HomeMy WebLinkAboutC-3090(D) - Harbor Island, 829 - Consent to Assignment of Leasehold Interest - "Balboa Yacht Basin Office"Document -1839830 -Page -1
RECORDING REQUESTED BY AND
WHEN RECORDED RETURN TO:
City of Newport Beach
Attn: City Clerk
100 Civic Center Drive
Newport Beach, CA 92660
WITH A COPY TO:
Heritage Yacht Sales
829 Harbor Island Drive
Newport Beach, CA 92660
Exempt froth recording fees pursuant to
Govt. Code section 27383 8 6103
Page 1 of 1
Recorded in Official Records, Orange County
Hugh Nguyen, Clerk -Recorder
IIIIIII111111111111111111111111111111IIIII111111111111111111111111111111111 NO FEE
•$ R 0 0 0 8 6 7 0 4 9 8 8+
201600043128610:19 am 09108116
217 40S C34 145
0.00 0.00 0.00 0.00 432.00 0.00 0.00 0.00
SPACE ABOVE THIS LINE FOR RECORDER'S USE
CONSENT TO ASSIGNMENT OF LEASEHOLD INTEREST
py,isq THIS CONSENT TO ASSIGNMENT ("Assignment") is given this 11�t day of
dntg, 2016, by the CITY OF NEWPORT BEACH, a California municipal corporation and
charter city, ("City") on the following terms and conditions:
RECITALS
A. On August 1, 2001, City and Heritage Yacht Sales, Inc. ("Heritage"), entered
into that certain Lease Agreement ("Lease"), for portions of the Balboa Yacht Basin and
encompassing a yacht sales office located at 829 Harbor Island Drive, including all
structures and improvements.
B. On August 1, 2005, Heritage and Anthony B. Duni and Ann M. DUN
('Tenant") entered into an Agreement for the Purchase and Sale of Stock of Heritage
Yachts Sales, Inc. ("Purchase and Sale Agreement"), in which Tenant purchased all of
the shares of stock in Heritage, and Tenant continued to operate the yacht sales
brokerage under the trade name of "Heritage Yacht Sales."
C. On August 1, 2005 and concurrently with the execution of the Purchase and
Sale Agreement, the City consented to the Assignment of the Lease from Heritage to
the Tenant, and Tenant and City entered into a First Amendment to Lease Agreement
("First Amendment"), which is attached hereto as Exhibit "A" and incorporated herein by
reference.
D. On May 31, 2016, Seacoast of Channel Islands, LLC, a California limited
liability company ("Seacoast") and Heritage (owned and operated by Tenant) entered
into an Asset Purchase Agreement, attached hereto as Exhibit "B" and incorporated
herein by this reference, wherein certain assets were sold from Tenant to Seacoast.
about:blank 09/08/2016
RECORDING REQUESTED BY AND
WHEN RECORDED RETURN TO:
City of Newport Beach
Attn: City Clerk
100 Civic Center Drive
Newport Beach, CA 92660
WITH A COPY TO:
Heritage Yacht Sales
829 Harbor Island Drive
Newport Beach, CA 92660
Exempt from recording fees pursuant to
Govt. Code section 27383 & 6103
SPACE ABOVE THIS LINE FOR RECORDER'S USE
CONSENT TO ASSIGNMENT OF LEASEHOLD INTEREST
pmt THIS CONSENT TO ASSIGNMENT ("Assignment") is given this h'" day of
*fly, 2016, by the CITY OF NEWPORT BEACH, a California municipal corporation and
charter city ("City") on the following terms and conditions:
RECITALS
A. On August 1, 2001, City and Heritage Yacht Sales, Inc. ("Heritage"), entered
into that certain Lease Agreement ("Lease"), for portions of the Balboa Yacht Basin and
encompassing a yacht sales office located at 829 Harbor Island Drive, including all
structures and improvements.
B. On August 1, 2005, Heritage and Anthony B. Duni and Ann M. Duni
("Tenant") entered into an Agreement for the Purchase and Sale of Stock of Heritage
Yachts Sales, Inc. ("Purchase and Sale Agreement"), in which Tenant purchased all of
the shares of stock in Heritage, and Tenant continued to operate the yacht sales
brokerage under the trade name of "Heritage Yacht Sales."
C. On August 1, 2005 and concurrently with the execution of the Purchase and
Sale Agreement, the City consented to the Assignment of the Lease from Heritage to
the Tenant, and Tenant and City entered into a First Amendment to Lease Agreement
("First Amendment"), which is attached hereto as Exhibit "A" and incorporated herein by
reference.
D. On May 31, 2016, Seacoast of Channel Islands, LLC, a California limited
liability company ("Seacoast") and Heritage (owned and operated by Tenant) entered
into an Asset Purchase Agreement, attached hereto as Exhibit "B" and incorporated
herein by this reference, wherein certain assets were sold from Tenant to Seacoast.
E. Tenant now desires to assign its interests in the Lease to Seacoast, with the
prior written consent of the City.
CONSENT
NOW, THEREFORE, the City does hereby consent to the assignment of
Tenant's interest in and to the Lease, as amended, to Seacoast.
1. Said Assignment of Lease shall be subject to each and all of the
covenants, conditions and restrictions set forth in the Lease, as amended, and shall be
subject to all rights and interest of the City thereunder. Specifically, Seacoast accepts
such assignment and agrees to be bound by and comply with all terms, conditions and
obligations of the Lease and First Amendment.
2. To the best of City's knowledge, Tenant is not in default in the payment of
rent or any other amount due under the Lease through and including May 31, 2016, or,
to the knowledge of City, or any other covenant or condition to be observed or
performed by the Tenant under the Lease. Tenant and Seacoast have provided
satisfactory evidence to City to satisfy the assignment conditions provided in Lease
Section 14.1.
3. Any notice required under the Lease and First Amendment shall be made
in accordance with Section 21 of the Lease, as amended, except notice to Tenant shall,
from and after the Effective Date, be made to the address below:
Seacoast Yachts
3615 Victoria Avenue
Oxnard. CA 93035
4. This Consent to Assignment shall become effective upon recording.
[SIGNATURES ON FOLLOWING PAGE]
Consent to Assignment of Leasehold Interest Page 2
IN WITNESS WHEREOF, the parties hereto have executed this Assignment as of the
date first written above.
APPROVED AS TO FORM:
CITY ATTORNEY'S FFICE
Date: 6
By:
Aaron C. Harp otM v+I2r)liu
City Attorney
ATTEST: p
Date:
By: Y'—
Leilani I. Brown
City Clerk
CITY OF NEWPORT BEACH,
a California municipal corporation
Date:
By:
Dave Ki
City Manager
TENANT:
Date aG
B:
Anthony B Duni
Date: F / /6
By: r v M .
Ann M. Duni
SEACOAST: Seacoast of Channel Islands,
LLC, a California limited liability company
Date: —E3 t
By: \
Robe t,Clahm
Managing Member
[END OF SIGNATURES]
Assignor and Assignee must sign in the presence of notary public
Attachments: Exhibit A — First Amendment to Lease Agreement
Exhibit B — Asset Purchase Agreement
exH�b++c -�y�t OescvtpYton
Consent to Assignment of Leasehold Interest Page 3
ACKNOWLEDGMENT
A notary public or other officer completing this
certificate verifies only the identity of the individual
who signed the document to which this certificate is
attached, and not the truthfulness, accuracy, or
validity of that document.
State of California
County of LDS /paean S ) ss.
On , 20 -to before me, Q&m Clrwis FcLWO6 .
Notary Public, personally appeared Ayrtly l j2r F) ]2ia w; who
proved to me on the basis of satisfactory evidence to be the person,(%Y whose nam@TZ- is/ar6
subscribed to the within instrument and acknowledged to me that he/shWliey executed the same in
his/her/their authorized capacity; and that by his/hef/thef'r signaturesfsa on the instrument the
person/ -',(or the entity upon behalf of which the persons/,
ersons/ acted, executed the instrument.
I certify under PENALTY OF PERJURY under the laws of the State of California that the foregoing
paragraph is true and correct.
WITNESS my hand and official seal. Commission # 2086311
Notary Public - California z
Los Angeles County ;
My Comm�L �L=—. Expires Oct 16, 2018
0
Signatur (seal)
ACKNOWLEDGMENT
A notary public or other officer completing this
certificate verifies only the identity of the individual
who signed the document to which this certificate is
attached, and not the truthfulness, accuracy, or
validity of that document.
State of California
County of ss.
On 2016 before me, 7T,1�7
Notary Public, personally appeared 19,1n m
proved to me on the basis of satisfactory evidence to be the person(s) whose name(s) is/are
subscribed to the within instrument and acknowledged to me that he/she/they executed the same in
his/her/their authorized capacity(ies), and that by his/her/their signatures(s) on the instrument the
person(s), or the entity upon behalf of which the person(s) acted, executed the instrument.
I certify under PENALTY OF PERJURY under the laws of the State of California that the foregoing
paragraph is true and correct.
WITNES.Spy hand and official seal.
LGSi
11 qTONY DUNI
CONN.ii 191188797 (0
N NOTARY PUM-GALIFOPPHA
LOS AICOUNTY
UP, AUG.NT Como. EXP, ANT 2015'�
(seal)
Consent to Assignment of Leasehold Interest Page 4
ACKNOWLEDGMENT
A notary public or other officer completing this
certificate verifies only the identity of the individual
who signed the document to which this certificate is
attached, and not the truthfulness, accuracy, or
validity of that document.
State of California
County of JEArrv,en ) ss.
On g • S • 201 6 20 before me, _.ZieAmi.,D w G,eaNr
Notary Public, personally appeared�yBtW t A1.1t1M JA , who
proved to me on the basis of satisfactory evidence to be the personf%) whose name(,$) is/afe
subscribed to the within instrument and acknowledged to me that he/sklsAh y executed the same in
his/hefMRheir authorized capacity(ie6), and that by his/h@FAheir signatures(&) on the instrument the
person, or the entity upon behalf of which the person(aj acted, executed the instrument.
I certify under PENALTY OF PERJURY under the laws of the State of California that the foregoing
paragraph is true and correct.
00000000000000000000000000000000m000000
DONALD W. GRANT
WITN hand and fficial seal. R@MY
COMM. # 2132263 s
NOTARY PUBLIC -CALIFORNIA U
UVENTURACOUNTY r
QQ Commission E*res NOVEMBER 27, 2019 Q
_ iS000000a0000000000ooa00000000000000000000000000000
Sig a6-6 to(seal)
ACKNOWLEDGMENT
A notary public or other officer completing this
certificate verifies only the identity of the individual
who signed the document to which this certificate is
attached, and not the truthfulness, accuracy, or
validity of that document.
State of California
County of 0129kr11.E } ss.
On itWf:usT )Lo 20 Ito before me, Jt"NNtFia Art" IMuLVE-i
Notary Public, personally appeared PAV6 KIFF
proved to me on the basis of satisfactory evidence to be the person(-* whose name(s) is/are
subscribed to the within instrument and acknowledged to me that he/s4e*le� executed the same in
his/heHtheif-authorized capacity(ies), and that by his/hah4hair signatures(s) on the instrument the
person(&), or the entity upon behalf of which the persons) acted, executed the instrument.
I certify under PENALTY OF PERJURY under the laws of the State of California that the foregoing
paragraph is true and correct.
WITNESS my hand and official seal.
JENNIFER ANN MULVEY
Commission # 2045022 =
P_s. Notary Public - California z
Z Orange County
M Comm. Ez ires Oct 12 201 +
(seal)
Consent to Assignment of Leasehold Interest Page 5
EXHIBIT A
FIRST AMENDMENT TO LEASE AGREEMENT
Consent to Assignment of Leasehold Interest Page A-1
FIRST AMENDMENT TO
LEASE AGREEMENT
This First Amendment to the Lease Agreement is entered into this 1st of August, 2005,
by and between Anthony B. Duni and Ann M. Duni (collectively, "Tenant") and the City
of Newport Beach ("City").
RECITALS
On August 1, 2001, City entered into a Lease Agreement ("Lease") with Heritage
Yacht Sales, Inc., a California corporation ("Heritage") which is attached hereto
as Exhibit "X).
2. Heritage and Tenant entered into an Agreement for the Purchase and Sale of
Stock of Heritage Yachts Sales, Inc. ("Heritage'), dated August 1, 2005
("Purchase and Sale Agreement"), in which Tenant purchased all the shares of
stock in Heritage.
3. Concurrent with the execution of the Purchase and Sale Agreement, the City
consented to the Assignment of the Lease from Heritage to Tenant, and Tenant
agreed to be bound by the terms and conditions of the Lease.
4. City and Tenant now desire to amend the Lease to reflect the new terms and
conditions as provided below.
Now therefore, City and Tenant hereby agree as follows:
Tenn.
Article 3 is hereby deleted in its entirety and replaced with the following:
TERM.
3.1 Base Term. The `Base Term" of this Lease shall be five (5) years
from the Effective Date and shall expire on July 31, 2006, unless
extended as provided in Sections 3.2 and 3.3 below or terminated
in accordance with the other provisions of this Lease.
3.2 First Option Term. Provided Tenant is not in default of any
provision of the Lease during the Base Term, Tenant may extend
the term of this Lease for an additional term of five (5) years
("First Option Term") which shall commence on the Expiration of
the Base Term. Tenant may exercise the First Option Term
extension by giving City written notice of its intention to do so on
or before February 1, 2006. If exercised, the First Option Term
shall expire on July 31, 2011.
3.3 Second Option Term. Provided Tenant is not in default of any
provision of the Lease during the Base Term and/or First Option
Term, Tenant may extend the term of this Lease for an additional
term of five (5) years ("Second Option Term") which shall
commence on the Expiration of the First Option Term. Tenant
may exercise the Second Option Term extension by giving City
written notice of its intention to do so on or before February 1,
2011. If exercised, the Second Option Term shall expire on July
31, 2016.
3.4 First and Second Option Term. If Tenant is in default of any term,
condition, or provision of the Lease during the Base Term and/or
the First Option Term , City may, in its sole discretion, revoke the
First Option Term or Second Option Term by written notification
to Tenant, even if Tenant should cure its default prior to City's
revocation. If City revokes the First Option Term or Second
Option Term, the Lease shall terminate on July 3.1, 2006, or if
Tenant has exercised its First Option Term extension, shall
terminate on July 31, 2011.
3.5 Terms of Lease. The "Term" is defined as the Base Term and, if
exercised, the First Option Term and the Second Option Term.
3.6 Hold Over. Should Tenant hold over and continue in possession of
the Premises after the Expiration of the Base Term, First Option
Term or Second Option Term, Tenant's continued occupancy of
the Premises shall be considered a month-to-month tenancy subject
to termination by either Party upon thirty (30) days advance notice
and also to all the terms and conditions of this Lease, except the
provisions of Sections 3.1, 3.2 and 3.3.
2. Rent.
Section 4.3 of the Lease is hereby deleted in its entirety and replaced with the
following:
Rent shall be increased, effective August 1, 2003, August 1, 2005 during the Base
Term; August 1, 2007 and August 1, 2009 during the First Option Term, if
exercised; and August 1, 201I, August 1, 2013 and August 1, 2015 during the
Second Option Term, if exercised, based on the percentage change in the cost of
doing business as measured by the [CPI] for all urban consumers for the Los
Angeles, Long Beach, Anaheim areas, all items (1967=100) for the preceding 24
months.
2. Default and Remedies.
Article 15 of the Lease is hereby deleted in its entirety and replaced with the
following:
15. DEFAULT
15.1 The occurrence of anyone or more of the following shall
constitute a default by Tenant:
(a) Failure of Tenant to pay rent due hereunder within thirty
(30) days after written notice from Lessor; or
(b) Any failure by Tenant to perform any of the other terms,
conditions or covenants of this Lease to be observed or
performed by Lessee after thirty (30) days written notice
from Lessor; or
(c) Tenant becoming insolvent or filing any debtor
proceedings, or should any adjudications in bankruptcy be
rendered against Tenant, or should Tenant take or have
taken against it, in any court pursuant to any statute either
of the United States or of any State, a petition in
bankruptcy or insolvency or for reorganization or for the
appointment of a receiver or trustee of all or a portion of
Tenant's property, and should the same not be discharged
within one hundred twenty (120) days thereafter; or
(d) Tenant permitting the Premises to become vacant or
unoccupied for fifteen (15) consecutive days after written
notice to Tenant (except for vacancies caused by any force
majeure or by remodeling, reconstruction, alteration or
repairs permitted under this Lease); or
(e) The appointment of a trustee or receiver to take possession
of substantially all of the assets of Tenant located at the
Premises or Tenant's interest in this Lease or the Premises,
where possession is not restored within thirty (30) days.
15.2 Except for the payment of rent, if the nature of Tenant's default or
breach under this paragraph is such that more than thirty (30) days
are reasonably required for its cure, then Tenant shall not be
deemed to be in default or breach if Tenant commences such cure
within such thirty (30) day period and diligently proceeds with
such cure to completion.
0 i
15.3 Remedies. In the event of a default or breach by Tenant and
Tenant's failure to cure such default or breach, City may at any
time and with or without notice do any one or more of the
following:
(a) Re-enter the Premises, remove all persons and property,
and repossess and enjoy such Premises.
(b) Terminate this Lease and Tenant's right of possession of
the Premises. Such termination shall be effective upon
City's giving written notice and upon receipt of such
notice, Tenant shall immediately surrender possession of
the Premises to City.
(c) Maintain this Lease in full force and effect and recover any
rental, royalty, or other consideration as it becomes due,
without terminating Tenant's right of possession, regardless
of whether Tenant shall have abandoned the Premises.
(d) Exercise any other right or remedy which City may have at
law or equity.
Lease.
Except as expressly modified herein, all other provisions, terms, covenants and
conditions of the Lease shall remain unchanged and in full force and effect.
• 0
IN WITNESS WHEREOF, the parties hereto have executed this Amendment as of the
date first written above.
TENANT:
Ann M. Duni
ATTEST:
l .�vM •ktit ,
City Clerk
APPROVED AS TO FORM:
Assistant City Attorney
CITY OF NEWPORT BEACH
a municipal corporation
By:Its:
1Wcu r9
ASSET PURCHASE AGREEMENT
Consent to Assignment of Leasehold Interest Page B-1
DocuSign Envelope ID: 8FD02A75-1802-4CF6-A6DE-E8762769DFOB
ASSET PURCHASE AGREEMENT
THIS AGREEMENT (the "Agreement") is made effective as of May 31, 2016
by and between Seacoast of Channel Islands, LLC, a California limited liability
company, with its principal place of business at 3615 Victoria Avenue, Oxnard, CA
93035 ("Seacoast") and Heritage Yacht Sales, Inc. with its principal place of business
at 829 Harbor Island Drive, Newport Beach, CA 92660 ("Heritage").
RECITALS
WHEREAS, Heritage is doing business as a yacht sales brokerage at five
locations in California (the "Locations') and under the trade business name of
"Heritage Yacht Sales" (collectively described as the "Business") as identified below,
as follows:
Heritage Yacht Sales - Long Beach
231 N. Marina Drive
Long Beach, CA 90803
Heritage Yacht Sales - Newport Beach Office:
829 Harbor Island Drive
Newport Beach, CA 92660
Heritage Yacht Sales - San Pedro
210 Whaler's Walk Suite 121
Berth 31
San Pedro, CA 90731
Heritage Yacht Sales Inc. - San Diego
955 Harbor Island Drive
San Diego, CA 92101
Heritage Yacht Sales, Inc. - Wilmington
720 Peninsula Rd - Berth 202
Wilmington, CA 90744; and
WHEREAS, Seacoast is doing business as a yacht brokerage in Channel
Islands Harbor at 3615 Victoria Avenue, Oxnard, CA 93035; and
WHEREAS, Heritage wishes to sell certain assets specifically identified
hereinafter to Seacoast, together with providing for the assignment/subletting of
certain leases to the Locations; and
DocuSign Envelope ID: 8FD02A75-1802-4CF6-A6DE-E8762769DFOB
WHEREAS, Seacoast wishes to purchase the assets and have the rights to
lease the Locations under terms and conditions which are acceptable to it as more
particularly set forth hereunder.
OPERATIVE PROVISIONS
NOW, THEREFORE, in consideration of the premises and mutual covenants
and promises herein contained, and intending to be legally bound hereby, Heritage
and Seacoast agree as follows:
Purchase and Sale.
1.1 Purchase and Sale of Assets. On the terms and subject to the
conditions herein set forth, Heritage shall sell, convey, transfer, assign and deliver to
Seacoast and Seacoast shall acquire and accept from Heritage, free from all
liabilities and encumbrances (except as expressly provided herein), the furniture,
fixtures and office machines specifically described on Exhibit A attached hereto. The
furniture, fixtures, and office machines are referred to hereinafter collectively as the
"Purchased Assets." The conveyance, transfer, assignment and delivery of the
Purchased Assets shall be affected by deeds, bills of sale, endorsements,
assignments, drafts, checks and other instruments of transfer and conveyance in
appropriate form. Heritage, shall, as of the Closing Date (as defined in Section 9 of
this Agreement), upon Seacoast's request, do, execute, acknowledge and deliver all
further acts, deeds, assignments, transfers, conveyances, power of attorney and
assurances that are reasonably required for the better assigning, transferring,
granting, conveying, assuring and confirming to Seacoast or for aiding and assisting
in collecting and reducing to possession, any or all of the Purchased Assets.
1.2 UCC -3 Oblations. Heritage shall submit to Seacoast for
approval, at least three (3) days in advance of the Closing Date, UCC Financing
Statement Amendments pursuant to UCC Article 3 that act to and have the effect of
releasing and discharging any and all liens and UCC financing statements or filings
on or regarding the Purchased Assets.
1.3 Excluded Assets. Those assets which are excluded from the
Purchased Assets (collectively, the "Excluded Assets"), and hence will not be
purchased by Seacoast hereunder, include, but are not limited to, all cash and cash
equivalents and all other assets of Heritage not used solely in connection with its
business.
1.4 Assumed. Liabilities. Except as expressly set forth on Exhibit B
attached hereto, or except as otherwise expressly set forth herein, Seacoast shall not
assume or be obligated to perform any liability or obligation of Heritage, whether or
2
DocuSign Envelope ID: 8FD02A75-1802-4CF6-A6DE-EB762769DFOB
not such liability arises out of or in connection i6vith sale of the Purchased Assets
hereunder. On the Closing Date, Heritage shall transfer and assign to Seacoast and
Seacoast shall assume only those liabilities, contracts and obligations described on
Exhibit B (the "Assumed Liabilities"). Seacoast shall indemnify and hold Heritage
harmless from the Assumed Liabilities. Nothing in this Agreement shall be construed
to require Seacoast to assume any pre-closing liabilities or obligations of Heritage
whatsoever.
2. Purchase Price. The purchase price for the Purchased Assets to be
sold by Heritage hereunder (the 'Purchase Price") shall be paid as follows:
2.1 In Exchange for the assets listed in Exhibit A, Seacoast shall pay a
percentage of the Gross Revenue (as defined below) generated out of the Locations
over a period of five (5) years from the Closing Date (the "Earn Out Payments") as
follows:
2.1.1. Year one. Seacoast will pay Heritage ten percent (10%) of
the Gross Revenue from commissions received from the sale of brokered used
vessels from all of the Locations.
2.1.2 Year two. Seacoast will pay Heritage fifteen percent (15%)
of the Gross Revenue from the commissions received from the sale of vessels from
all of the Locations.
2.1.3 Year three. Seacoast will pay Heritage fifteen percent
(15%) of the Gross Revenue from the commissions received from the sale of vessels
from all of the Locations.
2.1.4 Year four. Seacoast will pay Heritage ten percent (10%)
of the Gross Revenue from the commissions received from the sale of vessels from
all of the Locations.
2.1.5 Year five. Seacoast will pay Heritage ten percent (10%) of
the Gross Revenue from the commissions received from the sale of vessels from all
of the Locations.
2.1.6 The term "Gross Revenue" is defined for the purpose of
this Section 2, as the total commission revenue earned and received by Seacoast,
after paying co-op fees, if any, prior to the payment of sales staff commissions.
2.1.7 For purposes of clarification, the Earn Out Payments shall
be due only from the Locations as described in the Recitals hereinabove.
3
DocuSign Envelope ID: 8FD02A75-1802-4CF6-A6DE-E8762769DFOB
2.1.8 Payment of the Earn Out Payments shall be made to
Heritage within thirty (30) days after the end of each month following the Closing
Date.
2.1.9 Heritage or its authorized representative may, upon fifteen
(15) days written notice to Seacoast, inspect and audit the books and records of
Seacoast relating to the Earn Out Payments provided, however, that such inspection
shall only occur during) normal business hours of Seacoast (unless agreed otherwise
by Seacoast) and may only occur once per calendar quarter. The costs for said audit
shall be paid for by Heritage, except that if said audit reveals that the Earn Out
Payment was in error more than five percent (5%) of the amount due Heritage for a
particular calendar quarter, the costs for the audit which includes such calendar
quarter shall be the responsibility of Seacoast but shall not be in excess of Two
Thousand Dollars ($2,000). In any case, Heritage will be provided with full visibility
into the Yacht Closer system to assist with the monitoring of deal flow.
2.2. Seacoast, as additional consideration for the tangible assets
contributed by Heritage=_ as described in Exhibit A ("Contributed Assets") shall transfer
to Tony Duni, a member interest equal to ten percent (10%) of the total membership
interest of Seacoast of Channel Islands, LLC (the "Transferred Membership Interest')
upon the Closing Date.
The Parties agree to treat this contribution of the Contributed Assets for
income Tax purposes as a non-taxable contribution of the Contributed Assets in
exchange for the Transferred Membership Interest pursuant to Section 721 of the
Internal Revenue Code and to report the transaction in such a manner on their
respective Tax Returns.
3. Sales in Progress. The parties acknowledge that on the Closing Date,
there may be sales of vessels which are in progress but for which payments or
commissions and/or fees have not been received or only partially received ("Sales in
Progress"). Heritage shall be entitled to payment of the full amount of proceeds from
each Sale in Progress which are outstanding as of the Closing Date (i.e. commission
fees owed to Heritage which are unpaid in full or part, as of the date of Closing Date)
regardless if payment is made after the Closing Date less any sales commissions
owed to the sales agent who made the sales, together with any associated direct
costs incurred. A list of all Sales in Progress is set out in Exhibit C, together with the
respective commissions due to sales associates. Seacoast shall not be obligated to
repay or compensate any commissions, coop fees, closing costs, or monies
concerning the Sales in Progress.
4. InventoEj. Heritage and Seacoast have made a physical inventory of
the equipment of the Business (the "Closing Inventory"), a copy of which is attached
0
DocuSign Envelope ID: 8FD02A75-1802-4CF6-A6DE-E8762769DFOB
hereto as Exhibit E
5. Location of Assets. Heritage warrants and represents that all the
tangible assets included in the Purchased Assets are located at the Locations.
Heritage will not remove any such property from any of the Locations without
Seacoast's written consent, except as maybe required in the ordinary course of trade
or business up to the Closing Date.
6. List of Vendors. Attached hereto as Exhibit F is a list of Heritage's
Business vendors (the "Vendors"), which contains the names and business
addresses of all vendors and suppliers of the Business.
7. List of Customers. Attached hereto as Exhibit G is a list of Heritage's
customers (the "Custorners"), which contains the names, telephone numbers and
addresses of all Customers of the Business. Said Customers and list shall be
transferred to Seacoast upon Closing which such list shall then become proprietary
information exclusively owned by Seacoast. Heritage agrees that it shall not sell,
transfer or disclose or contact any of the Customers for any purpose except with the
express written authorization of Seacoast. For purposes of clarification, those
Customers with Sales in Progress shall be included as Customers.
8. Allocations. The Purchase Price shall be allocated for tax purposes as
set forth in Exhibit D. Each of the parties shall report this transaction for tax purposes
in accordance with such allocations.
9. Closing. The closing of the transactions contemplated by this
Agreement (the "Closing") shall take place on a mutually agreeable date, but no later
than May 31, 2016 (the "Closing Date"). Time is of the essence. At the Closing
Date, Heritage shall execute and deliver to Seacoast all bills of sale and other
instruments that are reasonably necessary to transfer Heritage's right, title and
interest in and to the Purchased Assets to Seacoast, and shall deliver possession
thereof to Seacoast, together with the keys to the Locations as applicable. All such
bills of sale and other instruments will contain customary warranties and affidavit of
title and will effectively transfer to Seacoast all of Heritage's right, title and interest to
the property constituting the Purchased Assets, free and clear of all liens, security
interests and encumbrances. Heritage shall also deliver all releases, subordinations,
or waivers of security interests, liens, encumbrances or other claims against the
business or Purchased Assets constituting the Purchased Assets that Seacoast may
reasonably require.
10. Representations and warranties of Heritage. The following
representations and warranties made by Heritage are true and correct and shall
survive the Closing for a period of eighteen nonths.
r,
DocuSign Envelope ID: 8FD02A75-1802-4CF6-A6DE-E8762769DFOB
10.1 Heritage has all the requisite authority to own, lease, operate and
to carry on its business as now being conducted and is duly qualified and in good
standing to do business in each jurisdiction in which such qualification is necessary;
10.2 Heritage has all the requisite power and authority to enter into this
Agreement and to consummate the transactions contemplated hereby.
10.3 Heritage is the owner of and has, or will have, as of the Closing
Date, good and marketable title to or other right to use all of the Purchased Assets
owned by Heritage, free of all debts, liens, security interests and encumbrances;
10.4 Heritage has not .entered into any material contract relating to the
Purchased Assets;
10.5 Heritage does not owe any commissions to any of its clients or
customers, and is not obligated to pay any other amounts to perform other
obligations (other than routine servicing of customer accounts) for any of its clients or
customers;
. 10.6 Heritage has not entered into collective bargaining agreements,
union agreements, employment agreements,.profit-sharing, retirement plans or other
benefit plans with respect to its employees;
10.7 No judgments, liens, actions, or proceedings are pending, or, to
the Heritage's knowledge, threatened against Heritage anywhere related to the
Business-,
10.8 No action, suit, proceeding, or investigation by or on behalf of
Heritage's employees or any other party is pending or, to the knowledge of Heritage,
threatened, relating to, or affecting any of the Purchased Assets or relating to or
affecting the activities of Heritage carried on in connection with any of the Purchased
Assets, or which affects the enforceability of this Agreement or challenges any of the
transactions contemplated hereby, nor is there, to Heritage's knowledge, any basis
for any such action, suit, proceeding or investigation;
10.9 Heritage has complied with applicable bulk sales laws, if any,
which shall be confirmed prior to the Closing Date;
10.10 Heritage has to its knowledge complied with all material laws
applicable to the Purchased Assets including environmental, workplace, health and
safety laws, unfair labor practices, Americans with Disabilities Act (except Title III
thereof as applicable to public accommodations and access), immigration laws, as
well as rules and regulations relating to the Purchased Assets except where
noncompliance would in.ot have. a Material Adverse Effect;.
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10.11 Heritage is not in material default of any material provisions of
contracts or agreements to which it or any of the Purchased Assets are subject
including any of the leases for the Locations;
10.12 Heritage has paid in full, or will arrange for the payment in full at
the date of Closing, all state and federal employee income tax withholding, Federal
Social Security Tax (FICA) withholding, employment taxes, unemployment insurance,
sales and use taxes, federal and state income taxes, business or license fees, and all
other business related taxes or governmental charges related to the Business.
Heritage shall show proof of compliance with the above requirements by certificates
or letters from the applicable governmental authorities;
10.13 Heritage will have paid to its employees as of the Closing Date all
bonuses, vacation, personal and sick days, and other accrued amounts relating to
those employees. Heritage will supply Seacoast with an estoppel certificate from
each of his employees prior to the close of escrow,
10.14 Heritage is currently able to pay its obligations related to the
Business as they mature and will not be rendered unable to do so by the transfer
contemplated by this Agreement; and
10.15 To the knowledge of Heritage, no representation or warranty by
Heritage in this Agreement or in any exhibit, schedule, written statement, certificate,
or other document delivered or to be delivered to the Seacoast pursuant hereto, or in
connection with the consummation of the transactions contemplated hereby, contains
or will contain any untrue statement of a material fact, or omits or will omit to state a
material fact required to be stated therein or necessary to make the statements
contained therein not misleading.
11. Representations and Warranties of Seacoast. The following
representations and warranties made by Seacoast to Heritage are true and correct:
11.1 Seacoast has all requisite power and authority, and has taken all
action necessary, to execute and deliver this Agreement, to consummate the
transactions contemplated hereby and to perform its obligations hereunder. This
Agreement has been duly authorized, executed and delivered by Seacoast and
constitutes the legal, valid and binding obligations of Seacoast enforceable against
Seacoast in accordance with its terms.
11.2 The execution and delivery by Seacoast of this Agreement, the
performance by Seacoast of its obligations hereunder and the consummation by
Seacoast of the transactions contemplated hereby do not require Seacoast to obtain
any consent, approval or action of, or make any fiiing with or give any notice to, any
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corporation, partnership, person, firm or other entity or any public, governmental or
judicial authority and this Agreement will be in full force and effect on the Closing
Date.
11.3 No broker or finder has acted, directly or indirectly, for Seacoast,
nor has Seacoast incurred any obligation to pay any brokerage, finder's fee or other
commission in connection with the transactions contemplated by this,Agreement.
12. Conduct of Business. Heritage will conduct its Business up to the
Closing Date in substantially the same manner as it previously has been carried
out, will observe all provisions of the leases for the Locations, and will not enter into
any material contract except as may be required in the regular course of business.
Heritage shall maintain all tangible assets constituting the Purchased Assets in
good condition and working order, normal wear and tear expected, making all
reasonably necessary repairs up to the Closing Date.
13. Heritage Employees. Heritage shall terminate the employment of all
its employees as of the Closing Date.: Seacoast shall not be responsible for any
severance pay or entitlement obligations, if any, due to Heritage's employees. It is
Seacoasts intention to re -hire some of Heritages employees pursuant to the
applicable standard terms and conditions of Seacoasts employment agreement.
Seacoast will have no obligation to re -hire any of Heritages' employees or have any
other duty to them arising out of Heritage's employment.
14. Non -Solicitation. Heritage acknowledges and agrees that any
solicitation, luring away or hiring of any employees of Seacoast will be highly
detrimental to the business of Seacoast and will cause Seacoast serious loss of
business and great and irreparable harm since such employees have knowledge of
trade secrets and other confidential information related to its business.
Consequently, Heritage covenants and agrees that, for a period of one year after
the Closing Date, Heritage shall not directy or indirectly solicit any such employees
of Seacoast or assist or aid in any such activity.
15.. Non -Compete. Heritage, by Tony Duni, agrees to execute a Non -
Compete Agreement in the form attached hereto as Exhibit H which provides in
pertinent part that for a period of two years from the Closing Date Heritage, Tony
Duni shall not engage, either directly or indirectly, in the yacht brokerage business
in any of the cities in which the Locations are located.
16. Risk of Loss. Heritage assumes all risk of loss in connection with the
Purchased Assets due to fire or. other casualty up to the Closing Date. If any such
loss occurs before the Closing Date, or if the Business is closed or interrupted by
reason of any event not in the ordinary course of business, Seacoast may terminate
DocuSign Envelope ID. BFD02A75-1802-4CF6-A6DE-E8762769DFOB
this Agreement by giving Heritage written notice thereof. Upon such termination,
neither party shall have any liability hereunder.
17. Further Assurances. From time to time, at the request of the
Seacoast and without further consideration, Heritage shall execute and deliver such
further instruments of conveyance and transfer and take such other actions as the
Seacoast may reasonably require more effectively to convey and transfer any of the
Purchased Assets to the Seacoast. Heritage and Seacoast shall also execute and
deliver to the appropriate other party such other instruments as may be reasonably
required in connection with the performance of this Agreement, and each shall take
all such further actions as may be reasonably required to carry out the transactions
contemplated by this Agreement.
18. Conditions to Obligations of Seacoast. The obligations of Seacoast
to consummate the transactions contemplated by this Agreement are subject to the
satisfaction or waiver prior to the Closing of the following additional conditions:
18.1 Each of the terms, covenants and conditions of this Agreement to
be complied with and performed by Heritage at or prior to Closing pursuant to this
Agreement shall be complied with and performed in all material respects;
18.2 No court order shall have been entered and be in force in any
proceeding which enjoins, restrains or prohibits this Agreement or the complete
consummation of the transactions as contemplated by this Agreement and no such
proceeding shall be pending;
18.3 The representations and warranties of Heritage made in this
Agreement shall be true as of the Closing Date in all material respects;
18.4 All governmental notices and filings required to be made shall
have been made and all consents and approvals required by law and all third party
consents and approvals shall have been obtained and any applicable waiting
periods shall have expired or have been terminated, in each case without the
imposition of any term or condition which is unsatisfactory to Seacoast including but
not limited to the obtaining or assignment of a license to engage in the Business.
18.5 Seacoast shall receive a certificate as to the satisfaction of the
above conditions dated as of the. Closing Date executed by Heritage;
18.6 Heritage shall, no later than Closing Date, have withdrawn or
canceled all fictitious business name statements with respect to its use of its trade
name and shall cooperate with the assignment of any such business names to
Seacoast;
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18.7 Heritage shall sign a supercedure agreement whereby the
telephones from the Following Locations will be transferred to Seacoast:
Heritage Yacht Sales — Long Beach
231 N. Marina Drive
Long Beach, CA 90803
Tel: (866) 569-2248
Tel: (562) 431-8699
Tel: (562) 431-6135
Fax: (562) 431-8691
Newport Beach Office
829 Harbor Island Drive
Newport Beach, CA 92660
Tel: (877) 389-2248
Tel: (949) 673-3354
Tel: (949) 673-3358
Fax: (949) 723-2961
Heritage Yacht Sales — San Pedro
210 Whaler's Walk, Suite 121
Berth 31
San Pedro, CA 90731
Tel: (310) 549-2248
Tel: (310) 549-2204
Fax: (310) 514-2268
Heritage Yacht Sales Inc. — San Diego
955 Harbor Island Drive
San Diego, CA 92101
Toll-free: 866-396-7923
Tel: 760-402-3868
Fax: 619-222-4488
Heritage Yacht Sales, Inc.—Wilmington
720 Peninsula Rd — Berth 202
Wilmington, CA 90744
Tel: 310-547-8007
Fax: 310-547-8008
19. Conditions to Obligations of Heritage. The obligations of Heritage to
consummate the transactions contemplated by this Agreement are subject to the
satisfaction or waiver prior to Closing of the following conditions:
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19.1 Each of the terms, covenants and conditions of this Agreement
to be complied with and performed by Seacoast at or prior to Closing pursuant to
this Agreement shall be complied with and performed in all material respects;
19.2 No court order shall have been entered and be enforced in any
proceeding which enjoins, restraints or prohibits this Agreement or the complete
consummation of the transactions contemplated by this Agreement and no such
proceeding shall be pending;
19.3 The representations and warranties of Seacoast made in this
Agreement shall be true as of the Closing Date and all material respects;
19.4 AIII governmental notices and filings required to be made shall
have been made (except under applicable bulk sales laws) and all consents and
approvals required by law and all third party consents and approval shall have been
obtained and any applicable waiting period shall have expired or have been
terminated, in each case without the imposition of any term or condition which is
unsatisfactory to Heritage;
19.5 Heritage shall receive a certificate as to the satisfaction of the
above conditions dated as of the Closing Date executed by a duly authorized officer
of Seacoast;
20. Consent to Lease AssignmentslSublease. This Agreement is
contingent upon Seacoast's; .obtaining the landlords' consent to the assignment of
or sublease for the Locations at San Pedro, Yacht Haven, San Diego and Long
Beach; approving of the terms and conditions of the assignments/subleases of the
same; and receiving estoppie certificates from the lessor. As to the Newport
Beach Location, Seacoast needs to be approved as a new lessee on terms and
conditions acceptable: to Seacoast. Any such consents, amendments and estoppel
shall be in writing and delivered by Heritage to Seacoast at or before the Closing
Date. Nothing herein shall be construed to require Seacoast to compensate any
landlord for such landlord's consent to the assignment of the Lease.
20.1 Heritage shalt obtain a Written, verification that there has been no
damage to the premises nor charged against its security deposit from the Lessor
and that Lessor acknowledges that the rights to the security deposit under the lease
are held by Seacoast. Upon receipt of such verification Seacoast shall pay to
Seacoast shall reimburse Heritage for its security deposit
21. Inspection. of Books. At any time up to the Closing Date, Seacoast
and its representatives shall have; full access to Heritages' Locations including the
books, accounts and records of every kind related to the Business and shall be
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allowed to make extracts therefrom. Heritage shall furnish Seacoast with all
additional information as to the Business as Seacoast shall reasonably request.
22. Fees and Expenses; Broker. Each party shall pay its own fees and
expenses in preparing and entering into this Agreement, and in consummating the
transactions contemplated hereby. No party shall have any obligation to another
party if the transactions contemplated by this agreement are not consummated for
any reason other than the party's willful failure or refusal to perform its obligations
hereunder. In such event, the defaulting party shall remain liable for all damages
caused by such willful failure or refusal. Heritage and Seacoast each represent to
the other that no broker was involved in this transaction.
23. Confidentiality.
23.1 Any and all information disclosed.by Seacoast to Heritage or by
Heritage to Seacoast as a result of the negotiations leading to the execution of this
Agreement, or in furtherance thereof, which information was not already known to
Heritage or to Seacoast, respectively (the "Confidential Information"), shall remain
confidential to Heritage and Seacoast and their respective employees and agents ,
except to the extent that the Seacoast in its reasonable judgment must disclose
any such Confidential Information to banks and other institutional lenders in the
process of procuring any loan or loans of funds for the transactions contemplated
herein. If the Closing does not take place for any reason, Heritage and Seacoast
agree not to further divulge or disclose or use for their benefit or purpose any such
Confidential Information at any time in the future unless such Confidential
Information has otherwise become public. "Confidential Information" shall include,
but not be limited to, financial information, customer lists, sales representative's
lists, and anything else having economic or pecuniary benefit to Seacoast or
Heritage respectively.
23.2 • Heritage and Seacoast agree not to provide any information or
documentation to any other person regarding their relationship or business dealing
with the other in regards to the Business unless required to do so by valid court
order issued by a court of competent jurisdiction or unless otherwise required by
law.
24. Indemnification.
24.1 Heritage agrees to indemnify and hold Seacoast harmless from
and with respect to any and all claims, liabilities, losses, damages, costs, and
expenses, including, Wthout limitation, the fees and disbursements of counsel
(collectively "Loss" and/or "Losses"), related to or arising directly or indirectly out of
any of the following;
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24.1.1 any failure or breach by Heritage of any covenant,
obligation, or undertaking made by Heritage in this Agreement,-
2.4-1.2
greement;24.1.2 any and all Losses, including those of injury to person or
property, arising out cf the operation of the Assets or the related business carried on
by Heritage on or prior to the Closing Date;
24.1.3 any Loss arising under the bulk sales laws of any
jurisdiction in connection with transactions contemplated by this Agreement; and
24.1.4 any Loss with respect to any employee of Heritage in
connection with his or her employment on or prior to the Closing Date.
24.2 Seacoast agrees to indemnify and hold Heritage harmless from
and with respect to any and all Losses related to or arising directly or indirectly out of
any of the following:
24.2.1 any breach by Seacoast of any covenant, obligation or
undertaking made by Seacoast in this Agreement;
24.2.2 the ownership or operation of the Purchased Assets or
the Business after the Closing; and
24.2.3 the Assumed Liabilities.
24.3 In the event that any party (the "Indemnified party") maybe
entitled to indemnification hereunder with respect to any asserted claim of, or
obligation or liability to, any third party, such party shall notify the indemnifying party
hereunder (the "Indemnifying Party") thereof, describing the matters involved in
reasonable detail. The Indemnifying Party shall be entitled to assume the defense
thereof upon written notice to the Indemnified Party; provided, that once the defense
thereof is assumed by the Indemnifying Party, the Indemnifying Party shall keep the
Indemnified Party advised of a[] developments in the defense thereof and in any
related litigation, and the Indemnified Party shall be entitled at all times to participate
in the defense thereof at its own expense.
25. First Right of First Refusal. Seacoast hereby grants Heritage for a
period of five (5) years from the date of the execution of this Agreement a right of first
refusal to purchase the Assets of Seacoast or any portion of the Assets as defined in
section 25.2 in accordance with the terms and conditions set forth below (`Right of
First Refusal'):
25.1 If Seacoast receives a bona fide offer, whether or not solicited by
it, from any person or entity to purchase all or any portion of the Assets of Seacoast
and if Seacoast is willing to accept it, then Seacoast shall give written notice of the
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amount and terms of the offer, the identity of the proposed transferee and its
willingness to accept the offer to Heritage within ten (10) days of receipt of the offer.
Heritage shall have the option, within fifteen (15) business days after that notice has
been given to purchase the interest in the Assets on the same terms as those
contained in the offer. If Heritage does not exercise its option within the fifteen (15)
day period, or upon the expiration of the five (5) year period this Right of First Refusal
shall terminate.
25.2 For the purpose of this Right of First Refusal the term "Assets"
means assets owned and used by Seacoast in the operation of its yacht brokerage
business which are of such a nature so as to allow the potential purchaser to operate
a yacht brokerage as a result of the purchase of said Assets. The sale of a minor
number of Assets such as office equipment, furniture or other individual items which
are not critical to the operation of a yacht brokerage business shall not be subject to
this Right of First Refusal.
28. Binding Effect. This Agreement shall be binding upon inure to the
benefit of the parties and their respective successors and assigns.
27. Non -waiver': No delay or failure by either party to exercise any right
under this Agreement, and no partial or single exercise of that right, shall constitute a
waiver of that or any other right, unless otherwise expressly provided herein.
28. Headings. Headings in this Agreement are for convenience only and
are not to be used to interpret or construe its provisions.
29. Governing Law. This Agreement shall be governed by and
construed in accordance with the taws of the State of California without regard to its
conflict of laws principles. The parties agree to the exclusive jurisdiction and venue
of the Santa Barbara Superior Court, Anacapa Division in connection with any
litigation with respect to this Agreement. in the event of a dispute concerning this
agreement or its enforcement the prevailing party shall be entitled to an award of
attorney fees and costs.
30. CounterlDarts/Exec,ution. This Agreement may be executed in one or
more counterparts,' eachof which shall- be deemed an original but all of which
together shall constitute one and the same instrument. Signature pages may be
executed via "wet" signature or electronic mark and the executed signature pages
may be delivered using pdf or similar file type transmitted via electronic mail, cloud
based server, e -signature technology or other similar electronic means.
31. Assignment or Amendment of Aga
This Agreement may not be amended or assigned
114
either party without the other's
DocuSign Envelope ID: BFD02A75-1802-4CF6-A6DE-EB762769DFOB
written consent. Nothing in this Agreement, expressed or implied, is intended to
confer upon any person other than the parties hereto and their successors and
assigns, any rights or remedies under or by reason of this Agreement.
32. Time of Essence. Time is of the essence of this Agreement.
33. Entire Agreement. This Agreement supersedes all prior agreements
and embodies the entire agreement between the parties with respect to the subject
matter hereof. All schedules and exhibits referred to in this Agreement and attached
hereto are hereby incorporated by reference and made a part hereof.
34. Notices. All notices hereunder shall be in writing and delivered
personally or mailed by certified mail, postage prepaid, addressed and emailed to the
parties as follows:
If to Seacoast, to: Bob Nahm
3615 Victoria Avenue
Oxnard, CA 93035
Email: bob(aDseacoastvachts.com
If to Heritage, to: Tony Duni
341 Havana Ave,
Long Beach, CA 90814
Email: torly(fteritaoevachts.com
The address for delivery of notices hereunder may be changed by either parry
upon furnishing to the other the new address for notices in accordance with the
provisions of this paragraph.
34. Survivar; The representations and warranties of the parties set forth
in this Agreement shall survive the closing of this Agreement for a period of eighteen
months.
35. Exclusive Agent Agreement. Contemporaneously with the execution
of this Agreement, Seacoast shall enter into a separate exclusive agreement with
Heritage for the sale of Heritage's new yacht lines of vessels.
IN WITNESS WHEREOF, the parties have signed this agreement as of the
date above first written.
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HERITAGE YACHT SALES, INC.
DocuSigned by:
5/22/2016
DATED: _^"i
By: resi e;
Ic
Its:
SEAOAST OF CHANNEL ISLANDS, LLC
Dacu S'neg Cby:
B
DATED: �
5/21/2016 4 Nd«.
BT—P-M"NARM
Its: Managing Member
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Exhibit A
The assets sold in exchange for the `earn out" payments as described in Section 2.1
as follows:
1. Customer List.
2. Covenant not to compete.
3. Other intangible assets.
The tangible assets contributed to Seacoast in exchange for a ten percent
(10%) interest in Seacoast as described in Section 2.2 of the Agreement are as
follows:
1. Computers:
2. Furniture and Fixtures.
3. Awning improvement.
4- Cameras.
5. Signage.
A detail of the office inventory follows on pages 100.1-10.
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ExhibitB—Assumed Liabilities
No liabilities assumed
In
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Exhibit C — Sales in Progress
To be added last week of May
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Exhibit G - Allocation of Purchase Price
The assets sold in exchange for the "earn out' payments as described in Section 2.1
as follows:
1. Customer List.
2. Covenant not to compete.
3. Other intangible assets.
The tangible assets contributed to Seacoast In exchange for a ten percent
(10%) interest in Seacoast as described in Section 2.2 of the Agreement are as
follows:
1. Computers; $510.00
2. Furniture and Fixtures. $4.702.00
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Exhibit E - Inventory
Attached PDFs
RA
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Exhibit F- Vendor List
To be transmitted electronically as required
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Exhibit G - Customer List
To be transmitted electronically as required
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Exhibit H
HERITAGE NON -COMPETITION NON -SOLICITATION, AND NON -RAID
AGREEMENT
This Non -Competition, Non -Solicitation, and Non -Raid Agreement
("Agreement') is made and entered into as of May 31, 2016, by and between
Seacoast of Channel Islands, LLC ("Seacoast'), and Tony Duni, individually and
Heritage Yacht Sales, Inc, a California Corporation, collectively ("Heritage").
Seacoast and Heritage are collectively referred to as the "Parties" and individually as
a "Party."
Recitals
1- Heritage has been engaged in the yacht sales business and providing
related products and services using the trade name "Heritage Yacht Sales" or other
similar names at the following locations (the 'Business"):
Heritage Yacht Sales - Long Beach
231 N. Marina Drive
Long Beach, CA 90803
Newport Beach Office:
829 Harbor Island Drive
Newport Beach, CA 92660
Heritage Yacht Sales - San Pedro
210 Whaler's Walk Suite 121
Berth 31
San Pedro, CA 90731
Heritage Yacht Sales Inc. - San Diego
955 Harbor Island Drive
San Diego, CA 92101
Heritage Yacht Sales, Inc. -Wilmington
720 Peninsula Rd - Berth 202
Wilmington, CA 90744
Effective as of May 31, 2016, Heritage is selling substantially all of the assets
associated with the Business to Seacoast pursuant to the terms and conditions of an
Asset Purchase Agreement ("APA") dated May 31st 2016; and
'r_0
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3. Heritage has the capability of creating a business enterprise that could
effectively compete with Seaccast with respect to the operation of the assets which
Seacoast is acquiring from Heritage, and thus the Parties have agreed that the
execution and delivery of this Agreement by the Heritage is a condition of the Closing
under the APA.
NOW, THEREFORE, in consideration of the foregoing Recitals, which are
incorporated in the Agreement by reference herein, the mutual covenants contained
herein and other good and valuable consideration, the receipt and sufficiency of
which is hereby acknowledged, the Parties agree as follows:
Agreement
1. Non Competition., Heritage. covenants and agrees that immediately following the
Closing and continuing for a period of five (5) years, Heritage will not either
directly or indirectly, alone or with others:
a. market or own, manage, operate, or control any business which markets used
yacht sales or related products or services in competition with Seacoast within
a ten (10) mile radius of the following locations:
231 N. Marina Drive
Long Beach, CA 90803
829 Harbor Island Drive
Newport Beach, United States 92660
210 Whaler's Walk Suite 121
Berth 31
San Pedro, United States 90731
955 Harbor Island Drive
San Diego, United States 92101
Channel Islands Marna
3615 Victoria Avenue
Oxnard, CA 93035
b. solicit any of the employees of Seacoast who were employed by Heritage at
the business locations described in on Section 1 (a) above or any employees
of Seacoast of Santa Barbara, LLC;
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c. interfere with the relationship of Seacoast and its employees at the business
locations described in Section 1 (a) above-, or
d. interfere with the relationship of Seacoast with, or solicit, any customers or
others who are engaged in or who had business dealings with the Heritage at
the business locations described in Section 1 (a) above before the Closing of
the APA.
2. Blue Pencil. Heritage acknowledges that the period of restriction and the
geographic area imposed by Section 1 is fair and reasonable and is reasonably
required for the protection of Seacoast. If any part or parts of Section 1 shall be held
to be unenforceable or invalid, then the remaining parts thereof shall nevertheless
continue to be valid and enforceable as though the invalid portion or portions were
not a part hereof. If any of the provisions of Section 1 relating to the period of
restriction or geographic area shall be deemed to exceed the maximum period of
time or scope which a court of competent jurisdiction would deem enforceable, then
the time or scope shall, for the purposes of Section 1, be deemed to be the maximum
time period or scope which a court of competent jurisdiction would deem valid and
enforceable in any state in which such court of competent jurisdiction shall be
convened.
3. Confidentiality. Heritage'acknowledges that Heritage has knowledge of certain
Confidential Information related to the Business, its customers, and its prior
operations, for which the rights, title, and interest has been sold, assigned and
transferred to Seacoast under the APA. Heritage acknowledges that the disclosure
or use of the Confidential Information could cause Seacoast substantial losses and
damages. "Confidential] Information" means all information not generally known to the
public, relating to the affairs of the Business and/or its customers, clients,
representatives, employees and principals, including, but not limited to, any pricing
information or any other information concerning the Business's sales representatives,
business strategy, marketing practices and strategy, and sales promotion strategy,
whether such information was acquired by Seacoast under the APA or not. No notice
of confidentiality is required. Heritage agrees.to keep confidential all Confidential
Information, except to the extent such information or documents are or thereafter
become lawfully obtainable from other sources or are in the public domain through no
fault of Heritage or as is consented to in writing by Seacoast. If Heritage becomes
legally compelled to disclose any Confidential Information, it agrees to provide
Seacoast with prompt notice thereof and agrees to provide only such information or
documentation that is legally required by subpoena, court order, or the like.
4. Right to Seek Injunctive Relief. Heritage agrees and acknowledges that a
violation of the covenants contained in Sections 1 and 3. of this Agreement may
cause irreparable damage to Seacoast, and that it may be impossible to estimate or
26
DocuSign Envelope ID: 8FD02A75-1802-4CF6-A6DE-E8762769DFOB
determine the damage that will be suffered by Seacoast in the event of a breach by
Heritage of any such covenant. Therefore, Heritage further agrees that in the event
of any violation or threatened violation of such covenants, Seacoast shall be entitled
to seek as a matter of course an injunction from any court of competent jurisdiction
restraining such violation or threatened violation by Heritage, such right to seek an
injunction to be cumulative and in addition to whatever other remedies Seacoast may
have. Heritage shall be obligated to pay Seacoast for costs and attorneys' fees in
the event Seacoast prevails in a legal action to enforce this Agreement.
5- Miscellaneous.
a. Governing Law and Jurisdiction. This contract shall be construed under and
be governed in all respects by the substantive and procedural law of the state
of California without regard to choice -of -law principles. Any dispute hereunder
shall be venued exclusively in and determined by the Superior Court of Santa
Barbara County, Anacapa Division.
b. Non -Waiver. No waiver, delay or failure of Seacoast to enforce any provision
herein, whether known or unknown by Seacoast, shall relieve Heritage of its
duty to otherwise comply with the Agreement, and shall not waive Seacoast's
right to enforce the provision at a later time.
c. Assignment. Subject to the Right of First Refusal as set forth in Section 25 of
the Asset Purchase Agreement, Heritage consents and agrees that its
obligations under this Agreement may be assigned to a successor or assignee
of Seacoast.
Amendment. This Agreement cannot be amended, supplemented, or
otherwise modified except in a writing signed by Seacoast and Heritage.
e. Entire Agreement. This Agreement contains the entire agreement of the
Parties relating to the subject matter hereof and, except as otherwise stated,
supersedes any, and all oral or written prior agreements and understandings
with respect to such subject matter.
f. Counterparts and Electronic Signatures. This Agreement may be executed in
two or more counterparts, each of which shall be deemed an original but all of
which together shall constitute one and the same agreement- The
counterparts of this Agreement and any schedules and Exhibits hereto, if any,
may be executed and delivered by facsimile or other electronic signature by
any of the Parties to any other Party and the receiving Party may rely on the
receipt of such document so executed and delivered by facsimile or other
electronic means as if the original had been received.
27
DocuSign Envelope ID: 8FD02A75-1802-4CF6-A6DE-E8762769DFOB
g. Representation of Comprehension of the Agreement. In entering into this
Agreement, the Parties each represent that they have had the opportunity to
have the terms of this Agreement reviewed by an attorney of their choice, and
that they fully understand and voluntarily accept the terms of this Agreement.
h. Partial Invalidity. In the event that any provision of this Agreement shall be
held invalid or unenforceable by any court of competent jurisdiction, such
holding shall not affect the validity or enforceability of any other provision
herein.
IN WITNESS WHEREOF, the Parties hereto have executed this Agreement as
of the date referenced above.
Seacoast of Channel Islands, i_I_C Heritage Yacht Sales, Inc.
DowSigned by:
DocuSigned by.
Ned« KI
By: ffWM % ,, Manager BPresident
DocuSlg.ed br.
��g�l✓� Bu0 46
Tony Duni, individually
DocuSign Envelope ID: 8FD02A75-1802-4CF6-A6DE-E8762769DFOB
BUY SELL AGREEMENT
Preamble
TIYS AGREEMENT is entered into and is intended to be effective on the 31st day
of 2016 by and between Seacoast of Santa Barbara, Inc., ("SB
Seacoast"), Robert Nahm ("Nahm"), and Tony Duni ("Heritage"), each of whom is a
Member of Seacoast of Channel Islands, LLC (the "Brokerage").
Recitals
The purpose of this Agreement is three -fold:
1) To protect the management and control of the Brokerage against intrusion by
persons not active in the business or not acceptable to the other Members of the
Brokerage;
2) To provide for transition of the Brokerage interests in the event of the death or
withdrawal of one of the Members; and
3) To provide a mechanism for the establishment of a purchase price for the sale of
one Member's interest.
The current ownership interests in the Brokerage are, for all purposes, as follows:
SB Seacoast: 72%
Nahm: 18%
Heritage: 10%
NOW, THEREFORE, IT IS AGREED:
Restriction on Transfer
1. To accomplish the purpose of this Agreement, any transfer, sale, assignment,
hypothecation, encumbrance, or alienation of any Member's share of the Brokerage, whether
in whole or in part, other than according to the terms of this Agreement is void and transfers no
right, title, or interest in the Member's share of the Brokerage, to the purported transferee,
buyer, assignee, pledgee, or encumbrance holder. This provision shall not apply to SB
Seacoast which shall tie free to transfer its interest without restriction.
Aareement Available for Insr)ection
2. An original copy of this Agreement, duly executed by each of the Members,
shall be maintained by the Brokerage at its principal place of business and made available
for inspection by any person requesting to see it.
DocuSign Envelope ID: 8FD02A75-1802-4CF6-A6DE-E8762769DFOB
Iransfer of Brokerage Share Upon Death of Member
3. Upon the death of a Member, each surviving Member (including non -individual
entities) shall purchase, and the estate of the deceased Member shall sell to each surviving
Member, such proportion of the Brokerage owned by the Member at his or her time of death as
the percentage in the Brokerage already owned by a surviving Member bears to the total
ownership interests in the Brokerage owned by all of the surviving Members, for the price and
upon the terms and conditions specified in this Agreement. Each Member by his/its execution
of this agreement, agrees to insert in his Will and/or Trust a direction to his personal
representative to promptly comply with the terms of this Agreement and to execute any and all
documents reasonably required to achieve such compliance including, but not limited to, the
filing of a Petition for a preliminary Distribution of the Members interest as soon as it is possible.
3.1 Each Member, pursuant to his execution of this Agreement, hereby
absolves and exonerates his personal representative from any personal responsibility or liability
for any loss which may result to any property passing under his Will otherwise pursuant to the
directions contained in this agreement, as long as such personal representative shall have been
acting in good faith and without gross negligence.
3.2 In the event of the death of one of the Members, the remaining Members
shall have the first option, but not the obligation, to purchase from the deceased Member's
estate, the deceased Member's share in the Brokerage. The purchase price shall be
determined under the provisions hereunder. There shall be no right in favor of the personal
representative of a deceased Member to require either the Brokerage or the remaining
Members to acquire the deceased Member's share in the Brokerage. The remaining Members
may exercise their option at any time within sixty (60) days after the date of death by written
notice to the personal representative of the deceased Member's estate.
3.3 If the remaining Members elect not to exercise their call option to acquire
the deceased Member's share of the Brokerage, at its option, the Brokerage may seek to
locate a purchaser for the deceased Member's share of the Brokerage, who shall upon
payment of the price as specified herein shall be transferred the deceased Member's share of
the Brokerage.
3.4 Nothing in this Agreement shall limit the ability of the Members to establish
a Buy -Sell Agreement funded by the purchase of an insurance policy.
Purchase Price
4. The purchase shall consist of the following:
(a) Except as otherwise set forth herein, the purchase price for a Member's share
in the Brokerage to be sold under this Agreement shall be the book value as of the end of the
month immediately preceding the date of death of the first Member to die, excluding the
Members' individual Income Accounts used to track the distributive shares of the Brokerage's
profits and losses. The determination of the book value shall be made by the independent
certified public accountant then servicing the Brokerage and in accordance with the accounting
principles previously applied by the Brokerage. The determination of book value made by the
accountant shall be conclusive and binding on all parties. The book value of the Brokerage
shall be the difference between the total assets and the total liabilities of the Brokerage. The
book value per Member shall be obtained by multiplying the book value of the Brokerage by the
Member's percentage of Brokerage ownership on the date as of which the book value is
determined. In the event the Brokerage has any outstanding loans on its books in favor of a
deceased Member, the principal amounts of the loan(s) shall not be added to the purchase
DocuSign Envelope ID: 8FD02A75-1802-4CF6-A6DE-E8762769DFOB
price. However, the surviving Member(s) shall have the option to either repay these loans
under the terms of this Agreement or under the terms of the loans as originated.
(b) The purchase price shall additionally include an amount for "good will," as that
term is commonly understood by certified business appraisers in the Santa Barbara County
area, which shall be determined, if the parties are unable to agree, by a certified appraiser who
is qualified to appraise business goodwill of the type and nature of the Brokerage selected
mutually by all parties.
(c) The cost of such appraisal shall be shared equally between the parties. In the
event that the parties cannot collectively agree upon an appraiser or if one or more parties
object to the amount of the appraisal then the parties(s) objecting may select an appraiser and
shall be solely responsible for the cost of the same. The total of such appraisal shall be added
together and divided by the number of appraisers to determine the amount of the goodwill of the
Brokerage. The parties shall be bound by the amount so determined.
Terms of Purchase Price
5. Each surviving Member shall pay to the estate of the first Member to die a cash
amount equal to at least twenty percent (20%) of the total purchase price to be paid for the
portion of the decedent's share of the Brokerage being purchased by each such surviving
Member. In the event that the amount paid to the estate of the first Member to die by any
surviving Member is less than the total purchase price, the surviving Member shall pay the
balance of the purchase price in twenty-four (24) consecutive monthly payments beginning
three (3) months after ,payment of the cash portion of the purchase price. The unpaid balance
of the purchase price shall be evidenced by a series of negotiable promissory notes made by
the surviving Member to the order of the estate of the deceased Member with interest at ten
percent (10%) per annum or three percent (3%) above the then existing interest rate for one
year treasury notes, whichever is lower. Each note shall provide that in the event of default in
payment of principal, all notes subsequently due shall become due and payable immediately.
Each note shall be subject to prepayment in whole or in part at anytime.
Payment of Purchase Price
6. The purchase price payable to the estate of the first Member to die shall be paid in
cash, or in cash and notes, to the estate of the deceased Member upon:
6.1 The estate of the deceased Member becoming able, in the opinion of the
legal counsel for the surviving Members, of transferring to the surviving Members full legal and
equitable title, free of any tax lien, to the shares of the deceased Member; and
6.2 Delivery to the surviving Members of all necessary court approvals and/or
confirmation of sale documents representing the share in the Brokerage of the deceased
Member, properly endorsed in the manner required to transfer full legal and equitable title, free
of any tax lien to the surviving Members.
Costs of Performance
7. The estate of the deceased Member shall bear, and hold the surviving Members
harmless from, all costs and expenses required for securing any court orders, court decrees,
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DocuSign Envelope ID: 8FD02A75-1802-4CF6-A6DE-E8762769DFOB
court approvals, and tax clearances required to enable the estate of the deceased Member to
transfer to the surviving Members full legal and equitable tax-free title to the Brokerage share of
the deceased Member.
Estate of Deceased Member Defined
8. The term "estate of the deceased Member" as used in this Agreement shall
mean and include as those terms are understood in California law:
(a) The duly appointed and qualified executor, executrix, administrator,
administratrix, administrator with the Will annexed or administratrix with the Will annexed of
the estate of the deceased Member.
(b) The surviving joint tenant of the deceased Member, if the deceased
Member's share of the Brokerage was owned by the deceased Member and a person who
is not active in the business of the Brokerage as joint tenants.
(c) Any other person who may, because of the community property or other
law of any jurisdiction, acquire without formal probate proceedings any right, title, or interest
in or to the deceased Member's share of the Brokerage by reason of the death of the
deceased Member.
Termination of Aareement
9. This Agreement shall terminate upon the occurrence of any one of the
following events:
(a) The written Agreement of the Members to that effect;
(b) 'rhe bankruptcy, receivership, or dissolution of the Brokerage;
(c) "rhe complete withdrawal from the Brokerage of any Member during
his lifetime pursuant to Paragraph 9 herein;
(d) 'rhe sale of the Brokerage share of the first Member to die to the
surviving Members pursuant to Paragraphs 4 through 7 herein;
(e) The simultaneous deaths of any two or more Members, or the death of
a surviving Member within thirty (30) days after the death of the first
Member to die unless within that time settlement shall have been
made between the estate of the first Member to die and the surviving
Members as provided in Paragraph 4 through 7 herein.
Sale or Transfer of Shares
10. Except as set forth above, no transfer of any Membership interests shall be
permitted without the written approval of all Members. A Member may transfer all or
4
DocuSign Envelope ID: 8FD02A75-1802-4CF6-A6DE-E8762769DFOB
part of his/her/its membership interest only as follows:
(a) To another Member as provided in subsection c) herein below.
(b) To any third party, after the Member making the transfer has first offered the
other Members the right of first refusal in accordance with the provisions of subsection c) -
(c) If any Member receives a bona fide offer, whether or not solicited by
him/her/it, from a person not then a Member to purchase all or any portion of his/her/its
membership interest and if the Member receiving the offer is willing to accept it, he/she/it shall
give written notice of the amount and terms of the offer, the identity of the proposed transferee
and his/her/its willingness to accept the offer to the other Members. The other Members shall
have the option, within thirty (30) days after that notice has been given, to purchase the
designated membership interest on the same terms as those contained in the offer and in the
same proportion as they hold membership interests. If the other Member(s) does not exercise
his/her/its option within the thirty (30) day period, the Member who received the offer may sell
his/her/its interest to such third party making the offer only on such terms and conditions as
stated in the offer. Any modification to such offer would require the Member receiving the offer
to give the other Mernber(s) a new right of first refusal hereunder.
Amendments or Alterations
10. This Agreement may be altered or amended in whole or in part at any time, by
filing with this Agreement a written instrument setting forth the changes signed by all Members.
Notices
11. Any and all notices or other communications required or permitted by this
Agreement or by law to be served on, given to, or delivered to any party hereto by any other
party to this Agreement shall be in writing and shall be deemed duly served, given, or delivered
when personally delivered to the party or to an officer of the party, or in lieu of such personal
delivery, when deposited in the United States mail, first-class postage prepaid, addressed to a
Member at the address then appearing for him or her on the books and records of the
Brokerage.
Binding on Heirs
12. This Agreement shall be binding on the parties hereto and on each of their heirs,
executors, administrators, successors, and assignees.
Severability
13. Should any provisions or portion of this Agreement be held unenforceable or
invalid for any reason, the remaining provisions and portions of this Agreement shall be
unaffected by that holding.
Governing Law
14. This Agreement shall be construed and governed by the laws of the State of
California.
5
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Sole and Only Agreement
15. This instrument, in addition to the Operating Agreement of the Brokerage,
constitutes the sole and only agreement of the parties hereto respecting the sale and
purchase of their shares in the Brokerage, and correctly sets forth the rights, duties, and
obligations of each to the other in relation thereto as of its date. Any prior agreements,
promises, negotiations, or representations concerning its subject matter not expressly set
forth in this Agreement are of no force oreffect. In the event of an inconsistency between this
Agreement and the Operating Agreement of the Brokerage, the terms of this Agreement shall
prevail or be interpreted to give the terms recited herein effect.
Indemnification of Remaining and Withdrawing Member
16. A withdrawing Member or a dying Member's estate shall indemnify and hold the
Brokerage harmless from and against any and all liabilities of every kind and nature personal to
the withdrawing or dying Member that arose before or after the close date of a sale of
Brokerage interests. A withdrawing Member or a dying Member's estate shall continue to be
responsible after the chose date for any liabilities of the Brokerage that arose prior to the close
date whenever they occur. The Brokerage and any remaining Member shall indemnify and hold
the withdrawing or dying Member harmless from and against any and all liabilities of every kind
and description, relating to or attributable to the period after the close date of a sale or buy-out
transaction between the parties, and for the remaining Member's personal and professional
conduct whenever it occurred.
Distribution on Liauidation
17. On the dissolution of the Brokerage, except as otherwise provided in this
Agreement, its business shall be wound up and its properties liquidated, and the net proceeds
of the liquidation, together with any property to be distributed in kind, shall be distributed as
follows:
(a) to the payment of the Brokerage's debts and obligations that are then due,
including any loans or advances that may have been made by any of the
Members;
(b) to the establishment of any reserves that the Members may consider
necessary for any future liabilities of the Brokerage; and
(c) to the Members in equal proportion to the balances in their respective
capital accounts.
SIGNATURE PAGE FOLLOWS -
DocuSign Envelope ID: 8FD02A75-1802-4CF6-A6DE-E8762769DFOB
Executed on 5/31/2016 2016 at
Executed on 5/31/2016 .2016 at
Oxnard
DSigned by:
Sad Al d,
MMYN HM
Santa Barbara
California.
California.
SEACOAST OF SANTA BARBARA, INC.
DmuSignW by:
VA14- RA
Ey. AN HOOK
Its: President
Executed on 5/31/2016 . 2016 at Newport Beach
LDccuSi9� byV�TONY DUNI
7
California.
DocuSign Envelope ID: 8FD02A75-1802-4CF6-A6DE-E8762769DFOB
EXLUSIVE NEW VESSEL SALES AGENT AGREEEMENT
The Parties
THIS AGREEMENT (the "Agreement") is made effective as of May 31st, 2016 by
and between Seacoast of Channel Islands, LLC, a California Limited Liability Company,
with its principal place of business at 3615 Victoria Avenue, Oxnard, CA 93035
("Seacoast"), and Heritage Yacht Sales, Inc., with its principal place of business at 829
Harbor Island Drive, Newport Beach, CA 92660 ("Heritage").
Recitals
WHEREAS, Heritage has sold the assets to its yacht brokerage business under
an agreement entitled, "Asset Purchase Agreement" dated May 31, 2016;
WHEREAS, Heritage has retained its rights to sell new vessels/boats ("New
Vessels") through separate agreements with boat manufacturers;
WHEREAS, Seacoast wishes to act as an exclusive representative for the sale of
the new boat lines which Heritage represents (the "Vessel Lines"); and
WHEREAS, Heritage and Seacoast agree that Seacoast will act as the exclusive
sales representative for Heritage for New Boats in California on the terms and
conditions as contained herein.
Operative Provisions
NOW, THEREFORE, based upon the mutual promises and provisions contained
herein, the Parties agree as follows:
Exclusive Sales Representative
1. Heritage hereby grants to Seacoast the exclusive right (to the exclusion of
Heritage and all claiming through Heritage), for acting as Heritage's sales
representative, to solicit orders for the Vessel Lines. This Agreement shall extend to
any other Vessel Lines which Heritage may obtain during the term of this Agreement.
Seacoast will use its existing seven (7) locations for the sale of the New Vessels.
Territory
2. This Agreement shall extend to any New Boats and New Boat Lines which
Heritage has the rights to sell within the State of California.
Compensation
3. Heritage shall pay Seacoast fifty -percent (50%) of the gross profits it receives
from all commissions and other fees from New Boat sales and services. From the fifty
percent (50%), the sales agents making the sale will receive thirty percent (30%) to be
paid from Seacoast's share of gross profits. Notwithstanding the above, Heritage will be
DocuSign Envelope ID: 8FD02A75-1802-4CF6-A6DE-E8762769DFOB
solely responsible for paying all workers compensation insurance for sales people
resulting from the sale of New Boats if required by law.
Seacoast or its authorized representative may, upon fifteen (15) days written
notice to Heritage, inspect and audit the books and records of Heritage relating to the
gross profits from New Boat sales, however, that such inspection shall only occur during
normal business hours of Heritage (unless agreed otherwise by Heritage) and may only
occur once per calendar quarter. The costs for said audit shall be paid for by Seacoast,
except that if said audit reveals that the gross profits was in error by more than five
percent (5%) of the amount due Seacoast for a particular calendar quarter, the costs for
the audit which includes such calendar quarter shall be the responsibility of Heritage,
but shall not be in excess of Two Thousand Dollars ($2,000).
Promotional Costs
4. Seacoast shall pay twenty-five percent (25%) of the costs of boat shows in
which the New Boats participate (show fees, boat washing/detailing and any captain's
fees) and shall supply sales staff during the shows and shall arrange and shall list the
new boats in the Yachtworld MLS, and to include the New Boat brands in all other
marketing activities.
Flooring and Slip Fee Costs
5. Heritage will pay flooring costs, maintenance costs and slip fees (if boats are
kept at Yacht Haven Marina). Seacoast/Heritage will pay slip fees if the boats are
stored in other locations with the agreement of Heritage.
Warranties
6. Heritage will be solely responsible for any and all required warranty services
on New Boats. Heritage assumes all responsibility and shall bear all liabilities and
expenses relating to any warranties or claims related to warranties or conditions related
to the New Boats sold or which are offered for sale by Seacoast under this Agreement.
Heritage shall hold Seacoast harmless and defend and indemnify Seacoast for all
liabilities, losses, costs, expenses or damages howsoever caused by reason of any
New Boat claims; any claims under any warranty on New Boats; any act or omissions
by Heritage arising out of the offering for sale; sale or post -sale issues relating to New
Boat sales; any violations of municipal, state or federal laws or regulations governing
the New Boats; and any claims made by manufacturers related to the sale of New Boats
made against Seacoast.
Best Efforts
7. Heritage and Seacoast will provide best efforts in maintaining a mutually
profitable relationship in new boat sales and will Work closely together to control costs
and related expenses. 'Heritage shall make available all promotional material, technical
information and training which may be supplied or made available by the Vessel Lines
to Seacoast.
2
DocuSign Envelope ID: 8FD02A75-1802-4CF6-A6DE-E8762769DFOB
Termination
8. Either party may terminate this Exclusive New Vessel Sales Agent Agreement
at will with ninety (90) days written notice.
Relationship of the Parties
9. Seacoast shall be an independent contractor under the terms of this
Agreement and shall have the sole control over its actions in the sale of the New Boats.
Miscellaneous
10. Binding Effect. This Agreement shall be binding upon and inure to the
benefit of the parties and their respective successors and assigns.
11. Non -waiver. No delay or failure by either party to exercise any right under
this Agreement, and no partial or single exercise of that right, shall constitute a waiver of
that or any other right, unless otherwise expressly provided herein.
12. Headings. Fieadings.in this. Agreement are for convenience only and are not
to be used to interpret cr construe its provisions.
13. Governing Law. This Agreement shall be governed by and construed in
accordance with the laws of the State of California without regard to its conflict of laws
principles. The parties agree to the exclusive jurisdiction and venue of the Santa
Barbara Superior Court, Anacapa Division, in connection with any litigation with respect
to this Agreement. In the event of a dispute concerning this Agreement or its
enforcement, the prevailing party shall be entitled to an award of attorney fees.
14. Counterparts. This Agreement may be executed in one or more
counterparts, each of which shall be deemed an original but all of which together shall
constitute one and the same instrument. Signature pages may be executed via "wet"
signature or electronic mark and the executed signature pages may be delivered using
pdf or similar file type transmitted via electronic mail, cloud based server, e -signature
technology or other similar electronic means.
15. Assignment or Amendment of Agreement: No Third Party Benefits.
This Agreement may not be amended. or assigned by either party without the other's
written consent. Nothing in this Agreement, expressed or implied, is intended to confer
upon any person other than the parties hereto and their successors and assigns, any
rights or remedies under or by reason of this Agreement.
16. Time of Essence. Time is of the essence of this Agreement.
17. Entire Agreement. This Agreement supersedes all prior agreements and
embodies the entire agreement between the parties with respect to the subject matter
hereof. All schedules and exhibits, if any, referred to in this Agreement and attached
hereto are hereby incorporated by reference and made a part hereof.
3
DocuSign Envelope ID: 8FD02A75-1802-4CF6-A6DE-E8762769DFOB
18. Notices. All notices hereunder shall be in writing and delivered personally or
mailed by certified mail, postage prepaid, addressed and emailed to the parties as
follows:
If to Seacoast, to Bob Nahm
3615 Victoria Avenue, Oxnard, CA 93035
Email: bob@seacoastyachts.com
If to Heritage, to Tony Duni
341 Havana Ave,
Long Beach, CA 90814
Email: tony@heritageyachts.com
The address for delivery of notices hereunder may be changed by either party
upon furnishing to the other the new address for notices in accordance with the
provisions of this paragraph.
19. Survival. The representations and warranties of the parties set forth in this
Agreement shall survive the closing of this Agreement for a period of eighteen (18)
months -
5/22/2016
Dated:
HERITAGE YACHT SALES, INC.
—oocusignea by:
1-6" Vw,u
By: -TONY DUNI
Its:
SEACOAST OF CHANNEL ISLANDS, LLC
Dow5lgnetl by:
Dated: AIc
5/21/2016 $a(.l
By:
EE9ni3m..
o Nah
Its: Managing Member
El
DocuSign Envelope ID: 8FD02A75-1802-4CF6-A6DE-EB762769DFOB
MINUTES OF MEETING OF MEMBERS OF
SEACOAST OF CHANNEL ISLANDS, LLC
The organizational meeting of the Members was held at the following
date, time and place:
Date:
Time:
Place:
The following Members were present:
Robert Nahm, Vicki Van Hook for Seacoast of Santa Barbara, Inc.
The following Members were absent:
None.
The following persons were also present at the meeting:
Brian Coryat
Robert Nahm
Pursuant to the Operating Agreement, the following persons officiated at the
meeting:
Chair of rrieeting: Robert Nahm
Secretary of meeting: Vicki Van Hook
The chair called the meeting to order at a.m. and announced that the
meeting was held pursuant to waivers of notice and consents to the holding of the
meeting.
PURCHASE OF THE ASSETS OF HERITAGE YACHT SALES, INC.
The chair presented a proposed Asset Purchase Agreement (the "APA"). The
APA provides in essential terms that the Company will purchase certain assets of
Heritage Yacht Sales, Inc. ("Heritage"). This also includes the right to sublease or
obtain new leases on Heritages' current locations. Each member read the APA and its
terms. A copy of the APA is attached hereto as Exhibit A.
As a part of the purchase price the Company would issue a 10% interest of the
outstanding member shares to Tony Duni as and for his contribution of certain assets
1
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part of the purchase ,price. This would have the effect of changing the ownership
interests as follows:
Old Interest New Member Interest
Seacoast of Santa Barbara, Inc. 80% 72%
Robert Nahm 20% 18%
Tony Duni 0% 10%
Seacoast of Santa Barbara, Inc. and Robert Nahm recognized that they will be
diluted by the issuance of a Membership Interest to Toni Duni.
The Members a9so reported that they had terminated an agreement concerning
the ability to transfer ownership rights of their respective membership interest which was
dated November 14, 2014. A copy of the agreement entitled "Agreement to Purchase
Assets and Cancellation of Agreement", terminating the agreement is attached hereto
as Exhibit B.
The each of the Members stated that they had agreed to enter into a Buy Sell
agreement which was to govern the ownership interest of each concerning their
membership interests. Tony Duni was to also execute the agreement. A copy of the
unsigned agreement entitled "Buy Sell" is attached hereto as Exhibit C.
The following resolutions were moved, seconded and adopted:
RESOLVED, that the Company have its manager execute and implement the
terms and conditions of the APA.
RESOLVED, that Certificates of Membership Interests to Seacoast of Santa
Barbara, Inc. for seventy two percent (72%); Robert Nahm representing eighteen
percent (18%) and to Toni Duni representing ten percent (10%) membership
interests in the Company upon the close of the APA be issued in substantially the
same form as attached hereto as Exhibit "D". Any previously issued Certificates
of Membership vvere to be marked cancelled and replaced with the appropriate
interests as reflected herein.
RESOLVED FURTHER, that each Certificate of Membership Interest shall state
a statement of designations, preferences, qualifications, limitations, restrictions,
and special or related rights of the holder on the face or back of the certificate, or,
in lieu thereof, the company shall furnish the statement as a separate document
to the holder upon request without charge; and
MANAGER
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The chair stated that the current manager of Company should be re-elected. The
following resolution was, moved, seconded and adopted:
RESOLVED, that the following person is re-elected as manager of Company:
UATM
Robert Nahm
The Manager accepted his appointment as evidenced by his signature on the
Acceptances of Appointments by Manager attached to these Minutes.
OTHER NECESSARYACTS
The Members desire to authorize all other acts necessary to complete the
purchase of the assets as set forth in the APA. The following resolution was moved,
seconded and adopted:
RESOLVED, that each of is authorized and directed to make such filings and
applications, to Execute and deliver such documents and instruments and to do
such acts and obtain such licenses, authorizations, and permits as are necessary
or desirable for Company to conduct its business, to fulfill legal requirements
applicable to Company or its business to complete the purchase of the assets of
Heritage as set forth in the APA and to take any other action necessary or
advisable to carry out the purposes of this resolution.
ADJOURNMENT
The chair asks if there is any other business before this meeting. There being
none, a motion to adjourn was moved, seconded and adopted and the chair declared
the meeting adjourned at a.m.
Minutes of this meeting respectfully submitted by:
DocuSignw by:
LtffffAIRY: VICKI VAN HOOK
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ACCEPTANCE OF APPOINTMENT
As Continuing Manager of Seacoast of Channel Islands, LLC
As of May 2016
MANAGER:
Bot NAA(1
ROBERT NAHM
rd
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EXHIBIT REFERENCE
Exhibit "A" Asset Purchase Agreement
Exhibit "B" Agreement to Purchase Assets of Heritage Yacht Sales, Inc. and Cancellation of
Agreement
Exhibit "C" Buy Sell Agreement
Exhibit "D" Membership Certificate
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ASSET PURCHASE AGREEMENT
THIS AGREEMENT (the "Agreement") is made effective as of May 31, 2016
by and between Seacoast of Channel Islands, LLC, a California limited liability
company, with its principal place of business at 3615 Victoria Avenue, Oxnard, CA
93035 ("Seacoast') and Heritage Yacht Sales, Inc. with its principal place of business
at 829 Harbor Island Drive, Newport Beach, CA 92660 ("Heritage").
RECITALS
WHEREAS, Heritage is doing business as a yacht sales brokerage at five
locations in California (the "Locations") and under the trade business name of
"Heritage Yacht Sales" (collectively described as the "Business") as identified below,
as follows:
Heritage Yacht Sales - Long Beach
231 N. Marina Drive
Long Beach, CA 90803
Heritage Yacht Sales - Newport Beach Office:
829 Harbor Island Drive
Newport Beach, CA 82660
Heritage Yacht Sales. - San Pedro
210 Whaler's Walk Suite 121
Berth 31
San Pedro, CA 90731
Heritage Yacht Sales; Inc. - San Diego
955 Harbor Island Drive
San Diego, CA"92101
Heritage Yacht Sales, Inc. - Wilmington
720 Peninsula Rd - Berth 202
Wilmington, CA 90744; and
WHEREAS, Seacoast is doing business as a yacht brokerage in Channel
Islands Harbor at 3616 Victoria Avenue, Oxnard, CA 93035 ; and
WHEREAS, Heritage'wishes to sell certain assets specifically identified
hereinafter to Seacoast j6gether with providing for the assignment/subletting of
certain leases to the Locations; and
,or
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WHEREAS, Seacoast wishes to purchase the assets and have the rights to
lease the Locations under terms and conditions which are acceptable to it as more
particularly set forth hereunder.
OPERATIVE PROVISIONS
NOW, THEREFORE, in consideration of the premises a'nd mutual covenants
and promises herein contained, and intending to be legally bound hereby, Heritage
and Seacoast agree as follows:
Purchase and Sale.
1.1 Purchase and Sale of Assets. On the terms and subject to the
conditions herein set forth, Heritage shall sell, convey, transfer, assign and deliver to
Seacoast and Seacoast shall acquire and accept from Heritage, free from all
liabilities and encumbrances (except as expressly provided herein), the furniture,
fixtures and office machines specifically described on Exhibit A. attached hereto. The
furniture, fixtures, and office machines are referred to hereinafter collectively as the
"Purchased Assets." The conveyance, transfer, assignment and delivery of the
Purchased Assets shall be affected by deeds, bills of sale, endorsements,
assignments, drafts, checks and other instruments of transfer "Ind conveyance in
appropriate form. Heritage, shall, as of the Closing Date (as defined in Section 9 of
this Agreement), upon Seacoast's request, do, execute, acknowledge and deliver all
further acts, deeds, assignments, transfers, conveyances, power of attorney and
assurances that are reasonably required for the better assigning, transferring,
granting, conveying, assuring and confirming to Seacoast or for aiding and assisting
in collecting and reducing to possession, any or all of the Purchased Assets.
1.2 UCC -3 Obligations. Heritage shall submit to Seacoast for
approval, at least three (3) days in advance of the Closing Date:, UCC Financing
Statement Amendments pursuant to UCC Article 3 that act to and have the effect of
releasing and discharging any and all liens and UCC financing statements or filings
on or regarding the Purchased Assets.
1.3 Excluded Assets. Those assets which are excluded from the
Purchased Assets (collectively, the "Excluded Assets"), and hence will not be
purchased by Seacoast hereunder, include, but are not limited to, all cash and cash
equivalents and all other assets of Heritage not used solely in connection with its
business.
1.4 Assumed Liabilities. Except as expressly set forth on Exhibit B
attached hereto, or except as otherwise expressly set forth herain, Seacoast shall not
assume or be obligated to perform any liability or obligation of Heritage, whether or
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not such liability arises out of or in connection with sale of the Purchased Assets
hereunder. On the Closing Date, Heritage shall transfer and assign to Seacoast and
Seacoast shall assume only those liabilities, comracts and obligations described on
Exhibit B (the "Assurned Liabilities"). Seacoast shall indemnify and hold Heritage
harmless from the Assumed Liabilities. Nothing in this Agreement shall be construed
to require Seacoast to assume any pre-closing liabilities or obligations of Heritage
whatsoever.
2. Purchase Price. The purchase price for the Purchased Assets to be
sold by Heritage hereunder (the "Purchase Price") shall be paid as follows:
2.1 In Exchange for the assets listed in Exhibit A, Seacoast shall pay a
percentage of the Gross Revenue (as defined below) generated out of the Locations
over a period of five (5) years from the Closing Date (the "Earn Out Payments") as
follows:
2.1.1 Year one. Seacoast will pay Heritage ten percent (10%) of
the Gross Revenue from commissions received from the sale of brokered used
vessels from all of the Locations.
2.1.2 Year two. Seacoast will pay Heritage fifteen percent (15%)
of the Gross Revenue from the commissions received from the sale of vessels from
all of the Locations.
2.1.3 Year three. Seacoast will pay Heritage fifteen percent
(15%) of the Gross Revenue from the commissions received from the sale of vessels
from all of the Locations.
2. 1.4 Year four. Seacoast will pay Heritage ten percent (10%)
of the Gross Revenue from the commissions received from the sale of vessels from
all of the Locations.
2.1.5 Year five. Seacoast will pay Heritage ten percent (10%) of
the Gross Revenue from the commissions received from the sale of vessels from all
of the Locations.
2. 1.6 The term "Gross Revenue' is defined for the purpose of
this Section 2, as the total commission revenue earned and received by Seacoast,
after paying co-op fees, if any, prior to the payment of sales staff commissions.
2.1.7 For purposes of clarification, the Earn Out Payments shall
be due only from the Locations as described in the Recitals hereinabove.
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2.1.8 Payment of the Earn Out Payments shall be made to
Heritage within thirty (30) days after the end of each month following the Closing
Date.
2.1.9 Heritage or its authorized representative may, upon fifteen
(15) days written notice to Seacoast, inspect and audit the books and records of
Seacoast relating to the Earn Out Payments provided, however, that such inspection
shall only occur during normal business hours of Seacoast (unless agreed otherwise
by Seacoast) and may only occur once per calendar quarter. The costs for said audit
shall be paid for by Heritage, except that if said audit reveals that the Earn Out
Payment was in error more than five percent (5%) of the amount due Heritage for a
particular calendar quarter, the costs for the audit which includes such calendar
quarter shall be the responsibility of Seacoast but shall not be in excess of Two
Thousand Dollars ($2,000). In any case, Heritage will be provided with full visibility
into the Yacht Closer system to assist with the monitoring of deal flow.
2.2. Seacoast, as additional consideration for the tangible assets
contributed by Heritage as described in Exhibit A ("Contributed Assets") shall transfer
to Tony Duni, a member interest equal to ten percent (10%) cf the total membership
interest of Seacoast of Channel Islands, LLC (the "Transferred Membership Interest")
upon the Closing Date.
The Parties agree to treat this contribution of the Contributed Assets for
income Tax purposes as a non-taxable contribution of the Contributed Assets in
exchange for the Transferred Membership Interest pursuant to Section 721 of the
Internal Revenue Code and to report the transaction in such a manner on their
respective Tax Returns.
3. Sales in Proaress. The parties acknowledge that on the Closing Date,
there may be sales of vessels which are in progress but for which payments or
commissions and/or fees have not been received or only partially received ("Sales in
Progress"). Heritage shall be entitled to payment of the full amount of proceeds from
each Sale in Progress which are outstanding as of the Closing Date (i.e. commission
fees owed to Heritage which are unpaid in full or part, as of the date of Closing Date)
regardless if payment is made after the Closing Date less any sales commissions
owed to the sales agent who made the sales, together with any associated direct
costs incurred. A list of all Sales in Progress is set out in Exhibit C, together with the
respective commissions due to sales associates. Seacoast shall not be obligated to
repay or compensate any commissions, coop fees, closing costs, or monies
concerning the Sales in Progress.
4. Inventory. Heritage and Seacoast have made a physical inventory of
the equipment of the Business (the "Closing Inventory'), a copy of which is attached
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hereto as Exhibit E
5. Location of Assets. Heritage warrants and represents that all the
tangible assets included in the Purchased Assets are located at the Locations.
Heritage will not remove any such property from any of the Locations without
Seacoast's written consent, except as may be required in the ordinary course of trade
or business up to the Closing Date.
6. List of Vendors, Attached hereto as Exhibit F is a list of Heritage's
Business vendors (the "Vendors"), which contains the names and business
addresses of all vendors and suppliers of the Business.
7. List of Customers. Attached hereto as Exhibit G is a list of Heritage's
customers (the "Customers"), which contains the names, telephone numbers and
addresses of all Customers of the Business. Said Customers and list shall be
transferred to Seacoast upon Closing which such list shall then become proprietary
information exclusively owned by Seacoast. Heritage agrees that it shall not sell,
transfer or disclose or contact any of the Customers for any purpose except with the
express written authorization of Seacoast. For purposes of clarification, those
Customers with Sales in Progress shall be included as Customers.
8. Allocations. The Purchase Price shall be allocated for tax purposes as
set forth in Exhibit D. Each of the parties shall report this transaction for tax purposes
in accordance with such allocations.
9. Closing. The closing of the transactions contemplated by this
Agreement (the "Closing") shall take place on a mutually agreeable date, but no later
than May 31, 2016 (the "Closing Date"). Time is of the essence. At the Closing
Date, Heritage shall execute and deliver to Seacoast all bills of sale and other
instruments that are ,reasonably necessary to transfer Heritage's right, title and
interest in and to the Purchased Assets to Seacoast, and shall deliver possession
thereof to Seacoast, together with the keys to the Locations as applicable. All such
bills of sale and other instruments will contain customary warranties and affidavit of
title and will effectively transfer to Seacoast all of Heritage's right, title and interest to
the property constituting the Purchased Assets, free and clear of all liens, security
interests and encumbrances. Heritage shall also deliver all releases, subordinations,
or waivers of security interests, liens, encumbrances or other claims against the
business or Purchased Assets constituting the Purchased Assets that Seacoast may
reasonably require.
10. Representations and warranties of Heritage. The following
representations and warranties made- by Heritage are true and correct and shall
survive the Closing for a period of eighteen months.
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10.1 Heritage has a4l the requisite authority to own, lease, operate and
to carry on its business as now being conducted and is duly qualified and in good
standing to do business in each jurisdiction in which such qualification is necessary;
10.2 Heritage has all the requisite power and authority to enter into this
Agreement and to consummate the transactions contemplated hereby.
10.3 Heritage is the owner of and has, or will have, as of the Closing
Date, good and marketable title to or other right to use all of the Purchased Assets
owned by Heritage, free of all debts, liens, security interests and encumbrances;
10.4 Heritage has not entered into any material contract relating to the
Purchased Assets;
10.5 Heritage does not owe any commissions to any of its clients or
customers, and is not obligated to pay any other amounts to perform other
obligations (other than routine servicing of customer accounts) for any of its clients or
customers;
10.6 Heritage has not entered into collective bargaining agreements,
union agreements, employment agreements,profit-sharing, retirement plans or other
benefit plans with respect to its employees;
10.7 No judgments, liens, actions, or proceedings are pending, or, to
the Heritage's knowledge, threatened against Heritage anywhere related to the
Business;
10.8 No action, suit, proceeding, or investigation by or on behalf of
Heritage's employees or any other party is pending or, to the knowledge of Heritage,
threatened, relating to, or affecting any of the Purchased Assets or relating to or
affecting the activities of Heritage carried on in connection with any of the Purchased
Assets, or which affects the enforceability of this Agreement or challenges any of the
transactions contemplated hereby; not, is there, to Heritage's knowledge, any basis
for any such action, suit, proceeding or investigation;
10.9 Heritage has complied with applicable bulk sales laws, if any,
which shall be confirmed prior to the Closing Date;
10.10 Heritage has to its knowledge complied with ail material laws
applicable to the Purchased Assets including environmental, workplace, health and
safety laws, unfair labor practices, Americans with Disabilities Act (except Title 11)
thereof as applicable to public accommodations and access), immigration laws, as
well as rules and regulations relating to the Purchased Assets except where
noncompliance would not have a Material Adverse Effect;
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10.11 Heritage is not in material default of any material provisions of
contracts or agreements to which it or any of the Purchased Assets are subject
including any of the leases for the Locations;
10.12 Heritage has paid in full, or will arrange for the payment in full at
the date of Closing, all state and federal employee income tax withholding, Federal
Social Security Tax (FICA) withholding, employment taxes, unemployment insurance,
sales and use taxes, federal and state income taxes, business or license fees, and all
other business related taxes or governmental charges related to the Business.
Heritage shall show proof of compliance with the above requirements by certificates
or letters from the applicable governmental authorities;
10.13 Heritage will have paid to its employees as of the Closing Date all
bonuses, vacation, personal and sick days, and other accrued amounts relating to
those employees. Heritage will supply Seacoast with an estoppel certificate from
each of his employees prior to the close of escrow;
10.14 Heritage is currently able to pay its obligations related to the
Business as they mature and will not be rendered unable to do so by the transfer
contemplated by this Agreement; and
10.15 To the knowledge of Heritage, no representation or warranty by
Heritage in this Agreement or in any exhibit, schedule, written statement, certificate,
or other document delivered or to be delivered to the Seacoast pursuant hereto, or in
connection with the consummation of the transactions contemplated hereby, contains
or will contain any untrue statement of a material fact, or omits or will omit to state a
material fact required to be stated therein or necessary to make; the statements
contained therein not misleading.
11. Representations and Warranties of Seacoast. The following
septations and warranties made by Seacoast to Heritage are true and correct:
11.1 Seacoast has all requisite power and authority, and has taken all
action necessary, to execute and deliver this Agreement, to consummate the
transactions contemplated hereby and to perform its obligations hereunder. This
Agreement has been duly authorized, executed and delivered by Seacoast and
constitutes the legal, valid and binding obligations of Seacoast enforceable against
Seacoast in accordance with its terms.
11.2 The execution and delivery by Seacoast of +:his Agreement, the
performance by Seacoast of its obligations hereunder and the consummation by
Seacoast of the transactions contemplated hereby do not require Seacoast to obtain
any consent, approval or action of, or make any filing with or give any notice to, any
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corporation, partnership, person, firm or other entity or any public, governmental or
judicial authority and this Agreement will be in full force and effect on the Closing
Date.
11.3 No broker or finder has acted, directly or indirectly, for Seacoast,
nor has Seacoast incurred any obligation to pay any brokerage, finder's fee or other
commission in connection with the transactions contemplated by this Agreement.
12- Conduct of Business. Heritage will conduct its Business up to the
Closing Date in substantially the same manner as it previously has been carried
out, will observe all provisions of the leases for the Locations, and will not enter into
any material contract except as may be required in the regular course of business.
Heritage shall maintain all tangible assets constituting the Purchased Assets in
good condition and working order, normal wear and tear expected, making all
reasonably necessary repairs up to the Closing Date.
13. Heritage Employees. Heritage shall terminate the employment of all
its employees as of the Closing Date. Seacoast shall not be responsible for any
severance pay or entitlement obligations, if any, due to Heritage's employees. It is
Seacoasts intention to re -hire some of Heritages employees pursuant to the
applicable standard terms and conditions of Seacoasts employment agreement.
Seacoast will have no obligation to re -hire any of Heritages' employees or have any
other duty to them arising out of Heritage's employment.
14. Non -Solicitation. Heritage acknowledges and agrees that any
solicitation, luring away or hiring of any employees of Seacoast will be highly
detrimental to the business of Seacoast and will cause Seacoast serious loss of
business and great and irreparable harm since such employees have knowledge of
trade secrets and other confidential information related to its business.
Consequently, Heritage covenants and agrees that, for a period of one year after
the Closing Date, Heritage shall not directly or indirectly solicit any such employees
of Seacoast or assist or aid in any such activity.
15- Non -Compete. Heritage, 5y Tony Duni, agrees lo execute a Non -
Compete Agreement in the form attached hereto as Exhibit H which provides in
pertinent part that for a period of two years from the Closing Date Heritage, Tony
Duni shall not engage, either directly or indirectly, in the yacht brokerage business
in any of the cities in which the Locations are located.
16. Musk of Loss. Heritage assumes all risk of loss in connection with the
Purchased Assets due to fire or other casualty up to the Closing Date. If any such
loss occurs before the Closing Date, or if the Business is closed or interrupted by
reason of any event not in the ordinary course of business, Seacoast may terminate
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this Agreement by giving Heritage written notice thereof. Upon such termination,
neither party shall have any liability hereunder.
17. Further Assurances. From time to time, at the request of the
Seacoast and without further consideration, Heritage shall execute and deliver such
further instruments of conveyance and transfer and take such other actions as the
Seacoast may reasonably require more effectively to convey and transfer any of the
Purchased Assets to the Seacoast. Heritage and Seacoast shall also execute and
deliver to the appropriate other party such other instruments as may be reasonably
required in connection with the performance of this Agreement, and each shall take
all such further actions as may be reasonably required to carry out the transactions
contemplated by this Agreement.
18. Conditions to Obligations of Seacoast. The obligations of Seacoast
to consummate the transactions contemplated by this Agreement are subject to the
satisfaction or waiver prior to the Closing of the following additional conditions:
18.1 Each of the terms, covenants and conditions of this Agreement to
be complied with and performed by heritage at or prior to Closing pursuant to this
Agreement shall be complied with and performed in all material respects;
18.2 No court order shall have been entered and be in force in any
proceeding which enjoins, restrains or prohibits this Agreement or the complete
consummation of the transactions as contemplated by this Agreement and no such
proceeding shall be pending;
18.3 The representations and warranties of Heritage made in this
Agreement shall be true as of the Closing Date in all material respects;
18.4 All governmental notices and filings required to be made shall
have been made and all consents and approvals required by law and all third parry
consents and approvals shall have been obtained and any applicable waiting
periods shall have expired or have been terminated, in each case without the
imposition of any term or condition which is unsatisfactory to Seacoast including but
not limited to the obtaining or assignment of a license to engage in the Business.
18.5 Seacoast shall receive a certificate as to the: satisfaction of the
above conditions dated as of the Closing Date executed by Heritage;
18.6 Heritage shall, no later than Closing Date, have withdrawn or
canceled all fictitious business name statements with respect to its use of its trade
name and shall cooperate with the assignment of any such business names to
Seacoast;
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18.7 Heritage shall sign a supercedure agreement whereby the
telephones from the following Locations will be transferred to Seacoast:
Heritage Yacht Sales — Long Beach
231 N. Marina Drive
Long Beach, CA 90803
Tel: (866) 569-2248
Tel: (562) 431-8699
Tel: (562) 431-6135
Fax: (562) 431-8691
Newport Beach Office
829 Harbor Island Drive
Newport Beach, CA 92660
Tel: (877) 389-2248
Tel: (949) 673-3354
Tel: (949) 673-3358
Fax: (949) 723-2961
Heritage Yacht Sales — San Pedro
210 Whaler's Walk, Suite 121
Berth 31
San Pedro, CA 90731
Tel: (310) 549-2248
Tel: (310) 549-2204
Fax: (310) 514-2268
Heritage Yacht Sales Inc. — San Diego
955 Harbor Island Drive
San Diego, CA 92101
Toll-free: 866-396-7823
Tel: 760-402-3868
Fax: 619-222-4488
Heritage Yacht Sales, Inc.—Wilmington
720 Peninsula Rd — Berth 202
Wilmington, CA 90744
Tel: 310-547-8007
Fax: 310-547-8008
19. Conditions to Obligations of Heritage. The ob igations of Heritage to
consummate the transactions contemplated by this Agreement are subject to the
satisfaction or waiver prior to Closing of the following conditions:
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19.1 Each of the terms, covenan , and conditiois of this Agreement
to be complied with and performed by Seacoast at or prior to Closing pursuant to
this Agreement shall be complied with and performed in all material respects;
19.2 No court order shall have been entered and be enforced in any
proceeding which enjoins, restraints or prohibits this Agreement or the complete
consummation of the transactions contemplated by this Agreement and no such
proceeding shall be pending;
19.3 The representations and warranties of Seacoast made in this
Agreement shall be true as of the Closing Date and all material respects;
19A All governmental notices and filings required to be made shall
have been made (except under applicable bulk sales laws) and all consents and
approvals required by law and all third party consents and approval shall have been
obtained and any applicable waiting period shall have expired or have been
terminated, in each case without the imposition of any term or condition which is
unsatisfactory to Heritage;
19.5 Heritage shall receive a certificate as to the satisfaction of the
above conditions dated as of the Closing Date executed by a duly authorized officer
of Seacoast;
20. Consent to Lease AssiggmV_q!a1 ubiease. This Agreement is
contingent upon Seacoast's: obtaining the landlords' consent: to the assignment of
or sublease for the Locations at San Pedro, Yacht Haven, San Diego and Long
Beach; approving of the terms and conditions of the assignments/subleases of the
same; and receiving estoppie certificates from the lessor. As to the Newport
Beach Location, Seacoast needs to be approved as a new lessee on terms and
conditions acceptable to Seacoast. Any such consents, amendments and estoppel
shall be in writing and delivered by Heritage to Seacoast at or before the Closing
Date. Nothing herein shall be construed to require Seacoast to compensate any
landlord for such landlord's consent to the assignment of the Lease.
20.1 Heritage shall obtain a"written verification that there has been no
damage to the premises nor charged against its security deposit from the Lessor
and that Lessor acknowledges that the rights to the security deposit under the lease
are held by Seacoast. Upon receipt of such verification Seacoast shall pay to
Seacoast shall reimburse Heritage for its security deposit
21. inspection of Books. At any time up to the Closing Date, Seacoast
and its representatives shall have full access to Heritages' Locations including the
books, accounts and records of every kind related to the Business and shall be
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allowed to make extracts therefrom. Heritage shall furnish Seacoast with all
additional information as to the Business as Seacoast shall reasonably request.
22. Fees and Exl+enses�,vroker. Each party shall Day its own fees and
expenses in preparing and entering into this Agreement, and in consummating the
transactions contemplated hereby. No party shall have any obligation to another
party if the transactions contemplated by this agreement are not consummated for
any reason other than the party's willful failure or refusal to perform its obligations
hereunder. In such event, the defaulting party shall remain liable for all damages
caused by such willful failure or refusal. Heritage and Seacoast each represent to
the other that no broker was involved in this transaction.
23. Confidential! .
23.1 Any and all information disclosed by Seacoast to Heritage or by
Heritage to Seacoast as a result of the negotiations leading to the execution of this
Agreement, or in furtherance thereof, which information was not already known to
Heritage or to Seacoast, respectively (the "Confidential Information"), shall remain
confidential to Heritage and Seacoast and their respective employees and agents,
except to the extent that the Seacoast in its reasonable judgment must disclose
any such Confidential Information to banks and other institutional lenders in the
process of procuring any loan or loans of funds for the transactions contemplated
herein. If the Closing does not take place for any reason, Heritage and Seacoast
agree not to further divulge or disclose or use for their benefit or purpose any such
Confidential Information at any time in the future unless such Confidential
Information has otherwise become public. "Confidential Information" shall include,
but not be limited to, financial information, customer lists, sales representative's
lists, and anything else having economic or pecuniary benefit to Seacoast or
Heritage respectively.
23.2 Heritage and Seacoast agree not to provide any information or
documentation to any other person regarding their relationship or business dealing
with the other in regards to the Business unless required to do so by valid court
order issued by a court of competent jurisdiction or unless otherwise required by
law.
24. Indemnification.
24.1 Heritage agrees to indemnify and hold Seacoast harmless from
and with respect to any and all claims, liabilities, losses, damages, costs, and
expenses, including, without limitation, the fees and disbursements of counsel
(collectively "Loss" and/or "Losses"), related to or arising directly or indirectly out of
any of the following;
12
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21.1.1 any failure or breach by Heritage of any covenant,
obligation, or undertaking made by Heritage in this Agreement;
24.1.2 any and all Losses, including those of injury to person or
property, arising out of the operation of the Assets or the related business carried on
by Heritage on or prior to the Closing Date;
24.1.3 any Loss arising under the bulk sales laves of any
jurisdiction in connection with transactions contemplated by this Agreement; and
24.1.4 any Loss with respect to any employee of Heritage in
connection with his or her employment on or prior to the Closing Date.
24.2 Seacoast agrees to indemnify and hold Heritage harmless from
and with respect to any and all Losses related to or arising directly or indirectly out of
any of the following:
24.2.1 any breach by Seacoast of any covenant, obligation or
undertaking made by Seacoast in this Agreement;
24.2.2 the ownership or operation of the Purchased Assets or
the Business after the Closing; and
24.2.3 the Assumed Liabilities.
24.3 In the event that any party (the "Indemnified party") may be
entitled to indemnification hereunder with respect to any asserted claim of, or
obligation or liability to, any third party, such party shall notify the indemnifying party
hereunder (the "Indemnifying Party") thereof, describing the matters involved in
reasonable detail. The Indemnifying Party shall be entitled to assume the defense
thereof upon written notice to the Indemnified Party; provided, that once the defense
thereof is assumed by the Indemnifying Party, the Indemnifying Party shall keep the
Indemnified Party advised of all developments in the defense thereof and in any
related litigation, and the Indemnified Party shall be entitled at all times to participate
in the defense thereof at its own expense.
25. First Right of First Refusal. Seacoast hereby grants Heritage for a
period of five (5) years from the date of the execution of this Agreement a right of first
refusal to purchase the Assets of Seacoast or any portion of the Assets as defined in
section 25.2 in accordance with the terms and conditions set forth below ("Right of
First Refusal"):
25.1 If Seacoast receives a bona fide offer, whether or not solicited by
it, from any person or entity to purchase all or any portion of the Assets of Seacoast
and if Seacoast is willing to accept it, then Seacoast shall give written notice of the
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amount and terms .of the offer, the identity of the proposed transferee and its
willingness to accept the offer to Heritage within ten (10) days of receipt of the offer.
Heritage shall have the option, within fifteen (15) business days after that notice has
been given to purchase the interest in the Assets on the same terms as those
contained in the offer. If Heritage does not exercise its option within the fifteen (15)
day period, or upon the expiration of the five (5) year period this Right of First Refusal
shall terminate.
25.2 Far the purpose of this Right of First Refusal the term `Assets"
means assets owned and used by Seacoast in the operation of its yacht brokerage
business which are of such a nature so as to allow the potential purchaser to operate
a yacht brokerage as a result of the purchase of said Assets. The sale of a minor
number of Assets such as office equipment, furniture or other individual items which
are not critical to the operation of a yacht brokerage business shall not be subject to
this Right of First Refusal.
26. Binding Effect. This Agreement shall be binding upon inure to the
benefit of the parties and their respective successors and assigns.
27. Non -waiver: No delay or failure byeither party to exercise any right
under this Agreement, and no partial or single exercise of that right, shall constitute a
waiver of that or any other right, unless otherwise expressly provided herein.
28. Headings. Headings in this Agreement are for convenience only and
are not to be used to iinterpret or construe its provisions.
29. Governing Law. This Agreement shall be governed by and
construed in accordance with the laws of the State of California without regard to its
conflict of laws principles. The parties agree to the exclusive jurisdiction and venue
of the Santa Barbara Superior Court, Anacapa Division in connection with any
litigation with respect to this Agreement. In the event of a dispute concerning this
agreement or its enforcement the prevailing party shall be entitled to an award of
attorney fees and costs.
30. Counterparts/Execution. This Agreement may be executed in one or
more counterparts, each of which shalt be deemed.an original but all of which
together shall constitute one and the same instrument. Signature pages may be
executed via "wet' signature or electronic mark and the executed signature pages
may be delivered using pdf or similar file type transmitted via electronic mail, cloud
based server, e -signature technology or other similar electronic means.
31. Assignment or Amendme
This Agreement may not be amended or
14
party without the other's
DocuSign Envelope ID: 8FD02A75-1802-4CF6-A6DE-E8762769DFOB
written consent. Nothing in this Agreement, expressed or implied, is intended to
confer upon any person other than the parties hereto and their :successors and
assigns, any rights or remedies under or by reason of this Agreement.
32. Time of Essence. Time is of the essence of this Agreement.
33- Entire Agreement. This Agreement supersedes all prior agreements
and embodies the entire agreement between the parties with respect to the subject
matter hereof. All schedules and exhibits referred to in this Agrl:ement and attached
hereto are hereby incorporated by reference and made a part hereof.
34. Notices. All notices hereunder shall be in writing and delivered
personally or mailed by certified mail, postage prepaid, addressed and emailed to the
parties as follows:
If to Seacoast, to: Bob Nahm
3615 Victoria Avenue
Oxnard, CA 93035
Email: bob(a)seacoastvachts.com
If to Heritage, to: Tony Duni
341 Havana Ave,
Long Beach, CA 90814
Email: tony(aheritagevachts.com
The address for delivery of notices hereunder may be changed by either party
upon furnishing to the other the new address for notices in accordance with the
provisions of this paragraph.
34. Survival. The representations and warranties of the parties set forth
in this Agreement shall survive the closing of this Agreement for a period of eighteen
months.
35. Exclusive Anent Agreement. Contemporaneously with the execution
of this Agreement, Seacoast shall enter into a separate exclusive agreement with
Heritage for the sale of Heritage's new yacht lines of vessels.
IN WITNESS WHEREOF, the parties have signed this agreement as of the
date above first written.
im
DocuSign Envelope In 8FD02A75-1802-4CF6-A6DE-E8762769DFOB
5/22/2016
DATED:
HERITAGE YACHT SALES, INC.
LD
oousiyoea by:
" VMAnI
ST r e i e rift' I
Its:
SEAOAST OF CHANNEL ISLANDS, LLC
OoaSignetl by:
DATED: 5/21/2016
Its: Managing Member
16
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Exhibit A
The assets sold in exchange for the "earn out" Payments as described in Section 2.1
as follows:
1. Customer List.
2. Covenant not to compete.
3. Other intangible assets.
The tangible assets contributed to Seacoast in exchange for a ten percent
00%) interest in Seacoast as described in Section 2.2 of the Agreement are as
follows:
1.
Computers;
2.
Furniture and Fixtures.
3.
Awning Improvement.
4.
Cameras.
5.
Signage.
A detail of the office inventory follows on pages 10.1-10.
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Exhibit B —Assumed Liabilities
No liabilities assumed
w]
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Exhibit G — Sales in Progress
To be added last week of May
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Exhibit D - Allocation of Purchase Price
The assets sold in exchange for the "earn out' payments as described in Section 2.1
as follows:
1. Customer List.
2. Covenant not to compete.
3. Other intangible assets.
The tangible assets contributed to Seacoast in exchange for a ten percent
(10%) interest in Seacoast as described in Section 2.2 of the Agreement are as
follows:
1. Computers; $510.00
2. Furniture and Fixtures. $4:702.00
20
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Exhibit E - Inventory
Attached PDFs
21
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Exhibit F- Vendor List
To be transmitted electronically as required
22
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Exhibit G - Customer List
To be transmitted electronically as required
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Exhibit H
HERITAGE NON -COMPETITION NON -SOLICITATION, AND NON -RAID
AGREEMENT
This Non -Competition, Non -Solicitation, and Non -Raid Agreement
("Agreement") is made and entered into as of May 31, 2016, by and between
Seacoast of Channel Islands, LLC ("Seacoast"), and Tony Duni individually and
Heritage Yacht Sales, Inc. a California Corporation, collectively ("Heritage").
Seacoast and Heritage: are collectively referred to as the "Parties" and individually as
a "Party."
Recitals
1. Heritage has been engaged in the yacht sales business and providing
related products and services using the trade name "Heritage Yacht Sales" or other
similar names at the following locations (the "Business"):
Heritage Yacht Sales - Long Beach
231 N. Marina Drive
Long Beach, CA 90803
Newport Beach Office:
829 Harbor Island Drive
Newport Beach, CA 92660
Heritage Yacht Sales - San Pedro
210 Whaler's Walk Suite 121
Berth 31
San Pedro, CA 90731
Heritage Yacht Sales Inc. - San Diego
955 Harbor Island Drive
San Diego, CA 92101
Heritage Yacht Sales, Inc. -Wilmington
720 Peninsula Rd - Berth 202
Wilmington, CA 90744
Effective as of May 31, 2016, Heritage is selling substantially all of the assets
associated with the Business to Seacoast pursuant to the terms and conditions of an
Asset Purchase Agreement ("RPA") dated May 31st 2016; and
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3. Heritage has the capability of creating a business enterprise that could
effectively compete with Seacoast with respect to the operation of the assets which
Seacoast is acquiring from Heritage;, asci thus the Parties have agreed that the
execution and delivery of this Agreement by the Heritage is a ecndition of the Closing
under the APA.
NOW, THEREFORE, in consideration of the foregoing Recitals, which are
incorporated in the Agreement by reference herein, the mutual covenants contained
herein and other good and valuable consideration, the receipt and sufficiency of
which is hereby acknowledged, the Parties agree as follows:
Agreement
1. Non Competition. Heritage covenants. and agrees that immediately following the
Closing and continuing for a period of five (5) years, Heritage: will not either
directly or indirectly, alone or with others:
a. market or own, manage, operate, or control any business which markets used
yacht sales or related prcducts or services in competitior with Seacoast within
a ten (10) mile radius of the following locations:
231 N. Marina Drive
Long Beach, CA 90803
829 Harbor Island Drive
Newport Beach, United States 92660
210 Whaler's Walk Suite 121
Berth 31
San Pedro, United States .90731
955 Harbor Island Drive
San Diego, United States 92101
Channel Islands Marina
3615 Victoria Avenue
Oxnard, CA 93035
b. solicit any of the employees of Seacoast who were employed by Heritage at
the business locations described in on Section 1 (a) above or any employees
of Seacoast of Santa Barbara, LLC;
Fk7
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c. interfere with the relationship of Seacoast and its employees at the business
locations described in Section 1 (a) above; or
d. interfere with the relationship of Seacoast with, or solicit, any customers or
others who are engaged in or who had business dealings with the Heritage at
the business locations described in Section 1 (a) above before the Closing of
the APA.
2. Blue Pencil. Heritage acknowledges that the period of restriction and the
geographic area imposed by Section 1 is fair and reasonable and is reasonably
required for the protection of Seacoast. If any part or parts of Section 1 shall be held
to be unenforceable or invalid, then the remaining parts thereof shall nevertheless
continue to be valid and enforceable as though the invalid portion or portions were
not a part hereof. If any of the provisions of Section 1 relating to the period of
restriction or geographic area shall be deemed to exceed the: maximum period of
time or scope which a court of competent jurisdiction would deem enforceable, then
the time or scope shah, for the purposes of Section 1, be deemed to be the maximum
time period or scope which a court of competent jurisdiction v,rould deem valid and
enforceable in any state in which such court of competent jurisdiction shall be
convened.
3. Confidentiality. Heritage acknowledges that Heritage has knowledge of certain
Confidential Information related to the Business, its customers, and its prior
operations, for which the rights, title, and interest has been sold, assigned and
transferred to Seacoast under the APA. Heritage acknowledges that the disclosure
or use of the Confidential Information could cause Seacoast substantial losses and
damages. "Confidential Information" means all information not generally known to the
public, relating to the affairs of the Business and/or its customers, clients,
representatives, employees and principals, including, but not limited to, any pricing
information or any other information concerning the Business's sales representatives,
business strategy, marketing practices and strategy, and sales promotion strategy,
whether such information was acquired by Seacoast under the APA or not. No notice
of confidentiality is required. Heritage agrees to keep confidential all Confidential
Information, except to the extent such information or documents are or thereafter
become lawfully obtainable from other sources or are in the public domain through no
fault of Heritage or as is consented to in writing by Seacoast. If Heritage becomes
legally compelled to disclose any Confidential Information, it agrees to provide
Seacoast with prompt notice thereof and agrees to provide only such information or
documentation that is legally required by subpoena, court order, or the like.
4. Right to Seek Injunctive Relief. Heritage agrees and acknowledges that a
violation of the covenants contained in Sections 1 and 3 of this Agreement may
cause irreparable damage to Seacoast, and that it may be impossible to estimate or
M
DocuSign Envelope ID: 8FD02A75-1802-4CF6-A6DE-E8762769DFOB
determine the damage that will be suffered by Seacoast in the event of a breach by
Heritage of any such covenant. Therefore, Heritage further agrees that in the event
of any violation or threatened violation of such covenants, Seacoast shall be entitled
to seek as a matter of course an injunction from any court of competent jurisdiction
restraining such violat':= or threatened violation by Heritage, such right to seek an
injunction to be cumulative and in addition to whatever other remedies Seacoast may
have. Heritage shall be obligated to pay Seacoast for costs and attorneys' fees in
the event Seacoast prevails in a legal action to enforce this Agreement.
5. Miscellaneous.
a. Governing Law and Jurisdiction. This contract shall be construed under and
be governed in all respects by the substantive and procedural law of the state
of California without regard to choice -of -law principles. Any dispute hereunder
shall be venued exclusively in and determined by the Superior Court of Santa
Barbara County, Anacapa Division.
b. Non -Waiver. No waiver, delay or failure of Seacoast to enforce any provision
herein, whether known or unknown by Seacoast, shall relieve Heritage of its
duty to otherwise comply with the Agreement, and shall not waive Seacoast's
right to enforce the provision at a later time.
c. Assignment. Subject to the Right of First Refusal as set forth in Section 25 of
the Asset Purchase Agreement, Heritage consents and agrees that its
obligations under this Agreement may be assigned to a s.lccessor or assignee
of Seacoast.
d. Amendment. This Agreement cannot be amended, supplemented, or
otherwise modified except in a writing signed by Seacoast and Heritage.
e. Entire Agreement. This Agreement contains the entire agreement of the
Parties relating to the subject matter hereof and, except as otherwise stated,
supersedes any and all oral or written prior agreements and understandings
with respect to such subject matter.
Counterparts and Electronic Signatures. This Agreement: may be executed in
two or more counterparts, each of which shall be deemed an original but all of
which together shall constitute one and the same agreement. The
counterparts of this Agreement and any schedules and Exhibits hereto, if any,
may be executed and delivered by facsimile or other electronic signature by
any of the Parties to any other Party and the receiving Party may rely on the
receipt of such document so executed and delivered by facsimile or other
electronic means as if the original had been received.
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g. Representation of Comprehension of the Agreement. In entering into this
Agreement, the Parties each represent that they have had the opportunity to
have the terms of this Agreement reviewed by an attorney of their choice, and
that they fully understand and voluntarily accept the terms of this Agreement.
h. Partial Invalidity. In the event that any provision of this Agreement shall be
held invalid or unenforceable by any court of competent jurisdiction, such
holding shall not affect the validity or enforceability of any other provision
herein.
IN WITNESS WHEREOF, the Parties hereto have executed this Agreement as
of the date referenced above.
Seacoast of Channel islands, LLC
DocuSignetl by:
B� NA101
By: o ahm, Manager
Heritage Yacht Sales, Inc.
E
ignetl by:
VWAA
By: n 1, President
P4y
DocuSlgned by.
Owi
ony unl, Individually
DocuSign Envelope ID. 8FD02A75-1802-4CF6-A6DE-E8762769DFOB
AGREEMENT TO PURCHASE ASSETS OF HERITAGE YACHT SALES, INC.
AND CANCELLATION OF AGREEMENT
Parties
This Agreement to Purchase of Assets and Cancellation of Agreement is entered
into between Seacoast of Santa Barbara, Inc., ("SB Seacoast") and Robert Nahm ("Nahm"). SB
Seacoast and Nahm are referred to herein individually as the `Party" and collectively as the
"Parties".
Recitals
WHEREAS, the Parties to this Agreement have previously entered into an
agreement dated November 17, 2014 (the "Original Ownership Agreement"), a copy of which is
attached hereto as Exhibit A (involving the ownership of member interests in Seacoast of
Channel Islands, LLC (the "Brokerage"); and
WHEREAS, the Brokerage is purchasing the assets of Heritage Yacht Sales, Inc.
("Heritage") under the terms of an Asset Purchase Agreement ("APA"), a copy of which is
attached hereto as Exhibit B; and
WHEREAS, the Brokerage, as a part of the purchase price, has agreed to transfer a
ten percent (10%) interest in its membership shares to Heritage; and
WHEREAS, the membership ownership percentages in the Brokerage prior to the
APA was Nahm with a twenty percent (20%) interest and SB Seacoast with an Eighty Percent
(80%) interest; and
WHEREAS, as a result of the APA, the membership ownership will change to:
Nahm holding an eighteen percent (18%) member interest; Heritage holding a ten percent (10%)
member interest; and SB Seacoast holding a seventy-two percent (72%) member interest; and
WHEREAS, the Parties to this Agreement will be entering into an additional
agreement concerning the ownership and restrictions on the sale or transfer of their interests by
SB Seacoast, Nahm and Heritage which will replace the Original Ownership Agreement; and
WHEREAS, the Parties are desirous of confirming the APA and its terms and
conditions, especially as it relates to their respective member ownership interests; terminating
the Original Ownership Agreement and adopting a new ownership agreement to include
Heritage as a member.
Operative Provisions
NOW, THEREFORE, based upon the mutual covenants and promises made herein,
the Parties agree as follows:
1. The Parties agree to the terms and conditions of the APA.
2. The Parties agree that the Brokerage will issue a membership interest to
Tony Duni of Heritage equal to ten percent (10%) of the Brokerage.
DocuSign Envelope ID: 8FD02A75-1802-4CF6-A6DE-E8762769DFOB
3. The Parties agree that the new membership ownership interests in the Brokerage
will be: Nahm - eighteen percent (18%): SB Seacoast - seventy two percent (72%); and
Heritage (Duni) - a ten percent (10%) interest.
4. The Original Ownership Agreement is terminated and is of no force or effect.
5. The Parties agree to enter into a new Ownership Agreement in the form attached
hereto as Exhibit C. .
6. This Agreement shall be binding on the parties hereto and on each of their heirs,
executors, administrators, successors, and assignees.
7. Should any provisions or portion of this Agreement be held unenforceable or
invalid for any reason, the remaining provisions and portions of this Agreement shall be
unaffected by that holding.
8. This Agreement shall be construed and governed by the laws of the State
of California.
9. This instrument constitutes the sole and only agreement of the parties
hereto respecting the sale and purchase of their shares in the Brokerage, and correctly sets forth
the rights, duties, and obligations of each to the other in relation thereto as of its date. Any prior
agreements, promises, negotiations, or representations concerning its subject matter not
expressly set forth in this Agreement are of no force or effect.
oocusignea by:
5/21/2016 gog /�A44
Dated: g€6M73
ROBERT NAHM
SEACOAST OF SANTA BARBARA, INC.
DocuSigned by:
Dated:
5/21/2016 F� Z Vat&, lk &
_
8V CKMAN HOOK
DocuSign Envelope ID. 8FD02A75-1802-4CF6-A6DE-E8762769DFOB
BUY SELL AGREEMENT
Preamble
THIS AGREEMENT is entered into and is intended to be effective on the day
Of , 2016 by and between Seacoast of Santa Barbara, Inc., (`SB
Seacoast' , Robert Nahm ("Nahm"), and Tony Duni ("Heritage"), each of whom is a
Member of Seacoast of Channel Islands, LLC (the "Brokerage").
Recitals
The purpose o -,f this Agreement is three -fold:
1) To protect the management and control of the Brokerage against intrusion by
persons not active in the business or not acceptable to the other Members of the
Brokerage;
2) To provide for transition of the Brokerage interests in the event of the death or
withdrawal of one of the Members; and
3) To provide a mechanism for the establishment of a purchase price for the sale of
one Member's interest.
The current ownership interests in the Brokerage are, for all purposes, as follows:
SB Seacoast: 72%
Nahm: 18%
Heritage: 10%
NOW, THEREFORE, IT IS AGREED:
Restriction on Transfer
1. To accomplish the purpose of this Agreement, any transfer, sale, assignment,
hypothecation, encumbrance, or alienation of any Member's share of the Brokerage, whether
in whole or in part, other than according to the terms of this Agreement is void and transfers no
right, title, or interest in the Member's share of the Brokerage, to the purported transferee,
buyer, assignee, pledgee, or encumbrance holder. This provision shall not apply to SB
Seacoast which shall be free to transfer its interest without restriction.
Agreement Available for Inspection
2. An original copy of this Agreement, duly executed by each of the Members,
shall be maintained by the Brokerage at its principal place of business and made available
for inspection by any person requesting to see it.
HIBIT4*%
DocuSign Envelope ID: 8FD02A75-1802-4CF6-A6DE-EB762769DFOB
Transfer of Brokerage Share Unon Death of Member
3. Upon the death of a Member, each surviving Member (including non -individual
entities) shall purchase, and the estate of the deceased Member shall sell to each surviving
Member, such proportion of the Brokerage owned by the Member at his or her time of death as
the percentage in the Brokerage already owned by a surviving Member bears to the total
ownership interests in the Brokerage owned by all of the surviving Members, for the price and
upon the terms and conditions specified in this Agreement. Each Member by his/its execution
of this agreement, agrees to insert in his Will and/or Trust a direction to his personal
representative to pronnptly comply with the terms of this Agreement and to execute any and all
documents reasonably required to achieve such compliance including, but not limited to, the
filing of a Petition for a preliminary Distribution of the Members interest as soon as it is possible.
3.1 Each Member, pursuant to his execution of this Agreement, hereby
absolves and exonerates his personal representative from any personal responsibility or liability
for any loss which may result to any property passing under his Will otherwise pursuant to the
directions contained in this agreement, as long as such personal representative shall have been
acting in good faith and without gross negligence.
3.2 In the event of the death of one of the Members, the remaining Members
shall have the first option, but not the obligation, to purchase from the deceased Member's
estate, the deceased (Member's share in the Brokerage. The purchase price shall be
determined under the provisions hereunder. There shall be no right in favor of the personal
representative of a deceased Member to require either the Brokerage or the remaining
Members to acquire the deceased Member's share in the Brokerage. The remaining Members
may exercise their option at any time within sixty (60) days after the date of death by written
notice to the personal representative of the deceased Member's estate.
3.3 If the remaining Members elect not to exercise their call option to acquire
the deceased Member's share of the Brokerage, at its option, the Brokerage may seek to
locate a purchaser for the deceased Member's share of the Brokerage, who shall upon
payment of the price as specified herein shall be transferred the deceased Member's share of
the Brokerage.
3.4 Nothing in this Agreement shall limit the ability of the Members to establish
a Buy -Sell Agreementfunded by the purchase of an insurance policy -
Purchase Price
4. The purchase shall consist of the following:
(a) Except as otherwise set forth herein, the purchase price for a Member's share
in the Brokerage to be sold under this Agreement shall be the book value as of the end of the
month immediately preceding the date of death of the first Member to die, excluding the
Members' individual Income Accounts used to track the distributive shares of the Brokerage's
profits and losses. The: determination of the book value shall be made by the independent
certified public accountant then servicing the Brokerage and in accordance with the accounting
principles previously applied by the Brokerage. The determination of book value made by the
accountant shall be conclusive and binding on all parties. The book value of the Brokerage
shall be the difference between the total assets and the total liabilities of the Brokerage. The
book value per Member shall be obtained by multiplying the book value of the Brokerage by the
Member's percentage of Brokerage ownership on the date as of which the book value is
determined. In the event the Brokerage has any outstanding loans on its books in favor of a
deceased Member, the principal amounts of the loan(s) shall not be added to the purchase
2
DocuSign Envelope IDBFD02A75-1802-4CF6-A6DE-E8762769DFOB
price. However, the surviving Member(s) shall have the option to either repay these loans
under the terms of this Agreement or under the terms of the loans as originated.
(b) The purchase price shall additionally include an amount for "good will," as that
term is commonly understood by certified business appraisers in the Santa Barbara County
area, which shall be determined, if the parties are unable to agree, by a certified appraiser who
is qualified to appraise business goodwill of the type and nature of the Brokerage selected
mutually by all parties.
(c) The cost of such appraisal shall be shared equally between the parties. In the
event that the parties cannot collectively agree upon an appraiser or if one or more parties
object to the amount of the appraisal then the parties(s) objecting may select an appraiser and
shall be solely responsible for the cost of the same. The total of such appraisal shall be added
together and divided by the number of appraisers to determine the amount of the goodwill of the
Brokerage. The parties shall be bound by the amount so determined.
Terms of Purchase Price
5. Each surviving Member shall pay to the estate of the first Member to die a cash
amount equal to at least twenty percent (20%) of the total purchase price to be paid for the
portion of the decedents share of the Brokerage being purchased by each such surviving
Member. In the event that the amount paid to the estate of the first Member to die by any
surviving Member is less than the total purchase price, the surviving Member shall pay the
balance of the purchase price in twenty-four (24) consecutive monthly payments beginning
three (3) months after payment of the cash portion of the purchase price. The unpaid balance
of the purchase price shall be evidenced by a series of negotiable promissory notes made by
the surviving Member to the order of the estate of the deceased, Member with interest at ten
percent (10%) per annum or three percent (3%) above the then existing interest rate for one
year treasury notes, whichever is lower. Each note shall provide that in the event of default in
payment of principal, all notes subsequently due shall become due and payable immediately.
Each note shall be subject to prepayment in whole or in part at anytime.
Payment of Purchase Price
6. The purchase price payable to the estate of the first Member to die shall be paid in
cash, or in cash and notes, to the estate of the deceased Member upon:
6.1 The estate of the deceased Member becoming able, in the opinion of the
legal counsel for the surviving Members, of transferring to the surviving Members full legal and
equitable title, free of any tax lien, to the shares of the deceased Member; and
6.2 Delivery to the surviving Members of all necessary court approvals and/or
confirmation of sale documents representing the share in the Brokerage of the deceased
Member, properly endorsed in the manner required to transfer full legal and equitable title, free
of any tax lien to the surviving Members.
Costs of Performance
7. The estate of the deceased Member shall bear, and hold the surviving Members
harmless from, all costs and expenses required for securing any court orders, court decrees,
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corporation, partnership, person, firm or other entity or any public, governmental or
judicial authority and this Agreement will be in full force and effect on the Closing
Date.
11.3 No broker or finder has acted, directly or indirectly, for Seacoast,
nor has Seacoast incurred any obligation to pay any brokerage, finder's fee or other
commission in connection with the transactions contemplated by this Agreement.
12. Conduct of Business. Heritage will conduct its Business up to the
Closing Date in substantially the same manner as it previously has been carried
out, will observe all provisions of the leases for the Locations, and will not enter into
any material contract except as may be required in the regular course of business.
Heritage shall maintain all tangible assets constituting the Purchased Assets in
good condition and working order, normal wear and tear expected, making all
reasonably necessary repairs up to the Closing Date.
13. Heritage Employees. Heritage shall terminate the employment of all
its employees as of the Closing Date.. Seacoast shall not be responsible for any
severance pay or entitlement obligations, if any, due to Heritage's employees. It is
Seacoasts intention to re -hire some of Heritages employees pursuant to the
applicable standard terms and conditions of Seacoasts employment agreement.
Seacoast will have no obligation to re -hire any of Heritages' employees or have any
other duty to them arising out of Heritage's employment.
14. Non -Solicitation. Heritage acknowledges and agrees that any
solicitation, luring away or hiring of any employees of Seacoast will be highly
detrimental to the business of Seacoast and will cause Seacoast serious loss of
business and great and irreparable harm since such employees have knowledge of
trade secrets and other confidential information related to its business.
Consequently, Heritage covenants and agrees that, for a period of one year after
the Closing Date, Heritage shall not directly or indirectly solicit any such employees
of Seacoast or assist or aid in any such activity.
15. Non -Compete. Heritage, by Tony Duni, agrees to execute a Non -
Compete Agreement in the form attached hereto as Exhibit H which provides in
pertinent part that for a period of two years from the Closing Date Heritage, Tony
Duni shall not engage, either directly or indirectly, in the yacht brokerage business
in any of the cities in which the Locations are located.
16. Risk of Loss. Heritage assumes alt risk of loss in connection with the
Purchased Assets due to fire or other casualty up to the Closir g Date. If any such
loss occurs before the Closing Date, or if the Business is closed or interrupted by
reason of any event not in the ordinary course of business, Seacoast may terminate
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this Agreement by giving Heritage written notice thereof. Upon such termination,
neither party shall have any liability hereunder.
17. Further. Assurances. From time to time, at the request of the
Seacoast and without further consideration, Heritage shall execute and deliver such
further instruments of conveyance and transfer and take such other actions as the
Seacoast may reasonably require more effectively to convey and transfer any of the
Purchased Assets to the Seacoast. Heritage and Seacoast shall also execute and
deliver to the appropriate other party such other instruments as may be reasonably
required in connection with the performance of this Agreement, and each shall take
all such further actions as may be reasonably required to carry out the transactions
contemplated by this Agreement.
18. Conditions to Obligations of Seacoast. The obligations of Seacoast
to consummate the 'transactions contemplated by this Agreement are subject to the
satisfaction or waiver prior to the Closing of the following additional conditions:
18.1 Each of the terms, covenants and conditions of this Agreement to
be complied with and performed by Heritage at or prior to Clos ing pursuant to this
Agreement shall be complied with and performed in all material respects;
18.2 No court order shall have been entered and be in force in any
proceeding which enjoins, restrains or prohibits this Agreement or the complete
consummation of the: transactions as contemplated by this Agreement and no such
proceeding shall be pending;
18.3 The representations and warranties of Heritage made in this
Agreement shall be true as of the Closing Date in all material respects;
18.4 All governmental notices and filings required to be made shall
have been made and all consents and approvals required by law and all third party
consents and approvals shall have been obtained and any applicable waiting
periods shall have expired or have been terminated, in each case without the
imposition of any term or condition which is unsatisfactory to Seacoast including but
not limited to the obtaining or assignment of a license to engage in the Business.
18.5 Seacoast shall receive a certificate as to the satisfaction of the
above conditions dated as of the Closing Date executed by Heritage;
18.6 Heritage shall, no later than Closing Date, have withdrawn or
canceled all fictitious business name statements with respect to its use of its trade
name and shall cooperate with the assignment of any such business names to
Seacoast;
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18.7 Heritage shall sign a supercedure agreement whereby the
telephones from the following Locations will be transferred to Seacoast:
Heritage Yacht Sales — Long Beach
231 N. Marina Drive
Long Beach, CA 90803
Tel:
(866) 569-2248
Tel:
(562) 431-8699
Tel:
(562) 431-6135
Fax:
(562)431-8691
Newport Beach Office
829 Harbor Island Drive
Newport Beach, CA 92660
Tel: (877) 389-2248
Tel: (949) 673-3354
Tel: (949) 673-3358
Fax: (949) 723-2961
Heritage Yacht Sales — San Pedro
210 Whaler's Walk, !Suite 121
Berth 31
San Pedro, CA 90731
Tel: (310) 549-2248
Tel: (310) 549-2204
Fax: (310) 514-2268
Heritage Yacht Sales Inc. — San Diego
955 Harbor Island Drive
San Diego, CA 92101
Toll-free: 866-396-7923
Tel: 760-402-3868
Fax: 619-222-4488
Heritage Yacht Sales, Inc.—Wilmington
720 Peninsula Rd — Berth 202
Wilmington, CA 90744
Tel: 310-547-8007
Fax: 310-547-8008
19. Conditions to Obligations of Heritage. The obligations of Heritage to
consummate the transactions contemplated by this Agreement are subject to the
satisfaction or waiver prior to Closing of the following conditions:
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19-1 Each of the terms, covenants and conditions of this Agreement
to be complied with and performed by Seacoast at or prior to Closing pursuant to
this Agreement shall be complied with and performed in all material respects;
19.2 No court order shall have been entered and be enforced in any
proceeding which enjoins, restraints or prohibits this Agreement or the complete
consummation of the transactions contemplated by this Agreement and no such
proceeding shall be pending;
19.3 The representations and warranties of Seacoast made in this
Agreement shall be true as of the Closing Date and all material respects;
19.4 All governmental notices and filings required to be made shall
have been made (except under applicable bulk sales laws) and all consents and
approvals required by law and all third party consents and approval shall have been
obtained and any applicable waiting period shall have expired or have been
terminated, in each case without the imposition of any term or.condition which is
unsatisfactory to Heritage;
19.5 Heritage shall receive a certificate as to the satisfaction of the
above conditions dated as of the Closing Date executed by a (July authorized officer
of Seacoast;
20. Consent to Lease Assiq_nmenbsublease. This Agreement is
contingent upon Seacoast's; obtaining the landlords' consent to the assignment of
or sublease for the Locations at San Pedro, Yacht Haven, San Diego and Long
Beach; approving of the terms and conditions of the assignments/subleases of the
same; and receiving estopple certificates from the lessor. As to the Newport
Beach Location, Seacoast needs to be approved as a new lessee on terms and
conditions acceptable to Seacoast. Any such consents, amendments and estoppel
shalt be in writing and delivered by Heritage to Seacoast at or oefore the Closing
Date. Nothing herein shall be construed to require Seacoast to compensate any
landlord for such landlord's consent to the assignment of the Lease.
20.1 Heritage shall obtain a written verification that there has been no
damage to the premises nor charged against its security deposit from the Lessor
and that Lessor acknowledges that the rights to the security deposit under the lease
are held by Seacoast. Upon receipt of such verification Seacoast shall pay to
Seacoast shall reimburse Heritage for its security deposit
21. Inspection of Books. At any time up to the Closing Date, Seacoast
and its representatives shall have full access to Heritages' Locations including the
books, accounts and records of every kind related to the Business and shall be
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allowed to make extracts therefrom. Heritage shall furnish Seacoast with all
additional information as to the Business as Seacoast shall reasonably request.
22. Fees and Expenses; Broker. Each party shall pay its own fees and
expenses in preparing and entering into this Agreement, and in consummating the
transactions contemplated hereby. No party shall have any obligation to another
party if the transactions contemplated by this agreement are not consummated for
any reason other than the party's willful failure or refusal to perform its obligations
hereunder. In such event, the defaulting party shall remain liable for all damages
caused by such willful failure or refusal. Heritage and Seacoast each represent to
the other that no broker was involved in this transaction.
23. Confidentiality.
23.1 Any and all information disclosed by Seacoast to Heritage or by
Heritage to Seacoast as a result of the negotiations leading to the execution of this
Agreement, or in furtherance thereof, which information was not already known to
Heritage or to Seacoast, respectively (the "Confidential Information"), shall remain
confidential to Heritage and Seacoast and their respective employees and agents ,
except to the extent that the Seacoast in its reasonable judgment must disclose
any such Confidential Information to banks and other institutional lenders in the
process of procuring any loan or loans of funds for the transactions contemplated
herein. If the Closing does not take place for any reason, Heritage and Seacoast
agree not to further divulge or disclose or use for their benefit or purpose any such
Confidential Information at any time in the future unless such Confidential
Information has otherwise become public. "Confidential Information" shall include,
but not be limited to, financial information, customer lists, sales representative's
lists, and anything else having economic or pecuniary benefit tD Seacoast or
Heritage respectively.
23.2 Heritage and Seacoast agree not to provide any information or
documentation to any other person regarding their relationship or business dealing
with the other in regards to the Business unless required to do so by valid court
order issued by a court of competent jurisdiction or unless otherwise required by
law.
24. Indemnification.
24.1 Heritage agrees to indemnify and hold Seacoast harmless from
and with respect to any and all claims, liabilities, losses, damages, costs, and
expenses, including, without limitation, the fees and disbursements of counsel
(collectively "Loss" and/or "Losses"), related to or arising directly or indirectly out of
any of the following;
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24.1.1 any failure or breach by Heritage of any covenant,
obligation, or undertaking made by Heritage in this Agreement;
24-1.2 any and all Losses, including those of injury to person or
property, arising out of the operation of the Assets or the related business carried on
by Heritage on or prior to the Closing Date;
244.1.3 any Loss arising under the bulk sales laws of any
jurisdiction in connection with transactions contemplated by this Agreement; and
24. 1.4 any Loss with respect to any employee of Heritage in
connection with his or her employment on or prior to the Closing Date.
24.2 Seacoast agrees to indemnify and hold Heritage harmless from
and with respect to any and all Losses related to or arising directly or indirectly out of
any of the following:
24.2.1 any breach by Seacoast of any covenant, obligation or
undertaking made by Seacoast in this Agreement;
24.2.2 the ownership or operation of the Purchased Assets or
the Business after the Closing; and
24.2.3 the Assumed Liabilities,
24.3 In the event that any party (the "Indemnified party") may be
entitled to indemnification hereunder with respect to any asserted claim of, or
obligation or liability to, any third party, such party shall notify the: indemnifying party
hereunder (the "Indemnifying Party") thereof, describing the matters involved in
reasonable detail. The Indemnifying Party shall be entitled to assume the defense
thereof upon written notice to the Indemnified Party; provided, that once the defense
thereof is assumed by the Indemnifying Party, the Indemnifying Party shall keep the
Indemnified Party advised of all developments in the defense thereof and in any
related litigation, and the Indemnified Party shall be entitled at all times to participate
in the defense thereof at its own expense.
25. First Right of First Refusal. Seacoast hereby grants Heritage for a
period of five (5) years from the date of the execution of this Agreement a right of first
refusal to purchase the Assets of Seacoast or any portion of the Assets as defined in
section 25.2 in accordance with the terms and conditions set forth below ("Right of
First Refusal"):
25.1 If Seacoast receives a bona fide offer, whether or not solicited by
it, from any person or entity to purchase all or any portion of the: Assets of Seacoast
and if Seacoast is willing to accept it, then Seacoast shall give written notice of the
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amount and terms of the offer, the identity of the proposed transferee and its
willingness to accept the offer to Heritage within ten (10) days of receipt of the offer.
Heritage shall have the option, within fifteen (15; business days after that notice has
been given to purchase the interest in the Assets on the same terms as those
contained in the offer. If Heritage does not exercise its option within the fifteen (15)
day period, or upon the expiration of the five (5) year period this Right of First Refusal
shall terminate.
25.2 For the purpose of this Right of First Refusal the term "Assets"
means assets owned and used by Seacoast in the operation of its yacht brokerage
business which are of such a nature so as to allow the potential purchaser to operate
a yacht brokerage as a result of the purchase of said Assets. The sale of a minor
number of Assets such as office equipment, furniture or other individual items which
are not critical to the operation of a yacht brokerage business shall not be subject to
this Right of First Refusal.
26. Binding Effect. This Agreement shall be binding upon inure to the
benefit of the parties aind their respective successors and assigns.
27. Norr-waiiver. No delay or failure by either party to exercise any right
under this Agreement, and no partial or single exercise of that right, shall constitute a
waiver of that or any other right, unless otherwise expressly provided herein -
28. HeaqLngs. Headings in this Agreement are for convenience only and
are not to be used to interpret or construe its provisions.
29. Governing Law. This Agreement shall be governed by and
construed in accordance with the laws of the State of California without regard to its
conflict of laws principles. The parties agree to the exclusive jurisdiction and venue
of the Santa Barbara Superior Court, Anacapa Division in connection with any
litigation with respect to this Agreement. In the event of a dispute concerning this
agreement or its enforcement the prevailing party shall be entitled to an award of
attorney fees and costs.
30. Counterioarts/Execution. This Agreement maybe executed in one or
more counterparts, each of which shah be deemed.an original but all of which
together shall constitute one and the same instrument. Signature pages may be
executed via "wet' signaturee or electronic mark and the executed signature pages
may be delivered using pdf or similar file type transmitted via electronic mail, cloud
based server, e -signature technology or other similar electronic means.
31. Assignment or Amendment of Agreement. No Third Party Benefits.
This Agreement may not be amended or assigned by either parry without the other's
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written consent. Nothing in this Agreement, expressed or implied, is intended to
confer upon any person other than the parties hereto and their successors and
assigns, any rights or remedies under or by reason of this Agreement.
32. Time of Essence. Time is of the essence of this Agreement.
33. Entire Agreement. This Agreement supersedes all prior agreements
and embodies the entire agreement between the parties with respect to the subject
matter hereof. All schedules and exhibits referred to in this Agreement and attached
hereto are hereby incorporated by reference and made a part hereof.
34. Notices. All notices hereunder shall be in writing, and delivered
personally or mailed by certified mail, postage prepaid, addressed and emailed to the
parties as follows:
If to Seacoast, to; Bob Nahm
3615 Victoria Avenue
Oxnard, CA 93035
Email: bob(@seacoastyachts.com
If to Heritage, to: Tony Duni
341 Havana Ave,
Long Beach, CA 90814
Email: tone heritaoevachts.c:om
The address for delivery of notices hereunder may be changed by either party
upon furnishing to the other the new address for notices in accordance with the
provisions of this paragraph.
34. Survivat. The representations and warranties of the parties set forth
in this Agreement shall survive the closing of this Agreement for a period of eighteen
months.
35. Exclusive! Agent Agreement. Contemporaneously with the execution
of this Agreement, Seacoast shall enter into a separate exclusive agreement with
Heritage for the sale of Heritage's new yacht lines of vessels.
IN WITNESS WHEREOF, the parties have signed this agreement as of the
date above first written.
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HERITAGE YACHT SALES, INC.
oocuslgnea by:
5/22/2016 ulna �LtU.I
DATED:
By: TONY DUN]
Its:
President
SEAOAST OF CHANNEL ISLANDS, LLC
DocuSigned by:
DATED: got
5/21/2016 — Nd.
fy�wffwxfim
Its: Managing Member
M
DocuSign Envelope ID: BFD02A75-1802-4CF6-A6DE-E8762769DFOB
Exhibit A
The assets sold in exchange for the "earn out' payments as described in Section 2.1
as follows:
1. Customer List.
2. Covenant, not to compete.
3. Other intangible assets.
The tangible assets contributed to Se:=coast in exchange for a ten percent
(10%) interest in Seacoast as described in Section 2.2 of the Agreement are as
follows:
1.
Computers;
2.
Furniture and Fixtures.
3.
Awning Improvement,
4.
Cameras.
5.
Signage.
A detail of the office inventory follows on pages 16.1-10.
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Exhibit B — Assumed Liabilities
No liabilities assumed
FE
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Exhibit C — Sales in Progress
To be added last week of May
-19
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Exhibit D - Allocation of Purchase Price
The assets sold in exchange for the "earn out" payments as described in Section 2.1
as follows:
1. Customer List.
2. Covenant not to compete.
3. Other intangible assets.
The tangible assets contributed to Seacoast in exchange for a ten percent
(10%) interest in Seacoast as described in Section 2.2 of the Agreement are as
follows:
1. Computers; $510.00
2. Furniture and Fixtures. $4.702.00
DocuSign Envelope ID: 8FD02A75-1802-4CF6-A6DE-E8762769DFOB
Exhibit E - Inventory
Attached PDFs
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Exhibit F- Vendor List
To be transmitted electronically as required
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Exhibit G - Customer List
To be transmitted electronically as required
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Exhibit H
HERITAGE NON -COMPETITION NON -SOLICITATION, AND NON -RAID
AGREEMENT
This Non -Competition, Non -Solicitation, and Non -Raid Agreement
("Agreement') is made and entered into as of May 31, 2016, by and between
Seacoast of Channel Islands, LLC ("Seacoast'), and Tony Duni individually and
Heritage Yacht Sales, Inc. a California Corporation, collectively ("Heritage").
Seacoast and Heritage are collectively referred to as the 'Parties" and individually as
a "Party."
Recitals
1. Heritage has been engaged in the yacht sales business and providing
related products and services using the trade name "Heritage Yacht Sales" or other
similar names at the following locations (the `Business"):
Heritage Yacht Sales - Long Beach
231 N. Marina Drive
Long Beach, CA 90803
Newport Beach Office:
829 Harbor Island Drive
Newport Beach, CA 92660
Heritage Yacht Sales - San Pedro
210 Whaler's Walk Suite 121
Berth 31
San Pedro, CA 90731
Heritage Yacht Sales Inc. - San Diego
955 Harbor Island Drive
San Diego, CA 92101
Heritage Yacht Sales, Inc. - Wilmington
720 Peninsula Rd - Berth 202
Wilmington, CA 90744
Effective as of May 31, 2016, Heritage is selling substantially all of the assets
associated with the Business to Seacoast pursuant to the terms and conditions of an
Asset Purchase Agreement ("APA") dated May 31st 2016; and
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3. Heritage has the capability of creating a business enterprise that could
effectively compete with Seacoast with respect to the operation of the assets which
Seacoast is acquiring from Heritage-, and thus the Parties have agreed that the
execution and delivery of this Agreement by the Heritage is a condition of the Closing
under the APA.
NOW, THEREFORE, in consideration of the foregoing Recitals, which are
incorporated in the Agreement by reference herein, the mutual covenants contained
herein and other good and valuable consideration, the receipt and sufficiency of
which is hereby acknowledged, the Parties agree as follows:
Agreement
1. Non Competitions. Heritage covenants and agrees that immediately following the
Closing and continuing for a period of five (5) years, Heritage will not either
directly or indirectly, alone or with others:
a. market or own, manage, operate, or control any business which markets used
yacht sales or related products or services in competition with Seacoast within
a ten (10) mile radius of the following locations:
231 N. Marina Drive
Long Beach, CA 90803
829 Harbor Island Drive
Newport Beach, United States 92660
210 Whaler's Walk Suite 121
Berth 31
San Pedro, United States 90731
955 Harbor Island Drive
San Diego, United States 92101
Channel Islands Marina
3615 Victoria Avenue
Oxnard, CA 93035
b. solicit any of the employees of Seacoast who were employed by Heritage at
the business locations described in on Section 1 (a) above or any employees
of Seacoast of Santa Barbara, LLC;
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c. interfere with the relationship of Seacoast and its employees at the business
locations described in Section 1 (a) above; or
interfere with the relationship of Seacoast with, or solicit, any customers or
others who are engaged in or who had business dealings with the Heritage at
the business locations described in Section 1 (a) above before the Closing of
the APA.
2. Blue Pencil. Heritage acknowledges that the period of restriction and the
geographic area imposed by Section 1 is fair and reasonable and is reasonably
required for the protection of Seacoast. If any part or parts of Section 1 shall be held
to be unenforceable! or invalid, then the remaining parts thereof shall nevertheless
continue to be valid and enforceable as though the invalid portion or portions were
not a part hereof. If any of the provisions of Section 1 relating to the period of
restriction or geographic area shall be deemed to exceed the maximum period of
time or scope which a court of competent jurisdiction would deem enforceable, then
the time or scope shall, for the purposes of Section 1, be deemed to be the maximum
time period or scope which a court of competent jurisdiction would deem valid and
enforceable in any state in which such court of competent jurisdiction shall be
convened.
3. Confidentiality. Heritage acknowledges that Heritage has knowledge of certain
Confidential Information related to the Business, its customers, and its prior
operations, for which the rights, title, and interest has been sold, assigned and
transferred to Seacoast under the APA. Heritage acknowledges that the disclosure
or use of the Confidential Information could cause Seacoast substantial losses and
damages. "Confidential Information" means all information not generally known to the
public, relating to the affairs of the Business and/or its customers, clients,
representatives, employees and principals, including, but not: limited to, any pricing
information or any other information concerning the Business's sales representatives,
business strategy, marketing practices and strategy, and sales promotion strategy,
whether such information was acquired by Seacoast under the APA or not. No notice
of confidentiality is required. Heritage agrees to keep confidential all Confidential
Information, except to the extent such information or documents are or thereafter
become lawfully obtainable from other sources or are in the public domain through no
fault of Heritage or as is consented to in writing by Seacoasi. If Heritage becomes
legally compelled to disclose any Confidential Information, it agrees to provide
Seacoast with prompt notice thereof and agrees to provide only such information or
documentation that is legally required by subpoena, court order, or the like.
4. Right to Seek tniunctive Relief. Heritage agrees and acknowledges that a
violation of the covenants contained in Sections 1 and 3 cf this Agreement may
cause irreparable damage to Seacoast, and that it may be impossible to estimate or
`,
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determine the damage that will be suffered by Seacoast in the event of a breach by
Heritage of any such covenant. Therefore, Heritage further agrees that in the event
of any violation or threatened violation of such covenants, Seacoast shall be entitled
to seek as a matter of course an injunction from any court of competent jurisdiction
restraining such violation or threatened violation by Heritage, such right to seek an
injunction to be cumulative and in addition to whatever other remedies Seacoast may
have. Heritage shWl be obligated to pay Seacoast for costs and attorneys' fees in
the event Seacoast prevails in a legal action to enforce this Agreement.
5. Miscellaneous.
a. Governing Law and Jurisdiction. This contract shall be construed under and
be governed in all respects by the substantive and procedural law of the state
of California without regard to choice -of -law principles. Any dispute hereunder
shall be venued exclusively in and determined by the Superior Court of Santa
Barbara County, Anacapa Division.
b. Non -Waiver. No waiver, delay or failure of Seacoast to enforce any provision
herein, whether known or unknown by Seacoast, shall relieve Heritage of its
duty to otherwise comply with the Agreement, and shall not waive Seacoast's
right to enforce the provision at a later time.
c. Assignment. Subject to the Right of First Refusal as set forth in Section 25 of
the Asset Purchase Agreement, Heritage consents and agrees that its
obligations under this Agreement may be assigned to a successor or assignee
of Seacoast.
d. Amendment. This Agreement cannot be amended, supplemented, or
otherwise modified except in a writing signed by Seacoast and Heritage.
e. Entire Agreement. This Agreement contains the entire agreement of the
Parties relating to the subject matter hereof and, except as otherwise stated,
supersedes any and all oral or written prior agreements and understandings
with respect to such subject matter.
f. Counterparts and Electronic Signatures. This Agreement may be executed in
two or more counterparts, each of which shall be deemed an original but all of
which together shall constitute one and the same agreement. The
counterparts of this Agreement and any schedules and Exhibits hereto, if any,
may be executed and delivered by facsimile or other electronic signature by
any of the Parties to any other Party and the receiving Party may rely on the
receipt of such document so executed and delivered by facsimile or other
electronic means as if the original had been received.
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g. Representation of Comprehension of the Agreement. In entering into this
Agreement, the Parties each represent that they have had the opportunity to
have the terms of this Agreement reviewed by an attorney of their choice, and
that they fully understand and voluntarily accept the terms of this Agreement.
h. Partial Invalidity. In the event that any provision of this Agreement shall be
held invalid or unenforceable by any court of competent jurisdiction, such
holding shall riot affect the validity or enforceability of any other provision
herein.
IN WITNESS' WHEREOF, the Parties hereto have executed this Agreement as
of the date referenced above.
Seacoast of Channel Islands, LLC
Docusignea by:
Bog Nath.
AMo ihm, Manager
Heritage Yacht Sales, Inc.
F. hOOCUSigned by:
I o" VW'i
Sy: ony urii, President
DocuSigned by.
Tony Duni, individually
M
DocuSign Envelope ID: 8FD02A75-1802-4CF6-A6DE-E8762769DFOB EXHU31T C
BUY SELL AGREEMENT'
Preamble
THIS AGREEMENT is entered into and is intended to be effective on the day
of 2016 by and between Seacoast of Santa Barbara, Inc., ("SB
Seacoast"), Robert Nahm ("Nahm"), and Tony Duni ("Heritage"), each of whom is a
Member of Seacoast of Channel Islands, LLC (the "Brokerage"),
Recitals
The purpose of this Agreement is three -fold:
1) To protect the management and control of the Brokerage against intrusion by
persons not active in the business or not acceptable to the other Members of the
Brokerage;
2) To provide for transition of the Brokerage interests in the event of the death or
withdrawal of one of the Members; and
3) To provide a mechanism for the establishment of a purchase price for the sale of
one Member's interest.
The current ownership interests in the Brokerage are, for all purposes, as follows:
SB Seacoast: 72%
Nahm: 18%
Heritage: 10%
NOW, THEREFORE, IT IS AGREED:
Restriction on Transfer
1. To accomplish the purpose of this Agreement, any transfer, sale, assignment,
hypothecation, encumbrance, or alienation of any Member's share of the Brokerage, whether
in whole or in part, other than according to the terms of this Agreement is void and transfers no
right, title, or interest in the Member's share of the Brokerage, to the purported transferee,
buyer, assignee, pledgee, or encumbrance holder. This provision shall not apply to SB
Seacoast which shall be free to transfer its interest without restriction.
Aareement Available for Inspection
2. An original copy of this Agreement, duly executed by each of the Members,
shall be maintained by the Brokerage at its principal place of business and made available
for inspection by:any person requesting to see it.
DocuSign Envelope ID: BFD02A75-1802-4CF6-A6DE-E8762769DFOB
Transfer of Brokerage Share Upon Death of Member
3. Upon the death of a Member, each surviving Member (including non -individual
entities) shall purchase, and the estate of the deceased Member shall sell to each surviving
Member, such proportion of the Brokerage owned by the Member at his or her time of death as
the percentage in the Brokerage already owned by a surviving Member bears to the total
ownership interests in the Brokerage owned by all of the surviving Members, for the price and
upon the terms and conditions specified in this Agreement. Each Member by his/its execution
of this agreement, agrees to insert in his Will and/or Trust a direction to his personal
representative to promptly comply with the terms of this Agreement and to execute any and all
documents reasonably required to achieve such compliance including, but not limited to, the
filing of a Petition for a preliminary Distribution of the Members interest as soon as it is possible.
3.1 Each Member, pursuant to his execution of this Agreement, hereby
absolves and exonerates his personal representative from any personal responsibility or liability
for any loss which may result to any property passing under his Will otherwise pursuant to the
directions contained in this agreement, as long as such personal representative shall have been
acting in good faith and without gross negligence.
3.2 In the event of the death of one of the Members, the remaining Members
shall have the first option, but not the obligation, to purchase from the deceased Member's
estate, the deceased Member's share in the Brokerage. The purchase price shall be
determined under the provisions hereunder. There shall be no right in favor of the personal
representative of a deceased Member to require either the Brokerage or the remaining
Members to acquire .the deceased Member's share in the Brokerage. The remaining Members
may exercise their option at any time within sixty (60) days after the date of death by written
notice to the personal representative of the deceased Member's estate.
3.3 11' the remaining Members elect not to exercise their call option to acquire
the deceased Member's share of the Brokerage, at its option, the Brokerage may seek to
locate a purchaser for the deceased Member's share of the Brokerage, who shall upon
payment of the price as specified herein shall be transferred the deceased Member's share of
the Brokerage.
3.4 Nothing in this Agreement shall limit the ability of the Members to establish
a Buy -Sell Agreement funded by the purchase of an insurance policy.
Purchase Price
4. The purchase shall consist of the following:
(a) . Except as otherwise set forth herein, the purchase price for a Member's share
in the Brokerage to be sold under this Agreement shall be the book value as of the end of the
month immediately preceding the date of death of the first Member to die, excluding the
Members' individual Income Accounts used to track the distributive shares of the Brokerage's
profits and losses. The determination of the book value shall be made by the independent
certified public accountant then servicing the Brokerage and in accordance with the accounting
principles previously applied by the Brokerage. The determination of book value made by the
accountant shall be conclusive and binding on all parties. The book value of the Brokerage
shall be the difference between the total assets and the total liabilities of the Brokerage. The
book value per Member shall be obtained by multiplying the book value of the Brokerage by the
Member's percentage of Brokerage ownership on the date as of which the book value is
determined. In the event the Brokerage has any outstanding loans on its books in favor of a
deceased Member, the principal amounts of the loan(s) shall not be added to the purchase
YJ
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price. However, the surviving Member(s) shall have the option to either repay these loans
under the terms:of this Agreement or under the terms of the loans as originated.
(b) The purchase price shall additionally include an amount for "good will," as that
term is commonly understood by certified business appraisers in the Santa Barbara County
area, which shall be determined, if the parties are unable to ac ree, by a certified appraiser who
is qualified to appraise business goodwill of the type and nature of the Brokerage selected
mutually by all parties.
(c). The cost of such appraisal shall be shared equally between the parties. In the
event that the parties cannot collectively agree upon an appraiser or if one or more parties
object to the amount of the appraisal then the parties(s) objecting may select an appraiser and
shall be solely responsible for the cost of the same. The total of such appraisal shall be added
together and divided by the number of appraisers to determine the amount of the goodwill of the
Brokerage. The parties shall be bound by the amount so determined.
Terms of Purchase Price
5. Each surviving Member shall pay to the estate of the first Member to die a cash
amount equal to at least twenty percent (20%) of the total purchase price to be paid for the
portion of the decedent's share of the Brokerage being purchased by each such surviving
Member. In the event that the amount paid to the estate of the first Member to die by any
surviving Member is less than the total purchase price, the sun7iving Member shall pay the
balance of the purchase price in twenty-four (24) consecutive monthly payments beginning
three (3) months after payment of the cash portion of the purchase price. The unpaid balance
of the purchase price shall be evidenced by a series of negotiable promissory notes made by
the surviving Member to the order of the estate of the deceased Member with interest at ten
percent (10%) per annum or three percent (3%) above the then existing interest rate for one
year treasury notes, whichever is lower. Each note shall provide that in the event of default in
payment of principal, all notes subsequently due shall become due and payable immediately.
Each note shall be subject to prepayment in whole or in part at anytime.
Payment of Purchase Price
6. The purchase price payable to the estate of the first Member to die shall be paid in
cash, or in cash and notes, to the estate of the deceased Member upon:
6.1. The estate of the deceased Member becoming able, in the opinion of the
legal counsel for the surviving Members, of transferring to the surviving Members full legal and
equitable title, free of any tax lien, to the shares of the deceased Member; and
6.2 Delivery to the surviving Members of all necessary court approvals and/or
confirmation of sale documents representing the share in the Brokerage of the deceased
Member, properly endorsed in the manner required to transfer 4`ull legal and equitable title, free
of any tax lien to the surviving Members.
Costs of Performance
7. The estate of the deceased Member shall bear, and hold the surviving Members
harmless from, all costs and expenses required for securing any court orders, court decrees,
DocuSign Envelope ID: BFD02A75-7802-4CF6-A6DE-E8762769DFOB
court approvals, and tax clearances required to enable the estate of the deceased Member to
transfer to the surviving Members full legal and equitable tax-free title to the Brokerage share of
the deceased Member.
Estate of Deceased Member Deice
8. The term "estate of the deceased Member" as used in this Agreement shall
mean and include as those terms are understood in California law:
(a) The duly appointed and qualified executor, executrix, administrator,
administratrix, administrator with the Will annexed or administriatrix with the Will annexed of
the estate of the deceased Member.
(b) The surviving joint tenant of the deceased Member, if the deceased
Member's share of the Brokerage was owned by the deceased Member and a person who
is not active in the business of the Brokerage as joint tenants.
(c) Any other person who may, because of the community property or other
law of any jurisdiction, acquire without formal probate proceedings any right, title, or interest
in or to the deceased Member's share of the Brokerage by reason of the death of the
deceased Member.
Termination of Agreement
9. This Agreement shall terminate upon the occurrence of any one of the
following events:
(a) The written Agreement of the Members to that effect;
(b) The bankruptcy, receivership, or dissolution of the Brokerage;
(c) The complete withdrawal from the Brokerage of any Member during
his lifetime pursuant to Paragraph 9 herein;
(d) The sale of the Brokerage share of the first Member to die to the
surviving Members pursuant to Paragraphs 4 through 7 herein;
(e) The simultaneous deaths of any two or more Members, or the death of
a surviving Member within thirty (30) days after the death of the first
Member to die unless within that time selflement shall have been
made between the estate of the first Member to die and the surviving
Members as provided in Paragraph 4 through 7 herein.
Sale or Transfer of Shares
10. Except as set forth above, no transfer of any Membership interests shall be
permitted without the written approval of all Members. A Member may transfer all or
DocuSign Envelope ID: 8FD02A75-1802-4CF6-A6DE-E8762769DFOB
part of his/her/its membership interest only as follows:
(a) To another Member as provided in subsection c) herein below.
(b) To any third party, after the Member making the transfer has first offered the
other Members the right of first refusal in accordance with the provisions of subsection c).
(c) If any Member receives a bona fide offer, whether or not solicited by
him/her/it, from a person not then a Member to purchase all or any portion of his/her/its
membership interest and if the Member receiving the offer is willing to accept it, he/she/'It shall
give written notice of the amount and terms of the offer, the identity of the proposed transferee
and his/her/its willingness to accept the offer to the other Members. The other Members shall
have the option, within thirty (30) days after that notice has been given, to purchase the
designated membership interest on the same terms as those contained in the offer and in the
same proportion as they hold membership interests. If the other Member(s) does not exercise
his/her/its option within the thirty (30) day period, the Member who received the offer may sell
his/her/its interest to such third party making the offer only on such terms and conditions as
stated in the offer. .Any modification to such offer would require the Member receiving the offer
to give the other Member(s) a new right of first refusal hereunder.
Amendments or Alterations
10. This Agreement may be altered or amended in whole or in part at any time, by
filing with this Agreement a written instrument setting forth the changes signed by all Members.
Notices
11. Any and all notices or other communications required or permitted by this
Agreement or by law to be served on, given to, or delivered to any party hereto by any other
party to this Agreement shall be in writing and shall be deemed duly served, given, or delivered
when personally delivered to the party or to an officer of the party, or in lieu of such personal
delivery, when deposited in the United States mail, first-class postage prepaid, addressed to a
Member at the address then appearing for him or her on the books and records of the
Brokerage.
Binding on Heirs
12. This Agreement shall be binding on the parties hereto and on each of their heirs,
executors, administrators, successors, and assignees.
Severability
13. Should any provisions or portion of this Agreement be held unenforceable or
invalid for any reason, the remaining provisions and portions of this Agreement shall be
unaffected by that holding.
Governina Law
14. This Agreement shall be construed and governed by the laws of the State of
California.
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Sole and Only Agreement
15. This instrument, in addition to the Operating Agreement of the Brokerage,
constitutes the sole and only agreement of the parties hereto respecting the sale and
purchase of their shares in the Brokerage, and correctly sets forth the rights, duties, and
obligations of each to the other in relation thereto as of its dater. Any prior agreements,
promises, negotiations, or representations concerning its subject matter not expressly set
forth in this Agreement are of no force or effect. In the event of an inconsistency between this
Agreement and the Operating Agreement of the Brokerage, the terms of this Agreement shall
prevail or be interpreted to give the terns recited herein effect.
Inoemnification of Remaining and Withdrawing Member
16. A withdrawing Member or a dying Members estate shall indemnify and hold the
Brokerage harmless from and against any and all liabilities of every kind and nature personal to
the withdrawing or dying Member that arose before or after the: close date of a sale of
Brokerage interests. A withdrawing Member or a dying Member's estate shall continue to be
responsible after the close date for any liabilities of the Brokerage that arose prior to the close
date whenever they occur. The Brokerage and any remaining Member shall indemnify and hold
the withdrawing or dying Member harmless from and against any and all liabilities of every kind
and description, relating to or attributable to the period after thie close date of a sale or buy-out
transaction between the parties, and for the remaining Member's personal and professional
conduct whenever it occurred.
Distribution on Liouidatiorr
17. On the dissolution of the Brokerage, except as otherwise provided in this
Agreement, its business shall be wound up and its properties liquidated, and the net proceeds
of the liquidation, together with any property to be distributed in kind, shall be distributed as
follows:
(a) to the payment of the Brokerage's debts and obligations that are then due,
including any loans or advances that may have been made by any of the
Members;
(b) to the establishment of any reserves that the Members may consider
necessary for any future liabilities of the Brokerage; and
(c) to the Members in equal proportion to the balances in their respective
capital accounts.
SIGNATURE PAGE FOLLOWS -
DocuSlgn Envelope ID: BFD02A75-1802-4CF6-A6DE-E8762769DFOB
Executed on 5/31 , 2016 at
Executed on 5/31 , 2016 at
Oxnard
DocuSigned by:
A3338A409EE9473...
ROBERT NAHM
Santa Barbara
California.
California.
SEACOAST OF SANTA BARBARA, INC.
Lo«„sign a by:
UGICi VAAA. N- &
y: AN HOOK
Its: President
5/31 Newport Beach
Executed on 2016 at
EDocuSig ed by.
� Di
TONY DUNnI
7
California.
DocuSign Envelope ID: 8FD02A75-1802-4CF6-A6DE-E8762769DFOB
HERITAGE NON -COMPETITION NON -SOLICITATION, AND NON -RAID
AGREEMENT
This Non -Competition, Non -Solicitation, and Non -Raid Agreement
("Agreement") is made and entered into as of May 31, 2016, .by and between
Seacoast of Channel Islands, LLC ("Seacoast"), and Tony Duni individually and
Heritage Yacht Sales, Inc. a California Corporation, collectively ("Heritage").
Seacoast and Heritage are collectively referred to as the "Parties" and individually as
a "Party."
Recitals
1. Heritage has been engaged in the yacht sales business and providing
related products and services using the trade name "Heritage Yacht Sales" or other
similar names at the following locations (the "Business"):
Heritage Yacht Sales - Long Beach
231 N. Marina Drive
Long Beach, CA 90803
Newport Beach Office:
829 Harbor Island Drive
Newport Beach, CA 92660
Heritage Yacht Sales - San Pedro
210 Whaler's Walk Suite 121
Berth 31
San Pedro, CA 90731
Heritage Yacht Sales Inc. - San Diego
955 Harbor Island Drive
San Diego, CA 92101
Heritage Yacht Sales, Inc. - Wilmington
720 Peninsula Rd - Berth 202
Wilmington, CA 90744
Effective as of May 31, 2016, Heritage is selling substantially all of the assets
associated with the Business to Seacoast pursuant to the terms and conditions of an
Asset Purchase Agreement ("APA") dated May 31st 2016; and
DocuSign Envelope ID: 8FD02A75-1802-4CF6-A6DE-E8762769DFOB
3- Heritage has the capability of creating a business enterprise that could
effectively compete with Seacoast with respect to the operation of the assets which
Seacoast is acquiring from Heritage, and thus the Parties have agreed that the
execution and delivery of this Agreement by the Heritage is a condition of the Closing
under the APA.
NOW, THEREFORE, in consideration of the foregoing Recitals, which are
incorporated in the Agreement by reference herein, the mutual covenants contained
herein and other good and valuable consideration, the receipt and sufficiency of
which is hereby acknowledged, the Parties agree as follows:
Agreement
1. Non Competition. Heritage covenants and agrees that immediately following the
Closing and continuing for a period of five (5) years, Heritage will not either
directly or indirectly, alone or with others:
a- market or own, manage, operate, or control any business which markets used
yacht sales or (related products or services in competition with Seacoast within
a ten (10) mile radius of the following locations:
231 N. Marina Drive
Long Beach, CA 90803
829 Harbor Island Drive
Newport Beach, United States 92660
210 Whaler's Walk Suite 121
Berth 31
San Pedro, United States 90731
955 Harbor Island Drive
San Diego, United States 92101
Channel Islands Marina
3615 Victoria Avenue
Oxnard, CA 93035
solicit any of the employees of Seacoast who were employed by Heritage at
the business locations described in on Section 1 (a) above or any employees
of Seacoast of Santa Barbara, LLC;
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c. interfere with the relationship of Seacoast and its employees at the business
locations described in Section 1 (a) above; or
d. interfere with the relationship of Seacoast with, or solicit, any customers or
others who are engaged in or who had business dealings with the Heritage at
the business locations described in Section 1 (a) above before the Closing of
the APA.
2. Blue Pencil. Heritage acknowledges that the period of restriction and the
geographic area imposed by Section 1 is fair and reasonable and is reasonably
required for the protection of Seacoast. If any part or parts of Section 1 shall be held
to be unenforceable or invalid, then the remaining parts thereof shall nevertheless
continue to be valid and enforceable as though the invalid portion or portions were
not a part hereof. If any of the provisions of Section 1 relating to the period of
restriction or geographic area shall be deemed to exceed the maximum period of
time or scope which a court of competent'jurisdiction would deem enforceable, then
the time or scope shall, for the purposes of Section 1, be deemed to be the maximum
time period or scope which a court of competent jurisdiction would deem valid and
enforceable in any state in which such court of competent jurisdiction shall be
convened.
3. Confidentiality. Heritage acknowledges that Heritage has knowledge of certain
Confidential Information related to the Business, its customers, and its prior
operations, for which the rights, title, and interest has been sold, assigned and
transferred to Seacoast under the APA. Heritage acknowledges that the disclosure
or use of the Confidential Information could cause Seacoast substantial losses and
damages. "Confidential Information" means all information not generally known to the
public, relating to the affairs of .:the Business and/or its customers, clients,
representatives, employees and principals,. including, but not limited to, any pricing
information or any other information concerning the Business's sales representatives,
business strategy, marketing practices and strategy, and sales promotion strategy,
whether such information was acquired by Seacoast under the APA or not. No notice
of confidentiality is required. Heritage agrees to keep confidential all Confidential
Information, except to the extent such information or documents are or thereafter
become lawfully obtainable from other sources or are in the public domain through no
fault of Heritage or as is consented to in writing by Seacoast. If Heritage becomes
legally compelled to disclose any Confidential Information, it agrees to provide
Seacoast with prompt notice thereof and agrees to provide only such information or
documentation that is legally required by subpoena, court order, or the like.
4. Right to Seek lnlunctive. Relief. Heritage agrees and acknowledges that a
violation of the covenants contained in Sections 1 and 3 of this Agreement may
cause irreparable damage to Seacoast, and that it may be impossible to estimate or
M
DocuSign Envelope ID: BFD02A75-1802-4CF6-A6DE-E8762769DFOB
determine the damage that will be suffered by Seacoast in the event of a breach by
Heritage of any such covenant. Therefore, Heritage further agrees that in the event
of any violation or threatened violation of such covenants, Seacoast shall be entitled
to seek as a matter of course an injunction from any court of competent jurisdiction
restraining such violation or threatened violation by Heritage, such right to seek an
injunction to be cumulative and in addition to whatever other remedies Seacoast may
have. Heritage shale be obligated to pay Seacoast for costs and attorneys' fees in
the event Seacoast prevails in a legal action to enforce this Agreement.
5. Miscellaneous.
a. Governing Law and Jurisdiction. This contract shall be construed under and
be governed in all respects by the substantive and procedural law of the state
of California without regard to choice -of -law principles. Any dispute hereunder
shall be venued exclusively in and determined by the Superior Court of Santa
Barbara County, Anacapa Division.
b. Non -Waiver. No waiver, delay or failure of Seacoast to enforce any provision
herein, whether known or unknown by Seacoast, shall relieve Heritage of its
duty to otherwise comply with the Agreement, and shall not waive Seacoast's
right to enforce the provision at a later time.
c. Assignment. Subject to the Right of First Refusal as set forth in Section 25 of
the Asset Purchase Agreement, Heritage consents and agrees that its
obligations under this Agreement may be assigned to a successor or assignee
of Seacoast.
d. Amendment. This Agreement cannot be amended, supplemented, or
otherwise modified except in a writing signed by Seacoast and Heritage.
e. Entire Agreement. This Agreement contains the entire agreement of the
Parties relating to the subject matter hereof and, except as otherwise stated,
supersedes any and all oral or written prior agreements and understandings
with respect to such subject matter.
f. Counterparts and Electronic Signatures. This Agreement may be executed in
two or more counterparts, each of which shall be deemed an original but all of
which together shall constitute one and the same agreement. The
counterparts of this Agreement and any schedules and Exhibits hereto, if any,
may be executed and delivered by facsimile or other electronic signature by
any of the Parties to any other Party and the receiving Party may rely on the
receipt of such document so executed and delivered by facsimile or other
electronic means as if the original had been received.
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g. Representation of Comprehension of the Agreement. In entering into this
Agreement, the Parties each represent that they have had the opportunity to
have the terms of this Agreement reviewed by an attorney of their choice, and
that they fully understand and voluntarily accept the terms of this Agreement.
h. Partial Invalidiiiy. In the event that any provision of this Agreement shall be
held invalid or unenforceable by any court of competent jurisdiction, such
holding shall not affect the validity or enforceability of any other provision
herein.
IN WITNESS WHEREOF, the Parties hereto have executed this Agreement as
of the date referenced above.
Seacoast of Channel Islands, LLC
By: Bob Nahm, Manager
Heritage Yacht Sales, Inc.
DocuSlgn�ned by:
y: ony juni, President
ESigned by:
VlAu
To y 37Mi, individually
EXHIBIT C
LEGAL DESCRIPTION
A parcel of land situated in the Northwest quarter (NW 1/4) of Section Thirty Five (35),
Township Six (6) South, Range Ten (10) West, S.B.B. & M., Orange County, California,
more particularly described as follows, to -wit:
Beginning at a point in the U.S. Bulkhead line between Station No. 200 and Station No.
101 as shown upon a map entitled "Harbor Lines, Newport Bay Harbor, California,"
approved May 2, 1936 by the Secretary of War, and on file in the office of the U.S.
District Engineer at Los Angeles, California, said point of beginning being East 754.25
feet of said bulkhead Station No. 200, running thence North 424.71 feet to a point in the
Northerly line of that certain parcel of land conveyed to City of Newport Beach by the
Irvine Company, as described in a deed recorded September 25, 1929, in Book 306,
Page 375, of official records of Orange County, California; thence South 850 43' East
772.15 feet to the Northeasterly corner of the last mentioned parcel of land; thence
South along the Easterly line of the last mentioned parcel of land 367.01 feet to a point
in said U.S. Bulkhead line between Station No. 200 and Station No. 101, thence West
along said bulkhead line 770 feet to the point of beginning, containing approximately
seven (7) acres.
Consent to Assignment of Leasehold Interest Page C-1
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court approvals, and tax clearances required to enable the estate of the deceased Member to
transfer to the surviving Members full legal and equitable tax-free title to the Brokerage share of
the deceased Member.
Estate of Deceased Member Defined
& The term "estate of the deceased Member" as used in this Agreement shall
mean and include as those terms are understood in California law:
(a) The duly appointed and qualified executor, executrix, administrator,
administratrix, administrator with the Will annexed or administratrix with the Will annexed of
the estate of the deceased Member.
(b) The surviving joint tenant of the deceased Member, if the deceased
Member's share of the Brokerage was owned by the deceased Member and a person who
is not active in the business of the Brokerage as joint tenants.
(c) Any other person who may, because of the community property or other
law of any jurisdiction, acquire without formal probate proceedings any right, title, or interest
in or to the deceased Member's share of the Brokerage by reason of the death of the
deceased Member.
Termination of Agreement
9. This Agreement shall terminate upon the occurrence of any one of the
following events:
(a) The written Agreement of the Members to that effect;
(b) The bankruptcy, receivership, or dissolution of the Brokerage;
(c) The complete withdrawal from the Brokerage of any Member during
his lifetime pursuant to Paragraph 9 herein;
(d) The sale of the Brokerage share of the first Member to die to the
surviving Members pursuant to Paragraphs 4 through 7 herein;
(e) The simultaneous deaths of any two or more Members, or the death of
a surviving Member within thirty (30) days after the death of the first
Member to die unless within that time settlement shall have been
made between the estate of the first Member to die and the surviving
Members as provided in Paragraph 4 through 7 herein.
Sale or Transfer of Shares
10. Except as set forth above, no transfer of any Membership interests shall be
permitted without the written approval of all Members. A Member may transfer all or
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DocuSign Envelope ID: 8FD02A75-1802-4CF6-A6DE-E8762769DFOB
part of his/her/its membership interest only as follows -
(a) To another Member as provided in subsection c) herein below.
(b) To any third party, after the Member making the transfer has first offered the
other Members the right of first refusal in accordance with the provisions of subsection c).
(c) If any Member receives a bona fide offer, whether or not solicited by
him/her/it, from a person not then a Member to purchase all or any portion of his/her/its
membership interest and if the Member receiving the offer is willing to accept it, he/she/it shall
give written notice of the amount and terms of the offer, the identity of the proposed transferee
and his/her/its willingness to accept the offer to the other Members. The other Members shall
have the option, within thirty (30) days after that notice has been given, to purchase the
designated membership interest on the same terms as those contained in the offer and in the
same proportion as they hold membership interests. If the other Member(s) does not exercise
his/her/its option within the thirty (30) day period, the Member who received the offer may sell
his/her/its interest to such third party making the offer only on such terms and conditions as
stated in the offer. Any modification to such offer would require the Member receiving the offer
to give the other Member(s) a new right of first refusal hereunder.
Amendments or Alterations
10. This Agreement may be altered or amended in whole or in part at any time, by
filing with this Agreement a written instrument setting forth the changes signed by all Members.
Notices
11. Any and all notices or other communications required or permitted by this
Agreement or by law to be served on, given to, or delivered to any party hereto by any other
party to this Agreement shall be in writing and shall be deemed duly served, given, or delivered
when personally delivered to the party or to an officer of the party, or in lieu of such personal
delivery, when deposited in the United States mail, first-class postage prepaid, addressed to a
Member at the address then appearing for him or her on the books and records of the
Brokerage.
Binding on Heirs
12. This Agreement shall be binding on the parties hereto and on each of their heirs,
executors, administrators, successors, and assignees.
Severability
13. Should any provisions or portion of this Agreement be held unenforceable or
invalid for any reason, the remaining provisions and portions of this Agreement shall be
unaffected by that holding.
Governing t_aw
14. This Agreement shall be construed and governed by the laws of the State of
California.
DocuSign Envelope ID: 8FD02A75-1802-4CF6-A6DE-E8762769DFOB
Sole and Only Agreement
15. This instrument, in addition to the Operating Agreement of the Brokerage,
constitutes the sole and only agreement of the parties hereto respecting the sale and
purchase of their shares in the Brokerage, and correctly sets forth the rights, duties, and
obligations of each to the other in relation thereto as of its date. Any prior agreements,
promises, negotiations, or representations concerning its subject matter not expressly set
forth in this Agreement are of no force or effect. in the event of an inconsistency between this
Agreement and the Operating Agreement of the Brokerage, the terms of this Agreement shall
prevail or be interpreted to give the terms recited herein effect.
Indemnification of Remaining and Withdrawing Member
16. A withdrawing Member or a dying Member's estate shall indemnify and hold the
Brokerage harmless from and against any and all liabilities of every kind and nature personal to
the withdrawing or dying Member that arose before or after the close date of a sale of
Brokerage interests. A withdrawing Member or a dying Member's estate shall continue to be
responsible after the close date for any liabilities of the Brokerage that arose prior to the close
date whenever they occur. The Brokerage and any remaining Member shall indemnify and hold
the withdrawing or dying Member harmless from and against any and all liabilities of every kind
and description, relating to or attributable to the period after the close date of a sale or buy-out
transaction between the parties, and for the remaining Member's personal and professional
conduct whenever it occurred.
Distribution on Liquidation
17. On the dissolution of the Brokerage, except as otherwise provided in this
Agreement, its business shall be wound up and its properties liquidated, and the net proceeds
of the liquidation, together with any property to be distributed in kind, shall be distributed as
follows:
(a) to the payment of the Brokerage's debts and obligations that are then due,
including any loans or advances that may have been made by any of the
Members;
(b) to the establishment of any reserves that the Members may consider
necessary for any future liabilities of the Brokerage; and
(c) to the Members in equal proportion to the balances in their respective
capital accounts.
SIGNATURE PAGE FOLLOWS -
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DocuSign Envelope ID: BFD02A75-1802-4CF6-A6DE-E8762769DFOB
5/31/2016 Oxnard
Executed on , 2016 at ,California.
DocuSlgnetl by:
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5/31 Santa Barbara
Executed on 2016 at , California.
SEACOAST OF SANTA BARBARA, INC.
DocuSlgnetl by:
l/cl� Vale. ('("bbd
By: VICKI VAN HOOK
Its: President
5/31 Newport Beach
Executed on , 2016 at California.
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DocuSign Envelope ID: BFD02A75-1802-4CF6-A6DE-E8762769DFOB
AGREEMENT TO PURCHASE ASSETS OF HERITAGE YACHT SALES INC.
AND CANCELLATION OF AGREEMENT
Parties
This Agreement to Purchase of Assets and Cancellation of Agreement is entered
into between Seacoast of Santa Barbara, Inc., ("SB Seacoast') and Robert Nahm ("Nahm"). SB
Seacoast and Nahm are referred to herein individually as the "Party" and collectively as the
"Parties".
Recitals
WHEREAS, the Parties to this Agreement have previously entered into an
agreement dated November 17, 2014 (the "Original Option to Purchase and Buy Sell
Agreement'), a copy of which is attached hereto as Exhibit A (involving the ownership of
member interests in Seacoast of Channel Islands, LLC (the "Brokerage"); and
WHEREAS, the Brokerage is purchasing the assets of Heritage Yacht Sales, Inc.
("Heritage') under the terms of an Asset Purchase Agreement ("APA"), a copy of which is
attached hereto as Exhibit B; and
WHEREAS, the Brokerage, as a part of the purchase price, has agreed to transfer a
ten percent (10%) interest in its membership shares to Heritage; and
WHEREAS, the membership ownership percentages in the Brokerage prior to the
APA was Nahm with a twenty percent (20%) interest and SB Seacoast with an Eighty Percent
(80%) interest; and
WHEREAS, as a result of the APA, the membership ownership will change to:
Nahm holding an eighteen percent (18%) member interest; Heritage holding a ten percent (10%)
member interest; and SB Seacoast holding a seventy-two percent (72%) member interest; and
WHEREAS, the Parties to this Agreement will be entering into an additional
agreement concerning the ownership and restrictions on the sale or transfer of their interests by
SB Seacoast, Nahm and Heritage which will replace the Original Option to Purchase and Buy
Sell Agreement; and
WHEREAS, the Parties are desirous of confirming the APA and its terms and
conditions, especially as it relates to their respective member ownership interests; terminating
the Original Option to !Purchase and Buy Sell Agreement and adopting a new ownership
agreement to include Heritage as a member.
Operative Provisions
NOW, THEREFORE, based upon the mutual covenants and promises made herein,
the Parties agree as follows:
1. The Parties agree to the terms and conditions of the APA.
2. The Parties agree that the Brokerage will issue a membership interest to
DocuSign Envelope ID: 8FD02A75-1802-4CF6-A6DE-E8762769DFOB
Tony Duni of Heritage equal to ten percent (10%) of the Brokerage.
3. The Parties agree that the new membership ownership interests in the Brokerage
will be: Nahm - eighteen percent (18%): SB Seacoast - seventy two percent (72%); and
Heritage (Duni) - a ten percent (10%) interest.
4. The Original Option to Purchase and Buy Sell Agreement is terminated and is of
no force or effect.
5. The Parties agree to enter into a new Ownership Agreement in the form attached
hereto as Exhibit C.
6. This Agreement shall be binding on the parties hereto and on each of their heirs,
executors, administrators, successors, and assignees.
7. Should any provisions or portion of this Agreement be held unenforceable or
invalid for any reason, the remaining provisions and portions of this Agreement shall be
unaffected by that holding.
8. This Agreement shall be construed and governed by the laws of the State
of California.
9. This instrument constitutes the sole and only agreement of the parties
hereto respecting the :sale and purchase of their shares in the Brokerage, and correctly sets forth
the rights, duties, and obligations of each to the other in relation thereto as of its date. Any prior
agreements, promises, negotiations, or representations concerning its subject matter not
expressly set forth in this Agreement are of no force or effect.
Doasigned by:
5/21/2016 Bal N�dn
Dated:
ROBERT NAHM
SEACOAST OF SANTA BARBARA, INC.
E;-qjPAFAGiAgA-
By:
O"Signed by:
5/21/2016 &i `AV, Nk
Dated:.. VICKI VAN HOOK
2
DocuSign Envelope ID: 8FD02A75-1802-4CF6-A6DE-E8762769DFOB
EXHIS
OPTION TO PURCHASE AND BUY SELL AGREEMENT
Preamble
November THIS AGREEMENT is entered into and is intended to be effective on the 17 day of
2014 by and between Seacoast of Santa Barbara, Inc., ("SB Seacoast") and
Robert Nahm. Robert Nahm ("Nahm") is a Member of Seacoast of Channel Islands, LLC (the
"Brokerage"). Nahm owns a twenty percent (20%) interest in the Brokerage and SB Seacoast
owns an Eighty Percent (80%) interest.
Recitals
The purpose of this Agreement is four fold:
(1) To protect the management and control of the Brokerage against
intrusion by persons not active in the business or not acceptable to
the other members of the Brokerage;
(2) To provide for transition of the Brokerage interests in the event of the
death or withdrawal of one of the Members.
(3) To provide a mechanism for the establishment of a purchase price
for the sale of one Members interest.
(4) To provide for the right of Seacoast SB to purchase Nahm's interest
for the first five (5) years of the operation of the Brokerage.
NOW, THEREFORE, IT IS AGREED:
Restriction on Transfer
1. To accomplish the purpose of this Agreement, any transfer, sale, assignment,
hypothecation, encumbrance, or alienation of any Member's share of the Brokerage, whether in
whole or in part, other than according to the terms of this Agreement is void and transfers no
right, title, or interest in the Member's share of the Brokerage, to the purported transferee,
buyer, assignee, pledgee, or encumbrance holder. This provision shall not apply Seacoast SB
which shall be free to transfer its interest without restriction.
Agreement Available for Inspection
2. An original copy of this Agreement, duly executed by each of the Members shall
be maintained by the Brokerage at its principal place of business and made available for
inspection by any person requesting to see it.
Transfer of Brokerage Share Upon Death of Member
3. Upon the death of a Member, each surviving Member including (non -individual
entities) shall purchase, and the estate of the deceased Member shall sell to each surviving
DocuSign Envelope ID: 8FD02A75-1802-4CF6-A6DE-E8762769DFOB
Member, such proportion of the Brokerage owned by the Member at his or her time of death as
the percentage in the Brokerage already owned by a surviving Member bears to the total
ownership interests in the Brokerage owned by all of the surviving Members, for the price and
upon the terms and conditions specified in this Agreement. Each Member by his execution of
this agreement, agrees, to insert in his Will and/or Trust a direction to his personal
representative to promptly comply with the terms of this Agreement and to execute any and all
documents reasonably required to achieve such compliance including, but not limited to, the
filing of a Petition for a preliminary Distribution of the Members interest as soon as it is possible.
3.1 Each Member, pursuant to his execution of this Agreement, hereby absolves
and exonerates his personal representative from any personal responsibility or liability for any
loss which may result to any property passing under his Will otherwise pursuant to the
directions contained in this agreement, as long as such personal representative shall have been
acting in good faith and without gross negligence.
3.2 In the event of the death of one of the Members, the remaining Members
shall have the first option, but not the obligation, to purchase from the deceased Member's
estate the deceased Member's share in the Brokerage. The purchase price shall be
determined under the provisions hereunder. There shall be no right in favor of the personal
representative of a deceased Member to require either the Brokerage or the remaining
Members to acquire the deceased Member's share in the Brokerage. The remaining Members
may exercise their option at any time within sixty (60) days after the date of death by written
notice to the personal representative of the deceased Member's estate.
3.3 if the remaining Members elect not to exercise their call option to acquire the
deceased Member's share of the Brokerage, at its option, the Brokerage may seek to locate a
purchaser for the deceased Member's share of the Brokerage, who shall upon payment of the
price as specified herein shall be transferred the deceased Member's share of the Brokerage.
3.4 Nothing in this Agreement shall limit the ability of the Members to establish a
Buy -Sell Agreement funded by the purchase of an insurance policy.
Purchase Price
4. The purchase shall consist of the following:
(a) Excerpt as otherwise set forth herein, the purchase price for a Member's share
in the Brokerage to be sold under this Agreement shall be the book value as of the end of the
month immediately preceding the date of death of the first Member to die, excluding the
Members' individual Income Accounts used to track the distributive shares of the Brokerage's
profits and losses. The; determination of the book value shall be made by the independent
certified public accountant then servicing the Brokerage and in accordance with the accounting
principles previously applied by the Brokerage. The determination of book value made by the
accountant shall be conclusive and binding on all parties. The book value of the Brokerage
shall be the difference between the total assets and the total liabilities of the Brokerage. The
book value per Member shall be obtained by multiplying the book value of the Brokerage by the
Member's percentage of Brokerage ownership on the date as of which the book value is
determined. In the event the Brokerage has any outstanding loans on its books in favor of a
deceased Member, the principal amounts of the loan(s) shall not be added to the purchase
DocuSign Envelope ID: 8FD02A75-1802-4CF6-A6DE-E8762769DFOB
price. However, the surviving Mernber(s) shall have the option to either repay these loans
under the terms of this Agreement or under the terms of the loans as originated.
(b) The purchase price shalt additionally include an amount for "good will," as that
term is commonly understood by certified business appraisers in the Santa Barbara County
area, which shall be determined, if the parties are unable to agree, by a certified appraiser who
is qualified to appraise business goodwill of the type and nature of the Brokerage selected
mutually by all parties.
(c) The cost of such appraisal shall be shared equally between the parties. In the
event that the parties cannot collectively agree upon an appraiser or if one or more parties
object to the amount of the appraisal then the parties(s) objecting may select an appraiser and
shall be solely responsible for the cost of the same. The total of such appraisal shall be added
together and divided by the number of appraisers to determine the amount of the goodwill of the
Brokerage. The parties shall be bound by the amount so determined.
Terms of Purchase Price
5. Each surviving Member shall pay to the estate of the first Member to die a cash
amount equal to at least twenty percent (20%) of the total purchase price to be paid for the
portion of decedent's share of the Brokerage being purchased by each such surviving Member.
In the event that the amount paid to the estate of the first Member to die by any surviving
Member is less than the total purchase price, the surviving Member shall pay the balance of the
purchase price in twenty-four (24) consecutive monthly payments beginning three (3) months
after payment of the cash portion of the purchase price. The unpaid balance of the purchase
price shall be evidenced by a series of negotiable promissory notes made by the surviving
Member to the order of' the estate of the deceased Member with interest at ten percent (10%)
per annum or three percent (3%) above the then existing interest rate for one year treasury
notes, whichever is lower. Each note shall provide that in the event of default in payment of
principal, all notes subsequently due shall become due and payable immediately. Each note
shall be subject to prepayment in whole or in part at any time.
Payment of Purchase Price
6. The purchase price payable to the estate of the first Member to die shall be paid in
cash, or in cash and notes, to the estate of the deceased Member upon:
6.1 The estate of the deceased Member becoming able, in the opinion of the
legal counsel for the surviving Members, of transferring to the surviving Members full legal and
equitable title, free of any tax lien, to the shares of the deceased Member, and
6.2 Delivery to the surviving Members of all necessary court approvals and/or
confirmation of sale documents representing the share in the Brokerage of the deceased
Member, properly endorsed in the mariner required to transfer full legal and equitable title, free
of any tax lien to the surviving Members.
Costs of Performance
7. The estai:e of the deceased Member shall bear, and hold the surviving Members
harmless from, all costs and expenses required for securing any court orders, court decrees,
DocuSign Envelcpe ID: 8FD02A75-1802-4CF6-A6DE-E8762769DFOB
court approvals, and tax clearances required to enable the estate of the deceased Member to
transfer to the surviving Members full legal and equitable tax-free title to the Brokerage share of
the deceased Member,
Estate of Deceased Member Defined
8. The term "estate of the deceased Member" as used in this Agreement shall mean
and include as those terms are understood in California law:
(a) The duly appointed and qualified executor, executrix, administrator,
administratrix, administrator with the Will annexed or administratrix with the Will annexed of the
estate of the deceased Member.
(b) The surviving joint tenant of the deceased Member, if the deceased
Member's share of the Brokerage was owned by the deceased Member and a person who is
not active in the business of the Brokerage as joint tenants.
(c) Any other person who may, because of the community property or other
law of any jurisdiction, acquire without formal probate proceedings any right, title, or interest in
or to the deceased Member's share of the Brokerage by reason of the death of the deceased
Member.
Option of SB Seacoast to Purchase Nahm's Interest
9. During the first twelve months, from December 1, 2014 until November 30, 2015,
SB Seacoast shall have the right at its election to purchase all of Nahm's twenty percent
interest (20%) in the Brokerage ("Nahm's Interest") for the sum of One Hundred ($100) Dollars.
9.1 After December 1, 2015, SB Seacoast's option to purchase Nahm's Interest
shall be reduced by twenty percent (20%) and by a 1.666% factor on the first day of each month
thereafter until December 1, 2019 when this option shall terminate.
For example: On December 1, 2015, SB Seacoast may elect to purchase
78.333% of Nahm's Interest (80% less 1.666% or 78.333%). On January 1, 2016, Seacoast SB
may elect to purchase 76.667% of Nahm's Interest in the Brokerage. A schedule of the
percentage which SB Brokerage may purchase is attached hereto as Exhibit "A".
9.2 Any purchase under this paragraph 9 shall be for the sum of $100 regardless
of the date of the election to purchase under this option. An election to purchase Nahm's
Interest shall be made in writing and sent to Nahm by mail pursuant to the provisions of
paragraph 12 herein below. Nahm shall deliver the certificate of his Interest within ten (10)
business days to the office manager for SB Seacoast who shall cancel the Interest and reissue
the Interests to Nahm and SB Seacoast pursuant to the terms of this Agreement.
Termination of Agreement
10. This Agreement shall terminate upon the occurrence of any one of the following
events:
91
DocuSign Envelope ID: 8FD02A75-1802-4CF6-A6DE-E8762769DFOB
(a) The written Agreement of the Members to that effect;
(b) The bankruptcy, receivership, or dissolution of the Brokerage;
(c) The complete withdrawal from the Brokerage of any Member during
his lifetime pursuant to Paragraph 9 herein;
(d) The sale of the Brokerage share of the first Member to die to the
surviving Members pursuant to Paragraphs 4 through 7 herein;
(e) The simultaneous deaths of any two or more Members, or the death
of a surviving Member within thirty (30) days after the death of the
first Member to die unless within that time settlement shall have
been made between the estate of the first Member to die and the
surviving Members as provided in Paragraph 4 through 7 herein.
Amendments or Alterations
11. This Agreement may be altered or amended in whole or in part at any time, by
filing with this Agreement a written instrument setting forth the changes signed by all Members.
Notices
12. Any and all notices or other communications required or permitted by this
Agreement or by law to be served on, given to, or delivered to any party hereto by any other
party to this Agreement shall be in writing and shall be deemed duly served, given, or delivered
when personally delivered to the parry or to an officer of the party, or in lieu of such personal
delivery, when deposited in the United States mail, first-class postage prepaid, addressed to a
Member at the address then appearing for him or her on the books and records of the
Brokerage.
Binding on Heirs
13. This Agreement shall be binding on the parties hereto and on each of their heirs,
executors, administrators, successors, and assignees.
Severability
14. Should any provisions or portion of this Agreement be held unenforceable or
invalid for any reason, the remaining provisions and portions of this Agreement shall be
unaffected by that holding.
iioverning Law
15. This Agreement shall be construed and governed by the laws of the State of
California.
//
DocuSign Envelope ID: BFD02A75-1802-4CF6-A6DE-E8762769DFOB
Sole and Only Agreement
16. This instrument constitutes the sole and only agreement of the parties hereto
respecting the sale and purchase of their shales in the Brokerage, and correctly sets forth the
rights, duties, and obligations of each to the other in relation thereto as of its date. Any prior
agreements, promises, negotiations, or representations concerning its subject matter not
expressly set forth in this Agreement are of no force or effect.
Indemnification of Remaining and Withdrawing Member
17. A withdrawing Member or a dying Member's estate shall indemnify and hold the
Brokerage harmless from and against any and all liabilities of every kind and nature personal to
the withdrawing or dying Member that arose before or after the close date of a sale of
Brokerage interests. A withdrawing Member or a dying Member's estate shall continue to be
responsible,after the chose date for any liabilities of the Brokerage that arose prior to the close
date whenever they occur. The Brokerage and any remaining Member shall indemnify and holt
the withdrawing or dying Member harmless from and against any and all liabilities of every kind
and description, relating to or attributable to the period after the close date of a sale or buy-out
transaction between the parties, and for the remaining Member's personal and professional
conduct srh enever it occurred.
Distribution on Liquidation
18. On the dissolution of the Brokerage, except as otherwise provided in this
Agreement, its business shall ba wound up and its properties liquidated, and the net proceeds
of the liquidation, together with any property to be distributed in kind, shall be distributed as
follows:
(a) to the payment of the Brokerage's debts and obligations that are then
due, including any loans or advances that may have been made by any of
the Members;
(b) to the establishment of any reserves that the Members may consider
necessary for any future liabilities of the Brokerage; and 3) to the Members
in equal proportion to the balances in their respective capital accounts.
11117/2014 location Oxnard
Executed on . 2014 at ,California.
4 s"g ee by
Dated: 11/17/2014, 2014 �a�an� %1 l n•
SEACOAST OF SANTA BARBARA, INC.
D ug'g d by:
Dated:11111/2014 2014 '� UAbt, h6L
�ftt 1;1"UK
Its: PRESIDENT
A
DocuSign Envelope ID: 8FD02A75-1802-4CF6-A6DE-E8762769DFOB
ASSET PURCHASE AGREEMENT
THIS AGREEMENT (the "Agreement") is made effective as of May 31, 2016
by and between Seacoast of Channel Islands, LLC, a California limited liability
company, with its principal place of business at 3615 Victoria ,Avenue, Oxnard, CA
93035 ("Seacoast") and Heritage Yacht Sales, Inc- with its principal place of business
at 829 Harbor Island Drive, Newport Beach, CA 92660 ("Heritage").
RECITALS
WHEREAS, Heritage is doing business as a yacht sales brokerage at five
locations in California (the "Locations") and under the trade business name of
"Heritage Yacht Sales" (collectively described as the `Business") as identified below,
as follows:
Heritage Yacht Sales - Long Beach
231 N. Marina Drive
Long Beach, CA 90803
Heritage Yacht Sales - Newport Beach Office:
829 Harbor Island (Drive
Newport Beach, CA 92660
Heritage Yacht Sales - San Pedro
210 Whaler's Walk Suite 121
Berth 31
San Pedro, CA 90731
Heritage Yacht Sales Inc. - San Diego
955 Harbor Island Drive
San Diego, CA 92101
Heritage Yacht Sales, Inc. - Wilmington
720 Peninsula Rd - Berth 202
Wilmington, CA 90744; and
WHEREAS. Seacoast is doing business as a yacht brokerage in Channel
Islands Harbor at 3615 Victoria Avenue, Oxnard, CA 93035 ; and
WHEREAS, Heritage wishes to sell certain assets specifically identified
hereinafter to Seacoast, together with providing for the assignrnent/subletting of
certain leases to the Locations; and
DocuSign Envelope ID: 8FD02A75-1802-4CF6-A6DE-E8762769DFOB
WHEREAS, Seacoast wishes to purchase the assets and have the rights to
lease the Locations under terms and conditions which are acceptable to it as more
particularly set forth hereunder.
OPERATIVE PROVISIONS
NOW, THEREFORE, in consideration of the premises and mutual covenants
and promises herein contained, and intending to be legally bound hereby, Heritage
and Seacoast agree as follows:
Purchase and Sale.
1.1 Purchase and Sale of Assets. On the terms and subject to the
conditions herein set forth, Heritage shall sell, convey, transfer, assign and deliver to
Seacoast and Seacoast shall acquire and accept from Heritage, free from all
liabilities and encumbrances (except as expressly provided herein), the furniture,
fixtures and office machines specifically described on Exhibit A:attached hereto. The
furniture, fixtures, and office machines are referred to hereinafter collectively as the
"Purchased Assets." The conveyance, transfer, assignment and delivery of the
Purchased Assets shall be affected by deeds, bills of sale, endorsements,
assignments, drafts, checks and other instruments of transfer and conveyance in
appropriate form. Heritage, shall, as of the Closing Date (as defined in Section 9 of
this Agreement), upon Seacoast's request, do, execute, acknowledge and deliver all
further acts, deeds, assignments, transfers, conveyances, power of attorney and
assurances that are reasonably required for the better assigning, transferring,
granting, conveying, assuring and confirming to Seacoast or for aiding and assisting
in collecting and reducing to possession, any or all of the Purchased Assets.
1.2 UCC -3 Obligations. Heritage shall submit to Seacoast for
approval, at least three (3) days in advance of the Closing Date, UCC Financing
Statement Amendments pursuant to UCC Article 3 that act to and have the effect of
releasing and discharging any and all liens and UCC financing statements or filings
on or regarding the Purchased Assets.
1.3 Excluded Assets. Those assets which are excluded from the
Purchased Assets (collectively, the "Excluded Assets"), and hence will not be
purchased by Seacoast hereunder, include, but are not limited to, all cash and cash
equivalents and all other assets of Heritage not used solely in connection with its
business.
1.4 Assumed. Liabilities. Except as expressly set forth on Exhibit B
attached hereto, or except as otherwise expressly set forth herein, Seacoast shall not
assume or be obligated to perform any liability or obligation of Heritage, whether or
2
DocuSign Envelope ID: 8FD02A75-1802-4CF6-A6DE-E8762769DFOB
not such liability arises out of or in connection with sale of the Purchased Assets
hereunder. On the Closing Date, Heritage shall transfer and assign to Seacoast and
Seacoast shall assume only those liabilities, contracts and obligations described on
Exhibit B (the "Assumed Liabilities"). Seacoast shall indemnify and hold Heritage
harmless from the Assumed Liabilities. Nothing in this Agreement shall be construed
to require Seacoast to assume any pre-closing liabilities or obligations of Heritage
whatsoever.
2. Purchase Price. The purchase price for the Purchased Assets to be
sold by Heritage hereunder (the 'Purchase Price") shall be pais as follows:
2.1 In Exchange for the assets listed in Exhibit A, Seacoast shall pay a
percentage of the Gross Revenue (as defined below) generated out of the Locations
over a period of five (5) years from the Closing Date (the "Earn Out Payments") as
follows:
2. 1.1 Year one. Seacoast will pay Heritage ten percent (10%) of
the Gross Revenue from commissions received from the sale of brokered used
vessels from all of the Locations.
2.1.2 Year two. Seacoast will pay Heritage: fifteen percent (15%)
of the Gross Revenue from the commissions received from the sale of vessels from
all of the Locations.
2.1.3 Year three. Seacoast will pay Heritage fifteen percent
(15%) of the Gross Revenue from the commissions received from the sale of vessels
from all of the Locations.
2.1.4 Year four. Seacoast will pay Heritage ten percent (10%)
of the Gross Revenue from the commissions received from the sale of vessels from
all of the Locations.
2.1.5 Year five. Seacoast. will pay Heritage ten percent (10%) of
the Gross Revenue from the commissions received from the sale of vessels from all
of the Locations.
2.1.6 The term "Gross Revenue" is defined for the purpose of
this Section 2, as the total commission revenue earned and received by Seacoast,
after paying co-op fees, if any, prior to the payment of sales staff commissions.
2.1.7 For purposes of clarification, the Earn Out Payments shall
be due only from the Locations as described in the Recitals hereinabove.
3
DocuSign Envelope ID: 8FD02A75-1802-4CF6-A6DE-E8762769DFOB
2.1.8 Payment of the Earn Out Payments shall be made to
Heritage within thirty (30) days after the end of each month following the Closing
Date.
2.1.9 Heritage or its authorized representative may, upon fifteen
(15) days written notice to Seacoast, inspect and audit the books and records of
Seacoast relating to the Earn Out Payments provided, however, that such inspection
shall only occur during normal business hours of Seacoast (unless agreed otherwise
by Seacoast) and may only occur once per calendar quarter. The costs for said audit
shall be paid for by Heritage, except that if said audit reveals that the Earn Out
Payment was in error more than five percent (5%) of the amount due Heritage for a
particular calendar quarter, the costs for the audit which includes such calendar
quarter shall be the responsibility of Seacoast but shall not be in excess of Two
Thousand Dollars ($2,000). In any case, Heritage will be provided with full visibility
into the Yacht Closer system to assist with the monitoring of deal flow.
2.2. Seacoast, as additional consideration for the tangible assets
contributed by Heritage as described in Exhibit A ("Contributed. Assets") shall transfer
to Tony Duni, a member interest equal to ten percent (10%) of the total membership
interest of Seacoast of Channel Islands, LLC (the "Transferred Membership Interest')
upon the Closing Date.
The Parties agree to treat this contribution of the Contributed Assets for
income Tax purposes as a non-taxable contribution of the Contributed Assets in
exchange for the Transferred Membership Interest pursuant to Section 721 of the
Internal Revenue Code and to report the transaction in sui�h a manner on their
respective Tax Returns.
3. Sales in Progress, The parties acknowledge that on the Closing Date,
there may be sales of vessels which are in progress but for which payments or
commissions and/or fees have not been received or only partially received ("Sales in
Progress"). Heritage shall be entitled to payment of the full amount of proceeds from
each Sale in Progress which are outstanding as of the Closing Date (i.e. commission
fees owed to Heritage which are unpaid in full or part, as of the date of Closing Date)
regardless if payment is made after the Closing Date less any sales commissions
owed to the sales agent who made the sales, together with any associated direct
costs incurred. A list of all Sales in Progress is set out in Exhibit C, together with the
respective commissions due to sales associates. Seacoast shall not be obligated to
repay or compensate any commissions, coop fees, closing costs, or monies
concerning the Sales in Progress.
4. Inventory. Heritage and Seacoast have made a physical inventory of
the equipment of the Business (the "Closing Inventory"), a copy of which is attached
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hereto as Exhibit E.,
5. Location of Assets. Heritage warrants and represents that all the
tangible assets included in the Purchased Assets are located at the Locations.
Heritage will not remove any such property from any of the Locations without
Seacoast's written consent, except as may be required in the ordinary course of trade
or business up to the Closing Date.
6. List of Vendors. Attached hereto as Exhibit F is a list of Heritage's
Business vendors (the "Vendors"), which contains the names and business
addresses of all vendors and suppliers of the Business.
7. List of Customers. Attached hereto as Exhibit G is a list of Heritage's
customers (the "Customers"), which contains the names, telephone numbers and
addresses of all Customers of the Business. Said Customers and list shall be
transferred to Seacoast upon Closing which such list shall then become proprietary
information exclusively owned by Seacoast. Heritage agrees that it shall not sell,
transfer or disclose or contact any of the Customers for any purpose except with the
express written authorization of Seacoast. For purposes of clarification, those
Customers with Sales in Progress shall be included as Customers.
8. Allocations. The Purchase Price shall be allocated for tax purposes as
set forth in Exhibit D. Each of the parties shall report this transeiction for tax purposes
in accordance with such allocations.
9. Closing. The closing of the transactions contemplated by this
Agreement (the "Closing") shall take place on a mutually agreeable date, but no later
than May 31, 2016 (the "Closing Date"). Time is of the essence. At the Closing
Date, Heritage shall execute and deliver to Seacoast all bills of sale and other
instruments that are reasonably necessary to transfer Heritage's right, title and
interest in and to the Purchased Assets to Seacoast, and shall cleliver possession
thereof to Seacoast, together with the keys to the Locations as applicable. All such
bills of sale and other instruments will contain customary warranties and affidavit of
title and will effectively transfer to Seacoast all of Heritage's right, title and interest to
the property constituting the Purchased Assets, free and clear of all liens, security
interests and encumbrances. Heritage shall also deliver all releases, subordinations,
or waivers of security interests, liens, encumbrances or other claims against the
business or Purchased Assets constituting the Purchased Assets that Seacoast may
reasonably require.
10. Representations and warranties of Heritage. The following
representations and warranties made by Heritage are true and correct and shall
survive the Closing for a period of eighteen months.
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10.1 Heritage has all the requisite authority to own, lease, operate and
to carry on its business as now being conducted and is duly qualified and in good
standing to do business in each jurisdiction in which such qualification is necessary;
10.2 Heritage has all the requisite power and authority to enter into this
Agreement and to consummate the transactions contemplated hereby.
10.3 Heritage is the owner of and has, or will have, as of the Closing
Date, good and marketable title to or other right to use all of the Purchased Assets
owned by Heritage, free of all debts, liens, security interests and encumbrances;
10.4 Heritage has not entered into any material contract relating to the
Purchased Assets;
10.5 Heritage does not owe any commissions to any of its clients or
customers, and is not obligated to pay any other amounts to perform other
obligations (other than routine servicing of customer accounts) for any of its clients or
customers;
10.6 Heritage has not entered into collective bargaining agreements,
union agreements, employment agreements,profit-sharing, retirement plans or other
benefit plans with respect to its employees;
10.7 No judgments, liens, actions, or proceedings are pending, or, to
the Heritage's knowledge, threatened against Heritage anywhere related to the
Business;
10.8 No action, suit, proceeding, or investigation by or on behalf of
Heritage's employees or any other party is pending or, to the knowledge of Heritage,
threatened, relating to, or affecting any of the Purchased Assets or relating to or
affecting the activities of Heritage carried on in connection with any of the Purchased
Assets, or which affects the enforceability of this Agreement or challenges any of the
transactions contemplated hereby, nor is there, to Heritage's knowledge, any basis
for any such action, suit, proceeding or investigation;
10.9 Heritage has complied with applicable bulk sales laws, if any,
which shall be confirmed prior to the Closing Date;
10.10 Heritage has to its knowledge complied with all material laws
applicable to the Purchased Assets including environmental, workplace, health and
safety laws, unfair labor practices, Americans with Disabilities Act (except Title III
thereof as applicable to public accommodations and access), immigration laws, as
well as rules and regWations relating to the Purchased Assets except where
noncompliance would not have Material Adverse Effect;
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10.11 Heritage is not in material default of any material provisions of
contracts or agreements to which it or any of the Purchased Assets. are subject
including any of the leases for the Locations;
10.12 Heritage has paid in full, or will arrange for the payment in full at
the date of Closing, all state and federal employee income tax withholding, Federal
Social Security Tax (FICA) withholding, employment taxes, unemployment insurance,
sales and use taxes, federal and state income taxes, business or license fees, and all
other business related taxes or governmental charges related to the Business.
Heritage shall show proof of compliance with the above requirements by certificates
or letters from the applicable governmental authorities;
10.13 Heritage will have paid to its employees as of the Closing Date all
bonuses, vacation, personal and sick days, and other accrued amounts relating to
those employees. Heritage will supply Seacoast with an estoppel certificate from
each of his employees prior to the close of escrow;
10.14 heritage is currently able to pay its obligaticns related to the
Business as they mature and will not be rendered unable to do so by the transfer
contemplated by this Agreement; and
10.15 To the knowledge of Heritage, no representation or warranty by
Heritage in this Agreement or in any exhibit, schedule, written statement, certificate,
or other document delivered or to be delivered to the Seacoast ;pursuant hereto, or in
connection with the consummation of the transactions contemplated hereby, contains
or will contain any untrue statement of a material fact, or omits or will omit to state a
material fact required to be stated therein or necessary to make the statements
contained therein not misleading.
11. Representations and Warranties of Seacoast. The following
representations and warranties made by Seacoast to Heritage are true and correct:
11.1 Seacoast has all requisite power and authority, and has taken all
action necessary, to execute and deliver this Agreement, to consummate the
transactions contemplated hereby and to perform its obligations hereunder. This
Agreement has been duly authorized, executed and delivered by Seacoast and
constitutes the legal, valid and binding obligations of Seacoast Enforceable against
Seacoast in accordance with its terms.
11.2 The execution and delivery by Seacoast of this Agreement, the
performance by Seacoast of its obligations hereunder and the consummation by
Seacoast of the transactions contemplated hereby do not require Seacoast to obtain
any consent, approval or action of, or make any filing with or give any notice to, any
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