ASSET PURCHASE AGREEMENT
THIS AGREEMENT is made and entered this 31st day of January,
1997, by and among ATLANTA PROVISION COMPANY, INC., a Georgia
corporation (the "Company"), and COLORADO BOXED BEEF COMPANY, a
Florida corporation ("Buyer").
W I T N E S S E T H:
WHEREAS, the Company is engaged in business as a distributor
of meat, poultry and seafood to retail food outlets, meat
wholesalers and restaurants (the "Subject Business"); and
WHEREAS, Buyer wishes to purchase, and the Company wishes to
sell, certain of the assets owned and employed by the Company in
connection with the Subject Business on the terms and conditions
set forth herein;
NOW, THEREFORE, the parties hereto, in consideration of the
mutual promises hereinafter set forth, do promise and agree as
follows:
1. Purchase and Sale of Assets.
1.1 Purchased Assets. At the Closing (as hereinafter
defined), the Company will sell, transfer, assign, convey and
deliver to Buyer, and Buyer will purchase, accept and receive the
following assets of the Company (collectively, the "Purchased
Assets"):
(a) all accounts receivable, employee loans, notes receivable
and other receivables, as specifically identified on Schedule
1.1(a) (excluding the Excluded Receivables as defined below), but
only as such exist at the close of business on January 31, 1997
(the "Effective Time") and are identified on a schedule to the
Closing Statement (as defined below) (the "Receivables"), and all
goodwill associated therewith;
(b) all inventories, raw materials, work in progress and
finished products, whether on hand or in transit, as specifically
identified on Schedule 1.1(b), but only as such exist at the
Effective Time and are identified on a schedule to the Closing
Statement (the "Inventory");
(c) all business permits, licenses and regulatory approvals
currently utilized by the Company, which are specifically
identified on Schedule 1.1(c) (the "Necessary Permits"), to the
extent they are assignable to Buyer;
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(d) all rights of the Company under unfilled sales orders
with customers of the Subject Business or purchase orders with
suppliers of the Subject Business, in each case to the extent
assignable to Buyer;
(e) All rights of the Company under equipment leases, service
agreements and other agreements listed on Schedule 1.1(e)
(collectively, the "Operating Agreements");
(f) all machinery, equipment, furniture, information systems,
automobiles, trailers, tools and other fixed assets of the Company
specifically identified on Schedule 1.1(f) (the "Machinery,
Equipment and Furniture");
(g) the right to use and copy all financial and operating
records related to the Subject Business, including, without
limitation, all customer lists and customer records, books of
account, related computer software and personnel records, as set
forth in Section 7.2 below (collectively, the "Business Records");
(h) all supplies, prepaid expenses and security deposits
specifically identified on Schedule 1.1(h), but only as such exist
at the Effective Time and are identified on a schedule to the
Closing Statement (the "Supplies");
(i) all United States, state and foreign trademark rights,
including trademark applications, trademark registrations, trade
names, brand names and interests thereunder as set forth on
Schedule 1.1(i) (collectively, the "Proprietary Rights");
(j) all defenses related, directly or indirectly, to the
Assumed Liabilities (as defined below);
(k) all rights of the Company under written or oral
agreements, contracts and commitments to which the Company is a
party, and which the Company could terminate on thirty (30) days or
less notice without liability to the Company (the "Smaller
Commitments"), to the extent they are assignable to Buyer;
(l) the right to use "lockbox" account No. 198929 currently
in the name of the Company and maintained by NationsBank, N.A.
(South) ("NationsBank");
(m) the right to use "disbursement" accounts No. 010-114-1324
and 010-711-6650 currently in the name of the Company and
maintained by Nationsbank;
(n) the right to use the Company's name, and derivations
thereof, as set forth in Section 8.5; and
(o) all rights of the Company to utilize its existing phone
numbers and post office boxes.
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1.2 Assumed Liabilities. At the Closing, the Buyer will
assume and agree to pay, perform and discharge the following debts,
obligations, contracts and liabilities of the Company
(collectively, the "Assumed Liabilities"), and no others:
(a) all accounts payable and trade payables specifically
identified on Schedule 1.2(a), but only as such exist at the
Effective Time and are identified on a schedule to the Closing
Statement (the "Payables");
(b) all obligations and liabilities pertaining to the
accruals and outstanding checks specifically identified on Schedule
1.2(b), but only as such exist at the Effective Time and are
identified on a schedule to the Closing Statement (the "Accruals");
(c) all obligations and liabilities of the Company under
sales orders and purchase orders specifically identified on
Schedule 1.2(c), but only as such exist at the Effective Time and
are identified on a schedule to the Closing Statement
(d) all obligations and liabilities of the Company under the
Operating Agreements;
(e) the contracts reflected on Schedule 4.9(b) and
liabilities of the Company thereunder to the extent such
liabilities are identified on Schedules 1.2(a) or 1.2(b), which
are in existence at the Effective Time and were incurred in the
ordinary course of business or which arise thereunder after the
Effective Time (such contracts and liabilities are referred to
collectively as the "Employee Benefit Liabilities"), and also
including any obligations that arise by operation of the
Consolidated Omnibus Budget Reconciliation Act of 1985 ("COBRA"),
the National Labor Relations Act and the Labor Management Relations
Act with respect of such benefits;
(f) all obligations and liabilities of the Company relating
to returns of products in the ordinary course of business in
accordance with past practices (but not including any product
liability claims related to such returns); and
(g) all obligations and liabilities of the Company arising
under the Smaller Commitments to the extent that such liabilities
are identified on Schedules 1.2(a) or 1.2(b), and all obligations
and liabilities arising pursuant to the Smaller Commitments on or
after the Effective Time.
1.3 Excluded Assets and Liabilities. The Purchased Assets
specifically exclude cash and cash accounts, the Company's interest
in Fieldstone Meats of Alabama, unamortized loan fees, any real
estate owned by the Company, and the troubled accounts and notes
receivable specifically described on Schedule 1.3 (the "Excluded
Receivables"). The Assumed Liabilities specifically, and without
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limitation, exclude all liabilities of the Company not specifically
identified as an Assumed Liability, all liabilities for personal
property taxes, business license fees or taxes, and real estate
taxes, and any liabilities of the Company to The Xxxxx Corporation
("Xxxxx"), Entree Corporation ("Entree"), or any officers,
directors or stockholders of the Company, Xxxxx, Entree, or any
entity related to said corporations which are not identified on
Schedule 1.2(b) (collectively, the "Excluded Liabilities").
2. Purchase Price.
2.1 Amount. The Purchase Price shall equal (i) one hundred
percent (100%) of the aggregate cost of the Inventory as reflected
in the Closing Statement (defined in Section 2.2 below), plus (ii)
one hundred percent (100%) of the aggregate face amount of the
Receivables as reflected in the Closing Statement, plus (iii) the
value of the Machinery, Equipment and Furniture as reflected on
Schedule 1.1(f), and the Supplies as reflected on the Closing
Statement, minus (iv) the value of the Payables as reflected on the
Closing Statement, minus (v) the value of the Accruals as reflected
on the Closing Statement; and minus (vi) Three Hundred Thousand
Dollars ($300,000.00).
2.2 Closing Statement. On or before 10:00 A.M. on February
3, 1997, the Company and Buyer shall agree upon a Closing Statement
detailing the Purchase Price and reflecting an Inventory physical
count, changes in Receivables, Payables, Accruals and Supplies, all
as of the Effective Time, and based upon the review of Company and
bank records and other matters conducted by representatives of
Company and Buyer after the Effective Time and prior to February 3,
1997. The closing of this transaction shall be effective as of the
Effective Time and, if closed, Buyer shall be responsible for the
Assumed Liabilities and shall have title to the Purchased Assets as
of the Effective Time. The value of the Inventory, Payables and
Supplies as reflected on the Closing Statement shall be final,
conclusive and binding on the parties, and there shall be no post-
Closing adjustment of said value.
2.3 Payment at Closing. At Closing, Buyer shall pay to the
Company, in immediately available funds, the Purchase Price, minus
the Escrow Amount (as defined below), and shall deposit the Escrow
Amount with the Escrow Agent identified in Section 2.4 below.
2.4 Accounts Receivable and Indemnification Escrow. At
Closing, Buyer shall deposit a sum equal to the amount of the
Receivables plus the Excluded Receivables, multiplied by ten
percent (10%), and then minus the amount of the Excluded
Receivables (the "Escrow Amount") with Reliance Trust Company, as
escrow agent (the "Escrow Agent"), to be held in accordance with
the Escrow Agreement substantially in the form of Schedule 8.2(e).
After Closing, there shall be no adjustment for the value of the
Receivables, except for the procedure set forth in Section 8.4 and
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the Escrow Agreement as to specific accounts, or portions thereof,
constituting portions of the Receivables.
3. Allocation of Purchase Price. Company and Buyer shall
allocate the Purchase Price among the Purchased Assets in
accordance with Section 1060 of the Internal Revenue Code of 1986,
as amended (the "Code"), and Schedule 3 attached. Buyer, the
Company, and any persons or entities related to the Company, shall
make all filings and reports required by Section 1060 of the Code
on a basis consistent with Schedule 3.
4. Representations and Warranties of the Company. The
Company represents and warrants as follows:
4.1 Corporate.
(a) The Company is a corporation incorporated, organized and
validly existing and in good standing under the laws of Georgia and
has all requisite power and authority to own and operate the
business and property of the Subject Business as and where it is
now being conducted, and to perform its respective obligations
under this Agreement and the instruments contemplated herein.
(b) The execution, delivery and performance of this Agreement
and the consummation of the transactions contemplated hereby has
been duly authorized by the Board of Directors and shareholders of
the Company and no other corporate action by the Company is
necessary to authorize such actions.
(c) This Agreement is, and the agreements, instruments and
documents to be executed by the Company pursuant hereto or in
connection herewith will be, when executed by it, the valid and
legally binding obligations of the Company, enforceable in
accordance with their respective terms, except to the extent
limited by bankruptcy, insolvency, reorganization, moratorium or
similar laws affecting creditors' rights generally or by general
equitable principles.
(d) All of the outstanding shares of stock of the Company
are, and as of the Closing will be, owned by those persons or
entities set forth on Schedule 4.1(d).
4.2 Financial.
(a) Attached hereto as Schedule 4.2(a) are copies of the
audited financial statements of the Company as of March 30, 1996,
and for the year then ended (the "Company Year-End Financials").
These financial statements present fairly the assets and
liabilities of the Company in accordance with generally accepted
accounting principles, consistently applied. There is no material
obligation, claim or liability which is not properly reflected or
reserved in the Company Year-End Financials.
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(b) Attached hereto as Schedule 4.2(b) are copies of the
internal financial statements of the Company as of January 4, 1997
(the "Company Current Financial Statements"). The Company Current
Financial Statements present fairly the assets and liabilities of
the Company in accordance with generally accepted accounting
principles consistently applied (except for the omission of
footnotes and subject to year-end adjustments) and are consistent
with past financial statements of the Company.
(c) Except as disclosed in Schedule 4.2(a), (b) and (c),
since January 4, 1997, there has not been:
(1) any material adverse change in the financial
condition or the operations of the Subject Business;
(2) any sale, pledge or assignment of material assets or
properties of the Company, except for assets disposed of in
the ordinary course of business;
(3) any damage, theft or destruction to the Purchased
Assets, whether covered by insurance or not, which has had or
could be reasonably anticipated to have a material adverse
effect on the Subject Business;
(4) any change in the Company's accounting methods or
practices, including, without limitation, any change in the
practice and procedures regarding inventory costing, accounts
receivable and accounts payable;
(5) any general or uniform increase in the salaries,
wages or benefits of employees of the Company, or any increase
in the salaries or benefits of the ten (10) most highly
compensated employees of the Company;
(6) incurred any obligation or liability (whether
accrued, absolute, contingent or otherwise, and whether due or
to become due), except in the ordinary course of its business;
and
(7) any default in any material obligation of the
Company.
4.3 Title to and Condition of Property.
(a) The Company has and will have as of the Closing good and
marketable title to all of the Purchased Assets free and clear of
all liens, encumbrances or obligations of any kind, nature or
description, and whether fixed or contingent, except those set
forth in Schedule 4.3(a) hereto and which shall be discharged or
released at or prior to Closing by the Company or assumed at
Closing by Buyer.
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(b) Except as set forth in Section 4.3(a), no representation
or warranty is made as to the condition of the Machinery, Equipment
and Furniture, or the Supplies, and the property subject to the
Operating Agreements. Said assets shall be sold to Buyer "as is"
and "where is," with all faults.
4.4 Contracts and Commitments.
(a) Schedule 4.4(a) attached hereto contains a list of all
written or oral agreements, contracts and commitments (except for
sales orders, purchase orders and the Smaller Commitments) to which
the Company is a party. The Company is not, and to the Company's
knowledge no other party is, in breach of any provisions of, and is
not in default in any respect under the terms of, any such
agreement, contract or commitment.
(b) All sales orders and purchase orders to which the Company
is, as of this date, a party are set forth on Schedule 1.2(c)
attached hereto.
(c) The Company is not a party to or bound by any contracts
with officers, employees, agents, consultants or distributors of
the Subject Business, and the Company has no obligations for
increases in compensation to employees other than pursuant to the
Collective Bargaining Agreement, which is not a part of the Assumed
Liabilities.
4.5 No Breach of Statute or Contract. Except as set forth in
Schedule 4.5 hereto, neither the execution and delivery of this
Agreement, nor compliance with the terms and provisions hereof, on
the part of the Company will (i) violate any provision of the
articles of incorporation or by-laws of the Company, (ii) cause the
Company to breach any statute, ordinance or regulation of any
governmental authority, domestic or foreign, or (iii) conflict with
or result in a breach of any of the terms, conditions or provisions
of any agreement or instrument to which the Company is a party or
by which it may be bound, or constitute a default thereunder.
4.6 Litigation. Except as set forth in Schedule 4.6, there
is no suit, action, grievance, workmen's compensation claim,
unemployment compensation claim, unfair labor practice claim or
arbitration, nor is there any investigation, legal or
administrative or other proceeding before or by any federal, local
or other governmental agency, pending or, to the best knowledge of
the Company, threatened against the Company or related to the
Purchased Assets or the Subject Business. Schedule 4.6 sets forth
a true, correct and complete list and description of all claims,
settled and open (including amounts paid, the nature of the claim,
the amount of reserves established, if known) asserted against the
Company during the current and past year, or which remain open at
this time. Such claims are not part of the Assumed Liabilities,
and the Company warrants that it has adequate insurance coverage
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and will maintain adequate reserves after Closing to fully satisfy
all liabilities, if any, of the Company pursuant to such claims.
4.7 Proprietary Rights. Except as set forth in Schedule
1.1(i), there are no patents, patent applications, trademarks,
copyrights, trade secrets or proprietary rights necessary to the
conduct of the Subject Business as now conducted.
4.8 Insurance. Schedule 4.8 hereto contains a list of all
policies of insurance relating to the operations and assets of the
Subject Business in effect as of the date hereof.
4.9 Labor Matters.
(a) Except as set forth in Schedule 4.9(a), no employee of
the Subject Business is covered by any collective bargaining
agreements and, to the knowledge of the Company, no union
organizing activities are in process or contemplated involving such
employees and no petitions have been filed for union organization
or representation of such employees. There is not pending or, to
the knowledge of the Company, threatened any labor dispute, strike
or work stoppage involving the employees of the Subject Business
which affects or which may affect or interfere with its continued
operation, and the Company has not experienced any work stoppages
in the past three (3) years.
(b) Schedule 4.9(b) lists all employee benefit plans,
programs, policies or arrangements with respect to the Company's
employees and former employees that the Company maintains,
contributes to, or has any liability under, including, without
limitation, all bonus, pension, profit-sharing, retirement,
deferred compensation, welfare benefit, vacation and severance pay
plans. The Company does not maintain, contribute to, have any
obligation to contribute to, or have any actual or potential
liability under any "employee pension benefit plan" (as such term
is defined in Section 3(2) of the Employee Retirement Income
Security Act of 1974, as amended ("ERISA")) that is a defined
benefit pension plan (other than the Multi-Employer Plan described
in Section 4.9(c) below).
(c) The only multi-employer plan, as that term is defined in
Section 3(37) of ERISA, to which the Company contributes (or to
which it has any obligation to contribute) or to which, to the
Company's knowledge, it may have actual or potential liability
under Title IV of ERISA for a complete or partial withdrawal from
a multi-employer plan is the United Food & Commercial Workers
International Union-Industry Pension Fund (the "Multi-Employer
Plan").
(d) With respect to the Company's 401(k) plan, neither the
Company nor any fiduciary therefor has engaged in a prohibited
transaction which would subject the Company to a tax or penalty on
8
prohibited transactions imposed by ERISA or the Code, or to any
other liability under ERISA or the Code. All reports, statements,
returns and other information required to be furnished or filed
with respect to said 401(k) have been furnished or filed in
accordance with ERISA and the Code, and they are true, correct and
complete in all material respects. The Company has no knowledge of
any threatened or pending claim against the Company or its
fiduciaries by any participant, beneficiary or governmental agency.
4.10 No Governmental Approval. No consent, approval, order,
authorization or designation of, and no registration, declaration,
filing or recording with, any governmental authority is required to
be obtained by the Company in connection with the transactions
contemplated by this Agreement.
4.11 Brokers. There are no claims for brokerage commissions,
finder's fees or similar compensation in connection with the
transactions contemplated by this Agreement based on any
arrangement or agreement made by or on behalf of the Company.
4.12 Compliance with Laws.
(a) Except as set forth on Schedule 4.12(a), all of the
Purchased Assets and existing operations of the Subject Business
comply, to the Company's knowledge, in all material respects with
all statutes, ordinances and regulations relating to the Purchased
Assets and the Subject Business or their use, including, without
limitation, all federal, state and local acts, including rules and
regulations thereunder, regulating or otherwise affecting employee
health and safety or the environment.
(b) Except as set forth on Schedule 4.12(b), the Company has
not received, during the twelve (12) months prior to this date,
notice of any violation by the Company of, and, to the best of the
Company's knowledge, the Company is not in violation of, the
Occupational Safety & Health Act of 1970, as amended, including
rules and regulations thereunder, or any other federal, state or
local laws, including rules and regulations thereunder, regulating
or otherwise affecting employee health and safety, which violation
would have a material adverse effect on the Subject Business or
Purchased Assets.
(c) Company has filed all federal, state and local income tax
returns, and Company has filed all excise or franchise tax returns,
real estate and personal property tax returns, sales and use tax
returns, and other tax returns (including returns with respect to
withholding and unemployment tax) required to be filed by it, and
has paid all taxes owing by it, including interest and penalties
thereon, except taxes which have not yet accrued or otherwise
become due for which adequate provision has been made. Neither the
Internal Revenue Service nor any other taxing authority is now
asserting, or, to the knowledge of the Company or any stockholder
9
thereof, threatening to assert against Company any deficiency or
claim for additional taxes or interest thereon or penalties.
4.13 Product Liability Claims. Except as set forth on
Schedule 4.6, the Company has not been served with any currently
effective summons or complaint, and there is no action or suit,
equitable or legal, to which the Company is a party, nor any
administrative, arbitration or other proceeding pending or, to the
Company's knowledge, threatened against the Company with respect to
products sold or distributed by the Company.
4.14 Permits/Approvals. Company currently possesses such
certificates, authorities or permits issued by the appropriate
local, state or federal regulatory agencies or bodies as are
necessary to conduct the Subject Business, the failure of which to
have would create a material adverse impact on the Subject
Business. All of such certificates, authorities and permits are
listed on Schedule 1.1(c), and the Company has not received any
notice of proceedings relating to the revocation or modification of
any such certificate, authority or permit.
4.15 Certain Environmental Matters. Except as set forth on
Schedule 4.15, the Company is operating and has operated the
Subject Business in material compliance with all applicable local,
state and federal environmental laws, regulations and ordinances,
including, but not limited to, the Comprehensive Environmental
Response, Compensation, and Liability Act, 42 U.S.C. Sections 9601
et seq. ("CERCLA"), the Resource Conservation and Recovery Act, 42
U.S.C. Sections 6901 et seq., the Clean Water Act, 33 U.S.C.
Sections 1251 et seq., and the environmental laws and regulations
of the State of Georgia, as each such statute or regulation has
been amended from time to time ("Environmental Laws and
Regulations"). The Company has not knowingly accepted for storage
and, to the best of its knowledge, does not store any hazardous
substance or hazardous material at the property and buildings at
which the Subject Business is conducted (the "Property") in
violation of the Environmental Laws. The Company has never
knowingly caused the release of any amount of any hazardous
substance or hazardous material to the environment, which release
would constitute a violation of any Environmental Laws and
Regulations. The Company does not own, lease, rent or otherwise
utilize any underground storage tanks, and, to the best of the
Company's knowledge, there are no waste tanks, containers,
cylinders, drums or cans buried, stored or deposited in or at the
Subject Business in violation of the Environmental Laws and
Regulations. To the best of Company's knowledge, the property and
buildings from which the Subject Business is conducted does not
contain (i) any asbestos, (ii) any polychlorinated biphenyl (PCB)
substances, or (iii) any waste petroleum products. For purposes of
this Section 4.15, "hazardous substance", "release" and
"environment" shall have the same meanings as those terms are
defined by Section 101 of CERCLA, 42 U.S.C. Section 9601, and
"hazardous material" shall have the same meaning as that term is
defined by
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Environmental Laws and Regulations.
4.16 Transactions with Interested Persons. Neither Company
nor any of its stockholders own, directly or indirectly, on an
individual or joint basis, any material interest in any customer,
competitor or supplier of the Subject Business, or any organization
which has a material contract or arrangement with the Subject
Business, except for the Company's interest in Fieldstone Meats of
Alabama, Inc.
4.17 Financial Matters.
(a) The value of assets of Company at a fair valuation in the
aggregate will, immediately following the Closing, and after giving
effect to all of the transactions contemplated by this Agreement,
exceed the amount of its then existing debts and other liabilities
(including contingent liabilities).
(b) The assets of Company will not, immediately following
Closing, and after giving effect to all of the transactions
contemplated by this Agreement, constitute unreasonably small
capital to carry out its business as conducted or as proposed to be
conducted.
(c) Company will receive reasonably equivalent value in
exchange for the Purchased Assets (including Buyer's assumption of
the Assumed Liabilities), and Company does not intend to, does not
believe it will, nor should it reasonably believe it will incur
debts beyond its ability to pay such debts as they mature (taking
into account the timing and amounts of cash to be received by Buyer
and amounts to be payable or in respect of then existing debts of
the Buyer).
4.18 Receivables. To the Company's knowledge, the Receivables
represent bona fide undisputed accounts now owed to the Company for
products delivered in accordance with purchase orders or
specifications of customers of the Company, and, to the Company's
knowledge, no such account is subject to a defense, counterclaim or
offset, or an agreement for reduction or discount, except to the
extent of an Assumed Liability. To the Company's knowledge, no
payment on any of the Receivables is contingent upon performance of
any other obligation of the Company, or any other person or entity.
4.19 Exhibits and Deliveries. To the Company's knowledge,
all schedules and exhibits attached hereto accurately reflect the
true, correct and complete list of all material items and matters
referenced therein. Company has delivered to Buyer true, correct
and complete originals or copies of all documents and instruments
referenced, listed or described in all of the exhibits or
schedules, including any and all material riders, attachments,
addenda and amendments thereto, and guaranties thereof.
11
4.20 Disclosure. To the Company's knowledge, no
representation or warranty by the Company contained in this
Agreement, and no statement, schedule, exhibit, writing,
certificate, list, document or other instrument furnished, to be
furnished or delivered to Buyer by Company (or on behalf of the
Company) pursuant hereto or in connection with the transaction
contemplated herein, contains any untrue statement of material fact
or omits to state a material fact necessary to make the statements
and information herein or therein not misleading.
4.21 Disclaimer of Disclosure. The Company does not make,
and has not made, any representation or warranty relating to the
Company, the Subject Business, the Purchased Assets or otherwise in
connection with the transactions contemplated hereby other than
those expressly set out. It is understood that any cost estimates,
projections or other predictions, or any other data not included
herein are not and shall not be deemed to be or to include
representations or warranties of the Company. Except as set forth
herein, no person has been authorized by the Company to make any
representation or warranty relating to the Company, the Subject
Business, the Purchased Assets or otherwise in connection with the
transactions contemplated hereby and, if made, such representation
or warranty must not be relied upon as having been authorized by
the Company.
5. Representations and Warranties of Buyer. The Buyer
represents, warrants and agrees as follows:
5.1 Corporate.
(a) Buyer is a corporation organized, validly existing and in
good standing under the laws of Florida, and has all requisite
power and authority to own and operate its business and property as
and where it is now being conducted.
(b) The execution, delivery and performance of this Agreement
and the consummation of the transactions contemplated hereby have
been duly authorized by the Board of Directors of Buyer and no
other corporate action by Buyer is necessary to authorize such
actions.
(c) This Agreement is, and the agreements, instruments and
documents to be executed by Buyer pursuant hereto or in connection
herewith will be when executed by it, the valid and legally binding
obligations of Buyer enforceable in accordance with their
respective terms, except to the extent limited by bankruptcy,
insolvency, reorganization, moratorium or similar laws affecting
creditors' rights generally or by general equitable principles.
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5.2 Financial.
(a) Attached hereto as Schedule 5.2(a) are copies of the
audited financial statements of the Buyer as of March 30, 1996, and
for the year then ended (the "Buyer Year-End Financials"). These
financial statements present fairly the assets and liabilities of
the Buyer in accordance with generally accepted accounting
principles, consistently applied. There is no material obligation,
claim or liability which is not properly reflected or reserved in
the Buyer Year-End Financials.
(b) Attached hereto as Schedule 5.2(b) are copies of the
internal financial statements of the Buyer as of December 27, 1996
(the "Buyer Current Financial Statements"). Buyer Current
Financial Statements present fairly the assets and liabilities of
the Buyer in accordance with generally accepted accounting
principles, consistently applied (except for the omission of
footnotes and subject to year-end adjustments), and are consistent
with past financial statements of the Buyer.
(c) Since December 27, 1996, there has not been:
(1) any material adverse change in the financial
condition or the operations of the business of the Buyer;
(2) any obligation or liability incurred (whether
accrued, absolute, contingent or otherwise, and whether due or to
become due), except in the ordinary course of its business; and
(3) any default in any material obligation of the Buyer.
5.3 Financial Matters.
(a) The value of the assets of Buyer at a fair valuation in
the aggregate will, immediately following the Closing and after
giving effect to all of the transactions contemplated by this
Agreement, exceed the amount of its debts and other liabilities
(including contingent liabilities).
(b) The assets of Buyer will not, immediately following
Closing and after giving effect to all of the transactions
contemplated by this Agreement, constitute unreasonably small
capital to carry out its business as conducted or as proposed to be
conducted.
(c) Buyer has received reasonably equivalent value in
exchange for its payment of the Purchase Price (including Buyer's
assumption of the Assumed Liabilities), and Buyer does not intend
to, will not, does not believe it will, nor should it reasonably
believe it will incur debts beyond its ability to pay such debts as
they mature (taking into account the timing and amounts of cash to
be received by Buyer and amounts to be payable on or in respect of
13
debts of Buyer).
5.4 No Breach of Statute or Contract. Neither the execution
and delivery of this Agreement, nor compliance with the terms and
conditions hereof, on the part of Buyer will (i) violate any
provision of the articles of incorporation or by-laws of Buyer,
(ii) cause Buyer to breach any statute, ordinance or regulation of
any governmental authority, domestic or foreign, or (iii) conflict
with or result in a breach of any of the terms, conditions or
provisions of any agreement or instrument to which Buyer is a party
or by which it may be bound, or constitute a default thereunder.
5.5 Brokers. There are no claims for brokerage commissions,
finder's fees or similar compensation in connection with the
transactions contemplated by this Agreement based on any
arrangement or agreement made by or on behalf of Buyer.
6. Covenants of the Company Pending Closing. The Company
covenants and agrees that from and after the date of this Agreement
and until the Closing:
6.1 Access to Information. Buyer and its authorized
representatives and agents (including, but not limited to,
potential lenders, accountants, attorneys, and agents and
representatives of the foregoing) shall have reasonably full access
during normal business hours to all plant and other properties,
books, records, contracts and documents of the Subject Business and
other materials reasonably related to the business and affairs of
the Company. The Company shall furnish or cause to be furnished to
Buyer and its authorized representatives and agents all information
with respect to the business and affairs of the Company as they may
reasonably request, including such information as Buyer may
reasonably request for the purpose of disclosure to any financial
institution in connection with providing such financing as Buyer
deems to be in its best interest, all subject to the terms of the
Mutual Confidentiality Agreement executed by the Company and Buyer.
Any inspection or testing of physical properties or facilities by
Buyer must be approved in advance by an officer of the Company.
Buyer and its representatives and agents shall not meet with
representatives of the Union (as defined in Section 10.16) or
discuss any potential collective bargaining agreement without the
consent of the Company and without a representative of the Company
being present.
6.2 Carry On In Regular Course. The Company will use its
best efforts to cause the Subject Business to be conducted
according to its ordinary and usual course and substantially in the
manner heretofore conducted, except as contemplated by this
Agreement. The Company will use its reasonable best efforts to
preserve in all material respects its business organization and
business relationships.
14
6.3 Best Efforts. The Company will use its best efforts to
cause all conditions to the consummation of the transactions
contemplated hereby which are within the control of the Company to
be satisfied as promptly as practicable, shall not undertake any
course of action inconsistent therewith or which would make any of
its representations contained herein untrue at or prior to Closing,
and shall deliver at Closing all documents which are to be
delivered by it as a condition to Buyer's obligations hereunder.
6.4 Insurance. The Company shall maintain all existing or
equivalent insurance covering the Subject Business, the premises
from which it is currently conducting the Subject Business and/or
the Purchased Assets in effect as of the date hereof.
6.5 Property and Assets. The Purchased Assets will be used,
preserved and maintained in the ordinary course of business to the
same extent as is consistent with past customs and practices.
6.6 Corporate Action and Consents. The Company shall take
all corporate and other action necessary to consummate the
transaction contemplated hereby and shall use its best efforts to
obtain all corporate and similar consents and approvals required
from third-parties to enable it to carry out the transactions
contemplated by this Agreement.
6.7 Financial Affairs. The Company shall not take any action
(or omit to take any action) within its control which would
necessitate disclosure on Schedules 4.2(a), (b) or (c).
6.8 Excluded Liabilities. The Company covenants and agrees
that at or prior to Closing, or, as appropriate, after Closing,
that it shall pay, perform and discharge all of the Excluded
Liabilities, and shall do so no later than their respective due
dates, and that the Company will maintain adequate reserves, or, at
this time, has adequate assurances that all sums necessary to pay
the Excluded Liabilities shall be available to the Company.
6.9 No Further Encumbrances. The Company covenants and
agrees that it shall not, for one (1) year after the Effective
Time, impose, or allow the imposition of, any lien or encumbrance
on the Property securing money borrowed, other than the two (2)
existing mortgages on the Property, and shall not request or allow
any future advances to be made under said existing mortgages so as
to increase the outstanding principal balances thereunder in excess
of their respective present outstanding principal balances.
Notwithstanding the above, this covenant shall not in any manner
restrict the Company's sale of the Property at any time to a bona
fide purchaser for value.
15
7. Covenants of Buyer.
7.1 Best Efforts. Buyer will use its best efforts to cause
all conditions of the consummation of the transactions contemplated
hereby which are within its sole control to be satisfied as soon as
practicable, shall not undertake any course of action inconsistent
therewith or which would make any of its representations contained
herein untrue at or prior to Closing, and shall deliver at Closing
all documents which are to be delivered by it as a condition to the
Company's obligations hereunder.
7.2 Utilization and Maintenance of Records. From and after
the Closing Date until the termination or expiration of the Lease
between the Company and the Buyer referred to in Schedule 8.2(d)
below (the "Utilization Period"), the Buyer shall have the right to
fully utilize and copy the Business Records. At or prior to the
end of the Utilization Period, the Buyer shall notify the Company
that the Business Records are available at the Property to be
picked up or utilized there by the Company; provided, however, that
the Buyer shall be allowed to permanently retain and remove from
the Property all personnel records. Buyer further covenants that,
during the Utilization Period, and upon request of the Company, the
Company and its authorized representatives shall have reasonable
access during normal business hours to the Business Records, and
shall thereafter allow the Company or its authorized
representatives and agents reasonable access during normal business
hours to all personnel records, all as such records pertain to the
period before the Effective Time.
7.3 Letters of Credit. On the Closing Date, Buyer shall use
its best efforts to provide security or make other arrangements as
are necessary to release the Company from any reimbursement
obligations under outstanding letters of credit.
7.4 Assistance to the Company. Buyer covenants and agrees
that subsequent to the Closing it will provide the following
services to the Company:
(a) During the Utilization Period, Buyer shall provide the
Company with administrative support and personnel reasonably
sufficient to enable the Company (i) to prepare, file and make all
necessary property, payroll, withholding and sales tax reports, as
are required of the Company, (ii) to assist in gathering supporting
documentation and payments by the Company of Excluded Liabilities,
(iii) to prepare final business license tax and final sales tax
returns, and (iv) to provide similar assistance as the Company may
reasonably request. Such services shall include, but not be
limited to, reasonable assistance in the preparation of all
required payroll related reports and returns, such as applicable
Forms W-2, Form 941 and unemployment reports and all materials
relating to the taxes and fees described in Section 10.13.
16
(b) Buyer shall complete and deliver to the Company within 45
days of the Closing Date information as of the Closing Date
reasonably requested by the Company to assist in preparation of
income tax returns for the Company and its affiliates.
(c) Buyer shall deliver to the Company within seven (7) days
of the Closing Date information reasonably requested by the Company
to assist with the Company's preparation of an interim financial
statement through the period immediately prior to and immediately
after and giving effect to the Closing.
(d) Buyer shall provide reasonable administrative assistance
with respect to remaining insurance plan liabilities of the Company
and all outstanding claims and arbitrations in which the Company is
presently involved.
7.5 Guarantees. Buyer shall, at Closing, use its best
efforts to obtain releases of Xxxxx from all guarantees by it of
liabilities of the Company.
7.6 Payment of Assumed Liabilities. Buyer covenants and
agrees that it shall pay, perform and discharge in the ordinary
course of business all of the Assumed Liabilities, and shall do so
no later than their respective due dates. Buyer further covenants
and agrees that all payments made by the Buyer after the Closing
Date to individuals or entities to whom trade payables that
constitute Assumed Liabilities are owed (the "Assumed Trade Debt
Vendors") shall be designated (by notation on the check or
remittance advice to the Assumed Trade Debt Vendor accompanying
payment, copies of which shall be retained by Buyer for no less
than three years following the Closing Date) as repayment first of
outstanding indebtedness constituting Assumed Liabilities. For
purposes of the preceding sentence, such designation, whenever
possible, shall be made by reference to a specific invoice number.
8. Closing.
8.1 Time and Place of Closing. The closing of this Agreement
(herein called the "Closing") shall be held at the offices of the
Company, Atlanta, Georgia, at 11 o'clock a.m. local time on or
before February 3, 1997, or on such other date and at such other
time or place agreed to by the parties. The date of Closing is
sometimes referred to herein as the "Closing Date." For all
purposes, however, this transaction, if closed, shall be effective
as of the Effective Time.
8.2 Conditions Precedent to Obligations of Buyer. Each and
every obligation of Buyer under this Agreement shall be subject to
fulfillment, prior to or at the Closing, of each of the following
conditions unless waived by Buyer:
17
(a) each representation and warranty made by the Company in
this Agreement or any schedule hereto shall be true and correct in
all material respects on and as of the Closing Date with the same
effect as though each such representation and warranty had been
made or given on and as of the Closing Date;
(b) the Company shall have performed and complied with all of
its obligations under this Agreement which are to be performed or
complied with by it prior to or at the Closing;
(c) the Company shall have tendered for delivery to Buyer a
Xxxx of Sale, Assignment and Assumption Agreement in the form of
Schedule 8.2(c), along with such other assignments, certificates of
title and instruments of transfer as shall be necessary to vest in
Buyer the Purchased Assets in form reasonably satisfactory to
Buyer;
(d) the Company shall have tendered for delivery the Lease in
the form of Schedule 8.2(d), shall have subordinated all of its
interests as landlord in the Buyer's property to the interests of
Buyer's lender and have complied with any other reasonable requests
of Buyer's lender;
(e) the Company shall have tendered for delivery the Escrow
Agreement in the form of Schedule 8.2(e) (the "Escrow Agreement");
(f) the Company, Xxxxx and Entree shall have tendered for
delivery the Noncompetition and Confidentiality Agreement in the
form of Schedule 8.2(f);
(g) the Company shall have delivered to the Buyer a copy of
resolutions of the Board of Directors and the shareholders of the
Company, certified by the Secretary of the Company, authorizing the
transactions contemplated by this Agreement;
(h) the Company shall have obtained all consents necessary
for the transfer and assignment of all Operating Agreements;
(i) Buyer shall have obtained such licenses, permits and
other regulatory approvals necessary for it to conduct the Subject
Business, except where failure to obtain such a consent or new
licenses, permits or regulatory approvals (i) results from Buyer's
failure to utilize its reasonable best efforts to obtain such
authorization, or (ii) would not have a material adverse effect on
Buyer in its operation of the Subject Business following Closing;
(j) Xxxxx shall have executed that Guaranty in the form of
Schedule 8.2(j);
(k) no action or proceeding before any court or governmental
body shall be pending or threatened wherein a judgment, decree or
order would prevent any of the transactions contemplated herein or
18
cause such transactions to be unlawful or rescinded, or which
materially affect the right of Buyer to own, operate or control the
Purchased Assets;
(l) the Buyer shall have received from the Company's counsel,
Xxxxxxx and Xxxx, S.C., an opinion in the form set forth in
Schedule 8.2(l), addressed to the Buyer and Buyer's lenders, dated
as of the Closing Date;
(m) the Company shall have delivered to the Buyer a
certificate of its officers certifying to the fulfillment of the
conditions set forth in Sections 8.2(a) and 8.2(b) above;
(n) Buyer shall receive written evidence that all liens,
encumbrances or security interests affecting the Purchased Assets
(and not related to an Assumed Liability) have been released and
terminated, and adequate provision has been made to terminate such
interests of record; and
(o) the Closing Statement shall be prepared and delivered by
the Company in accordance with this Agreement.
8.3 Conditions Precedent to Obligations of the Company. Each
and every obligation of the Company under this Agreement shall be
subject to fulfillment, prior to or at the Closing, of each of the
following conditions unless waived by the Company:
(a) each representation and warranty made by the Buyer in
this Agreement or any schedule hereto shall be true and correct in
all material respects on and as of the Closing Date with the same
effect as though each such representation and warranty had been
made or given on and as of the Closing Date;
(b) Buyer shall have performed and complied with all of its
obligations under this Agreement which are to be performed or
complied with by it prior to or at the Closing;
(c) Buyer shall have tendered to Company a Xxxx of Sale,
Assignment and Assumption Agreement in the form of Schedule 8.2(c);
(d) Buyer shall have tendered for delivery the Lease in the
form of Schedule 8.2(d);
(e) Buyer shall have tendered for delivery the Escrow
Agreement;
(f) Buyer shall have delivered to the Company a copy of
resolutions of the Board of Directors of Buyer, certified by the
Secretary of Buyer, authorizing the transactions contemplated by
this Agreement;
19
(g) Buyer shall have delivered to the Company a certificate
of its officers certifying to the fulfillment of the conditions set
forth in Sections 8.3(a) and 8.3(b) above;
(h) Buyer shall have made the Closing payment to the Company;
(i) The Company shall have received from the Buyer's counsel,
Xxxxxxxx & Xxxxx, P.A., an opinion in the form set forth in
Schedule 8.3(i), addressed to the Company, dated as of the Closing
Date;
(j) Buyer shall not have terminated this Agreement during the
Inspection Period referred to in Section 10.12;
(k) no action or proceeding before any court or governmental
body shall be pending or threatened wherein a judgment, decree or
order would prevent any of the transactions contemplated herein or
cause such transactions to be unlawful or rescinded, or which might
materially affect the right of Buyer to own, operate or control the
Purchased Assets;
(l) Buyer shall have provided the security, or have made
other arrangements, as set forth in Section 7.3, and shall have
obtained releases of Xxxxx, as set forth in Section 7.5; and
(m) Buyer shall have received reasonable assurances that
Buyer's lender shall have no security interest, or shall release
any security interest it may claim, in any of the Receivables that
are re-assigned to the Company in accordance with the Escrow
Agreement.
8.4 Authority to Collect Receivables. Upon Closing, the
Company shall fully cooperate with Buyer with respect to Buyer's
collection of the Receivables. The Company shall, by communication
prepared and approved by Buyer, notify all account debtors that the
Company has assigned the Receivables to Buyer and shall instruct
such account debtors to make all payments directly to Buyer or to
such accounts as Buyer shall direct. Any payments on such
Receivables which may be received by the Company or made payable to
the Company shall be immediately endorsed or paid over to Buyer.
For the limited purpose of collecting the Receivables, the Company
hereby irrevocably appoints the Buyer as the Company's attorney-in-
fact, with full authority in the place and stead of the Company,
and in the name of the Company, or otherwise, to take any action
and to execute any instrument necessary or convenient to receive,
endorse and collect any drafts or other instruments, documents and
chattel paper in connection with the Receivables, to ask, demand,
collect, xxx for, recover, issue valid credits in the ordinary
course of business (other than for the return of product assumed in
Section 1.2(f), and receive and give acquittance and receipts for
monies due with respect to the Receivables, and to file any claims
or take any action or institute any proceedings which the Buyer may
20
deem necessary or desirable for the collection of the Receivables,
or otherwise to enforce the rights of the Company with respect to
the Receivables.
With respect to any Receivables which are re-assigned to the
Company as uncollectible accounts under the Escrow Agreement, Buyer
shall fully cooperate with the Company with respect to Company's
collection, if possible, of such Receivables. The Buyer shall
notify appropriate account debtors that the Buyer has re-assigned
the Receivables to the Company, and shall instruct such account
debtors to make all payments directly to the Company, or to such
accounts as the Company shall direct. Any payments on such
Receivables which may be received by the Buyer or made payable to
the Buyer shall be immediately endorsed or paid over to the
Company. In the event that such uncollectible account is, because
of valid credits or other adjustment issued by the Company, unable
of being further pursued by the Company, the Buyer, simultaneously
with making a Receivable Claim (as that phrase is defined in the
Escrow Agreement) with the Escrow Agent, shall deliver to the
Company appropriate documentation reflecting such valid credit or
adjustment. Buyer shall proceed diligently to collect the
Receivables in the ordinary course of its business, and Buyer will
not take any action to interfere with or impair the orderly
collection of the Receivables; provided, however, that the parties
agree that Buyer shall not be restricted in any manner in dealing
with account receivable debtors as it would normally deal with such
debtors in the ordinary course of its business, including, without
limitation, the procurement of new credit applications, instituting
new credit terms or payment schedules, and, if prudent in Buyer's
judgment, ceasing to do business with certain debtors.
The parties agree that as a condition of Closing, the Buyer
shall be required to execute and deliver that Indemnity and Release
Agreement in favor of the Company's lender ("Sanwa"), in the form
attached as Schedule 8.4 (the "Indemnity Agreement"). In the event
that Sanwa makes any claim against the Buyer pursuant to the
Indemnity Agreement, the parties agree that the Buyer shall be
entitled to immediately make a Receivable Claim with the Escrow
Agent for the claimed amount, and that the Buyer shall direct Sanwa
to deliver the applicable returned or insufficient fund check(s) to
the Company. For all purposes hereunder and under the Escrow
Agreement, the amount of any claim by Sanwa under the Indemnity
Agreement shall be treated in the same manner as an uncollectible
Receivable and as a Disputed Account (as that phrase is defined in
the Escrow Agreement).
The Buyer shall use its best efforts to have the UCC-1
executed by the Company, as debtor, filed in connection with the
sale of the Receivables, in favor of NationsBank, to be terminated
of record within one (1) year of the Closing Date.
21
8.5 Use of Name. For a period not less than six (6) months
from Closing, but not to exceed the Utilization Period, the Buyer
shall have the right to use the Company's name, and derivations
thereof, incident to the Buyer's use, in the normal course of
business, of the Supplies, existing signage on the Property,
existing signage with respect to vehicles and other equipment, and
existing stationery, checks and other supplies constituting a part
of the Purchased Assets; provided, however, that Buyer shall have
the right to use the Company's name incident to Buyer's use of the
tractors and trailers under the UPS equipment lease for the
remaining term of said lease. Buyer shall indemnify and hold the
Company harmless from and against any loss, cost, expense or other
damage (including reasonable attorneys' fees) resulting from,
arising out of, or incurred with respect to, the Buyer's use of the
Company name, or any derivation thereof, after Closing.
9. Survival of Warranties; Indemnification.
9.1 Survival of Representations and Warranties. The
representations and warranties, and the covenants and agreements to
be performed after the Closing of each party contained in this
Agreement or in any document delivered pursuant hereto shall be
deemed continuing and shall survive the Closing for a period of one
(1) year after the Closing Date, unless a longer period is
specifically provided.
9.2 Indemnification by the Company. The Company shall
indemnify and hold Buyer harmless from and against any loss, cost,
expense or other damage (including reasonable attorneys' fees)
resulting from, arising out of, or incurred with respect to (i) the
falsity or breach of any representation or warranty made by the
Company herein, (ii) the breach of any covenant or agreement made
by the Company herein, and (iii) any debts, obligations, contracts
and liabilities of the Company other than Assumed Liabilities,
including, without limitation, the Excluded Liabilities and any
liability which may follow the Purchased Assets pursuant to
applicable bulk sales laws (except to the extent that such
liability is or arises from an Assumed Liability).
9.3 Indemnification by Buyer. Buyer shall indemnify and hold
the Company harmless from and against any loss, cost, expense or
other damage (including reasonable attorneys' fees) resulting from,
arising out of, or incurred with respect to (i) the falsity or
breach of any representation or warranty made by Buyer herein, (ii)
the breach of any covenant or agreement made by the Buyer herein,
(iii) any Assumed Liabilities, or (iv) any obligations or
liabilities of Buyer.
9.4 Limitations. The foregoing notwithstanding, any claim
for indemnification under Sections 9.2 and 9.3 shall be asserted by
written notice ("Indemnification Notice") specifying its nature in
reasonable detail by the party claiming indemnification. In the
22
event such Indemnification Notice is not given within one (1) year
following the Closing Date, the right to assert such claim shall
lapse. The Company's indemnification obligation shall in no event
exceed the Purchase Price.
9.5 Defense of Claim. If any third party shall assert any
claims against Buyer which, if successful, would entitle Buyer to
indemnification under this Section 9, Buyer shall give notice of
such claim to the Company and the Company shall have the right to
assume the defense of such claim at its expense. If the Company
does assume the defense of such claim, it shall indemnify and hold
Buyer harmless, to the extent provided in Sections 9.1 through 9.4
and Section 9.6, from and against any and all losses, damages and
liabilities, including, without limitation, reasonable attorneys'
fees, caused by or arising out of any settlement or judgment of
such claim. In addition, Buyer shall have the right to participate
in the defense of such claim at its expense, in which case (i) the
Company agrees to cooperate in providing information to and
consulting with Buyer about the claim, and (ii) the Company shall
not consent to the entry of judgment or enter into any settlement
without the prior written consent of Buyer, which consent shall not
unreasonably be withheld. If the Company does not assume the
defense of any such claim, Buyer may defend against and/or settle
the claim in such manner and on such terms as they in good xxxxx
xxxx appropriate and shall be indemnified, to the extent provided
in Sections 9.1 through 9.4 and Section 9.6, for the amount of any
judgment or settlement and for all losses or expenses, legal or
otherwise, incurred in connection with the defense and/or
settlement of any claim. Failure by the Company to give written
notice to Buyer of its election to defend any claim within fifteen
(15) days after written notice thereof is given to the Company by
Buyer shall be deemed a waiver of its right to defend such claim.
The Buyer shall be entitled to make an Indemnification Claim (as
that phrase is defined in the Escrow Agreement) with the Escrow
Agent, in accordance with the terms and conditions set forth in the
Escrow Agreement for such claims, without first complying with the
procedures set forth in this Section 9.5.
9.6 Buyer's Remedies. Any provision herein to the contrary
notwithstanding, Buyer shall be entitled to any remedy at law or in
equity in order to enforce any provision of this Agreement,
including, without limitation, specific performance and injunctive
relief; provided that Buyer's remedy for monetary damages shall be
limited by the provisions of Sections 9.4 and 9.5 above.
9.7 Prompt Notice. Buyer and the Company covenant and agree
to promptly provide to the other party any Indemnification Notice
described in Section 9.4 above.
23
10. Miscellaneous.
10.1 Expenses Incident to Transaction. Each party shall pay
his or its own expenses and costs relating to the negotiation,
execution and performance of this Agreement, including all fees of
their respective attorneys, accountants, financial advisors and
other professionals.
10.2 Further Assurances. After the Closing, the Company will
execute and deliver such further instruments of conveyance and
transfer and take such other reasonable actions as Buyer may
request to carry out the transactions contemplated by this
Agreement.
10.3 Governing Law. This Agreement shall be construed and
interpreted according to the laws of Georgia.
10.4 Notices. All notices hereunder shall be in writing and
shall be deemed to have been duly given, and all document
deliveries will be deemed to have been made, when personally
delivered or three (3) days after the date when mailed, certified
or registered mail, with postage prepaid, and
(a) if to Buyer, to: Colorado Boxed Beef Company
c/o Xxxxx Xxxxxxx, Senior Vice
President
000 Xxxxxxxx Xxxx
Xxxxxxxxxx Xxxxxxxxxx Xxxx
Xxxxxxxxxx, XX 00000
with copy to: Xxxxx Xxxxxx
Xxxxxxxx & Xxxxx, P.A.
000 Xxxxx Xxxxxx
Xxxxx 000
Xxxxxx Xxxxx, XX 00000
or to such other person or address as Buyer shall designate from
time to time by notice in writing to the Company pursuant hereto;
or
(b) if to Company, to: Atlanta Provision Company, Inc.
c/o Xxxxx Xxxxxxx
Sattel Communications LLC
00000 Xxxxxx Xxxx
Xxxxxxxxx, XX 00000
with copy to Xxxxx X. Xxxxxxxxx
Xxxxxxx & Xxxx, S.C.
000 Xxxxx Xxxxx Xxxxxx
Xxxxxxxxx, XX 00000
24
or to such other person or address as the Company shall designate
from time to time by notice in writing to Buyer pursuant hereto.
10.5 Publicity. Neither party shall issue any news releases
regarding the proposed transaction unless and until the transaction
closes, except as required by law. The attorneys for the
respective parties must agree that a news release is required by
law. Any news release must be agreed to in writing between the
parties as to the text before it is released. This Agreement is
otherwise subject to the Mutual Confidentiality Agreement between
the parties.
10.6 Entire Agreement. This Agreement and its schedules, and
the Mutual Confidentiality Agreement executed by Buyer and the
Company, embody the entire agreement among the parties hereto with
respect to the transactions contemplated herein, and there have
been and are no agreements, representations or warranties between
the parties other than those set forth or provided for herein.
This Agreement supersedes all proposals, letters or intent and
other agreements relating to the subject matter hereof.
10.7 Headings. The headings used in this Agreement are
inserted for convenience only and shall not constitute a part
hereof.
10.8 Modification; Waiver. No modification or waiver of any
provision of this Agreement or consent to any departure therefrom
shall be effective unless in writing and signed by authorized
officers of the Company and Buyer.
10.9 Counterparts. This Agreement may be executed
simultaneously in counterparts, each of which shall be deemed an
original, but all of which together shall constitute one and the
same instrument. It shall not be necessary that any single
counterpart be executed by all parties hereto provided that each
party shall have executed at least one counterpart.
10.10 Binding Nature. This Agreement shall be binding and
inure to the benefit of all the parties named herein and their
respective successors and assigns.
10.11 Bulk Sales. The parties each hereby waive compliance
with any applicable bulk sales or similar law of any jurisdiction
in connection with the sale of the Purchased Assets.
10.12 Termination and Abandonment. The transactions provided
for by this Agreement may be terminated and abandoned at any time
on or before the Closing:
(a) by mutual written consent of Buyer and the Company,
without liability on the part of any party to the other; or
25
(b) by Buyer, if any of the conditions of Section 8.2
above have not been met or have not been waived in writing by
Buyer as of the Closing Date; or
(c) by the Company, if any of the conditions of Section
8.3 above have not been met and have not been waived in
writing by the Company as of the Closing Date;
(d) by Buyer or the Company, if the transaction
contemplated by this Agreement has not closed on or before
February 3, 1997, provided the party seeking to terminate
shall have performed in all material respects all of its
covenants under this Agreement which were to have been
performed prior to the time of termination; or
(e) by Buyer by written notice to the Company on or
prior to Closing (the "Inspection Period"), if (a) Buyer shall
have determined during its due diligence investigation of the
Company that any matters had been materially misrepresented by
the Company or (b) if Buyer shall not have received
unconditional assurances satisfactory to it that it will
obtain financing on terms reasonably satisfactory to it to
consummate the purchase of the Purchased Assets, provided that
Buyer has used its best efforts to obtain such unconditional
assurances.
In the event of termination and abandonment by any party as
provided in this Section 10.12, written notice shall forthwith be
given to the other party by facsimile transmission or as set forth
in Section 10.4 above. In the event of such termination, this
Agreement shall terminate and become null and void other than with
respect to Section 10.1 and Section 9. No termination shall
release a party of any liability for breach hereof. The Mutual
Confidentiality Agreement executed by Buyer and the Company shall
survive any termination of this Agreement.
10.13 Sales and Transfer Taxes. The Buyer shall pay and
discharge when due any and all liability for recording fees, sales
and use taxes, documentary taxes, motor vehicle transfer taxes and
all similar fees, taxes and costs relating to the consummation of
the transactions contemplated in this Agreement.
10.14 Assumption of Employee Benefit Plans. With respect
to the employees of the Company who become employees of the Buyer
after the Closing, Buyer will assume the Employee Benefit
Liabilities set forth on Schedule 1.2(e), along with all of the
powers previously reserved by the Company under the plans related
to the Employee Benefit Liabilities to amend, terminate or modify
such contracts.
10.15 Employment of Company Employees. Buyer agrees to
provide a written offer of employment or written posting of notice
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of offer of employment effective as of the Effective Time to
substantially all employees of the Company promptly following the
Effective Time, which offer shall be conditioned upon the Closing.
Nothing in this Section shall create any rights on behalf of such
employees as third-party beneficiaries with respect to this
obligation. Buyer hereby agrees to indemnify and hold the Company
harmless from and against any and all claims and liability arising
solely as a result of Buyer's conduct after the Closing taken with
respect to the employment of or refusal to hire a previous Company
employee, including, without limitation, any claims or liability,
based on the Buyer's acts or omissions arising after the Closing,
and arising under the Workers Adjustment and Retraining
Notification Act ("WARN") and any regulations promulgated
thereunder or any similar state or local laws.
10.16 Union Contract. The Buyer agrees to employ
substantially all of the Company's employees covered by the current
collective bargaining agreement between the Company and Local
Number 1996 of the United Food and Commercial Workers Union (the
"Union"), effective as of the Effective Time, but conditioned upon
Closing. (The agreement with the Union is herein referred to as
the "Collective Bargaining Agreement.") In addition, the Buyer
agrees to recognize the Union as the current exclusive collective
bargaining representative of the employees covered by the
Collective Bargaining Agreement, a complete copy of which has been
previously furnished to Buyer. Nothing in this Section shall
create any rights on behalf of such Union or any other union as
third-party beneficiaries with respect to this obligation.
IN WITNESS WHEREOF, the parties hereto have caused this
Agreement to be duly executed all as of the day and year first
above written.
THE COMPANY:
ATLANTA PROVISION COMPANY, INC.
/s/ G. Xxxxxxx Xxxxxxx
President & CEO
BUYER:
COLORADO BOXED BEEF COMPANY
/s/ Xxxxx X. Xxxxxxx
Senior Vice President
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