. Any
required notice of sale shall be deemed commercially reasonable if
given at least five (5) days prior to sale. Secured Party may adjourn
any public or private sale to a different time or place without notice
or publication of such adjournment, and may adjourn any sale either
before or after offers are received. The Collateral may be sold in such
lots as Secured Party may elect, in its sole discretion. Secured Party
may take such action as it may deem necessary to repair, protect, or
maintain the Collateral pending its disposition.
(d) Secured Party may recover any or all proceeds of accounts
from any bank or other custodian who may have possession thereof.
Obligor hereby authorizes and directs all custodians of Obligor's
assets to comply with any demand for payment made by Secured Party
pursuant to this Agreement, without the need of confirmation from
Obligor and without making any inquiry as to the existence of an Event
of Default or any other matter. Secured Party may engage a collection
agent to collect accounts for a reasonable percentage commission or for
any other reasonable compensation arrangement.
(e) Secured Party may notify any or all account debtors that
subsequent payments must be made directly to Secured Party or its
designated agent. Such notice may be made over Secured Party's
signature or over Obligor's name with no signature or both, in Secured
Party's discretion to the extent consistent with the Uniform Commercial
Code. Obligor hereby authorizes and directs all existing or future
account debtors to comply with any such notice given by Secured Party,
without the need of confirmation from Obligor and without making any
inquiry as to the existence of an Event of Default or as to any other
matter.
25
(f) Secured Party may, but shall not be obligated to, take
such measures as Secured Party may deem necessary in order to collect
any or all of the accounts. Without limiting the foregoing, Secured
Party may institute any administrative or judicial action that it may
deem necessary in the course of collecting and enforcing any or all of
the accounts. Any administrative or judicial action or other action
taken by Secured Party in the course of collecting the accounts may be
taken by Secured Party in its own name or in Obligor's name. Secured
Party may reasonably compromise any disputed claims and may otherwise
enter into reasonable settlements with account debtors or obligors
under the accounts, which compromises or settlements shall be binding
upon Obligor. Secured Party shall have no duty to pursue collection of
any account, and may abandon efforts to collect any account after such
efforts are initiated.
(g) Secured Party may, with respect to any account involving
uncompleted performance by Obligor, and with respect to any general
intangible or other Collateral whose value may be preserved by
additional performance on Obligor's part, take such action as Secured
Party may deem appropriate including, but not limited, to performing or
causing the performance of any obligation of Obligor thereunder, the
making of payments to prevent defaults thereunder, and the granting of
adequate assurances to other parties thereto with respect to future
performance. Secured Party's action with respect to any such accounts
or general intangibles shall not render Secured Party liable for
further performance thereunder unless Secured Party so agrees in
writing.
(h) Secured Party may exercise its lien upon and right of
setoff against any monies, items, credits, deposits or instruments that
Secured Party may have in its possession and that belong to Obligor or
to any other person or entity liable for the payment of any or all of
the Obligations.
(i) Secured Party may exercise any right that it may have
under any other document evidencing or securing the Obligations or
otherwise available to Secured Party at law or equity.
6. Audits and Examinations. Secured Party shall have the right, at any
time, by its own auditors, accountants or other agents, to examine or audit any
of the books and records of Obligor, or the Collateral, all of which will be
made available upon request, provided, however, that no such examination or
audit shall unreasonably interfere with the operation of Obligor's business.
Such accountants or other representatives of Secured Party will be permitted to
make any verification of the existence of the Collateral or accuracy of the
records that Secured Party deems necessary or proper. Any reasonable expenses
incurred by Secured Party in making such examination, inspection, verification
or audit shall be paid by Obligor promptly on demand and shall constitute part
of the Obligations. Notwithstanding anything in this paragraph to the contrary,
except upon the occurrence of an Event of Default, Obligor shall not be required
to pay the expenses associated with any such examination more than once in any
calendar year.
7. Termination Statement. Upon receipt of proper written demand
following the satisfaction and performance in full of the Obligations, Secured
Party shall forthwith send a termination statement with respect to any financing
statement filed to perfect
26
Secured Party's security interests in any of the Collateral to Obligor or
cause such termination statement to be filed with the appropriate filing
officer(s).
8. Power of Attorney. Obligor hereby constitutes Secured Party or its
designee, as Obligor's attorney-in-fact with power, upon the occurrence and
during the continuance of an Event of Default, to endorse Obligor's name upon
any notes, acceptances, checks, drafts, money orders, or other evidences of
payment or Collateral that may come into either its or Secured Party's
possession; to sign the name of Obligor on any invoice or bill of lading
relating to any of the accounts receivable, drafts against customers,
assignments and verifications of accounts receivable and notices to customers;
to send verifications of accounts receivable; to notify the Post Office
authorities to change the address for delivery of mail addressed to Obligor to
such address as Secured Party may designate; to execute any of the documents
referred to in Section 3(c) hereof in order to perfect and/or maintain the
security interests and liens granted herein by Obligor to Secured Party; to do
all other acts and things necessary to carry out the purposes of and remedies
provided under this Agreement. All acts of said attorney or designee are hereby
ratified and approved, and said attorney or designee shall not be liable for any
acts of commission or omission (other than acts of gross negligence or willful
misconduct), nor for any error of judgment or mistake of fact or law. This power
being coupled with an interest is irrevocable until all of the Obligations are
paid in full and any and all promissory notes executed in connection therewith
are terminated and satisfied.
9. Binding Effect. This Agreement shall inure to the benefit of Secured
Party's successors and assigns and shall bind Obligor's heirs, representatives,
successors and assigns.
10. Severability. If any provision of this Agreement is held invalid, such
invalidity shall not affect the validity or enforceability of the remaining
provisions of this Agreement.
11. Governing Law and Amendments. This Agreement shall be construed and
enforced under the laws of the State of Florida applicable to contracts to be
wholly performed in such State. No amendment or modification hereof shall be
effective except in a writing executed by each of the parties hereto.
12. Survival of Representations and Warranties. All representations and
warranties contained herein or made by or furnished on behalf of Obligor in
connection herewith shall survive the execution and delivery of this Agreement.
13. Counterparts. This Agreement may be executed by facsimile, in any
number of counterparts and by different parties to this Agreement in separate
counterparts, each of which when so executed shall be deemed to be an original
and all of which taken together shall constitute one and the same Agreement.
14. Construction and Interpretation. Should any provision of this Agreement
require judicial interpretation, the parties hereto agree that the court
interpreting or construing the same shall not apply a presumption that the terms
hereof shall be more strictly construed against one party by reason of the rule
of construction that a document is to be more strictly construed against the
party that itself or through its agent prepared
27
the same, it being agreed that Obligor, Secured Party and their respective
agents have participated in the preparation hereof.
15. Consent to Jurisdiction; Exclusive Venue. Obligor hereby
irrevocably consents to the jurisdiction of the United States District Court for
the ________ District of Florida and of all Florida state courts sitting in
Broward County, Florida, for the purpose of any litigation to which Secured
Party may be a party and which concerns this Agreement or the Obligations. It is
further agreed that venue for any such action shall lie exclusively with courts
sitting in Broward County, Florida, unless Secured Party agrees to the contrary
in writing.
16. Waiver of Trial by Jury. SECURED PARTY AND OBLIGOR HEREBY KNOWINGLY
AND VOLUNTARILY WITH THE BENEFIT OF COUNSEL WAIVE TRIAL BY JURY IN ANY ACTIONS,
PROCEEDINGS, CLAIMS OR COUNTER-CLAIMS, WHETHER IN CONTRACT OR TORT OR OTHERWISE,
AT LAW OR IN EQUITY, ARISING OUT OF OR IN ANY WAY RELATING TO THIS AGREEMENT OR
THE LOAN DOCUMENTS.
[Remainder of Page Intentionally Left Blank]
28
IN WITNESS WHEREOF, Obligor and Secured Party have executed this
Agreement, or have caused this Agreement to be executed as of the date first
above written.
OBLIGOR:
M.I.N.I.M.E., INC.
By:
------------------------------
Name: Matt Sailor
Title: President
Address: 6001 Powerline Road
Fort Lauderdale, Florida 33309
SECURED PARTY:
FLOOR DECOR, LLC
By: _______________________________
Name: Michael W. Carrender
Title: Executive Vice President
and Chief Financial Officer
TIGER TELEMATICS, INC.
By: _______________________________
Name: Michael W. Carrender
Title: Executive Vice President
and Chief Financial Officer
[Signature Page to Security Agreement]
29
ASSIGNMENT AND ASSUMPTION
THIS ASSIGNMENT AND ASSUMPTION, made as of August 9, 2002, is entered into
by and among FLOOR DECOR, LLC, a Delaware limited liability company ("Seller"),
TIGER TELEMATICS, INC., a Delaware corporation formerly know as Floor Decor,
Inc. ("Stockholder") and M.I.N.I.M.E., INC., a Florida corporation ("Buyer").
RECITALS:
Buyer, Stockholder and Seller have entered into an Asset Purchase Agreement
dated August __, 2002 (the "Purchase Agreement") pursuant to which Buyer has
agreed to purchase substantially all of the assets of Seller and to assume
certain liabilities of Seller and Stockholder. Unless otherwise defined or the
context otherwise requires, capitalized terms used herein shall have the
respective meanings given to them in the Purchase Agreement. Pursuant to the
terms and conditions of the Purchase Agreement, Seller and Stockholder now
desire to make a formal assignment to Buyer of the Acquired Assets and Buyer now
desires to make a formal assumption from Seller and Stockholder of the Assumed
Liabilities, as contemplated by the Purchase Agreement.
NOW, THEREFORE, for and in consideration of the transfer of the Acquired
Assets, the assumption of the Assumed Liabilities, the payment of the Purchase
Price designated in Section 2.1 of the Purchase Agreement and other good and
valuable consideration, the receipt and sufficiency of which are hereby
acknowledged, the parties agree as follows.
Assignment and Conveyance of Assets. Seller and Stockholder hereby sell,
transfer and convey to Buyer all of Seller's and Stockholder's right, title and
interest in and good and marketable title, free and clear of all liabilities
(other than Assumed Liabilities and liabilities consisting of obligations to
perform the Assumed Contracts from and after the date hereof), security
interests, liens (including tax liens), mortgages, encumbrances, claims and
rights of others of any kind whatsoever, other than the security interest and
associated liens provided for in the Security Agreement of even date herewith
entered into by and among the Seller, the Stockholder and the Buyer, to the
Acquired Assets of Seller listed on Schedule I hereto, including without
limitation the Assumed Contracts. Seller and Stockholder each agrees to execute
and deliver, or cause to be executed and delivered, and to do or make, or cause
to be done or made, any and all instruments, papers, acts or things,
supplemental, confirmatory or otherwise, as reasonably may be required by Buyer
for the purposes of perfecting and completing the sale, transfer and conveyance
to Buyer of the Acquired Assets.
Assumption of Liabilities. Buyer hereby assumes and agrees to discharge and
perform all of the Assumed Liabilities set forth on Schedule III attached
hereto, including without limitation obligations to perform the Assumed
Contracts from and after the date hereof. Buyer shall discharge and perform each
of the Assumed Liabilities as it becomes due in accordance with its terms, or as
otherwise set forth in Schedule III. Buyer shall defend, indemnify and hold
Seller and Stockholder and their respective subsidiaries and affiliates and the
persons serving as officers, directors, partners, employees or agents thereof
(hereinafter collectively referred to as "Seller Indemnified Parties" or
individually as a "Seller Indemnified Party") harmless from and against any
damages, liabilities, losses, fines, penalties, clean-up costs, study costs and
expenses (including, without limitation, reasonable counsel fees and expenses as
the same are incurred) (collectively, "Losses") of any kind or nature whatsoever
that may be sustained or suffered by any of them arising out of or based upon or
in connection with any of the following: (i) a breach of Buyer's obligation to
satisfy and discharge in full each of the Assumed Liabilities in accordance with
the terms of this Assignment and Assumption and the Purchase Agreement; and (ii)
any claims of third parties arising out of or relating to the ownership or
operation of the Acquired Assets or the Business by the Buyer subsequent to the
Closing Date, whether accrued, absolute, contingent or otherwise. Buyer does not
agree to pay or otherwise perform, and Buyer shall not assume or have any
responsibility, obligation or liability for or with respect to, the Retained
Liabilities.
30
This Assignment and Assumption shall be construed and enforced under the
laws of the State of Florida applicable to contracts to be wholly performed in
such State. No amendment or modification hereof shall be effective except in a
writing executed by each of the parties hereto.
[Remainder of Page Intentionally Left Blank]
31
IN WITNESS WHEREOF, Seller, Stockholder and Buyer each has caused this
Assignment and Assumption to be executed and delivered in a manner sufficient to
bind it, as of the day and year first above written.
FLOOR DECOR, LLC
By:______________________________
Name: Michael W. Carrender
Title: Executive Vice President
and Chief Financial Officer
TIGER TELEMATICS, INC.
By:______________________________
Name: Michael W. Carrender
Title: Executive Vice President
and Chief Financial Officer
M.I.N.I.M.E., INC.
By:______________________________
Name: Matt Sailor
Title: President
[Signature Page to Assignment and Assumption]
ASSIGNMENT AND ASSUMPTION OF LEASE
THIS ASSIGNMENT AND ASSUMPTION OF LEASE ("Assignment"), made as of August
9, 2002, by and among TIGER TELEMATICS, INC., a Delaware corporation
("Assignor"), and M.I.N.I.M.E., INC., a Florida corporation ("Assignee"),
provides as follows.
W I T N E S S E T H :
- - - - - - - - - -
32
Pursuant to an Asset Purchase Agreement dated as of August 9, 2002 (the
"Purchase Agreement"), Assignee acquired from Assignor certain assets used by
such company in the conduct of its business. Pursuant to a Lease Agreement dated
as of December (the "Lease"), Assignor leased from Lessor certain premises
designated as 7100 S. Military Trac 1, Lake Worth, Florida 33463. Assignor
desires to assign all of its right, title, and interest in, to and under the
Lease to Assignee, and Assignee desires to accept such assignment and assume
certain obligations with respect thereto, all as hereinafter set forth.
NOW, THEREFORE, for and in consideration of the payment of the purchase
price provided for in the Purchase Agreement and other good and valuable
consideration, the receipt and sufficiency of which each party hereby
acknowledges, the parties agree as follows.
1. Assignment and Assumption. Assignor hereby sells, transfers and conveys
to Assignee all of Assignor's right, title and interest in and to the Lease. In
consideration of the foregoing assignment, Assignee hereby assumes and agrees to
observe, keep, carry out and perform all of Assignor's obligations under the
Lease that may arise after the date of this Agreement.
2. Conveyance. Assignor agrees to execute and deliver, or cause to be
executed and delivered, and to do or make, or cause to be done or made, any and
all instruments, papers, acts or things, supplemental, confirmatory or
otherwise, as reasonably may be required by Assignee or Lessor for the purpose
of perfecting and completing the assignment of the Lease to Assignee.
3. Assignor Indemnification. Assignor undertakes and agrees to hold
Assignee, its successors and assigns, its or their partners, shareholders,
directors, and officers, harmless from, against, and in respect of any and all
damages, losses, costs, liabilities, claims, obligations, penalties, judgments,
fines, assessments, and expenses, including without limitation reasonable
attorneys' fees, actually incurred or suffered by Assignee arising out of, in
connection with, or with respect to any and all proceedings, whether civil or
criminal, actions, causes of action, suits, claims, demands, or settlements
involving any breach, misrepresentation or other violation in any material
respect of any of Assignor's covenants or agreements contained in this
Assignment or any claims of third parties arising out of the Lease with respect
to occurrences arising on or prior to the date hereof.
4. Assignee Indemnification. Assignee undertakes and agrees to hold
Assignor, its successors and assigns, partners, shareholders, directors, and
officers, harmless from, against, and in respect of any and all damages, losses,
costs, liabilities, claims, obligations, penalties, judgments, fines,
assessments, and expenses, including without limitation reasonable attorneys'
fees, actually incurred or suffered by Assignor arising out of, in connection
with, or with respect to any and all proceedings, whether civil or criminal,
actions, causes of action, suits, claims, demands, or settlements
33
involving any breach, misrepresentation or other violation in any material
respect of any of Assignee's covenants or agreements contained in this
Assignment or any claims of third parties arising out of the Lease with respect
to occurrences arising after the date hereof.
5. Miscellaneous. This Assignment shall be governed by, and shall be
construed in accordance with, the laws of Florida and shall inure to the benefit
of, and shall be binding upon, the respective successors and assigns of the
parties hereto. This Assignment may be executed in any number of counterparts
and each will be considered an original, and together they will constitute one
agreement.
IN WITNESS WHEREOF, each party has caused this Assignment to be
executed and delivered in a manner sufficient to bind it, as of the day and year
first above written.
TIGER TELEMATICS, INC. M.I.N.I.M.E., INC.
By: _________________________ By: _________________________
Title: Executive Vice President Title: President
And Chief Financial Officer
Date: August 9, 2002 Date: August 9, 2002
ASSIGNMENT AND ASSUMPTION OF LEASE
THIS ASSIGNMENT AND ASSUMPTION OF LEASE ("Assignment"), made as of August
9, 2002, by and among FLOOR DECOR, LLC, a Florida limited liability company
("Assignor"), and M.I.N.I.M.E., INC., a Florida corporation ("Assignee"),
provides as follows.
W I T N E S S E T H :
- - - - - - - - - -
Pursuant to an Asset Purchase Agreement dated as of August 9, 2002 (the
"Purchase Agreement"), Assignee acquired from Assignor certain assets used by
such company in the conduct of its business. Pursuant to a Lease Agreement dated
as of
34
December (the "Lease"), Assignor leased from Lessor certain premises
designated as 6001 Powerline Road, Fort Lauderdale, Florida 33309. Assignor
desires to assign all of its right, title, and interest in, to and under the
Lease to Assignee, and Assignee desires to accept such assignment and assume
certain obligations with respect thereto, all as hereinafter set forth.
NOW, THEREFORE, for and in consideration of the payment of the purchase
price provided for in the Purchase Agreement and other good and valuable
consideration, the receipt and sufficiency of which each party hereby
acknowledges, the parties agree as follows.
4. Assignment and Assumption. Assignor hereby sells, transfers and conveys
to Assignee all of Assignor's right, title and interest in and to the Lease. In
consideration of the foregoing assignment, Assignee hereby assumes and agrees to
observe, keep, carry out and perform all of Assignor's obligations under the
Lease that may arise after the date of this Agreement.
5. Conveyance. Assignor agrees to execute and deliver, or cause to be
executed and delivered, and to do or make, or cause to be done or made, any and
all instruments, papers, acts or things, supplemental, confirmatory or
otherwise, as reasonably may be required by Assignee or Lessor for the purpose
of perfecting and completing the assignment of the Lease to Assignee.
6. Assignor Indemnification. Assignor undertakes and agrees to hold
Assignee, its successors and assigns, its or their partners, shareholders,
directors, and officers, harmless from, against, and in respect of any and all
damages, losses, costs, liabilities, claims, obligations, penalties, judgments,
fines, assessments, and expenses, including without limitation reasonable
attorneys' fees, actually incurred or suffered by Assignee arising out of, in
connection with, or with respect to any and all proceedings, whether civil or
criminal, actions, causes of action, suits, claims, demands, or settlements
involving any breach, misrepresentation or other violation in any material
respect of any of Assignor's covenants or agreements contained in this
Assignment or any claims of third parties arising out of the Lease with respect
to occurrences arising on or prior to the date hereof.
4. Assignee Indemnification. Assignee undertakes and agrees to hold
Assignor, its successors and assigns, partners, shareholders, directors, and
officers, harmless from, against, and in respect of any and all damages, losses,
costs, liabilities, claims, obligations, penalties, judgments, fines,
assessments, and expenses, including without limitation reasonable attorneys'
fees, actually incurred or suffered by Assignor arising out of, in connection
with, or with respect to any and all proceedings, whether civil or criminal,
actions, causes of action, suits, claims, demands, or settlements involving any
breach, misrepresentation or other violation in any material respect of any of
Assignee's covenants or agreements contained in this Assignment or any claims of
35
third parties arising out of the Lease with respect to occurrences arising after
the date hereof.
5. Miscellaneous. This Assignment shall be governed by, and shall be
construed in accordance with, the laws of Florida and shall inure to the benefit
of, and shall be binding upon, the respective successors and assigns of the
parties hereto. This Assignment may be executed in any number of counterparts
and each will be considered an original, and together they will constitute one
agreement.
IN WITNESS WHEREOF, each party has caused this Assignment to be
executed and delivered in a manner sufficient to bind it, as of the day and year
first above written.
FLOOR DECOR, LLC M.I.N.I.M.E., INC.
By: _________________________ By: _________________________
Title: Executive Vice President Title: President
And Chief Financial Officer
Date: August 9, 2002 Date: August 9, 2002
36