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EXHIBIT 10.4
ASSET PURCHASE AGREEMENT
This Asset Purchase Agreement (this "Agreement") entered into as of
September 5, 2000, by and among Total Logistic Control, LLC, a Delaware limited
liability company (the "Buyer"), The Pro Source Group, Inc., a Delaware
corporation (the "Seller"), and FMG (Atlanta), Inc., a Delaware corporation (the
"Shareholder"). The Buyer, the Seller and the Shareholder are referred to
collectively herein as the "Parties". This Agreement contemplates a transaction
in which the Buyer will purchase certain assets the Seller.
Now, thereforee, in consideration of the premises and the mutual
promises herein made, and in consideration of the representations, warranties,
and covenants herein contained, the Parties agree as follows:
1. Definitions.
"Acquired Assets" means all right, title and interest in and to those
certain assets of the Seller listed on Schedule A attached hereto and made a
part hereof, including without limitation any right or interest that the Seller
has or may have in or to any prospective business with any Person other than
Xxxxxx Farms Incorporated and other than the Shareholder and/or its affiliates,
it being specifically understood that, notwithstanding anything to the contrary
set forth herein, no right, title and/or interest in or to (a) any cash or
accounts receivable of the Seller and/or (b) any contracts rights of the Seller
in respect to business now or hereafter conducted by the Seller with Xxxxxx
Farms, Incorporated are or shall be deemed to be transferred by the Seller to
the Buyer.
"Liabilities" means any liabilities or obligations (whether known or
unknown, whether asserted or unasserted, whether absolute or contingent, whether
accrued or unaccrued, whether liquidated or unliquidated, whether to make
payment or to perform any other form of obligations and whether due or to become
due), including any Liabilities for any Tax.
"Person" means an individual, a partnership, a corporation, a limited
liability company, an association, a joint stock company, a trust, a joint
venture, an unincorporated organization or a governmental entity (or any
department, agency, or political subdivision thereof).
"Subsidiary" means any corporation with respect to which a specified
Person (or a Subsidiary thereof) owns a majority of the common stock or has the
power to vote or direct the voting of sufficient securities to elect a majority
of the directors.
"Tax" means any federal, state, local, or foreign income, gross
receipts, single business, license, payroll, employment, excise, severance,
stamp, occupation, premium, windfall profits, environmental (including taxes
under ss.59A of the Internal Revenue Code of 1986, as amended), customs duties,
capital stock, franchise, profits, withholding, social security (or similar),
unemployment, disability, real property, personal property, sales, use,
transfer, registration, value added, alternative or add-on minimum, estimated,
or other tax of any kind whatsoever, including any interest, penalty, or
addition thereto, whether disputed or not.
2. Basic Transaction.
(a) Purchase and Sale of Assets. On and subject to the terms and
conditions of this Agreement, the Buyer agrees to purchase from the Seller, and
the Seller agrees to sell, transfer, convey and deliver to the Buyer, all of the
Acquired Assets at the Closing for the consideration specified in ss.2(c) of
this Agreement.
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(b) No Assumption of Liabilities. The Buyer will not, except as
expressly set forth herein, assume or have any responsibility with respect to
any Liabilities of the Seller whatsoever.
(c) Purchase Price. The Buyer agrees to pay to the Seller at the
Closing Fifty-Eight Thousand Dollars ($58,000).
(d) The Closing. The closing of the transactions contemplated by this
Agreement (the "Closing") shall take place at the offices of the Seller at 0000
Xxxxxxxxx Xxxxxxxxx in Aurora, Illinois on September 8, 2000 or at such other
time and place, including a closing by mail, as the Parties may mutually
determine (the "Closing Date").
(e) Deliveries at the Closing. At the Closing, the Seller will deliver
to the Buyer a xxxx or bills of sale and assignments sufficient to transfer to
the Buyer all right, title and interest of the Seller in and to the Acquired
Assets free and clear of all security interests, liens and encumbrances.
3. Representations and Warranties of the Seller and the Shareholder.
The Seller and the Shareholder jointly and severally represent and warrant to
the Buyer that the statements contained in ss.3(a) through ss.3(e) of this
Agreement are correct and complete as of the date of this Agreement and will be
correct and complete as of the Closing Date (as though made then and as though
the Closing Date were substituted for the date of this Agreement throughout ss.3
of this Agreement).
(a) Organization of the Seller. The Seller is a corporation duly
organized, validly existing, and in good standing under the laws of the State of
Delaware. The Seller does not have any Subsidiary. All of the outstanding
capital stock of the Seller is owned by the Shareholder.
(b) Authorization of Transaction by the Seller and the Shareholder. The
Seller and the Shareholder each has full power and authority (including full
organizational power and authority) to execute and deliver this Agreement and to
perform its respective obligations hereunder. The Shareholder and the board of
directors of the Seller have duly authorized the execution, delivery and
performance of this Agreement by the Seller. This Agreement constitutes the
valid and legally binding obligation of the Shareholder and the Seller,
enforceable in accordance with its terms and conditions.
(c) Title to Assets. The Seller has good and marketable title to the
Acquired Assets, free and clear of all security interests, liens and
encumbrances and free and clear of all restrictions on transfer whatsoever.
(d) Agreements with Key Employees of the Seller. There are no
agreements between any of the key employees of the Seller named in ss.5(b) of
this Agreement, on the one hand, and the Seller, the Shareholder and/or any
affiliates of the Shareholder, on the other hand, that require or relate to the
employment of any of such key employees by the Seller, the Shareholder and/or
any affiliate of the Shareholder on or after September 5, 2000 and/or that would
preclude, prevent or restrict the employment by the Buyer of any of such key
employees on or after September 5, 2000.
(e) Office Space Lease. Xxxxx X. Xxxxxxx, Esquire, counsel representing
the Shareholder, has delivered to Xxxxxx X. Xxxxxxx III, Esquire, counsel
representing the Buyer, by facsimile transmission on September 7, 2000 a true
and correct copy of an Office Lease dated December 16, 1999 (the "Office Lease")
entered into between Lakewoods Realty & Mortgage Corporation, as Landlord, and
the Seller, as Tenant, in respect to office space located at 0000 Xxxxxxxxx
Xxxxxxxxx in Aurora, Illinois. The Office Lease has not been modified, changed,
altered or amended in any respect and the Seller is not, as of September 5,
2000, in default in any obligations required under the Office Lease to be
performed by the Seller.
4. Representations and Warranties of the Buyer. The Buyer represents
and warrants to the Seller that the statements contained in ss.4(a) and ss.4(b)
are correct and complete as of the date of this Agreement and will be correct
and complete as of the Closing Date (as though made then and as though the
Closing Date were substituted for the date of this Agreement throughout ss.4 of
this Agreement).
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(a) Organization of the Buyer. The Buyer is a limited liability company
duly organized, validly existing, and in good standing under the laws of the
State of Delaware.
(b) Authorization of Transaction. The Buyer has full power and
authority (including full organizational power and authority) to execute and
deliver this Agreement and to perform its obligations hereunder. This Agreement
constitutes the valid and legally binding obligation of the Buyer, enforceable
in accordance with its terms and conditions.
5. Post-Closing Covenants. The Parties agree as follows with respect to
the period following the Closing:
(a) General. In case at any time after the Closing any further action
is necessary to carry out the purposes of this Agreement, each of the Parties
will take such further action (including the execution and delivery of such
further instruments and documents) as any other of the Parties reasonably may
request, all at the sole cost and expense of any other of the Parties requesting
such further action.
(b) Employment of Key Employees of the Seller. The Buyer will,
effective September 5, 2000, hire and employ on an "at will" basis the following
key employees of the Seller and, except as expressly set forth herein and only
to the extent that the Buyer is or may be liable and/or obligated by agreement
with such key employees (such liabilities and/or obligations of the Buyer to
such key employees, the "Buyer Employment Liabilities"), relieve the Seller from
any liabilities and/or obligations relating to, and assume complete liability
for, compensation and/or employee benefits attributable to labor and/or services
performed by such key employees for any of the Parties on and after September 5,
2000:
Xxxxxx Xxxxxxx
Xxxxx Xxxxx
Xxx Xxxxx
Xxxxxxx Xxxxx
Xxxxxx X. Xxxxx.
Notwithstanding anything to the contrary set forth herein, if, to the
extent that and as long as the Buyer employs the first four key employees of the
Seller named above during the one year period commencing September 5, 2000, the
Buyer will, at the sole cost and expense of the Buyer and without charge to the
Seller, furnish to the Seller up to but not exceeding twenty man hours per week,
in the aggregate, of the services, as reasonably required, of the first four key
employees of the Seller named above during such one year period in order that
the Seller shall be able to carry out existing contractual commitments of the
Seller to Xxxxxx Farms, Incorporated relating to the management and operation of
a facility owned by Xxxxxx Farms, Incorporated and located in St. Xxxxxx County,
Virginia. Further, notwithstanding anything to the contrary set forth herein,
if, to the extent that and as long as the Buyer employs Xxxxxx X. Xxxxx during
the two year period commencing on September 5, 2000, the Buyer will furnish to
the Shareholder the services of Xxxxxx X. Xxxxx on a part time basis equal to at
least one-half of the total working hours of Xxxxxx X. Xxxxx during such two
year period in order that Xxxxxx X. Xxxxx can during such two year period act as
a marketing representative of the Shareholder and/or its affiliates, it being
specifically understood and agreed that for and in consideration of the Buyer so
furnishing the services of Xxxxxx X. Xxxxx the Shareholder will pay to the Buyer
for each month that the Buyer so provides the services of Xxxxxx X. Xxxxx an
amount equal to the lesser of (a) $13,021 or (b) 50% of the actual payroll
costs, exclusive of any bonuses, incurred and paid by the Buyer during such
month in employing Xxxxxx X. Xxxxx, it being specifically understood and agreed
that the Shareholder shall directly reimburse Xxxxxx X. Xxxxx for and in respect
to any business expenses, including without limitation travel expenses, that
Xxxxxx X. Xxxxx reasonably incurs in order to carry out services rendered for
the Shareholder and/or its affiliates. The Shareholder shall cause the Seller to
continue to lease and maintain automobiles used as of September 5, 2000 by the
five key employees of the Seller named above until the respective lease relating
to each such respective automobile expires, and as long as the Seller is so
leasing each such respective automobile the Seller shall make each such
respective automobile available for use by personnel of the Buyer as the Buyer
shall reasonably designate, it being specifically understood and agreed that as
long as the Seller is so leasing each such respective automobile the Buyer
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shall reimburse the Seller for and in respect to all costs, including without
limitation insurance, license fees and taxes, incurred and paid by the Seller in
so leasing and maintaining each such respective automobile.
(c) Non-Competition. The Seller and the Shareholder agree during the
three year period commencing September 5, 2000 the Seller and the Shareholder
shall not engage in or offer to engage in, and shall prevent the affiliates of
the Seller and/or the Shareholder from engaging in or offering to engage in, the
business of managing the operations of distribution and/or processing facilities
located within the United States of America, provided however that,
notwithstanding anything to the contrary set forth herein, the Seller, the
Shareholder and/or the affiliates of the Seller and the Shareholder shall not be
prohibited from or precluded in any respect by this Agreement from engaging in
or offering to engage in the business of performing planning, programming,
logistics, materials handling, design, architectural, engineering, construction
and/or construction management services relating to any facilities whatsoever.
(d) Office Space. The Seller will promptly after September 5, 2000
cause any and all right and interest of the Seller as Tenant under the Office
Lease to be assigned to the Buyer, free and clear of any liabilities and/or
obligations relating to the use or occupancy of such office space prior to
September 5, 2000 and without causing a default under the lease for such office
space or giving the lessor of such office space the right to evict the Buyer or
change to the detriment of the Buyer the terms of such lease, and the Buyer
will, except as expressly set forth herein, assume the obligations and
liabilities of the Seller as Tenant under the Office Lease insofar as and to the
extent that such liabilities and obligations relate to the use and occupancy on
and after September 5, 2000 of the office space which is the subject of the
Office Lease and will, except as otherwise set forth herein, relieve the Seller,
the Shareholder and any affiliates of the Shareholder from any and all of the
liabilities and obligations of the Seller incurred on and after
September 5, 2000 and attributable to such office space, it being specifically
understood and agreed that, notwithstanding anything to the contrary set forth
herein, (a) the Seller shall for the two year period commencing September 5,
2000 be entitled to use and occupy forty percent of such office space and shall
reimburse the Buyer promptly upon request therefore by the Buyer in an amount
equal to forty percent of the rent incurred and paid by the Buyer during such
two year period for and in respect to such office space and (b) the Buyer shall
promptly after September 5, 2000 use reasonable efforts to cause any liabilities
and/or obligations of the Seller, the Shareholder and/or the affiliates of the
Shareholder directly to Lakewoods Realty & Mortgage Corporation relating to the
Office lease to be terminated insofar as and to the extent that such liabilities
and/or obligations apply to the the Seller, the Shareholder and/or any of
affiliates of the Shareholder. The Shareholder shall cause the Seller to
continue to lease and maintain the rented fax machine, the rented copier, the
rented postage machine and the rented portions of the telephone system located
in such office space on September 5, 2000 until the respective lease relating to
each such respective item of office equipment expires, and as long as the Seller
is so leasing each such respective item of office equipment the Seller shall
make each such respective item of office equipment available in such office
space for use by the Buyer, it being specifically understood and agreed that as
long as the Seller is so leasing each such respective item of office equipment
the Buyer shall reimburse the Seller for and in respect to all costs incurred
and paid by the Seller in so leasing and maintaining each such respective item
of office equipment.
(e) Building Project Option. The Buyer will in good faith negotiate
with the Shareholder and its affiliates so as to grant a first right of refusal
option to the Shareholder for and in respect to the design and construction, on
a cost plus a fee basis with prior agreement as to fee, engineering costs and
overhead costs, of any building projects done through the Pro Source operation
of the Buyer during the three year period commencing September 5, 2000.
(f) Indemnification Against Liabilities. The Seller and the Shareholder
agree that, except for any liabilities and/or obligations of the Seller that the
Buyer shall expressly assume or be required to assume pursuant to this
Agreement, the Seller and the Shareholder will indemnify and hold harmless the
Buyer from and against any and all of the Liabilities of the Seller and from and
against any loss, cost or damage (including reasonable attorneys' fees and
related costs) in any way attributable to any and all of the Liabilities of the
Seller. The Buyer agrees that, except for any liabilities and/or obligations of
the Shareholder to the Buyer pursuant to ss.5(b) of this Agreement, the Buyer
will indemnify and hold
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harmless the Seller and the Shareholder from and against any and all of the
Buyer Employment Liabilities and from and against any loss, cost or damage
(including reasonable attorneys' fees and related costs) in any way attributable
to any and all of the Buyer Employment Liabilities. Further, the Buyer agrees
that, except for any liabilities and/or obligations of the Shareholder to the
Buyer pursuant to ss.5(d) of this Agreement, the Buyer will indemnify and hold
harmless the Seller and the Shareholder from and against any and all liabilities
and/or obligations attributable to the use and/or occupancy of the office space
mentioned in ss.5(d) of this Agreement on and after September 5, 2000 and from
and against any loss, cost or damage (including reasonable attorneys' fees and
related costs) in any way attributable to any and all of such liabilities and/or
obligations.
(g) Name Use. The Seller acknowledges that after the Closing the right
of the Seller to use the name "The Pro Source Group, Inc." or any derivation
thereof will be non-exclusive, and the Seller agrees (a) that from and after the
Closing the Seller will use the name "The Pro Source Group, Inc." or any
derivation thereof only in respect to the corporate functions of the Seller
and/or in connection with the performance of contractual commitments of the
Seller to Xxxxxx Farms, Incorporated and (b) that the Seller will not later than
September 30, 2001 change its corporate name to a name other than "The Pro
Source Group, Inc." or any derivation thereof.
6. Survival of Representations and Warranties. All of the
representations and warranties contained in ss.3 and ss.4 of this Agreement and
all of the covenants contained in ss.5 of the Agreement shall survive the
Closing and continue in full force and effect forever thereafter (subject to any
applicable statutes of limitations). The survival of the warranties and
representations contained in this agreement shall not be affected by the fact
that the damaged party knew or should have known of any misrepresentation or
breach thereof at the time of Closing and the right of the damaged party to
recover for any breach shall not be affected thereby.
7. Miscellaneous.
(a) No Third-Party Beneficiaries. This Agreement shall not confer any
rights or remedies upon any Person other than the Parties and their respective
successors and permitted assigns.
(b) Entire Agreement. This Agreement constitutes the entire agreement
between the Parties and supersedes any prior understandings, agreements, or
representations by or between the Parties, written or oral, to the extent they
related in any way to the subject matter hereof.
(c) Succession and Assignment. This Agreement shall be binding upon and
inure to the benefit of the Parties and their respective successors and
permitted assigns. None of the Parties may assign either this Agreement or any
of its respective rights, interests or obligations hereunder without the prior
written approval of all of the other of the Parties, which such approval shall
not be unreasonably withheld as long as the assigning party nonetheless remains
responsible for the performance of all of its respective obligations hereunder.
(d) Counterparts. This Agreement may be executed in one or more
counterparts, each of which shall be deemed an original and all of which
together will constitute one and the same instrument.
(e) Notices. All notices, requests, demands, claims and other
communications hereunder will be in writing. Any notice, request, demand, claim
or other communication hereunder shall be deemed duly given only if (and then
two business days after) such notice is sent by registered or certified mail,
return receipt requested, postage prepaid, and addressed to the intended
recipient as set forth below:
If to the Seller
or the Shareholder: FMG (Atlanta), Inc.
0000 Xxxx Xxxx Xxxxx
Xxxxxx, Xxxxxxx 00000
Attention: Xx. Xxxxxx X. Xxxxxxxx
with a copy to:
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Xxxxx X. Xxxxxxx, Esquire
c/o FMG (Atlanta), Inc.
0000 Xxxx {Xxxx Xxxxx
Xxxxxx, Xxxxxxx 00000
If to the Buyer: Total Logistic Control, LLC
0000 Xxxxxxxx Xxxxx
Xxxxxxx, Xxxxxxxx 00000
Attention: Xx. Xxxx X. Xxxxxx
Any of the Parties may change the address to which notices, requests, demands,
claims and other communications hereunder are to be delivered by giving all of
the other of the Parties notice in the manner hereinabove set forth.
(f) Governing Law. This Agreement shall be governed by and construed in
accordance with the domestic laws of the State of Illinois without giving effect
to any choice or conflict of law provision or rule (whether of the State of
Illinois or any other jurisdiction) that would cause the application of the laws
of any jurisdiction other than the State of Illinois.
(g) Amendments and Waivers. No amendment of any provision of this
Agreement shall be valid unless the same shall be in writing and signed by all
of the Parties. No waiver by any of the Parties of any default,
misrepresentation, or breach of warranty or covenant hereunder, whether
intentional or not, shall be deemed to extend to any prior or subsequent
default, misrepresentation, or breach of warranty or covenant hereunder or
affect in any way any rights arising by virtue of any prior or subsequent such
occurrence.
(h) Severability. Any term or provision of this Agreement that is
invalid or unenforceable in any situation in any jurisdiction shall not affect
the validity or enforceability of the remaining terms and provisions hereof or
the validity or enforceability of the offending term or provision in any other
situation or in any other jurisdiction.
(i) Expenses. Each of the Parties will bear its own respective costs
and expenses (including legal fees and expenses) incurred in connection with
this Agreement and the transactions contemplated hereby.
IN WITNESS WHEREOF, the Parties hereto have executed this Agreement as of the
date first above written.
The Pro Source Group, Inc. Total Logistic Control, LLC
By: By:
----------------------------------------- --------------------------
Title: President Title:
-----------------------
FMG (Atlanta), Inc.
By:
-----------------------------------------
Title: Secretary and General Counsel
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SCHEDULE A
The Acquired Assets comprise:
a. any and all furniture and/or office equipment of the Seller located on
September 5, 2000 in the office space leased by the Seller pursuant to
the Office Lease except the following items of furniture and/or office
equipment located as of September 5, 2000 in such premises:
the rented fax machine
the rented copier
the rented postage machine
the rented portions of the telephone system
the furniture and/or office equipment located on September 5,
2000 in the offices within such premises designated for
the exclusive use of personnel of the Shareholder and its
affiliates other than the Seller;
b. any and all prospective business of the Seller with any person other
than Xxxxxx Farms, Incorporated and other than the Shareholder and/or
any of its affiliates; and
c. any and all files and records of the Seller relating to the Acquired
Assets and/or relating to the business operations of the Seller,
including any and all files and records of the Seller related to
prospective business of the Seller, provided however that,
notwithstanding anything to the contrary set forth herein, (i) the
Acquired Assets shall not include or comprise any files and/or records
of the Seller relating to business with Xxxxxx Farms, Incorporated, any
files and/or records of the Seller relating to cash or accounts
receivable of the Seller, any files and/or records of the Seller
comprising tax records or filings of the Seller, any files and/or
records of the Seller comprising the accounting ledgers, accounting
records, payroll records, corporate minute books or stock transfer
records of the Seller and/or any files and/or records of the Seller
relating to business with the Shareholder and/or any affiliates of the
Shareholder and (ii) the Seller reserves and retains the right to have
access to any files and/or records that are included in the Acquired
Assets in connection with the any corporate function of the Seller,
including the filing of any tax returns, if and to the extent that the
Seller reasonably requires such access in order to satisfy or comply
with the provisions of any governmental laws, ordinances, rules,
regulations and/or orders, it being specifically understood and agreed
that the Buyer shall, promptly upon request therefore by the Seller,
provide such access to the Seller.
As used herein, capitalized terms have the same meaning as such capitalized
terms have in an Asset Purchase Agreement dated as of September 5, 2000 entered
into among the Buyer, the Seller and FMG (Atlanta), Inc.
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