ASSETS PURCHASE AGREEMENT
Exhibit 10.2
24
THIS
IS AN AGREEMENT made as of the 17th day of April, 2007 by and among:
XXXXXXX
ACQUISITION CORP.
a
Connecticut corporation
with
a place of business at
00
Xxx Xxxx Xxxx
Xxxxxx,
XX
00000
("Buyer")
and
XXXXXXX
FOOD SERVICES CORPORATION
a
Connecticut corporation
with
a place of business at
000
Xxxxxxx Xxxxxx
Xxx
Xxxxx, XX
00000
("Xxxxxxx
Food Service")
and
HOST
AMERICA CORPORATION
a
Colorado corporation
with
a place of business at
0
Xxxxxxxx
Xxxxxx,
XX
00000 ("Parent")
WHEREAS,
Xxxxxxx Food Service and Parent are hereinafter collectively referred to as
the
“Seller”; and
WHEREAS,
the Seller owns and operates a business which engages in the food service
business consisting of contract packaging, school meals and senior feeding
services (the "Business");
and
WHEREAS,
the Seller desires to sell substantially all of the assets of the Business,
tangible and intangible, including without limitation all rights to the name
"Xxxxxxx Food Services" (but excluding the Excluded Assets as hereinafter
defined); and
WHEREAS,
the Buyer is willing to purchase said assets on the terms and subject to the
conditions hereinafter set forth; and
1
NOW,
THEREFORE, IN VIEW OF THE FOREGOING AND IN CONSIDERATION OF THE MUTUAL PROMISES
HEREINAFTER SET FORTH, THE PARTIES HERETO DO HEREBY REPRESENT, WARRANT, COVENANT
AND AGREE AS FOLLOWS:
(reference
being hereby made to Appendix
I
for the definition of certain capitalized terms.)
1. Sale
and Purchase of Certain Assets.
On
the terms and subject to the conditions contained herein, at the Closing, the
Seller will sell, transfer, assign, convey and deliver to the Buyer, and the
Buyer will purchase from the Seller, for the consideration hereinafter set
forth, substantially all of the Seller’s assets relating to the Business,
tangible and intangible, of every kind, nature and description, wherever located
and whether or not recorded on the books of Seller, in connection with the
operation of the Business, as described below:
(a) the
Business as a going concern;
(b) all
of Seller's inventory (including food and non-food inventory) relating to the
Business as shall exist on the Closing Date (the “Inventory”).
Such Inventory in existence as of the date hereof is described on attached
Schedule
1(b);
(c) all
of Seller's machinery, equipment, furniture, vehicles, fixtures (excluding
any
fixtures located at 0 Xxxxxxxx, Xxxxxx, Xxxxxxxxxxx), computer equipment
(excluding any computer equipment located at 0 Xxxxxxxx, Xxxxxx, Xxxxxxxxxxx),
and other personal property which is related to the Business, all as described
on Schedule
1(c) attached
hereto (all such assets being hereinafter referred to as the "Other
Tangible Assets");
(d) All
of Seller’s accounts receivable relating to the Business as shall exist on the
Closing Date (“Accounts
Receivable”)
and any Indebtedness owing to Seller, Seller's rights in respect of orders,
contracts and agreements for the purchase or sale of goods, services, including,
without limitation, any existing service agreements, customer accounts, bid
and
performance bonds, deposits, and work in process, all of which specifically
relate to the Business and, as exist on the date hereof, are as described on
Schedule
1(d)
attached hereto (all such assets being hereinafter referred to as the
"Purchased
Contracts");
(e) all
of Seller's good will, prospect sales lists, sales reports, costs sheets,
processes, relations with customers, customer lists, relations with suppliers,
supplier lists, know-how and copyrights, all of which are specifically related
to the Business and are as described in Schedule
1(e) and
the rights of Seller to the trademarks, service marks, copyrights, copyrightable
materials, the name “Xxxxxxx Food Service” in all of its various trade styles
and trade names (all such assets being hereinafter referred to as the
"Intangible
Assets");
and
(f) the
leases for real estate and capital equipment relating to the Business as set
forth on Schedule
1(f)
(the “Assumed
Leases”);
and
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(g) all
cash on hand in collected funds of the Business on the Closing
Date;
((a)
- (g) being hereinafter collectively referred to as the "Purchased
Assets").
(h) Anything
to the contrary in this Section 1 notwithstanding, the Purchased Assets shall
not include the following assets of the Seller (the "Excluded
Assets"):
(i) deferred Taxes, and the right to receive any refunds of Taxes paid by Seller
prior to the Closing; (ii) any and all net operating loss carryforwards; (iii)
any refunds of unearned insurance premiums; (iv) any and all employee pension,
retirement, profit sharing, bonus, incentive, deferred compensation or other
employee benefit plans, and any related trust or assets thereof; (v) the rights
of Seller under this Agreement and any agreement entered into pursuant hereto;
(vi) all assets, rights and properties of Seller relating to its corporate
governance and administration, including corporate minute books, corporate
seals
and stockholder records; (vii) Seller's Tax records and Tax returns; (viii)
any
tangible assets located at 0 Xxxxxxxx, Xxxxxx, Xxxxxxxxxxx; and (ix) any other
item not specifically listed in (a) through (f) above.
(a) Purchase
Price.
In consideration for the Purchased Assets to be sold to the Buyer hereunder,
and
the other covenants and provisions hereof to be performed by the Seller and
subject to the adjustments and set-offs provided for hereunder, Buyer shall
pay
$2,500,000 to the Seller (as the same may be adjusted as described herein,
"Purchase
Price")
at the Closing upon fulfillment of all conditions as described herein.
(b) Adjustments.
The Purchase Price has been agreed upon based on an initial Net Asset Value
of
$2,395,193.00 (collectively, the “Initial
Net Asset Value”)
determined as set forth on Schedule
2(b)
attached hereto. The Net
Asset Value
as of a given date shall mean the amount calculated by subtracting the Assumed
Liabilities as of that date from the Total Assets of the Company all as
calculated in accordance with the methods used in determining the Initial Net
Asset Value as shown on Schedule
2(b)
On the day that is two (2) business days prior to the Closing, the Seller and
the Buyer shall determine the Net Asset Value as of such date (the “Estimated
Closing Net Asset Value”).
Based upon the entries on the Estimated Closing Net Asset Value plus
$104,807, the Purchase
Price to be paid by the Buyer on the Closing Date pursuant to Section 2(a)
above
shall be (a) increased by $1.00 for each $1.00 by which the Estimated Closing
Net Asset Value exceeds the Initial Net Asset Value and (b) decreased by $1.00
for each $1.00 that the Estimated Closing Net Asset Value is less than the
Initial Net Asset Value but in no circumstances will the purchase price be
adjusted below $2,245,000 so long as the Estimated Closing Net Asset Value
(and
actual Net asset Value on the Closing date) is not less than $2,145, 000.00
.
The adjustments in the Purchase shall be rounded to the nearest whole dollar
amount. The Estimated Closing Net Asset Value shall be executed by the Buyer
and
the Seller.
(c) Specific
Inventory Adjustment.
Buyer and Seller acknowledge that for the 12 month period of calendar year
2006,
Xxxxxxx’x cost of goods sold as reflected on its monthly income
3
statements
did not exceed 48% of sales (as more particularly set forth on Schedule
2(c))
for any month during such period. As a result, Buyer and Seller have agreed
that, on the Estimated Closing Net Asset Value, the value of Inventory shall
be
$459,781 which represents the monthly average Inventory for the 12 month period
of calendar year 2006. The Inventory used in calculating the Post Closing
Valuation described below will be adjusted upward if necessary to equal such
48%
of sales for the last completed month prior to the Closing Date and the Purchase
Price will be increased accordingly. In the event the value of the Inventory
determined by the Post Closing Valuation described below results in a cost
of
goods sold less than or equal to 48% of sales for the last completed month
prior
to the Closing Date, there will be no adjustments made to the Purchase Price
as
a result of this paragraph. For example, if sales for the last completed month
prior to the Closing Date equaled $1,300,000 and cost of goods sold was $663,000
or 51% of such sales, then the purchase price will be increased by $39,000
which
represents the 3% of cost of goods sold above 48%. Provided the provisions
of
this paragraph shall have been complied with, nothing herein shall affect other
adjustments to the Purchase Price provided for elsewhere herein.
(d) Valuation.
It is acknowledged by Buyer and Seller that Host must obtain an independent
valuation of the Business to determine if the Purchase Price is a fair purchase
price (the “Valuation”).
(e) Post
Closing Valuation.
During the 90 day period following the Closing (the “Review Period”), Buyer and
Seller shall each have the independent right to review the final determinations
of the Estimated Closing Net Asset Value and all other closing adjustments,
including without limitation any costs paid by Buyer which under the terms
hereof were to have been the obligation of Seller, occurring either before
or
after the Closing Date (such closing adjustments being hereinafter referred
to
as the “Closing Adjustments”). At or before the conclusion of the Review Period,
the following terms shall apply:
(i) If
Buyer and Seller mutually agree that the actual Net Asset Value on the Closing
Date was less than the Estimated Closing Net Asset Value, or that Purchase
Price
has been otherwise overstated based on a review of the Closing Adjustments
(in
either case, an “Overpayment”), then at the end of the Review Period, or such
earlier time as Buyer and Seller agree to in writing, Seller shall pay, in
cash
or current funds $1.00 for each $1.00 of Overpayment to Buyer but not in an
amount which reduces the Purchase Price below that determined under Section
2(c)
above. In the event the Seller fails to pay the Overpayment to Buyer as and
when
due, said Overpayment shall accrue interest thereon at the rate of 12% per
annum
from and after the expiration of the Review Period, and such interest shall
be
due and payable with said Overpayment.
(ii) If
Buyer and Seller mutually agree that the actual Net Asset Value on the Closing
Date was greater than that contained in the Estimated Closing Net Asset Value,
or that the Purchase Price has been otherwise understated based on a review
of
the Closing Adjustments (in either case, an “Underpayment”), then at the end of
the Review Period, or at such earlier time as Buyer and Seller agree to in
writing, Buyer shall pay, in cash or current funds, $1.00 for each $1.00 of
Underpayment to Seller. In the event the Buyer fails to pay the Underpayment
to
Seller as and when due, said Underpayment shall accrue interest thereon at
the
rate of 12% per annum from and
4
after
the expiration of the Review Period, and such interest shall be due and payable
with said Underpayment.
(iv) If
Seller and Buyer cannot agree as to whether the Purchase Price has been
overstated or understated, then the matter shall be arbitrated in accordance
with the provisions of Section 22 hereof.
3. Closing.
The
Closing of the sale and purchase of the Purchased Assets hereunder shall be
held
at the offices of Rogin, Nassau, Xxxxxx, Xxxxxxx & Xxxxxx, LLC, 000 Xxxxxx
Xxxxxx, Xxx Xxxxx, Xxxxxxxxxxx at 2:00 p.m. on the last Friday of the month
after the satisfaction of the condition set forth in Section 9(e) below, or
at
such other place, time or date as the Buyer and the Seller may mutually agree
(such closing herein called the "Closing"
and such date on which the Closing actually takes place is herein called the
"Closing
Date"),
time being of the essence of this Agreement. In any event, the Closing Date
shall be as early as practicable.
(a) Deliveries
by Buyer at the Closing:
1. The
Purchase Price in U.S. Dollars, wired to the Seller in accordance with the
Seller’s instructions.
2. A
Good Standing Certificate of the Buyer.
3. A
Certificate of the Buyer, dated as of the Closing Date, certifying in such
detail as Seller may reasonably request to the fulfillment of the conditions
set
forth in Section 9;
(b)
Deliveries
by Seller at the Closing:
1. Good
Standing Certificates of Seller in their respective states of incorporation.
2. A
Certificate of Seller, dated as of the Closing Date, certifying in such detail
as Buyer may reasonably request to the fulfillment of the conditions set forth
in Section 8.
3. Warranty
bills of sale and other good and sufficient instruments of transfer, assignment
and conveyance as shall be effective to transfer to and vest in the Buyer good
and marketable fee simple title to the Purchased Assets, free and clear of
any
and all liens, claims and encumbrances of any kind, nature and description,
all
in form satisfactory to counsel for the Buyer.
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4. Any
and all records relating to any and all of the Purchased Assets and the
Business, including without limitation any and all customer lists, supplier
lists, purchase orders, employee records and such other records and documents
as
Buyer shall reasonably require.
5. Originally
signed contracts or similar type items evidencing the Purchased Contracts.
6.
A
release of all Liens against the Purchased Assets .
7. Letters
issued of recent date by the State of Connecticut Department of Revenue Services
with respect to the payment of taxes by Xxxxxxx.
8.
The
Non-Competes referenced in Section 19 below.
9. The
documents evidencing the assumption of the Food Broker’s Loan as described in
Section 8(h) below.
10. An
original executed change of name of Xxxxxxx Food Service to a dissimilar name
on
forms prescribed by the Connecticut Secretary of State, together with the
applicable filing fee.
11. Assignments
of current disability and life insurance policies issued on the life of, or
for
the benefit of Xxxx Xxxxxxx and Xxxxxxx Xxxxxxxxxx to the extent the same are
assignable.
(c) Buyer
and Seller shall deliver to the other such other documents, including certified
resolutions of their Board of Directors (and or shareholders), as applicable,
authorizing the transactions contemplated hereunder, and take such other action
as may be provided for herein or contemplated hereby.
(d) Buyer,
Seller and/or Parent shall execute and deliver to one another such other
instruments and documents as shall be necessary and proper to carry out this
Agreement, including, but no limited to, the Estimated Closing Net Asset Value,
a listing of all Accounts Receivable, accounts payable and Inventory as used
to
determine Estimated Closing Net Asset Value, an assignment and assumption
agreement(s) including without limitation with respect to the Food Brokers
Loan
and assignments and assumptions of leases in form, substance and content
reasonably satisfactory to the parties, fully executed by Buyer and Seller
to
which Buyer assumes and Seller assigns, as of the Closing Date, the future
payment and performance of the Assumed Liabilities and the Assumed Leases.
(e) Personal
property Taxes, deposits, prepayments and/or payments under Assumed Liabilities
(hereinafter defined), employee benefits and sick and vacation pay and all
other
continuing items relating to the operation of the Business being purchased
as
set forth herein shall be adjusted at the Closing as of the Closing Date in
accordance with the local custom in New Haven County, Connecticut. All sales,
use and excise taxes shall be paid by Buyer.
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(f) Parent,
Seller and Xxxxxxx Xxxxxxxxxx and Xxxx Xxxxxxx shall enter into an agreement
terminating all agreements between Seller and/or Parent on the one hand and
said
Xxxxxxxxxx and/or Xxxxxxx on the other hand, except that Xxxxxxx Xxxxxxxxxx
may
continue as a director of Parent pending subsequent election of directors
pursuant to Parent’s governing documents.
(g) On
the day of the Closing Date, representatives of Seller and Buyer shall prepare
a
Schedule (Schedule
3(g))
to this Agreement which shall be executed by Seller and Buyer and which shall
establish the final Purchase Price as adjusted as described herein. Such
Schedule
3(g) shall
be appended hereto, shall be a part hereof and shall represent the final
determination of the Purchase Price for purposes of the Closing.
(h) In
connection with the Closing, Seller shall take or cause to be taken all actions
as may reasonably be required by Buyer to take actual possession and control
of
the Purchased Assets. Buyer shall be solely responsible for any costs it incurs
which are associated with the physical removal and delivery of the Purchased
Assets to Buyer and shall be responsible for any costs or damages associated
with such physical removal or delivery of the Purchased Assets which are
incurred by Seller and which are not the result of Seller’s negligence.
4. Access.
Between
the date hereof and the Closing Date, Seller will (a) provide, to the officers
and other authorized representatives of Buyer, full access, during normal
business hours, to any and all premises, properties, files, books, records,
documents, and other information of the Business and will cause its officers
to
furnish to Buyer and its authorized representatives any and all financial,
technical and operating data and other information pertaining to the Business
and properties of the Business and (b) make available for inspection and copying
by Buyer true and complete copies of any documents relating to the
foregoing.
5. Liabilities.
Except
for the Assumed Leases and the Assumed Liabilities, Buyer does not assume any
liabilities or obligations of Seller. Attached hereto as Schedule
5
is a listing of the Purchased Contracts, the Assumed Leases, the Assumed
Liabilities, including without limitation the Food Broker Loan, and other items
which Buyer shall assume (collectively, the "Assumed
Liabilities").
The Assumed Liabilities shall be the only liabilities or obligations of Seller
which are assumed hereunder by Buyer. Any and all obligations of Seller, or
related to the Assets, which are not Assumed Liabilities, shall remain the
liabilities and obligations of the Seller, and Seller shall remain solely
responsible for their payment and performance when due. The Buyer agrees to
honor the Seller’s obligations under the Assumed Liabilities and the Assumed
Leases in accordance with the terms of such items and to indemnify Seller
against any liability in connection therewith in accordance with Section 11
hereof.
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6. Assumed
Liabilities.
It
is the intent of the parties hereto that Buyer shall assume the responsibility
to perform services with respect to the Assumed Liabilities as of the Closing
Date. Buyer shall be responsible for all expenses related to the Assumed
Liabilities on and after the Closing Date. Any payments respecting such services
received by Seller for any period after the Closing Date shall be promptly
remitted in kind, by such Seller to Buyer. Any expenses incurred in connection
with the Assumed Liabilities on and after the Closing Date shall be repaid
by
Buyer.
7. Seller’s
Employees.
It
is anticipated that in connection with the consummation of the transactions
contemplated by this Agreement, Seller will terminate the employment all
employees of Seller in connection with the Business. Buyer will be responsible
for all obligations to such employees arising after the Closing
Date.
8. Conditions
Precedent to Buyer's Obligations.
Buyer's
obligation to close the transactions described herein are expressly conditioned
upon the fulfillment of each and all of the following:
(a) All
obligations of Seller hereunder shall have been fully performed to the
satisfaction of Buyer.
(b) The
Business being operated between the date hereof and the Closing Date in the
ordinary course and there having occurred since January 1, 2007, it being
acknowledged however that the shareholders of Buyer will continue to operate
the
Business as employees of Seller or Parent as the case may be until the Closing
shall have been consummated.
(c) All
warranties and representations hereinafter of the Seller set forth being true
when made and being true on the Closing Date as though made at and respecting
each such time and all of Seller’s covenants having been fully performed on such
date.
(d) Neither
Seller, nor the Business nor any of the Purchased Assets being subject to any
material litigation and no such litigation being in any way pending or
threatened.
(e) All
other parties to any of the Assumed Liabilities having consented to Buyer's
assuming the Assumed Liabilities and agreeing to Buyer's performance thereunder
from and after the Closing Date.
(f) All
actions to be taken by the Seller in connection with consummation of each of
the
transactions contemplated hereby and all documents, instruments or agreements
required to effect the transactions contemplated hereby will be satisfactory
in
form and substance to the Buyer.
(g) Buyer
shall have completed a due diligence review of the Purchased Assets and the
Business, the results of which shall be reasonably satisfactory to Buyer.
8
(h) With
respect to the assumption of the Food Brokers Loan, execution of acceptable
assignment and assumption agreements between Parent, the Buyer, and Food
Brokers, Inc.confirming or relating to :
(i) there
being no uncured default which has been declared and is continuing under the
documents evidencing the Food Brokers Loan;
(ii) Parent’s
assignment of the rights it has in the $250,000.00 cash collateral account
presently being held in connection with the Food Brokers Loan;
(iii) the
assignment to the Buyer of all non-competition and non-solicitation and
indemnity agreements from Food Brokers, Inc. and its principals to Parent and/or
the Seller (the “Food Broker’s Non-Competes”) in form and substance reasonably
acceptable to Buyer;
(iv) Food
Brokers, Inc. agreement to the Buyer’s assumption of the Food Broker’s Loan and
the Food Broker’s Non-Competes and the execution of documents evidencing all of
the above in form and substance satisfactory to the parties..
(i) Buyer
shall have received a commitment for financing in the amount of at least
$2,400,000 upon generally available market terms.
(j) In
the event Buyer has not provided notice to Seller that any such condition has
not been fulfilled within 90 days after the date hereof, all conditions
described above shall be deemed to be fulfilled. Notwithstanding Buyer shall
use
its best efforts to fulfill such conditions as soon as possible. This time
limitation shall not apply to Section 8(h) and (i) above
9. Conditions
Precedent to Seller’s and Parent’s Obligations.
(a) All
obligations of Buyer hereunder shall have been fully performed to the
satisfaction of Seller.
(b) All
warranties and representations of the Buyer hereinafter set forth being true
when made and being true on the Closing Date as though made at and respecting
each such time and all of Seller’s covenants having been fully performed on such
date.
(c) The
Buyer not being subject to any material litigation and no such litigation being
in any way pending or threatened.
(d) All
actions to be taken by the Buyer in connection with consummation of each of
the
transactions contemplated hereby and all documents, instruments or agreements
required to effect the transactions contemplated hereby will be satisfactory
in
form and substance to the Seller.
(e) Parent
shall have received the authorization of its board of directors and shareholders
and of the United States Securities and Exchange Commission (“SEC”) and any
other
9
governmental
authority having jurisdiction over Seller or Parent to consummate the
transactions contemplated by this Agreement.
(f) In
the event Seller has not provided notice to Buyer that any such condition has
not been fulfilled within 90 days after the date hereof, all conditions
described above shall be deemed to be fulfilled. This time limitation shall
not
apply to Section 9(e) above. Notwithstanding, Seller and Parent shall use their
best efforts to fulfill such conditions as soon as possible.
10. Representations
and Warranties of the Seller and Parent.
Seller
and Parent represents and warrants to and agrees with the Buyer as follows:
(a) Xxxxxxx
Food Service is a corporation duly organized and validly existing under the
laws
of the State of Connecticut with full authority to conduct its business as
presently conducted. Xxxxxxx Food Service has all licenses and permits required
by any governmental authority to own and operate its properties and to carry
on
the Business activities as presently conducted in all states in which it
conducts business. Parent is a corporation duly organized, validly existing
and
in good standing under the laws of the State of Colorado. Parent has full
corporate power and authority to own its properties and conduct the business
presently being conducted by it, to execute this Agreement, and to consummate
the transactions contemplated by this Agreement
(b) The
execution and delivery of this Agreement has been duly authorized by all
necessary corporate action of Seller and Parent (including without limitation
the consent of Parent's shareholders, if required) and does not, and the
performance of the transactions contemplated hereby will not, materially breach
or materially violate any of the provisions of Seller's or Parent’s Articles of
Incorporation or By-Laws or any material agreement, judgment or law respecting
which Seller is a party or is bound or affected.
(c)
No Tax which is or may result in a lien on any of the Purchased Assets that
is
due at the time of Closing will be unpaid at the time of Closing. With respect
to Taxes: (i) Seller shall be responsible for and pay when due all of Seller’s
Taxes attributable to, levied or imposed upon or incurred in connection with
the
Purchased Assets or the Business relating or pertaining to the period (or that
portion of any period) ending on or prior to the Closing Date, and Buyer shall
be responsible for and pay when due all taxes attributable to, levied or imposed
upon or incurred in connection with the Purchased Assets or the Business
relating or pertaining to the period (or that portion of any period) ending
after the Closing Date. Seller shall continue to timely file within the time
period for filing, or any extension granted with respect thereto, all of
Seller’s Tax Returns required to be filed in connection with the Purchased
Assets and such Tax Returns shall be true and correct and completed in
accordance with applicable laws.
(ii) No
new elections with respect to Taxes, or any changes in current elections with
respect to Taxes, affecting the Purchased Assets shall be made after the date
of
this Agreement without the prior written consent of Buyer.
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(iii) Seller
and Buyer shall each (i) provide the other with such assistance as may
reasonably be requested by any of them in connection with the preparation of
any
Return, audit or other examination by any taxing authority or judicial or
administrative proceeding relating to liability for Taxes, (ii) retain and
provide the other with any records or other information which may be relevant
to
such Return, audit or examination, proceeding or determination, and (iii)
provide the other with any final determination of any such audit or examination,
proceeding or determination that affects any amount required to be shown on
any
Return of the other for any period. Without limiting the generality of the
foregoing, Buyer and Seller shall retain, until the applicable statutes of
limitations (including any extensions) have expired, copies of all Returns,
supporting work schedules and other records or information which may be relevant
to such Returns for all tax periods or portions thereof ending before or
including the Closing Date and shall not destroy or otherwise dispose of any
such records without first providing the other party with a reasonable
opportunity to review and copy the same.
(d) To
Seller’s knowledge, there is no legal action, suit or governmental proceeding or
investigation pending or threatened against or affecting the Purchased Assets
and Seller is not subject to any order, writ, injunction or decree of any court
or governmental authority with respect to the sale of the Purchased Assets.
The
Seller’s conduct of the Business is in material compliance with all laws,
ordinances, rules, regulations or orders that are applicable to it or them
and
that would affect the Business. Schedule
10(d)
lists all permits, consents, approvals, licenses and other like instruments
issued under health, safety or environmental protection laws which are currently
held by Seller relating to the Business.
(e) No
representation or warranty of Seller contained herein, or information with
respect to Seller contained herein or in any Schedule hereto or in any
statement, certificate or other document furnished or to be furnished to the
Buyer by Seller pursuant hereto or in connection with the transactions
contemplated hereby, contains or will contain any untrue statement of material
fact or omits or will omit to state any material fact necessary to make the
statements herein and the Schedules hereto not false or misleading.
(f) The
Seller has good and marketable title to all of the Purchased Assets free and
clear of all tile defects, liens, claims or other encumbrances. All of the
Purchased Assets are sold “As
Is”,
and where is, and without warranties as to merchantability or fitness for a
particular purpose. Notwithstanding the foregoing, all Inventory shall be
saleable on the Closing Date as reported by Xxxxxxx to Host in a manner
consistent with such reporting over the 12 month period prior to the Closing
Date. If any Inventory is considered by Buyer to be non-salable, a listing
of
such Inventory will be provided by Buyer to Seller at least two (2) days prior
to the Closing. Any such non-salable inventory will not affect the adjustment
provided for in Section 2(c) above.
(g) No
other party will, on the Closing Date, have any right to or interest in any
of
the Purchased Assets or any right to acquire any interest in the Business or
any
of the Purchased Assets.
(h) To
Seller’s knowledge, the financial statements attached hereto as Schedule
10(h),
including the comments and notes contained therein are true and complete and
fairly present, with respect to the Business: (i) the financial position of
Seller at the date thereof and the results of
11
its
operations for the period purported to be covered thereby and (ii) the book
values of all the Purchased Assets at the date thereof. Each such financial
statement has been prepared in conformity with GAAP applied on a consistent
basis throughout all periods involved.
(i) To
Seller’s knowledge, there is no labor strike, grievance, procedure, arbitration
proceeding or organizational drive pending or threatened against Seller.
(j) All
Purchased Contracts are valid and in effect. Seller has not received
notice of default under any Purchased Contracts, and knows of no event that
has
occurred or that is expected to occur which (after notice and lapse of time
or
both) would become a breach or default under any such Purchased Contract.
11. Representations
and Warranties of the Buyer.
Buyer
represents and warrants to and agrees with Seller as follows:
(a) Buyer
is a corporation, duly organized, validly existing and in good standing under
the laws of Connecticut. Buyer has all requisite corporate power and authority
to own, lease and operate its properties, to carry on its business as now being
conducted and to execute, deliver and perform this Agreement and all writings
relating hereto.
(b) The
execution and delivery of this Agreement has been duly authorized by all
necessary corporate action of Buyer (including without limitation the consent
of
Buyer’s shareholders, if required) and does not, and the performance of the
transactions contemplated hereby will not, materially breach or materially
violate any of the provisions of the Buyer’s Articles of Incorporation or
By-Laws or any material agreement, judgment or law respecting which any Buyer
is
a party or is bound or affected.
(c) Buyer
has been provided with adequate opportunities to review contracts, assess the
Purchased Assets and otherwise satisfy itself with the value of the Purchased
Assets.
(d) Buyer
has all necessary licenses, permits and other approvals necessary to conduct
its
affairs and operate the Business post-Closing.
(e)
To
Buyer’s knowledge, there is no legal action, suit or governmental
proceeding
or investigation pending or threatened against or affecting the Purchased Assets
and Buyer is mot subject to any order, writ, injunction or decree of any court
or governmental authority with respect to the Purchased Assets.
(f) Buyer
acknowledges that its shareholders have operated the Business on a day-to-day
basis as employees of Seller. Buyer has no knowledge of any breach of the
representations of Seller contained in Sections 10(d), (i) or (j)
above.
12
12. Conduct
of Business.
(a) From
the date hereof until the Closing Date, the Seller will: (i) conduct the
Business only in the ordinary course; (ii) maintain the general character of
the
Business; (iii) maintain the Purchased Assets in good repair and condition,
ordinary wear and tear alone excepted; (iv) maintain in all material respects
all necessary insurance coverage and all necessary licenses and permits,
governmental or otherwise; (v) use its best efforts to preserve its good will
and the good will of its suppliers, customers and others having business
re1ationships with it; (vi) provide the Buyer with all such information
concerning its business, affairs, products and the like, as the Buyer may
reasonably request; and (vii) permit the Buyer and its representatives to
examine its books, records and properties, and its auditor's work papers
associated with and supporting its financial statements, at all reasonable
times, provided reasonable notice shall have been given to the Seller.
(b) From
the date hereof until the Closing, the Seller will not: (i) mortgage, pledge
or
borrow or subject to lien or other encumbrance any of the Purchased Assets
that
will not be fully paid and discharged on the Closing Date; (ii) sell or
otherwise dispose of any of the Purchased Assets, except Inventory in the
ordinary course of business; and (iii) in connection with the Business, enter
into any agreement, contract, or commitment other than in the ordinary course
of
business.
13. Confidentiality.
(a) Confidentiality
Obligations of Seller
(1) Seller
acknowledges and agrees that it possesses confidential information related
to
the Buyer, the Business and the Purchased Assets, the improper disclosure or
misuse of which would materially adversely affect the ability of Buyer to make
use of the Purchased Assets.
(2)
Other than as may be required by any applicable law, rule or regulation, Seller,
and any agent or representative of it, shall not, without prior written consent
of the Buyer, disclose any proprietary information relating to the Buyer, the
Business or the Purchased Assets (“Confidential
Information").
Confidential Information shall not include information that becomes publicly
available through no act of the disclosing party, is received rightfully from
a
third party without duty of confidentiality, is disclosed under operation of
law, or is disclosed with the prior written permission of the Buyer.
(3) Other
than in connection with the Business, Seller agrees that it will not at any
time
or in any manner, either directly or indirectly, use any Confidential
Information for their own benefit, and that they will protect such information
and treat it as strictly confidential. Buyer shall be entitled to an injunction
to restrain Seller from disclosing, in whole or in part, any Confidential
Information, or from providing any services to any party to whom such
information has been disclosed or may be disclosed. Buyer shall not be
prohibited by this provision from pursuing other remedies, including claims
for
losses or damages.
13
(b) Confidentiality
Obligations of Buyer
(1) Buyer
will hold in confidence, and will not use to the detriment of Seller, any data
and information obtained from Seller or Parent in connection with this
Agreement. Upon termination of this Agreement for any reason, Buyer shall return
promptly to Seller all printed information received by Buyer from Seller in
connection with the proposed transaction and deliver to Seller or destroy all
copies of such printed material which may have been made by Buyer or its
representatives.
(2) In
the event Buyer does not purchase the Purchased Assets, Buyer shall not, unless
required by any applicable law, rule or regulation, without prior permission
of
Seller, disclose any proprietary information relating to Seller, the Business
or
the Purchased Assets (collectively, "Seller's
Confidential Information").
Seller's Confidential Information shall not include any other information that
becomes publicly available through no act of the disclosing party, is received
rightfully from a third party without duty of confidentiality, is disclosed
under operation of law, or is disclosed with the prior written permission of
the
Seller.
(3) Buyer
agrees that it will not at any time or in any manner, either directly or
indirectly, use any of Seller's Confidential Information for its own benefit,
and that it will protect such information and treat it as strictly confidential.
Seller shall be entitled to an injunction to restrain Buyer from disclosing,
in
whole or in part, Seller’s Confidential Information, or from providing any
services to any party to whom such information has been disclosed or may be
disclosed. Buyer shall not be prohibited by this provision from pursuing other
remedies, including claims for losses or damages.
14. Disclosure.
The
parties mutually agree not to disclose the terms of this Agreement except only
in a form mutually agreed to in writing, in advance by the parties, or as
required by any applicable laws, regulations, rules, or in accordance with
any
of the rules and regulations of any exchange on which any capital stock of
Parent is listed, or except as required by court order. If disclosure is
required, the disclosing party agrees to notify the other party in advance
of
the content of the information being disclosed and to whom the disclosure is
being made. It is understood that certain or all parts of this agreement will
be
included in a proxy statement filed with the SEC prior to the Closing Date
by
Parent. It is also understood that the proxy statement filed with the SEC is
a
public document.
15. Termination.
(a) At
any time prior to the Closing, the Buyer may terminate this Agreement and all
liability of the Buyer hereunder in the event:
(i) the
Buyer, in its reasonable discretion shall determine that there has been a
material misrepresentation and/or breach of warranty on the part of Seller
or
the Parent and/or the nonfulfillment of any condition precedent or covenant
required to be fulfilled by Seller or the Parent under this Agreement;
14
(ii) the
transaction contemplated herein is not closed by ninety (90) days after the
date
hereof unless full approval of the transaction by all governmental and
regulatory authorities having jurisdiction over any activities of Parent shall
not have been unconditionally obtained, in which event the Closing may be
postponed until all such approvals have been obtained, or unless caused by
the
act or failure to act of Buyer.
(iii) the
loan described in Section 8(i) fails to fund.
(b) Seller
may terminate this Agreement if:
(i) the
transaction contemplated herein is not closed by ninety (90) days after the
date
hereof unless full approval of the transaction by all governmental and
regulatory authorities having jurisdiction over any activities of Parent shall
not have been unconditionally obtained, in which event the Closing may be
postponed until all such approvals have been obtained, or unless caused by
the
act or failure to act of Seller;
(ii) Seller,
in its reasonable discretion, shall determine that there has been a material
misrepresentation or breach of warranty on the part of the Buyer and/or the
nonfulfillment of any condition precedent or covenant required to be fulfilled
by the Buyer under this Agreement.
16. Brokerage
and Other Expenses.
The
parties hereto represent to each other that neither of their representatives
has
incurred any liability for any broker's, finders or similar fee in connection
with this Agreement and the transactions contemplated hereby. Each of the
parties hereto shall pay such party's respective expenses, including, without
limitation, attorney's fees, in connection with this Agreement and the
transactions contemplated hereby, and neither of the parties hereto shall in
anyway be liable for such expenses of the other.
17. Indemnification;
Survival of Representations, Warranties and Covenants;
(a) Indemnification.
Seller on the one hand, and Buyer on the other hand, shall hold harmless and
indemnify one another from and against any and all liability, loss, damage
or
expense, including attorneys’ fees and other expenses, resulting from the breach
by the indemnifying party of its representations, warranties and covenants
under
this Agreement. Seller
shall hold harmless and indemnify Buyer from and against any and all liability,
loss, damage or expense, including attorneys’ fees and other expenses, resulting
from any account payable, liability or obligation of Seller or the Business
as
operated by Seller through the Closing Date (other than the Assumed
Liabilities), whether or not such liability or obligation was disclosed to
Buyer. Buyer shall hold harmless and indemnify Seller from and against any
and
all liability, loss, damage or expense, including attorneys’ fees and other
expenses, resulting from any account payable, liability or obligation of Buyer
or the Business as operated by Buyer after the Closing Date.
(b)
Set-Off.
Buyer shall be entitled to claim a set-off against the unpaid portions of the
Purchase Price for any alleged liabilities, losses, damages or expenses which
are incurred by
15
Buyer
or the Business and for which Seller has indemnified Buyer pursuant to the
terms
of this Agreement, including Purchase Price Adjustments made pursuant to
Sections 2.3 and 2.4 of this Agreement and the indemnified claims set forth
in
Section 17 of this Agreement (a “Claimed Set-Off”). Prior to effecting (solely
in the manner provided herein) any such Claimed Set-Off, Buyer shall give Seller
written notice of such Claimed Set-Off with supporting documentation
establishing the amount of the Claimed Set-Off. Seller shall have ten (10)
business days within which to respond, in writing, to Buyer’s Claimed Set-Off.
In the event Seller disputes the asserted basis for the Claimed Set-Off and
the
parties are unable to resolve the matter within thirty (30) days of Seller’s
receipt of Buyer’s notice of a Claimed Set-Off then in such event Seller shall
deposit the amount of the Claimed Set-Off in escrow as set forth in the Set-Off
Escrow Agreement.
Seller
shall be entitled to claim a set-off against the unpaid portions of the Purchase
Price for any alleged liabilities, losses, damages or expenses which are
incurred by Seller or the Business and for which Buyer has indemnified Seller
pursuant to the terms of this Agreement, including Purchase Price Adjustments
made pursuant to Sections 2.3 and 2.4 of this Agreement and the indemnified
claims set forth in Section 17 of this Agreement (a “Seller Claimed Set-Off”).
Prior to effecting (solely in the manner provided herein) any such Seller
Claimed Set-Off, Seller shall give Buyer written notice of such Seller Claimed
Set-Off with supporting documentation establishing the amount of the Seller
Claimed Set-Off. Buyer shall have ten (10) business days within which to
respond, in writing, to Seller’s Claimed Set-Off. In the event Buyer disputes
the asserted basis for the Seller Claimed Set-Off and the parties are unable
to
resolve the matter within thirty (30) days of Buyer’s receipt of Seller’s notice
of a Seller Claimed Set-Off then in such event Buyer shall deposit the amount
of
the Seller Claimed Set-Off in escrow as set forth in the Set-Off Escrow
Agreement.
(c) Survival
Period.
Except as described in this Section 17, the representations, warranties,
covenants and agreements of the parties in this Agreement shall survive the
execution and delivery of this Agreement and the Closing but only until the
date
one (1) year after the Closing Date (except for claims in respect thereof
pending at such time, which shall survive until finally resolved or settled).
Except as set forth in Section 17(e), no action may be commenced with respect
to
any representation, warranty, covenant or agreement in this Agreement, or in
any
writing delivered pursuant hereto, unless written notice, setting forth in
reasonable detail the claimed breach thereof, shall be delivered pursuant to
Section 21 to the party or parties against whom liability for the claimed breach
is charged on or before the termination of the survival period specified in
this
Section 17 for such representation, warranty, covenant or agreement.
(d) Threshold
and Cap.
Notwithstanding anything to the contrary herein, in no event shall the Buyer
be
liable to Seller, or any of their Affiliates, pursuant to this Section 17 or
otherwise, nor shall Buyer, or any of its Affiliates be liable to Seller, for
any matter related in any way to this Agreement until the total amount of
Damages to such parties exceeds $25,000.00 (the “Threshold
Amount”),
and then only to the extent such Damages exceed the Threshold Amount. .
(e) Mitigation.
In computing any Damages under this Section 17, the amount of any insurance
proceeds (including title insurance proceeds), Tax benefits, and any
indemnity,
16
contribution
or other similar payment from any third party to which any party is entitled
with respect to any matter shall be deducted from such Damages. Such party
shall
also be required to take all necessary and desirable steps to mitigate any
Damages for which any claims under this Section 17 may be brought upon and
after
becoming aware of any event that could reasonably be expected it to give rise
to
any such Damages, including taking all commercially reasonable efforts to
collect any amounts available under any applicable insurance coverage or from
any third party.
(f) Limited
Remedies.
Notwithstanding anything to the contrary in this Agreement, the remedies
described in this Section 17 shall be the sole and exclusive remedies available
to any party for any Damages a party may incur. Furthermore, anything in this
Agreement to the contrary notwithstanding, in no event shall any party have
any
liability for any consequential, incidental, lost profits, punitive or exemplary
damages, howsoever caused, arising out of, or relating to this Agreement, even
if such party has been advised to the possibility of any such damages or
losses.
(g) Exceptions
to Survival Period.
Nothing contained in this Section 17 shall be deemed to limit any party’s right
to enforce any of the other parties’ covenants under Sections 5-6 (Liabilities
and Assumed Liabilities), 13 (Confidentiality), 14 (Disclosure), 20
(Allocation), 22 (Arbitration) and 23 (Covenant of Further
Assurances).
18. Successors
and Assigns.
This
Agreement shall be binding upon and inure to the benefit of the parties hereto
and their respective successors and assigns and nominees, as applicable.
19. Non-Compete
Agreements.
In
furtherance of the sale to Buyer of the Purchased Assets, Seller [and Parent]
will enter into agreements (the "Non-Compete
Agreements")
whereby Seller and Parent each agree that for a period of five (5) years after
the Closing Date it shall not: (a) compete, directly or indirectly, with the
Business as conducted as of the Closing Date; (b) communicate with or contact
any of the customers of Buyer for the purpose of soliciting such customers
to
purchase any goods, products or services of the type being manufactured, offered
or sold by the Business as of the Closing Date; (c) use or disclose to others
any trade secrets or other confidential information relating to the Purchased
Assets or Business. The Non-Compete Agreements shall be in the forms attached
hereto as Schedule
19.
20. Allocation.
The
Buyer and the Seller shall use reasonable commercial efforts to agree on a
reasonable and fair allocation of the Purchase Price among the Purchased Assets,
which shall value Inventory, the Other Tangible Assets, the Assumed Leases
and
the Purchased Contracts at their estimated fair market values as of the Closing
Date, and shall allocate the remainder of the Purchase Price to the Intangible
Assets. The Buyer and the Seller agree that each party shall report the
transactions contemplated by this Agreement for income Tax purposes in
accordance with the agreed-upon allocation of the Purchase Price, pursuant
to
Section 1060 of the Federal Internal Revenue Code and
17
the
regulations thereunder, and agree not to take, in any filing with or
accompanying any Tax return reporting any part of the transaction undertaken
herein, a position inconsistent with such allocations; provided, however, that
if the Buyer and the Seller are unable in good faith to reach an agreement
with
respect to the allocation of the Purchase Price consistent with the foregoing,
each such party may allocate the Purchase Price among the Purchased Assets
as it
deems appropriate but generally consistent with the foregoing.
21. Notices.
Any
notice, demand, request or other communication made, given, required or
permitted pursuant to this Agreement shall be (a) in writing, (b) delivered
personally, transmitted by facsimile, delivered by a commercial overnight
courier service or mailed by certified or registered United States first class
mail, return receipt requested, postage prepaid, and (c) addressed to the party
for whom intended, as follows:
(a) If
to Seller, addressed to:
Xxxxx
Xxxxxx, CEO
Host
America Corporation
0
Xxxxxxxx
Xxxxxx,
XX 00000
Copy
to:
Xxxxxx
X. Xxxxxx, Esq.
Rogin,
Nassau, Xxxxxx, Xxxxxxx & Xxxxxx, LLC
000
Xxxxxx Xxxxxx
00xx
Xxxxx
Xxxxxxxx,
XX 00000
(b) If
to the Buyer, addressed to:
Xxxxxxx
Xxxxxxxxxx, President
Xxxxxxx
Acquisition Corp.
00
Xxx Xxxx Xxxx
Xxxxxx,
XX 00000
Copy
to:
Xxxxxxx
X. Xxxxxxxxx, Esq.
Quatrella
& Riziio, LLC
Xxx
Xxxx Xxxx
Xxxxxxxxx,
XX
18
Any
party may change the address or telecopier number to which notices hereunder
are
to be sent to it by giving written notice of such change as herein provided.
Any
notice given hereunder shall be deemed given on the date of hand delivery,
transmission by telecopier, deposit with the U.S. Postal Service or delivery
to
a courier service, as appropriate.
22. Arbitration
of Disputes.
It is acknowledged by the parties that a quick and efficient resolution of
all
claims, disputes and other matters in question under this Agreement after the
Closing ("Disputes")
is critical to the implementation of the terms of this Agreement. In order
to
effectuate such intent, the parties do hereby establish this Dispute procedure
for use during the term of this Agreement. All Disputes shall be subject to
this
Section 22, it being the intention of the parties that all such Disputes be
subject hereto regardless of any specific reference or absence of such reference
to arbitrability herein. Prior to submission of any Dispute for resolution
in
accordance with this Section 22, the parties will negotiate in good faith to
resolve such Dispute. Only if such parties cannot reach agreement within ten
(10) days of written notice by any party to the other party that a Dispute
exists, the Dispute will be submitted for resolution in accordance with the
American Arbitration Association in Hartford, Connecticut. Upon such Dispute
being submitted to the American Arbitration Association for resolution, the
arbitrators shall assume exclusive jurisdiction over the Dispute and the
decisions of such arbitrators shall be binding upon the parties hereto and
may
be entered in any court of competent jurisdiction.
23. Covenant
of Further Assurances.
The parties hereto shall execute such other and further instruments and/or
documents as shall be necessary to implement and carry out the intents and
purposes of this Agreement. Without limiting the foregoing, in the event of
any
modification to the terms hereof as shall be mutually agreed upon by such
parties, the parties shall execute and deliver an amendment to this
Agreement.
24. Complete
Agreement.
This
Agreement contains the complete agreement between the parties hereto with
respect to the sale and purchase of the Purchased Assets and other transactions
contemplated hereby and supersedes all prior agreements and understandings
between the parties with respect to such sale and purchase and such other
transactions.
25. Governing
Law.
This
Agreement is being executed and delivered and is being closed in the State
of
Connecticut. This Agreement shall be construed and enforced under the applicable
procedural, statutory and common law of the State of Connecticut. The parties
hereto hereby consent and submit themselves to the jurisdiction of the Courts
of
the State of Connecticut with respect to any controversy arising under or
relating to this Agreement. Service of process may be effected on any party
hereto which is not a resident of the State of Connecticut by certified or
registered United States Mail, postage prepaid, addressed to such party at
the
address described in Section 21 hereof.
19
26. Counterparts.
This
Agreement may be executed in two (2) or more counterparts, each of which shall
be deemed an original but all of which shall constitute but one instrument.
27. Headings.
The
various section and subsection headings and titles are for convenience only
and
shall be subject to no independent substantive interpretation or
meaning.
28. Calculation
of Time.
Whenever in this Agreement a period of time is stated as a number of days,
it
shall be construed to mean calendar days; provided, however, that when any
period of time so stated would end upon a Saturday, Sunday or legal holiday,
such period shall be deemed to end upon the next day following which is not
a
Saturday, Sunday or legal holiday. For the purposes of this Agreement, a "legal
holiday" is any day on which banks are legally closed for business in the State
of Connecticut.
[REMAINDER
OF PAGE INTENTIONALLY LEFT BLANK; SIGNATURE PAGE FOLLOWS]
20
IN
WITNESS WHEREOF, the parties hereto have executed this Agreement as of the
date
first above written.
BUYER:
XXXXXXX
ACQUISITION CORP.
By:
/s/ XXXXXXX X. XXXXXXXXXX
Name:
Xxxxxxx X. Xxxxxxxxxx
Title:
President
SELLER:
XXXXXXX
FOOD SERVICES CORPORATION
By:
/s/ XXXXX XXXXXX
Name:
Xxxxx Xxxxxx
Title:
CEO
HOST
AMERICA CORPORATION
By:
/s/ XXXXX XXXXXX
Name:
Xxxxx Xxxxxx
Title:
CEO
21
APPENDIX
OF DEFINITIONS
Accounts
Receivable:
the meaning set forth in Section 1(d).
Affiliate:
with reference to any Person, any director, officer or employee of such Person,
any corporation, association, firm or other entity in which such Person has
a
direct or indirect controlling interest or by which such Person is directly
or
indirectly controlled or is under direct or indirect common control with such
Person.
Assumed
Leases:
the meaning set forth in Section 1(f).
Assumed
Liabilities:
the meaning set forth in Section 5.
Business:
the meaning set forth in the Recitals.
Buyer:
the meaning set forth on Page 1 of this Agreement.
Closing:
the meaning set forth in Section 3.
Closing
Date:
the meaning set forth in Section 3.
Damages:
any and all losses, claims, assessments, demands, damages, liabilities,
obligations, costs and expenses, including without limitation, reasonable fees
and disbursements of counsel, and other out-of-pocket costs and expenses
incurred in connection with investigating, preparing or defending or preventing
any action, suit or proceeding, commenced or threatened, or any claim
whatsoever.
Estimated
Closing Net Asset Value:
the meaning set forth in Section 2(b).
Food
Brokers Loan: loan evidenced by a certain promissory note between Host
America and Food Brokers.
GAAP:
United States generally accepted accounting principles and practices
consistently applied from accounting period to accounting period.
Indebtedness:
(a) all items which in accordance with generally accepted accounting principles
and practices would be included in determining total liabilities as shown on
the
liability side of a balance sheet of such Person as at the date of which
indebtedness is to be determined, (b) all indebtedness secured by any mortgage,
pledge, lease, lien or conditional sale or other title retention agreement
existing on any property or asset owned or held by such Person subject thereto,
whether or not such indebtedness shall have been assumed, and (c) all
indebtedness of others which such Person has directly or indirectly guaranteed,
endorsed, discounted or agreed (contingently or otherwise) to purchase or
repurchase or otherwise acquire, or in respect of which such Person has agreed
to supply
22
or
advance funds (whether by way of loan, stock purchase, capital contribution
or
otherwise) or otherwise to become liable directly or indirectly with respect
thereto.
Initial
Net Asset Value:
the meaning set forth in Section 2(b).
Intangible
Assets:
the meaning set forth in Section 1(e).
Inventory:
the meaning set forth in Section 1(b).
Net
Asset Value:
the meaning set forth in Section 2(b).
Non-Compete
Agreements:
the meaning set forth in Section 19.
Other
Tangible Assets: the
meaning set forth in Section 1(c).
Parent:
the meaning set forth on Page 1.
Person:
any natural person or legal entity.
Product
Expense %:
the meaning set forth in Section 2(d)(iii).
Purchase
Price:
the meaning set forth in Section 2(a).
Purchased
Assets:
the meaning specified in Section 1.
Purchased
Contracts:
the meaning set forth in Section 1(d).
Seller:
the meaning set forth on Page 1.
SEC:
the Securities and Exchange Commission of the United States.
Taxes:
federal, state, local, foreign and provincial income, capital gains, property
transfer, payroll, withholding, excise, sales, use, use and occupancy,
mercantile, real estate, personal property, value added, capital stock,
franchise, controlling interest transfer or other taxes, easements or charges
and estimated taxes relating thereto, and any and all interest, penalties and
additions to tax on any of the foregoing.
Total
Assets:
The items listed above the term “Total Assets” of Schedule
2(b)
attached hereto.
23
SCHEDULE
OF SCHEDULES
|
Schedule
|
||
|
Reference
|
Section
|
Description
|
|
1(b)
|
1(b)
|
Inventory
|
|
1(c)
|
1(c)
|
Other
Tangible Assets
|
|
1(d)
|
1(d)
|
Purchased
Contracts
|
|
1(e)
|
1(e)
|
Intangible
Assets
|
|
1(f)
|
1(f)
|
Assumed
Leases
|
|
2(b)
|
2(b)
|
Determination
of Initial Net Asset Value
|
|
2(c)
|
2(c)
|
Determination
of Cost of Goods Sold
|
|
3(g)
|
3(g)
|
Closing
Purchase Price (to be attached at closing)
|
|
5
|
5
|
Assumed
Liabilities
|
|
10(d)
|
10(d)
|
Permits
|
|
10(h)
|
10(h)
|
Financial
Statements
|
|
19
|
19
|
Form
of Non-Compete Agreements
|
24
