Exhibit 10(h)(1)
ASSET PURCHASE AGREEMENT (this "Agreement") made as of March 18, 1997,
by and between XXXXXXXX'X FOODS, INC., a Virginia corporation ("Seller"), XXXXX
X. XXXXXX and LEVIS X. XXXXXXX, or their assigns ( "Buyer"), XXXXXX MULES,
individually ("Mules"), and XXXXX XXXXXX, individually ("Xxxxxx").
R E C I T A L S
A. Seller desires to sell certain of its assets used in the
manufacturing division of Seller's business for the production and sale of the
Products set forth on the attached Exhibit A which is incorporated in and made a
part of this Agreement (the "Products").
B. Buyer desires to purchase said assets used in Seller's manufacturing
division for the production and sale of the Products (the "Business") as more
fully set forth in this Agreement.
C. Mules and Xxxxxx are entering into this Agreement for the sole
purpose of contractually obligating themselves to the execution and delivery of
the Noncompete Agreements described herein, which said Noncompete Agreements are
an integral part of the transaction provided for in this Agreement.
NOW, THEREFORE, in consideration of the mutual representations,
warranties, covenants and agreements, and upon the terms, and subject to the
conditions hereinafter set forth, the parties hereby agree as follows:
I. PURCHASE OF ASSETS
1. Purchase and Sale. Seller shall sell, convey, transfer,
assign and deliver to Buyer, and Buyer shall purchase and accept from Seller, at
the Closing (as that term is defined in Section 4.1), all of Seller's right,
title and interest in and to the assets listed on Schedule 1.1A (the assets
being purchased hereunder from Seller are hereinafter sometimes collectively
referred to as the "Purchased Assets"), free and clear of any and all options,
pledges, mortgages, security interests, liens, charges, burdens and other
encumbrances whatsoever. The Purchased Assets shall not include cash and cash
equivalents, prepaid expenses, notes receivable, accounts receivable, rent
receivable, and all other assets, properties, rights, claims and contracts set
forth on Schedule 1.1B (hereinafter and hereinabove referred to as the "Excluded
Assets"). Notwithstanding the foregoing, the transfer of title, delivery, and
payment for Seller's inventory of finished goods, raw materials, seasonings, and
packaging materials shall be as provided in Section 2.3 hereunder.
2. Non-Assumption and Assumption of Certain Obligations. Buyer
shall not be obligated to hire any of Seller's employees nor assume or be
obligated, except to the extent any applicable law imposes such obligation upon
Buyer, to observe or perform any collective bargaining agreement, or recognize
any bargaining representative of Seller's employees. Buyer shall not assume or
be liable for the payment, performance or discharge of any of Seller's debts,
contracts, agreements, liabilities, obligations, commitments, restrictions,
disabilities or duties, whether direct or indirect, fixed, contingent or
otherwise, except that Buyer shall assume the vendor and customer contracts and
purchase orders related to the Purchased Assets, entered into by Seller prior to
the date of the Closing in the ordinary course of Business, provided such vendor
and customer contracts and purchase orders are set forth on Schedule 1.2 or have
been entered into between the execution hereof and the Closing Date (hereinafter
defined) and have been approved by Buyer, in writing, prior to Closing. Schedule
1.2 shall be updated on the Closing Date to show each vendor and customer
contract and purchase order that Buyer will assume at Closing. Buyer's
assumption of obligations hereunder shall be limited to those obligations which
accrue on and after the Closing Date.
II. PURCHASE PRICE; INVENTORY
1. Purchase Price. The Purchase Price for the Purchased
Assets shall consist of the Base Price plus the Inventory Price, as defined
below.
2. Base Price. The Base Price shall be Three Hundred
Thousand Dollars ($300,000.00), payable as follows:
3. Fifty Thousand Dollars ($50,000.00) in cash (the
Non-Refundable Deposit paid by Buyer in connection with the execution and
delivery of the letter of intent for this transaction and governed by the
provisions of Section 11.3 hereunder).
4. One Hundred Fifty Thousand Dollars ($150,000.00) in cash at
Closing.
5. One Hundred Thousand Dollars ($100,000.00) payable one year
from the date of Closing and evidenced by a promissory note from Buyer
substantially in the form of Exhibit B attached hereto and made a part hereof
(the "Promissory Note").
6. Inventory.
7. Physical Inventory. At 5:00 P.M. on March ______, 1997
Seller shall cease/terminate the manufacture and processing of the Products. An
inventory shall be taken on ____________, 1997, of all raw materials (meat and
ingredients, the "Raw Materials") of the Business, all packaging materials
(excluding labels, the "Packaging Materials") of the Business, and all finished
goods and products (the "Finished Goods") of the Business (collectively, the
"Inventory").
8. Inventory Price. For purposes of determining the "Inventory
Price," all good and usable Raw Materials and Packaging Materials will be valued
at the lower of cost or current market value as of the Closing Date; the salable
Finished Goods will be valued at Seller's manufacturing division wholesale
prices, as listed on Schedule 2.3, less 25%. The phrase "good and usable Raw
Materials and Packaging Materials" means materials in quantities reasonably
required for the conduct of the Business and sufficiently fresh for use in the
production of the Products by Buyer following the Closing Date. The phrase
"salable Finished Goods" means goods that are of sufficient quality and
freshness for sale to Seller by Buyer following the Closing Date under the terms
of the Product Supply Agreement attached hereto as Exhibit D. Raw Materials and
Packaging Materials which are not good and usable, if any, and Finished Goods
which are not salable, if any, shall be identified during the pre-Closing
inventory and shall be retained by Seller.
9. Payment and Delivery.
a. The salable Finished Goods shall be paid for
in cash and delivered at Closing.
b. The good and usable Packaging Materials
shall be delivered at Closing and paid for by Buyer in cash in four consecutive
equal monthly installments. The first payment for the Packaging Materials shall
be due 30 days from the Closing Date, the second payment shall be due 30 days
thereafter, and the remaining payments shall be due accordingly.
c. The good and usable Raw Materials shall be
purchased by Buyer on an as-needed basis during a four-month period following
the Closing Date. Payment for any Raw Materials items will be due in cash upon
delivery of such items, and title to such items will transfer to Buyer upon
payment and delivery. The balance of the Raw Materials, if any, remaining in the
possession of Seller at the expiration of the four-month period shall be
delivered immediately to Buyer, and payment therefor shall be due in full at
that time.
10. Guaranty. Payment of any due and unpaid portion of the
Promissory Note and the deferred payment obligations set forth in Paragraph
2.3.c will be personally guaranteed by Xxxxx X. Xxxxxx and Levis X. Xxxxxxx,
pursuant to a guaranty substantially in the form of Exhibit C, attached hereto
and made a part hereof (the "Guaranty").
11. Allocation of Base Price. The Base Price for the Purchase
Assets shall be allocated as follows:
12. Machinery, Equipment, and Furniture $
13. Contracts, Customer and Supplier Lists,
Recipes and Formulas, Prepaid Expenses $
14. Noncompete Seller $ 1.00
15. Noncompete Mules $ 1.00
16. Noncompete Xxxxxx $ 1.00
III. CLOSING
1. Date and Place of Closing. Subject to satisfaction or
waiver of the conditions to the obligations of the parties, the purchase and
sale of the Purchased Assets pursuant to this Agreement shall be consummated at
a closing (the "Closing") to be held in the offices of McGuire, Woods, Battle &
Xxxxxx, L.L.P. in Norfolk, Virginia, or such other place as mutually agreed on
by the parties, at 10:00 A.M. on March _____, 1997, or such other date as the
parties may mutually agree upon (the "Closing Date"). Except as otherwise
provided herein with respect to the Raw Materials, title to the Purchased Assets
shall pass from Seller to Buyer at the Closing.
2. Seller's Obligations at Closing. At the Closing,
concurrently with performance by Buyer of its obligations to be performed at the
Closing, Seller shall:
3. Documents of Conveyance. Execute and deliver to Buyer, in
form and substance acceptable to Buyer, (i) warranty bills of sale conveying to
Buyer all tangible personal property and other tangible assets owned by it and
included among the Purchased Assets, (ii) an assignment agreement, the form of
which is attached hereto as Exhibit I (the "Assignment Agreement") conveying to
Buyer all of Seller's claims, rights and benefits, to and under the vendor and
customer contracts and purchase orders to be assumed by Buyer pursuant to
Section 1.2, (iii) all transferable licenses, permits, certificates,
manufacturer equipment warranties, and authorizations pertaining to the
Purchased Assets, and (iv) all other conveyances, bills of sale, assignments,
endorsements and instruments of transfer as shall be necessary or appropriate to
carry out the intent of this Agreement, and as shall be sufficient to vest in
Buyer title to all of the Purchased Assets and all right, title and interest of
Sellers thereto. If requested by Buyer, such documents shall be in a form
suitable for recording.
4. Records. Deliver to Buyer all customer and supplier lists,
sales contracts, sales lists, licenses, and business files and records,
formulas, recipes, seasoning recipes, processing procedures, research and
development records, and advertising materials relating to the Products. Buyer
acknowledges that Xxxxx X. Xxxxxx has previously obtained possession of the
contracts set forth on Schedule 1.2 hereof.
5. Certificates and Opinions. Execute and deliver to Buyer the
certificates referred to in Sections 8.3 and 8.4 and deliver to Buyer the
opinion of counsel referred to in Section 8.8.
6. Supply Agreement. Execute and deliver the Product Supply
Agreement between Seller and Buyer, the form of which is attached hereto as
Exhibit D (the "Supply Agreement").
7. License Agreement. Execute and deliver the License
Agreement between Seller and Buyer, the form of which is attached hereto as
Exhibit E (the "License Agreement").
8. Noncompete Agreement. Execute and deliver the Noncompete
Agreement between Seller and Buyer, the form of which is attached hereto as
Exhibit F (the "Noncompete Agreement").
9. Lease Agreement. Execute and deliver the Lease Agreement
between Seller and Buyer, the form of which is attached hereto as Exhibit G (the
"Lease Agreement").
10. Assignment Agreement. Execute and deliver the Assignment
Agreement between Buyer and Seller..
11. Other Action. Take all such other steps as may be
necessary or appropriate to put Buyer in actual and complete ownership and
possession of the Purchased Assets.
12. Buyer's Performance. At the Closing, concurrently with the
performance by Seller of its obligations to be performed at the Closing, Buyer
shall:
13. Purchase Price. Deliver to Seller the cash payments
specified in Sections 2.2.b and 2.3.c(1).
14. Promissory Note. Execute and deliver to Seller the
promissory note described in Section 2.2.c.
15. Supply Agreement. Execute and deliver to Seller the Supply
Agreement.
16. Assumption Agreement. Execute and deliver to Seller an
agreement to assume the vendor and customer contracts and purchase orders Buyer
has agreed to assume pursuant to Section 1.2 (the "Assumption Agreement"), the
form of which is attached hereto as Exhibit H.
17. Certificates and Opinions. Execute and deliver to Seller
the certificates referred to in Sections 9.3 and 9.4 and deliver the opinions of
counsel referred to in Section 9.7.
18. License Agreement. Execute and deliver to Seller the
License Agreement.
19. Noncompete Agreement. Execute and deliver to Seller the
Noncompete Agreement.
20. Lease Agreement. Execute and deliver to Seller the Lease
Agreement.
21. Guaranty. Deliver to Seller the duly executed Guaranty.
22. Assignment Agreement. Execute and deliver the Assignment
Agreement.
23. Further Action by Parties. In addition to the foregoing,
the parties agree as follows:
24. Further Action by Seller. At any time and from time to
time, at or after the Closing, upon request of Buyer, Seller shall do, execute,
acknowledge and deliver or shall cause to be done, executed, acknowledged and
delivered, all such further acts, assignments, transfers, conveyances, powers of
attorney and assurances as may reasonably be required in order to vest in and
confirm to Buyer full and complete title to and, possession of, and the right to
use and enjoy, the Purchased Assets.
25. Further Action by Buyer. At any time and from time to
time, at or after the Closing, upon request of Seller, Buyer shall do, execute,
acknowledge and deliver or shall cause to be done, executed, acknowledged and
delivered all such further acts and assurances as may reasonably be required to
complete the assumption by Buyer of its obligations assumed by Buyer pursuant to
this Agreement including without limitation the Assumption Agreement.
IV. REPRESENTATIONS AND WARRANTIES OF SELLER
Seller represents and warrants to Buyer that:
1. Due Organization and Qualification. Seller is a corporation
duly organized, validly existing, qualified to do business, and in good standing
under the laws of the Commonwealth of Virginia.
2. Corporate Power and Authority. The Board of Directors of
Seller have duly approved this Agreement and the transactions contemplated
hereby. The execution and delivery of this Agreement and the performance by
Seller of its obligations hereunder have been duly authorized by all requisite
corporate action, and no further action or approval is required in order to
permit Seller to consummate the transactions contemplated by this Agreement.
Seller has full power, authority and legal right to enter into this Agreement
and to consummate the transactions contemplated hereby. The making and
performance of this Agreement and the consummation of the transactions
contemplated hereby in accordance with the terms hereof will not (a) conflict
with the Certificate or Articles of Incorporation or the Bylaws of Seller, (b)
result in any breach or termination of, or constitute a default under, or
constitute an event that with notice or lapse of time, or both, would become a
default under, or result in the creation of any Encumbrance (hereinafter
defined) upon any of the Purchased Assets, or create any rights of termination,
cancellation, or acceleration in any person under any vendor or customer
purchase order assumed by Buyer hereunder, or violate any order, writ,
injunction or decree by which any of the Purchased Assets, or the Business may
be bound or affected or under which any of the Purchased Assets, or the Business
receive benefits, (c) result in the loss or adverse modification of any material
license, permit or other authorization granted to or otherwise held by Seller
and related to the Purchased Assets, or the Business, (d) violate any provision
of any law, ordinance, regulation, rule, requirement or order to which Seller,
the Purchased Assets, or the Business, are subject, except for violations that,
in the aggregate, would not have a material adverse affect upon the business,
operations, condition (financial or otherwise), results of operations, value or
prospects of the Purchased Assets, or the Business, (a "Material Adverse
Effect").
3. Title. Seller has and upon conveyance, transfer and
assignment of the Purchased Assets to Buyer by Seller at the Closing and as
provided in Section 2.3, Buyer will acquire and hold, good and marketable title
in fee simple to all of the Purchased Assets, in each case, free and clear of
any and all options, rights, pledges, mortgages, security interests, liens,
charges, burdens, servitudes and other encumbrances whatsoever (herein sometimes
collectively referred to as "Encumbrances"). Neither Seller, any affiliate or
subsidiary of Seller owns or holds under lease any assets of any kind, character
or description that are utilized in a material way to the Business or the
Purchased Assets and are not being conveyed hereunder, except as set forth on
Schedule 4.3.
4. Inventory. The Seller's Inventory to be conveyed hereunder
consists of current items of a quality and quantity that are usable or
marketable in the ordinary course of the Business, and items not so usable or
marketable in the Business have been written down in value to estimated net
realizable market values. Since March 1, 1997 the Inventory has been maintained
at a level consistent with the operation of the Business in its normal course,
and no change has occurred in such Inventory that materially adversely affects
or will materially adversely affect its usability or salability. Orders for
inventory items have not been given for amounts materially in excess of the
amounts necessary to maintain the Inventory of Seller for the Business at normal
levels based on past practice.
Notwithstanding the foregoing, Buyer acknowledges and agrees that, from
the date of the execution of this Agreement until Closing, Seller intends only
with Buyer's permission to be rendered on a weekly basis, to reduce Inventory
below historically normal levels based on past practice. Seller agrees to keep
Buyer informed of its running estimate as to the expected levels of the
Inventory at Closing. In addition, Seller will cooperate with and assist Buyer
during the pre-Closing period to prepare for Buyer's production of the Products
as soon as practicable after Closing, provided that such assistance shall not
require additional out-of-pocket expenses. In the event that Closing does not
occur, (i) Buyer agrees that it will promptly return to Seller and keep
confidential all formulas, recipes, and materials provided by Seller and (ii)
Seller agrees to purchase all Products that Buyer may have produced, provided
said Products are of reasonable quality and were produced according to the
formulas and recipes provided to Buyer by Seller, the price for same to be
calculated in accordance with the valuation method of Seller's compensable
product items under the provisions of Section 2.3.
5. Purchased Assets. Schedule 1.1A includes an accurate and
complete listing of all tangible personal property and other tangible and
intangible assets owned or leased by Seller and used primarily in the Business,
other than Excluded Assets, Inventory and other similar assets used or consumed
in the ordinary course of business between the date hereof and the Closing Date.
All equipment and machinery included among the Purchased Assets are sold "as
is." Seller enjoys peaceful possession of the Purchased Assets. In making the
foregoing representation and warranty, Seller is relying in part on the accuracy
of Schedule 1.1A(1), which was prepared by Xxxxx X. Xxxxxx pursuant to his
physical inventory of the applicable machinery and equipment.
6. Contracts. Schedule 4.6 sets forth a brief description of
all material contracts, consulting agreements, contract packaging agreements,
private label agreements, employment agreements, other agreements, leases,
arrangements and commitments (whether oral or written) to which Seller is a
party and by which any of the Purchased Assets, or the Business are affected or
are bound, except vendor and customer contracts and purchase orders assumed by
Buyer under this Agreement and set forth on Schedule 1.2.
7. Contract Defaults. To the best of Seller's knowledge, no
other party thereto is in default in any material respect under any of the
contracts, agreements, leases, arrangements and commitments listed on Schedule
4.6 or the contracts described in Section 1.2 to be assigned to and assumed by
Buyer. To the best of Seller's knowledge, (a) there has not occurred any event
which, with the lapse of time or giving of notice or both, would constitute such
a material default; (b) such contracts, agreements, leases, arrangements, and
commitments are legal, valid, and binding obligations of the respective parties
thereto in accordance with their terms and, except to the extent reflected in
Schedules 4.6 and 1.2, have not been amended; and (c) no defenses, offsets, or
counterclaims thereto have been asserted, or to the best knowledge of Seller,
may validly be made, by any party thereto other than Seller.
8. Litigation. Schedule 4.8 sets forth all actions, suits,
proceedings, investigations, or grievances pending against Seller to the best
knowledge of Seller, threatened against Seller, and affecting the Purchased
Assets, or the Business, or involving products manufactured by Seller in its
manufacturing division, at law, in equity or in admiralty, before or by any
court or any federal, state, municipal or other governmental department,
commission, board, bureau, agency or instrumentality, domestic or foreign
(hereinafter sometimes collectively referred to as "Agencies"). None of the
actions, suits, proceedings or investigations listed on Schedule 4.8, either (a)
has resulted in, or would, if adversely determined, result in, a Material
Adverse Effect, or (b) has affected, affects or would, if adversely determined,
affect the right or ability of Seller to carry on the Business substantially as
now conducted. To Seller's knowledge, Seller is neither subject to nor in
default of any continuing court or Agency order, writ, injunction or decree,
applicable to the Purchased Assets or the Business.
9. Compliance with Laws. Except as listed on Schedule 4.9A.,
to the best of Seller's knowledge, (a) each of Seller, the Purchased Assets, and
the premises to be leased by Buyer pursuant to the Lease Agreement has complied
with and is in compliance with, all federal, state, county, and municipal laws,
ordinances, regulations, rules, requirements and orders applicable to the
Purchased Assets, the Business, the premises to be leased by Buyer, or operation
of the Business, the breach or violation of which could have a Material Adverse
Effect, (b) Seller has filed with the proper authorities all statements and
reports required by all laws, ordinances, regulations, rules, licensing and
other requirements and orders to which the Purchased Assets or the Business is
subject the failure to file which could have a Material Adverse Effect, and none
of such statements and reports contains untrue statements of material fact or
omits any statement of material fact necessary to make such statements and
reports not misleading, and (c) Seller has obtained and maintained all licenses,
permits and governmental authorizations necessary for the present ownership and
use of the Purchased Assets and for the conduct of the Business in the manner in
which and in the jurisdictions and places where the Business is now conducted,
the failure to have which could have a Material Adverse Effect. Seller has not
received written notice of any violation of, or any pending investigation under,
any of such laws, ordinances, regulations, rules, licensing and other
requirements and orders during the last three (3) years related to the Business.
Schedule 4.9B correctly lists all material licenses, permits, certificates,
approvals, memberships and authorizations, and all registrations and
applications pending before any agency or authority for the issuance of any
licenses, permits, certificates, approvals, memberships or authorizations or the
renewal thereof related to the Business. Seller has no franchises relating to
its Business, and none are presently required for the conduct thereof.
10. Attachments and Other Proceedings. There are no
attachments, executions, assignments for the benefit of creditors,
receiverships, conservatorships or voluntary or involuntary proceedings in
bankruptcy or pursuant to any debtor relief laws contemplated or filed by Seller
or pending against Seller.
11. Taxes. Seller has duly filed, or has duly obtained
effective extensions for filing, all U.S. federal, foreign, state, county, local
and other excise, franchise, property, payroll, income, profits, capital stock,
sales and use, and other tax returns which are required to be filed, and all
such returns are true and correct in all material respects. Seller has paid,
collected or withheld and remitted to the appropriate governmental agency all
taxes which have become due or have been assessed against it and all taxes,
penalties and interest which any taxing authority has proposed or asserted to be
due and owing. All tax liabilities to which the Purchased Assets have been
subjected have been discharged and there are no liens for taxes on the Purchased
Assets except for property taxes assessed but not yet payable or as described in
Schedule 4.11. Except as described in Schedule 4.11, there are no tax
deficiencies or claims presently being asserted, or, to the best of Seller's
knowledge, threatened, against Seller and Seller has no knowledge of any basis
for such claims or deficiencies. Seller has not granted any extension to any
taxing authority of the limitation period during which any tax liability may be
asserted.
12. Consents. Except as set forth on Schedule 4.12, no
consent, approval, authorization or order of any court, Agency or any other
person is required under any law, ordinance, regulation, rule, requirement,
order, writ, judgment, decree, contract, agreement, lease, commitment, charter
or bylaw applicable to or binding upon Seller in order to permit Seller to
consummate the transactions contemplated by this Agreement and to perform its
obligations hereunder and under the Supply Agreement, and the License Agreement.
13. Patents, Trademarks, Etc. Seller neither has contracted
for, nor has licenses or agreements to use any trade secrets, know-how,
processes, formulae, royalties, inventions, discoveries, improvements,
proprietary or technical information, proprietary rights, joint venture or joint
operating interests, copyrights, patents, trade names, trademarks, service marks
and applications for copyright, patent, trade name, trademark and service xxxx
registration (hereinafter sometimes collectively referred to as "Intangible
Rights") for use at, or in connection with, the operation of the Business except
for its rights to the "Xxxxxxxx'x" trade name and xxxx, and the Intangible
Rights among the Purchased Assets. None of the Purchased Assets or activities or
operations of the Business infringe or involve or have resulted within three
years prior to the date hereof in (a) the infringement of, or (b) any claim of
infringement of, any Intangible Right of any other person, firm or corporation;
and no proceedings have been instituted, are pending, or are threatened, that
challenge the rights of Seller in respect thereof. To the best knowledge of
Seller, the "Xxxxxxxx'x" tradename is not being infringed by the products,
activities, operations, patents, trade names, trademarks, service marks or
copyrights of any other person or persons and is not subject to any outstanding
order, judgment, decree, stipulation or agreement restricting the use thereof.
14. Product Warranties. No shipment or other delivery of
Products made or to be made by Seller on or prior to the Closing Date was or as
of the Closing Date will be, and no food or food ingredients in the Inventory on
the Closing Date will be as of the Closing Date: (i) adulterated or misbranded
within the meaning of the Federal Food, Drug and Cosmetic Act, as amended; (ii)
an article which may not under the provisions of ss. 404 or ss. 505 of such Act
be introduced into interstate commerce; or (iii) adulterated or misbranded
within the meaning of any pure food laws or ordinances of any state or city to
which such articles are shipped or to be shipped. All such Inventory will meet
the Seller's reasonable standards of quality and sanitation and all requirements
of the laws and regulations enforced by the United States Department of
Agriculture. All products processed as of the Closing Date shall be labeled in
accordance with the requirements of the National Labeling and Education Act.
15. Brokerage Commissions. There are no claims for, or rights
to, brokerage commissions or agent's or finder's fees resulting from any action
taken by Seller in connection with the transactions contemplated by this
Agreement.
16. Xxxx-Xxxxx-Xxxxxx. Neither Seller nor any "ultimate
parent" of Seller have sales or assets of $100,000,000.00 or more.
17. No Affiliates. Seller has no affiliates or affiliated
business entities that have a material effect on the Business or the Purchased
Assets except those set forth on Schedule 4.17.
18. Full Disclosure. No representation or warranty of Seller
made in this Agreement, nor any written statement, schedule or certificate
heretofore furnished to Buyer by Seller pursuant hereto, or in connection with
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
necessary to make the statement or facts contained herein or therein not
misleading. Seller has not withheld and will not withhold from Buyer knowledge
of any events, conditions or facts, of which Seller has knowledge, that could
have a Material Adverse Effect.
V. REPRESENTATIONS, WARRANTIES AND COVENANTS OF BUYER
It is the intent of Xxxxx X. Xxxxxx and Levis X. Xxxxxxx to assign
their rights under this Agreement to a yet-to-be-formed a corporation. To the
extent that the following representations, warranties, and covenants apply to
such corporate entity, they contemplate that such corporation will have been
formed and will be the Buyer at Closing. Buyer represents, warrants and
covenants to Seller that:
1. Due Organization and Qualification. At Closing, Buyer shall
be a corporation duly organized, validly existing, in good standing and
qualified to do business under the laws of the Commonwealth of Virginia.
2. Corporate Power and Authority. Before Closing, the Board of
Directors of Buyer shall have duly approved this Agreement and the transactions
contemplated hereby. The execution and delivery of this Agreement and the
performance by Buyer of its obligations hereunder shall have been duly
authorized by all requisite corporate action, and no further action or approval
shall be required in order to permit Buyer to consummate the transactions
contemplated by this Agreement. Buyer shall have full power, authority and legal
right to assume the obligations of this Agreement and to consummate the
transactions contemplated hereby. The assumption and performance of this
Agreement and the consummation of the transactions contemplated hereby in
accordance with the terms hereof will not (a) conflict with the Articles of
Incorporation or the Bylaws of Buyer or (b) violate any provision of any law,
ordinance, regulation, rule, requirement, order, writ, judgment, decree,
contract, agreement, lease, arrangement or commitment to which Buyer is subject
or is a party that, individually or in the aggregate, would have a Material
Adverse Effect upon the ability of Buyer to perform its obligations hereunder
and under the Supply Agreement or the License Agreement.
3. Actions, Suits, Etc.. There are no actions, suits,
proceedings or investigations pending, or to the knowledge of Buyer, threatened
against or affecting Buyer at law or in equity or before any federal, state,
municipal or other instrumentality in which it is sought to restrain or prohibit
or obtain damages in respect of the consummation of the purchase and sale of the
Purchased Assets or the other transactions contemplated hereby. Moreover, Buyer
is, to the best knowledge of Buyer, not in default with respect to any order,
writ, injunction or decree of any court, or Agency with respect to the
consummation of the purchase and sale of the Purchased Assets or the other
transactions contemplated hereby.
4. Consents. No consent, approval, authorization or order of
any court, Agency or any other person is required under any law, ordinance,
regulation, rule, requirement, order, writ, judgment, decree, contract,
agreement, lease, commitment, charter or bylaw applicable to or binding upon
Buyer in order to permit Buyer to consummate the transactions contemplated by
this Agreement and to perform its obligations hereunder and under the Supply
Agreement or the License Agreement.
5. Brokerage Commissions. There are no claims for, or rights
to, brokerage commissions or agent's or finder's fees resulting from any action
taken by Buyer in connection with the transactions contemplated by this
Agreement.
6. Xxxx-Xxxxx-Xxxxxx. Neither Buyer nor any "ultimate parent"
of Buyer have sales or assets of $100,000,000.00 or more.
7. Sophisticated Purchaser. The transactions contemplated in
this Agreement are for the Buyer's own account for the purposes of operating the
Business as a going concern and not with a view towards resale or distribution.
The Buyer acknowledges that, in reliance on the foregoing, the transactions
contemplated hereby have not been registered under any federal or state
securities laws.
VI. COVENANTS OF SELLER
1. Negative Covenants Regarding Conduct of Business. Except as
may be otherwise expressly provided herein, from and after the date of this
Agreement and until the Closing Date, with respect to the Purchased Assets and
the Business, without the consent of Buyer, Seller covenants and agrees that it
will not in respect of the Business or the Purchased Assets:
2. Creation of Obligations. Incur any obligation or liability,
absolute or contingent, except current liabilities incurred, and obligations
under contracts entered into, in the ordinary course of business consistent with
past practice.
3. Encumbrances. Execute, grant, create or suffer any
Encumbrance upon the Purchased Assets.
4. Disposition of Assets. Effect any sale, transfer,
Encumbrance or other disposition of assets and properties that would otherwise
be included in the Purchased Assets, except for sales of Inventories in the
ordinary course of business, except for machinery, equipment, furniture and
fixtures replaced with items of equivalent or greater value, and except for
supplies and other similar assets used or consumed in the ordinary course of
business.
5. Contracts, Licenses, Etc. Amend, modify, assign, transfer,
grant or terminate any contract, agreement, lease, arrangement or commitment
listed in Schedule 4.6. and Schedule 1.2.
6. Rights. Waive, modify or release any rights of material
value to the Business or the Purchased Assets.
7. Affirmative Covenants Regarding Conduct of Business. From
and after the date of this Agreement and until the Closing Date, Seller
covenants and agrees that it will:
8. Ordinary Course of Business. Carry on the operations of
Business only in the usual, regular and ordinary course consistent with good
business practices and with prior practices.
9. Maintenance of Relationships. Use its best efforts to
maintain and preserve the Business and to maintain its present relationships
with customers, suppliers and others having business dealings with the Business.
10. Maintenance of the Purchased Assets. Maintain the
Purchased Assets in good operating repair and condition and maintain the level
of Inventories in accordance with past practices, except as otherwise provided
in this Agreement.
11. Payment of Obligations in Ordinary Course. Pay and
discharge all costs and expenses of carrying on the operations of the Business
and of maintaining and operating the Purchased Assets as they become due and pay
and discharge any such costs and expenses that at the date hereof are past due,
unless contested in good faith.
12. Representations and Warranties. Use its best efforts to
prevent the occurrence of any change or event that would prevent any of the
representations and warranties of Seller contained herein from being true in all
material respects at and as of the Closing Date with the same effect as though
such representations and warranties (in the exact language contained in this
Agreement with appropriate modification of tense in the case of representations
and warranties relating to statements of fact as of specific dates) had been
made at and as of the Closing Date.
13. Maintenance of Records. Maintain its books, accounts, and
records relating to the Business and the Purchased Assets in the usual, regular
and customary manner on a basis consistently applied.
14. Access to and Updating of Information. During reasonable
business hours, afford to the officers, attorneys, accountants, and other
authorized representatives of Buyer, free and full access to the Purchased
Assets and the Business, in order that Buyer may have full opportunity to make a
reasonable investigation with respect to the Purchased Assets, the Business, the
contracts, leases, arrangements and commitments listed in Schedule 4.6 hereto,
the books and records of the Business and their operations, including, without
limitation, fixed asset records, sales records relating to the customers of the
Business, purchase records, and inventory records. Seller will furnish to Buyer
all such further information concerning the Purchased Assets and the Business as
Buyer may reasonably request. Seller will update by amendment or supplement each
of the Schedules referred to herein and any other disclosures made in writing to
Buyer forthwith upon any material change in the information set forth in said
Schedules or other disclosure, and Seller represents and warrants that such
Schedules and such written disclosures, as so amended or supplemented, shall be
true, correct and complete in all material respects as of the date or dates of
such amendments or supplements; provided, however, that the inclusion of any
information in any such amendment or supplement, not included in the original
Schedule at or prior to the date of this Agreement, shall not limit or impair
any rights that Buyer might otherwise have respecting the representations or
warranties of Seller contained in this Agreement.
VII. AGREEMENTS OF SELLER AND BUYER
1. Public Disclosures. Seller and Buyer shall cooperate with
each other and give each other advance notice in respect of any public
announcements or disclosures pertaining to the transaction described herein.
Buyer shall draft the form of public announcement or disclosure pertaining to
this transaction which shall be approved by Seller prior to release.
Notwithstanding the foregoing, nothing in the Section will preclude either party
from making any disclosures required by law or regulation or necessary and
proper in conjunction with the compliance with all applicable federal and state
securities laws and the filing of any tax return or other document required to
be filed with any federal, state, or local governmental body, authority, or
agency.
2. Promotion/Damaged Goods Allowances. In the event that
customers of the Business xxxx Buyer or make deductions against Buyer's
otherwise valid invoices for promotional pricing allowances or damaged goods
applicable to sales of Products produced or sold by Seller, which said
xxxx-backs or deductions shall be the liability of Seller, Buyer will promptly
forward such xxxx to Seller and Seller will, in turn, promptly pay all such
bills or compensate Buyer for any xxxx-back or deduction made by such customer
and Seller shall resolve directly any dispute over such xxxx-back or deduction
directly with its customer.
3. Return of Inventories and Damaged Goods. From and after the
Closing Date, Buyer shall settle in good faith any claims for returns or damaged
goods relating to Products shipped prior to the Closing Date and made by
customers of the Business to Buyer on or after the Closing Date. Seller shall
reimburse Buyer for all costs incurred by Buyer as a result of such returned
Products. Buyer's costs shall include the invoice price for any Products shipped
to a customer in place and stead of the returned Product, plus any reasonable
and customary transportation and handling costs incurred by Buyer.
4. Consumer Claims and Complaints. The parties shall cooperate
and assist each other to assure the expeditious handling of customer claims and
complaints. All customer claims and complaints made with respect to Products
sold by Seller prior to the Closing Date or Products acquired by Buyer from
Seller at the Closing shall be the responsibility of the Seller.
5. Due Diligence Investigation. Buyer may, prior to the
Closing Date, make or cause to be made such investigation of the Business and
properties of the Business and of its financial and legal condition as Buyer
deems necessary or advisable. Seller will permit Buyer and its authorized agents
or representatives, including its independent accountants, to have full access
to the properties, books, and records of the Business at reasonable hours to
review information and documentation relative to the properties, books,
contracts, commitments, and other records of the Business and Assets. If for any
reason the transactions contemplated by this Agreement are not consummated,
Buyer and its representatives will promptly return to Seller all materials and
documents provided by Seller and all copies thereof, and will hold in confidence
all confidential information obtained from Seller, its officers, agents,
representatives, or employees.
6. Assignment to Incorporated Entity. It is the intent of
Xxxxx X. Xxxxxx and Levis X. Xxxxxxx to form prior to Closing a Virginia
corporation to be known as Coddle Roasted Meats, Inc., or such other name as
designated by them (the "Corporation"), and to assign their rights and
obligations under this Agreement and the Transaction Documents (except for the
Guaranty) to the Corporation to buy and hold the Purchased Assets in the name of
the Corporation. Upon the due and proper formation of the Corporation in
accordance with law, Seller hereby consents to such assignment and upon due and
proper execution of resolutions of the Corporation in form reasonably approved
by Seller, Seller will release Xxxxx X. Xxxxxx and Levis X. Xxxxxxx from any
individual liability to Seller under this Agreement and the other Transaction
Documents (except for the Guaranty), provided that nothing herein shall affect
Seller's rights to retain the Nonrefundable Deposit as provided in Section 11.3.
VIII. CONDITIONS TO OBLIGATIONS OF BUYER
The obligations of Buyer under this Agreement are subject to the
satisfaction, or the written waiver thereof by Buyer, of the following
conditions on or prior to the Closing Date:
1. Representations and Warranties of Seller. All of the
representations and warranties of Seller contained in this Agreement shall have
been true and correct when made, and shall be true and correct in all material
respects on and as of the Closing Date, except to the extent that changes shall
have been approved in writing by Buyer.
2. Covenants of Seller. All of the covenants and agreements
herein on the part of Seller to be complied with or performed on or before the
Closing Date, shall have been fully complied with and performed.
3. Seller's Certificates. There shall be delivered to Buyer a
certificate dated as of the Closing Date and signed by Seller to the effect set
forth in Sections 8.1 and 8.2 as they relate to Seller, which certificate shall
have the effect of a representation and warranty made by Seller on and as of the
Closing Date.
4. Certificates of Authorities; Corporate Authorization.
Seller shall have furnished to Buyer (a) a certificate of the State Corporation
Commission dated as of a date not more than twenty days prior to the Closing
Date, attesting to the organization and good standing of Seller, and (b) a copy,
certified by the Secretary or Assistant Secretary of Seller, of resolutions or
minutes duly adopted by the Board of Directors of Seller duly authorizing this
Agreement, the Supply Agreement, and the transactions contemplated hereby.
5. No Material Adverse Changes. There shall not have occurred
any change in the Business, or the Purchased Assets that could have a Material
Adverse Effect, and Seller shall not have suffered any loss (whether or not
insured) by reason of physical damage caused by fire, earthquake, flood, wind,
accident or other calamity, or by reason of any taking by eminent domain or
condemnation, which could have a Material Adverse Effect.
6. Litigation. At the Closing Date, there shall not be pending
or threatened any litigation in any court or any proceeding before any Agency
(a) in which it is sought to restrain or prohibit or obtain damages in respect
of the consummation of the purchase and sale of the Purchased Assets or the
other transactions contemplated hereby, (b) that could, if adversely determined,
result in a Material Adverse Effect, (c) that could, if adversely determined,
affect the right or ability to carry on the Business as now conducted, or (d) as
a result of which, in the reasonable judgment of Buyer, Buyer could be deprived
of the material benefits of its ownership of the Purchased Assets.
7. Satisfactory to Buyer's Counsel. All actions, proceedings,
instruments and documents required to carry out this Agreement or incidental
thereto, and all other related matters shall have been satisfactory to Payne,
Gates, Xxxxxxxx & Radd, P.C., counsel for Buyer.
8. Opinion of Seller's Counsel. Buyer shall have received an
opinion of McGuire, Woods, Battle, and Xxxxxx, L.L.P., counsel for Seller, dated
the Closing Date, to the effect that: (a) Seller is a corporation duly
organized, validly existing and in good standing under the laws of the
Commonwealth of Virginia, (b) each of Seller, Mules, and Xxxxxx has full power,
authority and legal right to enter into this Agreement, the License Agreement,
the Lease Agreement, the Supply Agreement, the Guaranty, the Noncompete
Agreements, the Assignment Agreement, and the Assumption Agreement
(collectively, the "Transaction Documents") to which it or he is a party and to
consummate the transactions contemplated hereby and thereby; (c) all corporate
actions required to be taken by Seller to approve the "Transaction Documents" to
which it is a party, and the transactions contemplated hereby and thereby and to
authorize execution and delivery of the Transaction Documents to which it is a
party and the performance by Seller of its obligations hereunder and thereunder,
have been duly and properly taken, and no further action or approval is required
in order to permit Seller to consummate the transactions contemplated by the
Transaction Documents; (d) the Transaction Documents have been duly executed and
delivered by Seller, Mules, and Xxxxxx, as applicable, and constitute legal,
valid and binding obligations of Seller, Mules, and Xxxxxx, as applicable,
enforceable in accordance with their terms (subject to the availability of the
discretionary remedy of specific performance and, as to enforcement of remedies,
to applicable bankruptcy, insolvency, reorganization, moratorium and similar
laws from time to time in effect but excluding any presently pending proceedings
and the exercise by a court of its general powers of equity); (e) the
instruments of transfer of the Purchased Assets from Seller to Buyer have been
duly authorized, executed and delivered, and are legal, valid and binding
instruments enforceable in accordance with their terms (subject to the
availability of the discretionary remedy of specific performance and, as to
enforcement of remedies, to applicable bankruptcy, insolvency, reorganization,
moratorium and similar laws from time to time in effect but excluding any
presently pending proceedings and the exercise by a court of its general powers
of equity); (f) the execution and delivery of the Transaction Documents by
Seller, Mules, and Xxxxxx and the performance by each of them of their
obligations thereunder do not constitute a violation of or a default under
Seller's certificate or articles of incorporation or bylaws, or any writs,
orders, judgments or decrees by which it is bound and of which counsel has
actual knowledge; and (g) such counsel has no knowledge of any action, suit,
proceeding or investigation that would be required by the terms of Section 4.8
to be listed in Schedule 4.8 that is not listed in Schedule 4.8. In the event of
any dispute between the parties arising from the Transaction Documents or the
transactions contemplated therein, counsel to Seller shall not be disqualified
from representing the Seller, Mules or Xxxxxx in any dispute resolution
proceeding by virtue of having rendered the referenced opinion letter.
9. Transaction Documents. Seller shall have executed and
delivered to Buyer each of the Transaction Documents.
10. Individual Noncompete Agreements. Each of Xxxxxx Mules and
Xxxxx Xxxxxx shall have executed and delivered to Buyer a Noncompete Agreement
in the form attached hereto as Exhibits F-1 and F-2.
11. Release of Encumbrances. All Encumbrances on the Purchased
Assets (other than any imposed or permitted by lenders to Buyer) shall have been
released.
12. Due Diligence Investigation. The results of any due
diligence investigations by Buyer of the Business and the Purchased Assets shall
be satisfactory to Buyer in its reasonable discretion.
13. Financing. Buyer's financiers shall have approved all
necessary documents and given their respective authorization to close and
advance the funding.
14. Union Matters. Buyer shall be satisfied that there are no
material unresolved disputes or issues between Seller and the union representing
Seller's employees in connection with effecting the transactions contemplated by
this Agreement.
IX. CONDITIONS TO OBLIGATIONS OF SELLER
The obligations of Seller under this Agreement are subject to the
satisfaction, or the written waiver thereof by Seller, of the following
conditions on or prior to the Closing Date:
1. Representations and Warranties of Buyer. All of the
representations and warranties of Buyer contained in this Agreement shall have
been true and correct when made, and shall be true and correct in all material
respects on and as of the Closing Date, except to the extent that changes shall
have been approved in writing by Seller.
2. Covenants of Buyer. All of the covenants and agreements
herein on the part of the Buyer to be complied with or performed on or before
the Closing Date shall have been fully complied with and performed.
3. Buyer's Certificates. There shall be delivered to Seller a
certificate dated as of the Closing Date and signed by the President of Buyer to
the effect set forth in Sections 9.1 and 9.2 as they relate to Buyer, which
certificate shall have the effect of a representation and warranty made by Buyer
on and as of the Closing Date.
4. Certificates of Authorities. Buyer shall have furnished to
Seller (a) a certificate of the State Corporation Commission dated as of not
more than twenty days prior to the Closing Date, attesting to the organization
and good standing of Buyer, and (b) a copy, certified by the Secretary or an
Assistant Secretary of Buyer, of resolutions duly adopted by the Board of
Directors of Buyer duly authorizing this Agreement, the Supply Agreement and the
transactions contemplated hereby and thereby.
5. Injunctions. At the Closing Date, there shall not be in
effect any injunctions or restraining orders restraining or prohibiting the
consummation of the purchase and sale of the Purchased Assets or the other
transactions contemplated hereby.
6. Satisfactory to Seller's Counsel. All actions, proceedings,
instruments and documents required to carry out this Agreement or incidental
thereto and all other related legal matters shall have been satisfactory to
McGuire, Woods, Battle & Xxxxxx, L.L.P.
7. Opinion of Counsel to Buyer. Seller shall have received an
opinion from Payne, Gates, Xxxxxxxx & Radd, P.C., counsel for Buyer, Xxxxx X.
Xxxxxx ("Xxxxxx"), and Levis X. Xxxxxxx ("Xxxxxxx"), dated the Closing Date, to
the effect that (a) Buyer is a corporation duly organized, validly existing and
in good standing under the laws of the Commonwealth of Virginia; (b) Buyer has
full power, authority and legal right to enter into the Transaction Documents
and to consummate the transactions contemplated hereby and thereby; (c) the
execution and delivery of the Transaction Documents, and the performance by
Buyer of its obligations hereunder and thereunder, have been duly authorized by
all requisite corporate action, and no further action or approval is required in
order to permit Buyer to consummate the transactions contemplated by the
Transaction Documents; (d) the Transaction Documents have been duly executed by
Buyer and constitute valid and binding obligations of Buyer, and the Guaranty
has been duly executed by Xxxxx X. Xxxxxx and Levis X. Xxxxxxx, and the
Transaction Documents and the Guaranty are enforceable in accordance with their
terms (subject to the availability of the discretionary remedy of specific
performance and, as to the enforcement of remedies, to applicable bankruptcy,
insolvency, reorganization, moratorium and similar laws from time to time in
effect but excluding any presently pending proceedings and the exercise by a
court of its general powers of equity); and (e) the execution and delivery of
the Transaction Documents by Buyer and the performance by Buyer of its
obligations thereunder do not constitute a violation of or a default under their
respective certificates or articles of incorporation or bylaws, or any writs,
orders, judgments or decrees by which it is bound and of which counsel has
actual knowledge. In the event of any dispute between the parties arising from
the Transaction Documents or the transactions contemplated therein, counsel to
Buyer shall not be disqualified from representing Buyer, Xxxxxx or Xxxxxxx in
any dispute resolution proceeding by virtue of having rendered the referenced
opinion letter.
8. Transaction Documents. Buyer shall have executed and
delivered to Seller each of the Transaction Documents.
9. Guaranty. Xxxxx X. Xxxxxx and Levis X. Xxxxxxx shall have
executed and delivered to Seller the Guaranty.
10. Financing. Buyer's financiers shall have approved all
necessary documents and given their respective authorization to close and
advance the funding.
11. Union Matters. Seller shall be satisfied, in its sole
discretion, that there are no material unresolved disputes or issues between
Seller and the union representing Seller's employees in connection with
effecting the transactions contemplated by this Agreement.
X. INDEMNIFICATION
1. Buyer's Losses. Seller agrees to indemnify Buyer and save
and hold it harmless from, against and in respect of any and all damages
(including, without limitation, amounts paid in settlement with Seller's
consent), losses, obligations, liabilities, liens, deficiencies, costs and
expenses, including, without limitation, reasonable attorney's fees and costs
incurred to comply with injunctions and other court and Agency orders, and other
costs and expenses incident to any suit, action, investigation, claim or
proceeding or to establish Buyer's right to indemnification hereunder (herein
referred to collectively as the "Buyer's Losses") suffered, sustained, incurred
or required to be paid by Buyer by reason of (a) the failure by Seller to comply
with applicable laws relating to bulk transfers, including, without limitation,
the provisions of the Uniform Commercial Code of the Commonwealth of Virginia;
(b) any representation or warranty made by Seller in or pursuant to this
Agreement or the other Transaction Documents being untrue or incorrect in any
respect; (c) any failure by Seller, Mules, or Xxxxxx to observe or perform its
covenants and agreements set forth in this Agreement or the other Transaction
Documents; (d) any liability for product warranties or defective products
arising from sales of finished goods manufactured and sold by Seller prior to
the Closing Date; (e) any failure by Seller to perform its obligations in
connection with any of its Employee Benefit Plans as defined in Section 3(3) of
ERISA; or (f) any failure by Seller to satisfy and discharge any other debt,
contract, agreement, liability, obligation, commitment, restriction, disability
or duty, whether direct or indirect, fixed, contingent or otherwise, not
expressly assumed by Buyer pursuant to this Agreement and the Assumption
Agreement.
2. Sellers' Losses. Buyer agrees to indemnify Seller and save
and hold it harmless from, against, for and in respect of any and all damages
(including, without limitation, amounts paid in settlement with Buyer's
consent), losses, obligations, liabilities, claims, deficiencies, costs and
expenses, including, without limitation, reasonable attorneys' fees and costs
incurred to comply with injunctions and other court and Agency orders, and other
costs and expenses incident to any suit, action, investigation, claim or
proceeding or to establish Seller's right to indemnification hereunder (herein
referred to collectively as "Seller's Losses") suffered, sustained, incurred or
required to be paid by Seller by reason of (a) any representation or warranty
made by Buyer in or pursuant to this Agreement or the other Transaction
Documents being untrue or incorrect in any respect, (b) any failure by Buyer to
observe or perform its covenants and agreements set forth in this Agreement or
the other Transaction Documents, or any failure by Xxxxxx or Xxxxxxx to perform
his covenants and agreements in the Guaranty, (c) any liability for product
warranties or defective products arising from sales of finished goods
manufactured or sold by Buyer after the Closing Date, or (d) any failure by
Buyer to satisfy and discharge any liability or obligation expressly assumed by
Buyer pursuant to this Agreement and the Assumption Agreement.
3. Notice of Loss; Indemnified Party's Negligence.
Notwithstanding anything herein contained, the Indemnifying Party (as
hereinafter defined in Section 10.4) shall not have any liability under the
indemnity provisions of this Agreement with respect to a particular matter
unless a notice setting forth in reasonable detail the breach that is asserted
has been given to the Indemnifying Party and, in addition, if such matter arises
out of a suit, action, investigation or proceeding, such notice is given
promptly after the Indemnified Party (as hereinafter defined in Section 10.4)
shall have been given notice of the commencement of the suit, action,
investigation or proceeding. Notwithstanding the preceding sentence, failure of
the Indemnified Party to give notice hereunder shall not release the
Indemnifying Party from its obligations under this Article X, except to the
extent the Indemnified Party is actually prejudiced by such failure to give
notice. With respect to Buyer's Losses (as defined below), Seller shall be the
Indemnifying Party and Buyer shall be the Indemnified Party. With respect to
Seller's Losses, Buyer shall be the Indemnifying Party and Seller shall be the
Indemnified Party. An Indemnified Party's failure to investigate or lack of due
diligence occurring for any reason whatsoever, shall not (a) constitute a
defense to any action or proceeding brought by the Indemnified Party to enforce
his or its rights under this Article X, (b) excuse performance by the
Indemnifying Party of its obligations under this Article X, or (c) entitle the
Indemnifying Party to any right of setoff or counterclaim against amounts owed
under this Article X.
4. Right to Defend. Upon receipt of notice of any suit,
action, investigation, claim or proceeding for which indemnification might be
claimed by an Indemnified Party, the Indemnifying Party shall be entitled
promptly to defend, contest or otherwise protect against any such suit, action,
investigation, claim or proceeding at its own cost and expense. The Indemnified
Party shall have the right, but not the obligation, to participate at its own
expense in a defense thereof by counsel of its own choosing, but the
Indemnifying Party shall be entitled to control the defense unless the
Indemnified Party has relieved the Indemnifying Party from liability with
respect to the particular matter or the Indemnifying Party fails to assume the
defense of the matter. If the Indemnifying Party fails to defend, contest or
otherwise protect in a timely manner against any such suit, action,
investigation, claim or proceeding, the Indemnified Party shall have the right,
but not the obligation, to defend, contest or otherwise protect against the
same, and make any compromise or settlement thereof and recover the entire cost
thereof from the Indemnifying Party including reasonable attorneys' fees,
disbursements and all amounts paid as a result of such suit, action,
investigation, claim or proceeding or the compromise or settlement thereof.
However, if the Indemnifying Party undertakes the defense of such matters, the
Indemnified Party shall not, so long as the Indemnifying Party does not abandon
the defense thereof, be entitled to recover from the Indemnifying Party any
legal or other expenses subsequently incurred by the Indemnified Party in
connection with the defense thereof other than the reasonable costs of
investigation undertaken by the Indemnified Party with the prior written consent
of the Indemnifying Party.
5. Cooperation. Seller and Buyer, and each of their
affiliates, successors and assigns shall cooperate with each other in the
defense of any suit, action, investigation, proceeding or claim by a third party
and, during normal business hours, shall afford each other access to their books
and records and employees relating to such suit, action, investigation,
proceeding or claim and shall furnish each other all such further information
that they have the right and power to furnish as may reasonably be necessary to
defend such suit, action, investigation, proceeding or claim.
XI. TERMINATION
1. Termination. This Agreement may be terminated and abandoned
at any time prior to or on the Closing Date:
2. Mutual Consent. By the mutual consent in writing of Buyer
and Seller.
3. By Buyer. By Buyer in writing if any of the conditions to
the obligations of Buyer contained herein shall not have been satisfied or, if
unsatisfied, waived as of the Closing Date.
4. By Seller. By Seller in writing if any of the conditions to
the obligations of Seller herein contained shall not have been satisfied or, if
unsatisfied, waived as of the Closing Date.
5. Closing Delayed. By Buyer or Seller in writing if the
Closing shall not have occurred by April 15, 1997.
6. No Further Force or Effect. In the event of termination and
abandonment of this Agreement pursuant to the provisions of Section 11.1, this
Agreement shall be of no further force or effect, except for Sections 10.1,
10.2, 11.3, and the post-termination provisions of Section 7.5, which shall not
be affected by termination of this Agreement.
7. Non-Refundable Deposit. In consideration of Seller's
execution of the Letter of Intent dated March 3, 1997, and its Agreement to the
"No Shop" Provision as provided in paragraph 13 therein, Buyer has provided
Seller with a Non-Refundable Deposit of Fifty Thousand Dollars ($50,000.00). The
Non-Refundable Deposit shall be applied against payment of the Base Price as
provided in Section 2.2 of this Agreement. Buyer acknowledges and agrees that in
consideration of and in reliance upon the Non-Refundable Deposit, Seller
declined the opportunity to enter into a letter of intent with another
prospective purchaser, and that whether or not the transaction contemplated by
this Agreement closes, the Non-Refundable Deposit is, except in the event of
Seller's material breach, Act of God, or Material Adverse Change in the Business
or the Purchased Assets not reasonably foreseeable by Buyer, fully
non-refundable and shall be deemed to be liquidated damages in full payment for
Seller's costs, efforts, and lost business opportunities in connection with the
Letter of Intent, this Agreement, and the transactions contemplated thereby.
XII. MISCELLANEOUS
1. Expenses. Each party will bear its own legal, accounting
and other costs incurred in connection with the transaction contemplated hereby.
2. Notices. All notices, requests or other communications
hereunder shall be in writing, addressed to Seller or Buyer, at the following
addresses:
(i) If to Seller: with copy to:
Xx. Xxxxxx Mules, Chairman Xxxxxxx X. Xxxxxxx, Esquire
Xxxxxxxx'x Foods, Inc. McGuire, Woods, Battle and Xxxxxx, L.L.P.
X.X. Xxx 0000 Xxxxx Xxxxx Xxxxxx - Xxxxx 0000
000 Xxxxxxxxxx Xxxxxx 000 Xxxx Xxxx Xxxxxx
Xxxxxxxxxx, XX 00000 Xxxxxxx, XX 00000-0000
Telephone (000) 000-0000 Telephone: (000) 000-0000
Telecopier: (000) 000-0000
(ii) If to Buyer: with copy to:
Xx. Xxxxx X. Xxxxxx Xxxxxxx X. Xxxxx, Esquire
000 Xxxxxx Xxxx Xxxxx, Xxxxx, Xxxxxxxx & Radd, P.C.
Xxxxxxxx Xxxxx, XX 00000 Attorneys and Counsellors at Law
Fifteenth Floor, Dominion Tower
Telephone: (000) 000-0000 000 Xxxxxxxxx Xxxxx
Xxxxxxx, XX 00000
Telephone: (000) 000-0000
Telecopier: (000) 000-0000
The address of either party may be changed by giving notice in writing at any
time to the other party. Any notice to be given under this Agreement shall be
deemed duly given if (i) delivered personally, (ii) sent by telecopy and
acknowledged by recipient, (iii) delivered by overnight express, or (iv) sent by
United States registered or certified mail, postage prepaid. Any notice that is
delivered personally, or sent by telecopy or overnight express in the manner
provided herein shall be deemed to have been duly given to the party to whom it
is directed upon actual receipt (and, in the case of telecopy acknowledgment) by
such party. Any notice that is addressed and mailed in the manner provided
herein shall be conclusively presumed to have been given to the party to which
it is addressed at the close of business, local time of the recipient, on the
third day after it is so placed in the mail.
3. Entire Agreement; Modification and Waiver. This Agreement
sets forth all of the promises, covenants, agreements, conditions and
understandings between the parties hereto and supersedes all prior and
contemporaneous agreements and understandings, inducements or conditions,
expressed or implied, oral or written. This Agreement may be amended, modified,
superseded or canceled and any of the terms, covenants, representations,
warranties or conditions hereof or any breach thereof may be waived only in
writing signed by Sellers and Buyer, or in the case of a waiver, by the party
waiving compliance. No waiver by any party of any condition, or the breach of
any term, covenant, representation or warranty contained in this Agreement,
whether by conduct or otherwise, in any one or more instances, shall be
construed as a further or continuing waiver of any such condition or breach or a
waiver of any other condition or of the breach of any other term, covenant,
representation or warranty set forth in this Agreement.
4. Governing Law. This Agreement shall be governed by, and
construed and enforced in accordance with, the laws of the Commonwealth of
Virginia.
5. Captions. The captions of the various Articles and Sections
are for convenience of reference only and shall not affect the interpretation of
the provisions hereof.
6. Successors and Assigns. This Agreement may not be assigned
by any party except with the prior written consent of the other parties. This
Agreement, and all of the terms, covenants and representations, or warranties
and conditions hereof, shall be binding upon, and inure to the benefit and be
enforceable by, the parties hereto and their successors and assigns. Nothing in
this Agreement, express or implied, is intended to confer or shall confer upon
any person other than the parties hereto, their successors and permitted assigns
any rights or remedies under or by reason of this Agreement.
7. Survival. All covenants and agreements set forth in this
Agreement, or any agreement furnished pursuant hereto, shall survive the Closing
and any investigation made by or in behalf of any party hereto. All
representations and warranties set forth in this Agreement, or any schedule or
document furnished pursuant hereto, shall survive the Closing and any
investigation made by or in behalf of any party hereto for a period of one year
from the Closing Date; provided, however, that the representations and
warranties in the first sentence of Section 4.3 shall survive indefinitely,
Section 4.12 shall survive until the statutes of limitations applicable to the
matters covered by such Section have expired, running from the Closing Date.
8. Schedules and Certificates. All statements contained in any
disclosure schedule, certificate or other instrument delivered by or on behalf
of the parties hereto, or in connection with the transactions contemplated
hereby, are an integral part of this Agreement, and shall be deemed
representations and warranties hereunder.
9. Facts "Known" to a Corporation. Whenever a representation
or warranty is made herein as being "to the best of knowledge," "to the
knowledge of," or "known" to a party, it is understood and agreed that an
individual will be deemed to have "knowledge" of a particular fact or other
matter if: (a) such individual is actually aware of such fact or other matter;
or (b) a prudent individual could be expected to discover or otherwise become
aware of such fact or other matter in the course of conducting a reasonably
comprehensive investigation concerning the existence of such fact or other
matter. A party, person, or entity (other than an individual) will be deemed to
have "knowledge" of a particular fact or other matter if any individual who is
serving, or who has at any time served, as a director, officer, partner,
executor, or trustee of such party, person, or entity (or in any similar
capacity) has, or at any time had, knowledge of such fact or other matter.
10. Severability. If any provision or provisions of this
Agreement or any portion of any provision hereof, shall be deemed invalid or
unenforceable pursuant to a final determination of any court of competent
jurisdiction or as a result of future legislative action, such determination or
action shall be construed so as not to affect the validity or enforceability
hereof and shall not affect the validity or effect of any other portion hereof.
11. Bulk Transfer Laws. Buyer acknowledges that Seller will
not comply with the provisions of any bulk transfer laws of any jurisdiction in
connection with the transactions contemplated by this Agreement.
IN WITNESS WHEREOF, the parties have duly executed or caused this
Agreement to be duly executed by their authorized officials as of the day and
year first above written.
XXXXXXXX'X FOODS, INC.
By: /S/ Xxxxxx X. Xxxxxxxxx
---------------------------
Its: Senior Vice President
/s/ Xxxxx X. Xxxxxx
---------------------------
/s/ Levis X. Xxxxxxx
---------------------------
/s/ Xxxxxx X. Mules
---------------------------
/s/ Xxxxx Xxxxxx
---------------------------
SCHEDULES
1.1A Purchased Assets
1.1B Excluded Assets
1.2 Assumed Purchase Orders
2.3 Wholesale Prices for Finished Goods
4.3 Material Assets Not Conveyed
4.6 Contracts
4.8 Litigation
4.9A Non-Compliance with Laws
4.9B Material Permits
4.11 Taxes
4.12 Consents
4.17 Affiliates
EXHIBITS
A Products
B Promissory Note
C Guaranty of Xxxxx Xxxxxx
D Product Supply Agreement
E License Agreement
F Xxxxxxxx'x Noncompete Agreement
F1 Mules Noncompete Agreement
F2 Xxxxxx Noncompete Agreement
G Lease Agreement
H Assumption Agreement
I Assignment Agreement
EXHIBIT A TO ASSET PURCHASE AGREEMENT
"Products" means cooked roast beef, cooked and raw corn beef, cooked pastrami,
cooked pot roast, cooked Philly shave steak, cooked meat loaf, cooked pork and
beef marinated products, and sweet pickle corned beef, including without
limitation, the products listed on the attached Manufacturing Inventory Value
Report Count.
